Endless Frontier Act-- continued

Floor Speech

Mr. President, the Senate is moving quickly, I hope, toward a vote on a far-reaching proposal to confront threats from China. Based on everything we know about the might and the ambitions of the Chinese Communist Party, there is a clear and urgent need for us to take action.

Every year, the U.S. intelligence community issues a threat assessment report outlining the greatest challenges confronting our country on the horizon. Topping the latest report, which was released last month, is China's push for global power. The report outlines China's efforts to strengthen its military power, diversify its nuclear arsenal, and fine-tune its cyber espionage skills, which are already quite considerable.

One major area that cannot be overlooked is China's industrial policy. Through the CCP's Made in China 2025 initiative, it seeks to achieve China's dominance in high-tech manufacturing. For everything from electric cars to advanced robotics, to artificial intelligence, to quantum computing, China wants to lead global production, and they are throwing serious money into the effort to get there. China is expected to spend $1.4 trillion by 2025, covering investments in everything from 5G to artificial intelligence.

The 2021 threat assessment report raises alarm bells here too. It says China will maintain these efforts because ``Chinese leaders see this strategy as necessary to reduce dependence on foreign technologies, enable military advances, and sustain economic growth and thus ensure the CCP's survival.'' I view this as both an alarming statement but really more as a call to action. If China is making these kinds of investments to increase its independence and global presence, we should be investing in our industrial base and our national security here at home. The most important place to start, I believe, is with semiconductor manufacturing.

The pandemic is hopefully soon to be in our rearview mirror as more and more Americans, more and more people get vaccinated. One of the most important lessons I believe we should have learned is the vulnerability of our supply chains, everything from personal protective equipment, most of which is made in China--and in the global race to get the PPE we needed during the pandemic, China got a head start because China manufactured it and we did not here at home.

So that opened up my eyes to the vulnerability of that supply chain, but we can't stop there. We need to look at how heavily we rely on other countries for semiconductors because nearly 90 percent of the semiconductors in the world are made in Southeast Asia, with Taiwan dominating the market. In fact, one company, Taiwan Semiconductor Manufacturing Company, accounted for more than one-half of total foundry revenues last year. Companies in Taiwan control 63 percent of the advanced semiconductor manufacturing in the world.

Now, if you are like me, before I got involved in this issue, I didn't really know very much about semiconductors, so I asked my staff to explain to me the significance of this vulnerability. They said: Well, Senator, think of it this way: Everything with an off and on switch involves semiconductors.

Well, that helped me quite a bit. Then I asked them to research something for me. I said: You see those rockets that are raining down on Israel from Hamas? Some of those interceptors are made by Raytheon, an American-based defense contractor. Ask them how many semiconductors are in a single interceptor.

They did the research, and they reported back--750 semiconductors in a single interceptor.

So these semiconductors or microelectronics are everywhere, everywhere--in the phones we carry, in the planes that our Air Force, Navy, and Marines are flying, the fifth-generation stealth fighter, the F-35. Semiconductors are everywhere. Given China's ambitions, it is easy to imagine how they might be tempted to interfere with the supply chain and our dependence on Asian-produced semiconductors. If China were to block or even invade Taiwan, we would be literally helpless.

Back in 1980, Jimmy Carter gave a speech in which he laid down what came to be known as the Carter Doctrine. This was 2 years after the Soviet Union invaded Afghanistan. He wanted to send a message to the world that they should not mess with U.S. access to the oil that came through the Strait of Hormuz in the Middle East.

So he laid down the Carter doctrine. He said: Anybody who interferes with our access to the oil that we need to power our armed services and our economy, that would be an act of war. Well, I don't think it is an exaggeration to say if another country were to block our access to semiconductors, it could well rise to the same sort of act of war that Jimmy Carter warned about in 1980. In other words, semiconductors have become the new oil in terms of our dependency, and it is a dangerous dependency we must correct.

This is precisely why the senior Senator from Virginia and I, Senator Warner, introduced the CHIPS for America Act. It is crucial that we shore up our dependence on chips manufactured overseas and we shore up our domestic production.

The vast majority of our colleagues have agreed that this is a critical task. It was carefully crafted after monthslong bipartisan, bicameral negotiations. Recently, we had a meeting at the White House, and President Biden agreed with us that this was a critical imperative. This is literally a bipartisan, bicameral agreement with the executive branch and legislative branch that this is something we need to fix.

Last fall, when we took up the National Defense Authorization Act, we introduced an amendment that authorized what we now hope to be able to pay for, which is an amendment to the Defense Authorization Act, which passed 96 to 4. Now we need to fund the program, and there is just one issue standing in the way.

During committee consideration of the Endless Frontier Act, an amendment was adopted that would apply controversial Davis-Bacon language to the underlying CHIPS for America provision signed into law last year. This provision creates, I believe, an unnecessary distraction from our focus, which should be on defeating this vulnerability in the supply chain.

The fact is, current wages of U.S. semiconductor manufacturing companies don't need Davis-Bacon. They pay much better than the prevailing wage Davis-Bacon would require. So it is really a nonissue when it comes to semiconductor manufacturing.

But what is more significant--and I think the reason why some of our Democratic friends are insisting on this inclusion--is it represents an expansion over labor policies by applying it to private construction as opposed to public works. Obviously, this would set a troublesome precedent.

Leaving this language in the bill, I do believe, has the potential to weaken the support for the broader legislation. And I hope we can all agree that the stakes are too high to risk letting that happen.

Last week, I introduced an amendment to strike this unnecessary and divisive provision and maintain strong bipartisan support for the underlying CHIPS for America legislation. A partisan provision with zero impact is hardly a reason to sacrifice the strong bipartisan support we have seen for the CHIPS Act.

Republicans and Democrats have worked very closely together and, I think, really in an encouraging and responsible way to bolster domestic manufacturing of semiconductors and confront one of the biggest looming threats to our national security and our economic security. Now is not the time to backpedal on the progress we have made.

I expect the Senate will vote on my amendment later this evening. I encourage my colleagues on both sides of the aisle to support this amendment so we can maintain the strong bipartisan support we have demonstrated so far for this critical, critical legislation.

BREAK IN TRANSCRIPT

Source