Transcripts For CSPAN Commerce 20240703

The critical thing and we should visit when we have more time. Let me just say the reports about because way are incredibly disturbing and i cant count on the investigations but we take every threat seriously and investigate to the fullest wherever we think theres some incredible allegation that a company has done an end run around your export controls. We need different tools, im supportive of the guard act which would and the restrict act which would codify our itcs authorities. We need that to have a comprehensive approach to go after connected apps. We would need resources additionally to do that. I think we need Additional Resources around enforcement to do exactly what youre talking about. Candidly we need the threat is different today. The threat from china in 2023 is different than the cold war threats of decades ago. It is technology and a. I. And it is moving fast so i would welcome a broader discussion with you around how we modernize what we do and how we properly fund what we do. Theres been several walkup calls and huwaei stands out and i would welcome your suggestion on how we either as appropriators or authorizers would be helpful in closing this opportunity for China Technology theft. Sec. Raimondo we will do it. Im proud of the fact under my watch we imposed the largest fine ever in history, 200 million fine for a Company Called cgate for violating controls, selling to hauwei. Were tough as we need to be but resources are helpful. Andersen moran was the fine collected . Sec. Raimondo yes. Thank for you this important hearing. Secretary, thanks for being here, director, thanks for being here. Secretary raimondo, one thing i wanted to share with you and also chair cantwell is to show support for Ranking Member cruzs question to the secretary on mid band spectrum and coordination between the department of commerce and defense to ensure more mid band spectrum is available for 5g wireless. Senator lujan i wanted to show support from senator cruz and i want to assure the information about the study. Im proud of new mexicos long history of connecting scientific innovation, National Security and Global Competitiveness and over 75 years the department of Energy National labs has served the nation with their International Leadership in scientific disclosure. N. S. F. Engines are to create regional skill and ecosystems to accelerate the development of critical technologies. These innovation engines will provide another opportunity for states like new mexico to support the nation by driving the scientific motivation needed to maintain International Leadership. Director, i was pleased your testimony acknowledged the fact we all know too well the Economic Prosperity of innovation has not been shared equally across our nation. My question, director, yes or no, do you expect the choice of Regional Innovation engines will provide Economic Opportunities to those communities that are too often overlooked . Mr. Panchanathan yes. I can give you many examples. Sen. Lujan i thank you very much and will submit something to get those specific responses as well. I was happy to see one of the 16 innovation engine finalist is the new Mexico Space Valley Coalition which is dedicated to growing the nations commercial space industry. The new Mexico Space Valley Coalition includes the city of albuquerque, leaders from the private industry, universities across the state of new mexico including navajo technical university. Director, as you know the coalition in new mexico is an incredibly talented group that represents the diversity of my state and the United States of america. By all measures the Valley Coalition appears to be a perfect fit for the innovation decision. The chips and science act established the Technology Innovation and partnership directed at the National Science foundation. Of those three words, technology, innovation and partnerships, partnership is very important. By expanding authorities for not just the National Science foundation but also the departments of energy and commerce, the chips and science act makes clear no Single Department or agency can do it alone. The scientific challenges we face are too big and the time line to meet these challenges is too short and the International Competition is too strong. I was pleased to see the n. S. F. And the department of energy signed a m. O. U. To partner to find solutions to many of these challenges. Director, yes or no, for the National Science foundation to successfully implement the new authorities provided by chips and science, will the agency need partners like the department of energy . Mr. Panchanathan yes, and we do it in large measure with m. O. U. And i have many examples that, too. Sen. Lujan can you share some of the examples you shared and others that show that connection and partnership with the department of energy . Mr. Panchanathan i would be happy to do that, yes. Sen. Lujan secretary raimondo, thanks for your leadership and leading the department of commerce, especially in this space where so many challenges we face as a country will fall under your leadership will fall under the department of commerce and your team. We just heard from the director how n. S. F. Is partnering with the department of energy and can you share with the department how the department of commerce is engaging and the department of energy and the national lab in implementing chips and science . Sec. Raimondo we have cooperation with the International Technology center which will stand up this fall and they along with n. S. F. Will be one of the founding entities and they will have a real role to play in establishing the center, defining the priorities, and we plan to rely on their expertise very heavily. Sen. Lujan madam chair, as i yield back, i just want to know for the record the concern that i have, which is looking at the aggressive posture from the administration solely for the interNational Science Foundation Top line. I have a concern when im looking at the top lines for n. S. F. Compared to the department of Energy Office and science and i think they need to expand funding for the office of n. S. F. And the department of science at a similar rate to make sure chips truly succeed as well and i yield back. Chair cantwell senator thune. Sen. Thune ive been working one both sides of the aisles to obtain a. I. And it will help us be the Global Leader for us in technologies and you referenced the new Semi Conductor technology center. Im focused on assuring the senate puts the necessary guardrails in place while also assuring any legislation encourages and thought stifles innovation in a. I. Can you explain in more detail how the national Semi Conductor center and the chips and science act more broadly is encouraging innovation in Artificial Intelligence . Sec. Raimondo thank you. I agree strongly. The United States has a Competitive Edge in the world and were leading in a. I. And need to preserve that lead and extend that lead. So we have to preserve our Competitive Edge. Having said that, we have to balance the opportunity with guardrails to protect ourselves from the downside and nist has put out a risk manager game work which is voluntary to developers for safeguards they should use as they develop new a. I. Algorithms, similar to the voluntary commitments that the president and the administration has extracted from the biggest a. I. Developers. With respect to the netc, that will be research and development. So whether its new materials, new ways to develop new Semi Conductor chips, all a. I. Will be powered by a. I. Chips where again we lead the world. The nect will lead the next wave of development and startups as we continue to maintain our a. I. Lead. Sen. Thune this Administration Pushes for public style regulations on the internet and usda tried to insert Net Neutrality rules in the reconnect program and ntia has thrown requirements in the bead program and last week the s. E. C. Aannounced it will reinstate the obama