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US Senate Advances Bill to Boost Microchip Production

The U.S. Senate has passed a $280 billion initiative that would boost domestic production of microchips and provide support for a key industry that competes with overseas countries including China. VOA’s Congressional Correspondent Katherine Gypson reports.
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Key Senate Democrats Agree on $430B Tax, Drugs, Energy Bill 

U.S. Democratic Senator Joe Manchin said Wednesday that he had reached a deal with Senate Democratic leader Chuck Schumer on a bill to increase corporate taxes, reduce the national debt, invest in energy technologies and lower the cost of prescription drugs. 

Manchin has often been a roadblock to President Joe Biden’s policy goals, including those specifically addressed in the bill. He previously said he wanted to address high U.S. prescription drug costs, but he was concerned more government spending could increase inflation. 

The bill includes $430 billion in new spending on energy and health insurance investments, and it more than pays for itself by raising minimum taxes for big companies and enforcing existing tax laws, Schumer and Manchin said in a statement. 

The measure is substantially smaller than the multitrillion-dollar bill Democrats had envisioned last year. But it still represents a significant advance for Biden’s policy agenda ahead of midterm elections November 8 that could determine whether Democrats retain control of Congress. 

Schumer plans to pass the measure through a Senate maneuver called reconciliation that allows him to proceed with just a 51-vote majority, bypassing normal rules that require 60 of the 100 senators to agree to most legislation. That could allow him to pass the bill with only Democratic votes, if necessary, if every Democrat is on board. 

Manchin and Schumer in a statement said the bill would reduce the nation’s deficit by about $300 billion, lower carbon emissions by about 40% by the year 2030 and allow the government’s Medicare health plan to negotiate prescription drug prices. But they did not provide specifics. 

The new agreement will be paid for by raising the corporate minimum tax on big companies to 15%, ramping up Internal Revenue Service tax enforcement, lowering the price government agencies pay for prescription drugs and closing a loophole that lets some ultra-wealthy pay less tax, Schumer and Manchin said. 

“I have worked diligently to get input from all sides on the legislation my Democratic colleagues have proposed and listened to the views of my Republican friends to find a path forward that removes inflationary policies so that Congress can respond to Americans’ suffering from high prices,” Manchin said.  

Senator Kyrsten Sinema of Arizona, another Democrat who has at times blocked Biden’s agenda, declined immediate comment on news of the agreement.  

Crossing McConnell

News of the agreement came hours after the Senate passed sweeping legislation to subsidize the domestic semiconductor chip industry with several Republican votes. 

Last month, top Senate Republican Mitch McConnell promised to block the “chips bill” as it is known, unless Democrats abandoned their plans for a reconciliation bill like the one Manchin and Schumer outlined. The House will vote on the bill on Thursday, but Republicans don’t have the votes to block it on their own. 

Republicans were quick to criticize the move. “I can’t believe that Senator Manchin is agreeing to a massive tax increase in the name of climate change when our economy is in a recession,” Senator Lindsey Graham said. 

McConnell also criticized the bill, saying it would “kill many thousands of American jobs.” 

Schumer said the Senate will take the bill up next week.
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Senate Advances Key Legislation Addressing US Competition With China

The U.S. Senate passed the CHIPs bill by a vote of 64-33 Wednesday, advancing legislation that lawmakers on both sides of the aisle say will be key in addressing U.S. economic competition with China.

The $280 billion bill provides $52 billion in grants and incentives to domestic producers of semiconductors, a key element in a wide range of products that require microchips but that are often manufactured abroad.

“Today is a very good day for the American people into the future of our country. I believe firmly that when signed into law, this bill will reawaken the spirit of discovery and innovation that made America the envy of the world,” Senate Majority Leader Chuck Schumer said Wednesday ahead of the final vote.

The bill will also provide $200 billion in funding for scientific research over the next 10 years.

“No longer will America always ever be dependent on something offshore that was created here, made in America, invented here. And we will again have the jobs here,” House Speaker Nancy Pelosi said last week while meeting with United Auto Workers in the midwestern manufacturing state of Michigan.

The CHIPs bill is a bipartisan compromise after lawmakers spent nearly a year and a half trying to reach an agreement on much more ambitious legislation addressing U.S. competition with China. Senator Mark Warner, chairman of the Senate Intelligence Committee, said Wednesday’s vote was a good start to address strategic competition overseas.

