Sanders battles corporate welfare subsidizing of semiconductor firms
The Senate has rebuffed the latest attempt by Vermont Independent Sen. Bernie Sanders to curb corporate welfare. | Ted S. Warren/AP

WASHINGTON—Brushing aside Vermont Independent Sen. Bernie Sanders’s charges of “massive corporate welfare,” the Senate approved the multibillion-dollar CHIPS Act to revive the U.S. semiconductor/chip industry. The bipartisan vote was 64-33, with 32 Republicans joining Sanders’s “no.”

Sanders agreed the U.S. must revitalize semiconductor and microchip manufacturing, but objected to using tax dollars to do it—especially with no strings attached to what he called a giant corporate giveaway.

“When the semiconductor industry says ‘jump,’ my colleagues say ‘How high?’ the longtime Socialist from the Green Mountain State said.

He then tried to attach strings to the aid, specifically banning chipmakers who seek the federal cash from tossing out existing union contracts at their plants, or opposing organizing drives, or using the cash for stock buybacks. The Senate snipped his strings.

“There’s nothing in the CHIPS Act “to stop microchip companies from union-busting,” Sanders said. His conditions amendment went nowhere.

The July 27 vote sent the CHIPS Act to the House, which was expected to OK it the next day. It’s one of three big-ticket pieces of legislation Democratic President Joe Biden is lobbying Congress—not just the Democratic-run House—to approve before lawmakers break for their August recess.

Those measures are also expected to show voters that Biden and the narrowly Democratic Congress can, despite Republican obstructionism, actually accomplish goals the public wants.

A second measure would give the government power, step by step, to bargain down the prices Medicare pays Big Pharma for prescription drugs. The third would legislatively protect same-sex marriage against the threat of a future U.S. Supreme Court ruling outlawing it.

The CHIPS Act OK came days after Biden convened a White House meeting via zoom to marshal support from his Cabinet, business and labor—Communications Workers President Chris Shelton—for it. Shelton emphasized the jobs CHIPS would create, and that his union, the only one representing an end-product chip plant, could organize the workers.

The CHIPS Act is estimated to pump $52 billion in tax subsidies and other federal aid to chipmakers to erect semiconductor and chip plants, plus $24 billion for other R&D. Sanders, though, called it “a $76 billion blank check” to the corporate class.

Those firms greased the skids for CHIPS with campaign contributions and $19 million spent this year on lobbying, Sanders said. Intel, in particular, was active, he stated.

That big firm awaits enactment of the CHIPS Act so it can break ground on a multi-factory “fab”—chip fabrication—complex, worth $20 billion, in New Albany, Ohio, the Cleveland Labor Citizen reported. Erecting those plants would employ 7,000 construction workers.

“Over past decade, the semiconductor industry—the industry that is asking for corporate welfare today–has spent 70% of its $250 billion in profits not on R&D and not on building new plants in the U.S., [which is] what this bill is presumably this bill is about,” Sanders said.

“Instead, that industry spent the money on buying back their own stock to enrich their wealthy stockholders. Apparently they couldn’t find $76 billion of their own money to invest in new plants. They need the taxpayer to do it for them.

“This is rather incredible. This tells you where we are as a nation politically.”

Sanders also ribbed colleagues who rushed to give money to the corporate class while screaming about “debt” and “budget deficits” whenever spending to help the poor and the middle class comes up. He didn’t cite campaign contributions.

“We are told we cannot extend the childhood tax credit” due to the deficit. “At a time when 18 million people are homeless, we are told over and over again we cannot build the affordable housing we desperately need. We are told we cannot afford to expand Medicare ‘because of the deficit,’” said Sanders, a longtime champion of expanding that program for the elderly.

“At a time when an average family is spending $15,000 a year for child care, we are told we cannot reform a dysfunctional child care system ‘because of the deficit,’” said Sanders, who, with Biden, wrote federal child care subsides into their now-dead Build Back Better Act.

“We cannot guarantee health care as a human right ‘because of the deficit.’ And despite the fact half of the American people are living paycheck to paycheck, in a nation where three billionaires have more wealth than bottom 50%, we are told we cannot help ‘because of the deficit.’

“Well, all of that profound concern fades away when it comes to providing a $76 billion blank check” to the chipmakers. Sanders termed that “massive corporate welfare” to an industry that doesn’t merit it.

“Over the last 20 years, the microchip industry has shut down 780 production plants in the U.S. and eliminated over 150,000 jobs, while moving most of those jobs overseas. In other words, what taxpayers are doing is rebuilding an industry that was destroyed by the industry going overseas in search of more profit,” he stated.

But Senate Democrats voted 48-0 for the chipmakers and against Sanders. So did the other Democratic-leaning independent, Maine’s Angus King, and 15 Republicans. The other 32 “no” votes Sanders garnered were from the rest of the Senate’s 50 Republicans.

The lawmakers heeded Biden, his Cabinet, corporate chieftains and Shelton. All said at the July 25 White House meeting the CHIPS Act would help revitalize U.S. manufacturing while providing well-paying jobs. For Biden and other senators, it would combat China, too.

“We can no longer leave it up to corporations,” Senate Majority Leader Charles Schumer, D-N.Y., warned before Sanders spoke on the Senate floor. “Authoritarian nations are waiting for us to fail. This legislation will allow the U.S. to out-innovate, outproduce and outcompete the nations of the world.”

“With passage of this bill and the growing investment in semiconductor production, I’m expecting to be able to help organize thousands of additional workers,” Shelton said at the White House session.  “For those workers, this bill will be a ticket to a better life.

“I’m also glad the bill includes key protections to prevent companies that receive the money from turning around and investing in semiconductor production in China instead of the United States….It will help us grow this industry right here in the U.S.A. for the long term.

“And it actually goes far beyond that. This bill will help prevent us from having to face the situation where the numerous industries that depend on semiconductors—and that’s just about every industry—are simply unable to acquire them ever again,” Shelton told Biden. “So, this bill is a key part of rebuilding our manufacturing sector as a whole.”

Biden agreed. “People, understandably, don’t even realize that if we could just get our act together in the Congress, we’d be able to do a heck of a lot more and create literally thousands and thousands and thousands of good-paying jobs,” he replied.

Later in the dialogue, Shelton added another practical point: If the chips are made in the U.S., we know they’ll work. And availability of foreign-made chips is chancy.

“As some of the CEOs said, lots of them (industries) can’t build or make whatever it is they make because they can’t get semiconductors, for instance,” Shelton said.

“You know when it’s another country making these things instead of good American workers, they can always stop, and they do stop. We see this happening every day. We worry about what’s going to happen to this country if nothing is ever made here again. If we don’t make it here, we can’t be sure that, A, it works and that, B, we’re going to be able to use it.”


Mark Gruenberg
Mark Gruenberg

Award-winning journalist Mark Gruenberg is head of the Washington, D.C., bureau of People's World. He is also the editor of the union news service Press Associates Inc. (PAI). Known for his reporting skills, sharp wit, and voluminous knowledge of history, Mark is a compassionate interviewer but tough when going after big corporations and their billionaire owners.