15 months and counting, massive China bill tests ability of a divided US Congress to compromise

In late February 2021, as US President Joe Biden's administration was just getting started, a Congress hungry to confront Beijing dived into a new project - sweeping legislation meant to jolt American industry and alliances in the competition with China.

Fifteen months later, after scores of hearings, speeches, votes, and even name changes, the bill now faces a final, towering hurdle: actually becoming law.

In a potential coup for Beijing, observers inside and outside Congress say they do not know if it will pass because of toxic partisanship, particularly in the House of Representatives - even though Republicans and Democrats alike say that the US must do more to take on China.

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

"Pass the damn bill and send it to me," Biden said on May 6.

Congress is trying. But in interviews, aides in both the House and Senate who are closely involved in the bill negotiations described deep uncertainty about what is to come.

US President Joe Biden is ready to sign a China bill, but Congress is stuck in negotiations. Photo: Bloomberg alt=US President Joe Biden is ready to sign a China bill, but Congress is stuck in negotiations. Photo: Bloomberg>

They warned that the clock is ticking before the midterm elections in November. Every day that the bill does not become law is another day closer to a potential flip in congressional leadership, from Democrats to Republicans.

"What we're already starting to hear is: why would we vote for this bill?" one Senate Republican aide said, referring to colleagues in the House. "We're going to win the majority in a significant way in November. Why don't we just pass our own China bill at that point?"

Perhaps even more significantly, aides said that the legislative process for this bill, now called the Bipartisan Innovation Act, was not like any other in recent memory.

After the Senate passed a blimp-sized 2,376-page version of the bill last June, and then the House passed its own 3,610-page edition in February, the two chambers now have to combine them into a final text that can attract enough votes to become law.

For the first time in years, the only way forward appears to be a true bipartisan, bicameral compromise.

Lawmakers in this bitterly partisan era are not used to doing that. In a will-they-or-won't they moment, they have just begun to meet in a formal "conference" process - a once-standard procedure for negotiating bills that has become exceedingly rare in today's Congress.

Select members of the House and Senate are supposed to get in a room, move line-by-line through thousands of pages of legislative text to resolve differences, and compromise on a final bill.

Many aides and even members of Congress have no experience with anything like it - the legislative equivalent of flapping a pair of vestigial wings, wondering if lift-off is still possible.

"This will be a great case study," said Martin Gold, a former chief counsel to the Senate Republican leader who has written a textbook on the subject of Senate procedure. "Either because it succeeded or because it didn't."

House Speaker Nancy Pelosi pressed the Foreign Affairs Committee to get its bill done. Photo: EPA-EFE alt=House Speaker Nancy Pelosi pressed the Foreign Affairs Committee to get its bill done. Photo: EPA-EFE>

The last time Congress did something similar for a completely new piece of legislation, one aide said, was more than a decade ago, for the Dodd-Frank banking reform bill after the 2008 financial crisis. It involved just a handful of congressional committees compromising, the aide said, and was considered a major legislative achievement at the time.

The talks starting now involve more than two dozen committees and include 107 lawmakers - fully one-fifth of the entire Congress, and the largest conference in modern history.

The legislation is also many times larger than Dodd-Frank. It has ballooned by thousands of pages since last year, filled in various drafts with billions of dollars for semiconductor manufacturing; a new human rights envoy for China's Xinjiang region; closer US ties to Taiwan and allies all around China's periphery; and other priorities.

The road to the conference has not always been smooth either.

The Senate bill last year was quite bipartisan and passed 68-32. The House bill was not at all, though most committees had worked to draft it in a cooperative, bipartisan way.

Senate aides contend that the bipartisan breakdown came on the House Foreign Affairs Committee, whose Republican members accused Democrats of jamming through a one-sided bill without their input.

Those Republicans said that Democrats - already under pressure to hurry up from House Speaker Nancy Pelosi - filled it with items they said were unrelated to China, including billions of dollars to finance the United Nations climate fund.

House Democrats insist that the Republicans on the committee refused to negotiate in good faith, even when they offered to cut some of the climate change programmes. The Democrats even question whether Republicans have any interest in passing a major China bill at all if the Democrats are going to get credit for it while they control the White House and Congress.

"We're nervous," said a Senate Republican aide, watching the other chamber at work. "I don't think I fully appreciated how poisoned the well had become for Republicans in the House."

Both sides of the committee are represented in the conference process, and it is unclear if their differences will cause some sections - or even the entire bill - to fall apart.

"If the case were different, and we had some amount of things that we cared about," a House Republican aide said, "I think we'd be eager to get those across the finish line."

Adding tougher export controls against China - a priority for Representative Michael McCaul, the committee's top Republican - might make it easier to agree to some of the Democrats' climate change wishes, for example.

McCaul has also led the effort in the House for more semiconductor funding, a major part of the bill.

"I don't always say this, but I think the Senate did a pretty good job," McCaul said at the conference's first formal meeting on Thursday. "They came up with a bipartisan bill. I am disappointed to say that did not happen in the House.

"That is a challenge of this conference committee, to make this a truly bipartisan bill," he said.

Representative Michael McCaul of Texas, the senior Republican on the House Foreign Affairs Committee, seeks stronger export controls against China. Photo: AP alt=Representative Michael McCaul of Texas, the senior Republican on the House Foreign Affairs Committee, seeks stronger export controls against China. Photo: AP>

"So much is riding on this," a Senate Democratic aide acknowledged. "If we can get a lot of the conference to agree, then that is a lot of votes. But that is a lot of votes to wrangle."

This is also the most closely divided Congress in years.

The Senate is evenly split, 50-50, and any China bill will need 60 votes to pass there. Thus, the conference's final version must have Republican support.

"It can't just be the Democrats negotiating with themselves," said Richard Arenburg, a former senior Senate Democratic aide and the author of a reference book on congressional procedure.

House Democrats, meanwhile, have just a 12-seat majority, with almost no room for defections. Left-leaning lawmakers there will not necessarily want to cater to Republican demands.

And even within the parties, there are disagreements.

Republicans are split over how much of a hand the government should have in setting industrial policy. Some of those lawmakers warn it is dangerous to try to beat China by becoming them; others say the only way the US can compete is with strong governmental support.

Democrats have their own disagreements - such as how hard to crack down on China's enormous and relatively cheap solar exports, for example, if it means the US will have a harder time transitioning to clean energy.

The bill also includes a highly disputed trade section, with lawmakers split on whether to push the Biden administration to ease some Trump-era tariffs on Chinese goods.

Congressional staffers said that if no compromise was reached on trade, the section could in theory be cut out of the bill altogether, to avoid bringing down the entire legislation.

If other sections were removed for the same reason - an inability to compromise - the final bill could be much smaller.

The Biden administration wants the bill passed as soon as possible. Gina Raimondo, the US commerce secretary, even enlisted former officials from the Donald Trump administration to lobby for the legislation.

If the conference process does fail, observers say that at least the US$52 billion for semiconductor industry funding would likely pass on its own before the end of the year, because the subsidies have widespread bipartisan support.

But they add that there is more at stake than just money.

When speaking about US-China competition, Biden has frequently invoked the struggle of democracy versus authoritarianism - and he has argued throughout his term that democracies, as messy as they are, must show that they can still compete.

"When this thing passes and becomes law, we can point to the success of the democratic process," the Senate Republican aide said. "Look, we are a deeply divided country, but here's an example of where we have all come together.

"Now, if we're not successful, then I think it sends a really ugly message that we can't unite around even the most important things facing us.

"I really hope that that is not the story ahead of us."

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2022. South China Morning Post Publishers Ltd. All rights reserved.