How the ‘chips-plus’ bill grew by nearly 1,000 pages

Senators insisted on science provisions in addition to semiconductor incentives

Sen. Maria Cantwell, D-Wash., went to work behind the scenes after the expansive bill got stripped down. (Tom Williams/CQ Roll Call file photo)
Sen. Maria Cantwell, D-Wash., went to work behind the scenes after the expansive bill got stripped down. (Tom Williams/CQ Roll Call file photo)
Posted July 26, 2022 at 11:47am

Senate Commerce Chair Maria Cantwell expected to finalize a bipartisan, bicameral conference committee agreement on rival competition bills this month. But when “leadership politics” got in the way, the Washington Democrat and other lead negotiators pushed to salvage as much of their work as possible.

Ultimately the lawmakers were successful in convincing Senate leaders to add nearly 1,000 pages of science and research and development provisions that the conference committee had largely finalized to a more narrow “chips-plus” bill focused on semiconductor manufacturing incentives. Lawmakers are rushing to pass the measure before their summer recess.

“We thought it was really important before we went home for the August recess to say that we were going to make this investment in science and R&D to make the U.S. more competitive in key areas of national security, not just in semiconductor manufacturing, but in [artificial intelligence] and quantum and other key manufacturing sectors,” Cantwell said in an interview.

Multiple factors, as described by lawmakers and aides involved in the process, were key to securing the science-related additions:

The conference committee had already agreed on most of those provisions before a threat from Senate Minority Leader Mitch McConnell halted the formal negotiations.

Cantwell and others continued one-on-one conversations after McConnell’s threat.

A classified briefing showed lawmakers the U.S. was in danger of falling behind its foreign competitors on more than just semiconductor manufacturing.

A handful of senators said they wouldn’t support a chips incentive bill unless it also included the science provisions.

“The new language includes many research funding, security, and STEM education provisions that are essential if the U.S. hopes to outcompete China and protect our intellectual property,” Commerce ranking member Roger Wicker, R-Miss., said in a statement. Wicker was among those senators who opposed advancing the semiconductor manufacturer incentives without the science and R&D provisions.

The competition package originated with a bill Senate Majority Leader Charles E. Schumer, D-N.Y., and Sen. Todd Young, R-Ind., introduced early last year, which they called the “Endless Frontier Act.” The measure would have authorized $100 billion over five years for the creation of a new technology and innovation directorate at the National Science Foundation.

Increasing NSF’s funding authorization so the agency could help spur more research and development around the country remained a key focus of the broader competition bills the Senate and House later passed and took to conference.

'Leadership politics'

The bicameral conference committee held an initial public meeting in May and made significant progress in closed-door negotiations until McConnell announced that Republicans wouldn’t sign off on a conference agreement while Democrats pursued a partisan budget reconciliation package.

Without McConnell instructing Republicans to stop negotiating, the conference committee likely would have concluded its negotiations and had a conference report ready to sign this month, Cantwell said.

“The leadership politics just got in our way, and we just had to figure out a way around all that,” she said. “And so we did.”

One key step toward working around McConnell’s directive was Schumer and Cantwell hosting a classified briefing July 13 for all senators on the national security imperative of passing a competition package before the August recess.

Cantwell had organized at least three previous classified briefings for members of the conference committee but she wanted to hold one for all senators to make a broader case for the legislation. The House held a similar all-members classified briefing on the legislation that week.

“Afterwards, I just remember members talking on the floor about it and saying, ‘Well, if we can fall behind in one area, why can’t we fall behind in others?’ And so let’s get going,” Cantwell said.

Meanwhile, Commerce Committee Democratic aides were working on finalizing the legislative text of the science provisions, taking what lawmakers largely agreed upon in conference and making some educated guesses about what all sides would support as they filled in the rest.

They walked key Republican staff through the text they came up with on July 17 and started sharing it more broadly the next two days as key senators in both parties worked to ensure there would be enough votes to add the science provisions.

