The Washington PostDemocracy Dies in Darkness

Opinion The Chips Act has only gotten better. Now it’s the House’s turn to act.

President Biden during a virtual meeting with CEOs and labor leaders to discuss the Chips and Science Act in D.C. on July 25. (Demetrius Freeman/The Washington Post)

From toasters to toys to tanks, the computer chips known as semiconductors are responsible for making things work. Now, on the cusp of passing a bill to fund the domestic manufacturing of these crucial components, Congress is proving it can work, too.

What’s now called the Chips and Science Act passed the Senate 64-33 on Wednesday and now heads to the House, after more than a year of back and forth over dueling versions of the legislation from the two chambers. This time, the odds look good the bill will end up at long last on President Biden’s desk: There’s some grumbling from those furthest to the right and some from those furthest to the left, but the congressional middle largely stands behind the proposal. After all, there’s a lot to like for states that would benefit from fabrication facilities built on their soil, or from regional technology hubs established in areas that don’t usually draw in Silicon Valley money.

These hubs weren’t included in the chips-only iteration of the legislation that lawmakers initially planned on passing this summer — but thankfully, they and a host of other research and innovation provisions have made their way in. Those $52 billion in subsidies to domestic semiconductor manufacturers may well help the United States compete with China, which has invested a whopping $150 billion of its own. Rules to prevent grant recipients from using the funds to construct facilities in countries that pose a national security threat, or to conduct stock buybacks, are welcome — though the bill would be more responsible, and less of a gift to industry, if they were strengthened.

E.J. Dionne Jr.: The chips bill means the Era of Hands-Off Government is over

Yet the innovation component has always been more important than the manufacturing subsidies, if less discussed. This country has a far better chance at taking the next technological leap before its adversaries get there than it does at outspending them. By authorizing the largest five-year investment in public research and development in the nation’s history (to the tune of $82.5 billion in new spending) to boost advances in artificial intelligence, quantum computing and more, the bill moves the country closer to that goal. The private sector perennially underinvests in basic research — which is why this area, more than chip-builders with plenty of cash in their pockets, needs the help the most.

The United States used to manufacture more than 40 percent of the world’s chips. Now it makes about 12 percent, little of that at the cutting-edge. Nearly four-fifths of global fabrication occurs in Asia — and the bulk of those cutting-edge semiconductors are crafted in vulnerable Taiwan. There’s no question an intervention is needed. Luckily, Congress is poised to make a smarter one than it previously contemplated. Now, it’s up to the House to get us the rest of the way there.

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