Five Scenarios for USICA-COMPETES Legislation

By Jonathan Mantz, BGR Commerce Practice Co-Head

Overview

The United States Innovation and Competition Act (USICA) and America Creating Opportunities to Meaningfully Promote Excellence in Technology, Education, and Science (America COMPETES) Act Conferees negotiations have encountered a serious roadblock. As members were discussing differences between the House and Senate versions of their respective bills, Senate Republican Leadership announced Republicans would not engage in ongoing negotiations for any China competition legislation if Senate Democratic Leadership attempted to revive the long-dormant Build Back Better package through reconciliation. There are still plenty of key differences between the House-passed America COMPETES Act and the Senate-passed USICA that have not been reconciled. The Biden administration continues to make a full-court push for the legislation, including a Senators’ Only classified briefing from Commerce Secretary Gina Raimondo, Director of National Intelligence Avril Haines and Deputy Defense Secretary Kathleen Hicks. Industry is also making clear that it is making adjustments on production based on what Congress does or does not do. Right now, we believe there are at least five potential outcomes on this critical legislation.

1 – Stalemate Due to Reconciliation Revival – On Tuesday, June 28, 2022, Senate Minority Leader Mitch McConnell (R-KY) stated, “Let me be perfectly clear: there will be no bipartisan USICA as long as Democrats are pursuing a partisan reconciliation bill.” Further, on July 11, McConnell added that reconciliation would “crowd out our [Republicans] ability to process the bipartisan USICA bill aimed at competing with China,” and “our side cannot agree to frantically steamroll through delicate bipartisan talks in order to meet an artificial timeline so our Democratic colleagues can clear the decks to ram through a party line tax hike.”

McConnell’s statements follow reports about Democrats working on revised plans for their budget reconciliation package that was paused due to inflationary concerns expressed by Senator Joe Manchin (D-WV). The Democratic Majority loses the ability to use the reconciliation process at the end of September and is making one last effort to move a slimmed down package. The White House quickly responded to McConnell’s statement, by expressing that he and Republicans are “holding a bipartisan bill hostage.” This legislation has been amongst a top priority for the Biden administration. Secretary of Commerce Gina Raimondo recently weighed in stating that Congress is “playing politics with national security by delaying the passage of legislation that will liberate billions of dollars for chipmakers to build more manufacturing facilities in the U.S. amid a global shortage.”

Democrats are not happy. “No one feels like they have a fire under their ass and get it done,” said Rep. Elissa Slotkin (D-Mich.). “But I would love for some of those leaders to come to my district and sit at that roundtable and have that conversation with people and explain why election-year politics is getting in the way of having some control over our economic security.” At this stage it appears that unless Republicans re-engage, negotiations will remain on hold.

2 – House Passes Senate-passed Bill – Given the compressed schedule and loaded agenda, there is a possibility the House could pass the Senate-passed USICA bill and abandon the conference process altogether. This would give Democrats and the White House a much-needed victory ahead of the midterm elections. However, it would require House Democrats to swallow trade-related provisions they have previously opposed. Senator McConnell suggested this as a path forward if conference negotiations remain stuck. On July 13, Speaker Pelosi and Majority Leader Hoyer confirmed they were not interested in passing the Senate’s USICA bill unchanged.

3 – CHIPS Moves Alone – One of the most sought-after provisions in this process is the CHIPS Act, which aims to increase American competitiveness by subsidizing new investment in domestic semiconductor manufacturing capacity. If the CHIPS Act language is stripped out and moves on its own, roughly $50 billion would be allocated for the Commerce Department to carry out the semiconductor incentive program. Other key provisions in the package are the trade titles, which are likely to be stripped out entirely given that the House and Senate conferees did not seem to agree to the other chambers proposed language. There is a possibility that negotiators attempt to attach provisions from package to the end of year government spending package. Majority Leader Schumer has suggested the Senate could move on this as soon as next week, but Senate Republicans made clear they would not agree to advance such a package if there is still a chance a reconciliation package is moving.

4 – Lame Duck Action – If nothing breaks loose before the midterm elections due to scheduling challenges and a lack of consensus on a path forward, the legislation could be revisited in a post-election legislative session.

5 – Pushed to New Congress – With many predicting the House will flip Republican in the midterms, the legislation could be revised significantly in a new Congress. Should that happen, House Republicans could re-write provisions of the package including to increase the number of tax incentives for semiconductor manufacturing.

 

Presidential Outlook from Both Sides of BGR

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BGR Group, a bipartisan lobbying and communications firm, offers presidential campaign analyses from both sides. Jonathan Mantz, one of BGR’s leading Democratic lobbyists, offers his case for Joe Biden and Sean Duffy, one of BGR’s top Republicans, explains why Donald Trump should be reelected.

