The Showdown Over the China Competition Bill

Plus: What might end up in the annual defense authorization measure?

Published July 12, 2022

Good morning. Congress is back from a two-week recess, but the Wilt family is still stuck at home with coronavirus. I’ll blame this edition’s not-entirely-graceful writing on the brain fog (or as I accidentally but very aptly called it during a Dispatch-wide conference call last week, brain frog).

China Competition Bill on Ice

For more than a year, Congress has been debating a major package to boost U.S. semiconductor chip production and scientific research. The bill, which has passed in two different forms in the House and Senate, is broadly intended to heighten American competitiveness. Members of the conference committee negotiating the measure have struggled to rally around a compromise version—and now they face new headwinds.

With Senate Democrats now pulling together an unrelated drug pricing and climate bill they could advance on party lines, Senate GOP Leader Mitch McConnell issued an ultimatum at the end of June: Republicans won’t work on the bipartisan China competition bill as long as Democrats are working on their partisan budget reconciliation package. This has translated into a real logjam, with Senate Republicans canceling meetings and putting a hold on efforts to rectify differences with the House.

Disagreements in the talks already had various interest groups searching for lifeboat bills—like spending packages, or the annual defense authorization bill—to attach their priorities to before the 117th Congress ends. But McConnell’s ultimatum made those concerns more concrete and left Democratic aides weighing how to circumvent the stalemate and advance COMPETES Act items.

As Axios reported last week, one option aides have floated is to bring the Senate version of the competitiveness bill forward in the House and pass it, getting key items like billions of dollars for semiconductor chips over the finish line. But simply accepting the Senate bill would set aside many House priorities, something Democratic members wouldn’t be happy about. Democrats have a thin margin in the chamber, meaning they’ll need backing from nearly all their members to pass the bill if Republicans were to stand by McConnell and oppose it.

Democrats could also add some of the most meaningful components of the competition bill to their own budget reconciliation measure, meaning they’d be able to pass it without GOP support. That could complicate the reconciliation talks even more, though, and the Senate parliamentarian could impose some limits under the Senate rules. (Roll Call has a good rundown of potential legislative strategies here.)

Another more piecemeal option aides have considered is the annual National Defense Authorization Act (NDAA). Some offices introduced China competition-related amendments to the must-pass defense bill in the House last week. A person familiar with the conversations told The Dispatch that House Democratic leaders have made it clear the NDAA won’t turn into the vehicle for many COMPETES provisions, although a few could still make the cut. The debate will play out in the House Rules Committee and on the House floor this week. (For a sense of how slow the competition bill debate has been, recall that Senate Majority Leader Chuck Schumer tried to attach the Senate’s version of the China bill to last year’s NDAA while talks were stalled in the House. That didn’t pan out.)

Aides gathered privately to discuss potential amendments to the NDAA during an hours-long virtual meeting last week. Members introduced more than 1,200 amendments in total, a fraction of which are related to the China competition debate.

One amendment by Rep. Ami Bera, for example, would include a bill supporting Taiwan—the Taiwan Peace and Stability Act—in the defense package. The House passed it in the chamber’s China competition bill earlier this year. One staffer who isn’t tied to Bera’s effort said that as of Monday afternoon the plan appeared likely to reach the floor for consideration to advance in the defense bill.

Another amendment, sponsored by Rep. Zoe Lofgren, has faced more roadblocks. The plan would allow more immigrants with advanced degrees into the United States, a change the defense industry has been calling for to meet demand for essential positions and to maintain a scientific advantage over China. (For more background, look back on the letter supporting it from former defense and national security officials that we wrote to you about in May.)

The language passed the House in the competition bill, but Senate Republicans have rejected it in talks for the final version, opposing all immigration provisions.

Groups behind the effort made an attempt at including it in the defense bill last week, but sources said the House Ways and Means Committee has pushed back with technical concerns. The amendment levies a fee for applicants, a revenue-raising mechanism to comply with the NDAA rules. The Congressional Budget Office has estimated the amendment would cost $1 billion over 10 years, according to a person involved in the talks; the fee was intended to offset that. The Ways and Means Committee classified the fee as a tax, which means the amendment would run afoul of the House rules. Section 5(a) of House Rule 21 for this Congress notes that a bill “carrying a tax or tariff measure may not be reported by a committee not having jurisdiction to report tax or tariff measures.” The Ways and Means panel jealously guards its jurisdictional prerogatives.

On Tuesday morning, sources said they expected leaders to reject the amendment on those grounds.

Other China competition-related amendments are expected to be sent to the dustbin for similar reasons, with committees vying for jurisdiction. But House Democratic leaders also sent a broader message against using the NDAA to skirt McConnell’s maneuvering, making the case to aides last week that Republicans should not be rewarded for refusing to cooperate on the China bill. (For their part, people advocating for these amendments vehemently disagree with the idea that passing Democratic priorities in a different bill constitutes rewarding McConnell for the stalemate.)

