Biden to sign $280B CHIPS act in bid to boost US over China

WASHINGTON (AP) — President Joe Biden’s legislative victories have aimed to position the U.S. to “win the economic competition of the 21st century,” but his investments to boost the nation’s technology, infrastructure and climate resilience over the next decade are set against a 90-odd-day clock until the midterms.

From turbocharging the U.S. computer chip sector to shifting the nation to a greener economy, the achievements from Biden will take years to come to fruition -- reflecting the sheer scope of his ambitions that, taken together, put Biden among the most legislatively productive presidents in recent memory.

Yet Democrats are also gambling that the rapid clip of recent accomplishments will persuade an electorate that's downcast about the economy and the general direction of the country to vote nonetheless in their party’s favor. Particularly critical, they say, is being able to illustrate to voters what Democrats can accomplish when they hold the levers of power in Washington, even if energy bills don’t decline right away or a new bridge takes years to be completed.

“I do think this bill will have immediate political impact, but not because people will feel the effects in the next six weeks,” Sen. Brian Schatz, D-Hawaii, said of the big health care, climate and economic package making its way through Congress. “It’s because they know we are lawmakers who weren’t making very many laws over the last six months.”

Schatz added, “It’s a vibe, and the vibe is winning.”

The White House views the legislative victories as interlocking pieces fulfilling the agenda Biden laid out when he ran for president in 2020 on the promise of helping the country out-compete a rising China. The policy proposals were focused on addressing generational threats and creating long-term opportunities — especially after what Biden viewed to be troubling setbacks during the Trump years.

A 50-year veteran of Washington and a former senator and vice president, Biden also aimed to avoid governing by executive order, a crutch of presidents for both parties when legislative dysfunction is high. Executive orders can be rewritten or overturned by a president’s successors — and they’re often constrained by how much they can do without Congress acting. Biden, White House aides said, aimed not just for altering the country’s trajectory, but keeping it on that path, a move that required legislating, not emergency declarations.

On Tuesday, as he signed a $280 billion bill bolstering U.S. competitiveness against China, Biden said he was enacting a once-in-a-generation investment whose impact will resonate for decades. The law sets aside $52 billion to bolster the semiconductor industry, which manufactures the diminutive chips that power everything from smartphones to computers to automobiles.

“The CHIPS and Science Act is going to inspire a whole new generation of Americans to answer that question: What next?” Biden said. “That’s why I’m confident that decades from now, people are going to look back at this week, with all we’ve passed and all we’ve moved on, that we met the moment at this inflection point in history.”

Speaking with reporters Monday, Biden said the Democrats’ massive climate and health care package — poised for final House passage Friday — would help his party ahead of the November midterms, pointing in particular to its drug pricing provisions.

“Now, some of it is not going to kick in for a little bit, but it’s all good,” Biden said in Dover, Delaware. “When you sit down at that kitchen table at the end of the month, you’re going to be able to pay a whole hell of a lot more bills because you’re paying less in medical bills.”

Biden likes to talk up the bill’s provisions capping drug costs for seniors on Medicare at $2,000 annually, although that won’t occur until January 2024. White House officials are also touting an extension of subsidies that would help an estimated 13 million people purchase coverage under the Affordable Care Act, assistance that would have expired this year and subsequently spike out-of-pocket costs.

Other aspects of the climate and health care bill will take much longer to see. An analysis from the Rhodium Group, an independent research firm, said the measure could reduce consumer energy costs in the longer term, with households saving between $730 to $1,135 per year, but not until 2030. The Congressional Budget Office has also said the inflation-reducing aspects of the “Inflationary Reduction Act” will be negligible in the short term.

Chris Wilson, a Republican strategist, said the legislation won’t help Democrats’ chances when voters already disapprove of Biden’s handling of the economy.

“Joe Biden and the Democrats are taking a big risk pushing out a major taxing and spending bill on the eve of an election,” he said.

The administration has been sensitive to criticism that it will take years to fully realize its policies.

One senior administration official, insisting on anonymity to discuss private conversations, stressed that 18 months of talks and negotiations were required for the computer chip funding to pass. Because it could take a decade to build semiconductor plants and shift more advanced chip production to the U.S., the official said America would have been much further ahead in the process if Congress passed the measure earlier. The official said the administration was essentially moving as fast as it could given the speed of politics.

The chips bill was more than a year in the making, but finally cleared Congress late last month with significant bipartisan margins. The Senate passed it 64-33, with 17 GOP senators supporting it, while the House followed suit with a 243-187 vote that included 24 Republicans in favor, even though party leaders began urging their ranks to vote against it after Democrats advanced the separate bill focused on climate and health care.

The White House sought Tuesday to begin selling the immediate impacts of the semiconductor measure, noting that Micron, a leading U.S. chip manufacturer, will announce a $40 billion plan to boost domestic production of memory chips, while Qualcomm and GlobalFoundries will unveil a $4.2 billion expansion of an upstate New York chip plant.

“We are working hand-in-hand with private companies who are already announcing new investments here at home,” White House press secretary Karine Jean-Pierre said. Asked when Americans will see new jobs or other impacts of the new competitiveness law, Jean-Pierre declined to say, noting the White House would have details “very soon.”

But there is also a limit as to how fast the administration can pump money into the economy for technological breakthroughs and new infrastructure. Commerce Secretary Gina Raimondo has stressed that the goal is ensuring funding for broadband and economic development is properly spent, not just ushered out the door quickly. Her department will take the lead on implementing the chips law.

Mitch Landrieu, the former mayor of New Orleans who is coordinating the release of infrastructure money, has said the goal is not necessarily to achieve political gains in midterms but ensure that state and local governments get the money they urgently need.

“I didn’t get hired to be a political prognosticator,” Landrieu said in a May interview, noting that even Republicans who opposed the infrastructure spending are now touting its benefits and “that’s OK with us because this was done for the American people.”

Tuesday’s sweltering South Lawn ceremony celebrating the competitiveness bill was the latest White House event running through a veritable checklist of recent accomplishments. Biden will host another Wednesday to sign legislation offering care for veterans suffering from exposure to toxic burn pits. The White House is also expected to hold an event after the climate and health care package clears the House.

“We know there are those who focus more on seeking power than securing the future,” Biden said as he signed the chips measure. But he added that with the new law, “the future of the chip industry is going to be made in America.”

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Associated Press writer Zeke Miller contributed to this report.