Jul 13, 2022 - Politics & Policy

Scoop: Raimondo wants to "cleave off" CHIPS Act and pass standalone bill

Gina Raimondo uses her hands to make a point in a suit

Photo: Tasos Katopodis/Getty Images

The Biden administration is open to cutting bait on an expansive China competitiveness bill and encouraging Congress to focus solely on passing some $52 billion for the semiconductor industry before leaving for August recess.

Driving the news: In an interview with Axios, Commerce Secretary Gina Raimondo said the country doesn't have the luxury of waiting for the House and Senate to hash out all the differences on their competing versions of the stalled legislation.

What they're saying: "Cleave off the CHIPS and pass it," Raimondo said, referring to the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act.

  • "There's a real time urgency there, because these chip companies are making their decisions right now about where to expand," she said, while also raising the importance of the Investment Tax Credits, a roughly $10 billion provision that has broad support in both chambers.
  • "Obviously, we want more," she said. "The president supports a robust Bipartisan Innovation Act."
  • Along with deputy defense secretary Kathleen Hicks and Director of National Intelligence Avril Haines, Raimondo was scheduled to brief senators in a closed-door session at 4pm Wednesday afternoon.

Why it matters: With Senate Minority Leader Mitch McConnell (R-Ky.) holding the broader China bill hostage, negotiations between the House and Senate on their dueling legislation have been frozen, with only 12% of their differences ironed out.

  • But on Tuesday, McConnell floated a potential off-ramp and opened the door to just passing the CHIPS funding as a way to get some money out the door quickly.
  • Raimondo seized that opening and plans to make the case to focus on the CHIPS and ITC provisions to lawmakers on Wednesday.
  • "I talked to a dozen lawmakers in the past 24 hours," Raimondo said. "I feel like they are coalescing around the path of [passing] CHIPS immediately and then live to fight another day on the rest of it."
  • Key Senate Democrats like Sen. Mark Warner (D-Va.) have been pressing for a standalone CHIPS bill since March.

Between the lines: Raimondo, who has taken the lead in pressing Congress to pass bipartisan China legislation, isn't giving up getting a more expansive legislation passed by Congress down the line.

  • "Having said that, we are literally out of time. And the national security risk, as Lloyd Austin and I laid out in our letter today, is immediately significant,” she said.

The big picture: Senate Majority Leader Chuck Schumer (D-N.Y.) has made a broader China bill a priority this Congress and had some success last year in passing a bill out of the Senate, 68-32, with 19 Republican votes.

  • President Biden has urged the House and Senate to iron out their differences and send him a finished product.
  • White House officials have also accused McConnell of holding the bill hostage to help the pharmaceutical industry keep its profit margins high.
  • The fate of the bill has taken center stage in the Ohio Senate race, where thousands of jobs are at stake at a potential Intel factory east of Columbus.

Go deeper: Some House Democrats were toying with the idea of passing the Senate bill in order to deliver legislation to Biden before Democrats face voters in November.

  • But House Speaker Nancy Pelosi (D-Calif.) and House Majority Leader Steny Hoyer (D-Md.) firmly rejected that approach on Wednesday.

Editor's note: This story has been corrected to note that McConnell is minority leader, not majority leader.

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