On Wednesday, the United States Senate passed a bill subsidizing semiconductors that proponents say will allow America to compete with China while bolstering supply chains, but critics warn the legislation is nothing more than corporate welfare.
The Senate passed the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science act in a bipartisan vote of 64-33. The bill will dedicate $52 billion in government subsidies for computer chip-making companies, alongside $24 billion in tax credits, while putting forth $170 billion in scientific research over the next five years. Folks like Senator Ron Johnson (R-WI) argue that the bill is a complete waste of taxpayer money.
“It makes no sense whatsoever,” Johnson said in an interview. “We have more than enough money sloshed around the economy to invest in semiconductor manufacturing here. It’s about aligning the incentives properly. We’re not looking at that at all. We’re just throwing more money at the problem, which is what Washington does.”
Senator Mike Lee (R-UT) also criticized the bill, arguing that it favors folks at the top of the economic food chain by taxing those making less.
“The poorer you are, the more you suffer,” Lee said prior to the vote. “Even people well-entrenched in the middle class get gouged considerably. Why we would want to take money away from them and give it to the wealthy is beyond my ability to fathom.”
On Wednesday, Lee tweeted, “Next time you file your taxes remember the Senate just voted to give $75 billion to huge chip manufacturers—regardless of whether they use that money in the USA.”
Next time you file your taxes remember the Senate just voted to give $75 billion to huge chip manufacturers—regardless of whether they use that money in the USA.
— Mike Lee (@SenMikeLee) July 27, 2022
Lee’s counterpart, Senator Mitt Romney (R-UT), praised the bill for boosting global competition with the Chinese Communist Party.
“Remaining competitive with China is critical to our security and economic well-being,” Senator Mitt Romney (R-UT) tweeted on Wednesday. “Proud to join my colleagues in passing a package of China bills that will promote innovation, foster scientific talent, expand research, and break our dependence on China for microchips.”
Yet Senator Bernie Sanders (I-VT) condemned the plan, noting that the tech companies which would receive government funding have been raking in billions in recent years.
“The five biggest semi-conductor companies that will likely receive the lion’s share of this taxpayer handout, Intel, Texas Instruments, Micron Technology, Global Foundries and Samsung, made $70 billion in profits last year,” Sanders said in a recent statement about the CHIPS act. “Does it sound like these companies really need corporate welfare?”
Advocates of the spending hailed it for protecting national security and giving our economy a boost.
“This legislation is going to create good paying jobs, it will alleviate supply chains, it will help lower costs, and it will protect America’s national security interests,” Senate Majority Leader Chuck Schumer (D-NY) said in a statement.
Republican Senator John Cornyn (TX) also praised the bill.
“This is a bad day for President Xi and the Chinese Communist party,” Cornyn remarked after its passage. “The slumbering giant that is America has finally awakened to the challenge that we face from the People’s Republic of China.”
President Joe Biden also tweeted that he and his staff took a moment to watch the Senate vote on the bill.
“I took a moment today to watch the Senate pass the CHIPS and Science Act, a bipartisan bill that will accelerate semiconductor manufacturing in the U.S.,” he said. “It will lower prices, create jobs, and – critically – decrease our reliance on imported chips. The House should pass it ASAP.”
I took a moment today to watch the Senate pass the CHIPS and Science Act, a bipartisan bill that will accelerate semiconductor manufacturing in the U.S.
It will lower prices, create jobs, and – critically – decrease our reliance on imported chips.
The House should pass it ASAP. pic.twitter.com/dnsa3xVdDr
— President Biden (@POTUS) July 27, 2022
It is expected that the House will vote on the bill sometime this week.