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BREAKING: The new CHIPS bill

July 20, 2022

Read our latest series

Our newest editorial project, in partnership with Google, explores how AI is advancing sectors across the U.S. economy and government through a four-part series.

Check out our second feature focused on AI and cybersecurity with Rep. Eric Swalwell (D-Calif.).

PRESENTED BY

BY PUNCHBOWL NEWS STAFF

THE TOP

Happy Wednesday morning.

Big news for CHIPS fans. The Senate Tuesday evening kicked off debate on the CHIPS-Plus bill, which will green-light tens of billions of dollars in federal subsidies and tax credits to boost domestic semiconductor manufacturing.

But there’s a lot more than that in the legislation. A lot more.

Senate Majority Leader Chuck Schumer filed a bipartisan amendment Tuesday night following that 64-34 vote. That 1,054–page amendment includes tens of billions for the National Science Foundation, the Commerce Department and the National Institute of Standards and Technology. There are also provisions impacting NASA.

You can read the substitute bill here.

Here’s a backgrounder on the new CHIPS Act.

Punchbowl News Premium subscribers got a sneak peek at most of this bill on Tuesday afternoon well before it was officially released. The only section that was not finished at the time of the Midday edition was final language on the CHIPS Act, which we are giving you now.

This bipartisan initiative will establish the “CHIPS for America Fund.” There’s $39 billion in “financial assistance to build, expand or modernize” domestic semiconductor facilities. Up to $6 billion of that can be used in direct loans or loan guarantees.

Another $11 billion will go toward advanced research and development programs under the Commerce Department. And $2 billion will be used for national defense tech applications or workforce training.

There are “guardrails” included in the legislation. None of these funds can be used to underwrite stock buybacks or on facilities in China or “any other foreign country of concern.”

The proposed legislation also authorizes more than $80 billion for the National Science Foundation over the next five years – nearly double the agency’s current budget – as well as $10 billion for “regional technology hubs.” And there’s billions more for advanced research and high-tech manufacturing programs under NIST.

The Energy Department gets billions for advanced research programs in a variety of areas, including fusion and lasers. Congress also wants to put billions into STEM programs and research grants.

The overall price tag of this legislation, according to Sen. Todd Young of Indiana, one of the lead Republican sponsors, is in the $250 billion range. So that’s a pretty hefty package.

Here’s Schumer introducing the revised bill:

“As you all know, I am a strong supporter of the science provisions — I was the original author, along with Senator Young, of many of these policies under the Endless Frontier Act.”

Overall, this bill isn’t quite USICA, the huge China competition proposal approved by the Senate last year. However, it’s got a lot of elements of that original legislation. So we wondered what to call it. “Son of USICA?” “USICA Junior?” “USICA II?” We tried to go with “USICA Lite,” but no bill with a $250 billion price tag is going to be called Lite. Less debate, more funding!

Schumer had said if the bill got 60 or more votes during the test vote on Tuesday night, he’d be open to expanding the legislation beyond his original vision of a narrow CHIPS-Plus bill. Schumer ended up getting 64, including 16 Republicans, led by Young and Sens. John Cornyn (R-Texas) and Rob Portman (R-Ohio).

This gives Schumer enough support to overcome any GOP opposition. Senate Minority Leader Mitch McConnell was one of the no votes on moving forward with the legislation, although Cornyn seemed to hold out hope that the Kentucky Republican could change his position. We’ll see.

Now the big questions become when the Senate can finish debate on the bill, as well as whether the House will ultimately pass it.

Schumer may file cloture on this bill as early as today, which would mean a cloture vote no earlier than Friday. We all know the Senate won’t be here on Friday, so that means a final vote sometime next week.

But Democratic leaders and their GOP supporters will try to speed up that timeline, sources familiar with the issue tell us, hoping they can get it done this week. They would need consent from all Republicans, including opponents of the measure. We’ll get a better idea on how this will play out today.

→	One more thing: Sen. Amy Klobuchar (D-Minn.) gave a long speech Tuesday night on the Senate floor on her Big Tech antitrust bill along with Sen. Chuck Grassley (R-Iowa). You can watch her remarks here.

