From Statecraft: How to Pass the CHIPS and Science Act
"It was contentious"
Dear readers,
We hope you have been having a restful holiday season.
We are excited to republish an interview our colleague Santi Ruiz at Statecraft conducted with Gerry Petrella, a senior aide to Senator Chuck Schumer (D-N.Y.) during the passing of the CHIPS and Science Act. We hope that in light of Factory Settings’ recent writing on execution readers will have a newfound appreciation for the legislative negotiations behind the effort involved.
We look forward to resuming our standard publication schedule in 2026. Until then, we wish all our readers a happy new year!
Please read on for a transcript of the interview with Statecraft’s Santi Ruiz. We encourage you to subscribe to Statecraft at the link below.
In 2022, the U.S. passed the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act, which authorized $280 billion of investment in a broad range of targets, including quantum computing, clean energy initiatives, NASA, semiconductor manufacturing, and $24 billion in tax credits incentivizing domestic semiconductor production to diminish supply chain reliance on China.
CHIPS and Science combined two bipartisan Senate bills: the Endless Frontier Act and the United States Innovation and Competition Act (USICA), in a complicated negotiation that involved both chambers of Congress and a rarely-used conference process.
In March 2023, Senate Majority Leader Chuck Schumer said on the Senate floor that both the CHIPS and Science Act and the Inflation Reduction Act “wouldn’t have happened without Gerry Petrella.” Petrella, a former longtime aide and policy director for Schumer, had worked for months behind the scenes to build the support needed for both bills.
Statecraft talked to Petrella about how the CHIPS negotiation went down.
What You’ll Learn
What are the functions of the majority leader’s staff?
How does information flow in the Senate?
Do committees still work, or has all negotiation moved to backrooms?
How does the office of the Senate majority leader work differently from the office of a run-of-the-mill senator? What are the organizational differences?
There are a couple of differences. First, there’s inherently a lot more decision-making that has to happen to actually run the Senate, because the mechanics and scheduling of the Senate are in the domain of the majority and minority leaders. I operated on both sides of that coin for Leader Schumer.
Because the Senate is a body that has to work, more often than not, by unanimous consent. Even waiving the morning business, which can take hours, requires all 100 senators to agree.
Senate operations require the two leaders, the staffs they have on the Senate floor, and the political and policy staff behind them to work together on both micro and macro level decisions. Together, they decide which legislation we will actually consider in the Senate, and when and how it goes from just being a bill or an idea, to a bill coming out of a committee, to getting to the Senate floor. Both leaders have to be a part of that process, and usually very early on.
The majority leader staff has a larger apparatus. By the numbers, the office is maybe double the size of a senator’s personal office. The staff includes multiple domain experts — health care, transportation, environment, and so on — to field incoming requests, answer questions, and provide leadership, vision, and strategy. The office also helps the committees and each of the senators’ offices, especially those on your side of the aisle, understand what’s going on, problem-solve, and take the incoming. There’s a lot of decision-making that has to happen there, so there’s more staff and more involvement.
I worked in the personal office for Schumer before he was leader, and it’s interesting to see the differences. There are certain things you wonder about when you’re not in the majority leader or minority leader’s office, like, “Why’d they make that decision? Why are we doing this? What’s going on?” Once you’re actually there, you’re like, oh, now I understand.
How does information enter the majority leader’s office, and what does that information diet look like? How does it get synthesized?
It’s really a tremendous effort on the part of so many people, including not only the leader’s office, but also the whip’s office, the chair of the policy and communications committee, and the press and speechwriting offices of the leader.
There are teams of people dedicated to getting information out to senators. When the leader gives remarks on the floor, someone has to write those. We process tons of complex parliamentary information every day. It often doesn’t sound like English. So the whip’s office and floor staff will translate that through emails and other forms of communication. There’s a broad apparatus dedicated to just doing that.
Go a level deeper for me on the distinction between floor staff and policy staff. What are the roles and day-to-days of the floor staff?