regulations on the internet. Dont ask me why youd want to integrate the internet as a monopoly but they seem to be headed down that road. With respect to the bead program, i find it troubling the administration would put over 40 billion in broadband funding at risk just to accomplish a campaign talking point. I would argue that instead we should be establishing efficient bead rules that incentivize the participation of companies that have spent years building out Reliable Networks to some of the most remote parts of the country. Will you commit to not require states to include specific price points for broadband offerings in their bead plans, yes or no . Sec. Raimondo i want to be clear were not regulating or price setting and not requiring states to do that. Furthermore, we want all providers, large and small to participate in the program. The way were doing, every state, your governor would create a plan that they think could meet the needs of the state and our job would be to evaluate that until we fund the plan. Sen. Thune you agree the nita will give recommendations for requirements . Sec. Raimondo yes. Sen. Thune i introduced the Work Force Development act with senator hassen which was part of the chips and science act and among other things the bill asked to build on the expertise of nist to improve Quantum Network and encryption. These applications can enhance security and privacy and bolster leadership in the development of these technologies. Can you describe how the kept has worked to promote u. S. Competitiveness and innovation and the development and standardization of Quantum Technologies through the implementation of this bill . Sec. Raimondo i will follow up with the dr. Anasio who runs nist but chips and a. I. Is where were exceedingly focused to develop standards and focus our investments. Sen. Thune thank you. Sen. Peters thank you all that youre here and the great work you do. Secretary raimondo, i believe in order to be a great country you actually have to make things and it has to be our focus. You and i have talked about that before and one of the primary goals of the chips and science act was to increase Domestic Production of mature Semi Conductors. The crisis that was preventing consumers to purchase vehicles resulted in furloughs of autoworkers due to the shortage of mature chips. We had parking lots full of automobiles and pickup trucks and other automobiles that needed a chip or two before they could head off to the dealer. Your department pledged to spend 10 billion in the chips funding to fix that and certainly well have an update on that but hopefully your commitment will stand through the full expenditure of that necessary investment in that industry. But in addition to making more mature chips here in america, we must also use the chips and science act to invest in the future of the Automotive Industry and that means research and development. Michigan stakeholders have mobilized to meet that challenge and one example is the Star Initiative to establish a Semi Conductor center of excellence in michigan led by the internationally Renowned Research center imake manufactured manufacturer k. L. A. , the university of michigan and wacinaw Community College. The Star Initiative will focus on advanced Electronic Research for Innovative Solutions to help cement the United States leadership not only in the future of Semi Conductors but also in the future of the Automotive Industry. My question for you, secretary raimondo, you said chips are in the funding in the coming months, would i commit to the crossover impacts that r d can have in other Industries Like the Automotive Industry as a way to maximize the impact of these funds . Sec. Raimondo i will but let me say this the statute, as you well know the statute requires a 2 billion set aside for the mature node chip and we have said that we believe well invest close to 10 billion in supply chains mature and current node chips. And that is still our plan. We think thats whats necessary to get the job done. With respect to your other question, early in the new year, well be getting the nofo out, the funding opportunity for the r d portion and i will commit certainly to work with you between now and then as we design that application before putting it out early in the new year, but i do want to be clear, and i said this all along, the point of the Chips Program isnt just to incentivize a few new fabs and call it a day it. Thats not enough. Thats not success. Thats not efficient. We need to do what you say, stimulate research and development and stimulate job training and to have a whole ecosystem that no longer that we need to deepen in the United States including applications like in the auto industry. We are in violent agreement on this, and, you know, i look forward to working with you. Mr. Peters i look forward to that as well. I raise another issue to Semi Conductors and thats advanced packaging which is a significant part of the chips supply chain as you well know needs significant focus as part of our onshoring efforts to bring those back to the United States because of its importance both from a National Security perspective and for American Workers and consumers. Calumet electronics in calumet, michigan, with the help of incredible engineers from the Michigan Technological University up in hoten is doing incredible work on advanced packaging particularly by making very advanced Circuit Boards for defense applications, and theyre expanding their capacity. My question for you is, as we try to assure the supply chain is supported, can you speak to how advanced packaging will be prioritized in funding Going Forward . Sec. Raimondo yes, this fall well put out a strategy paper on our packaging strategy, our plan and youll see that soon. Right now we dont do advanced packaging in the United States and is a huge problem that doesnt get much attention. Even if we make the chips in the United States and chip them to ship them to asia to be packaged doesnt hit our National Security goal. Were deeply committed at the end of this implementation to have advanced packaging on our shores, and as i say, later this year well put out more details on the strategy. Senator blackburn. Sen. Blackburn thank you. Let me stay with this issue on the fabs. And i had looked at your notice of funding opportunity when you were talking about we could have as man tampa bays as we want ant and how to move forward with this on the supply chain. My question for you is looking at the investment tax credit and should Congress Look at harmonizing the investment tax credit in 48d to align with the program that you are running to ensure this law allows for manufacturing for the facilities that you claim are going to be necessary and for being able to reshore much of that activity and then how are you working with secretary yellen on this . Sec. Raimondo ill leave it to congress to decide if and how you want to amend the legislation. The legislation is currently drafted crafted, has a tax credit being more restrictive than the grant. So its intended by statute that the tax credit is more restrictive than the grant program. Sen. Blackburn my question is should we harmonize that . Sec. Raimondo i have to think about that to be very honest. Sen. Blackburn i think your insight on this is something important. If youd get back to me on this. Sec. Raimondo ok. Sen. Blackburn we almost got you in a u. T. Jersey when you were in tennessee and well get you back. Lets talk about microelectronics and ultraviolet research and the work being done there. What are you doing to make sure we dont have several agencies working on this but were not harmonizing the work . Mr. Panchanathan senator, its great to be with you. And the university of tennessee in knoxville when we announced the regional engine, we keep talking about this was focused on transportation electrification and digitization and specifically a question, we have very tight partnerships with all the agencies that bring us together. For