United States Innovation and Competition Act

The United States Innovation and Competition Act of 2021 (USICA) (S. 1260), formerly known as the Endless Frontier Act, was United States legislation sponsored by Senators Chuck Schumer (D-NY) and Todd Young (R-IN) authorizing $110 billion for basic and advanced technology research over a five-year period. Investment in basic and advanced research, commercialization, and education and training programs in artificial intelligence, semiconductors, quantum computing, advanced communications, biotechnology and advanced energy, amounts to $100 billion. Over $10 billion was authorized for appropriation to designate ten regional technology hubs and create a supply chain crisis-response program.[1] The act is aimed at competing with China[2] and to respond to US fears of an AI Cold War.[3]

U.S. Innovation and Competition Act
Great Seal of the United States
Long titleTo establish a new Directorate for Technology and Innovation in the National Science Foundation, to establish a regional technology hub program, to require a strategy and report on economic security, science, research, innovation, manufacturing, and job creation, to establish a critical supply chain resiliency program, and for other purposes.
Number of co-sponsors13
Legislative history

A modified version of the bill became law on August 9, 2022, as the CHIPS and Science Act.

Legislative history

Before the full Senate vote, some Republican lawmakers such as Marco Rubio called for provisions that would prevent the allocation of grants to companies with financial ties to the People's Republic of China.[4] Rubio's amendment to limit the Director of National Intelligence from issuing grants to companies invested in the People's Republic of China was tabled 55–40.[5] On June 8, 2021, the USICA passed 68–32 in the Senate with bipartisan support.[6]

The America COMPETES Act of 2022 (H.R.4521) passed the House on February 4, 2022.[7] The Senate passed an amended bill by substituting the text of H.R.4521 with the text of the USICA on March 28, 2022. A Senate and House conference was required to reconcile the differences.[8]

Congress Short title Bill number(s) Date introduced Sponsor(s) # of cosponsors Latest status
116th Congress Endless Frontier Act of 2020 H.R. 6978 May 22, 2020 Ro Khanna

(D-CA)

 12 Died in committee
S.3832 May 21, 2020 Chuck Schumer

(D-NY)

 7 Died in committee
117th Congress Endless Frontier Act of 2021 H.R.2731 April 21, 2021 Ro Khanna

(D-CA)

 24 Referred to committees of jurisdiction.
America COMPETES Act of 2022 H.R.4521 July 19, 2021 Eddie Bernice Johnson

(D-TX)

 101 Enacted as part of CHIPS and Science Act
United States Innovation and Competition Act of 2021 S.1260 April 20, 2021 Chuck Schumer

(D-NY)

 13 Passed in the Senate (68-32).[9]

Responses

President Joe Biden released a statement supporting the bill saying "I'm heartened by Congress’ bipartisan work so far, and its commitment to quick action to get this to my desk as soon as possible. Together, we have an opportunity to show China and the rest of the world that the 21st century will be the American century – forged by the ingenuity and hard work of our innovators, workers, and businesses."[10]

The bill has been described by the New York Times as “the most expansive industrial policy legislation in U.S. history.”[11]

Organizations which have supported USICA include the AFL-CIO,[12][13] National Association of Manufacturers,[14] Semiconductor Industry Association,[15] Thurgood Marshall College Fund and American Association of Universities.[16] A letter organized by the Semiconductor Industry Association which called on Congress to pass the bill was signed by more than 100 CEOs.[17]

A poll conducted by the left wing think tank Data for Progress showed that 73% of respondents supported the bill.[18] The editorial boards of the Seattle Times and Buffalo News have both called for the passage of the bill into law.[19][20]

The Chinese government has criticized the bill for its provisions on Taiwan[21] and "Cold War mentality and ideological prejudice", and has warned of retaliation if it becomes law.[22][23] Schumer, one of the co-sponsors of the bill, has dismissed those threats, saying “No one will stand in the way of America strengthening our innovation capacity and domestic production so that we can launch a new era of leadership.” [24]

In November 2021, it was reported that some U.S. executives received letters from China's embassy in Washington, D.C., which pressed U.S. businesses to lobby, in possible violation of the Foreign Agents Registration Act (FARA), members of the Congress to alter or drop specific bills that seek to enhance U.S. competitiveness. The Chinese embassy explicitly asked companies to oppose the USICA and the Eagle Act (H.R. 3524), and warned that if the legislation passed, U.S. companies would risk losing market shares or revenues in China.[25][26]