In the Senate, both the majority and the minority leaders appoint their party secretary. There are not many roles that the senators themselves appoint, but Senate rules let them select the sergeant at arms and their secretaries.
You’ll see the two secretaries, currently Gary Myrick and Robert Duncan, are always on the Senate floor, and they wear a special pin. They are in their own league, really, because the entire Senate has granted them the privilege of helping make decisions about parliamentary procedure.
Those two secretaries each have a staff, colloquially called the floor staff. They’re wonderful, brilliant people who work way too many hours because the Senate often does business late into the night on Monday, Tuesday, Wednesday, and Thursday nights. They keep the place functioning.
Under the two secretaries are usually a deputy and a few other staffers who handle particular aspects of the parliamentary process for the Senate and senators. They help introduce bills, file amendments, and prepare scripts for leaders and senators to read to conduct floor business, but are separate from the policy staff in the party leader’s office. I worked very closely with Gary Myrick, who is an unbelievable individual and has been there for many years through many leaders, but our roles were different. My job was to figure out how am I getting a bill, a substantive piece of legislation to the Senate floor for it to be successful?
When it comes to bills like CHIPS and Science, how much of the nitty gritty is driven by senators themselves, vs. by staff?
That’s a great question, and it’s relevant to not just CHIPS and Science, but to the legislative process in general. The Senators are the key decision makers and visionaries for legislation – they set the path and call the final shots. However, I think senators, rightfully and smartly, rely a lot on staff — not just their own staff, but the staffs of the leaders and of the committees. It’s almost too complex and too much volume for any one human being to handle.
My former boss Leader Schumer relied on his team to help him execute the vision and goals he and the conference had. We helped with getting bills, ideas, and issues to a place where they could come out of the committees with bipartisan support and then come to the Senate floor. Staffers also help negotiate some of the more complex terms and policy issues inside of bills, like the Inflation Reduction Act and CHIPS and Science.
I think senators, writ large, do that. Let’s use CHIPS and Science as an example. Almost every senator has an aide who handles technology, environment, and climate change policy. Some offices break it up differently by discipline, but almost all of them have staffers who handle technology and science issues.
But then the Commerce Committee has its own suite of professionals who report to the Chairwoman and to the ranking member. Those folks are very technically savvy, and they are experts in actually writing statute. Oftentimes, senators will bring their ideas or bills to the Committee staff and say, “Here’s my idea,” or, “Here’s how I drafted the bill,” and then encounter the committee staff whose domain this really is. A bill’s outcome sometimes depends on whether the Senator wants to listen to the committee. The committee will want to put their imprimatur on the legislation, or correct how you’ve amended the statutes in their jurisdiction. I would always advise listening to the Committee professionals if you want to get a bill passed.
The Senate staffs are really the experts in many issue areas, and they help bring the senators’ ideas to life and move them through the process. The senators help provide vision, clarity, and strategy. Negotiation with other senators, especially on tricky issues, also often gets boiled up to their level. Let’s say there are 100 unresolved issues at the start of a negotiation. The staffs will try to negotiate as many of those issues as possible, but inevitably there will be two, three, or ten that they need to, as folks would sometimes joke, kick up to people with election certificates.
When you have bipartisan support, as you did with CHIPS and Science, how often do senators have to be in the room to hash out the details?
CHIPS and Science required a lot, because it was negotiated over the course of almost two years. Schumer himself was the original sponsor of the Endless Frontier Act, which was one of the individual pieces of the final bill. He also helped negotiate the original terms of it with Senator Young and others, so they were very, very involved.
The bill then went through a committee process where Chair Cantwell, ranking member Wicker, and others and their staffs said, “We didn’t like exactly how you did it, so we’re going to try to do it our way.” I was on some late-night phone calls with Senator Cantwell herself right before the markup of Endless Frontiers Plus, which wound up being called the U.S. Innovation and Competition Act (USICA) in the Senate, and then was signed as CHIPS and Science.
