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Speaker of the House Nancy Pelosi stands among members of Congress
Speaker of the House Nancy Pelosi stands among members of Congress after signing the CHIPS and Science Act at the Capitol in Washington, D.C. on Friday. Saul Loeb / AFP via Getty Images

Analysis: How did Democrats and Republicans agree on a $280 billion tech bill?

The short answer is China, but the bill also points to changes in how Congress looks at the economy.


If you’re tuning into political news just now, you might be wondering how the House and Senate ended up passing a $280 billion bill with bipartisan support to prop up semiconductor manufacturers and invest in advanced science and tech research. 

The CHIPS and Science Act now headed to President Biden's desk sounds like the kind of proposal that would have been decried by the right as socialism a decade ago, especially under a Democratic president. Republicans famously accused President Obama of "picking winners and losers” by using government funds to boost emerging tech companies like Solyndra and Tesla. This bill names the industries it wants to win and then spends tens of billions of dollars propping them up. 

What changed? The short answer: China

Both Republicans and Democrats have grown increasingly concerned about China’s role in the economy, especially as its government has grown more authoritarian at home and engaged in more saber-rattling abroad. These fears grew in the Covid era, which exposed how reliant the U.S. is on foreign supply chains for items like semiconductors, which go in everything from cars to videogames and are currently in short supply.

China’s government has invested heavily in building out its own semiconductor industry. The advanced semiconductor field is dominated by Taiwan, which raises the prospect of worldwide disruptions if China sought to isolate or invade the self-governed democracy, which they consider to be their territory. Imagine what happened to the oil market after Russia invaded Ukraine, but for semiconductors, basically.

These same concerns have built momentum for policy that boosts science and tech research, especially in areas like artificial intelligence and quantum computing that lawmakers worry could give an economic and national security edge to whichever country secures an early breakthrough. The CHIPS and Science Act identifies a variety of fields that fit this mold and provides funding for regional technology hubs, research grants, and education programs at every level from kindergarten on up, to help speed development and turn out more STEM workers.

Not everyone is happy with the product. Many Republicans, especially in more libertarian circles, see it as a free-market distortion that showers billions of dollars on companies that are already profitable and don’t need the help, and argue China’s own state investments have not proven effective. On the left, Senator Bernie Sanders, I-Vt. and others have also derided the bill as “corporate welfare” that doesn’t include enough protections for workers or give taxpayers a stake in company profits. 

For now, though, industrial policy around science and tech looks like one of the last bastions of bipartisanship that can unlock significant spending.