The Senate voted on Tuesday to adopt an approximately $250 billion bill to counter China’s growing economic and military prowess, hoping that major investments in science — and fresh punishments targeting Beijing — might give the United States a lasting edge.
The proposal commits billions of dollars in federal funds across a wide array of research areas. It pours more than $50 billion in immediate funding into U.S. businesses that manufacture the sort of ultrasmall, in-demand computer chips that power consumer and military devices, which many companies source from China. And it paves the way for the next generation of space exploration at a time when Washington and Beijing are increasingly setting their eyes on the stars.
With it, lawmakers also approved a host of proposals that seek to limit China’s economic aspirations and curb its political influence. The bill opens the door for new sanctions targeting Beijing over its human rights practices, commissions a new study about the origin of the coronavirus and calls for a diplomatic boycott of the upcoming 2022 Winter Olympics. It even authorizes $300 million specifically to counter the political influence of the Chinese Communist Party.
“I have watched China take advantage of us in ways legal and illegal over the years,” Senate Majority Leader Charles E. Schumer (D-N.Y.), the lead author of the bill, said during an interview before its passage. “The number one thing China was doing to take advantage of us … was investing heavily in research and science. And if we didn’t do something about it, they would become the number one economy in the world.”
The bill still must be adopted by the House, where some Democrats have raised early concerns with the Senate’s approach. Its passage comes on the same day the White House organized a new task force to address potential disruptions in the U.S. supply chain, seeking to further boost U.S. manufacturing of key medicines and technology at a time when many of those products and materials are made in countries including China.
For some experts, the burst of activity invoked the specter of the Cold War, when the United States spent once-unfathomable sums to counter the growing reach of the Soviet Union. Decades later, some lawmakers have shied away from the same comparison with Beijing, even as they authorized massive investments to better position U.S. businesses against their Chinese counterparts.
“This is not about a zero-sum relationship or resurrecting a Cold War mentality,” Democratic Sen. Robert Menendez (N.J.), the chairman of the Senate Foreign Relations Committee, said in a speech earlier in the debate.
The Senate’s effort also marks an evolution from the economic confrontations between the United States and China under President Donald Trump. During the last administration, the White House waged a trade war against Beijing, imposing massive tariffs in a tit-for-tat that analysts say caused deep damage to some parts of the U.S. economy. Democrats led by President Biden have tried to dial back Trump’s approach and rhetoric, even as they increasingly have come to share in some of Trump’s alarm about Beijing’s rise.
“The underlying anxiety about China is similar,” said Scott Kennedy, the senior adviser and trustee chair in Chinese business and economics at the Center for Strategic and International Studies. But he said it had “broadened” beyond a trade dispute into a more ideological clash between China’s authoritarian communist system and “free-market democracies and the liberal international order.”
Lawmakers adopted the bill, led by Schumer and Republican Sen. Todd C. Young (Ind.), on a bipartisan, 68-to-32 vote. The Biden administration earlier this month said it supported passage of the research-focused elements of the bill, describing them as “major investments in our long-term economic resilience and competitiveness.”
Democrats emphasized that their work on the legislation shows how the two parties can find common ground on a wide array of economic issues, perhaps setting the stage for progress in debates including major upgrades to U.S. infrastructure. But it was not without incident, after a small group of Republicans led by Sen. Ron Johnson (Wis.) upended lawmakers’ efforts to pass the bill swiftly — at one point holding up the chamber’s work for days to lament the way in which the legislation had been crafted.
Lawmakers authorized the lion’s share of the money under the new legislation, totaling $190 billion, for a major rethinking of federal science, technology and research spending. They created a new technology division within the National Science Foundation to focus on emerging areas including artificial intelligence. The Senate also gave a green light to $10 billion for the Commerce Department to invest in new technology hubs so that other regions and cities across the country can attract the same sort of economic opportunities as Silicon Valley.
“There will be millions of Americans in good-paying jobs because of the investments we’re making in the next 10 years,” Schumer said. “There will be new industries starting, and hopefully, not just in New York City and in San Francisco and in Austin, but also smaller places.”
Many of the federal science investments reflect an implicit attempt to battle back China, relying on new federal spending to keep pace with a country that some analysts say is investing more than 2 percent of its gross domestic product annually in research and development. To justify the expense, lawmakers cited economic as well as national security concerns, emphasizing that the United States cannot afford to allow Beijing to dominate emerging fields — and serve in some cases as the foremost supplier of sensitive tech equipment.
