Bill Clark/CQ Roll Call via AP Images
Speaker of the House Nancy Pelosi (D-CA) speaks during her America Competes Act event, February 4, 2022, at the Capitol in Washington.
The enduring takeaway from the polling timed to President Biden’s first anniversary in office was that too much time was spent on trying to advance social policy and not enough on inflation. This was in many ways an oversimplification; the dearly departed Build Back Better Act would have blunted the main drivers of cost of living for working families in health, education, and housing. But when the public says overwhelmingly that they would much rather see inflation come down than BBB passage, you have to take that into account.
Congress is actually doing so. A bill aimed at increasing domestic manufacturing of semiconductors while improving STEM education and scientific research has morphed into a broader effort, aimed at improving supply chains and breaking the structures of power that have been disabling them. If successful, the bill would serve as one of the most important reversals of neoliberal policy drift of the last 50 years. Combined with some other bipartisan legislation on the verge of passage, it would reflect a quiet reorientation of a surprisingly more productive Congress.
Seven months ago, when the Senate passed the U.S. Innovation and Competition Act (USICA), inflation increases and supply chain snarls were still emerging. The House delay in taking up USICA enabled them to use the vehicle to respond to the supply chain crisis. This fits well with a bill intended to reduce economic reliance on China, prevent shortages in critical goods, and bring decent-paying jobs back to our shores.
As I explained when the House released the COMPETES Act a couple of weeks ago, these supply chain–specific pieces include $45 billion to relocate manufacturing and build up stockpiles in “critical goods.” There’s a monitoring element to this as well, with the Department of Commerce given authority and funding to scan supply chains and identify gaps. Funding for specific supply chains in solar panels, electric grid equipment, prescription drugs, and wireless services was also included.
That addresses some of the offshoring and deregulation elements of the supply chain breakdown. But House progressives bolstered this even more. Rep. John Garamendi (D-CA) got his entire Ocean Shipping Reform Act update pulled into the COMPETES Act as an amendment. That revised bill passed the House last Friday along party lines.
OSRA 2021, an update of the original bill from 1998, got 364 House votes as a stand-alone piece of legislation in December. It’s an expansive re-regulation of the consolidated ocean shipping industry, whose profits soared tenfold last year. The bill would re-empower the Federal Maritime Commission (FMC) to investigate carrier practices, like extortionate fees for cargo lingering on the docks that owners have no way of moving. The FMC could impose minimum service standards on shipping contracts that third parties could use to challenge the terms being offered. The bill would also require ocean carriers to accept cargo if it can be loaded into their containers, rather than returning to Asia with empties.
The Senate just introduced their version of OSRA last week; it’s a bit more modest than the House bill, but would still allow the FMC to initiate investigations and enforce violations, while cracking down on fees at the docks and prohibiting “unreasonable” denials of shipping opportunities for exporters. But by getting OSRA into COMPETES, Garamendi has forced any compromise on the broader competitiveness bill to deal with ocean shipping as well.
Congress responded to public demands to legislate around inflation, and is stitching together a fairly solid attack on the policy forces that created much of the mess.
In other words, there will soon be finished legislation, likely with enough votes to pass into law, that would provide subsidies for semiconductor reshoring, authorize oversight of supply chain dysfunction, and mandate re-regulation of the industry profiting the most off the disruptions. That would tick off a lot of boxes, upending the policies that render the supply chain incapable of handling increased demand.
The bill would intersect with other initiatives, like the $17 billion for congested ports in the bipartisan infrastructure bill, to form a coherent whole. More onshoring would reduce pressure on the ports and profit-gouging from the ocean shipping companies. Initiatives like the pop-up container yard at the Port of Oakland, designed to help exporters get their goods loaded, matches OSRA’s goal of reciprocal trade. If you can spot supply chain problems in real time, they won’t fold in on themselves and magnify, like what’s happening now at the Ports of Los Angeles and Long Beach, where imports have fallen for four straight months.
The results may not be seen right away, but building resiliency is a long-term process that is worth the investment. The fact that, two years after the pandemic’s onset, we’re still seeing manufacturers cut production due to lack of semiconductor chips, shows that the cost of letting domestic capacity and supply chain robustness decay was far more damaging than the savings from so-called “efficiency.”
Amazingly, Congress has found its way toward this solution. The COMPETES/USICA compromise will be far from perfect—the Foreign Affairs title includes some needless anti-China belligerence—but of course nothing from the legislative sausage grinder is. The point here is that Congress responded to public demands to legislate around inflation, and is stitching together a fairly solid attack on the policy forces that created much of the mess.
Incredibly, with a couple of favorable breaks, Congress could have a pretty productive 2022 even without moving anything on the Build Back Better agenda. On Monday, the House passed a bill to end forced arbitration in sexual harassment cases, beating back a delaying effort from the Chamber of Commerce. That bill has several Republican co-sponsors and a very good chance of reaching 60 votes. Later this week, the House will pass the Postal Service Reform Act, which once and for all will end the ridiculous retirement prefunding requirement that has hobbled postal finances for years. It would also mandate nationwide delivery targets and integrate postal employees into Medicare.
Sen. Manchin, who has shied away from Build Back Better for months, is predicting that an overhaul of the Electoral Count Act, a minor but critical reform to prevent the vice president picking the winner of the presidential election, will pass. That bill might also include federal protections for election workers. Legislation to ban members of Congress and their staffs from trading stocks, a populist catnip that any member seeking distance from Washington corruption is keen to back, has also moved forward, with the Senate leadership pushing for a draft.
These bills push back on deregulation, corruption, and corporate resistance to accountability. Add to that a budget agreement, whenever it passes, that will increase domestic spending significantly (in line with an increase in military spending in all likelihood) and may even include some COVID relief. Suddenly you have a bipartisan agenda that could get unclogged.
It could all fall apart, of course; Republicans may wager that they’re taking back Congress soon enough and they should delay any bipartisan victories. But members want something to tout for re-election. And they want to reflect popular demands. Prices for key inputs are rising, and having a bill that people could point to and credibly say would reduce prices makes sense.
The process was meandering and suboptimal, but that bill exists and is within reach. And along with it, there’s an emerging philosophy reflected in these bills that fights back, in small but important ways, against a dominant consensus rooted in corporate control over government. That’s worth keeping track of.
