PRICE Act

Madam President, we have broken another record. Unfortunately, it is not the kind of record we want to

boast about. Last week, the latest Consumer Price Index exceeded inflation expectations at a staggering 9.1 percent. In Utah, that rate is much higher.

The Biden administration's evolving blame game has shifted. It has shifted its focus from the pandemic to the supply chain and then from the supply chain to Putin. There is, however, a more coherent answer: Government continues to spend more than it has--a lot more. Last year, we saw this play out. This Congress spent a stunning $6.8 trillion while collecting just over $4 trillion in revenue. With the return of legislative earmarks, porkbarrel spending, meanwhile, has increased over 1,700 percent.

Rather than recognizing the problems associated with spending more than the government brings in, the government simply prints itself more money. Like a child stricken with affluenza, rather than being cut off, the government helps itself to more money. It doesn't take long to lose the value of a dollar when you are not spending your own money. Government is no different.

While hard-working Americans pinch pennies, lawmakers spend carelessly. To pay for their next project, they threaten to raise taxes. When they don't have the support to raise taxes, they nevertheless continue to spend and drive up inflation. Inflation is nothing but an invisible tax on the people--a tax on the people that, I would add, disproportionately affects hard-working Americans, the poor and middle-class Americans. Sometimes the wealthiest of the wealthy can find ways to get even wealthier in times of inflation. Everyone else gets hurt.

With no action, the reckless spending will drive us off a financial cliff. But our spending trajectory is such that we cannot afford to wait for the consensus needed to pass a constitutional amendment.

While hard-working Americans wait, I have introduced the Preventing Runaway Inflation in Consumer Expenditures Act, or the PRICE Act, to stop the bleeding. The PRICE Act requires a three-fifths supermajority of Senators to approve new spending measures when the Nation's inflation rate is at or above 3 percent.

The PRICE Act is desperately needed. This insatiable spending machine is now costing Utahns $881 a month more than they paid last year, and that is on top of what they already pay in taxes. Those are 881 dollars every month for which Utahns receive nothing in return. It represents money that could be spent toward their home, toward their child's college education, toward filling their empty gas tank, but instead, millions of Americans will look at the skyrocketing costs of living and determine that they must sacrifice their wants and, in many cases, their needs just to meet their most basic, fundamental necessities.

My PRICE Act flips the script. It doesn't altogether prevent lawmakers from spending when inflation is above 3 percent, but it requires lawmakers to offset that spending with cuts from somewhere else. In essence, it puts the impetus on Congress to weigh its legislative wants against the legislative needs of the American people. That is because for everyone living in reality, a budget means something.

Failure to live within a budget has profound consequences. When Jack has to pay an extra $93 a month on food, he begins to doubt his ability to feed his family. When Jill has to pay an extra $145 a month for housing, she doubts her ability to keep a roof over her child's head. When Joe has to pay an extra $404 a month on transportation, he doubts his ability to get his child to and from soccer practice.

So why is it that when inflation is at 9.1 percent, lawmakers are still spending and looking for ways to spend even more? As Americans are filled with financial fear and doubt, why is it that Senate Democrats want to spend an additional trillion dollars for their Build Back Better plan?

Congress is failing to exercise self-restraint during this period of unprecedented inflation. As Americans tighten their belts, Congress has opened the spigot. If a household ran this disaster of a budget, a family would quickly be met with foreclosures, repossessions, and ultimately bankruptcy. Ronald Reagan couldn't have been more prescient when he described inflation as ``the price we pay for those government benefits everyone thought were free.'' While Members tout their shiny new pet projects, Americans are footing the bill.

It is unconscionable that Congress continues to pat itself on the back for passing massive spending bills while the country has a financial millstone around its neck. It is high time that Congress subject itself to the same cutbacks that working-class families are facing now.

Although I wish Members of Congress would self-impose these restraints, this latest push for a new trillion-dollar spending plan shows that is unlikely to happen. Given our long-demonstrated lack of self-restraint, it is time to pass the PRICE Act.

