Biden’s Semiconductor Success Faces Declining Support as Funding Disbursement Approaches
The $39 billion high-tech subsidy plan was intended to include safeguards. However, progressives are concerned that those protections are eroding right before them.
TroibNews 
Progressives and pro-labor Democrats are growing increasingly disillusioned with President Joe Biden’s CHIPS and Science Act, as the administration appears to be relaxing some of the environmental and transparency requirements originally tied to its $39 billion in subsidies.
This 2022 legislation is a landmark industrial policy aimed at enhancing the American high-tech sector by investing in semiconductor manufacturing. To garner support from fellow Democrats, the Biden administration committed to implementing a robust set of environmental regulations, worker protections, and public reporting obligations.
However, in early October, Biden enacted a law revoking a crucial environmental review standard that businesses were supposed to adhere to. Furthermore, the first significant award — $123 million allocated to the Minnesota-based chipmaker Polar Semiconductor — was issued under sealed terms, prompting concerns among early advocates that tech firms could operate without adequate public oversight.
With former President Donald Trump criticizing the CHIPS program during a recent interview, this Biden initiative now faces opposition from a potential future president who could fundamentally alter its administration. Republican House Speaker Mike Johnson indicated on Friday that if Trump regains the presidency and the GOP takes control of Congress, they might seek to dismantle rules perceived as unfavorable to the industry.
Criticism from both sides highlights uncertainties surrounding one of the president's key long-term policy initiatives.
“Whatever the administration does, it’ll be inadequate,” warned Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics and former top Treasury official, anticipating backlash from both mainstream Democrats and progressives as the law unfolds.
The CHIPS Act exemplifies the challenges of managing a major industry-building policy. The Biden administration is attempting to reconcile the fast pace of the business world with an intricate network of political and policy priorities, resulting in widespread dissatisfaction among all stakeholders. This has led to unfulfilled commitments and a clear disconnect between their envisioned industrial policy and the practical outcomes.
“We have two very different visions of what we believe an American investment into an industry should meet,” said Rep. Donald Norcross, a Labor Caucus co-chair, indicating the clash between industry interests and Democratic objectives.
Among Democrats, frustrations are already surfacing. Norcross, alongside three other Democratic Labor Caucus leaders, sent a pointed letter to Commerce Secretary Gina Raimondo on October 10, expressing disappointment that the Polar award “falls short of the Biden-Harris Administration’s vision for the CHIPS Act” and lacking the strong labor standards they have advocated for over the past two years.
The following day, Senators Elizabeth Warren, Bernie Sanders, and Ed Markey sent their own letter to Raimondo demanding access to details of the agreements with chipmakers regarding job quality, wages, worker health and safety, environmental impacts, and stock buybacks.
“Commerce’s lack of transparency raises serious concerns about how it’s managing this massive public investment,” Warren stated to PMG.
Chipmakers have also begun voicing their grievances, claiming that the government is prolonging the award process with continual negotiations over policy conditions.
“The journey to receive grants has taken much longer and been more complicated than we expected,” said Ganesh Moorthy, CEO of Microchip Technology, to PMG this fall. While his company’s preliminary grant was approved in January, Moorthy noted that he is still negotiating for the funds 10 months later, partly due to conflicting opinions among different federal agencies.
A spokesperson from the Department of Commerce defended the program, asserting that it is proceeding quickly while maintaining a “rigorous approach” in negotiations.
In an October 18 interview, a Biden administration official acknowledged the industry's frustrations but argued that such challenges indicate government negotiators are upholding high standards. Many deals, the official noted, are “on the closing stretch.”
“There are understandably a lot of participants at the company level that want to close the deal faster or get the money faster,” the official remarked. “I think it's a hallmark of a good program that we have a really strong team at the Department of Commerce that's vigorously negotiating on behalf of U.S. taxpayers.”
Given its size and budget, the CHIPS and Science Act represents an extraordinary intervention by Washington into industrial policy — a concerted effort to revitalize a single industry for economic and national security purposes. The law responds to the reality that a significant segment of the $500 billion global semiconductor market has migrated offshore, aiming to reverse this trend.
