WEBVTT - Erik Wasson on Chips Bill (Audio)

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<v Speaker 1>Well, the U. S. Senate has passed legislation that includes

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<v Speaker 1>fifty two billion dollars in grants and incentives for domestic

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<v Speaker 1>semiconductor manufacturing, and the bill is expected to pass the

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<v Speaker 1>House later this week. It will then move on to

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<v Speaker 1>President Biden's desk for his signature. Joining us now to

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<v Speaker 1>discuss this long path to getting it signed. As Eric Watson,

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<v Speaker 1>who's Bloomberg congressional reporter, Well, I think first let's look

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<v Speaker 1>at doesn't make a difference. One semiconductor firm alone, t

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<v Speaker 1>SMC is spending a hundred billion dollars over three years.

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<v Speaker 1>This is fifty two billions spread out over five and

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<v Speaker 1>it includes some money for things like five G wireless technology. Eric,

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<v Speaker 1>is is it really big enough to move the dial

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<v Speaker 1>for a whole nation's uh? Industry? Well, certainly the the

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<v Speaker 1>supporters of the bailing in Congress as well as the industry,

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<v Speaker 1>I do say so. And it's got widespread praise everyone

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<v Speaker 1>from the Business Roundtable too, industry groups saying this was

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<v Speaker 1>really necessary. Uh. You know, I talked to Mark Kelly

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<v Speaker 1>Arizona was involved in that investment you just mentioned out

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<v Speaker 1>there in Arizona, and he said this was they probably

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<v Speaker 1>weren't going to pull back on their investment, but they

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<v Speaker 1>definitely wouldn't expand it. And he thinks it's going to

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<v Speaker 1>make a difference attendance, housands of jobs in his state.

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<v Speaker 1>Uh you know, uh talk about the added you know,

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<v Speaker 1>city two billions for the coming up the industry, but

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<v Speaker 1>there are you know, everything else, the wireless that the

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<v Speaker 1>three thousand dollars for science agencies. You know, ultimately it's

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<v Speaker 1>about thirty nine billion dollars when you include a tax

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<v Speaker 1>cred as well. Uh, you know, there's additional money that's

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<v Speaker 1>been authorized but not appropriated. It's coming to you under

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<v Speaker 1>an eighty billion dollars totals. It does seem like Wall

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<v Speaker 1>Street liked it. We saw Intel shares up by about

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<v Speaker 1>three percent. What are we hearing from some of the

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<v Speaker 1>big giants that were concerned that delays to this bill

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<v Speaker 1>really thriatened plans for expanding manufacturing domestically. Well, you know, again,

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<v Speaker 1>I think that they're just very relieved. Now there's a

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<v Speaker 1>last minute wrinkle going on here because, as you also mentioned,

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<v Speaker 1>Joe Mansion has changed his tune on the Climate Energy Package.

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<v Speaker 1>And then now we we're learning the House Republicans are

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<v Speaker 1>gonna try to bring down this bill tomorrow. I talked

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<v Speaker 1>to House Democrats, some of the progressives who are worried

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<v Speaker 1>about what they call corporate welfare, and I think that

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<v Speaker 1>in the end of the day they're going to rally

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<v Speaker 1>and pass this bill. But it's not quite a done deal.

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<v Speaker 1>You know, the Republicans were mostly going to be on

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<v Speaker 1>board with this in the House, uh, you know, with

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<v Speaker 1>some exceptions, but because they're trying to retali ns Democrats

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<v Speaker 1>from moving forward on tax increases and climate change, it

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<v Speaker 1>could be actually an interesting vote tomorrow. Yeah, it's really

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<v Speaker 1>interesting when you because if you look at it, you

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<v Speaker 1>can find attractors that would say it's it's selective corporate welfare,

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<v Speaker 1>and you know, you're picking winners. So the free market

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<v Speaker 1>uh politicians probably don't like it. And and it hasn't

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<v Speaker 1>been much pushback on why not other industries? What about mine? Well,

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<v Speaker 1>certainly there's the Republicans and others want to see a

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<v Speaker 1>larger permanent R and D tax credit that would be broader.

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<v Speaker 1>They're still talk of bringing that in potentially in a

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<v Speaker 1>your end D allow That will depend on the election,

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<v Speaker 1>but there will be a tax extender's package talked about

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<v Speaker 1>in December, we may ce r and d uh you

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<v Speaker 1>know revived there, you know, but certainly I think when

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<v Speaker 1>we see that, you know, the shortage is going on

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<v Speaker 1>from Detroit and other major renistchors who can't get some

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<v Speaker 1>in conductors right now, and the effect they've had on

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<v Speaker 1>prices for consumers. Uh, you know, this is just the

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<v Speaker 1>opportune time for for the chief industry to get this

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<v Speaker 1>this helping hand, uh and get it through Congress. You

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<v Speaker 1>talked about some of the opposition. I mean, a pretty

