Commerce chief sees ‘devastating’ fallout if chips measure fails

Commerce Secretary Gina Raimondo said the consequences for the U.S. economy and national security would be “devastating” if there’s a significant delay in passing legislation proposed by the Biden administration aimed at easing the shortage of semiconductors.

“The consequences of a significant delay can’t be overstated,” Raimondo said Thursday in a Bloomberg Television interview with Emily Wilkins and Joe Mathieu. “If it can’t be done before Christmas, it has to be done in January because the consequences of not facing this problem long run are really quite devastating to our economy and our national security,” she said.

Raimondo has been leading the Biden administration’s response to the semiconductor shortage, and the Commerce Department recently asked companies in the semiconductor supply chain for information to detect bottlenecks and potential hoarding of supplies.

She’s been pressing Congress to pass a measure, known as the CHIPS Act, that would provide $52 billion to help computer chip manufacturers and ease a shortage of the components vital for a range of industries.

The Chips Act was included in a large package of legislation passed by the Senate in June. That legislation, called the U.S. Innovation and Competition Act, has since stalled in the House. In November, Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi announced an agreement to craft a version of the bill that could pass in both chambers. So far, that has not yielded any new proposals.

The worldwide auto industry has been suffering production disruptions for almost a year from the global chip shortage, leading to furloughs for American autoworkers. The Biden administration has acknowledged there’s no quick fix.

Texas Republican Senator John Cornyn said Wednesday that the Chips Act will likely only pass in February.