Congress is setting the stage for consideration of the most extensive legislation on technological leadership, innovation, and global competitiveness in decades. Prompted by a global pandemic that has underscored the critical importance of technology, a worldwide shortage of semiconductors, and competitive tensions with China, members of Congress are developing a wide-ranging, bipartisan package with both domestic and international components.
The legislation will likely include two major parts with additional components to be added just prior to or during consideration on the Senate floor: (1) the Endless Frontier Act, recently reintroduced by Senate Majority Leader Chuck Schumer (D-NY) and Senator Todd Young (R-IN) in the Senate, and Representatives Ro Khanna (D-CA) and Mike Gallagher (R-WI) in the House; and (2) the Strategic Competition Act, recently introduced by Senator Bob Menendez (D-NJ) and Senator James Risch (R-ID) in the Senate. The Senate Foreign Relations Committee passed the Strategic Competition Act by a vote of 21 to 1 on April 21, 2021. The Senate Commerce, Science, and Transportation Committee is expected to consider and vote on the Endless Frontier Act as soon as next week.
The Endless Frontier Act focuses on technological leadership and innovation at home. The bill authorizes $100 billion in a new Directorate of Technology under the National Science Foundation to support U.S. universities, non-profits, and industry partners pursuing research and development (R&D), education, and training in ten key technology focus areas. The investments include $35 billion to establish university technology centers, $15 billion to support students, $10 billion for test beds and fabrication facilities, and $5 billion for moving technology from laboratories to market. The bill also includes roughly $12.5 billion for additional programs to encourage domestic manufacturing, innovation, and supply chain resiliency.
After the Endless Frontier Act was introduced, the White House praised the bill as “one more encouraging sign of the bipartisan support for investing in America’s competitiveness” and lauded its “commitment to making a bold investment in American innovation” and “focus on strengthening American supply chains.” On April 29, 2021, President Biden stated in his address to a joint session of Congress that the country now spends less than half of what it used to on R&D, “China and other countries are closing in fast,” and the United States has “to develop and dominate the products and technologies of the future.”
Lawmakers are also considering emergency funding to address the semiconductor chip shortage and boost domestic manufacturing. Congress enacted the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act and the Utilizing Strategic Allied (USA) Telecommunications Act last year, both of which established technology funds: the former for semiconductor R&D and fabrication facilities and the latter for deploying more secure networks based on open architecture known as open radio access networks (open-RAN). Congress did not appropriate any amounts for these programs, however, and the Endless Frontier Act is now being eyed as a vehicle for funding these programs. The Senate is reportedly discussing a proposal for $30 billion to fund the CHIPS Act, and a bipartisan group of Senators has expressed their support for $3 billion to fund the USA Telecommunications Act.
The Strategic Competition Act focuses on technological leadership and economic competition abroad, particularly with respect to China. The bill establishes several Department of State programs including a partnership to assist foreign countries with expanding Internet access reliably and securely ($500 million); a network to develop high-quality infrastructure in the Indo-Pacific region ($75 million); and authorization for U.S. embassies to support U.S. companies with supply chain management issues related to China ($90 million). The bill adopts senses of Congress including the need for U.S. leadership in international standards-setting bodies for critical technologies; securing supply chains and networks; and using sanctions when necessary to respond to unfair practices by China. The bill also requires the Department of State to create a list of intellectual property violators and to publish an unclassified report on China’s support, including state subsidies and discriminatory treatment, for Chinese companies.
Other Senate committees—including Finance; Banking, Housing, and Urban Affairs; and Homeland Security and Governmental Affairs—are attempting to develop additional bipartisan provisions for the package. Leader Schumer has stated his intention to bring the package to the Senate floor for a vote this spring or summer.