example, we have a m. O. U. Sen. Blackburn youre watching the couply education. Mr. Panchanathan absolutely. Sen. Blackburn i want to talk about your trip to china, did you think it was a success . Sec. Raimondo it was a productive trip. Sen. Blackburn did you hold them to account . Sec. Raimondo i made it be clear we dont talk about export controls. Sen. Blackburn did you call them out about committing genocide on weaker muslims . Sec raimondo i did. I didnt get much of a response. Sen. Blackburn have you visited taiwan . Sec raimondo ive had no reason to visit taiwan. Sen. Blackburn do you consider taiwan a country and they ship a lot of chips. Sec. Raimondo the administration is clear on that. Sen. Blackburn and youre not deviating from that . Sec. Raimondo absolutely not. Sen. Blackburn way want to bolster our leadership whether it has to do with a. I. , quantum, the microelectronics we were discussing and we cannot afford to fall behind the c. C. P. We just cant. And its going to take calling them out on this and holding them to account. In my opinion its going to take supporting taiwan and the work that they are doing and of course weve got to make certain that the c. C. P. Controlled entities dont benefit as we move forward implementing chips, and i think also, madam chairman, one of the reasons weve got to get busy with the nqia and make sure we get that reauthorized this year. I read the article on the hill where they mentioned quantum capabilities is something the chinese are going to use to bolster their communication and satellite movements. And as you look at this, it is imperative that we not give them one inch. And sending that message, taiwan is someone we can work with and they want to have our business is something thats important. Thank you. Chair cantwell mr. Welch, keep to your time if you can, please, we have several witnesses. Sen. Welch secretary raimondo, youre doing a great job and were excited in vermont about the chips act and i think my college ty young, who played a instrumental role in getting that passed, we had a real production of nitrate chips printed on silicone chips which is a new technology providing greater power, global foundries which is a very Large Company in vermont is a leader in this. And i want to give you an opportunity to explain what the department is doing to continue to incentivize the development and manufacture of a mature legacy node Semi Conductor technology. Sec. Raimondo thank you, senator. Nice to see you. We must invest 2 billion in legacy nodes and well invest more than that because these chips are essential. We executed a m. O. U. With the department of defense whereby they can share information with us around their needs for the Defense Industrial base. Most if not most of the Defense Industrial base need these existing node and mature node legacy chips and why its another reason were focused on making sure we have enough of a supply in the United States. Sen. Welch also what is important are the regional hub programs which are parts of chips and science and we have applicants and is there a commitment from the e. D. A. , the department of commerce to follow the requirements in that program around rural epscor states and vermont would be among them. Sec. Raimondo yes, of course. Sen. Welch the deadline for phase 1 was august 15th and theres a lot of interest when were going to hear and i dont know if you can comment on that but it would be good to have some visibility when we can expect an answer. S, c. Raimondo yes, senator. We are working as fast as we can and we received over 400 applications from nearly every state. I hope to be able to have news in the next month or so. Sen. Welch i want to doctor drw questions. We really appreciate all youre doing to help Clean Energy Innovators from the Development Stage all the way through commercialization. And all of us are a little bit blue about how we developed solar but then lost commercialization to china. I want to give you an opportunity to express what youre doing to ensure that the director of technology is bringing Clean Energy Technology from the Research Phase to the commercialization phase in the u. S. Mr. Panchanathan thank you for the opportunity to weigh in on this. In may of this year, we announced the first ever n. S. F. Engine Development Awards which i talked about. Seven of those awards include Sustainable Energy as a topic. In august we announced 16n. S. F. Engine finalist proposals, two of those into the top areas of Sustainable Energy. In addition to that, many of what existing programs that is in the translation phase in terms of what you say in startups, Small Companies being invested in, the programs also have significant Clean Energy Portfolios as well. As an example, the vermont startup rich earth, l. L. C. Is aiming to leverage Clean Energy Technologies while in the process of optimizing Wastewater Treatment for water recovery. So theyve also launched many programs with the activities focused on clean energy and Sustainable Energy. Sen. Welch i want to make a comment about working with us on the letter of credit thats going to hammer us if it stays at its current level in the bead program. Madam chair, i yield back. Chair cantwell thank you, senator vance. Sen. Vance thank you, madam chair and secretary raimondo and the witness for being here. I want to say or at least echo some of the comments league colleagues from across the aisles have made of my the clerk will designate the amendment senator young and what was done on the chips act. I of course wasnt here when the chips act was passed and i would have supported it because its important to bring American Manufacturing and technologies back to our country. There have been many stories and questions raised since the chips act was passed about its implementation and also how companies are benefiting or not from some of its resources and want to focus on one particular barrier with secretary raimondo about the labor shortage. We hear from folks working in the chip industry we have a labor shortage and you hear it from taiwan Semi Conductor which tried to build a 40 billion facility in arizona and effectively trying to import skilled engineers from taiwan because they say they cant get the labor from here. Is that an accurate assessment of the situation that we have the need to produce chips in america but also have a shortage of Skilled Labor and recruiting the people to actually make those chips . Sec. Raimondo yes, it is. As i have said, we will be using some of the chips act to devote to labor and training and work force and in fact since the passage of the bill, over 50 Community Colleges have started new initiatives to train people but theres no question, we think well create about half a million jobs, at least, through the implementation and we need to do more to train people for that. Sen. Vance being mindful of time, i want to point to the criteria that in light of the labor shortage gives me some concerns. One of the administrative directives says that applicants to chips funding must, quote, develop an equity strategy in concert with their partners to create equitable work force pathways for disadvantaged individuals and their region. Additionally applicants must divert from sources of talent and set goals for workplace diversity. I know of course creating these diversity mandates within a Company Actually requires additional costs and you have to hire diversity consultants and additional Human Resource people. I guess im struggling to make sense of the fact we apparently have a shortage of Skilled Labor to manufacture chips on the one hand and yet the secretary of commerce is telling people that they can only hire the people who check the right diversity boxes. That doesnt make a ton of sense and seems to be counterproductive to the goal of bringing this industry back to the United States in the first place. Sec. Raimondo first of all, theres no mandates and second of all its completely consistent. Sen. Vance what would you