See also

References
  1. Rattigan, Kathryn M. (April 15, 2021). "The Endless Frontier Act: Shifting the Focus from Defense to Offense". National Law Review, Volume XI, Number 105. Archived from the original on 13 May 2021. Retrieved 13 May 2021.
  2. Andrew Desiderio (17 May 2021). "Senate advances a rare bipartisan deal on countering China". POLITICO. Archived from the original on 2021-06-10. Retrieved 2021-06-10.
  3. Ni, Vincent (9 June 2021). "China denounces US Senate's $250bn move to boost tech and manufacturing". The Guardian. Retrieved 5 July 2021.
  4. Martina, Michael; Shepardson, David (13 May 2021). "U.S. Senate panel approves tech bill to address China". Reuters. Archived from the original on 13 May 2021. Retrieved 13 May 2021.
  5. Rubio, Marco (2021-05-27). "S.Amdt.1802 to S.Amdt.1527 to S.Amdt.1502 to S.1260 - 117th Congress (2021-2022) - Amendment Text". www.congress.gov. Archived from the original on 2021-06-10. Retrieved 2021-06-10.
  6. Basu, Zachary (June 8, 2021). "Senate passes sweeping China competition bill in rare bipartisan vote". Axios. Archived from the original on June 8, 2021. Retrieved June 8, 2021.
  7. "U.S. House backs sweeping China competition bill as Olympics start". Reuters. 2022-02-04. Retrieved 2022-02-04.
  8. "Senate Overwhelmingly Approves Innovation and Competition Legislation, Setting Stage for Conference Committee". U.S. Senate Committee on Commerce, Science, and Transportation. 2022-03-28. Retrieved 2022-03-28.
  9. Geske, Dawn (2021-06-09). "$52B Chip Bill Passes Senate In 'Competition To Win' Against China". International Business Times. Archived from the original on 2021-06-23. Retrieved 2021-06-23.
  10. "Statement by President Biden on the America COMPETES Act of 2022". The White House. 2022-01-25. Retrieved 2022-01-25.
  11. Sanger, David E.; Edmondson, Catie; McCabe, David; Kaplan, Thomas (June 7, 2021). "Senate Poised to Pass Huge Industrial Policy Bill to Counter China". The New York Times. New York Times.
  12. "AFL-CIO strongly backs U.S. House bill on China competition, chips". Reuters.
  13. "AFL-CIO says lawmakers should remove 'pro-China' provisions from chips bill". Reuters.
  14. "Manufacturers weigh in as Congress negotiates China competition bill". Fox Business. May 19, 2022.
  15. "Five key parts of the Senate's sweeping China competitiveness bill". The Hill.
  16. "The Innovation and Competition Act is progressive policy". The Hill.
  17. "More than 100 CEOs urge U.S. Congress to pass China competition bill". Reuters.
  18. "Progressive poll finds broad support for China competitiveness bill". The Hill.
  19. "Congress must unite behind China competitiveness bill". The Seattle Times.
  20. "The Editorial Board: Progressives' speed bumps aren't helpful to bill promoting U.S. competitiveness". Buffalo News.
  21. huaxia, ed. (February 8, 2022). "China's top legislature slams U.S. bill with negative China content". Xinhua. Xinhua News Agency. Retrieved February 9, 2022. The bill's content relating to Taiwan seriously violates the one-China principle and the three China-U.S. Joint Communiqués, the statement said.
  22. Haltiwanger, John. "China blasts US bill aimed at challenging its growing global influence as 'full of Cold War mentality'". Business Insider. Archived from the original on June 9, 2021. Retrieved June 10, 2021.
  23. KINE, PHELIM; BADE, GAVIN (November 28, 2021). "China blowback looms for Schumer's Innovation and Competition Act". Politico. Retrieved November 29, 2021.
  24. KINE, PHELIM; BADE, GAVIN (November 28, 2021). "China blowback looms for Schumer's Innovation and Competition Act". Politico. Retrieved November 29, 2021.
  25. "Beijing urges US businesses to lobby against China-related bills in Congress". The Guardian. 12 November 2021. Retrieved November 13, 2021.
  26. "EXCLUSIVE Chinese embassy lobbies U.S. business to oppose China bills -sources". Reuters. Retrieved 14 November 2021.
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