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May 21, 2024

Biden pushes federal spending to boost domestic tech manufacturing

President Joe Biden met with a collection of business leaders, governors and U.S. Secretary of Commerce Gina Raimondo Wednesday to discuss increasing domestic tech manufacturing to compete with China.

Biden touted domestic manufacturing growth, saying 432,000 new manufacturing jobs have been created in the U.S. since the beginning of 2021. The economy has seen mixed results in the past year, with job growth rebounding from COVID-era shutdowns alongside increased inflation, supply chain issues, and fears of another recession.

Biden pointed to companies like Micron and Samsung, saying they are looking to invest in semiconductor manufacturing in the U.S., a major area of focus for the president in his push for expanded domestic manufacturing.

Bringing manufacturing jobs back to the U.S. was one of the signature platforms of former President Donald Trump.

Biden pushed the “Bipartisan Innovation Act,” which would incentivize high-tech manufacturing in the U.S. on products like semiconductors and microchips through rule changes and federal funding.

“First, it will send a message to the world that America is back in the game, open for investment, commitment, creating clean energy economy and competing to win in the 21st century,” Biden said. “Second, we are going to create jobs, good-paying, butting edge jobs, manufacturing jobs, many that don’t require a four-year college degree. Third, making it in America is one of the ways that we can address our cost and supply chain challenges.”

Semiconductor chip shortages have become a major issue after recent semiconductor shortages helped drive up the cost of vehicles. Pricing data released in February from the Bureau of Labor Statistics reports that the price of new vehicles increased more than 12% in the previous 12 months while used vehicles saw more than a 40% increase during the same time.

“One of the reasons we need to [pass the bill] is because there is perhaps no production more important than reclaiming America’s leadership and owning our future than semiconductors,” Biden said. “You know, these semiconductors are the size of a fingertip and power just about everything in our everyday life: smart phones, the internet, appliances, technologies we haven’t invented yet.

“The semiconductor was invented here in the United States of America,” he added. “Over 30 years ago, America had 40% of the global production of semiconductors, but since then something happened. American manufacturing, the backbone of our economy, got hollowed out. Companies moved jobs and production overseas, especially from the industrial Midwest, and the result today, we barely produce 10% of these computer chips despite being a leader on chip design and research.”

Meanwhile, COVID-19 supply chain disruptions and Biden’s ban on Russian oil earlier this week has heightened scrutiny about the U.S. supply chain and reliance on foreign powers.

“This puts us at the mercy of disruptions and supply chain bottlenecks, but we have an opportunity to reclaim the position of leadership,” Biden said.

The legislation comes as concerns increase over China potentially invading Taiwan after being emboldened by Russian aggression in Ukraine. It has received bipartisan backing with differing versions passed in the House and Senate. No version has made it out of Congress.

Critics said more federal funding is not the answer and that regulatory rollback would allow for the innovation to beat China.

“Every plan we’ve seen from the Biden administration and Democrats tries to copy China’s own dangerous path of centralized industrial policy and massive government handouts that benefit the ruling party’s political allies,” U.S. Rep. Cathy McMorris Rodgers, R-Wash., said. “We cannot, and should not even try, to beat the CCP at their own game. That is not the American way.

“If the Democrats truly wanted to make America more competitive and beat China, they would abandon their destructive, tax-and-spend agenda and work with us to reform our burdensome permitting, licensing, and regulatory regimes,” she added.

Biden called for Congress to pass the legislation during his State of the Union address earlier this month, saying the legislation would “make record investments in emerging technologies and American manufacturing.”

“That would be one of the biggest investments in manufacturing in American history,” he said.

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