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Republicans are split on a major bill aimed at boosting the US semiconductor industry, with some arguing the legislation reeks of corporate welfare and others saying it’s essential to help the US to compete with China.
The legislation allowed a 64-34 procedural vote Tuesday night, with 16 Senate Republicans voting for it.
The basis of the bill is $52 billion in funding for America’s semiconductor industry, which makes computer chips that power everything from cars to smartphones. But it’s also rising, with many other provisions added related to competition with China over research, intellectual property and more – and the bill is on course to exceed perhaps $200 billion.
Those who support it say it will be a boon for U.S. competition with China, while Republicans who oppose it say the bill will be counterproductive to that goal.
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“Tonight’s procedural vote is an important first step toward the Senate passing a strong ‘CHIPS Plus’ package,” Rep. Todd Young, R-Ind., who has been the driving force behind the GOP behind the legislation for months. “The strong bipartisan vote shows that there is broad support for including USICA provisions critical to our national security and our ability to outperform China.”
“The latest version of Chuck Schumer’s bogus China bill would spur inflation and despite Democrats’ claims, a lot of those taxpayer dollars will end up funding semiconductor factories in communist China, not back home,” said Republican Study Committee Chairman Jim Banks, R-Ind. ., said.
Heritage Action Vice President Garrett Bess said in an interview with Fox News Digital on Wednesday that the bill lacks adequate funding oversight and would benefit major semiconductor makers the most.
“While we are open to a productive discussion on industrial policy, these – this so-called package of solutions are weakening our national economy by increasing inflation and spending without providing … proper transparency and oversight,” he said. -he declares. “It’s really just a mixture of corporate welfare and industrial policy posing as a Chinese policy bill.”
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Bess said semiconductor companies have spent huge amounts of money lobbying Congress on this bill. CNBC reported that three of the companies that will benefit the most from the bill are Intel, Texas Instruments and Micron Technology.
According to lobbying information published by the non-profit organization OpenSecrets, Texas Instruments spent 21% more lobbying Congress in the first quarter of this year than in the first quarter of last year. Meanwhile, Intel spent more in the first quarter of 2022 than in any quarter since 2014. Micron Technologies, meanwhile, spent more on lobbying in the first quarter than in any quarter. since 2005, according to OpenSecrets.
Bess also noted that Intel had delayed opening a chip factory in Ohio, citing congressional delays in passing a bill to fund domestic chip production. He said it amounted to “blackmail”.
But a Republican aide whose senator voted to push the package forward said the timing of US-China competition on the world stage was too important not to try to act.
“We seek to strengthen the bill so that it will help us win the race against China and in turn strengthen our national and economic security at a time when America must reassert itself on the world stage,” he said. said the assistant.
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On Wednesday, several Republican senators who support the semiconductor legislation also shared a tweet thread from American Compass executive director Oren Cass pushing back against a Wall Street Journal op-ed opposing the bill.
“The WSJ editorial laments ‘subsidizing highly profitable companies that don’t need help,'” Cass wrote. “But the problem isn’t profitability, it’s fringe incentives to invest in domestic production. Publishers may only care about profits, America has other concerns.”
Rep. Ro Khanna, D-Calif., a progressive Democrat who has worked on semiconductor legislation for months, also said corporate welfare concerns were overblown and the benefits of the proposed law outweighed the costs.
“This bill will create thousands of jobs across the country and has strong safeguards in place to ensure that funds go directly to opening factories in the United States, not to buyouts. shares or the payment of dividends,” he said. “Just look at Intel – the company is expected to create three thousand new jobs, seven thousand construction jobs, and tens of thousands more jobs for Ohio suppliers and businesses. And that’s just one company. But all of those jobs are at risk if Republicans block the CHIPS law.”
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Khanna also said Republicans who support former President Donald Trump’s agenda should support investments like this.
“It brings production back to America,” he said. “People who ‘make America great’ should be all for it. I mean, do we want to make these semiconductor chips in America, or do we want China to lead the way?”
The timing of the bill’s passage through the Senate remains uncertain, though it’s possible the bill will pass this week or next week. A Senate GOP aide told Fox News that it was not entirely clear what provisions would be in the final version of the bill. Some of that is still ongoing with Senate Majority Leader Chuck Schumer, DN.Y., the GOP aide said.
A version filed by Schumer on Tuesday includes money for NASA, the National Science Foundation, nuclear research and more.
House Speaker Nancy Pelosi, D-California, said Wednesday that after the bill passes the Senate, she is “optimistic that the House will be able to consider this bill. from next week”.