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Floor Speech

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Mr. THUNE. Mr. President, the threat that China poses is widely recognized. Recent events laid bare the Chinese Communist Party's interest in spying on Americans. The Chinese military is growing more aggressive in the Indo-Pacific, especially toward Taiwan. And China is aligning itself with other adversaries like Russia, whose war against Ukraine China has helped support.

We need to make the right decisions now to ensure that the United States is able to counter China from a position of strength, which brings me to the majority leader's current China proposal. Last month, the Democrat leader launched an initiative Democrats are calling China Competition bill 2.0. While this proposal has some laudable goals, a lot of Republicans are rightly skeptical of this initiative. Leader Schumer's last China initiative massively ballooned in cost, and now it is being implemented by the Biden administration as a vehicle for advancing progressive policies.

I am not alone in fearing the Democrats' latest initiative will turn out to be just more of the same. If Democrats are serious about competing with China, one thing they should be doing is making passage of a robust National Defense Authorization Act a priority.

Unfortunately, the NDAA has not exactly been a priority for the Democrat leader over the past 2 years. In fact, last year, Senator Schumer refused to bring the bipartisan Senate Armed Services Committee-passed bill to the floor. This critical legislation was allowed to languish for months before a negotiated bill with the House and the Senate finally passed in December of last year.

Our national security should not be an eleventh-hour concern.

I am encouraged that the Senate markup of the NDAA is occurring next week and that the majority leader is inclined to bring it to the floor in July. And I hope that holds.

China has made investment in its military a priority. Over the last 10 years, China's defense budget has doubled. This year, it will increase by more than 7 percent for the second year in a row, not counting any additional defense funding that China hides. It comes as no surprise that China is outpacing our military in modern capabilities like hypersonic missiles and has amassed a larger Navy.

Recent U.S. war games positing a U.S.-China conflict following an attack on Taiwan have had grim results, showing enormous military and economic costs on both sides. These war games also made clear that the United States would run through its inventory of munitions, especially for long-range strike, in a matter of weeks, blunting our ability to sustain a protracted conflict.

The United States, along with our allies and partners, need to maintain a credible deterrence to ensure that the cost is prohibitively high and the odds of success are extremely slim for China to attack across the Taiwan Strait or further attempt to assert any absolute control within the so-called First Island Chain. To do that, we have work to do on boosting our military's resources and readiness. At the very least, that starts with taking up each year's Defense authorization and appropriations bills in a timely fashion.

Besides building up our military, one of the best ways to ensure our competitiveness with China is to strengthen American industry so we continue to lead in the breakthroughs, innovations, and advanced technologies that will define the future. How we attempt to do that matters.

The President and Democrats in Congress have shown their preference for heavy-handed and often costly industrial policy that bestows taxpayer-funded subsidies on certain select industries, and it would be wise to ask where this will put us in the next 5, 10, and 20 years. Will it stifle innovation in our most important engines of growth? What will be the result of government picking winners and losers? Will small businesses and new enterprises be able to compete with large, established, and government-subsidized firms?

The way the Biden administration has so far been implementing its subsidy programs makes me suspect that we are well on our way to having government bureaucrats play an outsized role in our economy, with correspondingly negative effects.

Look no further than the strings that the Commerce Department has attached to funding for semiconductor manufacturers. The Department is giving preference to companies using union workers and, in some cases, conditioning funding on companies offering employee benefits that align with the Biden administration's agenda. It is the opposite of creating a level playing field.

America succeeds when innovators and entrepreneurs are empowered to do what they do best, and government steps out of the way. Government should be focused, not on heavy-handed regulation or picking winners and losers but on creating the conditions on which all businesses, large and small, can thrive.

Republicans have shown how pro-growth policies like this lead to greater investment, more opportunities for workers, and a stronger economy for all. Take our 2017 tax reform legislation. The Tax Cuts and Jobs Act lowered tax rates for owners of small- and medium-sized businesses, farms and ranches, and made it easier for them to recover the cost of investing in their businesses, which, in turn, freed up cash for them to invest in their operations and their workers.

It lowered our country's sky-high corporate tax rate to make American businesses more competitive in the global economy. And it brought our international tax system into the 21st century so that American businesses no longer operated at a disadvantage to their foreign counterparts.

And it worked.

In the wake of the Tax Cuts and Jobs Act, incomes grew, unemployment fell to a 50-year low, the income gap in this country narrowed, and the list goes on. Business investment increased, inversions--which is tax speak for companies moving their headquarters overseas--stopped. Companies created new jobs and invested in their employees, and they opened new opportunities for American workers by moving production and capital into the United States and bringing substantially more than a trillion dollars in offshore funds home.

One major thing--one major thing--that we could do to help boost our economy and increase our competitiveness with China is to extend the expired provisions of the Tax Cuts and Jobs Act to give certainty to American businesses and entrepreneurs, and in Democrats' case, commit to not repealing key Tax Cuts and Jobs Act provisions.

In the defense space, we can enhance the certainty for businesses by authorizing more multiyear acquisition contracts for key munitions like those used by the B-1 bomber, something that would both enhance economic growth and strengthen our Nation's defense.

We also need to resume a real and robust trade policy. For the last 2\1/2\ years, the Biden administration has put trade on the back burner to the detriment of our economy and our place in the world. Trade opens new jobs and opportunities for American workers. It helps businesses and agriculture producers access new markets, which grows our economy, and it provides an opportunity to develop important strategic relationships, foster ties with our allies, and advance U.S. priorities abroad.

Under the Biden administration, the United States has been essentially inactive--inactive--on trade, but the rest of the world has not. China, for one, is currently negotiating or implementing a number of new trade agreements, adding to its already large portfolio of trading partners. These agreements aren't just economically advantageous, they are allowing China to build sometimes predatory relationships that serve to expand its sphere of influence.

One of the most important things we can do to ensure that our country remains competitive with China is to reengage on the trade front and get to work on trade deals that expand market access and strengthen our relationships with other countries, particularly those that neighbor China.

There are a number of other steps we can take to boost our competitiveness with China, things like unleashing American energy production to increase our energy security and to boost American industry, developing critical mineral resources here at home instead of relying on China for so much of our critical mineral supply, expanding our own security and technological partnerships so we have a more agile and resilient supply chain, and more.

If the Democrat leader is serious about improving our competitiveness with China and not just funding progressive priorities, these are the kinds of things that he should focus on for his bill.

There is no question in my mind that the United States can successfully compete with and deter aggression from China. But to do that, we have to make sure that we are doing the right things to build up our military and ensure that American industry can thrive. And I hope that as we move forward, we will make securing our competitiveness with China a priority and ensure that any China initiative does not simply become a vehicle for more spending on progressive fantasies.

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