To secure progressive support for the bill in 2022, Biden required their backing. Commerce Secretary Gina Raimondo garnered their votes by introducing regulatory safeguards designed to prevent misuse of taxpayer funds by corporations. The legislation already prohibited beneficiaries from making significant expansions in China or specifically using the subsidies for stock buybacks or shareholder payouts. The updated guidelines indicated the agency would prioritize companies committed to innovation, workers, and local communities.
Progressives regarded this agreement as a significant victory. “It’s the strongest language we've ever been able to get” in federal grant making for domestic manufacturing, remarked Progressive Caucus Chair Pramila Jayapal in an interview. The bill passed with overwhelming support from Democrats.
As the CHIPS subsidy program progressed, Congressional Democrats sought to maintain pressure. More than 180 members signed a letter to Raimondo in 2023, urging her to enforce robust workforce and accountability conditions linked to company payouts. This February, over 120 members signed another letter advocating for stringent labor standards, prompting the department to brief Labor Caucus staff on its initiatives.
Initially, it appeared the deal was holding firm. When the Commerce Department allowed chipmakers to begin applying for funding last year, it specified that businesses would have to comply with wage standards under the Davis-Bacon Act. Larger applicants seeking over $150 million faced additional expectations related to providing childcare for employees and profit-sharing with the government.
However, these safeguards began to erode as actual negotiations commenced. To date, the Biden administration has announced 20 preliminary grants to companies, totaling more than $36 billion. Each of these grants has resulted in individual negotiations and due diligence with the companies involved, extending up to ten months for chipmakers, with only the Polar deal finalized so far. The particulars regarding labor, environmental, and financial stipulations of that agreement remain concealed within a private contract that the government will not disclose.
During a September call with reporters discussing the Polar award, the administration justified its choice to keep contract language confidential, citing the inclusion of “business confidential information.”
Jayapal mentioned that her staff received a briefing on the Polar contract but could only view a single sentence concerning stock buybacks.
“If the department is actually trying to implement the conditions that we agreed to, we need to know about it,” she stated.
A subsequent regulatory battle was won by the companies in October, further troubling progressives.
Under existing federal law, CHIPS-funded construction projects were required to undergo a thorough environmental impact review under the long-standing National Environmental Policy Act — a stipulation that was unappealing to both the chip industry and its advocates in Congress.
As the government readied to review applications in 2023, Senators Mark Kelly and Ted Cruz introduced legislation to exempt certain projects from NEPA review. Congress passed this measure in September, with President Biden promptly signing it into law, despite public outcry from some Democratic committee leaders and numerous environmental and public health groups. Now, depending on the specifics of their grants, some CHIPS projects will no longer need to go through the NEPA process.
In response, concerned advocates have begun emphasizing the necessity for transparency in individual CHIPS agreements. Public access to these contracts, they believe, remains the “last existing lever” for the public to influence the impact of new chip manufacturing facilities, argued Harry Manin, deputy legislative director for industrial policy at the Sierra Club.
In this instance, transparency was not merely an abstract promise: The Commerce Department’s own guidelines for CHIPS Act applications require companies to submit workforce development plans that “must include” processes for “reporting publicly on the goals and commitments” and committing to “make data publicly available” in some capacity.
However, when the Polar award was announced in late September, it included none of that information, which incensed leading progressives in the Senate, prompting their letter mid-October.
“Congress charged Secretary Raimondo with overseeing billions of dollars in CHIPS grants — that means ensuring those taxpayer dollars go toward good jobs, not stock buybacks,” Warren stated in an emailed message to PMG. “The Department has made some big promises, but the devil is in the details.”
A spokesperson from the Commerce Department responded by stating that the agency has been attentive to many concerns raised by lawmakers. “Our team has worked tirelessly for more than two years meeting with Congressional offices and a diverse set of stakeholders, holding hundreds of meetings and briefings with representatives from industry, labor, and environmental groups and more,” the spokesperson noted.
