Biden meets with CEOs and workers. Supports bill to boost US chip production

US President Joe Biden delivers remarks on climate change and renewable energy at the site of the former Brighton Point Power Plant in Somerset, Massachusetts, US July 20, 2022. REUTERS/Jonathan Ernst/File Photo

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WASHINGTON, July 25 (Reuters) – President Joe Biden met virtually on Monday with the CEOs of Lockheed Martin (LMT.N), Medtronic PLC (MDT.N), and Cummins Inc (CMI.N) along with Labor leaders. Administration lobbied for legislation to boost the US semiconductor industry.

“Congress should pass this bill as quickly as possible,” Biden said. “There is an economic necessity…this bill will intensify the efforts of the semiconductor industry.”

Senate Majority Leader Chuck Schumer said he is postponing the procedural vote due to severe weather problems until Tuesday at 11 a.m. ET.

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The bill includes about $52 billion in subsidies for US semiconductor production, plus a new four-year 25% tax credit to encourage companies to build US semiconductor plants. The tax credit is estimated to be around $24 billion. Other allocations include a $1 billion grant program for “persistently distressed communities.”

Last week, the Senate voted 64 to 34 measures on a watered-down version of the legislation.

James Ticklett, Lockheed Martin’s CEO, told Biden that a robust supply of chips “is essential to national security and the health of the defense industrial base and the aviation industry as a whole.”

The bill aims to alleviate shortages that have disrupted production in industries including automobiles, consumer electronics, medical equipment and high-tech weapons.

“This is about investing in the United States,” said Commerce Secretary Gina Raimondo, who attended the event. America has become completely dependent on China, especially for chips used in aircraft, medical devices and industrial machinery.

It is part of a broad effort across the government to counter the rise of China and ease supply chain problems by reducing US companies’ reliance on foreign-made semiconductors.

Senator Bernie Sanders has criticized the legislation, calling it a “blank check” for the “highly profitable” chip industry that has been getting government money to replace US factories that have closed them over the past 20 years.

Biden dismissed criticism that the legislation was a handout to big business, stating that the trade would be able to recover funds from companies that fail to meet their obligations.

In June 2021, the Senate approved a bipartisan $250 billion bill to boost spending on research and technology development. The House passed its own version in February.

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(Reporting by David Shepardson, Alexandra Alper and Patricia Gingerley; Editing by Mark Porter and Margarita Choi

Our Standards: Thomson Reuters Trust Principles.

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