The House of Representatives on Friday voted largely along party lines to pass a bill aimed at bolstering microchip production, addressing supply chain issues and augment research capabilities in an effort to boost the United States' competitiveness with China.

What You Need To Know

  • The House passed a bill Friday aimed at bolstering microchip production, addressing supply chain issues and augment research capabilities in an effort to boost the United States' competitiveness with China

  • The bill passed largely along party lines, with one Republican voting to support it and one Democrat joining Republicans against it; the lone Democrat to vote "no," Florida Rep. Stephanie Murphy, expressed concerns about the bill's trade provisions

  • The Senate passed its own version of the bill, a major priority of Majority Leader Chuck Schumer, D-N.Y., in June of last year; now the two sides will meet in a conference to try and reconcile their differences

  • House Democrats and Republicans disagreed on whether or not the bill does enough to crack down on China

The $250 billion bill, known as the America COMPETES Act, includes $52 billion in federal subsidies to boost semiconductor manufacturing and $45 billion to address supply chain resilience.

“The American Competes Act will ensure that America’s preeminence in manufacturing, innovation and economic strength and can outcompete any nation,” House Speaker Nancy Pelosi D-Calif., said in advance of Friday's vote. “Hundreds of members of Congress have been involved in putting this legislation together, overwhelmingly bipartisan in its development, regardless of how the Republicans choose politically to vote today.”

The much-need supply chain funding would finance critical machinery to allow supply chains to continue running amid disruption of global trade routes, as well as the domestic production of essential goods.

The measure passed in a 222-210 vote, with just one Republican, Illinois Rep. Adam Kinzinger, joining Democrats to support the measure. Moderate Democrat Stephanie Murphy of Florida voted with Republicans against the bill. 

Murphy, who represents parts of Orlando, wrote in a statement that while she supports the goals and much of what's in the bill, she could not vote in favor of its passage because "the trade section of the bill includes problematic, poorly-vetted provisions and excludes sensible, bipartisan provisions that were part of the Senate-passed version of the bill."

"The House bill does more to limit trade than to enhance trade, even though expanded trade helps far more American workers than it hurts, reduces the prices that American consumers pay for goods and services, and is a powerful weapon in our strategic competition with China," Murphy continued. “In other words, the trade portion of the bill — in my view — runs counter to key objectives of the America COMPETES Act."

Republicans also expressed concerns about the trade portions of the bill. House Minority Whip Steve Scalise, R-La., blasted the measure as “a massive messaging bill that prioritizes Democrats’ radical socialist agenda and ignores the serious challenges our country is facing.”

Murphy went on to say that she hopes the issue is rectified when the House and Senate reconcile their versions of the bill. The Senate passed similar legislation in June of last year, known as the U.S. Innovation and Competition Act (USICA), in a widely bipartisan 68-32 vote.

The bill is a major priority of Senate Majority Leader Chuck Schumer, D-N.Y., who praised the House for passing their version of the bill in a statement Friday.

"Congress is now one step closer to delivering big, bold, bipartisan action to boost American jobs and American microchip manufacturing and strengthening supply chains so we can compete with countries across the globe, like China, lower costs for American families and invest in our future," the New York Democrat said.

"I look forward to a bicameral conference process that builds on the broad bipartisan support of the Senate-passed U.S. Innovation and Competition Act to supercharge microchip manufacturing here in America, to fix broken and strained supply chains, and invest in the innovation needed to ensure the critical products of today and tomorrow are made in America," he added. "We have no time to waste.”

House Ways and Means Committee Chairman Richard Neal, D-Mass., said that the measure is "a bill with teeth that cracks down on China's abuses of U.S. trade laws."

"The America COMPETES Act of 2022 is the boldest, best option we have to stand up to China's harmful actions and support American workers," Rep. Neal wrote in a statement.

But House Minority Leader Kevin McCarthy claims it doesn't do enough to "make China pay for the chaos they created," calling the bill "it is a façade to cover up the Democrats' reluctance to actually do anything to hold China accountable."

President Joe Biden praised the House for passing the bill in a statement, calling it "a critical vote today for stronger supply chains and lower prices, for more manufacturing – and good manufacturing jobs – right here in America, and for outcompeting China and the rest of the world in the 21st century."

"Business and labor alike have praised this legislation as vital for continuing the economic momentum we’ve seen over the last year, and national security leaders from both parties have said that the investments in this bill are needed if we want to maintain our competitive edge globally," Biden wrote. "This bill was built on numerous bipartisan elements and on shared bipartisan agreement on the need to act."

"If House Republicans are serious about lowering prices, making our economy stronger, and competing with China from a position of strength, then they should come to the table and support this legislation, which does just that," Biden added. "I look forward to the House and Senate quickly coming together to find a path forward and putting a bill on my desk as soon as possible for my signature. America can’t afford to wait."

One of the components the House bill does not contain, compared to its $2.5 billion Senate counterpart, is the nearly $200 billion devoted to bolstering research and development to compete with China. 

But the supply chain funding is seen as largely significant; it could be utilized to “relocate a manufacturing facility out of countries of concern, including countries that pose a significant economic or national security threat to the United States” or establish strategic stockpiles and reserves “to maintain the availability of critical goods during supply chain shocks," the House lawmakers wrote.

Commerce secretary Gina Raimondo echoed Schumer's sense of urgency of getting this bill to the president's desk in an interview earlier this week: "We have no time to wait. This is a historic investment in American manufacturing, American research and development in emerging technology and just cannot wait any longer."

House Majority Leader Steny Hoyer, D-Md., wrote in a statement that January's robust jobs report, which saw the U.S. add 467,000 jobs, "is proof that Democrats’ economic policies are working and getting our economy back on track," but Congress needs to "further legislation to position American businesses, workers, families, and children in the best possible position to compete in the global economy."

"That is why the America COMPETES Act and Build Back Better Act are both critical," Hoyer continued, noting that the bill passed Friday "will address major issues like strengthening our supply chains and helping more Americans learn in-demand job skills."

This is a developing story. Check back later for further updates.