call it when the secretary of commerce said you must do this to receive funding, if its not a mandate, what is it . Sec. Raimondo what it is they have to show us a work force plan and we have to evaluate the plan. Sen. Vance they must show a plan in order to receive money from the government and thats a definition of a mandate, you must do x in order to receive y dollars. Let me make this point, secretary raimondo. Think of this from a perspective of a company thinking of locating a chip manufacturing facility in this country or china. From china they get cheap labor, massive subsidies and a government that seems to want to work with them. From the United States they get a little bit of money and a Human Resources statement that looks like it was written by a 22yearold gender studies graduate of harvard or yale and to be honest it was probably written by a 22yearold gender studies graduate of harvard or yale and why would you locate your business in the u. S. And in china you get more access and is it the economy that makes it harder to do business or easier to do business . Im curious, where would you locate the facility given those two separate sets of criteria . Sec. Raimondo before i went to china i talked to 120c. E. O. s of businesses and they told me china is becoming increasingly uninvestable and i would locate my business in the United States. Sen. Vance i agree the companies should locate their businesses in the United States but we have to be careful the reason china has become uninvestable is its hard to get our money out but if we make it harder to do business and pass Bipartisan Legislation that puts money in American Manufacturing and make it harder to access it unless you check the diversity box well be counterproductive. Im mindful im at the end of my time and the last point id make is the United States thank god does not have a chief diversity officer and would appreciate it the Biden Administration doesnt pretend to be one. Sec. Raimondo i have to protect taxpayer money and the companies have to meet their mission and in order to do that they have to have a Trained Work Force and ill work with them to make sure it happens. Sen. Vance i dont think diversity is a part of it. Thank you, madam chair. Thanks for holding this important hearing. And secretary raimondo and mr. Panchanathan, thanks for your testimony today, its appreciated. I want to take a moment to recognize the work secretary raimondo and director panchanathan have done to implement the chips and sciences act. You have built a team thats gone above and beyond to quickly and efficiently roll out these programs so we can strengthen our stem work force and bring in good paying jobs right here at home to everyones point is what we want. We talked a lot about advanced manufacturing and of course we passed the chips and science weve been talking about this, we want to bring manufacturing back to america and want to bring those good paying jobs here and as we do this, again, everybody is talking about creating the work force with the training and skills necessary. Senator rosen im proud to support that bill and proud to include the language i drafted with senator blackburn to provide funding, work force this mission is a bipartisan, manufacturing jobs in america act. So director can you please provide an update on the implementation on the of the work force provision . And secretary raimondo can you talk a little bit after that how we include our smaller communities and Rural Communities being sure they can grow out advanced manufacturing. Thank you very much, senator. I want to thank you for the pleasure of being in reno, nevada. As you know this is the same Work Force Development agency for the country in all aspects of science, technology and engineering in terms of broad based mandate which focuses on k12 as well as university, Community Colleges and beyond. So this 25 Million Investment is focused on bringing up as i said earlier, bringing upwards of 100,000 new Semiconductors Manufacturers and educators fulfilling a key neefd Semiconductor Industry through f. Y. 2027 and beyond. These have been used primarily in the partnership we have had as well as the future of semiconductor programs as well as Computer Science for u. S. Programs and specifically focused on microelectronic development. Im happy to talk more about this in the interest of time i want to make sure that im respectful of the overall time constraints the chair talked about but im main to say that in reno, nevada, we are involving the Community College move twargd lithium mining processing as well as recycling, thank you. Thats great. We love our Community Colleges in nevada. Sec. Raimondo just to briefly add to what the director said, last friday we put out an additional funding application for small suppliers, additionally as i said earlier today we are committed to investing in or providing grants to small, medium and large semiconductor companies. In fact as we talked about, the United States lost about 25 of its small manufacturers in the past 25 years. Many of them are specialty chemical companies, Material Companies and so we are very much interested to partner with these companies, the Chips Program, to build out the entire supply chain all over the United States. Sen. Rosen i want to build on this in the rural arias and mining areas that director talked about too. Im a member of the Senate Armed Services committee, were thinking a lot about the National Security implications on the supply chain. Those big minerals are in the game in rural nevada. It is really important, were the nations lead for the hard rock mining and battery recycling. So talk about our work force, talking about all the things we can do, what more can congress do to bolster our Critical Minerals work force, strengthen our supply chain, thats naturally going to help our small and Rural Communities in nevada. Sec. Raimondo i think we need to continue to focus on it. We need a comprehensive National Plan as it relates to minerals. We at the Commerce Department are trying to set up a supply chain office in the Commerce Department so we can be proactiv, not just reactive in identifying all of our holes. Sen. Rosen thank you. Madam chair, i yield back my time. Thank you so much. Senator schmidt. Sen. Schmidt thank you, madam chair, good to see you. I want to get to two or three topics. As you know the d. O. D. Is in the process of this use, they talked about they issued a report, shared it with you, and theres a lot of hesitancy, i think, for a variety of reasons for other agencies. For a lot of reasons. Making additional spectrum available for commercial use. I think the collaboration is really important. And you play an Important Role in advising the president on this, as you know. And understanding what our nations spectrum strategy ought to be and what additional federal spectrum available for commercial use whether its licensed, shared, licensed or unlicensed. I think its critical, i serve on the Armed Services committee too in addition to this committee. Theres a balancing act, not just National Security but economic security. What are you doing specifically to have or evaluate the strategy here and what would you do tomorrow if d. O. D. Said the lower three are off limits entirely . Sec. Raimondo i think that would be deeply problematic. As we said earlier, we received a report at the end of last week and should arrange a briefing for d. O. D. And ndaa to provide that breefng what the report says tasms balance but economic competitiveness is National Security. And making sure we have enough spectrum available for private Sector Innovation and 5g expansion is National Security. And there are ways, if we are innovative this shouldnt be a zero sum game. We can make more spectrum available and also not take anything away from the d. O. D. That they need to fulfill their mission. Sen. Schmitt in august you visited china. Shortly thereafter it was restleeld p. R. C. Hacked your email account and were