Senate Advances Massive Subsidy Bill For The Semiconductor Industry
The Senate voted 64-34 to advance a more modest version of a long-debated bill that would subsidize domestic semiconductor production late Tuesday night.
The Chips Act is primarily designed to increase semiconductor production in the U.S. in order to decrease dependence on China and other Asia-based manufacturers, and provides $52 billion in subsidies, as well as tax incentives to the chip industry. Tuesday’s vote was a procedural one, meaning that it needed to pass so that senators can officially vote on the bill sometime later this week or early next week, according to CNBC.
If the US lost access to advanced semiconductors (none made in US) in the first year, GDP could shrink by 3.2 percent and we could lose 2.4 million jobs. The GDP loss would 3X larger ($718 B) than the estimated $240 B of US GDP lost in 2021 due to the ongoing chip shortage.
— Senator John Cornyn (@JohnCornyn) July 19, 2022
Semiconductors are used for virtually all of the electronic devices that power the modern economy, including smartphones, radios, TVs, computers, video games and advanced medical diagnostic equipment, according to the Semiconductor Industry Association.
Supply chain issues during the pandemic led to chip shortages that drove up prices for all of these goods and created economic pressure on everyday Americans, according to previous Daily Caller News Foundation reporting.
If the official vote is approved in the Senate, the bill would go to the House of Representatives for approval and ultimately President Joe Biden’s desk to be signed into law, CNBC reported.
Both chambers have passed considerably more ambitious subsidies for semiconductor producers in the past, but have failed to come to an agreement on reconciling the two bills, The Wall Street Journal reported. The Senate’s vote on this scaled-back version now comes as semiconductor manufacturers have threatened to move planned U.S. chip fabrication plants elsewhere, the WSJ added.
The Biden administration preferred a larger bill, but says that getting something passed on chips funding is paramount.
“There are several parts of the broader legislation that are important, and I am committed to doing whatever it takes to get them over the finish line in this Congress. But chips funding is the only part of this bill that we have to pass right now to avoid facing devastating consequences,” Commerce Secretary Gina Raimondo said, according to the WSJ.
The White House did not respond to the Daily Caller News Foundation’s request for comment.
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