US lawmakers understand why it’s important for America to invest heavily (in this case almost a quarter-trillion dollars) in initiatives aimed at upgrading the domestic economy to ensure it can compete with China. But there’s no such bipartisan support for upgrades to the very same domestic economy when the goals are repairing the country’s “infrastructure” (broadly construed) and addressing the myriad societal inequities that threaten to tear the nation apart.
A 68-32 Senate vote (late Tuesday) in favor of a bill that earmarks nearly $250 billion for R&D and manufacturing shows “winning the future” is a relatively easy sell when the conversation can be couched in neo-Cold War terminology.
“When future generations of Americans cast their gaze toward new frontiers, will they see a red flag planted on those new frontiers that is not our own?” Republican Todd Young asked, rhetorically, in a speech on the Senate floor. “Today, we answer unequivocally, ‘No.'” (The American flag is also blue, by the way.)
Chuck Schumer talked of quantum computing and AI, warning that if China runs out ahead of the west in such endeavors, Beijing will be able to shape the world in Xi’s image. Schumer has also parroted Joe Biden’s talking points around Xi’s assumption that democracy will be too slow to keep pace with authoritarian regimes when it comes to investing in the future. “[Authoritarian governments] believe squabbling democracies like ours can’t come together and invest in national priorities the way a top-down, centralized and authoritarian government can,” he said.
The legislation will funnel some $190 billion to R&D and toss $52 billion in subsidies and emergency funding to semiconductor makers amid the chip shortage that’s crippled auto production and upended supply chains.
“What is most striking about the legislation is the degree to which the projects that the bill funds closely parallel those in China’s ‘Made in China 2025’ program, which funnels huge government spending into technologies where the country is seeking to be independent of outside suppliers,” The New York Times noted. (Maybe Beijing should claim IP theft or copyright infringement.)
China on Wednesday decried the bill. The NPC’s committee on foreign affairs demanded US lawmakers “immediately stop” advancing the legislation which, Beijing said, “smears China’s development path [and] interferes in China’s internal affairs under the banner of innovation and competition.”
Mitch McConnell, who voted for the bill after panning parts of it initially, said it “can’t be the Senate’s final word on competition with China.” Pat Toomey, who has an unfortunate knack for bad press despite not being particularly nefarious relative to some of his GOP colleagues, voted against the legislation, likening the bill to “Chinese central planning.” Toomey reckoned that America ought to be able to keep up with Beijing based solely on what he called the “natural innovative entrepreneurship of America’s market economy.” That’s a laughably naive assessment.
In a testament to the somewhat cartoonish character of America’s legislative process, the Times went on to dryly observe that lawmakers were “eager to attach personal priorities to the bill” which meant that on its “swift” journey through the Senate, the final package “pick[ed] up provisions as diverse as… a ban on the sale of shark fins.”
Bloomberg noted the parallels with Biden’s efforts to inject a sense of urgency into domestic investment. The bill “mirrors Biden’s call to address a long slide in federal government spending on research and development,” one article read, adding that in 2020, R&D summed to just 0.7% of GDP, “a ratio flattered in part by the hit to [output] from the pandemic.”
The bill faces a somewhat arduous path in the House, but Biden is on board. He wants to sign it “as soon as possible,” according to a statement.
Meanwhile, Biden broke off talks with Shelley Moore Capito on a broader infrastructure deal, tossing the hot potato to the Problem Solvers Caucus, which subsequently cobbled together a scheme for $762 billion in spending over eight years which, when paired with nearly a half-trillion in planned outlays, sums to around $1.2 trillion. That’s $1 trillion short of Biden’s initial plan and a half-billion shy of a modified proposal.
A draft of the Problem Solvers’ plan showed $959 billion going to transportation (around half to highways and roads with the rest split between bridges, transit, EV initiatives, airports, waterways, ports and Amtrak) and $200 billion to water, energy, telecom and housing for veterans.
If autocrats around the world are, as Schumer and Biden insist, counting on democracy to be “too slow to keep pace with authoritarian regimes when it comes to investing in the future,” the intractable wrangling over the bigger infrastructure deal likely bolsters such convictions.
Of course, there’s really only one such regime capable of unbridled domestic spending and investment, and that’s China. It’s not exactly like Viktor Orban (for example) can just wake up one day and vault Hungary to superpower status (as an aside, note that Orban “enjoys a strong personal rapport with Xi,” a relationship that’s grabbed a few headlines.)
Ultimately, Democrats might have to go it alone on infrastructure, using reconciliation and various end-arounds to piece together the proposal. Biden spoke to Schumer on Tuesday about that possibility.
“It may well be that part of the bill that will pass will be bipartisan, and part of it will be through reconciliation,” Schumer told the media, adding that Democrats won’t “sacrifice the bigness and boldness in this bill.” (You know what they say: “Go ‘bigly’ or go home.”)
In separate remarks on the industrial policy plan aimed specifically at countering China’s rise in emerging technologies, Schumer called the legislation “one of the most important things [the Senate] has done in a very long time.” You might joke that’s true by default, considering it’s also one of the only things the Senate has done in a “very long time.”