“This funding sends a message that the U.S. is putting a strong down payment on maintaining our edge in the global technology race — and preventing global supply chains from being weaponized against us or our allies. Over the past few years, China has continued to increase investments in its domestic industries — and particularly in areas that confer long-term strategic influence,” Warner said on the Senate floor Tuesday.

With many Americans concerned about a weak economy and rising inflation, some conservatives criticized the cost of the bill that is projected to add $79 billion to America’s national debt over the next decade. Senator Bernie Sanders, who usually votes with Democrats, said this funding benefits wealthy corporations.

“The crisis is caused by the industry shutting down in America and moving abroad. And today what we are doing is say we are going to give you a blank check to undo the damage that you did,” Sanders, an independent, said on the Senate floor Tuesday.

In a written statement Wednesday, Republican Senator Marco Rubio said the version of legislation that passed removed important safeguards on the funding.

“We need to support American production of semiconductors, but we need to do it in a way that benefits our country and our workers. Corporate interests stripped meaningful safeguards from this package and blocked consideration of others,” Rubio said. “No one should be surprised when we hear stories of Beijing stealing U.S. technology funded by this bill or companies producing more chips in China even as they receive money from the taxpayers.”

But ultimately 17 Republicans voted for the funding, citing concerns about U.S. strategic competition with China.   

“This is about national security, and about making sure we have adequate supply here at home of things that are absolutely indispensable. I wish that were inexpensive, but in this particular situation, it’s not,” Senate Minority Leader Mitch McConnell told reporters Tuesday.

President Joe Biden is expected to sign the bill into law in the next week, after the House votes on the legislation before leaving for their six-week summer recess.
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US Justice Department Probing Trump’s Efforts to Overturn Election, Says Washington Post

The U.S. Justice Department is investigating Donald Trump’s actions in its criminal probe of the former president’s attempts to overturn his 2020 election defeat, The Washington Post reported on Tuesday, citing sources. 

The Justice Department has been interviewing former White House officials, including the former chief of staff to former Vice President Mike Pence, who confirmed on Monday he had testified to a federal grand jury investigating the Jan. 6, 2021, attack on the U.S. Capitol and efforts by Trump and his allies to overturn his defeat. 

Prosecutors questioning witnesses before the grand jury have asked about conversations with Trump and his lawyers and others close to him, the Post reported, citing two people familiar with the matter. 

The testimony of Pence’s former Pence chief of staff, Marc Short, the most high-profile official known to have appeared before the grand jury, is a sign the Justice Department’s investigation of the attack on the Capitol and the fake elector plot is heating up. 

Justice Department investigators in April also received phone records of important officials such as Trump’s former chief of staff Mark Meadows, The Washington Post said. 

The Justice Department could not be immediately reached for comment. 

A spokeswoman for Trump did not reply to a request for comment from Reuters. Trump has denied wrongdoing. 

In an interview with CNN earlier this year, Deputy Attorney General Lisa Monaco confirmed the Justice Department had received referrals about slates of alternative fake electors that were sent to the National Archives, and said prosecutors were reviewing them. 

The fake elector plot has featured prominently in multiple hearings of the Democratic-led U.S. House of Representatives committee probing the attack on the Capitol.
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In Defiant Return Speech, Trump Digs in on Claim of Election Fraud

Former U.S. President Donald Trump on Tuesday repeated his false claim that he won the 2020 election during a wide-ranging policy speech that marked his defiant return to Washington – and hinted at his possible return to politics.

“I always say I ran the first time and I won,” he said, speaking to about 600 well-heeled supporters in a hotel ballroom just a mile from The White House. “Then I ran a second time, and I did much better. We got millions and millions more votes. And you know what? That’s going to be a story for a long time. What a disgrace it was. But we may just have to do it again. We have to straighten out our game. I have to straighten out our country.”

This came more than halfway through a 90-minute speech that was the capstone of the two-day inaugural gathering of Trump’s America First Policy Institute. In attendance were several Trump administration figures and Republican lawmakers who raised objections to the official certification of electoral votes on January 6, 2021. That event certified the victory of President Joe Biden.

VOA asked former House speaker Newt Gingrich what he thought of Trump’s election victory claim, which is at the center of a series of congressional hearings looking at the violent insurrection attempt Trump supporters made at the U.S. Capitol that day.

“It’s amazing that you could take a two-hour speech and figure out the 90 seconds you care about,” Gingrich responded as his security guards ushered him into a waiting car.

