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Senate Democrats announce sweeping effort to outcompete China

Some provisions, including those on climate change, likely to meet resistance from Republicans

Senate Majority Leader Charles E. Schumer, D-N.Y., conducts a news conference with Democratic committee chairs on the legislative package to combat the Chinese government and bolster U.S. competitiveness in the Capitol on Wednesday.
Senate Majority Leader Charles E. Schumer, D-N.Y., conducts a news conference with Democratic committee chairs on the legislative package to combat the Chinese government and bolster U.S. competitiveness in the Capitol on Wednesday. (Tom Williams/CQ Roll Call)

Senate Democrats are mobilizing virtually all of their committees to come up with a massive legislative package designed to combat the Chinese government and bolster U.S. competitiveness against the global powerhouse.

The measure, which committee leaders have begun discussing with their ranking members in hopes of finding bipartisan consensus, would expand on the “chips and science” law Congress enacted last year. That package was largely focused on spurring domestic semiconductor manufacturing, scientific research and technology innovation.

The policy areas Democrats hope to cover in the new package are vast, but Senate Majority Leader Charles E. Schumer, D-N.Y., boiled it down to five key topics:

  • Limiting the flow of advanced technology to the Chinese government through export control laws and sanctions.
  • Curbing U.S. investment in China, including by giving the Commerce and Treasury secretaries authority to screen and halt capital flowing to Chinese government-backed high-tech industries.
  • Investing in domestic industries, including small businesses, that can reduce reliance on China.
  • Aligning U.S. allies and economic partners against the Chinese government, like providing a U.S.-led alternative to China’s Belt and Road Initiative that aims to expand its reach through funding infrastructure projects around the globe.
  • Deterring China from conflict with Taiwan and ensuring U.S. military allies are aligned in security goals.  

Democratic committee chairs, who spoke alongside Schumer at a press conference, are planning to hold hearings and mark up legislation. The bills will be combined “into one large Chinese government competition bill in coming months,” Schumer said. 

“We hope to get a bill within the next several months if we can do it,” he said. “It’s a big undertaking. But that’s what we hope to do.” 

Schumer said he’s talked to Sens. Todd Young, R-Ind., and John Cornyn, R-Texas, key partners on the chips and science law, and committee chairs have talked to their ranking members and other Republicans.

“The initial reaction has been excellent,” he said. 

Young said the initial conversations give him hope that senators can put together another bipartisan package, starting with provisions from a broader Senate-passed China competition package that were left on the cutting room floor last Congress in the final chips and science law.

“There’s some other things that are already ready to be bundled into some larger vehicle, like legislation Senator [Chris] Coons and I are working on to counter China’s economically coercive behavior,” he said.

Some of the legislative goals Democrats outlined, like deterring Chinese aggression toward Taiwan and limiting technology and investments flowing to China, have bipartisan support. 

But others could face more resistance. For example, Schumer and Senate Environment and Public Works Chairman Thomas R. Carper, D-Del., said one of the legislative goals is to position the U.S. as a global leader in the fight against climate change. 

“China has been a net polluter, and they’re still building coal plants,” Schumer said. “And this is one of the things we’re going to look at — not only making sure that the United States moves in a strong direction in terms of green power, but also making sure that other countries who are not moving in that direction can’t just move forward on their own.”

Republicans generally do not share the same climate and energy goals as Democrats so it may be hard to find compromise in that area.

However, Carper cited a bill he and EPW ranking member Shelley Moore Capito, R-W.Va., introduced last month that would strengthen nuclear energy infrastructure supply chains and bolster exports of U.S. nuclear technology as an example of the bipartisan measures that could be included in the package. 

Carper also spoke about wanting to strengthen domestic recycling systems to reduce dependence on foreign materials.

Senate Finance Chair Ron Wyden, D-Ore., said he and ranking member Michael D. Crapo, R-Idaho, plan to focus first on resurrecting key provisions from the trade title of the initial Senate-passed chips package before they were dropped in the bicameral version that became law. 

“We feel very strongly about toughening trade enforcement to protect American businesses and American jobs,” Wyden said.

Senate Agriculture Chairwoman Debbie Stabenow, D-Mich., said her panel will focus on legislation to stop China from buying U.S. agricultural land and limit their role in the global food supply. 

She cited a bill she and Sen. Charles E. Grassley, R-Iowa, have introduced in previous years to make the Agriculture Department and Food and Drug Administration permanent members of the Committee on Foreign Investment in the United States as an example of legislation her panel may contribute. 

Defense component

Democrats are likely to find the most support for the aspects of their plans to combat China that involve defense strategy. Senate Armed Services Chairman Jack Reed, D-R.I., said he wants to create a “force structure” with U.S. allies “to conduct operations and communication on an uninterrupted basis.”

While defense is a “necessary” component of the China competitiveness package, Schumer said it’s “not sufficient” on its own.

“We also have to deal with the economic issue because we’re in a large, very important, very crucial competition with the Chinese government,” he said. “Both are important.” 

Solving some of the economic challenges could prove difficult if Democrats propose significantly increasing spending, which Republicans may balk at, particularly if the package doesn’t include offsets.

Senate Appropriations Chair Patty Murray, D-Wash., said she will be looking at what kinds of investments will be needed to support the other committees’ plans. She also noted that she’s already begun conversations with fellow appropriators about increasing spending on research and development and strategic partnerships abroad. 

At a time when many Republicans, particularly on the House side, are looking to cut nondefense spending, Murray noted that competing with China will require more than just investing in defense. 

“Investing in child care is investing in the workforce that will build semiconductors here in America,” she said. “Investing in clean energy is investing in American jobs.” 

Sen. Jeanne Shaheen, chair of the Commerce-Justice-Science Appropriations Subcommittee, spoke about the need to build on robust appropriations for the National Science Foundation and other investments authorized in the chips and science law. 

Senate Homeland Security Appropriations Subcommittee Chairman Christopher S. Murphy, D-Conn., mentioned his plan to spend on efforts to combat trafficking of fentanyl, which he called “the most dangerous import from China into the United States” through Mexico. 

Some of those spending proposals could draw bipartisan support but one that Republicans will most certainly resist is Senate Foreign Relations Chairman Bob Menendez’s plan to fully fund the State Department and boost spending on U.S. diplomatic and development efforts. 

The State-Foreign Operations budget is a frequent GOP target for spending cuts. Menendez, D-N.J., argued such cuts would be detrimental as China continues to expand its diplomatic footprint.

“They have more diplomatic posts around the world than any other country, including the United States,” he said. 

Senate Small Business Chair Benjamin L. Cardin, D-Md., said he spoke with ranking member Joni Ernst, R-Iowa, about the need to provide assistance for small businesses trying to compete with global companies. But the structure and cost of that assistance could be a point of contention. 

Young said Democrats need to target the spending they propose in the package if they want to attract bipartisan support, given limited appetite among House Republicans for increased spending.

“I would hope that my colleagues irrespective of party would be willing to make strategic investments where necessary for our national security,” he said. “But I think many of these things involve empowering our diplomats to do their work and sometimes tweaking our laws to to enhance our position vis-a-vis the CCP.”

Other ideas Democrats discussed for the package ranged widely, from updating the Federal Information Security Management Act to improve the government’s cybersecurity posture to encouraging more domestic advanced manufacturing of generic drugs.

Schumer, asked about legislation to ban TikTok or other foreign-controlled applications, said that “will be something we will look at, definitely.” 

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