Updated at 10:53 p.m.
Sen. Bernie Sanders, I-Vt., wants to attach strings to a $50 billion pot of money earmarked for the semiconductor industry.
A sprawling, $120 billion piece of legislation often referred to as the Endless Frontiers Act has significant momentum and bipartisan backing in the Senate. The measure comes amid a global chip shortage and aims to help America better compete with China in emerging technologies and manufacturing. The semiconductor subsidies are a key part of the sweeping legislation, which would likely benefit GlobalFoundries — one of the largest private employers in Sanders’ home state.
But while Vermont’s junior senator, who chairs the upper chamber’s Budget Committee, said that a robust homegrown microchip industry is necessary to revive other manufacturing sectors in America — including the automobile industry — he argued Tuesday that government support should come with conditions.
“I am sympathetic to the goal of this bill,” Sanders said on the floor of the Senate. “But I am not sympathetic with the idea of simply laying out $52 billion of taxpayer money with no strings attached.”
If Sanders’ amendment is adopted, semiconductor companies that receive these subsidies could not buy back their own stock, outsource jobs or pay their executives more than 50 times the pay of their median worker. And they would have to give the government partial ownership in the form of equity interest.
“We are not going to socialize all of the risks and privatize all of the profits,” Sanders said. Similar conditions were also included in the federal Covid-19-relief package passed in spring 2020, he said.
The Innovation Act’s sponsors and chief champions include Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Todd Young, R-Ind. The upper chamber voted 86-11 on Monday to advance the measure, according to the New York Times, although the bill, which is widely believed to be highly likely to pass, still has a ways to go before finally clearing the Senate.
Among the bill’s likely beneficiaries is GlobalFoundries, the microchip manufacturer that employs about 2,000 people at its plant in Essex Junction. The company, a wholly owned subsidiary of Mubadala Investment Co., the sovereign wealth fund of the United Arab Emirates, recently moved its headquarters from Silicon Valley to Schumer’s district in upstate New York.
“GlobalFoundries thanks Senate Majority Leader Chuck Schumer for his leadership, his ongoing support of our industry, and his forward-looking perspective on U.S. chip manufacturing,” GlobalFoundries CEO Tom Caulfield said in a statement released by Schumer’s office last week upon the introduction of the Endless Frontiers Act.
Sanders himself invoked the company during his remarks Tuesday on the Senate floor, noting that GlobalFoundries was controlled by the UAE.
“So what we are looking at here is a reality where taxpayer money from working people in this country will be going to large, profitable corporations — and several of them are owned, literally, by other [countries],” he said.
