A deeply wonky high-tech investment bill wasn’t meant to be Democrats’ plan A—or their plan B, C, or D.
But with the vast majority of President Joe Biden’s economic, climate, and social welfare agenda stymied in the all-but-buried Build Back Better Act, Democrats are getting creative.
They are putting at least some of their midterm hopes on the tenuously named “America Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength Act of 2022,” otherwise known as the “COMPETES” Act.
The bill had been far down on the to-do list for House Democrats, but with so many economic and supply-chain complaints resonating with voters, party leaders pushed the legislation to the top of their agenda and plan to pass the bill on Friday.
The initiative is hardly viewed as a substitute for the Build Back Better Act. But a high-tech investment package that would inject tens of billions of dollars into US manufacturing and shore up the supply chain has one crucial advantage: It could actually become law.
Now, Democrats are racing to finish the bill, which could end up as their last major legislative achievement while they have control of Congress. And if they can spin this high-tech investment as a supply-chain and inflation salve, they might get a desperately needed win heading into November.
Underscoring the political stakes, in January, dozens of the most vulnerable House Democrats pushed their leadership to advance the legislation, citing concerns from constituents, Axios reported.
More immediately, Democrats have another challenge: They will have to work through a delicate issue that happens to be at the heart of the legislation—China.
The first version of the bill, passed with a large bipartisan majority in the Senate last summer, was explicitly premised on investing historic sums of money into US tech and industrial capacity to counter China’s advantages in the space. In a floor speech after the so-called US Innovation and Competition Act was approved in June, the Chinese Communist Party was almost immediately name-checked by Senate Majority Leader Chuck Schumer.
But in the House, many Democrats—particularly progressives—blanched at the hawkish framing of the project, along with some trade and foreign policy provisions they felt were especially egregious.
Rep. Mark Takano (D-CA), a leadership member of the Congressional Asian Pacific American Caucus, told The Daily Beast he was “frankly surprised” at the China-heavy rhetoric coming from the Senate, including members of his own party.
It took months after the Senate bill’s passage for the House to introduce their version. When House Democrats did—getting no support from House Republicans—the framing of their COMPETES Act was conspicuously China-free.
The week before debate in the House began, the chair of CAPAC, Rep. Judy Chu (D-CA), sent a message to all House Democratic chiefs of staff, which was viewed by The Daily Beast. She urged them to “consider the way our messaging on China can impact Asian Americans here at home,” and cited the rising tide of violence directed at Asian Americans.
“The solutions put forward in the America COMPETES Act deserve to be passed on the merits of how they will benefit our country and its competitiveness in the world,” Chu said. “We should not rely on fear of China to make our case.”
Few Democrats would disagree with that statement, and many have been increasingly careful in how they talk about the legislation. They are also already rallying against Republican rhetoric, which has taken up an even more harshly confrontational tone on China as Democrats have dialed down their own rhetoric.
But Democrats do acknowledge the House-Senate dissonance over the China focus, which has only grown in the long interim since the Senate passed their version, and admit that has created some confusion on what the bill seeks to achieve.
Rep. Jared Huffman (D-CA) called it “an unfortunate dynamic that we’re working through.”
Muddled messaging has been an issue for Democrats already in the past year. During Biden’s term, they have struggled to craft a cohesive communication strategy around the sweeping Build Back Better Act. Some Democrats worry that a repeat is possible now, potentially clouding what could be a significant achievement for them—and for Biden.
Many Democrats acknowledge they are hitting the reset button. One of the co-sponsors of the Senate bill, Sen. Chris Van Hollen (D-MD), told The Daily Beast: “We want to reframe this.”
A possible solution has emerged for Democrats eager to move past China concerns: casting the legislation as a salve for the country’s biggest short-term economic problems, especially the inflation caused by a faltering supply-chain that has helped generate more demand than supply.
Aside from vulnerable House Democrats, the White House has also leaned into this framing, casting the COMPETES Act as a response to current economic issues—less so as a guard against a rising China. The administration’s official statement of policy on the legislation did not mention China once.
The House version of the bill, much like the Senate’s version, includes significant investments aimed directly at shoring up current industrial, trade, and supply-chain issues. It includes $52 billion for semiconductor manufacturing and research, which is a pressing need right now. There is also a global shortage of the high-tech chips used for vehicles and other important machines, which has sent the cost of consumer autos soaring.
The House’s bill includes $45 billion in various funding to strengthen the country’s supply-chains and protect manufacturing capability for goods essential to the economy and to public health.
It’s not exactly straightforward stuff, Democrats acknowledge, and requires a bit of explaining. “It’s complicated,” said Rep. Dan Kildee (D-MI), whose Michigan district is a major base for the US auto industry. “What we have to do is, we have to reduce it to its essential elements. This is about supporting American manufacturing.”
But Kildee still didn’t discount the “long game” aspects of the legislation, which “really do” relate to China. “So, I mean, our bill is China-plus,” he said.
Whether these investments could actually be felt in a timeframe that conforms to Democrats’ political considerations is another matter. Kildee believes that merely passing the bill will give domestic manufacturers, like the automakers in his district, greater confidence that will be felt by workers and their communities.
Rep. Conor Lamb (D-PA), who is also running for Pennsylvania’s open US Senate seat this year, hailed the bill as a historic investment, but cautioned, “you know, it’s not going to materialize tomorrow.”
“But there’s no competing solutions—like, that’s our best effort on that,” Lamb said. “The rest of it, I think it has a lot more to do with national security and long-term economic growth than it does for short-term economic growth. That doesn’t make it any less important. People expect us to do that stuff, too.”
If the House passes its legislation on Friday, as expected, lawmakers from both parties and both chambers meet to iron out the differences in their bills in a process known as conferencing. It could be a contentious process, given that Senate Republican buy-in will still be necessary for it to exceed 60 votes in that chamber, and Republicans are supportive of certain China-specific provisions that House Democrats stripped out.
Rep. Gregory Meeks (D-NY), the chairman of the House Foreign Affairs Committee, defended the House legislation’s China focus as more than adequate in an interview with The Daily Beast. And in doing so, he offered the kind of perspective that could help speed along negotiations.
“In the bill, it mentions China about 600 times,” Meeks said. “Look, everyone knows we’re competing with China. I’m not trying to say that Chinese people are bad people or anything else. I want a level playing field, from my perspective.”