Mitch McConnell threatens to oppose Democrats’ tax and spending push for China bill

Senate Minority Leader Mitch McConnell on Thursday threatened to oppose the behemoth China competition bill passed by Congress if Democrats continue to push to revive President Biden’s long-stalled social welfare and climate change spending plans.

Negotiators in the Senate and House of Representatives remain deadlocked on the final passage of the United States Innovation and Competition Act (USICA), which includes a major $52 billion incentive for semiconductor makers to build production plants in the United States There is support from both sides of the aisle on both sides of the aisle.

But Kentucky Republicans are opposing the Democrats’ spending bill.

“Let me be very clear: As long as Democrats pursue a partisan settlement bill, there will be no bipartisan USICA,” Mr. McConnell tweeted.

President Biden has urged Congress to quickly pass the sweeping legislation, but final talks to resolve key differences between the two versions have stalled for months.

Democrats are separately trying to reach a deal on a stripped-down version of President Biden’s $1.75 trillion social welfare bill, which failed late last year.

Mr McConnell’s warning marks an uphill battle for Democrats who want to get the bill through the finish line as soon as possible, and puts the president in a difficult position where he must balance his domestic spending agenda with tough targets on China.

White House press secretary Carine Jean-Pierre was quick to respond to the Democrats’ bow and arrow, accusing Republican leaders of holding the China competition bill hostage “to protect Big Pharma’s ability to engage in price gouging.”

An element of Democratic legislation would give Medicare more power to negotiate with drugmakers.

“The Republican Party is actually choosing to help China outperform the U.S. in order to protect Big Pharma,” Ms. Jean-Pierre said.

“This elevates loyalty to special interests rather than working Americans to a new and appalling level.”

“We will not back down from this heinous threat,” she said.

The Senate’s $250 billion USICA passed in June with the support of 18 Republicans and 50 Democrats.

The $335 billion House counterpart, the U.S. Competition Act, includes a slew of spending, including $8 billion to help developing countries fight climate change, to fund U.S. reductions in Chinese solar technology, and to support U.S. supplies Chain provides $45 billion.

House Republicans opposed the bill, which passed 222-210 in February as a “foreign policy failure” that funneled taxpayer money into an “irresponsible UN slush fund”

For many Republicans, the $52 billion boost to semiconductor manufacturing remains one of the more popular terms of the two versions.

Industry leaders say semiconductor supplies are critical for the U.S. to remain competitive with China and other foreign producers.

Lawmakers on both sides of the aisle pointed to the recent chip shortage as evidence that Congress needs to act quickly.

The three major semiconductor makers — TSMC, Intel and Global Foundries — recently warned that they would scale back plans to produce semiconductors in the United States if Congress fails to reach a deal.

Asian and European countries have rolled out incentives to entice semiconductor makers to set up shop within their borders.



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