privy to all your emails. In an interview with cnns state of the union, you said you were firm and direct. Do you think they viewed this as a sign of your weakness . Sec. Raimondo i do not. Sen. Schmit trveg are you aware of other senators you were emailing with they hacked . Sec. Raimondo the investigation is ongoing. It is concerning. It is more than concerning. Sen. Schmitt i want to switch things up. Senator vance asked a couple of questions in this regard. What does Climate Change have to do with broadband . Sec. Raimondo Climate Change has to do with everything. Tell me your exact question . Sen. Schmitt ill be happy to. You have Climate Change requirements. Eligible entities must account not only for current climaterelated risks but also how the frequency, severity and nature of the events may evolve as our climate continues to change. Can you tell me anywhere, anywhere, madam speaker, anywhere where congress has put into plaw lau that you would require them to mitigate Climate Change . Can you point to that section . Sec. Raimondo congress requires us to be good stewards of taxpayer dollars. To be accountable. Therefore we have to Fund Projects that will be successful. Otherwise well waste money. Sen. Schmitt you may think its important, President Biden thinks its important but congress hasnt set that requirement. Sec. Raimondo but you want us to fund things that are successful, if Climate Changes prevent success sen. Schmitt how does broadband in missouri have anything to do with your climate agenda . Sec. Raimondo i talk to people all the time in rural places that due to climate event theirs Current Technology doesnt work. Like they dont have the internet when theres a storm. So climate very definitely affects the effectiveness of certain. Sen. Schmitt i can tell you having been elected by rural states, theyre interested in their kids being able to Access Internet for homework. Theyre not interested in social experiments. Respectfully how are we how about we just deploy broadband. Sec. Raimondo your state will receive 1. 7 billion. Your governor will be providing us with a plan for how he feels it should be invested. So senator markey. Sen. Markey thank you. You have two of my alltime favorite witnesses here. Good to see you, madam speaker, and panch. You know when somebody has just one name, like bee beston say or cher or bono. So with the explosive growth over the past two decades, the Semiconductor Industry is a large contributeor to the climate crisis. Releasing the equivalent of annual emigs of 1. 4 million dheerns roads of the United States. Carbon emissions and water consumption are particularly intense in the production of the most advanced chips. As the Commerce Department prepares to issue 50 billion for chip manufacturing in we cannot ignore the Environmental Impact of this investment. Secretary ramon doe raimondo, i was pleased to see you are requiring people to submit climate and environment plans for their chips acts funds so madam speaker, i understand that youre committing to making sure Companies Make good on their environmental commitments . Sec. Raimondo yes. Its Good Business. Every c. E. O. Of every American Company will tell you, they have to manage risk. And theres risk associated with climate events. And if we dont plan for those climate events, then they can insert risk into these prompts, whether its broadband or chip. So this is companies ought to Design Projects to minimize adverse impacts to the project from climate and the environment. This is just Good Business and good taxpayer protection. It has nothing to do with a social agenda sen. Markey so major Manufacturing Activities including chip manufacturing can lead to significant Environmental Justice concerns for communities surrounding the manufacturing plants, developing chips is an incredibly water, energy, and chemically intensive process. The chemicals currently used in Semiconductor Fabrication are extremely dangerous to workers, Community Members and their families, new technologies and processes are needed to manufacture semiconductors without these risks. To can you tell us how youre prioritizing that research so that truly green and clean in the Semiconductor Fabrication technologies . Sec. Raimondo in addition to companies who are applying for taxpayer money, they have to show us a financial plan, an r d plan, a security plan we want to see a sustainability plan that we can evaluate to make sure that theyre serious about these commitments. Sen. Markey so were going to open the federal taxpayers wallets to private sector company, if were going to do so we cant close our eyes to environmental harm where companies are located. We can do both at the same time. Now i want to move to the Environmental Impact of chip manufacture to the impact of chip use so big data, machine learn, a. I. All require huge numbers of chip cutting Edge Semiconductors and create a significant Environmental Impact. A study from the university of massachusetts amherst estimated that the energy for developing one advanced a. I. Algorithm out of millions of potential molds of algorithms would admit as much co2 as five cars over the algorithms lifetime. That could be millions of algorithms that are out there. So these data centers are using scarce Water Supplies across our country for cooling these chips. And while a. I. Proponents argue that a. I. Will solve most of our pressing problems, the Energy Required to pow they are technology is contributing to the biggest problem of them all. Climate change. So can you talk about how youre integrating your thinking at commerce on these issues as one solution to a set of problems could exacerbate a larger set of problems . Sec. Raimondo its such an excellent question. If you think about a. I. And the compute power required for training these large models, its much greater than any of us thought. One area of innovation in chips is making chips that consume less energy. So i the research and Development Money we will spend, the nftc, i suspect much of it will go to exactly this innovation which is to say high compute chips that are much more energy efficient. Because others this wont be sustainable. If you think what we need to do, match up what we need to do for sustainability with the amount of compute power we need to have new innovations. Sen. Markey i wish my mother could hear a Rhodes Scholar tell me i asked a good question. Finally on the labor front, good jobs that were trying to create so that these families can thrive, have good wages, health care, benefits. And the Commerce Department is going to be providing billions to these companies and my feeling is they should be required to maintain strong labor standards for their workers and nonunion companies to provide workers a free and fair chance to gin a union and bargain in good faith. Thank you, madam chair. Madam secretary, good to have you here. Panc ferg h. Its good for my colleagues to have the chance to ask these questions about the chips and science act to make sure its implemented in accordance with congressional will. Madam secretary you highlight the importance of being a good steward of taxpayer dollars. Can you tell the committee, in summary fashion, how you worked hard to be a good steward of taxpayer dollars as it pertains to implementation of chips and science and then advice members who may be listening, because they asked me, how they can track on an ongoing basis implementation of chips and science dollars, these investments. Sec. Raimondo ok. We built a team of over 100 people toonlize each of these applications. Every company in order to receive money has to show us a financial plan, has to show us their books, their company, their research and development plarntion their National Security plans, their work force plans. And as i said earlier, this has nothing to do with social policy, this is ensuring that these company kans get the jop job done. You dont want, i dont want, my taxpayer money given to a company that wasnt dunt have