Senate passes bipartisan bill to counter China, Biden infrastructure talks fall apart

Jessica Smith joins Myles Udland, Brian Sozzi, and Julie Hyman to discuss the passing of a $250 billion tech and manufacturing bill by the senate as a way to compete against China’s technological ambitions and Biden proceeding with backup plans for an infrastructure bill after talks with GOP fell apart.

Video Transcript

MYLES UDLAND: The Senate did agree yesterday to a bipartisan bill to boost government spending on R&D on finances. Jessica Smith joins us now with the latest on this development. Jess, always nice to talk about approval of some funds being allocated down in DC.

JESSICA SMITH: Right, a rare piece of bipartisan legislation passed the Senate. It passed 68 to 32 yesterday evening. Again, this bill is designed to help the US compete with China.

So, it puts $250 billion toward that effort. $52 billion of that would go toward the semiconductor industry, research and development and manufacturing. $190 billion would be aimed at strengthening advanced technology and research in the US. And then there would be $10 billion for tech hubs throughout different areas of the country to try and spur innovation in various places all around the country, instead of just in the typical hubs on the coast.

Now, Majority Leader Schumer said that this could be a turning point for American leadership in the 21st century. This is a significant win for him and his Republican counterpart, Senator Todd Young. They've been working on this together. There were months of negotiations, committee work. There were compromises and amendments on this piece of legislation.

But ultimately, it was able to make it through after even a delay that we saw for about two weeks before the Memorial Day recess. But now, we have to see what happens in the House. It's unclear where this bill is going to go because the House is advancing several of their own bills aimed at helping the US compete with China. So, we'll see if the House and Senate comes together to put together a conference committee and hash out their differences in order to send a bill to the president's desk.

It's not quite clear what they're going to do at this point. Both Republicans and Democrats do have some issues with the bill as it stands now. So, we'll keep an eye over the next couple of weeks of what the House decides to do here.

JULIE HYMAN: And Jess, you know, on a different topic, but also on the topic of sort of investment in the United States, the infrastructure bill. Yesterday, we know that one side of the talks fell apart, but it sounds like talks are still ongoing in other quarters.

JESSICA SMITH: Right. There were the negotiations between the president and Republican senators, led by Senator Shelley Moore Capito. Those talks broke down yesterday. They are no longer going to be trying to find a deal.

You'll remember it started with Republicans proposing a $568 billion deal. President Biden proposing a $2.3 trillion. And they were not able to overcome their differences.

Republicans do not want to touch the 2017 tax cuts. They don't want to raise taxes in any way in order to pay for infrastructure. President Biden does. And he said, Republicans were not willing to put enough-- more-- enough new money toward this effort. So, they have given up on those efforts.

But there is a bipartisan group of senators who are trying to hammer out some sort of a deal. They've been working kind of in the background of all of this, preparing a backup plan if these negotiations between the president and Republicans would fail. And now that they have, they are working, trying to come up with something. We know President Biden is shifting his focus toward that group now.

But he is also getting ready to potentially move forward with reconciliation. The White House said yesterday that he talked to Majority Leader Schumer about getting a budget resolution ready. So, he's kind of moving on multiple paths here to see what they can come up with, whether it be a bipartisan deal with this group of senators, or if they go it alone, and go through the reconciliation process, and try to get as many as-- of his priorities as they can with just Democratic support.

MYLES UDLAND: I mean, let's just call the infrastructure bill a competition with China bill, and then, obviously, you can get bipartisan support on those kinds of things. All right, Yahoo Finance's, Jessica Smith, with the latest on all of the legislative going on down in Washington DC.