Expanded ‘chips-plus’ package advances in Senate

Expanded bill expected to pass Senate with broad bipartisan support

Sen. Bill Hagerty, R-Tenn., has been pushing to beef up Supreme Court security funds. (Tom Williams/CQ Roll Call file photo)
Sen. Bill Hagerty, R-Tenn., has been pushing to beef up Supreme Court security funds. (Tom Williams/CQ Roll Call file photo)
Posted July 19, 2022 at 9:08pm, Updated July 20, 2022 at 10:42am

Corrected July 20 | The Senate is moving forward with an even broader “chips-plus” bill containing hundreds of pages of science-related provisions that Senate Majority Leader Charles E. Schumer agreed to add to a more narrow bill focused on semiconductor manufacturing grants and tax incentives.

Schumer based his decision on what he called a “test vote” held Tuesday evening to determine the level of Republican support for a broader bill containing the science provisions.

If there were enough GOP “yes” votes for the motion to proceed to the legislative vehicle for the package to show the Senate could comfortably override a filibuster, Schumer said he would add the science provisions. If not, he was going to stick to a more narrow bill focused on the semiconductor manufacturing incentives.

Ultimately 16 Republicans voted for the motion, which was adopted 64-34, paving the way for debate to begin on the broader package.

The text of the 1,055-page substitute amendment Schumer filed is more than 10 times as long as the alternative narrow version that would have been offered had not enough Republicans agreed to proceed to the bill.

Schumer is expected to file cloture on the substitute amendment, which would set up a vote to cut off debate on it later this week. But final passage could be pushed to next week if senators don't cooperate and yield back time; otherwise, Schumer will have to repeat the cloture process to cut off debate on the bill as eventually amended.

The science provisions include funding authorizations for the National Science Foundation, Energy Department Office of Science and more.

The broader language brings the chips-plus bill much closer to the expansive competition bills the Senate and House approved separately and went to conference on earlier this year. But some elements of those bills were still left out. For example, Senate Finance ranking member Michael D. Crapo said there were disagreements on trade provisions, so those would be left out for future negotiation in a separate legislative vehicle.

The main focus of all the various iterations of the bill is $54 billion in mandatory appropriations over five years that would fund grants for semiconductor manufacturing and research and 5G wireless deployment.

Lawmakers reached agreement over the past week to include tax incentives in the “chips-plus” bill that weren’t in the broader versions that went to conference. The substitute amendment includes a multiyear 25 percent investment tax credit for semiconductor plants estimated to cost $24 billion.

The substitute does not include a tax provision to restore full and immediate expensing of research and development costs that lawmakers had been pushing, despite Sen. Todd Young, R-Ind., floating it as a possibility earlier in the day.

The full and immediate expensing provision expired at the end of 2021, and companies now have to deduct domestic research and development costs over five years. Young had said earlier Tuesday that the negotiators were considering a one-year retroactive restoration, which would have renewed it just through 2022. But that didn’t make it in.

Regardless, lawmakers were likely to seek a longer restoration of the full R&D expensing, which is more lucrative for companies and has broad bipartisan backing, in a year-end package wrapping up a range of outstanding tax issues.
Court security

One surprise that did end up in the bill was $19.4 million in funding to provide for enhanced security protection for Supreme Court justices and clerks, as pushed by Sens. Bill Hagerty, R-Tenn., and Mark Warner, D-Va.

The legislative vehicle used for the chips package was originally Hagerty and Warner’s court security funding bill, which the Senate passed by unanimous consent last month. But the House later stripped the contents and sent it to the Senate as a “message” that created a prime legislative vehicle, since a message can skip some procedural steps.

Hagerty was among the 16 Republicans that supported the procedural motion and Schumer’s test vote. The others were: Young, Roy Blunt of Missouri, Bill Cassidy of Louisiana, Susan Collins of Maine, Shelley Moore Capito of West Virginia, John Cornyn of Texas, Steve Daines of Montana, Lindsey Graham of South Carolina, Rob Portman of Ohio, Mitt Romney of Utah, Mike Rounds of South Dakota, Ben Sasse of Nebraska, Thom Tillis of North Carolina, Lisa Murkowski of Alaska and Roger Wicker of Mississippi.

Bernie Sanders, I-Vt., was the lone Democratic caucus member to vote "no" on the motion. Sanders has consistently opposed the grant funding for chipmakers, arguing they are profitable companies and that the assistance is a form of corporate welfare.

Laura Weiss contributed to this report.

This report has been corrected to reflect that 16 Republicans voted to adopt the motion to proceed.