 

 

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Biden’s COVID-19 Bet

By Jonathan Mantz

With fewer than two months until election day, Democrats are unified to defeat Donald Trump and are making a strong case for Joe Biden’s candidacy. Nothing would bring the party more joy than to echo the words that Trump made famous when he starred in The Apprentice: “You’re Fired”.

Former Vice President Biden leads in polls nationally and in six key battleground states, according to RealClearPolitics averages. While margins may be narrowing, the Biden campaign holds leads in Florida, Pennsylvania, Michigan, Wisconsin, North Carolina and Arizona – all states Trump won in 2016.

But the outcome of the presidential election might turn on something tangible, even measurable: the extent to which the president did not do enough to stop the spread of COVID-19. Democratic strategists have successfully tied the severity of the pandemic to President Trump’s job performance and therefore his electoral prospects.

The bet is a good one for the Democrats. Voters tend to solidify their impressions of presidential candidates a month or so before they go to the polls (or, this year, as they mail in their ballots). COVID-19 is almost certain to remain the major problem it has been for months. In the September 13 ABC News poll, 65 percent of respondents disapproved of President Trump’s handling of COVID-19, 67 percent believed President Trump’s responsiveness to the virus was too slow, and Joe Biden had a 20 percentage point advantage over the president regarding who the public trusts in handling the virus.

While both Democrats and Republicans want this terrible scourge to end, Democrats will continue to make the point that the situation is due to President Trump’s inaction. Indeed, Biden and his backers have a compelling story. They say, simply, “Look at the numbers.” They mean the number of COVID-19 cases, hospitalizations, deaths, unemployment, failed businesses, and students whose schooling has been interrupted.

Voters’ belief about the trajectory of those numbers – especially the voters who are still undecided – will play a significant role in who wins the White House in November. The situation might improve in the coming weeks, but voters’ opinions about the pandemic – and the responsibility for it – could already be locked in.

Many Americans yearn for a president who can lead through the tough times, tell the truth and unite the country and not blame others when the going gets tough. It may very well be that because of Trump’s handling, or mishandling, of the pandemic, Joe Biden will be taking the oath of office in January.

Jonathan Mantz, a principal at BGR Group, a leading bipartisan lobbying and communications firm, is a member of the DNC’s National Finance Committee, a former finance director of the Hillary Clinton presidential campaign and an alumnus of the Democratic fundraising committees for both the Senate and the House.[/vc_column_text][/vc_column_inner][vc_column_inner width=”1/2″][vc_column_text]

Trump’s Winning Story

By Sean Duffy

President Trump has been badly maligned by the media. It’s not surprising that watchers of certain networks and readers of some big-city publications are unaware that the incumbent has done anything worth praising.

That information deficit is finally being addressed. The president and his many supporters were able to tell their own stories during the Republican convention this summer. The party’s advanced, online platforms spread the word. And now that the fall campaign is underway, there’s a chance for the Trump administration’s many accomplishments to be seen and understood by important segments of the American electorate.

The president and his surrogates can proclaim proudly that President Trump has completed much of what he promised. They also can credibly predict, based on their records, that Joe Biden and fellow Democrats would reverse the progress the president and his party have made on issues ranging from economic recovery to safety on American streets.

Both sides are doing plenty of finger-pointing. Democrats continue to caricature the president as just short of the devil incarnate. They constantly seek to blame him for every ill starting with the pandemic and ending with the violence in the nation’s cities. The Democratic base is sympathetic to these flagrant accusations.

But longtime Trump backers and a lot of people who aren’t reflexively partisan have been given plenty of reasons to be skeptical of the anti-Trump propaganda being pushed by Democrats and in some cases, the mainstream media. Many were probably shocked, for instance, to see so many women and people of color thanking the president for the positive impact his policies have had on their lives during the Republican convention in August. Prior to the convention, they probably didn’t realize how forward leaning Trump’s appointees have been in protecting citizens from COVID-19. They also are seeing on the news each day that federal law enforcement assistance is truly needed to bring peace to inner cities, just as the president has said all along.

Two of President Trump’s most important accomplishments are his appointment of many more conservatives as federal judges, including two Supreme Court justices, and the Trump tax cut, which led to the pre-COVID economic boom.

The conventional wisdom on presidential elections is that the polls tighten as November nears. That’s going to be truer than usual this year. The reason: Voters have finally been made aware of President Trump’s side of the story and they like what they hear.

Sean Duffy, a former member of the U.S. House of Representatives from Wisconsin, is co-head of the financial services practice at BGR Group, a leading bipartisan lobbying and communications firm.[/vc_column_text][/vc_column_inner][/vc_row_inner][vc_empty_space][/vc_column][/vc_row]