The Biden-Harris administration on Sunday said it plans to cut its grant to Intel, dealing a blow to the Democrats’ industrial policy vision.
The New York Times reported on Monday that the Biden-Harris admin plans to cut its $8.5 billion federal CHIPS grant to Intel after the chip manufacturer plans to delay its investment in chip facilities in Ohio. Intel has moved to cut costs after it experienced its biggest quarterly loss in half a century; it also has struggled to rival Taiwan-based rival, Taiwan Semiconductor Manufacturing Company.
The Biden-Harris administration tried to revitalize high-tech manufacturing with the CHIPS Act. Essentially, the bill doles out $39 billion in grants to encourage semiconductor fabrication in the United States.
“In March, President Biden traveled to Arizona to announce Intel’s multibillion-dollar award and said the company’s manufacturing investments would transform the semiconductor industry,” the Times wrote. The outlet continued:
Intel’s investment was at the forefront of the administration’s ambition to return chip manufacturing to the United States from Asia. The CHIPS Act, a bipartisan bill passed in 2022, provided $39 billion in funding to subsidize the construction of facilities to help the United States reduce its reliance on foreign production of the tiny, critical electronics that power everything from iPads to dishwashers.
Matt Cole, the CEO of Strive Asset Management, and Chris Nicholson, in an op-ed for the Hill blamed much of the failure on diversity, equity, and inclusion (DEI) policies attached to the CHIPS grants.
Rep. French Hill (R-AR), the vice chairman of the House Financial Services Committee, told Breitbart News that there are easier methods to make it easier to invest in high-tech manufacturing and energy production in America than what he described as “European-style industrial policy” such as the Biden-Harris method.
Breitbart News Economics editor John Carney explained that capital requirements could be adjusted to encourage economically beneficial lending for oil and gas exploration, pipeline construction, or even high tech manufacturing.
Carney wrote:
Unlike direct subsidies, which often lead to waste because companies are spending taxpayer funds rather than their own, companies would still be on the hook for these loans, and banks would still be taking risks in hopes of profit. Free market principles would still direct investment, but with less drag from regulation for activities deemed central to our economic might and national security.
Hill explained that there can be wide regulatory tax and permitting reform to boost manufacturing and investment in capital-intensive areas such as high-tech manufacturing and nuclear power.
He explained, “I’d say on the supply side, is what you talked about, which is, what can we do using the tax code … [and] permitting, regulatory relief? And yes, take a look at, you know, anything in the banking sector that would limit investments in that space, I would say the best thing you could do would be end the war on energy lending through ending the ESG Gary Gensler SEC Climate report — that would go a long way to do it.”
Sean Moran is a policy reporter for Breitbart News. Follow him on X @SeanMoran3.