Congress backs bill to aid US computer chip firms to counter China

US politicians have passed a $280 billion (£230 billion) package to boost the semiconductor industry and scientific research to create more high-tech jobs in the United States and better compete with international rivals such as China. can get help.

The House approved the bill by a solid margin of 243-187, sending the measure for President Joe Biden to sign into law and providing the White House with a major domestic policy victory.

About two dozen Republicans voted for the legislation.

“My plea is kept separate from politics. Get it done,” Mr Biden said before the vote, adding that it will give the US “the ability to not only compete with China for the future, but to lead the world and win the economic competitiveness of the 21st century.”

Republicans argued that the government should not spend billions to subsidize the semiconductor industry, and GOP leadership in the House recommended a vote against the bill, telling members that the plan would provide “heavy subsidies and tax credits to a specific industry.” which does not require additional government handouts”.

Republican Guy Reichenthaler said the way to help the industry would be tax cuts and easing federal regulations, with subsidies “by not choosing winners and losers” – an approach that Democrat Joseph Morrell said was too narrow.

“It affects every industry in the United States,” Mr. Morell said.

“For example, General Motors announced that they have 95,000 automobiles waiting for chips. So, you want to increase the supply of goods to people and help reduce inflation? It’s every single one across the United States. It is about increasing the supply of goods in the industry.”

Some Republicans saw the law as critical to national security.

Mike McCall, the top Republican on the House Foreign Affairs Committee, said it was important to protect semiconductor capacity in the US, which he said was heavily dependent on Taiwan for the most advanced chips.

If China tries to take over the self-governing island, which Beijing sees as a separate province, it could prove to be a major vulnerability.

“I’ve got a unique insight into this. I get classified briefings. Not all of these members do,” Mr. McCall said. “It’s of the utmost importance to our national security.”

The bill provides more than $52 billion in grants and other incentives for the semiconductor industry, as well as a 25% tax credit for companies that invest in chip plants in the US.

According to the Congressional Budget Office, it calls for increased spending on various research programs, which would amount to about $200 billion over 10 years.

Late developments in the Senate – progress announced by Democrats on a $739 billion health and climate change package as of Wednesday night – threatened to make it harder for supporters to get the semiconductor bill to the finish line, based on concerns about government spending .

Republican Frank Lucas said he was “disgusted” by the turn of events on Capitol Hill.

Despite bipartisan support for the research initiative, “sadly, and it is more regrettable than you can possibly imagine, I will not cast my vote for the Chips and Science Act today.”