Congress has become the trust fund baby that doesn't understand the value of a dollar. The PRICE Act is the recognition that sometimes you need to take away the credit card. So to that end, I would like to secure passage of this measure to protect the American people.

As if in legislative session, I ask unanimous consent that the Budget Committee be discharged from further consideration of S. 3770 and that the Senate proceed to its immediate consideration. I further ask that the bill be considered read a third time and passed and that the motion to reconsider be considered made and laid upon the table.

Mr. President, the Senator from Vermont and I don't agree on every issue. We represent very different States, come from very different political backgrounds. While I don't agree with everything he just said and while I am disappointed by his objection to my effort to pass the PRICE Act, which I regard as necessary to help keep inflation under control, I want to echo and applaud so much of what my colleague from Vermont just finished saying.

I don't think it is appropriate, when we have people throughout the country struggling just to get by and we have people in Utah shelling out an additional $881 a month--every month--not for luxury items, not for some wish-list item, but for their basic household monthly expenses, every single month because of excessive runaway spending in Washington leading to that inflation. Especially in that circumstance, I can't fathom why we would want to turn now and devote $75 to $76 billion to what my colleague from Vermont appropriately described as corporate welfare.

This is industrial policy, which--unlike the Senator from Vermont, I don't like industrial policy--but I completely agree with my colleague from Vermont. This goes beyond even that. This is corporate welfare.

There is an editorial in today's copy of the Wall Street Journal by the editorial board. It makes some excellent points, which I would like to excerpt and present to the Senate today. The editorial starts out as follows:

Industrial policy is back in fashion in Washington, or as

it ought to be called, corporate welfare. The semiconductor

industry is first in the queue, but it won't be the last.

Taxpayers should at least know they'll be subsidizing highly

profitable companies that don't need the help and might end

up regretting the political handcuffs they're acquiring.

The bill that will head to the Senate floor as early as

Tuesday--

Meaning today--

includes $52.2 billion in grants to the computer chip

industry. But wait, there's more. Congress is also offering a

25% tax credit for semiconductor fabrication, which is

estimated to cost about $24 billion over five years. That's

$76 billion for one industry.

The editorial continues:

Republicans on the House Ways and Means Committee point out

that for the same money Congress could double the research

and development tax credit for all companies through 2025. It

could also throw in 100% expensing for companies and allow

immediate R&D deductions through 2025. But that would mean

the politicians aren't picking favorites, which is what they

prefer to do.

The editorial goes on from there to describe the circumstances that led to the introduction of this bill, the fact that there was surging demand and diminished capacity to produce the semiconductors during the pandemic and that, since the pandemic, a lot of these very same firms trying, understandably, to keep up with demand have increased their production.

Meanwhile, 2 years later, they find themselves in a position where, due to changing economic circumstances, demand is starting to soften; and so they may now be in a position where they have ramped up supply only to see that demand is diminishing. All of which starts to beg the question, Why would we dump over $76 billion into this industry right now when people across America, including these Utahns, are facing some of the highest price hikes in the country for a variety of reasons? Why would we give money to a small handful of wealthy corporations at a time like this, understanding that every dollar we spend here that we don't have means that we are inflating the currency even more? And that ends up creating all sorts of problems.

A few paragraphs later the editorial goes on to explain the next line of arguments. They point out that those advocating on behalf of the CHIPS Act say: But, oh, we have to do this because it is about China. We have to do this in order to stop China, and this also can't withstand scrutiny.

Look, as the editorial writers of the editorial board of the Wall Street Journal point out:

Global semiconductor capacity increased 6.7 percent in 2020

and 8.6 percent in 2021 and is expected to grow another 8.7

percent this year. The risk of over-capacity is growing as

China heaps subsidies on its semiconductor industry as part

of its Made in China 2025 initiative, and the U.S. and Europe

race to compete.

Some 15,000 new semiconductor firms registered in China in

2020. Some have drawn investment from U.S. venture-capital

firms. Intel has backed Chinese startups even as CEO Pat

Gelsinger lobbies Congress for subsidies to counter Beijing.

