Enough stalling. Get this passed.
Everyone is getting tired of hearing and reading about the semiconductor chip shortage crisis. Lessons have been learned and now they need to be applied, specifically bringing chip production to the US instead of relying on Asian imports. Still not convinced this is necessary? Just ask any automaker right now what's their biggest problem: production slowdowns due to a lack of chips.
Slowdowns have affected everything from hot-selling trucks like the Chevy Silverado 1500 to muscle cars like the Ford Mustang. Not producing at full capacity means there are fewer cars to send to dealers to sell. Those that do arrive are often selling for above sticker due to high demand. This has led to a trickledown effect for the used car market as well.
On Friday, President Biden made a plea to Congress to pass a $52 billion fundraising bill specifically for domestic chip production. "Let's do it for the sake of our economic competitiveness and our national security," the President said. "Let's do it for the cities and towns all across America working to get their piece of the global economic package. And let's do it for the dignity and pride of this country and the American worker."
Also on Friday, Intel announced plans to invest $20 billion to build a new chip production plant near Columbus, Ohio. Intel CEO Patrick Gelsinger stood by Biden during his speech. A group of bipartisan lawmakers has been holding meetings with Commerce Secretary Gina Raimondo in an effort to help rally support to get the spending bill passed quickly.
Many members of Congress from Rustbelt states such as Ohio and especially Michigan are eager to get this done. Not only will it help bring much-needed jobs to the Midwest and other parts of the country, but also boost American competitiveness against its main economic foe, China.
"China is doing everything it can to take over the global market so they can try to out-compete the rest of us," Gelsinger said. "We have a stiff economic and technological competition. We're going to invest whatever it takes in America, and American innovation, and American communities and American workers."
According to his estimates, chip will account for 20 percent of a new vehicle's total cost by 2030. Today, that figure stands at 4 percent. Fortunately, the Senate approved the $52 billion funding bill last summer as part of the US Innovation and Competition Act. That bill calls for $2 billion to be set aside for chips specifically for major automakers.
Unfortunately, it's being held up in the House because some members don't think it's tough enough against China. It's now the House's turn to propose its version so the two chambers can make a deal.