Funding Remains 'Sticking Point' for Bill to Support Semiconductor Industry, Senators Say
U.S. lawmakers are seeking ways to fund a bill that would support the U.S. semiconductor industry amid rising technology competition with China. The bill (see 2006110038), which would incentivize U.S. semiconductor manufacturing and provide more federal support for research and development, includes provisions for refundable investment tax credits and $10 billion to match state incentives.
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Sens. Mark Warner, D-Va., and John Cornyn, R-Texas, who introduced the bill, said they are unsure where they will secure the federal funding but are optimistic they will find the money because of the bill’s broad bipartisan support. The senators, speaking during a July 23 event hosted by the Center for Strategic and International Studies, said they recently met with Treasury Secretary Steven Mnuchin, who suggested they fund the bill through money leftover in the next congressional relief package for COVID-19.
“How to pay for it remains a sticking point,” Cornyn said. “It's only a question of money.” Warner called the idea to use already appropriated COVID-19 relief funds a “valid one,” but said the two lawmakers are still negotiating with Mnuchin. “We may not fully agree with Steve on how we get there,” Warner said. “But I think he's committed to getting us there.”
Both senators stressed the bill's importance for U.S. semiconductor development, calling it necessary to compete with Chinese state-controlled companies backed by government resources. And even though they have not yet secured funding, both lawmakers said they already are looking toward similar funding bills for other U.S. industries competing with unfair Chinese subsidies, including the 5G, artificial intelligence and quantum computing sectors.
“This is one step at a time,” Cornyn said, “but I don't see why this wouldn't apply to 5G.” Warner said there’s a “recognition” that similar legislation for 5G will follow this bill, saying the U.S., along with allies, may need to create an “alternative economic model” to compete with China. “This [bill] is important for its own sake, even if this is the only thing we do,” Cornyn said. “We're still at the early stages of it, but I wouldn't be surprised to see it applied in other areas as well.”