Administration officials also expressed intentions to provide greater transparency to Congress and the public, though specifics are still being finalized, leaving doubts about whether these steps will meet the expectations of disappointed lawmakers.
“The Commerce Department still very much intends to release publicly some level of reporting because I think they want to share what they feel like is going to be a huge success in creating high-quality jobs,” said one administration official. This official added that “the exact form of how that is communicated is still being figured out,” and cautioned that the first award should not be perceived as “indicative of how the rest of the program goes ahead.”
Another administration official indicated that discussions regarding the pay and working conditions of new CHIPS jobs are ongoing, but warned it is premature to evaluate their quality: “Of course, most of them don't exist yet.”
The Commerce Department referred PMG to multiple examples of environmental and worker safety commitments it intends to ultimately include in CHIPS award agreements. These may encompass measures to reduce carbon emissions, utilize renewable energy, safely manage toxic substances, and create platforms for discussing worker safety issues.
The agency did not clarify whether it would share contracts or additional details publicly to reveal which requirements are factored into individual agreements.
With only the single CHIPS award formally finalized, the vast majority of the funds for manufacturing will be allocated under a new administration — possibly even a different political party.
Trump and Vice President Kamala Harris hold distinctly different views on strategies to enhance the economy, safeguard American trade, and generate new manufacturing jobs. Harris supports Biden’s industrial framework, while Trump contends that tariff increases and income tax reductions represent the most effective means to bolster domestic manufacturing.
On Monday, Harris made her most prominent campaign effort centered around the CHIPS Act, visiting the Hemlock Semiconductor factory — a Michigan chip supplier set to receive $325 million under the law. She seized the opportunity to highlight her own record in manufacturing and expressed gratitude to the chip workers for being “a source of my optimism,” while criticizing Trump for his recent attacks on the policy.
During a nearly three-hour appearance on the “The Joe Rogan Experience” podcast on Friday, Trump denounced the CHIPS Act, stating, “That chip deal is so bad. We put up billions of dollars for rich companies.”
The GOP presidential candidate claimed that Washington could have attracted investments in the semiconductor industry more effectively by implementing tariffs “so high that they will come and build their chip companies for nothing.”
Despite Trump’s criticisms, the CHIPS and Science Act remains law, and tens of billions of dollars are anticipated to flow to chipmakers. Progressives express concern that a Trump administration would impose even fewer restrictions on the funding, and while they have grievances regarding the current administration, they understand whom they would prefer to negotiate with.
“Hopefully, we're going to win in November, and we're going to have a continued chance to continue to make sure that we are achieving what we actually want to achieve with taxpayer dollars,” Jayapal stated.
Unlike Trump, even skeptical Democrats continue to support the law; they simply demand its implementation on their terms. While aiming to ensure that labor standards are upheld, Rep. Debbie Dingell underscored the necessity of keeping progress moving. In her view, the award for Hemlock took “too long.” “We need to get these deals done,” Dingell said.
In 2025, a broader array of issues will be at stake in Congress for tech companies than just the disbursement of CHIPS funds. A significant portion of Trump’s 2017 tax cuts is scheduled to expire next year, and the industry is advocating for Congress to extend and expand the generous tax incentives included in the CHIPS and Science Act. To achieve this, they will require Democratic support.
“Will the progressive Democrats object in 2026 to an extension of the credit? That could be a big issue if Harris wins, and it could also be an issue for Trump,” Hufbauer speculated.
Several legislators indicated that issues of transparency and corporate accountability are critical enough to potentially derail a new round of support for the chip industry.
Rep. Mark Pocan raised concerns about the risk of repeating the failed Foxconn project in his state, where the company broke its commitments to taxpayers and negotiated down its performance metrics. “The companies, they're trying to obviously work this in a way that they have the least extra work in order to get the funding,” he said. “It’s hard to ask for tax credits if you haven't proven that they work.”
