(The Center Square) – Opposition to the CHIPS Act is growing after Texas Gov. Greg Abbott urged Congress to pass it and Florida lawmakers expressed opposition to it.
Passing the bill, proponents argue, is necessary to bolster semiconductor production in the U.S. and reduce reliance on foreign production especially in China. When it was initially introduced, the bill would cost taxpayers $76 billion. Since then, it’s ballooned to $250 billion and is full of taxpayer subsidies to multi-billion-dollar companies with no strings attached for how the money is spent, opponents argue.
It also would use taxpayer money to subsidize the construction of these billion-dollar companies’ semiconductor factories in China, the former president of the Texas Public Policy Foundation and now president of the Heritage Foundation, Kevin Roberts, argues.
The U.S. Senate voted Tuesday to end debate on the CHIPS Act, (Creating Helpful Incentives to Produce Semiconductors) Act, which was initially introduced in 2020 by Texas Republicans Sen. John Cornyn and Rep. Michael McCaul and incorporated into the 2021 National Defense Authorization Act.
Texas lawmakers have supported the bill representing a state that leads the U.S. in production and exports of semiconductors and other electronic components.
But Roberts argues, “The answer to the CCP’s malevolent ambitions is not spending billions of dollars to help Fortune 500 companies, with no guarantee those dollars won’t end up supporting these companies’ business operations in China,” and $250 billion will further “contribute to record inflation and increase the already historic cost of living for working and middle-class Americans.”
Roberts told Fox Business News the bill also “subsidizes the construction of semiconductor factories in China.”
“I would not want to be an elected official of either party going back home to my district next month having voted for something that uses my voters’ taxpayer money to go to the construction of factories in China,” he added. “Unless this bill were to have a provision that would prevent that, it really is garbage.”
It also “sidesteps any effort to explicitly bar CCP members or Chinese nationals from national security-related, federally funded research, or from owning land near U.S. national security facilities,” Roberts said.
Last year, the Texas legislature passed a bill signed into law by Abbott banning all contracts or agreements in Texas with foreign-owned companies related to critical infrastructure such as the state’s power grid, water treatment or chemical facilities, communication systems and cyber networks.
The new law prohibits everyone in Texas from entering into contracts with businesses or government officials from “China, Iran, North Korea, Russia, or a country designated” by the Texas governor as a threat to critical infrastructure.
The legislature unanimously supported the bill after Kyle Bass, founder and principal of Hayman Capital Management, testified before the Texas Senate about a Chinese billionaire purchasing land next to the largest air force pilot training base in the U.S.
Sun Guangxin, an alleged former Chinese People’s Liberation Army general, purchased over 130,000 acres of Texan land within miles of Laughlin Air Force base, which Texas lawmakers argued posed a national security risk.
Opponents of the CHIPS Act also argue that multi-billion-dollar companies don’t need the federal subsidies, especially in Texas. Last month, Taiwan-based GlobalWafers Co. announced it was building its first-of-its-kind factory in North America in Sherman, Texas. The month prior, Texas Instruments broke ground on its new semiconductor plant in Sherman after announcing it had committed to a $30 billion investment. Last fall, Samsung announced it was investing $17 billion in a new semiconductor facility in Taylor, Texas.
In January, another $10 million Florida Job Growth Grant money was awarded to expand semiconductor manufacturing in Osceola County.
“Expanding domestic manufacturing capability is important for Florida and our nation,” Florida Gov. Ron DeSantis said. “The strategic investments we are making today will help bring microchip and semiconductor manufacturing back to our state at a time when the supply chains are more fragile than ever. Certainly, we cannot allow this important industry to become captive by the Chinese Communist Party.”
Florida’s former Republican governor and junior U.S. Senator, Rick Scott, who opposes the CHIPS Act, proposed an amendment to ensure no additional production in China is funded by American taxpayers. The amendment also would require companies to not be eligible for federal money if China invades Taiwan, among other conditions. Taiwan currently manufactures 90% of global semiconductor output and has been a target of the Chinese government for decades.
The current bill, Scott argues, “is nothing but a reckless spending spree. If higher inflation from even more spending isn’t enough to make my Senate colleagues pause, consider the consequences of the bill’s weakness on China. At a minimum, the Senate should pass my amendment fixing it.”