There were huge dramas related to some of the language that senators themselves had to address, like the Davis-Bacon language in the CHIPS program. Senators Stabenow and Warner were involved, for example, and they weren’t even on committee. There are always these moments when you’re handling major legislation, when the senators themselves are very involved as it goes through the committee markup process.
Like the amendment process, committee markups are held live and the senators are present. The staffs help them organize and make decisions, but the senators are the vessels to take the votes, give the speeches, and actually pass legislation.
It’s a symbiotic relationship. The staffer only exists because the senator has offered them the pleasure of serving, and the senator really needs the staffer in order to do the job.
When a bill like CHIPS and Science passes, how much of that legislative success do you attribute to careful procedural and tactical work on the floor and committee wheeling and dealing?
CHIPS and Science is an interesting example because it had fits and starts and looked like it was dead for a while. That one maybe more than any other examples of legislation, I should say. It’s pretty unique, because it started out in the Senate as a large, comprehensive, and bipartisan piece of legislation. The House really didn’t have input, and they reminded us of that very often in the first year of that Congress. It was contentious.
Speaker Pelosi and House Democrats were not that happy with the way we did it, so the House drafted and passed their own version of the bill, called Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength (COMPETES). We tried doing an informal conference between the two chambers, and while we were pursuing and passing this bipartisan legislation with the Republicans at the time, we were also doing some partisan legislating behind the scenes, which wound up becoming the Inflation Reduction Act.
It was hard to get a real negotiation going with the Republicans on CHIPS and Science because they were using it as leverage over the Inflation Reduction Act. We tried negotiating informally with the House, but that didn’t go anywhere.
To answer your question about whether there were any unique parliamentary moves used, we threatened to amend our Senate National Defense Authorization Act with the Senate-passed version of CHIPS and Science. It was getting close to the end of 2021, and we were frustrated that we hadn’t made any progress in our conference negotiation with the House. We were playing what’s called a ping pong, which is a legislative term for when the House and the Senate amend one another’s bills to try to get to a final product, rather than go through the conference process.
We got the idea to do that on the National Defense Authorization Act (NDAA) for 2022. Leader Schumer told me to go do it. I thought, “If this doesn’t work, let’s at least try to shake something loose.” So we threatened to put our version of CHIPS and Science on NDAA.
The Senate Republicans and House Democrats didn’t like that, so we were able to extract a commitment to do an official conference.
To clarify for our readers, the threat that you were making was that you would put your version of CHIPS and Science into legislation that had to pass.
Or at least that it then becomes a lot harder to get your own things in, because we were attaching it to the defense bill, yes. But out of that came a commitment from all of the leaders and the chairs of the relevant committees to form an official conference. Congress rarely ever does that anymore, but it is a real, technical vehicle for resolving issues between the two chambers.
Why are official conferences so rare?
You know... it’s interesting. You can’t do anything in Congress easily anymore, and even creating the mechanisms to resolve problems takes time. Just debating the motion to go to conference in the Senate, without cooperation from the other side, can take days or weeks, and you’re not even doing anything substantive. That’s one reason why it doesn’t happen often anymore.
Another reason, which some people bemoan, is the centralization of decision-making behind closed doors. Because of that first reason, among others, the committees and the leaders just negotiate on a bipartisan basis and resolve their issues informally. It’s essentially a conference negotiation without forming the technical committee.
I’m a nerd for procedure, so when we formed the technical conference committee to reconcile the differences between USICA and COMPETES, I thought, “This is cool. We haven’t done this in a while, and we made it happen.” The conference committee is required to have public meetings, so the senators and the House members who were appointed by the leaders on both sides all showed up and talked about how much they wanted to do it, but we still couldn’t get the thing going in the formal process.
Fast-forwarding to the waning days of Congress in the summer of 2022, the clock is ticking, we’re trying to pass Build Back Better, and negotiating with Manchin. We passed the bipartisan infrastructure bill and the veterans bills, we had Ukraine pop up and were doing tons of bipartisan stuff, but this one budgetary thing we were going to do on a partisan basis was still hanging out there and CHIPS and Science, not born of that name yet, was still hanging out there.