Intel has threatened to delay a planned Ohio factory unless

Congress passes the subsidy bill.

I pause here to note that this is troubling. If true, this should be a warning to us about why we don't engage in corporate welfare. This is wrong. Deep down, we know it is wrong to take from the poor and give to the rich. We have no business doing this, nor do we have any business voting cloture on a motion to proceed to a bill that doesn't yet exist. We don't yet know what is in the bill because it is still being transformed significantly, even as we speak.

The Wall Street Journal editorial board continues:

The other claim for the bill is that the U.S. must

subsidize domestic chipmaking to compete with China, but this

also isn't persuasive. The companies like to point out that

the U.S. share of the world's chips has fallen to 12 percent

from 37 percent in 1990. They don't mention that the U.S.

leads in chip design (52 percent) and chipmaking equipment

(50 percent). Seven of the world's ten largest semiconductor

companies are based in the U.S. China trails American

companies by years in semiconductor technology.

Chip fabrication has moved to South Korea and Taiwan

because many chips are commodities with low margins. But chip

makers are working to diversify their manufacturing bases to

avoid future supply disruptions and have announced $80

billion in new U.S. investments through 2025. Samsung plans

to build a $17-billion factory in Texas. TSMC has a $12-

billion plant under construction in Arizona.

I pause here to note that in meeting with representatives from some of these companies, including TSMC, TSMC noted--in my conversations with high-ranking executives of that company--that plant isn't made contingent on any legislation they are producing. They are doing that because it makes good business sense, not because it is their last-gasp effort. This is a profitable company doing well, and for the United States to be considering giving money--whether to domestic companies or foreign ones--under these circumstances in this amount of money makes no sense.

The editorial continues:

One unfortunate impetus behind this bill is that, for all

their talk about competing with China, many politicians

believe that Beijing's economic planning is superior to the

U.S. free market system. It reminds us of the 1980s when

legendary Intel CEO Andrew Grove warned that Japan was going

to dominate the chip industry and the future of global

technology.

As former Cypress Semiconductor CEO T.J. Rodgers explained

on these pages last year, the government set up the Sematech

chip consortium that ``was obsolescent when it opened.'' But

Intel innovated with more advanced chips, and no one is

talking now about Tokyo's central-planning genius.

The editorial concludes:

History shows that easy government money can undermine

competitiveness. It often leads to inefficient spending and

investment. The politicians will also attach their own

strings, perhaps with limits on stock buybacks and dividends.

Wait until Bernie Sanders is heard from on the Senate floor.

They forecasted what we have seen today. It closes with the following sentences:

The chip bill isn't needed to compete with China, and it

will set a precedent that other industries will follow.

Anybody who can throw up a China competitive angle will ask

for money. Why Republicans want to sign up for this is a

mystery, especially when they might control both Houses of

Congress in six months.

I couldn't agree more with the editorial board of the Wall Street Journal on this assessment. This is wrong. We know it is wrong. The bill still, as it stands right now, is unknown to most for the entirety of this body. We do know it costs over $76 billion. We do know people across America, including poor people throughout the State of Utah--not just the poor, but most people--again, with inflation, during periods of inflation, the extremely wealthy can find ways to become even wealthier, but everyone else suffers--literally, everyone else. The poorer you are, the more you suffer. Even people well-entrenched in the middle class get gouged considerably. Why we would want to take money away from them and give it to the wealthy is beyond my ability to fathom.

All of this ties back to the reason I came to the floor today, which was to try to pass the PRICE Act by unanimous consent. We didn't succeed today, but we are not going away. We are going to keep undertaking this effort because the fact is, we do need to impose a supermajority requirement for spending, especially when spending levels are producing inflation in excess of 3 percent. We are at 9.1 percent nationally. And in many of our States, including my own, it is higher than that. That is why we need this.

My colleague pointed out he believes that the Tax Cuts and Jobs Act may have contributed to that. Well, that is not exactly how things work. When you are passing a tax reform bill--a tax reform bill that makes downward adjustments to marginal income tax rates and to corporate rates and capital gains rates--yes, it brings in less revenue, but the government taking in less revenue doesn't cause inflation. It is deficit spending that causes inflation.