“I kept saying out of the 1,000 pages, probably 995 of them were what we had passed out of the Senate,” Cantwell said.

Policy details

The science provisions added to the chips bill in those roughly 1,000 pages include a five-year $102 billion authorization for the NSF, Commerce Department and National Institutes of Standards and Technology to increase investments in research and development. If appropriators provide those authorized funds in the annual spending bills, it would represent a $52 billion increase over baseline funding.

The bulk of the five-year funding authorization, $81 billion, is for the NSF, including $20 billion for a technology, innovation and partnerships directorate like one envisioned in the original Schumer and Young bill.

The measure retains Senate language to ensure a technology research focus in certain key areas, including artificial intelligence, quantum information science, robotics, disaster prevention and mitigation, biotechnology and cybersecurity.

But the House wanted to ensure the bill would do more than just incentivize applied research, and successfully fought for language and authorizing funds to bolster NSF’s core mission: to conduct early-stage research on emerging science and technologies that don’t yet have a clear applied purpose in the private market.

One provision Senate aides pushed to include would set aside 20 percent of the authorized NSF funds for Established Program to Stimulate Competitive Research jurisdictions, which are 25 states and three territories that typically lack the population and financial resources to compete with bigger states for research dollars. That provision was especially important to Wicker, one of the few lead negotiators who represents a rural state.

House Democrats, meanwhile, secured the inclusion of $1 billion in authorizing funds for the Commerce Department to launch a pilot program that would provide grants to help persistently distressed communities fund economic development activities. That’s much lower than what House Democrats initially sought. Many Republicans oppose the program, but that’s unlikely to prevent most proponents of the broader bill from voting for it, aides in both parties said.

Ultimately, the Democratic and Republican leadership of the Senate and House science panels, or the four corners, found things to like in the bill.

But a House Republican aide said it’s not totally accurate to call it a “four-corners agreement” since Democrats finalized the science section on their own after the conference negotiations stopped and moved ahead without House GOP sign off. Commerce Democratic aides said they sent the text to House Republicans on July 18 and asked for their input but never received any.

House Science Chairwoman Eddie Bernice Johnson, D-Texas, said in a statement that the package includes many provisions her panel originated and is “absolutely key to accomplishing our goals of revitalizing the American science and innovation enterprise.”

Whipping votes

With the science text largely finalized heading into the week of July 18, proponents focused on whipping the votes to ensure it would be added to the base chips bill.

A July 17 tweet from Sen. John Cornyn, R-Texas, noting the latest downsizing of Democrats’ reconciliation package to exclude the climate and tax provisions Republicans were primarily concerned about would “green light” action on the chips package helped loosen up Republican support.

Young and Sen. Kyrsten Sinema, D-Ariz., held a meeting of like-minded senators the evening of July 18 to discuss what they could do to ensure the science section was added. Some Democrats were nervous about jeopardizing the chips funding with additions, but by then McConnell had given his members the room to decide for themselves what the “plus” part of a chips-plus bill would look like, aides said.

Cantwell said the July 18 “whip operation” meeting and other discussions with senators who supported the broader bill made clear that adding the science provisions would help the vote count more than it would hurt it. At least five senators had said they wouldn’t support the chips bill without the science section, she said.

The next morning, the 19 Republicans who supported the broader competition bill gathered to go over the science text. Although some did not recommit their support in that meeting, later that day after senators had time to review the text it was clear there would be at least 15 Republicans willing to vote for a procedural motion to get on the bill.

Schumer said that July 19 procedural motion would serve as “test vote” for whether to add the science section, which he personally wanted to include. With 64 senators who voted “yes,” Schumer filed a substitute amendment to broaden the bill.

Final Senate passage is expected by Wednesday, even as Schumer had to postpone a scheduled Monday evening vote to cut off debate on the measure to Tuesday because of COVID-19 absences and weather-related travel delays.