The Klobuchar-Grassley bill, which would bar Big Tech companies from using their market dominance to push their own products or services over any competitors, was approved by the Senate Judiciary Committee back in January. But the legislation has stalled in the face of an intense lobbying campaign by Google, Amazon and other giant tech companies. And we do mean intense. Klobuchar told us Tuesday she still hasn’t been told by leadership when it might come to the floor.

Schumer said he’s working with Klobuchar on passing the legislation, adding: “I support these bills. I want to bring them to the floor. We have to see if we have 60 votes.”

Over on the House side, Rep. David Cicilline (D-R.I.), author of a similar bill that’s been hung up since last summer, said he hopes to have an announcement on a floor vote soon as well.

– John Bresnahan and Jake Sherman

This morning: We’re excited to interview Sens. Marco Rubio (R-Fla.) and Ben Cardin (D-Md.) about issues facing small business owners coming out of the Covid-19 pandemic. Join us at Nationals Park at 7:45 a.m. ET for this conversation and other special guest speakers during Goldman Sachs 10,000 Small Businesses Advocacy Day. RSVP here!

PRESENTED BY PHRMA

Today, there are 90 medicines in development for Alzheimer’s disease, 119 medicines for breast cancer, 26 medicines for childhood diabetes… But government price setting could mean fewer medicines in the coming years. Which diseases could go untreated if Congress passes government price setting? There is a better way to lower costs without risking new medicines.

THE FIRST TOWNHOUSE BREAKFAST

Tuesday we hosted our first breakfast event at the Punchbowl News Townhouse, presented by Lucid Motors. It was wonderful to bring our community together over breakfast and hear remarks from Anna Palmer, Eric Bach, senior vice president of product and chief engineer at Lucid Motors, and Jessica Nigro, head of global public policy at Lucid Motors. And also check out the Lucid Airs out back.Thanks to all who joined!

Breaking bread: Nat Lingo, Scott Matus and Michael Tubman of Lucid Motors, Symone Sanders of MSNBC, Jeff Werner of Panasonic, Kelley McCormick of Original Strategies, Ali Rubin of Brunswick Group, Liz Johnson of Sen. Mitt Romney’s (R-Utah) office, Kimberley Fritts of Cogent Strategies, Rachel Levitan of Sen. Tom Carper’s (D-Del.) office, Margaret Talev of Axios, Patrick Mellody of Journalists for Human Rights, and Andrew Kovalcin of Advanced Advocacy.

NEXT UP

House Democrats to watch on the assault weapons ban

The House Judiciary Committee is marking up legislation to ban assault weapons today — but Democratic leaders are sweating over whether they can get enough votes to pass it through the full House.

Here are the key House Democrats to watch on the measure and why they’re wavering. Remember: Speaker Nancy Pelosi has a four-vote margin. Democrats will likely pick up a few Republican votes, but not many.

→	The definite nos: Reps. Jared Golden (D-Maine) and Henry Cuellar (D-Texas).

Golden told us he would vote against the assault weapons ban. When asked to elaborate on his position, Golden added, “I don’t support it.” This isn’t a big surprise. Golden voted against the Protecting Our Kids gun control package last month. He’s also one of the most endangered House Democrats, representing a district that former President Donald Trump handily won in 2020.

Cuellar is one of the most conservative House Democrats and recently was the lone Democrat to vote against the Women’s Health Protection Act.

“I can support background checks, anything to keep the guns away from bad people, but I don’t want to keep them away from law-abiding people,” Cuellar told us.

→	Undecided, but likely nos: Reps. Kurt Schrader (D-Ore.) and Ron Kind (D-Wis.).

Schrader also voted against the Protecting Our Kids Act last month. He was the only other Democrat to do so, joining Golden. Schrader, who recently lost in the Democratic primary, said although he’s not seen the assault weapons ban legislation, he’s “not keen on that whole approach to things.”

Here’s Schrader unloading on the Democratic leadership’s strategy for bringing the measure up for a vote:

“It’s not going anywhere. Why are we doing this? We just passed a really, really good [gun safety] bill. Got decent press from you guys, big accomplishment, and now we’re going to undermine it. …

“It’s the way Democrats snatch defeat from victory.”

Kind told us his office was still looking at the bill. Kind added he had issues with the definition of an assault weapon included in a previous version of the ban.

