House passes U.S. COMPETES Act to counter Chinese economic threat

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The House ohn Friday passed the America COMPETES Act, a Democrat-led bill that aims to help industries deemed necessary to compete with China in technology and manufacturing.

The bill is House Speaker Nancy Pelosi’s version of the Innovation and Competition Act, which passed the Senate with bipartisan support in June 2021. It is backed by President Joe Biden.

The bill also marks a shift in federal policy on economic competition with China, taking a more confrontational approach than in previous decades.

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The bill would provide $52 billion to boost production of semiconductor chips in the United States and another $45 billion to support supply chains.

In her push for the bill, Pelosi sought to outline how she will invest in manufacturing semiconductor chips, which she called in a floor speech this week “the cornerstone of modern technology”, used in defense systems, cars and cell phones.

Pelosi also argued that the bill would address some supply chain disruptions causing inflation to spike.

Republicans supported the bill would actually benefit China. A recent note of the Republican Study Committee dubbed the legislation the “America CONCEDES Act”. The memo claimed the bill “adds fuel to the flames of inflation” without “any design” to pay for it.

But the bill passed by a vote of 222-210. A Democrat, Rep. Stephanie Murphy, voted against, while a Republican, Rep. Adam Kinzinger, voted in favor. As the bill passed, Pelosi could be heard saying, “That’s great,” on the floor.

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The two chambers will have to reconcile the differences between their bills before one can reach Biden’s office.

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