The day before, VOA asked White House Press Secretary Karine Jean-Pierre whether the Biden administration would be watching Trump’s speech.

“It’s not something that I’m tracking or we’re tracking here,” she said. “I don’t know what he’s coming to talk about. I guess we’ll see when he gets here tomorrow.”

Michael O’Hanlon, director of research in foreign policy at the Brookings Institution, told VOA that Trump’s decision to sow doubt about the election outcome is significant.

“Most of his policy interventions and ideas I’m prepared to live with, because at least he was playing within the rules,” he said. “At least this is what a constitutional democracy with checks and balances and democratic process is supposed to allow for and vet. However, when you stop respecting the outcome of elections, just because it hurts you personally, that is a whole different kettle of fish.”

He continued, “I think it really gets into illegal territory pretty quickly. And so it’ll be fascinating to see if he’s indicted. It’ll certainly be fascinating to see what he says in coming weeks and months.

“But I’m afraid that this is dangerous for our country, this kind of attitude by President Trump and his going against Democrats and Republicans, around the country, around the states within the Congress, within the system of checks and balances, just to serve his own personal, narcissistic political interest.”

The events of January 6, 2021, have been dramatically replayed in meticulous detail in the past month during a series of slickly produced congressional hearings. Those featured an outtake from Trump’s recorded message to the nation a day after the insurrection, in which he finally promised an orderly transition. The day after the January 6 attack, Trump still couldn’t say the election was over.

“I don’t want to say the election’s over,” he said during the outtake. “I just want to say Congress has certified the results without saying the election’s over.”

On Tuesday, he said that part out loud and called the two attempts to remove him from office “impeachment hoax number one, impeachment hoax number two.”

Trump also sketched out what he described as a “law and order” agenda that would take a harder line on immigrants and drug offenders and give law enforcement enhanced power. He also expressed admiration for China’s strict drug laws and its use of the death penalty in drug cases.

“There is no higher priority than cleaning up our streets, controlling our borders, stopping the drugs from pouring in, and quickly restoring law and order in America,” he said, adding: “There’s never been a time like this. Our streets are riddled with needles, and soaked with the blood of innocent victims. Many of our once-great cities from New York to Chicago to L.A., where the middle class used to flock to live the American dream, are now war zones, literal war zones.”

Outside, several dozen protesters gathered to oppose Trump’s appearance. “No Trump, no KKK, no fascist USA,” they chanted, across the street from several dozen supporters who waved large American flags and blew vuvuzelas.

Local police officers stood nearby and watched.
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In Defiant Return Speech, Trump Digs in on Claim of Election Fraud

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China Raises Stakes Over Pelosi Trip to Taiwan

U.S. House Speaker Nancy Pelosi’s potential plan to visit Taiwan during her trip to Asia in August has prompted a belligerent response from China, with the spokesman for the Foreign Ministry warning that Beijing would “act strongly to resolutely respond” and “take countermeasures” if Pelosi traveled to the island.

In a news conference on Monday, Foreign Ministry spokesperson Zhao Lijian confirmed a report in the Financial Times over the weekend that said China’s warnings were “significantly stronger” over the House speaker’s potential visit than during the previous times it had been unhappy with U.S. policy toward Taiwan.

“The Chinese side has repeatedly made clear to the U.S. side our serious concern over Speaker Pelosi’s potential visit to Taiwan and our firm opposition to the visit,” he said. “We are fully prepared for any eventuality. If the U.S. side insists on making the visit, the Chinese side will take firm and strong measures to safeguard our sovereignty and territorial integrity. The U.S. must assume full responsibility for any serious consequence arising thereof.”

In statements to different news outlets on Monday, Joanne Ou, the spokesperson for Taiwan’s Foreign Ministry, said that while Taiwan always welcomes visits from U.S. lawmakers, the government had not yet received any “definite information” about a visit from Pelosi.

Tense relationship

Taiwan has long been a point of tension in the U.S.-China relationship. China claims the island democracy as part of its territory. While the U.S. nominally has a “one China” policy that recognizes both Taiwan and China as part of the same country, it maintains “strategic ambiguity” in its relations with them.

The U.S. has official diplomatic relations with mainland China only; however, it maintains unofficial relations with the government in Taipei, to which it supplies military aid and weapons.

Since taking office, President Joe Biden has on several occasions suggested that the U.S. would defend Taiwan militarily if China attempted to retake the island by force, appearing to deviate from the U.S. tradition not stating definitively how it would respond to Chinese aggression against Taiwan.

