As China competition bill takes shape, Georgia lawmakers push for resources

A shortage in microchips has forced the Kia car plant in West Point to shut down for days at a time because the tiny electronics are such a necessary element to vehicles coming down the assembly line. Congress is trying to tackle the problem through a bill that would spend $50 billion to boost domestic production of microchips as part of a larger package intended to foster research and innovation in America. (Hyosub Shin / Hyosub.Shin@ajc.com)

Combined ShapeCaption
A shortage in microchips has forced the Kia car plant in West Point to shut down for days at a time because the tiny electronics are such a necessary element to vehicles coming down the assembly line. Congress is trying to tackle the problem through a bill that would spend $50 billion to boost domestic production of microchips as part of a larger package intended to foster research and innovation in America. (Hyosub Shin / Hyosub.Shin@ajc.com)

WASHINGTON — The coronavirus pandemic and resulting shutdowns made it difficult for American companies to obtain computer chips made in China, a crucial component for electronics big and small. Products were scarce, and shipping logjams made them slow to arrive.

In Georgia, the Kia car plant in West Point shut down for days at a time because the tiny electronics are such a necessary element to vehicles coming down the assembly line. The semiconductor shortage is a national issue and one that Congress is trying to tackle through a bill that would spend $50 billion to boost domestic production of microchips as part of a larger package intended to foster research and innovation in America.

The House and Senate each passed its own version of the bill, and both chambers agree on the semiconductor funding and some of the other provisions. A 107-member conference committee was appointed to work out a compromise on the rest.

Three lawmakers from Georgia are in that group: U.S. Sen. Raphael Warnock and U.S. Reps. Buddy Carter and David Scott. All three say their goal is to ensure the final package includes resources for Georgia universities and businesses, whether it be those who are coming up with new farming and food production methods or those hoping to improve the semiconductor supply chain.

That issue has affected even smaller businesses such as the Planters Telephone Cooperative in southeast Georgia.

Chief Executive Stephen Milner said it has become more difficult to expand telephone and internet services to new businesses and homes in rural areas because his company can’t guarantee it will get the parts needed to complete the job.

“When you’re unable to acquire product to put those customers into service with broadband, when you have lead times that exceed 60 weeks, it gets difficult trying to plan source material just to get them with the services that they’re requesting,” he said.

Many of the companies he partners with — big names such as Cisco and Sienna Systems — are also experiencing the same backlogs that can produce waits of over a year and bidding for the same scarce semiconductor chips as everyone else, Milner said.

The bill in Congress aims to boost research funding, incentivize businesses to boost manufacturing on U.S. soil and encourage new innovations that could help give America a leg up on this issue and many others, particularly when it comes to competing against China.

The Senate passed its package, called the United States Innovation and Competition Act, roughly a year ago. The House proposal is called the America COMPETES Act. It was approved in February with all but one Democrat in favor and all but one Republican opposed.

Now, leaders from both chambers are negotiating a final bill they hope can get the support of at least 60 senators and a majority of House members. The committee held its first and only public meeting so far on May 12, but much of the negotiating on the roughly 3,000-page measure has happened behind closed doors.

Senate Leader Chuck Schumer and House Speaker Nancy Pelosi issued a statement last week after meeting with their Republican counterparts, Mitch McConnell and Kevin McCarthy, to determine a pathway to finalizing the legislation. Their words hinted that there have been snags along the way.

“On behalf of House and Senate Democrats, we expressed our belief that there is no reason that we should not pass this bill through Congress in July,” Schumer and Pelosi wrote. “Democrats have already made accommodations in the name of reaching an agreement, which we are optimistic can happen soon. This legislation is necessary to help lower costs for the American people by addressing supply chain issues, the chips shortage and more, and we urge all Members to work with the urgency the situation deserves.”

Pelosi and Schumer’s goal is for the bill to be finished before Congress breaks for the August recess, but the days are ticking away. McConnell, in a post on social media Thursday, raised the possibility of yet another roadblock.

He was responding to news that a separate package being shaped by Democrats was beginning to take shape and is using a process, called reconciliation, that would allow it to become law without the support of any Republicans. That legislation is likely to focus on climate change, prescription drug costs and insurance premiums for low-income people purchasing coverage on federal exchanges.

If Democrats pursue that package, the Kentucky Republican wrote, he will withdraw GOP support from the China competition measure that needs the votes of at least 10 Senate Republicans to avoid a filibuster.

“Let me be perfectly clear: there will be no bipartisan USICA as long as Democrats are pursuing a partisan reconciliation bill,” McConnell wrote on Twitter, using the acronym for the Senate version of the bill.

Still, the members of the conference committee from Georgia are participating in discussions in hopes an agreement can be reached. Warnock recently submitted letters from Georgia Tech, the Georgia Chamber of Commerce and three local chambers that indicated their support for the legislation while also outlining their various priorities.

The Georgia Chamber advocated for language found in the Senate bill that would require e-commerce sites such as Amazon to verify and publish information about the sellers using the platform. Chambers and other business groups say it could deter online sales of counterfeit products or items that were procured by theft.

The House version has the same language but would go further by making online platforms liable if they don’t implement safeguards to prevent fake or harmful products from being sold. Disagreement on this language has become just one of the sticking points during negotiations on the bill.

Warnock, for his part, is most concerned about the semiconductor shortage and ensuring money for research and development is used to create technology centers near Georgia colleges, including its HBCUs.

“The good news is, I think there’s interest on both sides of the aisle around semiconductor production, investments in HBCUs and investments in our regional tech hubs,” the Atlanta Democrat said. “And this is a great opportunity to do something that’s bipartisan.”

Scott, another Atlanta Democrat who was named to the conference committee by virtue of his role as chairman of the House Agriculture Committee, said he would focus on ensuring that the package includes research dollars that can improve farming, boost food production and address issues in the supply chain for agricultural tools and products.

Carter represents the same pocket of southeast Georgia that Planters serves. The Republican from Pooler said he hopes the final bill reflects the diverse perspectives of the members of the committee. But he wants the focus for everyone to be on the competitor on the other side of the globe.

“China is not our friend, they are not our adversary, they are our enemy,” Carter said. “Now, I know enemy is a strong word, but at the same time they want to overtake us as the economic leader of the world. We need to keep that in mind.”

Keeping competition with China at the forefront of negotiations, Carter said, will guide the discussions and help lawmakers prioritize what to keep and what to throw out during deliberations.

He sees a lot of room for Georgia to benefit with money going to the ports to address backlogs and American pharmaceutical companies to ramp up domestic production. He, of course, is also concerned about the microchip issue.

“I’ve told my Democratic colleagues that I think this is going to be the signature legislation of this session,” Carter said. “Some say, ‘No, infrastructure was.’ Well, I think the two greatest challenges we have in this country right now are China and debt. And this is going to help us compete against China.”