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Time is running out for a deal on the China competitiveness bill

Analysis by
and 

with research by Tobi Raji

March 23, 2022 at 6:36 a.m. EDT
The Early 202

An essential morning newsletter briefing for leaders in the nation’s capital.

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In the agencies

Time is running out for a deal on China competitiveness bill

Congress has tied itself into a Gordian knot over one of President Biden’s top legislative priorities: a bill to bolster American semiconductor manufacturing and help the country compete economically with China. 

It's Commerce Secretary Gina Raimondo’s job to help cut it — but time is running out.

Raimondo is working to help lawmakers reach an agreement, which would give Democrats another achievement in the midterms. She told reporters in January that Congress “can’t wait until April, May” to pass the bill — a timeline that is now impossible to meet.

In an interview, Raimondo told The Early she thought the bill could be done by Memorial Day — maybe sooner.

“There’s no deadline, per se,” Raimondo said. “We just have stay focused on it and do the work — sit at the table and do the work to reconcile the differences.”

“I'm going to work on this and talk to members of Congress every single day until it does pass,” she added.

While the bill is a top priority for the White House, Senate Majority Leader Chuck Schumer (D-N.Y.) and House Speaker Nancy Pelosi (D-Calif.) to help improve Democrats' standing ahead of the midterms, the negotiations also serve as a political opportunity for Raimondo. The former Rhode Island governor could burnish her reputation as a leading moderate in the party by showing she can help negotiate a deal with Republicans at a time when bitter partisanship reigns.

“One of the most impressive things about Secretary Raimondo is that she is as comfortable, willing and happy to call a progressive member from California as a Republican senator from a deep-red state,” said Scott Mulhauser, who worked as a senior adviser to Raimondo for several months last year before returning to his consulting firm.

Some Republicans have praised Raimondo's work trying to hash out a compromise.

“Amongst many of the Senate Republican staff that I’ve spoken with on this matter, she has been very helpful,” said Ari Zimmerman, a Republican lobbyist at Brownstein Hyatt Farber Schreck who's lobbied on the bill. “She understands the problem in and out.”

But it's still unclear whether a deal will actually come together.

A tough deal

Congress has been laboring to pass the bill for most of Biden's presidency. The Senate cleared its version in June with 19 Republican voters; the House passed its own bill last month with the support of only a single Republican, Rep. Adam Kinzinger (Ill.).

The challenge facing Raimondo and Democratic congressional leaders now is how to strike a deal that keeps at least 10 Senate Republicans on board and still wins the support of wary House Democrats. That task grows harder each day as the midterms approach and Republicans lose any incentive to make compromises that would allow for passage of a bill Democrats could tout ahead of November's elections.

Raimondo insists there is a deal to be had and argued that there’s already bipartisan agreement on “the bones of the bill” — a $52 billion program to combat a global shortage of computer chips by subsidizing manufacturing in the United States.

But lawmakers are at odds over provisions that fall “outside of the core innovation package,” as she put it, such as climate change, financial services and human trafficking. The biggest gap between the two bills is on trade, according to Raimondo as well as several lobbyists tracking the legislation.

“That’s really where the two sides are the farthest apart,” said Brian Pomper, a Democratic lobbyist at Akin Gump Strauss Hauer & Feld who has lobbied on the bill. “And, I mean, they are universes apart.”

Republicans and Democrats are preparing to hash out the differences between the two bills in a conference committee. If negotiations falter, though, Pomper said lawmakers might push to scrap the trade provisions and pass a more limited bill.

“If you really get jammed up on the trade title, I think you’re going to see some members starting to say, ‘Well, why don’t we just ditch the trade title? And let’s do the rest of this bill, which is going to be a lot easier to figure out,” he said.

Not giving up without a fight

But stripping out the trade provisions could alienate Senate Republicans whose votes Democrats need to overcome a filibuster.

The trade language in the Senate bill “was the linchpin that was needed” to pass it last year, said Clete Willems, a former trade negotiator in Donald Trump’s White House who is now a lobbyist tracking the bill. “So I think it’s going to be ultimately included.”

House Democrats who spent months pushing to pass their version of the bill, meanwhile, aren't likely to give up without a fight.

“The things that we're proposing are good for American manufacturing,” said Rep. Earl Blumenauer (D-Ore.), who backed the trade provisions in the House bill. “They're good for the American consumer. Many of my Republican friends are violently opposed to giving special concessions to China. I wouldn't think this would be a heavy lift.”

The China bill, Blumenauer added, is likely the only chance to pass these trade measures before the midterms.

“This is one of the few trains leaving the station,” he said.

Flying in

Raimondo will get some help lobbying for the legislation this week from the Semiconductor Industry Association.