“Where do you draw the line? How do you define it? And otherwise manufacturers can just tweak things now here and then and then it becomes meaningless,” Kind said.

Democratic leadership aides expect them to both vote no.

→	In-between/True undecideds: Tom O’Halleran (D-Ariz.) and Vicente Gonzalez (D-Texas):

Here’s O’Halleran:

“I haven’t taken a final position yet.”

“I want to see appropriate protection of the Second Amendment, and but at the same time, protecting our public. And that’s the primary concern, how do we protect our public? And what does that look like in the final bill?”

We’ll note that O’Halleran has supported expanded background checks and other Democratic gun control measures.

Here’s Gonzalez:

“I would like to see a limitation of magazine capacity. That would bring real change and control to the issues. Because if we limit certain guns, there’s still others available at the same capacity.”

→	Undecideds but likely yes votes: Reps. Peter DeFazio (D-Ore.), Mike Thompson (D-Calif.) and Sanford Bishop (D-Ga.).

DeFazio, who chairs the House Transportation and Infrastructure Committee and is retiring, told us: “When I see the bill, I’ll let you know.”

Thompson, chair of the Gun Violence Prevention Task Force, said he wanted to see what emerges from the Judiciary Committee markup before announcing his position. But Thompson sounded supportive of the effort: “I do not believe our communities are the place for assault weapons.”

“My history is I voted for it in ‘94 and I’m likely to do the same once I see it,” Bishop said. Bishop is one of the few Democrats not co-sponsoring the current assault weapons ban.

→

There are also a few Democrats, such as Michigan Rep. Elissa Slotkin and Rep. Cori Bush of Missouri, who aren’t co-sponsors of the measure but have indicated they will vote for the bill if it comes to the floor. Slotkin’s spokesperson confirmed she planned to vote yes if and when that happens.

Republicans: There are a small number of Republicans who might support the assault weapons ban — namely retiring Reps. Adam Kinzinger (Ill.) and Chris Jacobs (N.Y.) — but Democrats aren’t counting on their support yet.

— Max Cohen, Heather Caygle and John Bresnahan

THE NEW FRONTIER

House Democrats will get a briefing on stablecoin bill today

Democrats on the House Financial Services Committee will get a briefing today on the panel’s efforts to regulate stablecoins. Aides on the Financial Services Committee got a briefing Tuesday and we got a readout. This proposal has been closely held from K Street and financial institutions.

First of all, stablecoins, for those who don’t know, are a type of cryptocurrency pegged to a currency or other outside asset, such as the U.S. dollar. Like their name suggests, they’re supposed to be relatively stable and avoid big price swings.

Second: Financial Services Committee Democrats plan to share the draft text with Republicans Friday. Democratic aides were told that the legislation mandates similar rules for banks and non-banks to issue stablecoins. The stablecoins, under this legislation, would be called “payment stablecoins.”

Licensing for non-bank issuers would be done by the Federal Reserve. The Fed will look at the financial health of the stablecoin issuer. Capital reserves need to be “one-to-one.” And critically, stablecoin issuers would not be able to lend to customers.

This legislation would force the Treasury Department to conduct a study on central bank digital currency. But this bill does not define stablecoins as securities or commodities. Furthermore, the legislation includes a ban on selling or offering foreign stablecoins in the United States.

We will bring you more on this after the member briefing later today.

– Jake Sherman

PRESENTED BY PHRMA

Which diseases could go untreated if Congress passes government price setting? There is a better way to lower costs without risking new medicines.

PREMIUM MEMBERS EVENT

Join us tomorrow, July 21 at 12 p.m. ET for our July Brown Bag Lunch conversation. Each month Anna, Jake, Bres and Heather have a virtual briefing with and exclusively for our Premium Community. We’ll be covering everything going on in Washington and answer your questions live. Get in the mix by joining Punchbowl News Premium.

THE MONEY GAME

Democrats fundraise off abortion protest arrest

Seventeen House Democrats were arrested Tuesday as part of an abortion protest at the Capitol.

At least two – New York Reps. Carolyn Maloney and Alexandria Ocasio-Cortez – are fundraising off of it.

