WASHINGTON/NEW YORK -- While the competition with China has been one of the few priorities boasting bipartisan support on Capitol Hill, some Republican lawmakers seem to have experienced sticker shock at the enormous funding required to implement the comprehensive legislation that promises to keep the U.S. a superpower.
The Senate agreed to delay a vote on the U.S. Innovation and Competition Act until at least early June, Senate Majority Leader Chuck Schumer said Friday, after a heated session on the legislation Thursday and as opposing lawmakers demanded more time to submit amendments.
The 1,000-plus-page Senate bill, orchestrated by Schumer, brings together a number of China-related bills including the Endless Frontier Act, the Strategic Competition Act and Meeting the China Challenge Act of 2021. The projected cost is about $250 billion.
The heated negotiations ground to a halt during a critical junction in Congress and punted the vote on the bill until after a holiday recess. The broad bipartisan support for legislation that opposes China's geopolitical goals was expected to be one of the only bills to pass this year in the deeply divided chamber. The two parties have already wrestled on the substance of the bill, including on such issues as how to fund scientific research to ensure America competes against Beijing's tech challenge.
The Endless Frontier Act is a key component of the legislation and aims at strengthening America's edge in science and technology against China, which spends heavily on research and development.
The bill, which was introduced by Schumer and Republican Sen. Todd Young, would approve billions in new funding toward basic research in the U.S., covering cutting-edge areas including artificial intelligence, quantum computing and energy.
The Biden administration, which is big on investing in American innovation, has publicly welcomed the Endless Frontier Act. But the spending scheme encountered pushback from Senate Republicans wary of increased public spending.
"America doesn't have the money to pay for the Endless Spending Act," Sen. John Kennedy, a Republican from Louisiana, said in a statement last week.
The once ambitious R&D bill went through an overhaul as it moved through the Senate Commerce Committee this month, which rendered it more conservative both in terms of amount and ways of spending.
The new version would include just $29 billion over the next five years for a new laser-focused Directorate for Technology at the National Science Foundation, in contrast to the $100 billion proposed in the original bill . Of the already curtailed figure, a mere 15% would be used to fund R&D activities, whereas in the original bill almost all funding would go directly toward that purpose.
A total of $81 billion would now go to broader foundation activities. According to a tally by Samuel Hammond, a policy analyst at the Washington-based progressive think tank Niskanen Center, the budget represents $12.9 billion in new funding for the foundation over five years. The National Science Foundation's budget was $8.5 billion this past year.
Young, the Republican co-sponsor of the bill, lamented the funding cutback. In a May 12 statement on the bill's committee clearance, Young said he is "disappointed that an amendment was adopted to divert significant funding away from the NSF Tech Directorate in favor of a program outside of the committee's jurisdiction thereby diluting the effectiveness of the directorate."
"I will continue working with my colleagues to ensure the final product lives up to its billing -- a bold investment in research, education, technology transfer, and the core strengths of the U.S. innovation ecosystem," he said. "The country that wins the race in key technologies will be the superpower of the future. We cannot afford to lose that race."
In a March report, the U.S. National Security Commission on Artificial Intelligence recommended $40 billion in annual federal funding for AI R&D, calling it "a modest down payment on future breakthroughs."
"China's plans, resources, and progress should concern all Americans," warned the report, saying that "China possesses the might, talent, and ambition to surpass the United States as the world's leader in AI in the next decade if current trends do not change."
Niskanen analyst Hammond argued in a commentary last week that if China overtakes the U.S. technologically, it will be because of "our utter lack of institutional innovation, driven by incumbent lock-in and our own leaders' failures of imagination."
Apart from the much disputed Endless Frontier Act, the broader China competition bill also incorporated the CHIPS Act, which would authorize over $50 billion in emergency funding for the semiconductor industry.
The legislation also includes measures such as forging deeper ties with Taiwan's government and placing greater pressure on Beijing through such steps as a ban on officials attending the Winter Olympics there next year.
On the foreign relations front, the bill initiates a program for two-year fellowships in Taiwan for U.S. government employees. Fellows would spend one year studying topics including Taiwanese politics and Mandarin and one year working with the island's government or legislature. These stints under current programs end within three months, according to a congressional source.
The first fellowships could be granted next year if the legislation passes this summer.
The program is being positioned as a concrete step toward implementing new guidelines released by the State Department last month to encourage engagement with Taiwan even without official diplomatic relations.
"We're committed to deepening our ties with Taiwan, and we obviously value them as a critical economic partner as well as a critical security partner," principal deputy spokesperson Jalina Porter told Nikkei.
The measure has broad support in the House of Representatives.
"We understand that this competition with China is probably long-term -- at least a decade, a few decades," Democratic Rep. Ami Bera told Nikkei. Bera, chairman of the House Foreign Affairs Subcommittee on Asia, the Pacific, Central Asia and Nonproliferation, wields considerable clout when it comes to legislation and budgeting in this area.
"If we have a trained U.S. workforce that has the language skills, has the deep understanding of the politics, history, and culture of the region, it both helps diplomatically but it also gives us a better understanding of how the Chinese Communist Party thinks about things," Bera said.
The Senate bill would also impose an official diplomatic boycott of the 2022 Olympics in Beijing, with a ban on spending federal money to send government officials to the event, in protest of abuses against the Uyghur Muslim population in Xinjiang. Washington has labeled China's treatment of the Uyghurs as "genocide," while Beijing denies human rights violations are taking place.
The conditions and scope of the diplomatic boycott have yet to be fully settled. An aide to a senior Democratic representative expressed the view that a total boycott would be excessive.
Questions also remain about the role of businesses.
Lawmakers on both sides of the aisle argue that American companies should encourage China to improve its human rights situation ahead of the games. Republicans are pushing for pressure on U.S. sponsors of the games to bow out, while a Democratic proposal calls for scrutiny of supply chains to ensure businesses are not complicit in human rights abuses in China.
On security, the Senate bill stipulates that the Japan-administered Senkaku Islands -- which are claimed by China as the Diaoyu -- are covered by Article 5 of the U.S.-Japan Security Treaty, under which the U.S. is obliged to defend Japan. While this has already been confirmed by multiple administrations, including it in bipartisan legislation would signal to Beijing that Washington is firmly committed.
The legislation calls for Washington to coordinate with partners and allies on economic and diplomatic measures to deter Chinese use of force against Taiwan, and to periodically brief Congress on these efforts. It would also restrict financial assistance to countries that host Chinese military installations.