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Happy Thursday morning.

Breaking in London: British Prime Minister Boris Johnson will resign. Bloomberg reports that Johnson would like to stay on until October. Here is the FT on who might replace him as prime minister.

Johnson, a former mayor of London, has been prime minister since July 2019. A hugely controversial figure, Johnson endorsed the Brexit movement that took Britain out of the European Union.

The pound and London financial markets both rose as investors looked toward the end of a crisis that had brought British politics to a standstill. Dozens of ministers had resigned from the government and a rebellion against the 58-year-old Johnson broke among Conservative Party lawmakers.

Back to USICA … Here’s the question that we have been getting over the last 24 hours from Capitol Hill offices, lobbyists and corporations – Is USICA dead?

Senate Majority Leader Chuck Schumer’s decision to forge ahead with crafting a reconciliation package has thrown the bill aimed at boosting U.S. high tech research and manufacturing into flux. Remember – this is a top priority of Schumer’s, the White House’s and big business.

Senate Minority Leader Mitch McConnell has vowed to stop USICA in its tracks if Schumer pushes a reconciliation package, which is exactly what’s happening. As we reported, Schumer filed a Medicare prescription drug pricing proposal with the parliamentarian on Wednesday.

So we asked McConnell’s office if he was serious about killing USICA. David Popp, the Kentucky Republican’s communications director, had this response: “The tweet stands.” McConnell issued the threat by tweet last Friday.

With all this happening, we wanted to break this down a bit further and discuss some of the potential outcomes here, especially if there’s a chance to pass some scaled-down version of this legislation during the next few months. Why do we care so much? Because hundreds of members have political equity in the bill, as does the White House, Commerce Department and corporate America.

Officials from the White House and other federal agencies we spoke to insist they’re going to push ahead on both Build Back Manchin – the reconciliation package – and USICA concurrently. Here’s what one senior administration official told us Wednesday afternoon about McConnell’s threat:

So what can they get done? Inside the Biden administration and on Capitol Hill, some Democrats and Republicans tell us that they’d settle for $52 billion in financial support for U.S. semiconductor manufacturers as a base package, stripping away other provisions such as boosting the National Science Foundation or responding to trade and climate change concerns. But can Congress pass an expensive package to benefit profitable semiconductor companies just before an election? There’s opposition from the right and left to any new government subsidies.

Schumer has been pushing upstate New York as the location for a massive tech research center. And he’s put a lot of time and effort personally into the underlying USICA legislation over the last year. Schumer has long been a China hawk, especially on economic and trade issues, and USICA was supposed to reset the U.S. approach to competing with Chinese companies – many of them state owned or directed – in the critical high-tech arena.

More importantly, there are also huge new investments in chip manufacturing facilities in Arizona, Texas, Ohio and New Mexico, projects that could revitalize the entire domestic semiconductor manufacturing base. Although the companies involved say they’re waiting to see what Congress does. Intel has already warned that it could delay or scale back the size of its Ohio project. There just happens to be a big Senate race there this November as well.

So buckle up. It will be an interesting July.

– Jake Sherman and John Bresnahan