Infrastructure Summer: Chuck Schumer, China, and building back better
After several days of suspended negotiations, House Speaker Nancy Pelosi reached a compromise last week with the corporate Democrats led by Josh Gottheimer of New Jersey, which allowed them to claim a tactical victory without conceding anything. substance. House Democrats, including Gottheimer’s Gang of Ten, then voted unanimously for House rule allowing consideration of the full $ 3.5 trillion budget resolution, also known as Build Back Better. In return, the leadership guarantees a vote on the small bipartisan infrastructure bill by September 27.
On all substantive spending issues, the agreement kicks the road. How much of the rule’s $ 3.5 trillion maximum will actually win the support of the most conservative Democrats in the House and Senate? What will the Congressional Progressive Caucus do if the proposed cuts are too big? All of this will be negotiated next month.
But there is another important bill pending that partially overlaps with infrastructure measures. This is Chuck Schumer’s omnibus Chinese and American manufacturing bill, now called the United States Innovation and Competition Act (USICA).
Thanks to the conclusion of intense Schumer deals, taking advantage of Republican aggression against China as a threat to the economy and national security, the USICA passed the Senate by a formidable 68-32 vote on the 8th. June. In many ways, it was a much more impressive two-party system. realization that the modest bipartisan infrastructure bill, which includes about $ 60 billion in new money per year over ten years, much of which is traditional and uncontroversial.
The USICA includes the old CHIPS Act, which allocates $ 52 billion under the National Defense Authorization Act, to create incentive programs for increased semiconductor production in the United States. The bill also includes more money for broadband and more funding for R&D as part of a new technology and innovation direction within the National Science Foundation, as well as support for rebuilding supply chains in other critical industries and technologies.
The Schumer Bill also contains several trade provisions aimed at boosting domestic production and containing Chinese mercantilism. It would codify into law the strengthened provisions of President Biden’s Buy American executive order of last February and strengthen requirements that federally funded infrastructure projects must use only iron, steel and building materials. made in the United States.
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Schumer’s bill also includes clever and salutary elements of what was once called the barrel of pork. The bill guarantees new regional technology centers. And 10 billion dollars of funds for the national production of semiconductors must be allocated by the states.
Since the USICA is forcing trade policy changes but also spending a lot of money, you might think that Schumer, given his influence as the majority leader, would invest as much of it as possible in the reconciliation process. And in a memorandum Schumer sent to committee chairs, he proposed to the leadership of the National Science Foundation to eventually be included in the reconciliation. But a larger-scale inclusion of all spending measures in the USICA is obviously not Schumer’s plan.
According to my sources, Schumer has pledged to get an independent vote on USICA in the House by the end of the year. He would be wary of the fact that if too much USICA spending is included in Build Back Better it would kill him as a stand-alone bill, which includes much more than spending. Reconciliation items, generally expenditure, must be linked to budgetary actions.
Given that a very big train – reconciliation – will be leaving the station in October, you could say it’s crazy; or he could be crazy as a fox.
After all, Schumer managed to get his bill through the Senate with a filibuster-proof margin of more than two-thirds. That far exceeds the 51 votes Democrats (with great luck and bargaining) hope to get when the Senate passes the Build Back Better budget resolution.
There are, however, a few bugs. First, the House is not yet on board. Schumer’s Senate legislation was cobbled together by making deals with key Democratic and Republican senators, who first made deals with each other. Different titles of the bill came out of different committees. Other amendments were added on the floor.
What is more, Schumer has won the support of many key senators. One downside is that the bill is unique legislation in the Senate.
On the House side, jurisdiction is fragmented. A key player is Rep. Eddie Bernice Johnson of Texas, chairman of the House Committee on Science, Space and Technology. She does not have a close working relationship with Schumer.
Schumer has pledged to get a stand-alone vote on USICA in the House by the end of the year.
The timing of reconciliation, slated for completion next month, forces Schumer to judge USICA’s potential results months in advance. The House may eventually pass the Schumer Bill. It is more likely that some elements of USICA, but not all, will be approved by the House on an ad hoc basis.
That leaves it up to Schumer to figure out what spending-related items might get a stand-alone vote in the House and what might be built into reconciliation. But presumably, every provision placed in reconciliation could undermine the momentum of a larger USICA bill.
A second problem is that in the various big deals that Schumer has done to bring together a broad senatorial coalition, very bad things have entered the USICA. The worst provision was the work of Democratic Senator Ron Wyden of Oregon and Republican Senator Mike Crapo of Idaho. It suspends tariffs on China until the end of 2022 and forces the government to reimburse importers for duties paid. This provision runs counter to the rest of the bill and is a gift to Beijing.
Another area is conspicuous by its absence. A shameful aspect of America’s indulgence towards Chinese commercialism is the open access that Chinese state-owned industries have to U.S. capital markets, enriching middlemen like Goldman Sachs. Some Republicans, like Marco Rubio, have proposed limits. Rubio made such a proposal in this magazine.
With all of USICA’s distant bipartisan arrangements, most of them exemplary, there was no room for a Rubio Amendment. In his work as a loyal and astute leader for Joe Biden’s progressive agenda, even adding some progressive elements of his own, Chuck Schumer has come a long way. He hasn’t come so far from Wall Street.