The trade group's members — who would benefit from the subsidies to the industry, as Biden pointed out in his State of the Union earlier this month — are in town this week and will meet with Raimondo, U.S. Trade Representative Katherine Tai and lawmakers.

At the White House

Biden heads to Europe to bolster the Western alliance, amplify Russian sanctions

Happening this week: Biden will travel to Brussels “where he will attend a NATO summit, a Group of 7 meeting and a session with heads of state from the European Union,” our colleagues Tyler Pager and Ashley Parker report. “He will then travel to Poland, a visit that will include a meeting with President Andrzej Duda on Saturday.”

On the itinerary: 

  • Sanctions. Biden intends to announce “sanctions on most members of Russia’s State Duma, the lower house of parliament, as part of an effort to punish Moscow over its invasion of Ukraine,” the Wall Street Journal’s Vivian Salama first reported. The announcement could come as soon as Thursday and target “400 individuals, including 328 lawmakers and Russian elites Russian officials.”
  • Energy. “To this point, much of Europe has not stopped importing gas and oil from Russia; doing so could cause an energy crisis on the continent and send prices skyrocketing around the globe,” Politico’s Christopher Cadelago and Jonathan Lemire report. “Sullivan said Tuesday that Biden was aiming to ‘announce joint action on enhancing European energy security and reducing Europe’s dependence on Russian gas,’ but did not provide further details.”
  • Refugees. “Biden’s decision to visit Poland was added to the itinerary only in the past few days, reflecting the country’s position at the center of an intensifying refugee crisis,” Pager and Parker write. “While in Poland, Biden plans to hold an event related to refugees, which could include meeting with some of the Ukrainians who have been streaming across the border.”

On the Hill

Ketanji Brown Jackson defends her record as judge, public defender in marathon hearing

Supreme Court nominee Ketanji Brown Jackson faced questions from senators on March 22 during the second day of her confirmation hearing. (Video: Joy Sung, Mahlia Posey/The Washington Post, Photo: Jabin Botsford/The Washington Post)

Day Two: Judge Ketanji Brown Jackson on Tuesday portrayed herself as a modest ‘stay in my lane’ jurist during a marathon day of questioning in her Supreme Court confirmation hearing, at times appearing exasperated that Republican senators repeatedly questioned slices of her legal and judicial career concerning Guantánamo Bay detainees and sentencing child pornography defendants,” our colleagues Robert Barnes and Ann E. Marimow report.

  • “The second day of her historic confirmation proceedings … alternated between celebratory bouquets from Democratic senators and suggestions from Republicans that she was soft on crime and focused on leftist theories of racial recrimination.”
  • “None of those issues were connected to cases coming before the Supreme Court — or to cases ever decided by the court,” the New York Times’s Jonathan Weisman and Jazmine Ulloa write. “They were amplified outside the chamber by institutional Republicans and the conservative media. Fox News ran a headline reading ‘Ketanji Brown Jackson serves on board of school that promotes critical race theory,’ and the Republican National Committee shared a GIF on Twitter showing the judge’s picture with her initials, ‘KBJ,’ crossed out and replaced by ‘CRT.’”

“The list of skeptical questions about Jackson’s record read like a compendium of political touchstones animating Republican politicians and voters: critical race theory, parental rights, mask mandates and transgender women in sports,” Weisman and Ulloa write.

  • On Critical Race Theory and Georgetown Day School: “Cruz asked whether Jackson, who serves on the school’s board of trustees, believed that critical race theory should be taught in schools,” our colleague Mariana Alfaro reports. “He noted that Jackson once celebrated that GDS — which was the first in the D.C. area to be racially integrated — fosters critical thinking, interdependence and social justice … [Jackson] explained that her praise for GDS came out of its history of integration and equality.”
  • On being accused of being ‘soft on crime’: “The suggestion that Jackson had gone easy on sex offenders was leveled most vociferously Tuesday by Sen. Josh Hawley (R-Mo.),” our colleagues Seung Min Kim, Aaron C. Davis and Paul Kane report. “Asked by Judiciary Committee Chairman Richard J. Durbin (D-Ill.) what she thought when she initially heard the allegations, the judge said that as a ‘mother and a judge who has had to deal with these cases, I was thinking that nothing could be further from the truth.’”
    • “Jackson told senators that at every sentencing involving child pornography, she details to the offender the horrific repercussions of their act that can linger. ‘And then I impose a significant sentence and all of the additional restraints that are available in the law,’” she told the committee.
  • “Jackson told senators that at every sentencing involving child pornography, she details to the offender the horrific repercussions of their act that can linger. ‘And then I impose a significant sentence and all of the additional restraints that are available in the law,’” she told the committee.

The Media

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