U.S. House, Senate will negotiate on China tech bill

By Patricia Zengerle and David Shepardson

WASHINGTON (Reuters) -U.S. House and Senate leaders said on Wednesday that lawmakers would negotiate to try to reach final agreement on a bill to boost U.S. technology competitiveness with China and semiconductor manufacturing.

Senate Democratic Majority Leader Chuck Schumer had sought to attach the bill to a $750 billion annual defense policy proposal. He said on Monday he planned to add the U.S. Innovation and Competition Act (USICA) to the National Defense Authorization Act (NDAA), hoping to get it passed so President Joe Biden can sign it into law this year.

USICA includes $52 billion to increase U.S. semiconductor production and authorizes $190 billion to strengthen U.S. technology and research to compete with China.

But the plan to combine USICA and the NDAA faced opposition, with Schumer and House Speaker Nancy Pelosi saying in a statement on Wednesday: "Senate Republicans made it clear they would block the inclusion of USICA on the NDAA."

The Senate passed USICA with bipartisan support in June. But the House of Representatives never took up the Senate-passed measure. House leaders said earlier they wanted to pass their own bill, but never did.

Schumer and Pelosi said they would now enter formal negotiations on USICA by going to "conference."

"Working with President Biden, the House and Senate have been crafting bipartisan legislation to bolster American manufacturing, fix our supply chains, and invest in the next generation of cutting-edge technology research," the two said, adding: "There are still a number of important unresolved issues."

Democratic Senator Maria Cantwell said the Senate got ahead of the House on USICA but that Congress must act quickly. "America's R&D infrastructure needs to be dusted off," she told reporters.

Senator Bernie Sanders, an independent who caucuses with Democrats, said the combined NDAA and USICA would be worth more than $1 trillion in one year.

Too much of that, he argued, would go to high-profit defense contractors as well as to semiconductor firms that shifted manufacturing to China, taking away U.S. jobs and contributing to the current worldwide chip shortage.

(Reporting by Patricia Zengerle and David Shephardson; Editing by Stephen Coates and Peter Cooney)