Commerce secretary nominee Howard Lutnick showed support for the Biden administration's CHIPS and Science Act at his Senate confirmation hearing Wednesday, but did not commit to honoring the law's billions of dollars in manufacturing grants.
Lutnick called the law an "excellent downpayment" on bringing semiconductor manufacturing to the U.S., but caveated that it needed to be reviewed to ensure that taxpayers get "the benefit of the bargain."
"I expect to do enormous work to make sure that you get the benefit of the bargain, that we get the money out appropriately, correctly, and we build in America," Lutnick said. "That is vital, we've done it bipartisan, and I'm going to help execute that."
Throughout the hearing, the CEO of investment bank Cantor Fitzgerald hammered home the theme of bringing manufacturing back to the U.S., including building an end-to-end semiconductor supply chain.
Lutnick called the CHIPS Act a "necessary and important" jumpstart to those efforts, but refused to say he would honor the finalized funding contracts the Commerce Department has signed with companies, including Intel, TSMC and GlobalFoundries.
“I can’t say I will honor something that I haven’t read,” Lutnick said.
“To the extent monies have been disbursed, I will commit to rigorously enforcing the documents that have been signed by those companies to make sure we get the benefit of the bargain," the commerce secretary nominee added.
Lutnick's tone towards the landmark law was friendlier than that of President Donald Trump, who has called the CHIPS Act "so bad." The president has said tariffs would be a more effective way to entice domestic semiconductor production.
Lutnick highlighted his support for tariffs during the hearing, saying he favors "across-the-board" tariffs on countries, rather than on specific products.
House Speaker Mike Johnson said in November that Republicans “probably will” try to repeal the CHIPS Act, according to a report from the Associated Press. Johnson later walked back those comments, saying in a statement there could be efforts to “streamline” the law and eliminate “its costly regulations and Green New Deal requirements.”
Given the political uncertainty, the Biden administration sprinted during its final weeks to finalize funding under the law. As of Jan. 17, roughly $30.6 billion out of the $39 billion funding pot had been finalized. However, most of that money has yet to reach the hands of awardees, who must hit specific project milestones in order to receive funds.
Senators noted during the hearing that CHIPS funding was among the many grant programs that would have been effected by President Trump's now-rescinded freeze on all federal funding. Lutnick noted that if such a freeze still occurred, it would give him time to review the law. He dismissed concerns that a funding freeze would cause delays in factory construction projects.
”The CHIPS [Act] has not really distributed much money, so the timing is not really impacted,” Lutnick said. “I commit to you to work hard to deliver you the benefit of the bargain. If you appropriate it, you should expect from me to deliver efficiently and effectively the outcomes that you anticipated or better.”
