Senate Passes Massive $250 Billion Legislation to Counter China

The Senate on Tuesday passed a sweeping piece of legislation that aims to compete with China by subsidizing US industries, spending money on research, and other provisions that address just about every aspect of the US-China relationship. The bill passed in a vote of 68 to 32, a rare show of bipartisanship that demonstrates both Republicans and Democrats view Beijing as a threat to US global hegemony that needs to be confronted.

The effort was led by Senate Majority Leader Chuck Schumer (D-NY). “The world is more competitive now than at any time since the end of the second world war,” Schumer said on the Senate floor before the vote. “If we do nothing, our days as the dominant superpower may be ending.”

The 2,400-page US Innovation and Competition Act of 2021 would spend almost $250 billion of US taxpayer dollars. About $52 billion would subsidize US semiconductor manufacturing, and $195 billion would be spent on scientific research and development over the next five years.

Senator Maria Cantwell (D-WA) compared the scientific research the bill would fund to the Manhattan Project, which developed the first nuclear weapons during World War II. “All we are asking for is a little R&D [research and development] dollars,” she said. “So I wish I could tell you that we would go out and find our Leslie Groves of today,” Cantwell said, referring to the US military official who oversaw the Manhattan Project. “Because those are the people who responded to our nation when we needed to respond in a competitive fashion,” she added.

Besides the spending, the bill would also sanction more Chinese officials over Xinjiang, prohibit US officials from attending the 2022 Olympics in Beijing. It includes provisions to strengthen ties with Taiwan, and provisions to boost military alliances in Asia. The legislation also addresses alleged cyberattacks and claims of intellectual property theft, and many other issues.

The bill now moves to the House, where lawmakers have been working on their own massive piece of anti-China legislation, known as the Eagle Act. If the House passes its version, then the two chambers would have to reconcile what will go to President Biden’s desk.

President Biden said he will sign the legislation, and has made it clear that competition with Beijing is a top priority for his administration. In his first address to Congress, Biden said the US was in competition with China to “win the 21st century.”

Biden echoed his congressional address in a statement applauding the Senate for passing the bill. “We are in a competition to win the 21^st century, and the starting gun has gone off.  As other countries continue to invest in their own research and development, we cannot risk falling behind.  America must maintain its position as the most innovative and productive nation on Earth …  I look forward to signing it into law as soon as possible,” he said.