Speaker 1: Well, the U. S. Senate has passed legislation that includes
Speaker 1: fifty two billion dollars in grants and incentives for domestic
Speaker 1: semiconductor manufacturing, and the bill is expected to pass the
Speaker 1: House later this week. It will then move on to
Speaker 1: President Biden's desk for his signature. Joining us now to
Speaker 1: discuss this long path to getting it signed. As Eric Watson,
Speaker 1: who's Bloomberg congressional reporter, Well, I think first let's look
Speaker 1: at doesn't make a difference. One semiconductor firm alone, t
Speaker 1: SMC is spending a hundred billion dollars over three years.
Speaker 1: This is fifty two billions spread out over five and
Speaker 1: it includes some money for things like five G wireless technology. Eric,
Speaker 1: is is it really big enough to move the dial
Speaker 1: for a whole nation's uh? Industry? Well, certainly the the
Speaker 1: supporters of the bailing in Congress as well as the industry,
Speaker 1: I do say so. And it's got widespread praise everyone
Speaker 1: from the Business Roundtable too, industry groups saying this was
Speaker 1: really necessary. Uh. You know, I talked to Mark Kelly
Speaker 1: Arizona was involved in that investment you just mentioned out
Speaker 1: there in Arizona, and he said this was they probably
Speaker 1: weren't going to pull back on their investment, but they
Speaker 1: definitely wouldn't expand it. And he thinks it's going to
Speaker 1: make a difference attendance, housands of jobs in his state.
Speaker 1: Uh you know, uh talk about the added you know,
Speaker 1: city two billions for the coming up the industry, but
Speaker 1: there are you know, everything else, the wireless that the
Speaker 1: three thousand dollars for science agencies. You know, ultimately it's
Speaker 1: about thirty nine billion dollars when you include a tax
Speaker 1: cred as well. Uh, you know, there's additional money that's
Speaker 1: been authorized but not appropriated. It's coming to you under
Speaker 1: an eighty billion dollars totals. It does seem like Wall
Speaker 1: Street liked it. We saw Intel shares up by about
Speaker 1: three percent. What are we hearing from some of the
Speaker 1: big giants that were concerned that delays to this bill
Speaker 1: really thriatened plans for expanding manufacturing domestically. Well, you know, again,
Speaker 1: I think that they're just very relieved. Now there's a
Speaker 1: last minute wrinkle going on here because, as you also mentioned,
Speaker 1: Joe Mansion has changed his tune on the Climate Energy Package.
Speaker 1: And then now we we're learning the House Republicans are
Speaker 1: gonna try to bring down this bill tomorrow. I talked
Speaker 1: to House Democrats, some of the progressives who are worried
Speaker 1: about what they call corporate welfare, and I think that
Speaker 1: in the end of the day they're going to rally
Speaker 1: and pass this bill. But it's not quite a done deal.
Speaker 1: You know, the Republicans were mostly going to be on
Speaker 1: board with this in the House, uh, you know, with
Speaker 1: some exceptions, but because they're trying to retali ns Democrats
Speaker 1: from moving forward on tax increases and climate change, it
Speaker 1: could be actually an interesting vote tomorrow. Yeah, it's really
Speaker 1: interesting when you because if you look at it, you
Speaker 1: can find attractors that would say it's it's selective corporate welfare,
Speaker 1: and you know, you're picking winners. So the free market
Speaker 1: uh politicians probably don't like it. And and it hasn't
Speaker 1: been much pushback on why not other industries? What about mine? Well,
Speaker 1: certainly there's the Republicans and others want to see a
Speaker 1: larger permanent R and D tax credit that would be broader.