On China’s part, its incursions into the Taiwan’s airspace and waters have become significantly more aggressive in recent years, raising concerns about Beijing’s intentions.

History of contention

While Pelosi’s national and international profile is tied to her leadership of the broader Democratic Party in the House of Representatives, the district in San Francisco that has sent her to Congress every two years since 1986 is nearly one-third Asian American.

Pelosi has been a critic of China’s social policies for many years. When asked about her upcoming Asia trip last week, she said, “It’s important for us to show support for Taiwan. None of us has ever said we’re for independence when it comes to Taiwan. That’s up to Taiwan to decide.”

China’s Foreign Ministry has criticized Pelosi for her complaints about the country’s treatment of minority groups such as the Muslim Uyghurs of the Xinjiang region, accusing her of “smearing” Beijing.

Timing sensitive

Pelosi’s trip to Asia comes at a politically sensitive time for the Beijing regime. Chinese Communist Party senior leaders are about to gather for their annual summer retreat, which comes just months before the National Party Congress. At that meeting, which happens once every five years, President Xi Jinping is expected to seek an unprecedented third term in office.

David Sacks, a research fellow at the Council on Foreign Relations, told VOA in an email exchange that the timing of Pelosi’s visit likely has much to do with the vehemence of China’s reaction.

“Xi likely fears that Pelosi’s high-profile visit to Taiwan could cause him to look weak in the eyes of other Party members and appear as someone who does not have a firm handle on one of the most important issues for the Chinese leadership,” Sacks said.

He added, “Facing significant economic headwinds and pushback to his zero-COVID policies and tough lockdowns at home, Xi will at the very least try to avoid another blow on Taiwan and could even find a crisis useful as a way to distract the public or rally public opinion.”

Options unclear

Having raised expectations that its response would be more powerful than any in the past, the Chinese government has raised concerns about exactly what it will do if Pelosi visits Taiwan.

In China, political commentator Hu Xijin, the former editor in chief of the state-run Global Times, suggested that Chinese People’s Liberation Army (PLA) jets might intercept Pelosi’s plane and “escort” it to Taiwan.

This would escalate tensions because while Chinese planes regularly enter Taiwan’s air defense identification zone, they have not violated its territorial airspace.

Other experts doubt that Xi would be willing to risk open conflict.

“I don’t think that Xi Jinping will let PLA fighter jets fly with her if Pelosi really goes (to Taiwan),” Arthur Ding, a professor emeritus of National Chengchi University in Taiwan, told VOA.

More likely, he said, are major economic moves, such as a repudiation of the Phase 1 agreement, reached during the Trump administration, to move toward a relaxation of the tariffs that the U.S. and China have imposed on each other’s exports.

“I think China may (respond) in this regard, instead of suddenly raising this tension through the PLA fighter jets accompanying Pelosi’s aircraft, because that is tantamount to direct provocation by China to the United States,” Ding said.

Biden cautious

Although the Biden administration has no authority to tell Pelosi not to go to Taiwan, the administration has apparently been trying to dissuade her from the journey. Last week, Biden told reporters, “I think that the military thinks it’s not a good idea right now.”

“I think what the president was saying is that maybe the military was afraid of my plane getting shot down or something like that,” Pelosi said Thursday.

National Security Council spokesperson John Kirby said that the NSC had briefed Pelosi on the security situation. However, members of the administration have made it clear that the choice is Pelosi’s to make, not the president’s.

Pelosi urged to go

Numerous current and former U.S. government officials have urged Pelosi to make the trip to Taiwan over Beijing’s objections.

Former Defense Secretary Mark Esper, during an appearance in Taipei last week, said, “I don’t think we should allow China to dictate the travel schedules of American officials.” He also urged the U.S. to reconsider its “One China” policy, saying that the stance had outlived its usefulness.

Former Secretary of State Mike Pompeo on Sunday tweeted an offer to accompany her, writing, “Nancy, I’ll go with you. I’m banned in China, but not freedom-loving Taiwan. See you there!”

Crisis may be inevitable

The discussion of China possibly using military aircraft to intimidate Pelosi speaks to the level of stress in the relationship among China, the U.S. and Taiwan.

There have been three major “Taiwan Strait Crises,” named for the body of water separating the island from the mainland. The first two, in the 1950s, involved armed conflict centered around small islands claimed by Taiwan but located close to the Chinese mainland. The third, in 1995 and 1996, involved China’s firing missiles into waters surrounding Taiwan.