a work force plan and therefore condition get the job done. So all those requirements are designed to do that. Furthermore, once we give the grant, or structure the grant, therell be like an agreement, a compliance agreement, theyre going to receive the money, contingent upon them doing certain things, and we will trawnch the money out on the basis of those milestones. Thank you. Ive had visibility into this process from the beginning and worked with you and members of your team who are implementing. I know you have hired on incredible talent, people with wall street experience, people who understand how much is needed for each of the stake holders and therefore much of your work is focused on making sure we dont overspend. So that we have more resources to spend more effectively and can advance national and economic security. With respect to the techa program, the regional tech and innovation program. Youve spoken to this already, madam secretary. The state of indiana, we submitted an application. It is dezic if designated it would help cement indianas position as a very important locus of biotech, medtech, genomics, and synthetic innovation. Congress has only appropriated a noafertion Tech Hubs Program funding what opportunities are we missing especially in regards to leveraging private sector investments but not prioritizing full funding of the program . Sec. Raimondo i want to thank you, youre a warrior to make sure the 500 million is in there. Its authorized at 10 billion. So were missing massive opportunities. We have 400 applications from over 40 states. And well only be able to make maybe five or six sizable grants. As i said earlier, well designate say 20 tech hub, plus or minus. Every one of them is probably worthy of maybe 100 million. That right there is 2 billion so i think every bit of the 10 billion we could put to work to stimulate high quality tech hubs. Your application is amazing. But then again so are many of the others. And we will be missing out. Dr. Panch, relatedly, we introduced the creative a. I. Act to enhance the international Artificial Intelligence force to help us harness the techs amazing potential. Are you supportive of this create a. I. Act . Yes or no . Yes. Thank you. I have limited time but if you could expand on the importance of federally funded research including the National Science foundations national Artificial Intelligence research institutes, id appreciate that. And then the importance of appropriating the chips and science acts research authorization. I would note were discussing Artificial Intelligence and critical importance of this to our National Security. The National Security commission on a. I. Has recommended funding at 32 billion per year. Beginning in fiscal year 2026, Artificial Intelligence. That lays a predicate for your response. A. I. Is made possible because of investment to a. I. Over several decades. Here we are right now. And we have a competitor thats outinvesting in some of these areas. This is not the time to enter discussions, this is the time to invest, outinvest, outcompete never aspect of what we need to do with a. I. What we cannot have, and i want to make this clear. What we cannot have is a situation like in semiconductors today. Trying to put the bandaid, trying to get it back into work we cannot use that advantage in a. I. Or quantum or advanced wireless or wired technology, you name it. Im extremely concerned we are not moving fast enough because our competitors are outpacing us. We have a strategic advantage and we must not lose it. Senator baldwin. Sen. Baldwin thank you madam chair. Welcome to both of our witnesses today. Secretary raimondo, i want to thank you for your leadership in execute thinking Regional Technology and Innovation Hub program. This committee worked very hard to craft that program and the Appropriations Committee on which i also sit provided the initial funding to get this program up and running. And i have heard you laudly and clearly that we need to follow through with significant additional funding in the years to come. As you know, wisconsin worked hard sole application focused on biohealth and personalized medicine technology. With a significant private Sector Partnership and investment. As you also know we have a rich history of innovation, World Class Research institutions, and Robust Manufacturing as well as a very strong work forest and work ethic. Wisconsin is poised to become a growth sector in this cutting edge and valuable industry. I do not envy your teams task as you look through multiple applications but i would have been remiss if i had not also highlighted our application as many of my colleagues have today. Now shifting a bit but not much. One of the fundamental issues that the chips and science act aims to address is the too common occurrence of our American Companies doing Cutting Edge Research and development in the United States and then manufacturing their products elsewhere. Thats the story of the semiconductor in a nutshell. And part of why the chips act was necessary in the first place. Now current law requires inventions that stem from federally funded research to be manufactured in the United States. But that requirement is often waived and literally approved with just a rubber stamp. For example, 2022 investigative report found that breakthrough Battery Technology invented in a federal lab and paid for with taxpayer dollars was licensed by the department of energy to a department to a Chinese Company and manufactured in china. Now i know you are not here from the department of energy. But the department of commerce has an incredibly Important Role to play in the solution. Earlier this summer, President Biden signed the invent it here, make it here executive order. It bears a striking resemblance to legislation i introduced earlier this year with senator vance which we twhaild invent here, make here act. Great minds think alike. Thats what ill say. Our legislation goes a little bit further than the executive order. It actually forebids licenses from being granted to countries of concern as defined in chips and science to include the p. R. C. , among others. So given your role in carrying out the executive order and the duties Congress Granted you in the chips and science act over commercialization, im interested to know your thoughts on the issue and the need for legislative action in this arena. Sec. Raimondo thank you. First of all, i fully agree with you that that did happen with semiconductors we used to make them in america. In search of cheap labor it all fled our shores and look where we are now. I strongly support what youre trying to do. I also assure you, there is no rubber stamping in these waivers. We have to be practical. Not everything is made in america. Not everything can be made in america. However, we had a fantastic visit in kenosha. Thats a perfect example of, because we in the Commerce Department have been holding their feet to the fire of those companies, we said were not going to give you a waiver. We dont believe we need to they found a way to manufacture in your state. Sen. Baldwin i want to make the distinction between buy american poll circumstances as you announced in kenosha, we cant necessarily source from nokia if theyre not going to make it here. But you work the buy america language, persuaded them to bring those job and that technology to the u. S. But here were talking about new inventions, funded by taxpayer dollars. And that, i feel, we have a special obligation as stewards of our tax dollars to keep the manufacturing here. Sec. Raimondo absolutely. I agree. Senator capito. Sen. Cap toa thank you both for being here with us today. A long afternoon. Secretary raimondo and dr. Panch, i guess, if i can call you that, i did vote for this bill. I think its very critical. Secretary, thank you for all of what youve done in broadband. Were looking forward to rolling this out, you and i have talked about this more than a few times. You know how important it is not