We hadn’t fully resolved all of our issues with the House, but because we created the conference committee and the conversations had been going on for so long, an understanding formed of what often is referred to in the halls of Congress as the “lowest common denominator.” In Congress, that means, “We can’t resolve all of the issues we’re fighting about, but what can we all agree to on a bipartisan basis? We can’t resolve all of the issues we’re fighting about, but what’s the lowest common denominator?”
Slowly it became clear that the trade provisions and some of the immigration and research restrictions in the Senate bill were just too controversial for the House Democrats, and we couldn’t resolve them with the remaining time. Through discussions, we understood that everyone wants the semiconductors, the chips part was hugely bipartisan, and everyone really liked the science pieces. We had to make some changes to accommodate the House, but we thought that maybe we could just go by on the chips and science parts at the end of the day. If we had to go, maybe we could just go on that. And that conversation began behind closed doors and not in a formal process.
Was that stance from the leader’s office purely in the interest of moving things through in that term of Congress?
Yes, we had to move things through. We thought, we have an election coming up in three months, the window is closing to legislate on something substantively important, and our members want to run on something.
The Senate ultimately passed CHIPS and Science in mid-July, before the August recess. It then went over to the House, which Speaker Pelosi controlled, so we expected to have no problem there.
What did the fights over CHIPS and Science implementation focus on? Was it about how the money would be disbursed?
I was kind of on my way out at that time, so I started the process of managing the implementation of those bills, but I didn’t get to see the fruition of it. I did just see that all the tech hubs got announced.
CHIPS and Science is a tricky one because you have limited resources, but the outcomes are very important for the country, and for individual states and members, so there’s a lot of jockeying. Where are the fabs going to go? Where are the hubs going to go?
That’s fine. Before we wrap up, are there other critical aspects of the legislative process that we haven’t discussed?
I’ll just wax poetic for a bit because I’m proud of this and I fight with Paul Kane at the Washington Post about this often. For a long time, or at least in the 15 years I was there, people have said that all of the power is with the four leaders and the White House and that all of the deals get cut behind closed doors and in back rooms, that the committees are powerless and don’t do anything.
Leadership does have to negotiate the terms, but much of the transformative legislation, like CHIPS and Science, the bipartisan infrastructure law, the CARES Act, COVID bills, gun bills, and much of the transformative stuff in the Inflation Reduction Act, is written by the committees. Sure, the leadership negotiated the big terms. But the committees write all that stuff. And they often wind up negotiating with Republican ranking members and members down dais [nb: junior members of Congress].
The CHIPS and Science Act was all legislation that got reported out of the committees, and the bipartisan infrastructure law was like seven Senate committee bills put into one. The leader’s office helps provide vision and negotiates and problem solves, but I don’t think it’s fair to say that the House and Senate committees are not critical. They’re incredibly important. The leaders don’t write bills out of thin air. They don’t have the capacity and that’s not the way the system is set up.
I have this long-standing point that I often make which is that the Senate is not an atrophied institution. It still works pretty well when you let it.
Are there procedural changes that you would make to the Senate as it exists today?
Yes. Yes. I would update the rules to allow more efficiencies. People complain, “Why don’t they do the 12 appropriations bills?” They just tried to pass three of them, and it took seven weeks. There should be special procedures for certain types of bills. If you have overwhelmingly bipartisan support, you should be able to move faster.
Thanks to Rita Sokolova for her judicious edits on this interview.
Fantastic walkthrough of how real legislationgoes from concept to law. The insight about threading CHIPS onto NDAA as a forcing function was genius, basically creating artifical urgency to unstick negotiations. I ran into simliar dynamics coordinating multi-stakeholder infrastructure projects where nobody moves until you tie their deliverable to something they cant afford to block.