EXCLUSIVE — A bipartisan group of lawmakers is hoping to counter the rise of
China
with federal dollars for small companies on the cutting edge of new defense
technologies
.
Sens. Jacky Rosen (D-NV) and Marsha Blackburn (R-TN) joined Reps. Chrissy Houlahan (D-PA) and Pat Fallon (R-TX) on Thursday in introducing the Investing in American Defense Technologies Act, which would encourage private investment in small
defense companies
that develop advanced technologies deemed important to national security, including hypersonics and autonomous systems.
Containing China has become a rare area of bipartisanship in Congress as lawmakers scrutinize everything from the Chinese-owned social app TikTok to the country’s acquisition of U.S. farmland. The bill’s introduction comes one day after Senate Majority Leader Chuck Schumer (D-NY) announced a new China initiative that, among other things, addresses intellectual property theft and U.S. access to critical earth minerals.
“When it comes to maintaining the United States’s edge in advanced defense capabilities, we cannot afford to fall behind China,” Rosen, a member of the Senate Armed Services Committee, said in a statement. “I’m introducing this bipartisan bill to bolster our competitiveness by establishing a public-private partnership to enable American defense-focused small businesses to succeed and scale their advanced technology innovations.”
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Rosen sees the legislation, first introduced in 2022, as a way to help small businesses in her state of Nevada, home to a burgeoning aerospace and defense industry, but also reverse the nationwide trend of consolidation in the defense industry. The number of small business contracts awarded by the Pentagon has
declined
more than 40% over the last decade.
The bill, which would mitigate risk through a federal loan guarantee, has the support of the U.S. Chamber of Commerce, which is advocating its inclusion in this year’s National Defense Authorization Act.
The congressional push would complement steps taken by the Biden administration to address “
investment gaps
” in the defense space, getting companies the capital needed to develop technologies that give the U.S. a competitive advantage. Last year, the Pentagon stood up the Office of Strategic Capital for this purpose.
The bill is just the latest introduced to aid small businesses. Houlahan, an entrepreneur and Air Force veteran, pushed for the
extension
of seed money programs known as SBIR and STTR in last year’s NDAA. She
reintroduced a bill
on Tuesday to help small companies get faster access to capital through these programs.
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But the Investing in American Defense Technologies Act also reflects an increased focus on competition with China. President Joe Biden signed into law last year the CHIPS and Science Act, a $280 billion bill meant to help the U.S. keep an edge in scientific research and technology.
Schumer has dubbed his Senate initiative the China Competition Bill 2.0.
