Gina Raimondo delivers a blunt message on stalled semiconductor chips bill: ‘Time’s up. It’s time to make it happen’

“It seems like folks are coalescing around the plan of some kind of a chips-plus package and moving quickly,” Raimondo said. “And so that’s what I’m hopeful will happen.”

Raimondo, who will be joined by Deputy Secretary of Defense Kathleen Hicks and Director of National Intelligence Avril Haines, has pressed lawmakers to move on the issue since the early days of the administration.

“Semiconductor companies need to get ‘concrete in the ground’ by this fall to meet this increased demand in the years ahead,” Raimondo and Secretary of Defense Lloyd Austin wrote in a Wednesday letter to congressional leaders. “CEOs of firms all along the supply chain have made clear that the industry is deciding where to invest now.”

Administration officials view the stakes as significant and wide ranging. Or, as Raimondo candidly put it: “Everyone who has studied enough has an ‘oh sh*t’ moment.”

Several companies have tied significant US manufacturing investments to the passage of chip funding, including Intel, which held a high-profile event at the White House in January to announce a $20 billion facility in Ohio.

The company recently canceled a scheduled July groundbreaking on account of congressional inaction.

As inflation sits at a new 40-year high, the ability to dramatically expand the supply of critical components in everything from cars and washing machines to iPhones is seen inside the administration as a long-term necessity.

“Clearly inflation is a problem,” Raimondo said. “And so investing to increase supply of chips is going to have a positive long term effect on inflation.”

The briefing on Wednesday, requested by Senate Majority Leader Chuck Schumer, will also draw direct attention to what officials view as the national security necessity of the funding.

It’s something with both near-term and longer-term implications. Raimondo noted that defense contractors are rapidly moving to replenish supply due to the massive US effort to supply weapons systems to Ukraine — many of which rely on chips.

But more broadly, officials keenly aware of significant Chinese efforts to ramp up domestic manufacturing of chips are seeing future defense systems as being at risk.

“Weapons systems employed on the battlefields of today and emerging technologies of tomorrow depend on our access to a steady, secure supply of microelectronics,” Raimondo and Austin wrote in their letter. “Immediate passage will revitalize the domestic semiconductor manufacturing industry and enable game-changing capabilities our warfighters need.”

More than a year after the Senate passed its bill, known as USICA, there are still a myriad of outstanding issues that haven’t been reconciled with the House Democratic counterpart. Aides in both parties acknowledge a near-term resolution is all but impossible at this point.

Things grew more dire in recent weeks when Senate Minority Leader Mitch McConnell, a Kentucky Republican who voted for the Senate proposal, drew his own red-line tied to the separate Democratic effort to pass a party-line economic package.

“Let me be perfectly clear: there will be no bipartisan USICA as long as Democrats are pursuing a partisan reconciliation bill,” McConnell said in a June 30 tweet.

Democrats, some of whom candidly acknowledged to CNN they saw a political opportunity, have railed against the proposed obstruction on from both sides of Pennsylvania Avenue.

But McConnell appeared to lay out a potential pathway to a resolution this week, when he noted two potential options would be for the House to simply pass the Senate version of the legislation or breaking the chips funding off and move it separately.

“There are members I have who are not overly fond of USICA but do think there’s a national security aspect to the chips deficit,” McConnell told reporters on Tuesday.

Speaker Nancy Pelosi, a California Democrat, ruled out the idea of passing the Senate version of the bill on Wednesday.

Raimondo directly cited that sequence of events when asked about the administration’s view of spinning off the chips funding and moving it immediately.

“I am simply saying time’s up for the chips portion of it,” Raimondo said.

As to political back and forth that has clouded the potential end game, Raimondo said she wasn’t surprised.

“Political posturing, looking for leverage in the 11th hour, trying to get exactly what you want in a bill,” she said. “That’s all pretty much standard operating procedure.”

But with lawmakers scheduled to depart Washington for the August recess in the coming weeks, that sanguine view won’t hold much longer.

“Going away for recess without getting this done, knowing that it puts your country at a massive you know, security risk,” Raimondo said. “Then I would be surprised. And really disappointed.”