GOP Senators: Money from computer chips endorsing “awakened” agenda
WASHINGTON (AP) — Republican senators are accusing the Biden administration of using $39 billion to build computer chip factories…
WASHINGTON (AP) — Republican senators are accusing the Biden administration of using $39 billion to build computer chip factories to further “wake up” ideas such as requiring some recipients to provide childcare and encouraging the use of union labor.
The government has countered that these elements of the funding guidelines announced on Tuesday increase the likelihood that companies will be attracted to build the semiconductor plants and people will be employed there – a key challenge that could determine the success of the program. It sees the guidelines as a starting point for working with businesses to ensure value for taxpayers.
The tension is an example of the partisan mistrust that can grow in Washington even over an agenda item lawmakers from both parties say is vital to US national security. Republicans say that in implementing the law, the administration is trying to introduce priorities that will satisfy the Democratic base. They also argue that the guidelines will increase the construction costs of semiconductor plants and erode any sense of lasting confidence.
“What President Biden is doing by cramming awake and green agenda items into legislation we pass makes it harder for him to ever get legislation passed again,” said R-Utah Senator Mitt Romney, who voted in favor of the bill.
But in the grand scheme of things, government officials say, the guidelines could help address two fundamental challenges to the government’s plans to transform the United States into the world leader in advanced computer chip manufacturing: the companies need a skilled workforce and they need innovations that can reduce production costs.
If the investments succeed, Commerce Secretary Gina Raimondo said the companies would need to source and train tens of thousands of workers, from welders to electrical engineers. More importantly, the industry needs scientific breakthroughs to cut the cost of making chips in half so the U.S. can compete with Asia, Raimondo told The Associated Press in an interview before the guidelines came out.
“Innovation happens when you start solving big problems, like cutting the cost of chip production in half,” Raimondo said. “That’s what we have to do.”
The money for the factories comes from the CHIPS and Science Act that President Joe Biden signed last August. It includes $11 billion for research, in addition to the $39 billion for building advanced computer chip factories. Tax breaks bring the total investment to $52 billion.
Chips are integrated circuits embedded in a semiconductor, a material — silicon, specifically — that can manage the flow of electrical current. The terms “chip” and “semiconductor” are often used interchangeably. Computer chips are used in everything from cars to toys to advanced weapons, making them as fundamental to the digital age as iron and steel were to the industrial age.
Administration officials said the factories could attract workers more easily if parents received childcare at an “affordable” rate from companies that would receive $150 million or more in government aid. Similarly, companies looking for the cash get a preference if they use labor contracts for construction, an incentive for union building. The White House said in a 2022 executive order that it can ensure projects are completed on time.
An administrative officer, who spoke on condition of anonymity to discuss private conversations, said no prospective applicants have complained about childcare. The official added that TSMC and Samsung – two potential applicants – already provide childcare services in Taiwan and South Korea, respectively.
Researchers at the Center for Strategic and International Studies, a think tank focused on national security, described the childcare facilities as necessary for the “fabs,” the chip industry’s term for factories.
“It is not, as some have falsely claimed, a matter of social policy,” wrote Sujai Shivakumar and Charles Wessner, both at CSIS. “It’s a pragmatic move, clearly aligned with the country’s security interests, to grow the workforce needed to build the factories and produce the chips that power our country.”
According to the Labor Department, there are about 360,000 jobs in semiconductor manufacturing. Announced projects linked to the possibility of government support could create an additional 200,000 jobs, including 36,000 directly linked to computer chips, according to a report from the Semiconductor Industry Association.
That same report noted that the US is at the forefront of chip design and the equipment to manufacture them. But more than 70% of the chips produced worldwide come from China, Japan, Taiwan and South Korea – an economic and military weakness for the US.
Senator Thom Tillis, RN.C., said the state aid access mandates would increase the cost of completing the factories planned by Intel, Micron and Wolfspeed, which plan to make silicon wafers in his state.
“What we’re starting to do is deduct the value of the investment that we’re making,” Tillis said. “I think what we’re doing is social engineering.”
Support for the computer chip legislation was twofold. Seventeen Republican senators joined Democrats in supporting the bill. Twenty-four House Republicans voted in favor of the legislation.
Raimondo, when asked if the law could be tripped by politics, said, “You always worry. Washington is unpredictable. And politics are crazy.”
Senator Todd Young, R-Ind., said the practical impact of the guidance is limited because companies likely would have offered child care and still relied on some unions. But Young said the administration’s messages aren’t going down too well with colleagues.
Young was instrumental in generating Republican support for the bill and worked closely with Senate Majority Leader Chuck Schumer in drafting it. The idea behind the proposed investments is “consistent with our free market principles,” he said. “But the administration’s communication exercise on these matters complicates that.”
R-Texas Senator John Cornyn, who voted in favor of the bill, said he has exchanged text messages with Raimondo since the directive came out, telling her “that when the administration does stuff like that, it really undermines our ability to work together in a twofold basis for passing legislation.”
Cornyn said he realizes that Raimondo “doesn’t control everything,” but hopes she sends the message to the White House about Republican frustration. He acknowledged that he is still evaluating the guidance and trying to figure out “what difference it makes”.
Senator Lindsey Graham, RS.C., said he voted to “give us the capabilities we don’t have,” not the “union agenda” he sees embedded in the application process.
Graham said Republicans are resorting to making sure the administration knows their objections, with the bickering possibly going well beyond computer chips: “Hold every nominee, make life miserable,” he said.
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