House Democratic leaders have instead insisted on proceeding with the China competition negotiations, hoping to wear McConnell down.

“I hope Leader McConnell will put aside politics and continue to support negotiations on a bill he already voted for,” House Majority Leader Steny Hoyer told Axios last week. “There’s no reason not to move ahead on legislation where we have bipartisan agreement—the American people expect us to get this done.”

Democrats also plan to make the national security case for the competition package more forcefully in the coming days.

Schumer has scheduled a classified briefing for all senators on Wednesday, where administration officials will push for congressional action.

Sen. Joe Manchin, the West Virginia Democrat who is central to the latest attempt at a reconciliation bill, said Monday that he won’t be deterred by McConnell’s threat.

“I’m not walking away if anybody’s going to threaten me or hold me hostage, if I can help the country,” Manchin told CNN’s Manu Raju. “And if they want to play politics and play party politics, shame on ‘em.”

NDAA Amendments Haley Noticed in Her COVID Fugue State

Last week, in a haze of quarantine and half-wakefulness, I scanned through the NDAA amendments lawmakers proposed (and by “scanned through” I mean I searched key phrases for pet issues I think are interesting). Here are a few that caught my eye:

Rep. Jackie Speier has introduced an attempt to “brain drain” Russia in retaliation for its unprovoked and brutal war in Ukraine. The amendment would boost immigration to the United States for Russian scientists to deprive Putin of high-skilled workers.
Rep. Sheila Jackson Lee introduced an amendment requiring a Defense Department report on the risks of man-made space debris in low-earth orbit, and how to mitigate it.
Rep. Barbara Lee sponsored an amendment to repeal the 2002 authorization for the use of military force against Iraq. Another amendment by Lee, alongside GOP Rep. Peter Meijer, expresses the sense of Congress that authorizations for military force should include expiration dates.
Rep. Scott Perry has a slate of China-related amendments, but this one stands out: It would establish as the policy of the United States that Tibet is an occupied country.

I also asked folks on the internet to send in their favorite amendments yesterday (yes, self-promotion was allowed).

Ben Kamens, an aide to Rep. Chuy García, pointed out García’s amendment to require a government report on the humanitarian impacts of U.S. sanctions on foreign countries. The report would include an assessment of the impact of sanctions with respect to civilian access to water, food, and other supplies, changes to the general mortality rate, maternal mortality, life expectancy, and literacy, and increases in refugees or migration to or from a country that has been sanctioned, among other items.
Andrew Lautz, director of federal policy at the National Taxpayers Union advocacy group, wrote in to highlight Rep. Pramila Jayapal’s amendment to end a requirement for service branches to send Congress unfunded priorities lists each year. (Read more here and here.)
Rep. Jim Langevin emphasized his amendment to make special immigrant visas available to people working for American entities in fields or research related to national security and innovation. “This amendment will help attract the world’s brightest scientists to bolster our national security,” he wrote.
Ellen Milhiser noted both Rep. Matt Gaetz and Rep. Alexandria Ocasio-Cortez have amendments to include MDMA and psilocybin mushrooms in studying alternatives to prescription opioids in treating military members for pain and/or PTSD.

On the Floor

The House will vote again this week on the active shooter alert bill that failed in the House last month. Democratic leaders are bringing it up under normal rules rather than expedited procedures, and it is expected to pass this time.

House lawmakers will also vote on two bills to codify and expand abortion access.

Also on the schedule: Nine post office renaming bills.

The Senate will consider several executive nominees, including Steven Dettelbach to direct the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Schumer and Sen. Richard Blumenthal have both tested positive for coronavirus, potentially complicating some votes this week. Sen. Pat Leahy is also out after breaking a hip.

Key Hearings

The House select committee investigating the January 6 attack on the Capitol is meeting this afternoon for a public hearing. Information and livestream here.

Senators on the Judiciary Committee are meeting this morning for a hearing on the legal consequences of the Supreme Court’s Dobbs decision. Information and livestream here.

Federal Transit Administrator Nuria Fernandez is appearing before the Senate Banking, Housing, and Urban Affairs Committee this morning for a hearing on advancing public transportation under the bipartisan infrastructure funding package passed last year. Information and livestream here.

The House Ways and Means Committee will hold a hearing Wednesday morning on housing scarcity in America. Information and livestream here.

The Senate committee that deals with health care will meet Wednesday morning for a hearing on reproductive health care in post-Roe America. Information and livestream here.

A Senate Energy and Natural Resources subcommittee will meet Wednesday afternoon for a hearing on how to reduce energy prices. Information and livestream here.

The House Judiciary Committee is scheduled to meet Thursday morning for a hearing on the privacy implications of the Supreme Court’s Dobbs decision. Information and livestream here.

Officials will testify before the Senate Homeland Security and Governmental Affairs Committee Thursday morning during a hearing on protecting America from unmanned aerial systems. Information and livestream here.