Given that it is deficit spending--particularly deficit spending during periods of inflation--that matters, I believe that is where we ought to be focused. We ought to be focused on pro-growth opportunities. And, frankly, if those adjustments to corporate rates, to capital gains rates, and to marginal tax rates are, in fact, pro- growth, they reduce disincentives to work, they bring more people back into the labor market, and that, in turn, produces more tax revenue.

You can expand, broaden the base, while lowering their rates and, ultimately, come out on top and with more robust economic growth. But what you can't do is engage in increasingly more aggressive deficit spending and expect that is going to do anything but harm the American people, especially America's poor and middle class.

I yield the floor.

I object.

Mr. President.

Senator Lee raises important issues about the deficit. I hope very much that he will be able to convince his Republican colleagues and Democratic colleagues as well that, among many other reasons, we should vote against this major corporate welfare bill that is coming down the pike, which will add at least $76 billion to the deficit. So if we are concerned about the deficit, as Senator Lee is and many others are, I hope that will be one of the reasons we vote against this massive corporate welfare bill that we will be considering later this afternoon.

I hear a lot of concern about the deficit here in the Senate, and I hear people say: We can't afford to feed hungry children. We can't afford to deal with climate change. We can't afford to guarantee healthcare to all. The deficit is very, very large.

Well, we are talking about $76 billion--at least that; maybe more-- which will add to the deficit. So when you consider the deficit, you might want to also take into account tax breaks and corporate welfare for large, profitable corporations.

I want to say a few words about this so-called chips bill and what it says about our national priorities, what it says about our tax policies, and basically what it says as to whether or not the U.S. Congress is capable of representing the needs of working families or whether we are totally beholden to wealthy and powerful corporate interests and their campaign contributions.

Last week, when I spoke about this issue, I expressed deep concern that Congress would provide $52 billion to a handful of profitable corporations in the microchip industry with no strings attached. Here it is, guys, $52 billion. Well, I stand corrected. As a result of some new tax-reduction language, the corporate welfare total for the microchip industry has gone up; it is now at $76 billion. And the corporate lobbyists working on this bill, like pigs at the trough, are not yet finished. They want more and more and more. Their needs are insatiable.

Needless to say, I do not usually quote approvingly from the editorial page of the Wall Street Journal. They are not my best friends. In fact, I think I get attacked on that page more than any other Member of the Congress. But, as you know, a broken clock is right twice a day, and even the Wall Street Journal got this one right.

Among the many reasons they urged Congress to vote against this bill is one that I think is very relevant. Let me quote. This is from the Wall Street Journal editorial page today:

The chip bill isn't needed to compete with China, and it

will set a precedent that other industries will follow.

Anybody who can

throw up a China competition angle will ask for money. Why

Republicans want to sign up for this is a mystery.

The Wall Street Journal. The point they make is a good one. We should be clear that over 90 percent of the cell phones used in this country and over 90 percent of the laptops used in this country are made in China.

So you pass this bill, and tomorrow we will hear, no doubt, from the cell phone industry, from the computer laptop industry about how they need their welfare checks as well. So I think the Wall Street Journal every once in a while makes a good point, and today they did.

Mr. President, I recently came across a very, very interesting interview that the CEO of Intel, Mr. Pat Gelsinger, did last Friday on CNBC's ``Squawk Box,'' and I think in that interview he did tell us everything we want to know about the American oligarchy, about corporate arrogance, and the state of American politics. This is what Mr. Gelsinger said last Friday--Mr. Gelsinger, head of Intel:

My message to congressional leaders is, hey, if I'm not

done with the job, I don't get to go home. Neither should

you.

He is talking to Congress.

Do not go home for August recess until you have passed the

CHIPS Act because I and others in the industry will make

investment decisions, and do you want those investments in

the U.S., or are we simply not competitive enough to do them

here and we need to go to Europe or Asia for those? Get the

job done. Do not go home for August recess without getting

these bills passed.

