I’m Isaac Saul, and this is Tangle: an independent, ad-free, subscriber-supported politics newsletter that summarizes the best arguments from across the political spectrum — then “my take.” You can read Tangle for free or subscribe for Friday editions, and you can reach me anytime by replying to this email. If someone sent you this email, they’re asking you to sign up. You can do that by clicking here.
Today’s read: 9 minutes.
We’re doing a special edition on a major bill that quietly passed Congress on Tuesday.
Each morning, I use this newsletter to summarize compelling arguments I can find on whatever issue is dividing the country that day.
Often, there are moments of common ground — parcels of positions that sound or look the same, agreement in the middle to work out from and some mutual acceptance of a set of facts, even if the interpretations of those facts differ.
Much more unusual is what happened in the U.S. Senate on Tuesday: some unity. Which inspired me, today, to deviate from the usual Tangle format and share my thoughts on a very significant moment in Congress that just passed by with a surprising lack of interest or attention from the public or media at large.
Quietly, and without much fanfare, the Senate overwhelmingly passed a nearly $250 billion, 2,400-page bill on Tuesday. With all the talk about trillion-dollar bills these days, I know that a $250 billion price tag may not sound so revolutionary. And of that $250 billion, not all of it is new spending, and much of it will be spent over several years. But that is a quarter-trillion dollar bill that you may have not even heard about. For some context, President Barack Obama’s American Recovery and Reinvestment Act of 2009 earmarked $224 billion for extended unemployment benefits, education and health care spending — which at the time was considered a gigantic response to one of the worst economic crises we’d ever seen.
This bill, which allocates $250 billion over several years, will put money into scientific research and development designed to bolster our technological competitiveness with China. It was initially dubbed the “Endless Frontier Act” and is now being called the “United States Innovation and Competition Act,” or USICA.
The bill passed with a 68-32 vote, with 31 nays coming from Republicans and one from Sen. Bernie Sanders, the independent from Vermont who typically caucuses with Democrats.
Despite the opposition overwhelmingly coming from Republicans, the bill was supported by 19 Republican senators, including Senate Minority Leader Mitch McConnell. And it also dealt with an issue that has come to define the party in the last several years, especially under the leadership of Donald Trump: combatting China.
What is in the bill?
The proposal that passed the Senate designates more than $50 billion in federal funds to U.S. businesses that manufacture the tiny computer chips powering all kinds of consumer and military devices: smartphones, cars, video game consoles, satellites and more. These chips are known as semiconductors, and you may have heard the warnings that we’re facing a global shortage of them. Many companies, especially in the U.S., source these chips from China, which has raised fears that the supply chain could be used as political or economic leverage against U.S. interests. Some U.S. automakers have already had to idle production because they did not have access to the chips.
The bill also changes the law to allow the suspension of tariffs on specific imports from low-income countries. Many of those tariffs have been criticized by both Democrats and Republicans. It opens the door for the Biden administration to impose new sanctions over the forced labor camps and human rights abuses occurring in Xinjiang, China. And notably, it also calls for a new commission to study the origins of coronavirus and a diplomatic boycott of the upcoming 2022 Winter Olympics, which will be hosted in Beijing. There is even an additional $300 million earmarked specifically to counteract the political influence of the Chinese Communist Party.
Some of the plans to counter China’s influence are more centered on international investment: the bill calls on the U.S. to increase funding and trade with Latin America, the Caribbean, Taiwan, Africa and Southeast Asia, many of which are regions where China has made serious inroads recently.
Initially, some $100 billion was set to go to The National Science Foundation, too. But lawmakers wrestled over that sum and ultimately amended the bill to move much of the money into basic research and laboratories run by the Energy Department, which has facilities in several of those senators’ states. Some other funding went into STEM scholarships and Pell Grants. That still left $29 billion for cutting-edge research, though, to pursue advancements in areas like artificial intelligence. There was another $10 billion for the Commerce Department to invest in new technology hubs to bring economic opportunities like those in Silicon Valley to new cities and regions across the United States.
There are other odds and ends, and lots of pet projects with a “must-pass” bill on the docket: a fresh round of funding for NASA, a ban on the sale of shark fins, a doubling of the budget for a Pentagon research agency, a ban on “gain-of-function” research in China, the termination of funding for the Wuhan Institute of Virology, and a new provision requiring that online merchants reveal the country of origin of their products (except, oddly, in the case of cooked king crab).
Three Republican senators even tried to insert a provision to ban research on human-animal hybrids, according to The Washington Post, though the effort apparently failed. Two $10 billion lunar lander contracts were also included in the bill, which many speculated would end up in the hands of Blue Origin, the space company funded by Amazon founder Jeff Bezos.
What they’re saying.
There’s no doubt the framing for this is a little different on each side. Both Republicans and Democrats seem to be coming to an agreement on a few things, though:
1) China is the number one geopolitical threat.
2) We cannot be reliant on China for critical supply chains like semiconductors, medicine, etc., and that this bill can help us build out those supply chains domestically over the next decade.
3) In order to compete with China, we need to invest more in emerging technologies and the research that supports them.
Sen. Chuck Schumer (D-NY) and Sen. Todd Young (R-IN) were the primary collaborators on the bill. It’s worth looking at how they framed the issue:
“I have watched China take advantage of us in ways legal and illegal over the years,” Sen. Schumer said. “The number one thing China was doing to take advantage of us … was investing heavily in research and science. And if we didn’t do something about it, they would become the number one economy in the world.”
