A bipartisan bill that proposes to spend upwards of $250 billion on domestic semiconductor production and development would increase the federal budget deficit by $79 billion over 10 years, the Congressional Budget Office said Thursday.
The bill would reduce tax revenue by $24 billion over a decade, CBO said, while increasing spending by $55 billion. The revenue loss would be driven by a 25% tax credit for semiconductor manufacturing.
The CBO score of the bill comes as no surprise and probably won’t harm the bill’s chances of passing. A final vote in the Senate is expected to occur next week, followed by a vote in the House, where the bill has the support of House Speaker Nancy Pelosi (D-CA).
Still, although the bill looks like it will pass, some fiscally conservative groups remain opposed, in large part due to its effect on the deficit. “There are plenty of options to offset the costs, and doing so would improve the fiscal, inflationary and competitiveness effects” of the bill, Maya MacGuineas of the Committee for a Responsible Federal Budget said in a statement. “But we can’t compete with China by going further into debt with them.”
