Warren, Sanders, Casten Urge Conferees to Put Up Corporate Guardrails During USICA/COMPETES Negotiations
Guardrails Would Ensure that Investments in Productive Capacity Supports Manufacturing, Jobs, and Competitiveness Instead of Enriching Corporate Executives
Washington, D.C. – U.S. Senators Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) and U.S. Representative Sean Casten (D-Ill.) sent a letter to the conferees who are negotiating the differences between the House America Creating Opportunities forManufacturing, Pre-Eminence in Technology, and Economic Strength (COMPETES) Act of 2022 and the Senate United States Innovation and Competition Act (USICA) of 2021 stressing the importance of strong guardrails to ensure that funding for the Creating Helpful Incentives to Produce Semiconductors (CHIPS) for America Act is invested in workers and communities as intended, instead of enriching corporate executives.
“It is vital that the CHIPS funds are used to invest in American manufacturing, strengthen the supply chain, and create jobs here in the United States, not reward corporate executives or shareholders. We urge the conferees to include conditions that prohibit recipients from buying back their stock, outsourcing jobs, and repealing existing collective bargaining agreements; that require them to remain neutral in any union organizing efforts; and that require them to issue warrants or equity interest to the U.S. government to the extent possible,” wrote the lawmakers.
Under proposed funding levels for USICA and COMPETES, grant funding for CHIPS could total around $53 billion for semiconductor firms. The CHIPS for America Act gives the Secretary of Commerce broad discretion in awarding these grants to bolster competitiveness so long as the projects are determined to be “in the interest of the United States.”
Over the last decade, however, the 19 publicly listed semiconductor firms that lobbied President Biden for CHIPS funding in a February 2021 letter collectively conducted $287 billion in stock buybacks, more than five times the nearly $53 billion CHIPS investment. The five largest repurchasers: Intel, IBM, Qualcomm, Texas Instruments, and Broadcom, accounted for nearly 90 percent of those buybacks, or $249 billion. Additionally, the semiconductor industry has a long record of offshoring American jobs even as it spent billions on stock buybacks and dividends.
The lawmakers argue that common-sense guardrails to prevent corporate abuse of public funds are crucial to ensuring that these investments support American jobs and the economy, and note that Congress has a history of protecting taxpayer investments in private companies from corporate abuse. The bipartisan Coronavirus Aid, Relief, and Economic Security (CARES) Act, which passed the Senate 96-0, prohibited recipients of government funding from conducting stock buybacks, outsourcing jobs, and repealing existing collective bargaining agreements, and also required firms to commit to remain neutral in any union organizing efforts and issue warrants or equity interest to the government.
Senators Warren and Sanders and Representative Casten are calling on the USICA/COMPETES conferees to include similar strong guardrails to protect the public’s investment in the semiconductor industry.
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