A bill to boost U.S. semiconductor production has managed to do the almost unthinkable — unite Democratic Socialist Senator Bernie Sanders with the economically conservative right.
Passing the Senate bill is a top priority for the Biden administration. That would add about $79 billion to losses over 10 years, largely as new grants and tax breaks will subsidize the cost of computer chipmakers building or expanding chip factories in the United States.
Proponents say countries around the world are spending billions of dollars to lure chipmakers. Should the U.S. do this or risk losing the safe supply of semiconductors that power U.S. cars, computers, instruments and some of the military’s most advanced weapons systems.
Sanders and numerous conservative lawmakers, think tanks and the media see it differently. For them, it’s “corporate benefits.” This is just the latest example of how spending taxpayer dollars to help the private sector break down normal partisan lines and build left and right allies who agree on other things.
Sanders said he hasn’t heard people talk about the need to help the semiconductor industry. Voters talk to him about climate change, gun safety, defending women’s rights to abortion and promoting Social Security benefits.
“I don’t remember many people – I’ve been to this country – saying: ‘Bernie, you go back there, you get this job, you hand over a high-margin company to its CEO.'” The outrageous compensation package paid off, billions in corporate benefits,'” Sanders said.
Sanders voted against the original semiconductor and research bill that passed the Senate last year. He was the only senator to join Democrats in opposing the measure, joining 31 Republicans.
While Sanders wants to see spending elsewhere, many Republican senators simply want to stop spending. Republican Senator Mike Lee said the spending would help fuel inflation that is hurting the poor and middle class.
“The poorer you are, the more you suffer,” Li said. “Even the wealthy people in the middle class suffer a lot. Why are we taking money from them to the rich people? Well, that’s beyond my comprehension,” Li said. . ,
Conservative mainstreams such as the Wall Street Journal’s editorial board, the Heritage Foundation and Free Workshop also opposed the bill.
“Giving taxpayer money to wealthy companies is not competing with China,” said Walter Lohmann, director of the Heritage Foundation’s Center for Asian Studies.
Opposition from the far left and far right means Senate Democratic Majority Leader Chuck Schumer and fellow Democrats, House Speaker Nancy Pelosi, will need help from Republicans to get the bill to the finish line. At least 11 Republican senators are needed to block the filibuster. A final vote on the bill is expected next week.
Republican Senator Mitt Romney is one of the potential Republican supporters. When asked about Sanders’ arguments against the bill, Romney said that while other countries subsidize the manufacture of high-tech chips, the United States should join the club.
“If you don’t play like them, you don’t make high-tech chips that are vital to our defense and our economy,” Romney said.
The most common reason lawmakers gave for subsidizing the semiconductor industry was the risk of national security being dependent on foreign suppliers, especially in the wake of the pandemic’s supply chain problems. According to the Congressional Research Service, Asia accounts for about four-fifths of global manufacturing capacity, with South Korea accounting for 28 percent, Taiwan 22 percent, Japan 16 percent and China 12 percent.
“Honestly, I hope you don’t have to, but France, Germany, Singapore, Japan, all the other countries are offering incentives for chip companies to build there,” Commerce Secretary Gina Raimondo said on CBS on Sunday. “” “For the whole country. “
“We can’t be in this vulnerable situation. We need to be able to protect ourselves,” she said.
If some progressives align with Sanders, and if a majority of Republicans oppose it on fiscal grounds, the bill’s window to pass the House will be narrow. The White House said the bill needs to pass by the end of the month as companies are now deciding where to build.
Two major congressional groups, the Problem Solvers Caucus and the NDP Coalition, have supported the measure in recent days,
The Problem Solver Caucus consists of members from both parties. Representative Brian Fitzpatrick of Pennsylvania, the group’s Republican co-chair, said Intel wants to build its chip capacity in the U.S., but if Congress doesn’t pass the bill, most of that capacity will go to Europe.
Democrat Derek Kilmer said he thinks the law checks too many boxes for his voters, including inflation on the front lines of today.
“It’s about lowering inflation. If you look at inflation, a third of the inflation last quarter was autos, and that was because of a shortage of chips,” Kilmer said. “So, one is to make sure we produce in the U.S. and the other is to reduce costs.”