'Yes Or No?': Jeff Merkley Grills Howard Lutnick On Implementation Of Chips Contracts

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At today's Senate Appropriations Committee hearing, Sen. Jeff Merkley (D-OR) questioned Commerce Secretary Howard Lutnick.

Transcript

00:00Senator Merkley. Thank you Mr. Chairman and I believe the chairman has already raised the

00:06issue of the manufacturing extension partnership. Last week I met with about 20 small manufacturers

00:13in Oregon who had benefited from this and they were telling me their stories of how how much

00:17more they've been able to increase their efficiency due to the expertise brought to bear through through

00:23MEP. There are 13 MEP centers signed up to recompete their 10-year cooperative agreements. I don't

00:31think that process has been initiated yet. Are you planning to initiate that process soon? Well I have

00:39to sort of sort it out with I have the Office of the Inspector General has been really had a very

00:45very negative report. So we need to clean it up and we need to modernize it. So that's what we're

00:50working on and then we're going to go forward try to figure out what to do next. Can you meet with

00:54those of us bipartisan fashion that that have seen the powerful impacts on supporting American

01:00manufacturing by small businesses through MEP to maybe go over the Inspector General's comments and

01:06think about how if we need to reform the system we can reform it but then we can get this renewal

01:11this contract. That sounds like a great idea I'd be glad to do that. That sounds great. Thank you. I wanted

01:17to turn to the the chips world to implement the chips act commerce signed contracts with American

01:24chip makers but you have noted publicly that you are not planning right now to distribute the chips

01:30award dollars even to folks who have satisfied the contract conditions. So just to be clear yes or no

01:39are you currently withholding the funding to chip makers who already had these contracts? I think the benefit of

01:46the bargain there are numerous contracts that can be made better for example the TSMC contract had a

01:52six billion dollar award for 65 billion of building and then we were able to modify the award for the

01:59same six billion dollars of funding but a hundred and sixty five billion of building. I think commitments

02:05of four percent or less are more appropriate than a ten percent funding just seemed overly generous and

02:13we've been able to renegotiate them. So if the question is are we renegotiating? Absolutely for

02:19the benefit of the American taxpayer for sure. Well I'll just note that I'm concerned. I'm concerned because the

02:28whole goal was to reinvigorate American chip manufacturing and to some degree you may be able to strike a better

02:36bargain but at some point it doesn't become a better bargain and we reduce the acceleration of our

02:42re-energize re-energizing the chip industry here. I can't be more confident than if you spend time with us

02:50you will see that all the deals are getting better and the only deals that are not getting done are deals

02:55that should have never been done in the first place but all the deals are getting better. Micron offered to do

03:00go from 25 billion in commitments to 60 billion in commitments. I mean the commitments of building

03:07in America are going better. We're just getting more value for the same dollars. So we are planning to

03:13distribute money only if we get much more building in America which we both agree is totally in the

03:19interest of America. Well I hear your point. I will say that when companies find when they put a lot of

03:28work into striking a deal that that contract then is up for renegotiation down the line that also kind

03:36of discourages folks from from being able to rely on on the contracts that they've struck. So I'm just

03:43registering concern about that and and hope the the rest of the deals that were were struck if they

03:51can be renegotiated to the favor I hope they can be done and we can proceed because I don't want to slow

03:56down uh the work that we invested in in a bipartisan fashion to reinvigorate chip making here in the

04:03United States. Sure. Thank you. I wanted to turn uh to the tech hubs and um the the department has

04:14canceled a number of well I think quite a few of the tech hubs awards and maybe it's a similar

04:20situation. I think you're planning to re-compete them um correct? Correct. And in doing so what uh

04:29are you committed to a full and fair process with no discrimination against those who won in the first

04:37round? Of course. Absolutely great. I appreciate that the uh I'll tell you uh the microfluidics uh hub uh in

04:46Oregon. The the challenge of cooling chips is such a key part of advanced chip making as the many many

04:54many more layers are are uh added uh uh to try to uh reach the the maximum amount uh and that's such an

05:04an important technology for the the future and so I can tell you uh um um the uh community in Oregon was

05:13very excited about the investments they've already put into this strategy and I think it's very in

05:19I'm I know that they were very competitive the first round I'm sure they'll be very competitive

05:22the second round but I just want to put in a word of um uh of how how important it is that that

05:29technology continue to be pursued aggressively. I look forward to reading. Thank you very much.

05:34Senator Britt. Thank you so much Mr. Chairman. Mr. Secretary it's wonderful

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