McConnell threatens to kill China competition bill
Senate Minority Leader Mitch McConnell (R-Ky.) put Senate Democrats and the White House on notice that they can kiss their bipartisan China bill goodbye if they continue to chase a climate, energy and tax deal with Sen. Joe Manchin (D-W.Va.).
Driving the news: In a tweet that ricocheted from Washington to Wall Street, McConnell declared his intent to hold the China bill hostage. "Let me be perfectly clear: there will be no bipartisan USICA as long as Democrats are pursuing a partisan reconciliation bill,” he said, referring to the bill's Senate acronym.
State of play: Manchin and Senate Majority Chuck Schumer (D-N.Y.) have been making quiet progress on rescuing parts of President Biden’s Build Back Better agenda and cobbling together a smaller package.
- Speculation about those negotiations has ramped up in the last 24 hours, including over the efforts to address prescription drug costs.
- Details have also emerged in the press about the possibility of increasing corporate taxes in a bill that would only need Democratic votes to pass.
Why it matters: McConnell knows that the China bill, which includes approximately $50 billion for the domestic semiconductor industry and some $100 billion for the National Science Foundation, is a key priority for Schumer and President Biden.
- With his aggressive statement, the Republican leader is leaving no doubt that he’s willing to let the China bill — which he voted for last June — wither on vine. The bill passed the Senate 68-32, with 19 Republicans supporting final passage.
- McConnell is also, apparently, unafraid of the political consequences for potentially killing a bill that business leaders are pushing Congress to act on.
Between the lines: For weeks, Senate Democrats have privately feared that McConnell would force them to choose between a pared-down Build Back Better bill and billions of dollars to help America nurture its own semiconductor industry and compete more effectively against China in key technological domains.
- Now, the minority leader has made his strategy clear.
The big picture: Schumer is making a concerted push to get House and Senate negotiators to iron out their differences on the China legislation and get a deal finalized by mid-July.
- He's asked some Senate Democrats to enlist CEOs to help increase the pressure on Republicans.