The news roundups this morning report that the Senate is expected to advance a bill to boost chip production and advanced technology, setting up final passage Tuesday or Wednesday. The Wall Street Journal has devoted two good editorials — here (“Congress goes all in for chip subsidies,” July 19) and here (“The Senate’s semiconductor con,” July 21) to the bill. The second of the two Journal editorials begins with this disheartening assessment:
Are Republican Senators conniving spendthrifts or babes in the Beltway? We lean toward the former after watching a $76 billion semiconductor subsidy bill morph within minutes on Tuesday night into a $250 billion bipartisan spendarama.
The Senate voted 64-34 to begin debate on its Chips bill, a corporate-welfare vehicle providing $52 billion in grants and $24 billion in tax credits to the profitable semiconductor industry. But it turns out that bill was merely the bad news. The really bad news is that Majority Leader Chuck Schumer quickly filed a 1,054-page bipartisan amendment to pour more than twice that amount of money into federal agencies.
The $76 billion Chips version is wasteful enough since the pandemic computer-chip shortage is already easing amid slowing demand and new investments in capacity—including new factories in the U.S.
But politicians always want more, and the $250 billion version will help the U.S. compete against China only if you believe that the key to success is a larger federal bureaucracy and more political allocation of capital.
The editors hold out some slim hope that sanity will prevail:
One hope is that enough Republicans will come to their political senses to defeat this on a vote for final passage. It’s also possible that Democrats in the House could fail to pass this new version. The House narrowly passed its version of a Chips bill in February, and all but one Republican voted no.
But Democrats are aching for a pre-election victory, and so the skids may be greased. America’s bipartisan political class at work.
If the Journal editors have this right, Democrats are aching for a pre-election victory…and Republicans are either bound to give it to them or lack the fortitude to stop them.
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