Now here is Sen. Young from his speech on the Senate floor:
“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? Today, we answer unequivocally, ‘No.’ … Today we declare our intention to win this century, and those that follow it as well.”
Next, the bill is going to the House of Representatives, where it is almost certainly going to undergo some changes.
While, to me, the most interesting thing about this story is the common ground here, that’s not to say there weren’t some bumps in the road. Plenty of senators — from Bernie Sanders complaining about federal dollars going to Jeff Bezos, to Republican senators claiming the bill wasn’t strong enough against China — had objections. Some Democrats and liberal groups said the bill will encourage xenophobia and a “Cold War mentality” toward China. In the House, the expectation is that there will be a renewed focus on elements of the bill that deviate from its central premise of increasing research in the technology space and shoring up critical supply chains.
Others, like the Bloomberg editorial board, have simply said the bill went from “surefire winner” to “bureaucracy, bloat and bad ideas.”
The policy analysts over at American Action Forum did a nice, succinct round-up of the bill, and I think their conclusion is fair, while also pointing to the areas where we might see friction as it works through the House:
USICA represents a dramatic expansion in the federal government’s role in facilitating technological growth. It will pour hundreds of billions into research and development in key technological areas such as artificial intelligence, advanced energy sources, and biotechnology. To many on both sides of the aisle, these expenditures are necessary to propel American growth in the 21st century and out-compete China. But in the name of bipartisanship, the bill has been amended numerous times to squeeze in many different provisions, many of which would not spur growth in U.S technology or help in countering China.
Over the last year, there have been countless essays and opinion pieces about how Covid-19 would change the world — and what the pandemic would do to everyday life for Americans.
Many of these pieces focused on the obvious: Would we all start wearing masks on public transportation? Would working remotely become the norm? Would the government safety net drastically expand?
Few people put much thought into a geopolitical realignment.
I’m currently reading Josh Rogin’s book about China and the Trump administration, which is fascinating. In our interview about the origins of coronavirus, Rogin explained to me the ways in which the pandemic was a wake-up call for us. One of the thrusts of the story he tells is how the Chinese government used its economic superiority to pressure countries like Australia — which originally called for an investigation into the origins of Covid-19 — into silence.
With the U.S., that pressure was applied in different but similarly striking ways. China restricted access to exports that included medical necessities like personal protective equipment early on in the pandemic, in some cases purposely leaving American masks and PPE (that were manufactured in China) stranded in warehouses abroad. Shortages of medicine, semiconductors, and other critical goods made it clear that the U.S., and our economy more generally, was too dependent on our good standing with the Chinese government.
And everything that’s happened since reflects that.
We are, right now, in an era where some Republican members of Congress still do not recognize Joe Biden’s victory in the 2020 election. From infrastructure to gun control to climate change to policing to immigration to racial justice, areas where there is often common ground among American citizens, our Congress has failed to work together. And yet, on this issue, of stemming the economic and political threat posed by China, we are seeing some semblance of the unity Joe Biden hoped for. We are seeing the burning embers of a time when the Senate functioned, when leaders worked across party lines, when amendments were added to major pieces of legislation to build consensus (in this case, 18 Republican amendments and four Democratic amendments), and when the upper chamber could develop sweeping and impactful legislation.
If you ask me, it’s a pretty wild moment. Not only does it represent a major shift on the right — with Republicans in Congress abandoning their past objections to this kind of government intervention (pre-Trump, the mantra would have been to “let the private sector” do its thing), it also represents a major shift on the left, and a realization by Democrats that for all its flaws, fervor, and ham-handedness, the Trump administration’s primary focus on China’s rising global power — and what that meant for democracy and the American economy — was actually the right instinct.
“When all is said and done, the bill will go down as one of the most important things this chamber has done in a very long time,” Schumer said shortly before the vote.
And I think he’s right. Equally striking is how little attention it has received, and how easily it amassed under the noses of the hundreds of millions of Americans whose tax dollars are going to fund it.
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A story that matters.
Nursing homes and assisted living facilities are struggling to find entry-level employees. In an industry that was already facing high turnover, nursing facilities’ reputations have been damaged during the pandemic, and they now face red hot competition from other minimum and low wage jobs. With more than 10,000 Americans turning 65 every day, the care aide workforce is expected to balloon in the next decade — but for now, workers seem scarce. Which presents a major problem for the facilities already struggling to care for a rapidly growing elderly population. (Axios)
- 37%. The U.S. share of global semiconductor manufacturing capacity in 1990.
- 12%. The U.S. share of global semiconductor manufacturing capacity now.
- Less than 3%. The total percentage of federal spending on research and development, according to some estimates, the lowest since before the space race of the 1960s.
- +29.7%. The increase in prices of used trucks and cars from May 2020 to May 2021, according to the latest Consumer Price Index.
- +4.0%. The increase in prices of food away from home from May 2020 to May 2021, according to the latest Consumer Price Index.
Have a nice day.
Yesterday, the Biden administration announced a plan to buy 500 million doses of the Pfizer vaccine and donate them to countries around the world. The new purchase represents one of the largest increases yet in the effort to help increase global vaccination rates, with the first 200 million doses being distributed this year and the second 300 million to be distributed in the first half of next year. “It’s an extraordinary development,” Jennifer Nuzzo, an epidemiologist and senior scholar at the Johns Hopkins Center for Health Security, said. She noted it “sends a profound signal in terms of U.S. commitment to global health security and willingness to help end this pandemic for the world and the United States.” (The Washington Post)