In a key procedural vote, the U.S. Senate on Tuesday voted to limit debate on a $52.7 billion bill intended to spur domestic production of semiconductor chips, an item in short supply since the pandemic and vital to Michigan’s dominant auto industry.
The Senate voted 64-32 to limit debate, with 17 Republicans joining Democrats in favor of advancing the legislation. A final vote, which requires only a simple majority in the 100-member Senate, is expected as soon as Wednesday in the chamber, with the legislation then going to the U.S. House, where the Democratic majority is expected to give it final passage.
U.S. Sen. Bernie Sanders, a Vermont independent who caucuses with the Democrats, voted against the legislation, characterizing it as a handout to corporate interests.
President Joe Biden has said he would sign the legislation. Just before the vote, his administration put out a statement saying it would “strengthen our economic and national security, catalyze semiconductor production and innovation, advance U.S. leadership in science and technology, boost resilience in U.S. supply chains, create good-paying jobs for U.S. workers in communities across the country and lower prices for U.S. consumers.”
More:Pelosi says legislation to address chip shortage close to passage
More:Michigan lawmakers again urge approval of funding for semiconductor production
Semiconductor chips are tiny circuits that control the flow of electrical current and are found in a vast number of electronics, appliances and other manufactured items. Some modern vehicles have thousands of them.
During the COVID-19 pandemic, however, the number of semiconductors available became limited by plant shutdowns in Asia, especially Taiwan, where the vast majority of the chips are produced. Many of those that were available went to other electronic goods, like computers, which were in particularly high demand, and to manufacturers that had special arrangements with producers.
That in turn led to a shortage in the U.S. and elsewhere that helped drastically lower the availability — and push up the price — of vehicles and other products, fueling some of the record inflation that has been seen worldwide.
The semiconductor legislation, if approved as expected, could forestall some of those problems in the future if it succeeds in reinvigorating U.S. production of semiconductors.
U.S. Sen. Gary Peters, D-Mich., who along with fellow Michigan Democratic U.S. Sen. Debbie Stabenow helped secure $2 billion of the funding to specifically address the need for more domestic production of “mature” or older design chips used in automobiles, said semiconductors are “absolutely essential” for manufacturing.
“We know there are cars now in parking lots across our state which are fully built but which need chips to be delivered to the dealership,” Peters said just ahead of the vote Tuesday. “Semiconductors are the building blocks of the modern economy. They power everything from automobiles, consumer electronics and household appliances, to the advanced weapons systems necessary for the national defense.”
Stabenow added, “The bottom line… is the fact that this is going to lower costs for consumers. It’s going to bring jobs home… and it’s going to strengthen our national security.”
It’s taken a long time for this bill to get to this point, however. Initially, the funding was part of a larger bill aimed at improving U.S. competition with Asian competitors, especially China. That legislation was approved by a bipartisan majority in the Senate more than a year ago.
But it took months for the U.S. House to finalize its version of the bill and no resolution between the two chambers could be found, especially with Republicans appearing to be ready to walk away from the legislation if Democrats tried to use their slimmest of majorities to force through sweeping legislation that would raise taxes and fund climate change and social spending programs.
When Democratic U.S. Sen. Joe Manchin of West Virginia said he couldn’t vote for that larger package recently, essentially meaning it can only be a much more narrow piece of legislation, Republicans saw their way to supporting a scaled-down semiconductor bill.
The legislation as amended in the Senate is expected to provide some $39 billion in incentives to companies building or expanding facilities to make semiconductors in the U.S., plus billions more in research and development that can help those facilities train workers and improve their product lines.
Some decades ago, the U.S. produced nearly 40% of worldwide semiconductors but that has dropped to about 12% in recent years. But there have been recent announcements, including Intel’s plans for a $20 billion chips facility in Ohio and Samsung’s proposed $17 billion plant in Texas, suggesting that could change dramatically, especially if Congress moves forward with the legislation.
Contact Todd Spangler attspangler@freepress.com. Follow him on Twitter@tsspangler. Read more onMichigan politics and sign up for ourelections newsletter.