“This is an opportunity for the United States to strike a below… answering the unfair competition we’re seeing from communist China,” said Sen. Roger Wicker (R-Miss.), who helped prepare the measure.
The concern has been particularly acute around computer chips, which Sen. Maria Cantwell (D-Wash.), the chairwoman of the chamber’s Commerce Committee, described in the days leading up to the vote as the “oil of the 21st century.” A wide array of U.S. businesses, from tech giants like Apple and Samsung to automakers such as General Motors, are struggling to navigate a global shortage in semiconductors that has threatened delays in manufacturing.
The approximately $53 billion included in the Senate’s bill may not immediately ease the supply crunch, experts say. But like much of the spending authorized this week, it aims to deliver longer-term improvements — including new financing, for example, so that chipmakers can produce more semiconductors domestically and stave off shortages in the future.
“This is a long-term solution,” said Andy Halataei, the executive vice president of government affairs at the Information Technology Industry Council, a Washington-based trade group that counts Intel and other tech giants as members. “When the bill is signed into law, we’re definitely talking about years of construction and building facilities.”
The chip funding still troubled some lawmakers: Sen. Bernie Sanders (I-Vt.) for days criticized the measure because the money did not come with significant strings attached. He sought to prohibit companies from taking federal aid to subsidize their manufacturing, then purchasing back stock or padding their executives’ pay, although Sanders did not prevail in pushing for his amendment. He ultimately voted against the bill.
The broad nature of the bill also opened the door for lawmakers to push some of their pet projects, raising alarms among both parties. Senators secured earlier in the debate a prohibition on the sale of shark fins, for example, and a provision requiring online merchants to reveal the country of origin behind the goods they sell — except in the case of cooked king crab. At one point, a trio of Republican senators even tried to ban research on human-animal hybrids, though the effort ultimately faltered.
In the version that passed the Senate, lawmakers did leave intact a $10 billion authorization for two lunar lander contracts, a provision that could benefit Blue Origin, the space company founded by Amazon founder Jeff Bezos, who owns The Washington Post. Cantwell, whose committee oversees NASA and helped craft the bill, spearheaded the spending as part of a bipartisan amendment adopted earlier in the debate. Her efforts ignited a controversy because Blue Origin is based in her home state.
Sanders sought to strip the funding, describing it as a “Bezos bailout,” but his efforts ultimately did not succeed. Cantwell, however, defended the provision on Tuesday by stressing NASA needs to invest in “many kinds of systems” to ensure its missions succeed. Earlier this month, Blue Origin praised lawmakers for their approach, noting in a statement: “Continued competition will safeguard America’s space industrial base and get America back to the Moon as quickly as possible.”
Lawmakers also included a host of provisions that take more explicit aim with China in a move that risks ratcheting up bilateral tensions in the years after Trump openly sparred with Beijing. The Senate bill officially designated China the “greatest geopolitical and geoeconomic challenge” to U.S. foreign policy, and it committed an additional $15 billion to countering that threat — including combating Chinese influence and disinformation online.
For some Republicans, the provisions still did not go far enough: Sen. Marco Rubio (Fla.), for example, said lawmakers needed to do more to make sure technologies funded by the U.S. government did not ultimately land in Chinese hands. Some of his attempts to toughen enforcement ultimately failed, and Rubio voted against the bill.
“What if a year from now we find out — you’re going to read an article two years from now, whenever — that says, ‘The Chinese have stolen a quarter — 25, 30 percent — of the [intellectual property] developed by the money that’s put forward in the bill that was passed?’ We’re all going to feel pretty stupid around here,” Rubio said in a speech.
Yet some liberals thought the bill was too strong, prompting more than 65 groups to raise alarms about the “Cold War mentality” of the bill, which they say could feed “racism, violence, xenophobia and white nationalism.” Some House Democrats have echoed those concerns, raising the potential that the bill may change further as debate proceeds.
But Senate Democrats have labored to play down concerns that the measure is anti-China, and Schumer in particular stressed it reflected a belief Congress should “build ourselves up rather than just tear them down.”
“It’s aimed mainly at having America progress economically,” he said. “But the threat of China or another country … leading in science is a real threat to the country, and we should deal with it not by being angry at them but by doing the right thing for ourselves.”