House Passes $280 Billion CHIPS Act Without China Provision, Sends Legislation to Biden's Desk

House Passes $280 Billion CHIPS Act Without China Provision, Sends Legislation to Biden's Desk
US President Joe Biden meets with CEOs about the economy in the South Court Auditorium of the Eisenhower Executive Office Building, next to the White House, in Washington, on July 28, 2022. (Mandal Ngan/AFP via Getty Images)
Andrew Thornebrooke

The U.S. House of Representatives passed the CHIPS and Science Act on July 28, allocating funding for a measure that's now nearly two years old. The new legislation, which now heads to President Joe Biden's desk for signing, will allocate $280 billion in subsidies, tax breaks, and research grants to prop up the domestic semiconductor industry.

"Today, the House passed a bill that will make cars cheaper, appliances cheaper, and computers cheaper," Biden said in a statement. "It will lower the costs of everyday goods. And, it will create high-paying manufacturing jobs across the country and strengthen U.S. leadership in the industries of the future at the same time.

"The CHIPS and Science Act is exactly what we need to be doing to grow our economy right now. By making more semiconductors in the United States, this bill will increase domestic manufacturing and lower costs for families."

Many proponents of the legislation were pleased to see its passage and believe that it will be a boon to U.S. manufacturing.

"Congress has recognized the importance of rising to the challenge of industrial planning, of supporting strategic industries, and making sure that we have high tech jobs here in America, but we can't stop here," Zach Mottl, chairman of Coalition for a Prosperous America, a nonprofit focusing on trade policy, told The Epoch Times.

"I think that America has been kind of laissez-faire, hands off for a little bit too long here. And we've lost a lot of opportunities."

To that end, Biden said the measure would improve jobs and national security by making the United States less dependent on foreign supply chains.

However, many legislators disagree with that statement because Democrats removed a provision of the legislation at the last minute that would have prevented U.S. companies from outsourcing subsequent technologies to China. Because of the removal of that provision, tech companies in the United States will be able to research new semiconductor technologies using billions of dollars in taxpayer funds, then outsource the production of those new technologies to China.

The move drew unusual alliances of opposition across Democrats, independents, and Republicans. Most notably among them were Rep. Thomas Massie (R-Ky.) and Sen. Bernie Sanders (I-Vt.), who criticized the measure as corporate welfare that would grow already-thriving tech companies and taxpayer expense.

"Senator Bernie Sanders said the senate CHIPS Act is 'a $53 billion bribe' that semiconductor companies demanded in exchange for staying in the United States," Massie wrote on Twitter. "He's right. Taking money from working Americans and giving it to profitable corporations is immoral and won't even work."
Rep. Marjorie Taylor Green wrote on Twitter, "Nancy Pelosi's CHIPS plan is nothing but more corporate welfare that thriving big companies don’t need. America Last policies forcing us to depend on foreign countries and shutting down our economy [are] why we don’t have chips."

Semiconductors, which are used in the production of everything from personal computers to hypersonic missiles, have become a key point of anxiety over the past two years as a global supply chain crisis has wreaked havoc on America's ability to obtain the chips.

The new CHIPS [Creating Helpful Incentives to Produce Semiconductors for America] and Science Act will provide hundreds of billions of dollars in subsidies and tax breaks to technology corporations in an effort to spur new market growth, as well as funding for government-backed tech research.

Proponents of the legislation have long said that it’s necessary in order to maintain a competitive edge with China, which is pouring money into its own domestic chip production.

The legislation is expected to be signed into law on July 29, just before Congress begins its annual August recess.

David Zhang contributed to this report. 
Andrew Thornebrooke is a national security correspondent for The Epoch Times covering China-related issues with a focus on defense, military affairs, and national security. He holds a master's in military history from Norwich University.