just to me but the rest of the country. Im interested to hear that your agency, the department of commerce, has run into an unexpected hurdle in implementing chips, that being the nepa process. Im on the epw committee, im the Ranking Member. This is an issue, doesnt matter if its chip manufacture, broadband development, transmission, energy exemployee airks everything is being held up by the nepa process, the permitting process, and the ensuing little gaition delays that come forward. So then i heard that theres i mean senator cruz has an amendment with senator kelly to exempt the nepa process for the particular bill. You spoke in favor of that. Sec. Raimondo yes. Sen. Capito how does this administration with you as your representative actually square exempting one industry over another when its holding up progress, National Security, Energy Security, communication, everything. Why would that be a good idea . And how can this administration think thats a good idea . Sec. Raimondo i can uh only speak to chip and what i said earlier was, sometimes these processes could take, you know, 10 years. For chips its a National Security imperative. I want to be crystal clear. We have to maintain basic environmental protections and we will as we build out these manufacturing facilities. We are not looking to get rid of environmental protections. We are just looking to have a more streamlined process. Sec. Raimondo we agree on that. Im not into eliminating environmental protections. Sen. Capito but the lent of the prompts, Energy Security is as important as chip security. I would say transmission in this country is just as important as something that does manufacturing chips. Then if youre going to manufacture the chips youve got to mine them. And recover them. And that means you have to permit the mines. If you look at arsenic which is used in chips, 97 of it is from china. Cobalt, 70 of that is from cobalt. Rare earth elements, 60 from china. 10 if the United States. Titanium, 86 from japan. Noble gases from russia and ukraine. But we have these resources in this country. But we can be the get these mined these mines the permit. How are you going to go from permitting to fab when you cant get the materials permitted . Theres a disconnect here . I would be fine to try work this disconnect out because as i said in the beginning, i think this is exceedingly important for our future. Sec. Raimondo as you say, this is complicated and there is a balance. I know that the chair in a bipartisan way has worked on an amendment in the ndaa as it relates to chip. Im in no way saying the other issues arent also important and they you know they merit further discussion. Sen. Cap toa i think its rather ironic that an administration would actually make an exception for something they consider a marquee plan for them, in the best interest of the country, when theres other things that i think politically are more difficult to touch, that they wouldnt look for the streamlining of permitting which should be fair and even across the board. Without giving up any environmental control. I sit on the committee that does this. Ive been very strong on air and water all the way through. Theres a better way to do it. Let me just ask one quick question then you can respond. I think youve been asked this before. I do obviously have my West Virginia tech hub application in. Were all putting our foot on the scale for our own projects. I understand the Program Requires one third of tech hub grant designations must significantly benefit a small rural community. That means one out of the three hub designations under phase two would be rewarded to Rural Communities. Is that a safe statement . Sec. Raimondo one yes. Statutory requirement is one third in rural or small communities. Sen. Capito so thats still the plan . Sec. Raimondo yes. Senator sinema. Sen. Sinema if we could just hurry, if we can. Sen. Syman thank you for being here today. Im proud of played a role in getting chips and science signed into law. A year later, the impact on the economy is clear, nowhere more evident than my state, arizona. Weve led on chips since the 1940s and will continue to lead with the help of the chips and science act. The department of defense to allow Central Arizona to continue its great work. Since 2020, Central Arizona has led in semiconductor go these investments are essential but arizonas leading Semiconductor Manufacturing ecosystem is built on the hundreds of chip related Companies Working at all phases of the manufacturing life cycle wells as well as the academic institutions, Work Force Training program and Small Businesses that make it possible. Thats why it was so important to address Semiconductor Manufacturing. There was a time when it looked like the development portions of the law would follow this trend to less than fighting. Thankfully, senator young, myself and other members worked across the aisle to make sewer that didnt happen. So turning to our witnesses, i want to first start by welcoming and recognizing my friend and fellow arizonan, panch tharyngsd amazing work youre doing. I got to see your work in education, science and innovation firsthand at a. S. U. And in the senior advisory roles you have played in our state government. Now i see that same dedicated insight implementing this legislation at the federal level so thank you. Thank you. Sen. Sinema my first question for you, the Work Force Education fund is essential to building an economy and rewarding careers. Can you comment on how the n. S. F. Funding along with publicprivate partnerships have helped get resources where theyre needed especially in arizona. Thank you. Senator sinema, truly a pleasure to hear from you. You are taking back to my years in arizona by what you said. Always a pleasure. The Work Force Investment that they are making to the chips and science act is 400 million over five years this year it is 25 million. We are focusing on ensuring that that investment for intel and micron as our partners who are coinvesting with us are being deployed in ensuring that we are training the work force not only in terms of what we do with Community Colleges and universities but also training the trainers, namely the teachers, in institutions so we have the pipeline of talent ensured for times to come. So were working on all of those Component Parts as we are thinking about deploying these resources. We are also talking on a project focused on internships with industry as well as making sure the efforts are also informed in. So its a comprehensive investment of what theyre doing with chips and science as well as the main investment of democrat which is is also prioritized key technologies. So i feel very happy. They are looking forward to the outcome which is very important in this time when theres so much need for a trained, skilled work force in semiconductors as was pointed out yesterday. Thank you so much for your support and championship of the chips and science act. Sen. Syman thank you. Secretary, i see what you outlined for the economic and National Security priorities at the heart of the chips and science act. To keep pace with these goals, and a robust American Work force the chips projects must be funded to be workable. Unfortunately the nepa reviews currently required for chips grans could slow down the Fund Disbursal and prevent actual construction by two years. This is a huge barrier to bringing these online as soon as possible. I worked on a bipartisan provision to streamline reviews. You testified previously before the House Science Committee you support this language. I want to check with you, do you still support it . Sec. Raimondo yes. Sen. Syman great. I have further questions i will send over but i will yield back for another member. Senator budd. Sen. Budd thank you, madam chair. Thank you both for being here. The Commerce Department has a lot of rollout responsibilities with the chips and science act and the broadband equity access and deployment bead program. So i need to hear youre going to adhere to Congress Intent in both of those laws. Serious concerns are coming to light in this administrations handling of 65 billion going to broadband. The secretary general said commerce is failing to do basing checks resulting in potential unlawful duplication. Recently the wall street journal reported that commercefunded broadband will cost more to bring broadband to a home than the assessed value of that home. Thats the wall street journal. Two weeks ago after months of letters from my colleagues and i with concerns that have been ignored, we released a report that found this administration is unlikely to reach all connected americans with broadband. Now this is due in large part to this administrations extreme bias against nonfiber technologies. Technologies like wireless and satellite broadband and then also its allocation of funding to parts of the country that already have high Speed Broadband like right here in washington, d. C. Unfortunately. And as the report went ton uncover, the department of commerce allocated washington, d. C. More than 547,000 per unserved location. 