That is Pat Gelsinger, head of Intel, last Friday.

In other words, Mr. President, the CEO of a major corporation which made nearly $20 billion in profits last year and a CEO who received a $179 million compensation package is saying to Congress that if you don't give my industry, the microchip industry, $76 billion and my company, it is estimated, some $20- or $30 billion, that despite their profound love for our country and their respect for American workers and their understanding of the needs of the U.S. military and the healthcare industry--despite all of that, in order to make more profits, they are prepared to go to Europe and Asia.

Now, Mr. President, I am, thankfully, not a lawyer, but that sure sounds like extortion to me. What Mr. Gelsinger is saying is that if you don't give the industry a blank check--here is $76 billion--and they want more, by the way--despite the needs of the military for advanced microchips--and we hear that from the military--despite the needs of the medical industry for advanced microchips, despite the entire needs of the American economy for advanced microchips, the industry is threatening to abandon this country and move abroad. Patriotic people, no doubt. Clearly, lovers of America.

Mr. Gelsinger says we should stay in session, if necessary, through August in order to pass his legislation. Well, I think we might want to stay in session through August but not necessarily to pass his legislation, because what I hear from the people in Vermont and people all across this country is that the job they want done is not a massive handout to large, profitable corporations; the job they want Congress to do is, for a change, to protect the American working class, our middle class, and the needs of the most vulnerable people in this country.

What I hear is that the American people want us to guarantee healthcare to every man, woman, and child, as every other major country on Earth does.

What I hear is that the American people think it is absurd that some of the wealthiest people in this country and largest corporations don't pay a nickel in Federal taxes and that we should demand that those loopholes be ended.

What I hear is that the American people want us to deal with the existential threat of climate change so that the young people of this country can actually have a planet they can grow up with in a healthy way.

What I hear from the elderly people in this country, in my State, is they can't make it on the Social Security benefits they are receiving now; they want to raise those benefits.

What I hear from the people back home is they want Congress to do the job and protect a woman's right to control her own body, they want to see us pass serious gun safety legislation, and they want to protect the rights of all Americans to be able to vote.

That, among many other things, is what I hear from the American people in terms of getting the job done. Not too many people that I can recall--I have been all over this country--say: Bernie, you go back there and you get the job done, and you give enormously profitable corporations, which pay outrageous compensation packages to their CEOs, billions and billions of dollars in corporate welfare.

Now, maybe, Mr. President, you hear that. I don't hear that from the people in my State.

By the way, when we talk about an expenditure of $76 billion, yeah, we can give it to some large, profitable corporation with no strings attached or we can use it--$76 billion--to expand Medicare, to provide senior citizens with the high-quality hearing aids and eyeglasses they desperately need, and for a bit more, we can provide dental care as well.

For $76 billion, we could eliminate homelessness in America and create hundreds of thousands of good-paying jobs from Maine to California, building all of the affordable rental units that this country desperately needs. We can end homelessness or give a corporate welfare check to profitable corporations.

Mr. President, for $76 billion, we could make every community college in America tuition-free for the next 7 years. Go home and ask the people whether they think they would rather spend money on allowing our young people to be able to go to community college tuition-free or a welfare check to large, profitable corporations.

And on and on it goes. Seventy-six billion is a lot of money. I know Senator Lee would probably prefer to see that go into deficit reduction. Fair enough. And I am concerned about deficit reduction, but I am making the point that we can invest this in a way that really improves lives for millions and millions of working families.

Mr. President, there is no doubt that there is a serious global shortage in microchips and semiconductors, which is making it harder for manufacturers to produce the cars, the cell phones, and the electronic equipment we need. This shortage is costing American workers good jobs and raising prices for families, and that is why I strongly support efforts to expand U.S. microchip production. But the question we should be asking is this: Should the American taxpayers provide the microchip industry with a blank check of $76 billion at a time when semiconductor companies are making tens of billions of dollars a year in profits and paying their CEOs very high salaries and compensation packages? I think the answer to that is a resounding no.

