Alleging that programs exceeded boundaries set by Congress, Senate Commerce Chair Sen. Ted Cruz, R-Texas, and Howard Lutnick, President Donald Trump’s nominee for Commerce secretary, are looking to cut portions from tech initiatives, from semiconductor subsidies to broadband expansion.
The Biden administration tacked on “left wing social objectives” as it implemented legislation passed by Congress, Cruz said at Lutnick’s nomination hearing, referring to demands placed by the Biden White House on recipients of federal grants from a $39 billion fund set up under the 2022 tax and climate law.
Pressed by committee Democrats on whether he’d honor contracts signed by the Biden administration with chip manufacturers, Lutnick offered tepid backing.
“I think they’re an excellent down payment,” Lutnick said, referring to agreements with Intel Corp., Taiwan Semiconductor Manufacturing Co., Samsung Electronics, and Micron Technologies. “I think we need to get it right. I think we need to review them and get it right.”
The Biden administration asked semiconductor manufacturers who applied for federal grants to ensure that the new facilities provided child care, encouraged the use of union labor, demonstrated responsibility on climate change and environmental issues, and included use of renewable energy to operate facilities.
All those requirements are likely to be up for review in the Trump administration, said Stephen Ezell, vice president for global innovation policy at the Information Technology and Innovation Foundation, a tech-focused think tank.
Although ensuring compliance with the “grab bag of social policy objectives” slowed down the selection of grant recipients and disbursement of funds, not all of the requirements were imposed by the previous administration, Ezell noted.
Lawmakers also added some requirements including requiring grant recipients to comply with the Davis-Bacon Act, a 1930s law that requires federal contractors to pay local prevailing wages to laborers and mechanics, Ezell said.
Lawmakers of both parties also pressed Lutnick to honor commitments made by the Biden administration under the chips funding law to provide $10 billion in funding to 20 regional technology hubs intended to spur innovation in areas not typically considered high-tech areas.
“I just want you to understand that there are a lot of us who want you to work with Congress to maintain and grow the tech hub programs, particularly in rural areas,” Sen. Roger Wicker, R-Miss., told Lutnick, who promised to look into the program.
Speeding internet access
Republicans also encouraged Lutnick to review the Biden administration program intended to expand high-speed internet across the country.
“I expect you to address the NTIA’s Broadband Equity Access and Deployment program, which provides over $42 billion,” Senate Majority Leader John Thune of South Dakota told Lutnick. “But as we know, it hasn’t connected a single household and there’s a reason for that. … It’s because it’s focused on all the wrong things instead of actually building broadband out into unserved areas.”
Congress in the 2021 infrastructure law appropriated $65 billion to expand high-speed internet access across the country. The National Telecommunications and Information Administration at the Commerce Department got about $49 billion of that. Late last year the agency said it had approved 55 of 56 plans submitted by states and federal territories.
Republicans accuse the Biden administration of slowing the fund disbursement by trying to accomplish social goals.
Brandon Carr, the newly appointed chair of the Federal Communications Commission, told Congress last year when he was a commissioner at the agency that the Biden administration “puts partisan political goals ahead of smart policy.”
Carr said the program was mired in red tape because it was attempting to advance progressive policy goals in areas of climate, diversity, price controls and preferences for government-run networks.
“The new administration is likely to revisit those,” Joe Kane, director of broadband and spectrum policy at ITIF, said in an email. “But there seemed to be bipartisan agreement at the hearing that the program itself should continue.”
Democratic lawmakers pressed Lutnick on whether he would withdraw funding for broadband and other programs if Trump ordered him to do so under the umbrella of a federal funding freeze.
“If the president asked you to cut an infrastructure program, would you cut the program?” Sen. Ben Ray Luján, D-N.M., asked. Lutnick said he worked for the president and would execute his policies, prompting Lujan to retort: “It’s not just that you work for Donald Trump, sir. You work for the American people if you get this position.”
In reviewing the broadband expansion program, Lutnick also is likely to consider more cost-effective options to provide high-speed internet instead of relying only on laying fiber-optic cables as the Biden administration had planned, ITIF’s Kane said.
The options may include satellite connectivity and fixed-wireless access using radio signals instead of wires, Kane said.
“Commerce can create a more focused, more tech-neutral broadband program without starting over from scratch,” Kane said.
Some Democrats pressed Lutnick on Trump’s order calling for a wholesale review of the Biden administration’s approach to regulating artificial intelligence technologies.
There was broad bipartisan agreement across the political spectrum as well as among tech industry groups on the need for the AI Safety Institute established under President Joe Biden and housed at the National Institute of Standards and Technology, which is part of the Commerce Department, Sen. Brian Schatz, D-Hawaii, said.
The institute is tasked with designing voluntary standards for safe use of AI.
“And so, I’m wondering what your thinking is on what do we do in place of this and how quickly can we get it done?” Schatz asked. Trump’s order on AI calls for a six-month review before issuing new guidelines.
Lutnick said NIST had developed the “gold standard in cybersecurity” and a similar effort to create standards for AI was possible and would garner bipartisan support.
Thune said that AI policies ought to “encourage the private sector to be the dominant winner” in the global contest for leadership in AI.
“A light touch approach to this is what makes sense to me,” Thune said.
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