McConnell threatens semiconductor bill, prompting White House rebuke

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A partisan fight erupted over bipartisan legislation aimed at boosting the domestic semiconductor industry on Thursday, as Senate Minority Leader Mitch McConnell (R-Ky.) threatened Republican support for the bill if Democrats move forward with a separate reconciliation package.

“Let me be perfectly clear: there will be no bipartisan USICA as long as Democrats are pursuing a partisan reconciliation bill,” McConnell tweeted on Thursday afternoon, referring to the Senate-passed version of the semiconductor bill called the United States Innovation and Competition Act (USICA).

The White House fired back hours later, accusing McConnell of “holding hostage” legislation designed to make the U.S. more competitive against China by investing in the chip industry. The legislation includes about $50 billion for the semiconductor industry in the U.S.

A version of the semiconductor bill passed the Senate more than a year ago with bipartisan support and the House followed suit with their own version earlier this year. The bill has been subject to bipartisan negotiations for the past several weeks.

The legislation is a top priority of the Biden administration, which has billed it as a way to make the U.S. more competitive against China while helping to ease supply chain woes by investing in a critical American industry.

McConnell’s tweet followed reports this week about Democrats working on revised plans for a package that they aim to pass with only Democratic votes in the Senate through a process known as budget reconciliation.

The Hill reported Thursday that Senate Democrats are planning to submit a revised proposal to lower prescription drug prices to the Senate parliamentarian in the coming days, which they hope to include in a larger reconciliation package.

It’s unclear if Democrats will succeed this time in successfully passing parts of Biden’s domestic policy agenda through reconciliation; a past effort to do so was torpedoed by Sen. Joe Manchin (D-W.Va.) in December. Republicans have stood uniformly against Biden’s domestic agenda proposal, taking issue with the price tag and arguing it could contribute to inflation.

If McConnell follows through on his threat, Democrats could fold the China competition bill into a reconciliation package.

“Senate Republicans are literally choosing to help China out compete the U.S. in order to protect big drug companies,” White House press secretary Karine Jean-Pierre said in the statement responding to McConnell’s tweet. “This takes loyalty to special interests over working Americans to a new and shocking height.  We are not going to back down in the face of this outrageous threat.”

Senate Majority Leader Charles Schumer (D-N.Y.) spokesman Justin Goodman echoed that message, tweeting: “Sen. McConnell is so beholden to PhRMA that he’s willing to help China, hurt American manufacturing, and screw over Americans with outrageously high Rx prices.”

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