WASHINGTON – A bill to boost semiconductor production in the United States has done the unthinkable – bringing together the democratic socialist Sen. Bernie Sanders and the conservative fiscal right.
The bill moving through the Senate is a top priority for the Biden administration. It would add about $79 billion to the deficit over 10 years, mostly as a result of new grants and tax breaks that subsidize the costs computer chip makers incur when building or expanding chip plants in the United States. .
Supporters say countries around the world are spending billions of dollars to woo chip makers. The US must do the same or risk losing a secure supply of the semiconductors that power the nation’s cars, computers, appliances and some of the military’s most advanced weapons systems.
Sanders, I-Vt., and a wide range of conservative lawmakers, think tanks and media outlets have a different take. For them, this is “corporate welfare.” It’s just the latest example of how spending taxpayer dollars to help the private sector can break down traditional partisan lines, creating allies on the left and right who agree on little. yet. They position themselves as defenders of the little man against powerful interest groups lining the public trough.
Sanders said he hasn’t heard from people about the need to help the semiconductor industry. Voters are talking to him about climate change, gun safety, preserving a woman’s right to an abortion and expanding Social Security benefits, to name just a few.
“Not too many people that I can remember – I’ve been all over the country – said: ‘Bernie, you go back there and you’re going to get the job done, and you’re giving big profits to corporations, who are paying big packages to compensation to their CEOs, billions and billions of dollars in corporate welfare,’” Sanders said.
Sanders voted against the original semiconductor and research bill that passed the Senate last year. He was the only senator to join with Democrats to oppose the measure, joining 31 Republicans.
While Sanders wants to see the spending directed elsewhere, many GOP senators want the spending to stop, for the time being. Senator Mike Lee, R-Utah, said the spending would help fuel inflation that hurts the poor and middle class.
“The poorer you are, the more you suffer. Even people deeply entrenched in the middle class were hurt badly. Why we want to take money from them and give it to the rich is beyond me,” Lee said.
Conservative mainstays such as The Wall Street Journal’s editorial board, the Heritage Foundation and the tea party aligned group FreedomWorks also came out against the bill. “Giving taxpayer money to wealthy corporations cannot compete with China,” said Walter Lohman, director of the Heritage Foundation’s Asian Studies Center.
Opposition from the far left and far right means Senate Majority Leader Chuck Schumer, D-N.Y., and House Speaker Nancy Pelosi, D-Calif., need help from Republicans to get a bill over the finish line. . Support from at least 11 Republican senators is needed to overcome a filibuster. A final vote on the bill is expected next week.
Sen. Mitt Romney, R-Utah, is one of the most likely Republican supporters. Asked about Sanders’ argument against the bill, Romney said that if other countries subsidize the production of high technology chips, the US should join the club.
“If you don’t play like they play, then you don’t make high-tech chips, and they’re important for our national defense as well as our economy,” Romney said.
The most common reason given by lawmakers for subsidizing the semiconductor industry is the risk to national security from relying on foreign suppliers, especially after the supply chain problems of the pandemic. Nearly four-fifths of global fabrication capacity is in Asia, according to the Congressional Research Service, broken down by South Korea at 28 percent, Taiwan at 22 percent, Japan, 16 percent, and China, 12 percent.
“I wish you didn’t have to do this, actually, but France, Germany, Singapore, Japan, all these other countries are giving incentives for CHIP companies to build there,” Commerce Secretary Gina Raimondo said Sunday. on CBS’s “Face the Nation.”
“We cannot afford to be in this vulnerable position. We have to protect ourselves,” he said.
The window to pass the bill in the House narrows if some progressives join Sanders and if most Republicans line up in opposition based on fiscal concerns. The White House says the bill should be passed by the end of the month because companies are making decisions now about where to build.
House Speaker Nancy Pelosi, D-Calif., told members of the United Auto Workers of Michigan on Friday that she feels “very confident” the bill will pass the House.
“Before I came in here, from the airport, I was told that we have some significant Republican support on that side of the House,” Pelosi said. “We value the bipartisanship of this bill.”
Two key congressional groups, the Problem Solvers caucus and the New Democrat Coalition, endorsed the measure in recent days,
The Problem Solvers caucus is made up of members from both parties. Rep. Brian Fitzpatrick of Pennsylvania, the group’s Republican co-chair, said Intel Corp. wants to to build its chip capacity in the United States, but most of its capacity will go to Europe if Congress does not pass the bill.
“If a semiconductor-related bill is brought to the floor, it will pass,” Fitzpatrick said.
Rep. Derek Kilmer, D-Wash., said he believes the legislation checks many boxes for his constituents, including the front-burner issue of the day, inflation.
“This is about reducing inflation. If you look at inflation, one-third of the inflation last quarter was in cars, and it was because there was a shortage of chips,” Kilmer said. “So it’s about, one, making sure we’re making things in the United States, and two, about reducing costs.”
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