Senate Puts China in Crosshairs With Passage of Innovation and Competition Act

Senate Majority Leader Chuck Schumer of N.Y., talks with reporters on Capitol Hill in Washington, Tuesday, June 8, 2021.

Senate Majority Leader Chuck Schumer of N.Y., talks with reporters on Capitol Hill in Washington, Tuesday, June 8, 2021. (AP Photo/Susan Walsh)

The legislation is long and its details remain murky—but here’s what we know.

Legislation approved with bipartisan support in the Senate would commit billions to U.S. chip-making—and even more to expand science- and technology-centered research across and enabled by multiple government agencies—all meant to help the nation out-innovate and out-compete China.

The chamber passed the U.S. Innovation and Competition Act by a 68-32 vote on Tuesday. Previously deemed the Endless Frontier Act, the bill is moving to the Democrat-controlled House where its future is not so clear. 

“We are in a competition to win the 21st century, and the starting gun has gone off,” President Joe Biden said, applauding the USICA’s passage. He added that it “will empower us to discover, build, and enhance tomorrow’s most vital technologies—from artificial intelligence, to computer chips, to the lithium batteries used in smart devices and electric vehicles—right here in” America.

Altogether, the legislation reportedly pledges roughly $200-plus billion in funding for a wide range of research, development and programs to drive new technologies and manufacturing over five years. 

A core element of the legislation is the Endless Frontier Act, the final version of which proposed infusing the National Science Foundation with $100 billion over a half-decade to advance studies and development of emerging technologies. Over the course of this Congressional session, that bill was expanded and rebranded to USICA, and then extended to incorporate many other amendments and inclusions before it passed.

The full and final text has not yet been updated on Congress’ official website, and Hill staffers confirmed to Nextgov on Wednesday that it likely won’t be ready until sometime next week. “We’re working to make sure the bill text accurately reflects all the amendments which were adopted in the process,” an aide noted.

Still, the Senate’s passed text would allocate about $29 billion over five years for a new NSF Directorate for Technology and Innovation, and more broadly, double the National Science Foundation’s budget over that time period.

Also included in the text is a $10 billion investment for the Commerce Department to ultimately help cities operate as regional hubs for technology-pushing research and refinement. NASA’s research budget would see big gains. And USICA mandates a $52 billion investment in domestic research, development and production of semiconductors—or the chips that underpin heaps of products Americans rely on, but are the center of a global shortage.

“As a percentage of GDP, we spend less than half as much as the Chinese Communist Party on basic research. We rely on foreign nations to supply critical technologies that we invented, like semiconductors,” Senate Majority Leader Chuck Schumer said on the chamber floor. “The world is more competitive now than at any time since the end of the Second World War. If we do nothing, our days as the dominant superpower may be ending.”

Among many others, the bill includes amendments that would invest $17 billion in the Energy Department’s national laboratories and even more for the Defense Advanced Research Projects Agency, direct the NSF to support STEM education in rural communities, enable new tools for border-protecting agencies to use against imports made by forced labor, and require a report on China’s supply of ballistic missiles or sensitive technology to other nations.

On Wednesday, the Foreign Affairs Committee of China’s National People’s Congress publicly stated the nation’s “resolute opposition” to the legislation.

Still, some senators argued the bill doesn’t go far enough in its inclusions against that top American competitor, or in providing for Pentagon spending.

It’s unclear whether USICA will move forward in the House to ultimately reach the president’s desk, as that chamber is taking a different approach and is already considering similar legislation.