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<v Speaker 1>strong tweet that we're quoting from Jim Banks on Bloomberg

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<v Speaker 1>as well just took us through. I guess how these

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<v Speaker 1>kind of messages that this money is going towards China

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<v Speaker 1>could kind of, I guess, derail things in terms of

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<v Speaker 1>President Barden's approval. Well, I mean, there are restrictions in

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<v Speaker 1>the bill actually that we're built in and on the

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<v Speaker 1>assistance of of of progressives actually that restrict any company

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<v Speaker 1>from using the money to invest in China or to

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<v Speaker 1>do stock buy back. So I think, you know, I

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<v Speaker 1>don't know what you're referring to, but there are guard

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<v Speaker 1>rails in the bill that really are aimed at ensuring

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<v Speaker 1>it that creates a domestic job. So I think, you know,

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<v Speaker 1>as far as when it helps UH buying approval rating,

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<v Speaker 1>I think members of connerss are pretty honest about you know,

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<v Speaker 1>even if Biden's whole agenda was passed, at the end

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<v Speaker 1>of the day, it's inflation and gas prices that are

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<v Speaker 1>really driving the approval rating, and we're not going to

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<v Speaker 1>see a lot of near term movement on those from

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<v Speaker 1>this bill, so you know, it may be a indirect

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<v Speaker 1>effect at best rating. Yeah, you talked about the guardrails

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<v Speaker 1>no dividends and and no buy backs, and I guess

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<v Speaker 1>companies will have to go through some sort of complicated

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<v Speaker 1>application process for for these grants. How tight will that

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<v Speaker 1>be or is that not yet written? You know, a

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<v Speaker 1>lot that's gonna be developed by the Converse Department and

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<v Speaker 1>you other you know branches of the government who are

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<v Speaker 1>gonna minister that. So that's something it will certainly be

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<v Speaker 1>following up on Bloomberg as as industry looks to make

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<v Speaker 1>sure that the seamless as possible. All Right, I'll just

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<v Speaker 1>reiterate what I was saying. Sorry, I thought, apologies for

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<v Speaker 1>not clarifying that it was representative Jim Banks of Indiana,

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<v Speaker 1>the chairman of the Republican Study Committee. He tweeted the

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<v Speaker 1>DEM's fake China bill allows your tax dollars to go

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<v Speaker 1>to communist China. Brian talked earlier about some of the

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<v Speaker 1>external companies, the likes of t SMC. We heard from

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<v Speaker 1>Samsung today as well in terms of how much they're developing.

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<v Speaker 1>Just tell us about the U S share of semiconductor

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<v Speaker 1>manufacturing and where we stand globally there well, certainly on

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<v Speaker 1>the advance I was talking, you know, some of the

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<v Speaker 1>advanced chips are talking to subsentators that we just don't

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<v Speaker 1>make them at all. The chips are going to the

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<v Speaker 1>iPhone and the very best. So I think there's a

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<v Speaker 1>real concern, especially from the Defense Department and others, that

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<v Speaker 1>we have zero really ability to make these advanced chips,

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<v Speaker 1>and it's doing a national security threat, especially if you

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<v Speaker 1>look at Taiwan, which is a leader in manufacturing these

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<v Speaker 1>and is under threat by China. Uh, you know, donder

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<v Speaker 1>a lot of pressure that certainly opens up a national

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<v Speaker 1>security threat. So I think, you know, the main pitch

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<v Speaker 1>and certainly one being clung to by McConnell and other

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<v Speaker 1>Republicans who are normally wary of government spending is if

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<v Speaker 1>this is a national security priority, So China is the

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<v Speaker 1>main target. I think maybe finally, uh in our chat today,

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<v Speaker 1>um are there? I mean what other countries really mostly

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<v Speaker 1>the other ones like South Korea and Taiwan. Um, Taiwan

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<v Speaker 1>not necessarily country. But I've seen as allies anybody else

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<v Speaker 1>out there that this targets. Well, certainly you know under

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<v Speaker 1>Mark Warner, uh, you know, one of the big proponents

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<v Speaker 1>of the Ship's Bill, and he said, you know, when

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<v Speaker 1>we announced that we're going to go forward with this,

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<v Speaker 1>you know, then there were moves by Germany, you know,

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<v Speaker 1>Britain and others to provide provide similar levels of subseason

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<v Speaker 1>attract investment there. So at that point, once it had

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<v Speaker 1>been telegraphed, it was very necessary to follow so to

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<v Speaker 1>not see you know, some of this these jobs go

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<v Speaker 1>to the EO. Okay, Eric, many thanks will push for

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<v Speaker 1>a raise nine o'clock at night, and you're doing this

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<v Speaker 1>for us. We really appreciate it. Big big hug from

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<v Speaker 1>Juliette and me. And we've been chatting here with Eric Wasawson,

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<v Speaker 1>Bloomberg Congressional reporter