The House passed a bill on Thursday to boost U.S. competitiveness with China.
No Democrats voted against the bill. The legislation was passed despite a last-minute push by GOP leaders.
President Joe Biden will sign the bill into law after it passes the Senate.
Legislators wanted to approve the package before they left Washington, D.C. The legislation took many forms and names in both chambers of congress before the final vote.
Billions of dollars in tax credits are included in the Chips and Science Act to encourage investment in chip manufacturing in the U.S. Tens of billions of dollars are provided to fund scientific research and to spur the development of other U.S. technologies.
Pelosi said the bill was a victory for American families and the economy.
Kevin McCarthy told his colleagues to reject the bill and start from scratch.
17 Republicans voted in favor of the bill in the Senate. McConnell warned that Republicans would not back the China competition bill if Democrats continued to pursue reconciliation.
Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin, D-W. Va., have struck a deal on a reconciliation bill. They hope to pass that package next week with a simple majority in the Senate, which is evenly divided between Republicans and Democrats.
House Republican leaders told their members to vote down the Chips and Science Act. They argued against giving billions of dollars in subsidies to chipmakers at a time of high inflation.
The office of House Minority Whip Steve Scalise, R-La., said in a memo Wednesday night that Democrats are poised to send the country into a crushing recession because of their agenda.
Some Republicans who opposed the bill said it didn't have enough guards to stop funding from ending up in China's hands. Critics argue that the U.S. would have to spend a lot more to compete with the world's top chipmakers.
It is vital to America's economy and national security to build more chips, which are increasingly critical components in a vast array of products, according to the bill's advocates.
During the Covid-19 Pandemic, there was a shortage of the chips. The factory shutdowns at the beginning of the outbreak affected chip production in Asia, while consumer demand for autos and upgraded home electronics increased. The US's share of global chip production has fallen steeply in recent decades, while China and other nations have invested a lot in the industry.
Taiwan is the epicenter of rising political tensions with China and is where most of the most advanced types of Semiconductor are made.
The U.S. defense officials are worried about the nation's dependence on foreign producers for its chip supply.
The chip shortage has been blamed for the high inflation that has hampered his presidency. Prices for used cars are pushing inflation higher because of a lack of chips in new cars.
America's invention of the Semiconductor. Biden said this week that it was time to bring it back.
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