Rep. Barry Moore on CHIPS Act: U.S. should reduce taxes and regulations for all industries, not pick winners and losers

Press Release

Rep. Barry Moore (AL-02)released the following statement after voting against the Creating Helpful Incentives to Produce Semiconductors (CHIPS-Plus) Act, a spending bill that subsidizes certain industries and is loaded with woke policy initiatives.

"In the midst of our highest inflation rate in more than 40 years, this legislation spends $250 billion on crony capitalist handouts with no guardrails to prevent that money from strengthening China's economy instead of our own," said Moore. "We all share the goal of revitalizing the critical semiconductor industry, but I cannot vote for legislation that adds $79 billion to the deficit without proper oversight or assurances of accomplishing its stated purpose.

"If we truly want to boost the American economy and decrease our dangerous dependence on foreign technology, energy, and supply chains, the answer is reducing taxes and regulations for all American industries and families, not crony capitalism."

CHIPS-Plus Act:

After failed conference negotiations on an American competitiveness package to confront China, the Senate amended H.R. 4346 to send billions of taxpayer dollars in subsidies and tax credits to a specific industry that does not need additional government handouts. While acknowledging the threat China poses to American industrial supply chains, this corporate welfare bill will not effectively address that important challenge. At a time when Democrats' reckless spending policies have led to historically high inflation, the government should not be injecting hundreds of billions of dollars in additional subsidies into the economy. This legislation comes to the House precisely as Senate Democrats have allegedly struck a deal on their partisan reconciliation bill, pairing up a tone-deaf agenda that on one hand gives billions away in corporate handouts, and on the other hand undoes historic tax cuts implemented by Republicans. The partisan Democrat agenda has given us record inflation, and now they are poised to send our country into a crushing recession.

CBO estimates that CHIPS-Plus increases the deficit by $79.3 billion over the years 2022 to 2031. Specifically, Division A would increase direct spending by $51.9 billion (CHIPS for America Fund and Wireless Supply Chain Innovation) and decrease revenues by $24.3 billion (25 percent Advanced Manufacturing Refundable Investment Credit) over the next ten years.
These CHIPS subsidies will not alleviate existing semiconductor supply constraints because it will take years for new facilities to ramp up and begin production. Moreover, this corporate welfare package will create a windfall for many successful companies that have already committed to build in America, with projects currently underway.
The bill provides $52 billion in semiconductor-related grant funding to the Biden Administration that lacks sufficient guardrails, has little Congressional direction on how it should be distributed, and provides limited opportunity for future Congressional oversight, allowing this inept administration to pick favorites and attach strings when distributing these federal dollars.
In addition, the bill authorizes the appropriation of about $200 billion over the 2022-2031 period, primarily for research activities, including $81 billion over 5 years for the National Science Foundation.
Instead of industry specific subsidies, broad based tax incentives would do more to increase the U.S.'s global competitiveness. For about the same cost as CHIPS subsidies ($52 billion in grants + $24 billion tax credit), Congress could enact a powerful set of incentives to allow all American companies to compete and win in the global economy:
Double research and development (R&D) tax credit through 2025 ($69 billion).
100 percent expensing through 2025 ($5 billion).
Allow R&D costs to be deducted immediately through 2025 ($4 billion).

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