WASHINGTON (AP) — Senate Republican Leader Mitch McConnell threatened Thursday to scrap a bill designed to boost U.S. semiconductor manufacturing if Democrats revive their stalled package of energy and economic initiatives.
Rejuvenating the Democratic reconciliation package that is central to President Joe Biden’s agenda is far from certain. But with some signs of progress in the talks, McConnell is trying to complicate the Democrats’ plans. He warned that Republicans would respond by blocking passage of separate semiconductor legislation in the coming weeks, despite his bipartisan support.
“Let me be perfectly clear: There will be no bipartisan USICA while Democrats pursue a partisan reconciliation bill,” McConnell tweeted, referring to the shortened name of the computer chip bill that passed the Senate last year.
Both houses of Congress passed their versions of the legislation, which would include $52 billion in incentives for companies to locate chip manufacturing plants in the U.S. Lawmakers are now trying to reconcile significant differences between the two bills, but at a pace that has many supporters were worried that the work would not be done before MPs left for recess in August.
White House press secretary Karin Jean-Pierre said McConnell is “holding hostage” a bipartisan package that would lower the cost of countless products that rely on semiconductors and provide hundreds of thousands of manufacturing jobs.
“Senate Republicans are literally choosing to help China compete with the U.S. to protect big pharma,” Jean-Pierre said. “This raises the special interest loyalty of working Americans to a new and shocking height. We will not back down in the face of this outrageous threat.
Democrats intend to use reconciliation — a special budget process — to get parts of their agenda through the 50-50 Senate because it allows them to bypass the filibuster and pass legislation with a simple majority. Any new reconciliation package that Democrats pursue was expected to include provisions designed to lower drug prices for many consumers.
Senate Majority Leader Chuck Schumer, DN.Y. and Sen. Joe Manchin, DW.Va., have been talking off-and-on for months in an effort to craft a watered-down version of the massive environmental and welfare measure that Manchin killed in December.
As part of that push, Democrats are expected to present wording to the House legislature to cut prescription drug costs in the coming days, according to an official familiar with the process.
Parliamentarian Elizabeth McDonough must confirm that the regulations adhere to Senate rules. That would allow Democrats to use special procedures that would allow them to pass legislation in the 50-50 chamber against unanimous Republican opposition.
Prescription drug provisions would be critical to the bill because they could save hundreds of billions of dollars by reducing federal spending.
These savings will be used to pay for other initiatives dealing with climate, energy and possibly health care subsidies for low-income people. Schumer and Manchin have yet to reach an agreement on other potential parts of the bill, which Schumer hopes the Senate will consider as early as late July.
The prescription drug provisions would allow Medicare to begin negotiating the prices of drugs it buys from manufacturers next year and would increase federal subsidies for premiums and copays for some low-income people, according to a summary obtained by The Associated Press.
It would also limit Medicare recipients’ out-of-pocket drug costs to $2,000 a year, payable in monthly installments; make it harder for drug companies to raise prices by requiring them to provide rebates if the price exceeds inflation and make vaccines free for Medicare beneficiaries, the plan says.
The now-defunct version of the legislation would have cost about $2 trillion over a decade and cleared the House. But Manchin, who had been negotiating with party leaders for months and whose vote Democrats needed for passage, suddenly said he opposed it, arguing it would fuel inflation.
Some Democrats expressed optimism that the effort could be revived. Others expressed pessimism that a new election-year deal could be reached with West Virginia as the Senate calendar winds down.
“To his credit, Senator Schumer is much more optimistic than I am,” the No. 2 Senate Democratic leader, Richard Durbin of Illinois, told reporters Thursday in Madrid, where Biden and lawmakers were attending a NATO summit. “So maybe before the end of the year they’ll pass this miracle bill, but I’ll continue to work in a 60-vote environment.”
That was a reference to the 60 votes, including the support of at least 10 Republicans, that major legislation normally needs to pass the Senate.
The semiconductor legislation will need the support of at least 10 Senate Republicans, and possibly more, to get a bill to Biden’s desk to be signed into law. If McConnell withdraws his support, it makes the task much more difficult, if not impossible, as other GOP lawmakers follow suit.
Supporters of the semiconductor legislation include the nation’s automakers and the nation’s largest technology companies. They have stepped up their lobbying in recent weeks to congressional leaders, saying the bill’s provisions boosting investment in research, workforce development and domestic manufacturing are critical if the U.S. is to compete with other nations, especially China.
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Associated Press writer Zeke Miller in Madrid contributed to this report.
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