House Passes Its Version of U.S.-China Competitiveness Bills

(Bloomberg) -- The House passed two bills Monday that are expected to form the core of legislation in the chamber designed to boost U.S. research and development in response to China’s challenge to U.S. economic supremacy.

By wide bipartisan margins, the House authorized more funding for the National Science Foundation and additional money for the Department of Energy, following a similar effort in the Senate that saw the passage of a comprehensive $250 billion measure that included more than $52 billion in incentives and grants for domestic semiconductor manufacturing.

“The United States has long been a beacon of excellence in science and engineering,” House Science Committee Chair Eddie Bernice Johnson said. “While we should be cognizant of our increasing global competition, we must not be constrained by it. To continue to lead, we must chart our own course.”

The latest action on Capitol Hill drew a sharp response from Beijing.

“How the U.S. develops itself is its own domestic affair. However, we firmly oppose efforts to target and use China as a pretense,” China’s Foreign Ministry said in a written response to the newly passed bills. “China’s development is for the Chinese people to live a happier and better life, not to compete with the U.S. to determine a winner or a loser.”

While the Senate pulled separate pieces of legislation into a single bill intended to bolster U.S. competitiveness with China, the House is taking a more piecemeal approach. Some lawmakers and industry groups are pressing for the House to include the incentives for chipmakers in whatever package eventually emerges.

“As the legislation advances, we urge Congress to include $52 billion to fund the critical semiconductor research, design, and manufacturing initiatives” included in previous congressional legislation that was never funded, the Semiconductor Industry Association said in a statement.

The House Science Committee sent both bills to the full House earlier this month. They would authorize $128 billion over five years in combined funding for the National Science Foundation and Energy Department, with $14 billion set aside to help stand up a new agency dedicated to developing technologies to help the U.S. stay ahead of its international rivals -- principally China.

The National Science Foundation measure passed 345-67 and the Energy Department authorization passed 351-68.

Negotiations Loom

The approach the House is taking is differs from Senate’s bill, known as the U.S. Innovation and Competition Act, with a focus more on the core functions of two agencies and a more modest allocation of funds for a new technology directorate that will funnel research money. That means the House and Senate will have to negotiate differences before a final version emerges and gets a vote in both chambers.

“We shouldn’t act rashly,” Johnson said during committee debate. “Instead of trying to cover the efforts of our emerging competitors, we should be doubling down on the proven innovation engines we have at the National Science Foundation and the Department of Energy.”

The House Foreign Affairs Committee is expected to take up another bill in the coming days that parallels another part of the Senate legislation.

Representative Frank Lucas, the top Republican on the Science Committee, said in an interview that he expected the final version of the legislation could be agreed upon by a House-Senate conference committee by September or October.

“The two sides are working really well together,” Lucas said. “I’m really kind of optimistic right now.”

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