Sanders Proposes Forcing Chipmakers to Give U.S. Equity for Aid

(Bloomberg) -- Senator Bernie Sanders said he wants semiconductor companies including Intel Corp. and Texas Instruments Inc. to give the federal government an equity interest in exchange for federal grants and aid that would be included in a sweeping bill intended to help the U.S. compete with China.

The legislation, known as the Endless Frontier Act, “provides $53.5 billion in financial assistance to the semiconductor industry with virtually no strings attached,” the Vermont independent said in a statement. “If we are going to reward these companies with a taxpayer assistance, the very least we can and should be doing is to put strong conditions on that taxpayer assistance.”

In addition to giving the U.S. warrants or other equity interest, Sanders proposes requiring companies that receive aid be prohibited from buying back their own stock, sending any U.S. jobs overseas or repealing existing collective bargaining agreements.

The money to bolster domestic semiconductor manufacturing is a key part of broader Senate legislation that also would put more than $100 billion into research and development of innovative manufacturing and technology. While there is bipartisan agreement on confronting China’s rising challenge to American economic primacy, Republicans and Democrats are still wrangling over the details.

The legislation would set up a program to give financial assistance to build, expand, or modernize semiconductor fabrication plants in the U.S. Although specific companies aren’t targeted for the aid, Sanders said five semiconductor companies likely would get the lion’s share.

His proposed amendment, which was reported earlier by the New York Times, is one of several that are expected to be introduced this week in the Senate. Debating and voting on those changes risks Majority Leader Chuck Schumer’s goal of finishing the legislation before the chamber goes on break at the end of the week.

Senate Republican leader Mitch McConnell said the China bill “is incomplete” without dealing with some of the changes wanted by members of both parties.

“We should not close debate on this bill until those amendments are addressed,” he said on the Senate floor.

More stories like this are available on bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2021 Bloomberg L.P.