Speaker 1: They're still talk of bringing that in potentially in a
Speaker 1: your end D allow That will depend on the election,
Speaker 1: but there will be a tax extender's package talked about
Speaker 1: in December, we may ce r and d uh you
Speaker 1: know revived there, you know, but certainly I think when
Speaker 1: we see that, you know, the shortage is going on
Speaker 1: from Detroit and other major renistchors who can't get some
Speaker 1: in conductors right now, and the effect they've had on
Speaker 1: prices for consumers. Uh, you know, this is just the
Speaker 1: opportune time for for the chief industry to get this
Speaker 1: this helping hand, uh and get it through Congress. You
Speaker 1: talked about some of the opposition. I mean, a pretty
Speaker 1: strong tweet that we're quoting from Jim Banks on Bloomberg
Speaker 1: as well just took us through. I guess how these
Speaker 1: kind of messages that this money is going towards China
Speaker 1: could kind of, I guess, derail things in terms of
Speaker 1: President Barden's approval. Well, I mean, there are restrictions in
Speaker 1: the bill actually that we're built in and on the
Speaker 1: assistance of of of progressives actually that restrict any company
Speaker 1: from using the money to invest in China or to
Speaker 1: do stock buy back. So I think, you know, I
Speaker 1: don't know what you're referring to, but there are guard
Speaker 1: rails in the bill that really are aimed at ensuring
Speaker 1: it that creates a domestic job. So I think, you know,
Speaker 1: as far as when it helps UH buying approval rating,
Speaker 1: I think members of connerss are pretty honest about you know,
Speaker 1: even if Biden's whole agenda was passed, at the end
Speaker 1: of the day, it's inflation and gas prices that are
Speaker 1: really driving the approval rating, and we're not going to
Speaker 1: see a lot of near term movement on those from
Speaker 1: this bill, so you know, it may be a indirect
Speaker 1: effect at best rating. Yeah, you talked about the guardrails
Speaker 1: no dividends and and no buy backs, and I guess
Speaker 1: companies will have to go through some sort of complicated
Speaker 1: application process for for these grants. How tight will that
Speaker 1: be or is that not yet written? You know, a
Speaker 1: lot that's gonna be developed by the Converse Department and
Speaker 1: you other you know branches of the government who are
Speaker 1: gonna minister that. So that's something it will certainly be
Speaker 1: following up on Bloomberg as as industry looks to make
Speaker 1: sure that the seamless as possible. All Right, I'll just
Speaker 1: reiterate what I was saying. Sorry, I thought, apologies for
Speaker 1: not clarifying that it was representative Jim Banks of Indiana,
Speaker 1: the chairman of the Republican Study Committee. He tweeted the
Speaker 1: DEM's fake China bill allows your tax dollars to go
Speaker 1: to communist China. Brian talked earlier about some of the
Speaker 1: external companies, the likes of t SMC. We heard from
Speaker 1: Samsung today as well in terms of how much they're developing.
Speaker 1: Just tell us about the U S share of semiconductor
Speaker 1: manufacturing and where we stand globally there well, certainly on
Speaker 1: the advance I was talking, you know, some of the
Speaker 1: advanced chips are talking to subsentators that we just don't
Speaker 1: make them at all. The chips are going to the
Speaker 1: iPhone and the very best. So I think there's a
Speaker 1: real concern, especially from the Defense Department and others, that
Speaker 1: we have zero really ability to make these advanced chips,
Speaker 1: and it's doing a national security threat, especially if you
Speaker 1: look at Taiwan, which is a leader in manufacturing these
Speaker 1: and is under threat by China. Uh, you know, donder
Speaker 1: a lot of pressure that certainly opens up a national
Speaker 1: security threat. So I think, you know, the main pitch
Speaker 1: and certainly one being clung to by McConnell and other
Speaker 1: Republicans who are normally wary of government spending is if
Speaker 1: this is a national security priority, So China is the
Speaker 1: main target. I think maybe finally, uh in our chat today,
Speaker 1: um are there? I mean what other countries really mostly
Speaker 1: the other ones like South Korea and Taiwan. Um, Taiwan
Speaker 1: not necessarily country. But I've seen as allies anybody else
Speaker 1: out there that this targets. Well, certainly you know under
Speaker 1: Mark Warner, uh, you know, one of the big proponents
Speaker 1: of the Ship's Bill, and he said, you know, when
Speaker 1: we announced that we're going to go forward with this,
Speaker 1: you know, then there were moves by Germany, you know,
Speaker 1: Britain and others to provide provide similar levels of subseason
Speaker 1: attract investment there. So at that point, once it had
Speaker 1: been telegraphed, it was very necessary to follow so to
Speaker 1: not see you know, some of this these jobs go
Speaker 1: to the EO. Okay, Eric, many thanks will push for
Speaker 1: a raise nine o'clock at night, and you're doing this
Speaker 1: for us. We really appreciate it. Big big hug from
Speaker 1: Juliette and me. And we've been chatting here with Eric Wasawson,
Speaker 1: Bloomberg Congressional reporter