House speaker riles NY with threat to repeal manufacturing bill. But what is the CHIPS Act?

House Speaker Mike Johnson found himself backpedaling out of New York Friday after telling a student journalist he’d work to repeal a law that’s pumping billions of dollars into the state’s manufacturing sector.

Johnson was stumping for Rep. Brandon Williams, a Republican who’s defending his seat against Democratic challenger John Mannion in an upstate district that includes Syracuse. Following an event there, Luke Radel, a journalism student at Syracuse University, asked the speaker if he’d try to repeal the CHIPS and Science Act.

“I expect that we probably will, but we haven’t developed that part of the agenda,” Johnson said on Friday.

Almost as soon as the words were uttered, the blowback began.

Williams, who was standing next to the speaker, stepped in to assure anyone watching that he supports the CHIPS and Science Act and he’d try to convince his fellow Republican to relent. Gov. Kathy Hochul issued a Friday night statement saying she’d “fight like hell” to defend the program. Rep. Alexandria Ocasio-Cortez, during an MSNBC interview, jokingly thanked Speaker Johnson for his “honesty and his forthrightness about what they plan to do with a Republican majority.”

So what is the CHIPS and Science Act and why is it such a big deal?

The measure was signed into law by President Joe Biden in 2022 and offers billions of dollars in incentives to jumpstart the semiconductor industry in states that have witnessed a long decline in manufacturing jobs.

It appropriates $39 billion in funding specifically for semiconductor factories and another $15 billion for research, as the United States faces an ongoing domestic chip shortage. The chips are crucial to almost any electronic device and, currently, only 12% of the world’s semiconductors are built in the U.S., according to the Semiconductor Industry Association.

Hochul in particular has made semiconductor manufacturing a central tenet of her economic agenda. As soon as the federal CHIPS Act was signed into law, she pushed through companion legislation in New York that would provide $10 billion in state tax breaks for the industry over the next two decades.

“Anyone threatening to repeal the CHIPS & Science Act is threatening more than 50,000 good-paying jobs in Upstate New York,” Hochul said in a statement late Friday. “Repealing this law would cede economic power to foreign nations like China and allow our national security to be put at risk.”

Upstate New York, like other “Rust Belt” regions, was devastated by the loss of manufacturing jobs in the auto, steel and coal industry. A decline that began in the 1950s and continues today has emptied out once thriving cities and invited economic deprivation to regions that once comprised the heart of U.S. manufacturing.

For the semiconductor industry, at least, the CHIPS Act has delivered some good news to those communities.

The Times Union reported in August that two of the state’s biggest chip manufacturers were upping their presence in New York. Micron Technology is developing a $100 billion chip manufacturing facility outside of Syracuse. GlobalFoundries is planning to add a new factory to its campus in Saratoga County.

And just a day before Johnson’s comments, Hochul and Sen. Chuck Schumer announced that the nation’s first semiconductor technology center facility would be coming to the Albany NanoTech Complex, along with $825 million in federal funding for research and development.

After being mocked by Democrats and chided by Republicans, Johnson issued a statement reported by the Associated Press, claiming he misheard the question and meant that he wanted to streamline the CHIPS Act, not repeal it.

Republican presidential candidate Donald Trump has vowed to strike the measure if he returns to the White House and Johnson voted against it before he was speaker.