NAICU Washington Update

Congress Pivots on Two Major Bills

July 29, 2022

With the clock ticking toward the August recess, Congress has revised its approach on two major pieces of legislation that have been in the works for several years – the competitiveness bill and the Build Back Better reconciliation package. Both bills were dramatically changed, renamed, and barely resemble their original forms.  

The Competitiveness Bill

The Senate passed the Creating Helpful Incentives to Produce Semiconductors for America Act, or the CHIPS for America Act, by a bipartisan vote of 64-33.  This bill, which has been in the works since before the pandemic, is the culmination of a long journey through negotiations on how to reduce American reliance on Chinese and other foreign-produced computer parts, incentivize American manufacturing for semiconductor production, invest in research and development, and stave off malign foreign influence, including in higher education.

Throughout the process, the key concern for colleges and universities was the balance between the significant investment in federally funded research with increased restrictions and regulations on reporting of interactions with and gifts from foreign entities. 

After months of negotiations, the bulk of the bills were narrowed to focus on the most pressing economic issue, which is the lack of computer chips, particularly in auto manufacturing. For colleges and universities, the bill includes limited R&D investment at the National Science Foundation (NSF) and the Department of Energy, with only targeted reporting on foreign entity engagement in the NSF grants. The final bill does not include the proposed expansions to Higher Education Act Section 117 or the new proposed Section 124, both of which deal with foreign gifts. Nor does it include the expansion of the Pell Grant to short-term programs, or the College Transparency Act, which at one point were amendments to the larger bill.  

The House is expected to pass the bill before recessing July 29. 

Reconciliation Bill 

The Senate is preparing to vote on a new reconciliation package before it breaks on August 5.  This package replaces the Build Back Better bill but uses the legislation framework created for the earlier bill.  This new bill is a drastically reduced version of the original Biden plan that sought to make investments government-wide much like the New Deal, including paths toward doubling the Pell Grant and free community college. The latest version, dubbed the Inflation Reduction Act of 2022, includes Medicare prescription drug provisions, health insurance expansions, clean energy and climate change programs, and tax provisions that result in reducing the deficit.  None of the higher education provisions once included in the reconciliation package have survived, something that has been clear for months.  

This is the Senate’s last chance at passing legislation under the reconciliation instructions provided in the FY 2022 budget resolution because they expire on September 30. The Senate must follow special rules for floor consideration, including time limits on debate and amendments, and the requirement that amendments be germane to the underlying bill. The Senate is moving first on this bill because of the difficulty of getting a majority vote. If it can pass the Senate, the House will consider it upon returning in September. 

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