Semiconductor bill unites right-wing Sanders — in opposition

A bill to boost US semiconductor production has managed to do the almost unthinkable: unite Democratic Socialist Senator Bernie Sanders and the fiscally conservative right.

The bill making its way through the Senate is a top priority for the Biden administration. This would add about $79 billion to the deficit over 10 years, mostly due to new subsidies and tax breaks that would subsidize the cost that computer chipmakers incur when building or expanding chip factories in United States.

Proponents say countries around the world are spending billions of dollars to lure chipmakers. The United States must do the same or risk losing a secure supply of semiconductors that power automobiles, computers, appliances, and some of the military’s most advanced weapons systems.

Sanders, I-Vt., and a wide range of conservative lawmakers, think tanks and media take a different view. For them, it is “corporate well-being”. This is just the latest example of how spending taxpayers’ money to help the private sector can blur the usual partisan lines, creating allies left and right who disagree on something else. They position themselves as defenders of the little guy against the powerful interest groups that line up at the public trough.

Sanders said he doesn’t hear anyone talking about the need to help the semiconductor industry. Constituents talk to her about climate change, gun safety, preserving women’s right to abortion and increasing social security benefits, to name a few.

“Not a lot of people that I can remember – I’ve been all over this country – say, ‘Bernie, you go back there and you do the work, and you give extremely profitable companies, who pay outrageous salaries to their CEOs, billions and billions of dollars in corporate welfare,” Sanders said.

Sanders voted against the original semiconductor and research bill that passed the Senate last year. He was the only senator who caucused with Democrats to oppose the measure, joining 31 Republicans.

While Sanders would like the spending directed elsewhere, several GOP senators simply want the spending stopped, period. Sen. Mike Lee, R-Utah, said the spending would help fuel inflation that hurts the poor and middle class.

“The poorer you are, the more you suffer. Even well-established middle-class people get ripped off considerably. Why we would want to take money away from them and give it to the rich is beyond my ability to comprehend,” Lee said.

Conservative stalwarts such as the Wall Street Journal editorial board, the Heritage Foundation and the Tea Party-aligned group FreedomWorks have also spoken out against the bill. “Giving taxpayers’ money to wealthy corporations is not in competition with China,” said Walter Lohman, director of the Heritage Foundation’s Center for Asian Studies.

Opposition from the far left and far right means Senate Majority Leader Chuck Schumer, D-N.Y., and House Speaker Nancy Pelosi, D-Calif., will need the help Republicans to push a bill to the finish line. The support of at least 11 Republican senators will be needed to overcome a filibuster. A final vote on the bill is expected in the coming week.

Sen. Mitt Romney, R-Utah, is among the likely Republican supporters. Asked about Sanders’ argument against the bill, Romney said that when other countries subsidize the manufacture of high-tech chips, the United States must join the club.

“If you don’t play like they play, then you’re not going to make high-tech chips, and they’re critical to our national defense as well as our economy,” Romney said.

The most common reason lawmakers give for subsidizing the semiconductor industry is the national security risk of relying on foreign suppliers, especially after pandemic supply chain issues. According to the Congressional Research Service, almost four-fifths of global manufacturing capacity is in Asia, split between South Korea at 28%, Taiwan at 22%, Japan at 16% and China at 12%.

“I wish you didn’t have to, to be very honest, but France, Germany, Singapore, Japan, all these other countries have incentives for CHIP companies to build there” , Commerce Secretary Gina Raimondo said on CBS on Sunday. “Facing the Nation.”

“We cannot afford to be in this vulnerable position. We have to be able to protect ourselves,” she said.

The window to push the bill through the House is narrow if some progressives join Sanders and most Republicans line up in opposition due to budget concerns. The White House says the bill must pass by the end of the month as businesses are now making decisions about where to build.

House Speaker Nancy Pelosi, D-Calif., told members of the United Auto Workers of Michigan on Friday that she felt “very confident” the bill would pass the House.

“Before coming in here, coming from the airport, I was told we had significant Republican support on the House side,” Pelosi said. “We appreciate the bipartisanship of this bill.”

Two key congressional groups, the Problem Solvers caucus and the New Democrat Coalition, endorsed the measure in recent days,

The Problem Solvers Caucus is made up of members from both parties. Representative Brian Fitzpatrick of Pennsylvania, the group’s Republican co-chairman, said Intel Corp. wanted to build its chip capacity in the United States, but that much of that capacity will go to Europe if Congress doesn’t pass the bill.

“If a semiconductor-related bill comes forward, it will pass,” Fitzpatrick said.

Rep. Derek Kilmer, D-Wash., said he thinks the legislation ticks a lot of boxes for his constituents, including on the priority issue of the hour, inflation.

“It’s about reducing inflation. If you look at inflation, a third of inflation in the last quarter came from automobiles, and that’s because there’s a shortage of chips,” Kilmer said. “So it’s, number one, making sure we’re making things in the United States, and number two, reducing costs.”

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