– Jake Sherman

THE CAMPAIGN

→	News: House Majority Forward, the 501(c)(4) associated with the House Majority PAC, is running a six-figure digital ad campaign in 21 districts highlighting the Democratic Party’s work defending abortion rights.

Here’s an example of one of the ads — this one is backing up Rep. Susie Lee (D-Nev.):

The spot highlights the Democratic lawmaker’s support for the Women’s Health Protection Act while urging the Senate to pass the measure.

The other Democratic members the ad supports: Reps. Josh Harder (Calif.), Nanette Barragan (Calif.), Katie Porter (Calif.), Mike Levin (Calif.), Cindy Axne (Iowa), Danny Davis (Ill.), Bill Foster (Ill.), Lauren Underwood (Ill.), Frank Mrvan (Ind.), Jared Golden (Maine), Andy Kim (N.J.), Josh Gottheimer (N.J.), Tom Malinowski (N.J.), Mikie Sherrill (N.J.), Teresa Leger Fernández (N.M.), Dina Titus (Nev.), Steven Horsford (Nev.), Susan Wild (Pa.), Elaine Luria (Va.) and Abigail Spanberger (Va.).

— Max Cohen

FRONTS

PRESENTED BY PHRMA

Government price setting could mean fewer medicines in the coming years.

MOMENTS

9:30 a.m.: President Joe Biden will get his daily intelligence briefing.

11:45 a.m.: Biden will leave the White House for Andrews, where he will fly to Warwick, R.I. Karine Jean-Pierre and climate adviser Gina McCarthy will gaggle on Air Force One. Biden will arrive at 1:15 p.m., and will leave for Brayton Point in Somerset, Mass.

2:45 p.m.: Biden will speak on climate change and clean energy.

3:30 p.m.: Biden will leave Massachusetts for the airport in Rhode Island. He’ll fly back to D.C. and arrive at the White House at 5:40 p.m.

CLIP FILE

NYT

→	“Putin Finds a New Ally in Iran, a Fellow Outcast,” by Anton Troianovski and Farnaz Fassihi

→	“Amid Campaign Revamp, Herschel Walker Stumps Without a Stumble,” by Maya King in Ocilla, Ga.

→	“Secret Service Says Some Missing Jan. 6 Texts Are Unlikely to Be Recovered,” by Zolan Kanno-Youngs and Maggie Haberman

WaPo

→	“Trump-backed Cox projected to win Maryland’s GOP gubernatorial primary,” by Erin Cox, Ovetta Wiggins and Antonio Olivo

NBC

→	“Biden to announce executive action on climate after failed effort in Congress,” by Zoë Richards

WSJ

→	“U.K. Inflation Hits 9.4%, a New 40-Year High,” by Paul Hannon

Bloomberg

→	“Black Districts Gutted as Suburban Flight Reshapes Congress Maps,” by Gregory Korte

Houston Chronicle

→	“Texas lawmakers call for criminal charges for those who aid an abortion patient, effective immediately,” by Taylor Goldenstein

Detroit News

→	“Majority of Michigan GOP voters would permit abortion for rape or incest, poll finds,” by Beth LeBlanc

PRESENTED BY PHRMA

Editorial photos provided by Getty Images

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Every single issue of Punchbowl News published, all in one place

Visit the archive

Read our latest series

Our newest editorial project, in partnership with Google, explores how AI is advancing sectors across the U.S. economy and government through a four-part series.

Check out our second feature focused on AI and cybersecurity with Rep. Eric Swalwell (D-Calif.).

BREAKING: The new CHIPS bill

THE TOP

PRESENTED BY PHRMA

THE FIRST TOWNHOUSE BREAKFAST

NEXT UP

House Democrats to watch on the assault weapons ban

THE NEW FRONTIER

House Democrats will get a briefing on stablecoin bill today

PRESENTED BY PHRMA

PREMIUM MEMBERS EVENT

THE MONEY GAME

Democrats fundraise off abortion protest arrest

THE CAMPAIGN

FRONTS

PRESENTED BY PHRMA

MOMENTS

CLIP FILE

PRESENTED BY PHRMA

Crucial Capitol Hill news AM, Midday, and PM—5 times a week

The Canvass Year-End Report

Every single issue of Punchbowl News published, all in one place

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