It is important, in light of Mr. Gelsinger's remarks and his threat to go to Asia or to Europe, to have a little bit of history about this issue. Over the last 20 years, the microchip 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. They did that, by the way, after receiving $9.5 billion in government subsidies and loans.

In other words, we have the absurd situation where we have a crisis that is caused precisely by the people we are now attempting to bail out. So as a reward for their bad behavior, for shutting down 780 manufacturing establishments in America, they come back and say: Oh, we have a crisis in America. We need your help.

So they want us to pay to undo the damage they caused. Well, that may make sense to someone but not to me.

In total, Mr. President, it has been estimated that five major semiconductor companies will receive the lion's share of this technology handout. Those companies are Intel, Texas Instruments, Micron Technology, GlobalFoundries, and Samsung. These five companies made $70 billion in profits last year.

The company that will likely benefit the most from this taxpayer assistance is Mr. Gelsinger's company, Intel. Now, I have nothing against Intel, and I wish them the best, but Intel is not a poor company. Last year, Intel made nearly $20 billion in profits. During the pandemic, Intel had enough money to spend $16.6 billion not on research and development, not on building new

plants, but on buying back its own stock to reward its executives and wealthy shareholders.

Over the past 20 years, Intel has spent over $100 million on lobbying and campaign contributions. So $100 million may seem like a lot of money, but if you are about to get $20 billion from the taxpayers of America, that is a very modest investment. Meanwhile, while they spent $100 million on lobbying and campaign contributions, they were shipping thousands of jobs to China and other low-income countries. Does this really sound like a company that needs a taxpayer handout?

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, the company spent $2.5 billion buying back its own stock.

Meanwhile, other companies that will receive taxpayer support are the Taiwan Semiconductor Manufacturing Company--and by the way, you would be shocked to know that the largest shareholder of the Taiwan Semiconductor Manufacturing Company is--well, you guessed it; it is the Government of Taiwan. So we would be giving money, I guess, directly to the Government of Taiwan. And on and on it goes.

Mr. President, I should be clear in stating that I do believe in industrial policy. I think that at times it is absolutely appropriate for the government to sit down with the private sector and say: Look, we have needs, and we want to work with you to solve those needs. You have a right to make a fair profit. We have the need--the right to see the needs of the American people addressed. We need a partnership.

To me, industrial policy 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.

So the question is, Will the U.S. Government develop an industrial policy that benefits all of our society or will we continue to have an industrial policy that benefits the wealthy, the powerful, their lobbyists, and the campaign contributors?

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 that what Dr. King said 54 years ago was accurate back then and is even more accurate today.

So, Mr. President, the Senate has an important decision to make, and that is, do we simply provide a blank check or do we put some restrictions on that money? That is why I will be offering an amendment which does that.

It seems to me that 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 microchip companies make a profit as a direct result of these Federal grants, the taxpayers of this country have a right to get a reasonable turn on that investment.

Further, if microchip 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 in the CARES Act by a vote of 96 to 0. That is why I will be filing an amendment to impose these conditions to this legislation.

I understand that some language has been inserted into this bill that would prohibit microchip companies from using these grants to buy back their own stock. Let us be clear: This language is totally meaningless. Under this legislation, companies will still be able to use the enormous profits that they are making on stock buybacks.

Bottom line: Let us rebuild the U.S. microchip industry, but let us do it in a way that benefits all of our people, not just a handful of wealthy profitable and powerful corporations.

Let me suggest to my friend from Utah that I agree with a lot of what he said about this legislation that we are going to be voting on within the hour.

I would simply add that while this bill has had many names--lately, they call it the chips bill; it has also been called the China bill and so forth--but theoretically, it is supposed to be competing against China.

But I would point out that since 2005, Intel has invested at least $700 million in Chinese technology companies, including at least four microchip startups. In 2020, 2 years ago, Intel invested in two Chinese semiconductor startups, ProPlus and Spectrum Materials, as part of a $132 million investment in 11 startups, including 3 in China. So we are investing, ostensibly to protect us from China, in a company that, in fact, invests in China.

I yield the floor.