Congress is back at it again, proving why its approval rating is rock bottom. If Congress has its way, taxpayers will soon be bankrolling highly profitable semiconductor chip companies with some $76 billion in direct grants ($52.2 billion) and subsidies ($24 billion over 5 years).
By giving corporate welfare to massive chip manufacturers (for example, California-based Intel’s 2021 revenue was $79 billion), Congress is carving out special handouts, even though semiconductor chip firms are already expanding production without subsidies.
The bill is meant in part supposedly to help U.S. firms compete with Chinese manufacturers, which receive loads of their own corporate welfare, courtesy of the Communist Party of China. The CCP is well known for harmful business practices that include subsidies to undercut other countries and drive rival industries out of business.
Democrats and their GOP allies in Congress should think long and hard: do I want to use the same market-distorting tools as the communists? To avoid eventual market collapse, U.S. firms must stand on their own two feet to truly compete in a global marketplace. Endless, binge-spending and corporate handouts from any country creates a zero-sum game, leaving taxpayers to pick up the bag.
America already has $30.6 trillion in debt outstanding, or nearly a quarter million dollars per taxpayer. Plunging our country further into debt will only make America less competitive in the long run.
The Wall Street Journal editorial board also notes, “The [chip] companies like to point out that the U.S. share of the world’s chips has fallen to 12% from 37% in 1990. They don’t mention that the U.S. leads in chip design (52%) and chip-making equipment (50%). Seven of the world’s 10 largest semiconductor companies are based in the U.S. China trails American companies by years in semiconductor technology.”
The Journal also reports that Republicans on the House Ways and Means Committee have argued that with this same money, Congress could level the playing field across the board by doubling the research and development tax credit for all companies through 2025 and also allow 100% expensing for companies along with immediate R&D deductions through 2025.
Meanwhile, there’s also the conflict of interest in this that stinks to high heaven. The Daily Caller’s Gabe Kaminsky reported the suspicious timing of House Speaker Nancy Pelosi’s husband, Paul Pelosi, purchasing as much as $5 million in stock options on a computer-chip company just ahead of a vote on this bill.
More evidence that Speaker Pelosi should surrender her gavel after November.