Sacks, of the Council on Foreign Relations, said current tensions over the status of Taiwan seem to be moving toward a breaking point.

“If China were to try to prevent Pelosi’s plane from landing, we would be in a full-blown Taiwan Strait crisis, which would be far more dangerous than previous crises given the political contexts in Washington and Beijing,” he said.

However, he added, “Even if we are able to navigate this trip and it does not cause a crisis, I believe a Taiwan Strait crisis is on the horizon.”
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Biden Presses Computer Chips Case in Advance of Senate Vote

Calling semiconductors “the building blocks for the modern economy,” President Joe Biden on Monday asked Congress to move quickly and send him a bipartisan bill designed to boost the computer chips industry and high-tech research in the United States. 

The Senate was originally expected to take a critical vote in the evening to advance the legislation, but Senate Majority Leader Chuck Schumer, D-N.Y., announced that storms on the East Coast had disrupted travel plans for several senators and that he would be delaying the vote until Tuesday morning. The bill needs support from at least 60 senators to clear procedural hurdles and place it on a path to final passage later this week, giving Biden a signature win on legislation his administration says is necessary to protect national security and help the U.S. better compete with China. 

The bill provides about $52 billion in grants and other incentives for the semiconductor industry as well as a 25% tax credit for those companies that build chip plants in the U.S. Supporters say those incentives are necessary to compete with other nations that are also spending billions of dollars to lure manufacturers. 

The pandemic has underscored how much the United States relies on semiconductor manufacturers abroad to provide the chips used in automobiles, computers, appliances and weapons systems. The Biden administration has been warning lawmakers they need to act before leaving for their August recess to ensure the companies invest in U.S. fabs instead of building the plants elsewhere. 

Biden, who is still recovering from COVID-19, held a virtual roundtable with members of his administration and industry leaders about the merits of the bill. He said that a shortage of semiconductors was the primary driver of rising automobile costs, which are a core component of the inflation gripping the country. 

Biden said the U.S. relies on Taiwan for the production of the most advanced chips and that China was also starting to move ahead of the U.S. on the manufacturing of such chips. 

“America invented the semiconductor. It’s time to bring it home,” Biden said. 

Commerce Secretary Gina Raimondo told him that chip manufacturers are finalizing investment plans and that money provided through the bill will be instrumental in their decisions. 

“We know they will expand, because they have to in order to meet demand. There’s no question about that,” Raimondo told Biden. “The question is, where will they expand? And we want them, we need them to expand here in the United States.” 

The leaders of Medtronic, a medical device maker, as well as Cummins Inc. and defense contractor Lockheed Martin, pitched the president on the need for the bill as well. 

“Like others at the table, we are facing a supply chain crisis. We are unable to get the components we need, and semiconductors is always at the top of the list,” said Tom Linebarger, chairman and CEO of Cummins Inc., which makes diesel engines. 

Linebarger said the company is now paying brokers as much as 10 times the regular cost to get the computer chips it needs. The federal government’s investments through the bill would move manufactures from “wringing our hands about where we sit in competition with others to actually moving onto the field and helping U.S. manufacturers compete,” he said. 

Overall, the bill would increase U.S. deficits by about $79 billion over the next 10 years, according to the Congressional Budget Office. The bill also authorizes about $200 billion to advance high-tech research in the U.S. over the coming decade. Congress must approve that funding as part of future spending bills, and the CBO did not include that research money in its deficit projection. 

Critics have likened the spending to “corporate welfare” and have said the money would be better spent on other priorities or not at all. Sen. Bernie Sanders, I-Vt., said he doesn’t hear from people about the need to help the semiconductor industry. Voters talk to him about climate change, gun safety, preserving a woman’s right to an abortion and boosting Social Security benefits, to name just a few. 

“Not too many people that I can recall — I have been all over this country — say: ‘Bernie, you go back there and you get the job done, and you give enormously profitable corporations, which pay outrageous compensation packages to their CEOs, billions and billions of dollars in corporate welfare,'” Sanders said. 

Once the Senate has acted, the bill will be taken up in the House. The window for passing the bill is narrow if some progressives join with Sanders and if most Republicans line up in opposition based on fiscal concerns. But House Speaker Nancy Pelosi, D-Calif., has said she’s confident that it will have enough support to pass before lawmakers leave Washington for the August recess. 

 
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