Bipartisan support still might not save chips funding
Hello, and welcome to Protocol Policy! Today, we scrutinize why the United States Innovation and Competition Act is no longer a sure thing, even though the semiconductor manufacturing subsidy in it has strong bipartisan support. Also, we pull out highlights from the trove of internal Uber documents released by The Guardian and look at the next stage in the Elon-Twitter saga: lawyers, and lots of them.
Congressional Democrats need a signature legislative win ahead of the midterms, and the United States Innovation and Competition Act could be exactly that.
- The bill includes $52 billion in subsidies for domestic chip manufacturing.
- Chipmakers including Intel, Samsung and TSMC have forged ahead with plans to build fabrication facilities in the U.S., trusting that Congress will eventually sort things out and pass the bill.
Meanwhile, Senate Majority Leader Chuck Schumer is forging ahead with an ambitious legislative agenda that includes USICA and a new version of the failed Build Back Better bill.
- The resurrected Build Back Better deal is expected to introduce prescription drug pricing reforms, extend Affordable Care Act subsidies, raise some taxes and provide as much as $300 billion in subsidies for green energy initiatives.
- Further complicating things, Democrats also face pressure to make good on long-awaited promises to pass their tech antitrust bills and to codify the now-defunct Roe v. Wade’s abortion protections into law.
But with Congress currently suspended for a tense July recess, the USICA no longer seems to be a sure thing. The House and Senate both already passed versions of the bill, but with major differences in partisan slants:
- The House’s Competes Act passed with only one Republican vote in February.
- The Senate USICA bill passed with a healthy bipartisan coalition of 68 votes at the end of March.
- Only the House version of the bill includes a renewal of trade adjustment assistance programs and plans to expand the immigration system for high-skilled tech workers. The proposed immigration reforms exempt foreign-born workers with doctoral degrees in STEM fields from annual green-card limits that often force them to leave the U.S.
And Senate Minority Leader Mitch McConnell won’t let the Democrats off easy. He understands their need for a legislative win and intends to use it against them. At the end of June, he tweeted: “Let me be perfectly clear: there will be no bipartisan USICA as long as Democrats are pursuing a partisan reconciliation bill.”
The chip industry has a backup plan: get the subsidies stripped out and passed on their own. “What could happen from all this is that you wind up getting nothing,” IBM vice president of government and regulatory affairs Chris Padilla told Protocol. He added that as Congress nears the end of the session, “everything gets linked to everything else — and then what you get usually is a grand bargain or nothing.”
The industry also warns that timing is critical. The chip industry and its champions in government have argued that nations such as Japan, Germany and France will lure chipmakers away from the U.S. with their own subsidy packages, which are already on the table.
- “Mark my words ... If Labor Day comes and goes and this Chips Act isn't passed by Congress, these companies will not wait, and they will expand in other countries,” Commerce Department Secretary Gina Raimondo warned at the end of June.
Congress is feeling the pressure. “We cannot continue to blow by deadline after deadline for a bill to create thousands of good, paying jobs and ensure the United States remains competitive with China,” Rep. Ro Khanna, one of the bill’s co-sponsors, told Protocol. Khanna added that it is critical for Congress to get a bipartisan innovation bill to President Biden’s desk by the end of August.
“I hope to bring a bipartisan, bicameral bill to the floor before the August District Work Period,” House Majority Leader Steny Hoyer told Protocol. “I’ve been urging my colleagues on the Conference Committee to move swiftly and settle differences between the House and Senate as soon as possible,” Hoyer added.— Hirsh Chitkara (email | twitter)
The Guardian has obtained a leak of nearly 125,000 documents from within Uber, revealing how, under Travis Kalanick, the company courted international leaders, foiled government investigators with tech tricks and stood by amid violence against Uber drivers.
Among the revelations from the documents, which have been shared with an international consortium of journalists:
- As part of Uber’s search for allies, David Plouffe, the former Obama campaign manager who had joined the company, reached out to U.S. ambassadors in countries where Uber was facing tough battles. Jim Messina, another top Obama alumnus who was consulting for the company, seems to have offered to plead its case before the leaders of Spain, Italy and other countries.
- The stories detail the extent of Uber’s use of a “kill switch” that would cut off access to the company’s internal networks by computers in offices that international investigators were raiding. Uber also sought to block access to rides subtly in the areas around certain government buildings as a way to deter probes.
In the courts
Musk officially wants out of his bid for Twitter, no matter pesky details — like the contract he signed promising to go through with the deal. The drama is eventually going to end in court, as board chair Bret Taylor promised. Twitter is in fact already lawyering up, according to Bloomberg, and planning to launch a lawsuit in Delaware within days, backed by powerhouse firm Wachtell, Lipton, Rosen & Katz.
Google has reportedly proposed spinning off parts of its ad tech business: but by spinning off, the company apparently just means making the business line into a separate unit of Alphabet. No word yet on whether changing the letterhead, but ultimately not the top leadership, will assuage federal antitrust enforcers who are considering suing Google over its position in ad tech.
A MESSAGE FROM GOOGLE PLAY
Google Play connects apps and games businesses of all sizes with over 2.5 billion Android users worldwide. And to fuel growth for developers, 99% of apps and games businesses are eligible for a service fee of 15% or less on Google Play.
The Fed’s vice chair, Lael Brainard, said the crypto crash shows an “urgent need" for regulation of the sector. Brainard told a conference in London that digital assets are "susceptible to the same risks that are all too familiar from traditional finance.”
The House Oversight Committee sent letters to 10 companies seeking information on the sale of reproductive health data. Although the committee’s expertise doesn’t lie in health or tech, it has broad investigative powers, and it demanded answers within days. The companies on the list included five data brokers and five apps.
SpaceX pushed its customers to weigh in with the FCC on an obscure spectrum issue that has pitted the company against Dish, according to the Wall Street Journal. The result was 95,000 comments and counting.
Three congressional Democrats led by Klobuchar introduced a pair of bills on media literacy, one that would aim at students and another that would focus on veterans. The latter would also touch on “cybersecurity best practices to identify disinformation and online scams.”
In the states
New York wants a list of social media accounts belonging to residents seeking concealed carry permits for handguns. The state reportedly hopes to assess the “character and conduct” of applicants.
$14.8 billion: That’s how much venture capitalists invested in Latin America in 2021 — more than the previous six years of investment combined, according to PitchBook. But as Protocol’s Biz Carson reports, the economic downturn is particularly testing investors who invested in Latin America. And the pullout seems to be more intense there relative to other markets.
A MESSAGE FROM GOOGLE PLAY
99% of apps and games businesses are eligible for a service fee of 15% or less when they distribute through Google Play. In fact, 97% of apps and games pay no service fee at all. With over 2.5 billion Android users worldwide, we help small developers grow.
U.S. intelligence officials backed efforts for a U.S.-based defense contractor, L3Harris, to acquire the Israeli firm behind the Pegasus spyware, the New York Times reported over the weekend. That revelation seemingly goes against the official Biden administration policy to blacklist NSO. Pegasus spyware had been used to target high-ranking political officials, including French President Emmanuel Macron and former Pakistani Prime Minister Imran Khan.
Thanks for reading — see you Wednesday!