Commerce Dep't: Companies Seeking CHIPS Funding Must Provide Child Care, Limit Stock Buybacks

(CNSNews.com) – The Biden Commerce Department today announced a taxpayer funding opportunity for companies that want to help rebuild the U.S.-based semiconductor industry, but the money comes with a catch:

Companies seeking the funding opportunity authorized by The CHIPS and Science Act must provide affordable child care and limit stock buybacks, another other requirements.

White House spokeswoman Karine Jean-Pierre made the announcement at Monday’s White House press briefing, asserting that child care is undeniably necessary to “boost” the American workforce.

“Part of the solution to that is that the Commerce Department is going to require companies seeking substantial CHIPS funding to submit a robust childcare plan that reflects the needs of their workers’ communities where they plan to build,” Jean-Pierre said.

“The country needs more workers, especially women, in order to deliver on the President’s bold agenda. And we are committed to working with the private sector to ensure the CHIPS — the success of CHIPS for America and to unlock the full potential — the full potential of our economy. This is a major innovative step just to do that.”

The requirements for receiving taxpayer money are laid out in a “notice of funding opportunity.”

“So the goal here is to make a once-in-a-generation-size investment in our national security,” Commerce Secretary Gina Raimondo told MSNBC on Tuesday.

“Right now, we’re in a very vulnerable spot, in that we purchase 90 percent of our leading-edge chips from one company located in Taiwan, which is untenable, as the president has said. So this will allow America to make leading-edge chips in our country with American workers, which will enable ourselves to continue to lead the world in technology.”

As for the child care and stock buyback requirements, “It’s all about making sure that these companies are effective to meet the mission,” Raimondo said:

“So in order to build every one of these facilities, it will require maybe 7- or 8-thousand construction workers. The unemployment rate in the construction trades right now in some places is, you know, one percent, so we need to recruit women, otherwise they won’t be able to build these facilities on time or on budget. And that requires them to think about child care.

“The same thing for inside the facilities. You know, as President Biden said in his State of the Union, this will create over a hundred thousand good jobs in these facilities — technicians, engineers, designers. We have to upscale people, including women, which means child care.

“With respect to stock buybacks, these companies ought to be investing in research and development. We need to lead the world in technology…”

President Joe Biden frequently hails the bipartisan CHIPS and Science Act as one of his major legislative accomplishments, as he did a few days before the November 2022 election in Carlsbad, California:

“America invented the computer chip,” Biden said at the time. “[W]e led the industry for decades.  But then something happened…American companies went overseas for cheaper labor.  American manufacturing got hollowed out.”

Biden promised that The CHIPS and Science Act will “turn things around.”

“What I did, I contacted a number of the leading companies in the world — in the United States, and said, ‘Are you more inclined to invest in something you need if the federal government is making a significant investment?’  It’s not — it’s not state planning,” Biden said at the time. “‘Are you inclined to do that?'” Biden said he asked the companies. “And to a company, they said, ‘Yes.'”

The CHIPS and Science Act provides $52.7 billion for American semiconductor research, development, manufacturing, and “workforce development,” says a White House fact sheet.

“The bill requires recipients to demonstrate significant worker and community investments, including opportunities for small businesses and disadvantaged communities, ensuring semiconductor incentives support equitable economic growth and development.

“These funds also come with strong guardrails, ensuring that recipients do not build certain facilities in China and other countries of concern, and preventing companies from using taxpayer funds for stock buybacks and shareholder dividends. It will also support good-paying, union construction jobs by requiring Davis-Bacon prevailing wage rates for facilities built with CHIPS funding.”

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