Excess CHIPS: GOP senators say Biden pushing unrelated agenda in semiconductor law

Companies can now compete for billions of dollars in government aid aimed at boosting American semiconductor manufacturing. However, the Biden administration requires companies to go through a lengthy process to qualify for funding. Companies that want to avail the $39 billion fund will have to provide details about childcare, unions, profit-sharing beyond a certain threshold with the government, and domestic suppliers.

Republican senators, who assisted in the passage of the CHIPS and Science Act, criticized these provisions announced by the Biden administration late in February. In a letter, Senators Steve Daines, Thom Tillis, Bill Cassidy, and John Cornyn urged Commerce Secretary Gina Raimondo to remove the costly mandates which, according to them, represent significant federal intervention in the private sector and undermine the bill’s primary purpose of making American computer chip manufacturing competitive. They argued that these regulations go beyond the law’s intent and reduce American jobs and high-tech investments.

Raimondo, on the other hand, has been vocal about her intentions to go beyond the Congress’s intentions. She said, “If Congress wasn’t going to do what they should have done, we’re going to do it in implementation.”

Critics assert that this is not what Congress had intended. Worse, the added costs and red tape undercut the bill’s objective of making American chip manufacturing more competitive. Taxpayers support chip subsidies because they want semiconductors, not childcare, according to Scott Lincicome, director of general economics at the libertarian-leaning Cato Institute.

Applications will be accepted later this month, but it is unknown when awards will be given. The $280 billion CHIPS and Science Act was passed with a vote of 64-33 in the Senate, with 17 Republicans assisting in passing it. Republicans who voted ‘yea’ wrote a letter to Secretary Raimondo calling to remove costly mandates that threaten the expansion of America’s semiconductor manufacturing capacity and job creation in the country.

President Joe Biden sold the bill as a way to compete with China and boost manufacturing in the electorally important Midwest. However, since then, requirements that undermine the objectives of the bill have been rolled out. There is some indication that the chip shortage that the bill was intended to alleviate is beginning to subside. Nonetheless, a wide range of companies, including labor unions, social media company Snap, heating and air conditioning firms, and FedEx, have hired lobbyists to try to get a piece of the billions on offer, according to Politico.

American Action Forum President Douglas Holtz-Eakin argues that the Biden administration, by imposing unrelated policies, is setting itself up for another courtroom showdown with its after-the-fact actions, joining litigation the White House has faced on COVID-19 mask and vaccine mandates, Title 42, evictions, and student loans. Holtz-Eakin said, “There is no disciplined thinking in the administration. They try to do everything with everything, and as a result, they accomplish much less.”