Semiconductor shortage hits auto manufacturers
Senate Majority Leader Chuck Schumer said he is directing the chamber’s top Republicans and Democrats to draw up legislation aimed at improving U.S. competitiveness with China in manufacturing and technology, including bolstering the supply of American-made semiconductors.
The outline Schumer set down Tuesday calls for emergency funding for programs included in a recent defense policy bill that authorized federal incentives to promote semiconductor manufacturing and research in the U.S. but provided no money for the grants and tax credits lawmakers say is necessary to attract investment. The issue that has taken on new urgency with a global chip shortage that has forced some U.S. carmakers forced to idle plants and threatens to spread to the electronics industry.
“Right now semiconductor manufacturing is a dangerous weak spot in our economy and in our national security,” Schumer said at a news conference at the Capitol. “That has to change. We cannot rely on foreign processors.”
The New York Democrat’s plan also listed possible sanctions or other steps to curb China on trade and intellectual property theft while also strengthening alliances akin to the U.S. and U.K.’s combined efforts on banning China’s electronic maker Huawei Technologies Co.
Schumer said he hopes to have the legislation on the Senate floor for a vote this spring. The tough-on-China approach to boosting U.S. supply chains and manufacturing is also one way that Senators could open the door to bipartisan talks on a robust infrastructure bill that President Joe Biden says will be his priority once another virus relief package clears Congress.
The president is expected to sign an executive order Wednesday calling for a supply chain review for critical goods, including semiconductors. The review is expected to take several months before recommendations are issued.
Democrats need at least 10 Senate Republicans to join them on an infrastructure bill if they want to avoid using the budget reconciliation process. Passing the bill with the fast-track procedure, which Democrats plan to do with the US$1.9 trillion stimulus bill moving through Congress, would mean that they would have to cut critical elements of the legislation because it doesn’t relate closely enough to the budget.
Democrats say they are hopeful they can get the GOP support. Senator Dick Durbin, the No. 2 Senate Democrat, said Monday he thinks there could be 60 votes -- the threshold needed to pass the chamber -- on a bill as large as US$3 trillion. However, to get those votes he says the Senate needs to move forward with a plan to restore lawmaker directed spending, known as earmarks, that were banned a decade ago.
“We can create much more bipartisan appropriation bills and infrastructure bills with earmarks,” Durbin told reporters. “Everybody talks about it but nobody does anything about it. I think Joe Biden -- a product-slash-creature of the Senate -- would understand that as well as anyone.”
Any bill would likely direct billions in spending to fund research and key technology areas. Schumer and Senator Todd Young, an Indiana Republican, have pushed legislation that would provide US$100 billion to the National Science Foundation and create regional technology centers funded by the Commerce Department to attract investment in their areas. Representatives Ro Khanna, a progressive Democrat from California, and Mike Gallagher, a Wisconsin Republican have pushed that idea in the House.