Pence votes no to chip bill

Rep. Greg Pence, R-Indiana, has voted against legislation supported by the largest employer in his district that seeks to boost the domestic semiconductor production and high-tech research programs that lawmakers say will help the country stay economically competitive with China and other countries in the decades ahead.

The House on Thursday approved the $280 billion package by a solid margin of 243-187, sending the bill to President Joe Biden to be signed into law and providing the White House with a major domestic policy victory, The Associated Press reported. Twenty-four Republicans voted for the legislation.

The measure cleared the Senate in a 64-33 vote earlier this week. Sen. Todd Young, R-Indiana — who spoke Wednesday on the Senate floor in favor of the bill — voted for the legislation, while Sen. Mike Braun, R-Indiana, voted against it.

The bill provides more than $52 billion in grants and other incentives for the semiconductor industry, as well as a 25% tax credit for those companies that invest in chip plants in the U.S., according to wire reports. It also calls for increased spending on various research programs that would total about $200 billion over 10 years, according to the Congressional Budget Office.

Pence did not respond to a request for comment on why he voted against the package.

However, proponents of the legislation say other countries are spending billons of dollars to lure chipmakers, according to wire reports. Backers say the U.S. must do the same or risk losing a secure supply of the semiconductors that power automobiles, computers, appliances and some of the military’s most advanced weapons systems.

The measure also has received vocal support from Cummins Inc. — the largest employer in Pence’s district, employing about 8,000 people in the Columbus area.

Cummins Chairman and CEO Tom Linebarger was among a group of chief executives and labor leaders who met virtually Monday with Biden to discuss the global seminconductor shortage and the legislation.

Linebarger told Biden during the meeting that the Columbus-based company and others are facing a “supply chain crisis,” including a global shortage of semiconductors that has sent costs soaring and impacted Cummins’s ability to meet customer demand, leading to manufacturing delays.

“We are unable to get the components we need, and semiconductors is always at the top of the list. And semiconductors really are the basic building blocks, they’re the steel of the 21st century,” Linebarger told Biden during the meeting.

“Costs have escalated dramatically,” Linebarger added later in the meeting. “We are often buying chips from brokers now and paying as much as 10 times the regular cost to get these chips just to make sure we can keep trucks on the road, driving inflation in our industry and challenges throughout our supply chain.”

Opponents, however, have been critical of the bill’s price tag, according to wire reports. It is projected to increase federal deficits by about $79 billion over 10 years.

Some House Republicans argued 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 the plan would provide enormous subsidies and tax credits “to a specific industry that does not need additional government handouts,” according to wire reports.

Rep. Kevin McCarthy, the Republican leader in the House, likened the bill’s spending to “corporate welfare to be handed out to whoever President Biden wants.”

Some Republicans criticized the bill as not tough enough on China, and GOP leaders emphasized that point in recommending a “no” vote, according to wire reports. Their guidance acknowledged the threat China poses to supply chains in the U.S., but said the package “will not effectively address that important challenge.”

For its part, China opposed the measure and actively lobbied against it, according to wire reports. The bill includes a provision that prohibits any semiconductor company receiving financial help through the bill from supporting the manufacture of advanced chips in China.

Zhao Lijian, a Chinese foreign ministry spokesman, commenting before the House vote, said the U.S. “should not put in place obstacles for normal science, technology and people-to-people exchanges and cooperation” and “still less should it take away or undermine China’s legitimate rights to development.”

Some Republicans viewed passing the legislation as important for national security, according to wire reports. Rep. Michael McCaul, the top Republican on the House Foreign Affairs Committee, said it was critical to protect semiconductor capacity in the U.S. and that the country was too reliant on Taiwan for the most advanced chips. That could prove to be a major vulnerability should China try to take over the self-governing island that Beijing views as a breakaway province

The bill had been in the works for years, starting with efforts by Young and Senate Majority Leader Chuck Schumer, D-New York, to increase the government’s investment in high tech research and development, according to wire reports. While the bill has taken several twists and turns, one constant theme that lawmakers repeatedly emphasized during Wednesday’s debate was the need to keep up with China’s massive investments in cutting-edge technology.

“China’s government is planning on winning the (artificial intelligence) race, winning future wars, and winning the future,” Young said Wednesday on the Senate floor. “And the truth is, Beijing is well on its way to accomplishing these goals. America is at risk of falling behind economically and technologically to a world power that does not value liberty or even respect human life.”

“Right now, the United States of America is almost entirely reliant on other nations for the high-tech computer chips that power our smart phones, automobiles, household appliances and military platforms,” Young added. “The recent shortage of these chips has hobbled our economy and hit our pocketbooks.”