33 of those locations are at the national zoo. This is a waste of taxpayer money. I think that most taxpayers would be horrified by the prospect of spending upwards of 100,000 or 200,000 to connect a single location. Especially when many of these homes could be connected by an alternative or Innovative Technology at an exponentially lower cost to taxpayers. So question. Would it be better for tax payers to spend 200,000 on a fiber connection to a single home thats worth 50,000, thats 200,000 to connection it, connection fee and cost, to a home worth 50,000 . Or would it be better to spend 500 connecting them oa high speed satellite . Sec. Raimondo thank you, senator, for your question. First, i want to say the statute provides thank you for the elaboration, if you could just answer is it better to spend 200,000 on a 50,000 or better to spend 500 connecting it to satellite . Sec. Raimondo it fends on the quality. It might be worth spending 200,000 of taxpayer money when you could do it for 500 . Did i hear that correctly . Sec. Raimondo this isnt my decision. Your governor and your state will provide a plan. Our job is to make sure that at the end of that plan every single north carolinian regardless of where they live has high quality, affordable internet. Low quality satellite doesnt help anybody. Heres whats happening. Let me get to the point. Would it be worthwhile, heres whats actually happening. Would it be worthwhile for taxpayers to spend 200,000 on a fiber connection to a mansion thats worth 5 million . Sec. Raimondo nobody says fiber has to be used. There seems to be a bias toward fiber. Thats whats happening. Sts its happening right now because the Biden Administration, he has it has shunned wireless and sat rite alternatives. Further bidens bead rules allows for building finer to mansions and vacation homes. These rules prohibit states from funding nonfiber projects except in extreme situations. These are extreme situations you may have begun to elaborate on but unless they get a waiver from the federal government to do the alternative. So i urge you to eliminate tech bias in your rules. And put in sensible limits that would stop subsidizing millionaires. In the matter of time, id like to mention this report put out by the Ranking Member, the red light report, to stop waste, fraud and abuse in federal broadband funding and id like to submit it for the record. Without objection. Thank you, i yield back. I dont see senator sullivan. I know he wanted to ask questions but i dont see him on the screen. Im going to ask a few and then wrap it up here so you can get on to the meetings you both have. Secretary, supply chain resiliency depends on security. Theres a lot of discussion over the last several months about how to get that, particularly when it could be back door attempts to information and communication technology. Data that can be used illegally for surveillance or espionage or various things. We have looked at this issue and its been suggested to us that Something Like the guard act which would give congress, when we think about the Information Age and technology and export and import controls, one thing is clear. We need a little better tool on the control of flow of what could be a back door of information, or information thats used in a way for purposes not friendly to our country. Like illegal foreign surveillance. So were concerned about targeting of military members. Their families. Immigrants. What do you think we should do about this . What do you think about the guard act . Sec. Raimondo im very supportive of the guard act proposal. Im often asked should we outlaw tiktok, this is bigger than tiktok. Tiktok poses National Security risks, to be clear. But we need a comprehensive plan to update, as you say, the threats are different today than they were 10 years ago. And so the right way to do this is to have, to empower a statutory set of tools, to have a comprehensive approach to these apps that pose National Security risks. Tiktok and others and so im supportive of attack it in a comprehensive, statutory way. Appreciate that. Director, were oversubscribed on the n. S. F. Side. Were oversubscribed. I suggest we have more conversation about this. How do we, from a scientific side tell our colleagues on the appropriations side that we have shortfalls that could i loved all these questions about both where we go, because obviously the bill is about creating a distributed generation of r d. And we already are pretty distributed, pretty competitive, way better than a topdown model of other countries. But i also say two guys named bill created our economies, bill boeing and bill gates. Never know where the next bill will come from. Thats why we want a more distributed generation of r d. But what do we do about the shortfall with our appropriators that theres so much in the pipeline that could be effective . On so many levels. Im so glad you have been a supporter of the chips and science act. I know how hard you worked. Thank you very much. On behalf of the science and Technology Community we owe you a debt of gratitude. I just want to say that, let me take the basic research paradigm. 50,000 proposals. We fund 11,000 of them. 20,000 were told we should fund them. But theyre on the chopping floor, its a huge loss, our competitors are taking advantage of that. The secretary talked about they have proposals, we are not going to be able to fund all the top quality proposals that need to be invested in. These are things that are being left behind. I suggest we get an answer from the Scientific Community about the science necessary on these proposals. Like yes, you get an a on your paper. It is where we should be investing. But we dont have the resources. Thats what i think we need. Not that we want some people to have failing grades on these proposal bus so that were prioritizing and people can see that this is really what we need this hearing will remain open for the record the record will remain open for four weeks until november 1. 2023. Any senators liking to submit questions for the record can do so. Two weeks from now by october 18. And we ask that responses to this be done by november 1. So thank you to the witnesses, thank you to all our colleagues. We had a double feature today in the committee. Very good attendance which i think shows the interest of members, particularly to this afternoon in this very important legislation. Thank you both for your tremendous leadership on americas competitiveness. Were adjourned. [captions Copyright National cable satellite corp. 2023] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. 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Virginia senator compared National Security threat to chi from to russias invasion with ukraine he talks about the risks of Artificial Intelligence, misinformation and the 2024 election. And the temporary government funding bill