What’s the Outlook for Semiconductor Industry Priorities in the New Congress?

by David Isaacs, Vice President, Government Affairs

As we prepare for the official start of the 114th Congress on Jan. 6, it’s a good time to assess the election results and the landscape for semiconductor industry priorities in the new Congress.

The most notable change in Washington from the 2014 elections is that Republicans gained the majority in the U.S. Senate for the first time since 2007. Republicans also expanded their majority in the U.S. House of Representatives, meaning Congress is now more solidly Republican than it has been at any time during the Obama presidency.

Given these changes, here’s the outlook for several of the industry’s top policy priorities in the 114^th Congress:

Trade: With some of the world’s most significant trade agreements currently under negotiation, the election results appear to have improved the prospects for semiconductor industry trade priorities. A primary reason is that the new Congress seems more likely to support Trade Promotion Authority (TPA) legislation, which would establish guidelines for the negotiation and congressional approval of trade agreements. The U.S. is actively pursuing an ambitious set of trade negotiations, including the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). TPA legislation would significantly strengthen the United States’ ability to negotiate and finalize these key trade agreements, which would lower tariffs, boost U.S. exports and create jobs. Congress last enacted TPA in 2002, and it expired in 2007.

Immigration:  The composition of the new Congress, coupled with the recent announcement of executive action on immigration, has further complicated the already complex political landscape surrounding immigration. While prospects for comprehensive reform appear to have diminished, the next Congress may advance a stand-alone bill providing for reform of the laws relating to high-skilled immigration. Republicans have long supported stand-alone high-skilled legislation, while the President and congressional Democrats have advocated for high-skilled reform to be included as part of a comprehensive immigration reform bill. The political climate on immigration remains challenging, but it appears that the next Congress will proceed with immigration reform on a piecemeal basis, including a stand-alone bill on high-skilled immigration.  It remains an open question whether Senate Democrats and the president will support such a bill in the absence of comprehensive reform. SIA will continue to advocate for high-skilled reforms that allow U.S. companies to access the best and brightest talent from around the world.

Research:  While members of both political parties recognize the importance of investing in basic scientific research, conventional wisdom holds that it may be more challenging to secure increases in research funding in the 114^th Congress due to concern with budget deficits, pressure to reduce spending, and support for tax reductions. Still, SIA will work to ensure that congressional leaders understand the tremendous impact that research investments have on America’s economic strength, technology leadership and global competitiveness – and that robust investments in research can be compatible with a fiscally responsible budget.

Tax: The new Congress will likely make corporate tax reform a high priority. During the “lame duck” session in December, Congress approved legislation that retroactively extended the R&D credit, which expired in 2013, through the end of 2014. Congressional Republicans have indicated that broader corporate tax reform legislation will be a priority in the 114^th Congress. SIA will continue to advocate for tax reform that achieves a globally competitive tax rate, a territorial system, and permanent, robust incentives for research and innovation.

Intellectual Property: The new Congress will likely consider legislation on patent litigation and trade secrets. In the 113^th Congress, the House passed the Innovation Act to reform the patent litigation system, but the Senate was unable to reach agreement on a patent bill. SIA remains committed to working to help pass balanced legislation in the new Congress that reduces abusive patent litigation conduct, strengthens our patent system, and promotes innovation.

A common theme of all semiconductor industry policy priorities is that they remove barriers to growth and innovation. SIA stands ready to work with our newly-elected leaders to advance initiatives that strengthen our industry and the U.S. economy as a whole.