Congress launched the Conference Committee on Bipartisan Innovation and Competition Legislation last week with a four-hour meeting featuring remarks by nearly one-hundred committee chairs and members from both chambers of Congress. Chaired by Senator Maria Cantwell (D-WA), the Conference Committee’s objective is to reconcile differences between the United States Innovation and Competition Act (“USICA”), which passed the Senate by a bipartisan vote of 68–32 in June 2021, and the America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science Act (“America COMPETES Act”), which passed the House by a partisan vote of 222–210 in February 2022.

The kick-off meeting suggested that this objective is attainable, but by no means guaranteed.

On display was broad consensus that the United States is not doing enough to spur innovation and remain competitive around the world, and that legislation is needed in support of those goals.  Chair Cantwell opened the conference by recognizing that this is a “historic day” with a supply chain crisis and that this is a “Sputnik moment.”  A bicameral and bipartisan chorus, including Senate Commerce Committee Ranking Member Roger Wicker (R-MS), House Science Committee Chair Eddie Bernie Johnson (D-TX), and House Science Committee Ranking Member Frank Lucas (R-OK) echoed her optimism and urgency.

Members also generally agreed on several key components in the bills.  Members of both chambers and both sides of the aisle recognized the importance of anchoring supply chains of critical products including semiconductors and pharmaceutical drugs in the United States.  A bipartisan group expressed support for the $52 billion in funding for semiconductor incentives that is included in both the USICA and America COMPETES Act.  Several Democrats and Republicans also noted that they are working together on an additional tax provision, which is currently not in either bill, to encourage semiconductor design and manufacturing in the United States.  Members also agreed on the need to push back against anti-competitive conduct by China such as cyberattacks and intellectual property theft, and to invest in science, technology, education, and mathematics (STEM) education to expand and improve the U.S. workforce.

Yet Democrats and Republicans from each chamber diverged on some key priorities.  Among the notable sticking points were the amount of government spending in the bill, climate change and clean energy provisions, and the proper response to China.

Democratic Members emphasized the importance of authorizing major investments to support innovation, with Senate Democrats celebrating the research and development provisions in the USICA and House Democrats lauding corresponding Science Committee provisions in the America COMPETES Act.  A number of Republican Senators support the provisions in the USICA, and a few Republican House members support those in the America COMPETES Act.  Other Republicans, largely from the House, criticized federal government spending amid rising inflation.  House Republicans also pressed that reducing regulatory barriers, rather than additional government spending, was the solution to supporting greater U.S. innovation. 

A number of House Democrats also expressed support for the climate change and clean energy provisions that were included in the America COMPETES Act.  Many Senate and House Republicans expressed opposition to these provisions.  They argued that the provisions were unnecessary, would cede leadership to China, or otherwise were not appropriate to include.

Meanwhile, many Republican Members focused on competition against China.  They expressed that the bills are not strong enough in responding to their concerns of anti-competitive conduct and human rights abuses by China.  House Republicans were especially critical of the America COMPETES Act, suggesting that the bill “concedes to” rather than “competes with” China.  Several Republican members suggested that if the final bill does not adequately respond to China, there is no reason to advance it. The Conference Committee is expected to continue discussions in the upcoming weeks.  Some Members expressed optimism that a consensus could be reached by as early as Memorial Day, while others identified Independence Day as a goal.  Chair Cantwell did not identify a date but expressed hope that an agreement could be reached by the August recess.