“I would certainly think by the time that the election results are announced, that both sides will understand we have to get this done quickly,” stated Norcross. “Let's be absolutely clear, unless we get this aligned with both what is important to the taxpayer, to the workers and to the company, I would be very hesitant from taking another step forward.”
James del Carmen contributed to this report for TROIB News
This 2022 legislation is a landmark industrial policy aimed at enhancing the American high-tech sector by investing in semiconductor manufacturing. To garner support from fellow Democrats, the Biden administration committed to implementing a robust set of environmental regulations, worker protections, and public reporting obligations.
However, in early October, Biden enacted a law revoking a crucial environmental review standard that businesses were supposed to adhere to. Furthermore, the first significant award — $123 million allocated to the Minnesota-based chipmaker Polar Semiconductor — was issued under sealed terms, prompting concerns among early advocates that tech firms could operate without adequate public oversight.
With former President Donald Trump criticizing the CHIPS program during a recent interview, this Biden initiative now faces opposition from a potential future president who could fundamentally alter its administration. Republican House Speaker Mike Johnson indicated on Friday that if Trump regains the presidency and the GOP takes control of Congress, they might seek to dismantle rules perceived as unfavorable to the industry.
Criticism from both sides highlights uncertainties surrounding one of the president's key long-term policy initiatives.
“Whatever the administration does, it’ll be inadequate,” warned Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics and former top Treasury official, anticipating backlash from both mainstream Democrats and progressives as the law unfolds.
The CHIPS Act exemplifies the challenges of managing a major industry-building policy. The Biden administration is attempting to reconcile the fast pace of the business world with an intricate network of political and policy priorities, resulting in widespread dissatisfaction among all stakeholders. This has led to unfulfilled commitments and a clear disconnect between their envisioned industrial policy and the practical outcomes.
“We have two very different visions of what we believe an American investment into an industry should meet,” said Rep. Donald Norcross, a Labor Caucus co-chair, indicating the clash between industry interests and Democratic objectives.
Among Democrats, frustrations are already surfacing. Norcross, alongside three other Democratic Labor Caucus leaders, sent a pointed letter to Commerce Secretary Gina Raimondo on October 10, expressing disappointment that the Polar award “falls short of the Biden-Harris Administration’s vision for the CHIPS Act” and lacking the strong labor standards they have advocated for over the past two years.
The following day, Senators Elizabeth Warren, Bernie Sanders, and Ed Markey sent their own letter to Raimondo demanding access to details of the agreements with chipmakers regarding job quality, wages, worker health and safety, environmental impacts, and stock buybacks.
“Commerce’s lack of transparency raises serious concerns about how it’s managing this massive public investment,” Warren stated to PMG.
Chipmakers have also begun voicing their grievances, claiming that the government is prolonging the award process with continual negotiations over policy conditions.
“The journey to receive grants has taken much longer and been more complicated than we expected,” said Ganesh Moorthy, CEO of Microchip Technology, to PMG this fall. While his company’s preliminary grant was approved in January, Moorthy noted that he is still negotiating for the funds 10 months later, partly due to conflicting opinions among different federal agencies.
A spokesperson from the Department of Commerce defended the program, asserting that it is proceeding quickly while maintaining a “rigorous approach” in negotiations.
In an October 18 interview, a Biden administration official acknowledged the industry's frustrations but argued that such challenges indicate government negotiators are upholding high standards. Many deals, the official noted, are “on the closing stretch.”
“There are understandably a lot of participants at the company level that want to close the deal faster or get the money faster,” the official remarked. “I think it's a hallmark of a good program that we have a really strong team at the Department of Commerce that's vigorously negotiating on behalf of U.S. taxpayers.”
Given its size and budget, the CHIPS and Science Act represents an extraordinary intervention by Washington into industrial policy — a concerted effort to revitalize a single industry for economic and national security purposes. The law responds to the reality that a significant segment of the $500 billion global semiconductor market has migrated offshore, aiming to reverse this trend.
To secure progressive support for the bill in 2022, Biden required their backing. Commerce Secretary Gina Raimondo garnered their votes by introducing regulatory safeguards designed to prevent misuse of taxpayer funds by corporations. The legislation already prohibited beneficiaries from making significant expansions in China or specifically using the subsidies for stock buybacks or shareholder payouts. The updated guidelines indicated the agency would prioritize companies committed to innovation, workers, and local communities.
Progressives regarded this agreement as a significant victory. “It’s the strongest language we've ever been able to get” in federal grant making for domestic manufacturing, remarked Progressive Caucus Chair Pramila Jayapal in an interview. The bill passed with overwhelming support from Democrats.
As the CHIPS subsidy program progressed, Congressional Democrats sought to maintain pressure. More than 180 members signed a letter to Raimondo in 2023, urging her to enforce robust workforce and accountability conditions linked to company payouts. This February, over 120 members signed another letter advocating for stringent labor standards, prompting the department to brief Labor Caucus staff on its initiatives.
Initially, it appeared the deal was holding firm. When the Commerce Department allowed chipmakers to begin applying for funding last year, it specified that businesses would have to comply with wage standards under the Davis-Bacon Act. Larger applicants seeking over $150 million faced additional expectations related to providing childcare for employees and profit-sharing with the government.
However, these safeguards began to erode as actual negotiations commenced. To date, the Biden administration has announced 20 preliminary grants to companies, totaling more than $36 billion. Each of these grants has resulted in individual negotiations and due diligence with the companies involved, extending up to ten months for chipmakers, with only the Polar deal finalized so far. The particulars regarding labor, environmental, and financial stipulations of that agreement remain concealed within a private contract that the government will not disclose.
During a September call with reporters discussing the Polar award, the administration justified its choice to keep contract language confidential, citing the inclusion of “business confidential information.”
Jayapal mentioned that her staff received a briefing on the Polar contract but could only view a single sentence concerning stock buybacks.
“If the department is actually trying to implement the conditions that we agreed to, we need to know about it,” she stated.
A subsequent regulatory battle was won by the companies in October, further troubling progressives.
Under existing federal law, CHIPS-funded construction projects were required to undergo a thorough environmental impact review under the long-standing National Environmental Policy Act — a stipulation that was unappealing to both the chip industry and its advocates in Congress.
As the government readied to review applications in 2023, Senators Mark Kelly and Ted Cruz introduced legislation to exempt certain projects from NEPA review. Congress passed this measure in September, with President Biden promptly signing it into law, despite public outcry from some Democratic committee leaders and numerous environmental and public health groups. Now, depending on the specifics of their grants, some CHIPS projects will no longer need to go through the NEPA process.
In response, concerned advocates have begun emphasizing the necessity for transparency in individual CHIPS agreements. Public access to these contracts, they believe, remains the “last existing lever” for the public to influence the impact of new chip manufacturing facilities, argued Harry Manin, deputy legislative director for industrial policy at the Sierra Club.
In this instance, transparency was not merely an abstract promise: The Commerce Department’s own guidelines for CHIPS Act applications require companies to submit workforce development plans that “must include” processes for “reporting publicly on the goals and commitments” and committing to “make data publicly available” in some capacity.
However, when the Polar award was announced in late September, it included none of that information, which incensed leading progressives in the Senate, prompting their letter mid-October.
“Congress charged Secretary Raimondo with overseeing billions of dollars in CHIPS grants — that means ensuring those taxpayer dollars go toward good jobs, not stock buybacks,” Warren stated in an emailed message to PMG. “The Department has made some big promises, but the devil is in the details.”
A spokesperson from the Commerce Department responded by stating that the agency has been attentive to many concerns raised by lawmakers. “Our team has worked tirelessly for more than two years meeting with Congressional offices and a diverse set of stakeholders, holding hundreds of meetings and briefings with representatives from industry, labor, and environmental groups and more,” the spokesperson noted.
Administration officials also expressed intentions to provide greater transparency to Congress and the public, though specifics are still being finalized, leaving doubts about whether these steps will meet the expectations of disappointed lawmakers.
