Raimondo Urges Senators to Get USICA Conference Done Quickly: Young Says Memorial Day Goal Unlikely

Commerce Secretary Gina Raimondo told senators repeatedly during her testimony at a Commerce Committee hearing that the conference process for the House and Senate's China packages needs to get done as soon as possible, because other countries are offering funds to chipmakers, and companies are looking to plan new plants, because demand is so high. Raimondo said she's spoken with all the American chipmakers, and it's clear to her that if Congress doesn't act, those companies will invest in Germany, Singapore, France or Spain rather than Ohio or Arizona. Raimondo said, "They want to operate in our country, but they cannot wait. They are going to build, and if we don’t act quickly with USICA, they’ll build elsewhere."

In a hallway interview outside the hearing, Sen. Todd Young, R-Ind., one of the original champions of the Senate's U.S. Innovation and Competition Act (USICA), said that he no longer thinks the conference committee can get its work done by Memorial Day. "By the end of summer would be a more realistic timeline," he said.

Raimondo told Sen. Mike Peters, D-Mich., that $2 billion of the $52 billion in the bill to support semiconductor manufacturers will be dedicated to legacy chips. But she told him that the auto industry is no longer the sector hurt most by a shortage in legacy chips; now it's the medical device industry.

Peters asked if the administration supports language from the House bill, which offers money to producers of chip manufacturing equipment or materials that go into semiconductors. "We’re going to be fighting to be sure that proposal gets into the final product," Peters said.

Raimondo agreed that upstream suppliers are "absolutely" crucial to building a domestic supply chain that's less dependent on Asia.

Raimondo, who appeared in front of the committee April 27 to discuss the administration's budget request, said that the request includes $16.1 million to support secure and diversified supply chains, and nearly $200 million for the Bureau of Industry and Security to apply and enforce export controls and strengthen efforts to counter China and Russia. It also includes $141 million for the Bureau of Economic Analysis, to compile new data on supply chains.

But she said the annual budget is not nearly as powerful as USICA, including its supply chain authorities. She said it would allow Commerce to continuously map and monitor supply chains of critical goods. "This is threatening our national security as well as our economic security," she said, referring to the chip shortage. "The average consuming industry has less than 5 days of inventory," she said, including defense contractors. She noted that Javelins, an anti-tank weapon sent to Ukraine in large numbers, contain more than 250 semiconductor chips. "I talked to all the national defense contractors recently on the Ukraine replenishment issue," she said.

Several senators asked Raimondo how long it would take to get money out the door once the bill becomes law, and she said that while there's been extensive stakeholder engagement, and they've started to plan for hires, she can do nothing until the bill is signed by the president.

Ranking Member Roger Wicker, R-Miss., noted that some senators object to grants to large, profitable companies that also produce in China.

"My top priority will be protecting taxpayers," Raimondo replied, and noted that she has a history of that in her government service in Rhode Island. "If this was used by companies violating our export controls, we would claw them back."

"Yes, they’re big, yes, they’re profitable," she said, but added, "If you want them to expand in America, you must have the Chips Act, and you must act quickly."