Biden expected to sign $280 billion in CHIPS, critics fear it will exacerbate debt and inflation

President Joe Biden is expected to sign CHIPS, a $280 billion spending bill aimed at incentivizing American manufacturers to produce semiconductor chips in the United States.

Critics say the measure contains no accountability requirements for companies that receive taxpayer money, will increase the national debt and high inflation for 40 years, and will not enhance national security.

The bill passed the US Senate by 64 to 33, and 17 Republicans joined the Democrats in approving it. It passed in the House of Representatives by 243 votes to 187, with 24 Republicans joining 219 Democrats despite opposition from the Republican leadership to the bill.

Biden expressed his support, tweeting, “Semiconductor chips are the building blocks of the modern economy – they power our smartphones and our cars. And for years, manufacturing has been sent overseas. For American jobs and our economy, we must make them at home. The Chip Act for America will get that done.” “.

Senate Majority Leader Chuck Schumer said the bill would “target shortages in national semiconductor chips, lower costs for American consumers, and boost scientific innovation and jobs.”

Key provisions of the bill include $52.7 billion in taxpayer-funded subsidies for US chip manufacturing, a 25% tax credit for semiconductor manufacturing, $1.5 billion earmarked for technology development for US companies that claim to rely on foreign communications, and $10 billion The Commerce Department earmarks the development of 20 regional technology centers, and directs the development of the federal government through the expansion of federal agencies.

The Congressional Budget Office says the bill sets aside “about $200 billion over the period 2022-2031, primarily for research activities.”

One section of the bill directs the US Department of Energy to fund research facilities and infrastructure that will cost $5.9 billion. The CBO estimates that this will increase direct spending by $3.1 billion over the 2022-2031 period.

Another division authorizes the National Aeronautics and Space Administration to enter into enhanced-use lease agreements through 2032, which will increase direct spending by $80 million over 2022-2031, says CBO.

Texas Republican Senator John Cornyn, who joined Democrats in voting on the measure, said it would “help start domestic production of these semiconductors in a way that will prevent our supply chain from being jeopardized given that 90 percent of advanced semiconductors currently come from Asia.”

He also said, “It could create approximately 185,000 jobs each year as these new facilities are built. In the long run, it could create another 280,000 online jobs. Once these foundries are up and running, they will provide American-made semiconductors that can be used in Everything from smartphones, to cars, to aircraft, to missile defense systems.”

He said the bill would also enable the United States to “compete” with China and “overtake” it and “go beyond innovation”.

Texas Governor Greg Abbott also praised the law’s passage, saying it would help expand production in Texas, which he says has been “a beacon of innovation and has been the nation’s leading source for semiconductors and other electronic components for eleven years in a row.”

But Florida Senator Rick Scott, who has urged his colleagues in the Senate and House of Representatives to vote against the bill, argues it is a “pro-China” bill that would “weaken America’s standing on the world stage.”

With US debt now at $30 trillion, “the spending of another $280 billion that we don’t have,” he said, “sets a dangerous precedent for the welfare of huge taxpayer-financed corporations for the world’s most profitable corporations without any accountability or guarantee of return on investment for the American people.” .

Worse, the bill lacks basic safeguards and will allow companies to use US tax dollars to build factories in communist China and expand their share of the Chinese semiconductor market.

He added that there is no stipulation in the bill for manufacturers to build a certain number of factories in the United States, or require them not to outsource American jobs abroad. The bill does not include any requirements to produce chip quotas for manufacturers and instead “serves as a blank check with virtually no accountability measures to protect the massive taxpayer spending it allows and no ROI requirements.”

He said it does not improve the national security of the United States, instead “a huge spending bill that is funded with American tax money that gives companies and communist China everything they want while leaving American workers and American families with little.”

Leave a Reply

%d bloggers like this: