At a time of massive income and wealth inequality, the American people are sick and they are tired of the unprecedented level of corporate greed that is taking place from one end of this country to the next.
They are sick and tired of paying outrageously high prices at the gas pump and at the grocery store while the oil companies and the food companies are seeing profits at an all-time high.
They are sick and they are tired of struggling to pay for the basic necessities of life while 700 billionaires in our country became $2 trillion richer during the pandemic.
They are sick and tired of CEOs making 350 times more than the average worker, while over half of our people live paycheck to paycheck.
They are sick and they are tired of seeing multi-billionaires like Elon Musk, Jeff Bezos and Richard Branson taking joy rides to outer space, buying $500 million super-yachts and living in mansions with 25 bathrooms when some 600,000 people are homeless in America.
They want Congress to address corporate greed and make sure that the wealthiest people and most profitable corporations pay their fair share of taxes.
The last poll that I saw had Congress with a 16% approval rating. This to me is shocking, really shocking. And I suspect it has to do with the fact that the 16% are not yet fully aware of what Congress is doing.
So what is Congress doing? For nearly two months, a 107-member conference committee has been meeting behind closed doors to provide over $50 billion in corporate welfare with no strings attached to the highly profitable micro-chip industry.
And yes, if you can believe it, this legislation may also provide a $10 billion bailout to Jeff Bezos so that his company Blue Origin can launch a rocket ship to the moon.
For all of my friends who tell us how concerned they are about the deficit, how we cannot fund the needs of our children, how we can’t fund the needs of our seniors, a $53 billion blank check to some of the most profitable corporations in America and a $10 billion bailout to the second wealthiest person in our country is an absolute outrage. It is why the American people today have such low regard for Congress.
There is no doubt that there is a global shortage in microchips and semiconductors which is making it harder for manufacturers to produce the cars, cell phones and electronic equipment that we need. This shortage is costing American workers good jobs and raising prices for families. That is why I fully support efforts to expand U.S. microchip production.
But the question we should be asking is this: Should American taxpayers provide the micro-chip industry with a blank check of over $50 billion at a time when semiconductor companies are making tens of billions of dollars in profits and paying their executives exorbitant compensation packages? I think the answer to that question should be a resounding NO.
Let’s review some recent history. Over the last 20 years, the micro-chip industry has shut down over 780 manufacturing plants in the United States and eliminated 150,000 American jobs while moving most of its production overseas after receiving over $9.5 billion in government subsidies and loans.
In other words, in order to make more profits, these companies took government money and used it to ship good-paying jobs abroad. Now, as a reward for that bad behavior, these same companies are in line to receive a massive taxpayer handout to undo the damage that they did. That may make sense to someone. It does not make sense to me.
In total, it has been estimated that 5 major semi-conductor companies will receive the lion’s share of this taxpayer handout: Intel, Texas Instruments, Micron Technology, Global Foundries, and Samsung. These 5 companies made $70 billion in profits last year.
The company that will likely benefit the most from this taxpayer assistance is Intel. I have nothing against Intel. I wish them well. But, let’s be clear. Intel is not a poor company. It is not going broke.
In 2021, Intel made nearly $20 billion in profits. During the pandemic, Intel had enough money to spend $16.6 billion, not on research and development, but on buying back its own stock to reward its executives and wealthy shareholders.
Last year, Intel could afford to give its CEO, Pat Gelsinger, a $179 million compensation package. Over the past 20 years, Intel spent over $100 million on lobbying and campaign contributions while shipping thousands of jobs to China and other low-income countries. Does it sound like this company really needs corporate welfare?
Another company that would receive taxpayer assistance under this legislation is Texas Instruments. Last year, Texas Instruments made $7.8 billion in profits. In 2020, this company spent $2.5 billion buying back its own stock while it has outsourced thousands of good-paying American jobs to low-wage countries.
Who else is in line to receive corporate welfare under this bill?
Well, how about the Taiwan Semiconductor Manufacturing Company (TSMC)? It is in line to potentially receive billions of dollars in federal grants under this bill.
Guess who the largest shareholder of TSMC is? Well, if you guessed the Government of Taiwan you would be correct – which should come as no surprise to anybody who studies how other countries throughout the world conduct industrial policy.
So let’s be clear: When we provide TSMC money, we are giving that taxpayer money directly to the Government of Taiwan.
Samsung, another very large corporate entity from South Korea is also in line to receive federal funding under this bill.
In other words, not only would this bill be providing corporate welfare to profitable American corporations, but we would literally be handing over U.S. taxpayer dollars to corporations that are owned or controlled by other countries.
And on and on it goes.
Let me be clear. I believe in industrial policy. I believe that it makes sense, in certain occasions, for the government and the private sector to work together to address a pressing need in America.
Industrial policy to me means cooperation between the government and the private sector. Cooperation. It does not mean the government providing massive amounts of corporate welfare to profitable corporations without getting anything in return.
The question is will the United States government develop an industrial policy that benefits all of our society, or will we continue to have an industrial policy that benefits the wealthy and the powerful?
In 1968, Dr. Martin Luther King, Jr. said: “The problem is that we all too often have socialism for the rich and rugged free enterprise capitalism for the poor.”
I am afraid what Dr. King said 54 years ago was accurate back then and it is even more accurate today.
We have heard a lot of talk in the halls of Congress about the need to create public-private partnerships – and that all sounds very good. But when the government adopts an industrial policy that socializes all of the risk and privatizes all of the profits that’s not a partnership. That is crony capitalism.
Some of my colleagues make the point that the microchip industry is enormously important for our economy and that we must become less dependent on foreign nations for micro-chips. I agree. There is no argument about that. But we can and must accomplish that goal without simply throwing money at these companies while the taxpayer gets nothing in return.
In my view, we must prevent microchip companies from receiving taxpayer assistance unless they agree to issue warrants or equity stakes to the Federal Government.
If private companies are going to benefit from generous taxpayer subsidies, the financial gains made by these companies must be shared with the American people, not just wealthy shareholders. In other words, if micro-chip companies make a profit as a direct result of these federal grants, the taxpayers of this country have a right to get a reasonable return on that investment.
Further, if micro-chip companies receive taxpayer assistance, they must agree that they will not buy back their own stock, outsource American jobs overseas, repeal existing collective bargaining agreements and must remain neutral in any union organizing effort.
This is not a radical idea. All of these conditions were imposed on companies that received taxpayer assistance during the pandemic and passed the Senate by a vote of 96-0.
Bottom line: Let us rebuild the U.S. microchip industry, but let’s do it in a way that benefits all of our society, not just a handful of wealthy, profitable and powerful corporations.
Moreover, I know this may be a radical idea in the halls of Congress, but no. I do not believe that the USICA conference committee should approve a $10 billion bailout for Jeff Bezos to fly to the moon. If Mr. Bezos wants to go to the moon, good for him. He has $138 billion in personal wealth. He became $33 billion richer during the pandemic. He is the second richest person in America. And, in a given year, Mr. Bezos has paid nothing in federal income taxes.
If he wants to go to the moon, let him use his own money, not U.S. taxpayers. The House did the right thing by not providing Jeff Bezos with a $10 billion bailout in its version of USICA. The conference committee should follow the House’s lead on that issue.
This is adapted from Senator Sanders’s senate floor speech.