“The Commerce Department still very much intends to release publicly some level of reporting because I think they want to share what they feel like is going to be a huge success in creating high-quality jobs,” said one administration official. This official added that “the exact form of how that is communicated is still being figured out,” and cautioned that the first award should not be perceived as “indicative of how the rest of the program goes ahead.”
Another administration official indicated that discussions regarding the pay and working conditions of new CHIPS jobs are ongoing, but warned it is premature to evaluate their quality: “Of course, most of them don't exist yet.”
The Commerce Department referred PMG to multiple examples of environmental and worker safety commitments it intends to ultimately include in CHIPS award agreements. These may encompass measures to reduce carbon emissions, utilize renewable energy, safely manage toxic substances, and create platforms for discussing worker safety issues.
The agency did not clarify whether it would share contracts or additional details publicly to reveal which requirements are factored into individual agreements.
With only the single CHIPS award formally finalized, the vast majority of the funds for manufacturing will be allocated under a new administration — possibly even a different political party.
Trump and Vice President Kamala Harris hold distinctly different views on strategies to enhance the economy, safeguard American trade, and generate new manufacturing jobs. Harris supports Biden’s industrial framework, while Trump contends that tariff increases and income tax reductions represent the most effective means to bolster domestic manufacturing.
On Monday, Harris made her most prominent campaign effort centered around the CHIPS Act, visiting the Hemlock Semiconductor factory — a Michigan chip supplier set to receive $325 million under the law. She seized the opportunity to highlight her own record in manufacturing and expressed gratitude to the chip workers for being “a source of my optimism,” while criticizing Trump for his recent attacks on the policy.
During a nearly three-hour appearance on the “The Joe Rogan Experience” podcast on Friday, Trump denounced the CHIPS Act, stating, “That chip deal is so bad. We put up billions of dollars for rich companies.”
The GOP presidential candidate claimed that Washington could have attracted investments in the semiconductor industry more effectively by implementing tariffs “so high that they will come and build their chip companies for nothing.”
Despite Trump’s criticisms, the CHIPS and Science Act remains law, and tens of billions of dollars are anticipated to flow to chipmakers. Progressives express concern that a Trump administration would impose even fewer restrictions on the funding, and while they have grievances regarding the current administration, they understand whom they would prefer to negotiate with.
“Hopefully, we're going to win in November, and we're going to have a continued chance to continue to make sure that we are achieving what we actually want to achieve with taxpayer dollars,” Jayapal stated.
Unlike Trump, even skeptical Democrats continue to support the law; they simply demand its implementation on their terms. While aiming to ensure that labor standards are upheld, Rep. Debbie Dingell underscored the necessity of keeping progress moving. In her view, the award for Hemlock took “too long.” “We need to get these deals done,” Dingell said.
In 2025, a broader array of issues will be at stake in Congress for tech companies than just the disbursement of CHIPS funds. A significant portion of Trump’s 2017 tax cuts is scheduled to expire next year, and the industry is advocating for Congress to extend and expand the generous tax incentives included in the CHIPS and Science Act. To achieve this, they will require Democratic support.
“Will the progressive Democrats object in 2026 to an extension of the credit? That could be a big issue if Harris wins, and it could also be an issue for Trump,” Hufbauer speculated.
Several legislators indicated that issues of transparency and corporate accountability are critical enough to potentially derail a new round of support for the chip industry.
Rep. Mark Pocan raised concerns about the risk of repeating the failed Foxconn project in his state, where the company broke its commitments to taxpayers and negotiated down its performance metrics. “The companies, they're trying to obviously work this in a way that they have the least extra work in order to get the funding,” he said. “It’s hard to ask for tax credits if you haven't proven that they work.”
“I would certainly think by the time that the election results are announced, that both sides will understand we have to get this done quickly,” stated Norcross. “Let's be absolutely clear, unless we get this aligned with both what is important to the taxpayer, to the workers and to the company, I would be very hesitant from taking another step forward.”
James del Carmen contributed to this report for TROIB News
