Peters' $2 billion chips amendment added to China bill

Riley Beggin
The Detroit News

Washington — Legislation by Sen. Gary Peters, D-Bloomfield Township, to pump $2 billion into semiconductor manufacturing in the United States was added Wednesday to a bill targeting American competitiveness with China. 

The amendment, approved by the Senate Commerce Committee 15-13, would provide funds to chip production that would "advance the economic and national security interests of the United States," according to a draft version of the amendment provided to The Detroit News, with a special focus on projects that serve "mature technology nodes."

Sen. Gary Peters

That's a nod to the auto industry, which has called for any funding for semiconductor chips include a carve-out for automakers as they compete with electronics and other tech manufacturers for the coveted chips. Sen. Deb Fischer, R-Nebraska, raised concerns that the funding is too narrowly directed at the auto industry and pushed for more "neutral language."

Peters said the legislation isn't intended to fund auto chips alone, but added that "manufacturing of autos basically drives the entire manufacturing sector in this country" because it touches so many other supply chains such as glass, tires and electronics. 

"The impact of the auto industry on our entire economy is profound," he said. "Right now we're having an impact because of our overdependence on foreign sources for these chips. It is impacting jobs in America as we speak. If this legislation is about jobs, if it's about competitiveness, if it's about building our economy — if we aren't dealing with the problem that's impacting us right now, then why are we even here?"

The global semiconductor shortage brought on by the coronavirus pandemic has had a massive impact on the auto industry and is estimated to result in around 2.5 million fewer vehicles being built this year than planned, accounting for a more than $61 billion hit to the industry. More than 70,000 autoworkers have experienced shutdowns or pared-down shifts at plants represented by the United Auto Workers and more than 50 plants have been affected across North America.

The Peters amendment will be included in the Endless Frontier Act, an approximately $110 billion bill focused on making the U.S. more economically competitive with China that would fund science and technology research over the next five years, and create a manufacturing office within the White House.

The bill is sponsored by Senate Majority Leader Chuck Schumer, D-New York, and Sen. Todd Young, R-Indiana and was approved by the committee on Wednesday.

The Peters amendment also includes a provision requiring workers on any construction project funded through the legislation be paid prevailing wage, which multiple Republican members of the committee voiced against.

Young said during the hearing he had told Peters he would support the amendment, but once learning of the prevailing wage requirement, he changed his mind because "it creates great difficulties for many of my colleagues on this side of the aisle."

The Endless Frontiers Act is supported by both Republicans and Democrats and is expected to have an easier path to passage than most Democratic priorities in the closely divided Congress. However, a group of Republicans reportedly sent a memo around earlier this week arguing the bill is too expensive and doesn't do enough to protect American interests against China.

Twitter: @rbeggin