Illustration: Aïda Amer/Axios
There's a lot of talk around the CHIPS and Science Act's future, but there's only so much lawmakers can do.
Why it matters: President-elect Trump called out the law as "so bad" during the campaign, and there's a general sentiment among Republicans that government spending needs to go down.
- Commerce Secretary Gina Raimondo has long said she aims to allocate all or nearly all the money this year.
- But Congress is far from realizing other big goals in the law and is fielding calls to secure domestic manufacturing in additional ways.
Here's what will be on Congress' radar next year when it comes to CHIPS.
1. Manufacturing appropriations
Lawmakers have already appropriated $39 billion for chips manufacturing between FY2022 and FY2026.
- The Commerce Department has finalized three awards so far to Polar Semiconductor, TSMC and GlobalFoundries.
- Those awards are binding contracts and rescinding funding would require an act of Congress or the company to not be in compliance with the contract, according to the Commerce Department.
What they're saying: Sen. Deb Fischer said she's waiting to see how Trump's Commerce nominee Howard Lutnick would impact CHIPS implementation.
- It's premature to be concerned that the law won't get any more funding, she said, adding that "we got a lot of time."
2. Tax credit
Industry is looking for Congress to extend the CHIPS investment tax credit, saying it would be more beneficial to the semiconductor sector than CHIPS grants because it would apply more broadly across companies.
- Industry association SEMI's public policy vice president John Cooney said lawmakers are "highly attentive" to this issue, but concerns about the price tag remain.
- One estimate is extending the credit would cost $4 billion-$5 billion over five years. If that projection holds, Cooney said lawmakers could find that worthwhile.
- Sens. Marsha Blackburn and Michael Bennett introduced an NDAA amendment that would expand the Treasury Department's tax code interpretation of the ITC to include all relevant chips manufacturing materials and equipment.
- The amendment has not made it into the annual defense policy bill, and SEMI believes it's no longer in play, setting up a debate for next year.
3. Science appropriations
Congress is projected to be more than $40 billion behind through FY2027 in meeting the science authorizations of CHIPS.
- A Republican sweep of Congress and an incoming administration focused on slashing the government will make it difficult to meet the authorization goals.
- But Trump in his first term spearheaded the "Industries of the Future" initiative, which focused on AI, quantum, and advanced manufacturing, and he nominated current NSF director Sethuraman Panchanathan.
- Research groups are in a wait-and-see mode on whether science and tech will be prioritized over the next four years.
- "Congress approved CHIPS and Science in 2022 as a visionary, bipartisan way to keep the United States at the forefront of global scientific research and innovation – but we've failed to appropriate funds to achieve that vision," Matt Hourihan, associate vice president for government relations and public policy at the Associated of American Universities, said in a statement.
- "To compete for the future, we've got to invest in science."
What we're watching: We'll be watching two key threads — how Commerce will handle implementation and how Republican lawmakers will balance the benefits of investments in their districts with Trump's rhetoric.
