HOUSE LOOKS TO BOOST SEMICONDUCTOR WORKFORCE: With chip makers starting to stream back to the United States — and with more likely to join them once Congress passes the $52 billion in semiconductor incentives tacked onto its sprawling anti-China competitiveness package — lawmakers are moving to ensure the companies will find capable workers. In planned remarks shared with MT ahead of a House Science Research and Technology Subcommittee meeting slated for this morning, subcommittee ranking member Randy Feenstra (R-Iowa) calls the planned subsidies "only the first step." Feenstra added that the committee "should continue to consider how we are connecting Americans with these good, high-wage STEM jobs across the country." — STEM deficit: Lawmakers will repeat a familiar lament in this morning's hearing: The U.S. is woefully behind much of the world in its number of graduates with degrees in science, technology, engineering and mathematics fields. "Today, many countries in Asia have a competitive advantage over the United States in terms of high-skilled workforce capacity for semiconductor manufacturing," committee staff wrote in the hearing charter ahead of Tuesday. The committee claims the relative lack of technical workers in the U.S. "is part of the reason that the United States does not have a single state-of-the-art [factory] capable of making the most advanced microelectronics." — Industry appeal: Shari Liss, the executive director of the SEMI Foundation, a major chip lobbying group, plans to ask lawmakers to increase investments in STEM education at all levels, with a particular focus on recruiting and training marginalized groups. Liss will also ask Congress to fund programs to increase awareness of job opportunities in the semiconductor industry. — Free fall: The U.S.' share of global chip manufacturing is just 12 percent — down from 37 percent in 1990. The Semiconductor Industry Association, one of the industry's top lobbyists in Washington, told the National Institute of Standards and Technology that a limited supply of U.S. workers with advanced STEM degrees, a lack of academic programs supporting emerging technologies and competition with other tech sectors are all hurdles to current onshoring efforts. — Dearth of diversity: As in many STEM fields, the chip industry also lags when it comes to diversity. A separate SIA study highlighted by the committee found just 4 percent of chip workers were Black, compared to 10 percent in all manufacturing fields, and 13 percent were Hispanic, compared to 17 percent in all manufacturing. Women are dramatically underrepresented — less than a quarter of chip-industry employees are female, and fewer than 1 percent of leadership roles are held by women. — Another chip bill inbound? Lawmakers are likely to ask whether it makes sense to revive federal programs meant to increase participation in the chip industry. From 1988 to 1996, the Defense Advanced Research Projects Agency provided around $870 million to SEMATECH, a research consortium then based in Austin, which sought to develop novel chip manufacturing techniques. Committee staff also wrote that legislation specific to chips could be modeled after the National Quantum Initiative Act (H.R. 6227) and the National AI Initiative Act (H.R. 6216, later incorporated into 2021 defense policy bill), both of which support workforce development for their respective technologies. FTC'S WILSON DINGS CONGRESS ON PRIVACY, REJECTS AI REGS: Wilson ratcheted up her fight against Democratic FTC Chair Lina Khan's progressive policy goals during an interview on Monday with the U.S. Chamber of Commerce — an organization that's also no friend of Khan's. The remarks suggest partisan tensions at the FTC are only escalating, particularly over something as potentially contentious as a privacy rulemaking. Meanwhile, the commission's 2-2 deadlock between Republicans and Democrats seems set to persist for some time. — Chill, Congress: While Wilson supports the FTC as the lead agency on data privacy, she called on Capitol Hill to think twice before granting Khan control over a new privacy bureau at the commission or providing her with increased authority to levy penalties — two provisions included in the Democrats' now-moribund Build Back Better Act. "The current leadership of the FTC has embarked on a sweeping campaign to replace the free-market system with its own rules governing how companies should operate," Wilson said, explaining why she opposed a new FTC privacy bureau absent "guardrails" from Congress to prevent regulatory overreach. Wilson later said the Build Back Better Act "goes too far in granting first time civil penalty authority" for businesses found to have broken the law by engaging in unfair or deceptive acts or practices. — Cool it on the AI regs, too: Wilson also dismissed Khan's nascent effort to regulate algorithmic decision-making and other AI tools. "AI rules, at this point in time, are a really bad idea," she told the Chamber, claiming the FTC is "a long way away from making sensible rules in this area." Although algorithmic and facial recognition tools are already in wide use, Wilson said any regulations targeting the "nascent" AI sector run the risk of "chill[ing] innovation and competition." FTC spokesperson Juliana Gruenwald Henderson forwarded a response to questions about Wilson's sharp comments on privacy and AI regulations from a spokesperson in Wilson's office. That spokesperson, who did not provide a name, said Wilson believes her remarks "speak for themselves." Split commission: Few had expected Wilson to bury the hatchet with Khan anytime soon, even before her remarks on Monday. But the apparent uptick in rhetoric against the commission's chair further dims the prospect that the two can find common ground on piecemeal privacy efforts. That makes it even less likely that any kind of privacy rulemaking — long rumored to be a priority of Khan's — will make it out of the commission, unless and until the Senate confirms Alvaro Bedoya and brings the Democrats up to a 3-2 majority. STABLECOINS SURGE ON CAPITOL HILL — Both chambers of Congress are bustling with activity today around stablecoins, as cryptocurrency continues to seep into the mainstream — and as lawmakers struggle to overcome their longtime reluctance to regulate the digital currency space. — Bill drop: This morning Rep. Josh Gottheimer (D-N.J.) released draft legislation creating a new regulatory framework around what the bill calls "qualified" stablecoins. These currencies would receive government-backed insurance, similar to the insurance protections afforded to bank deposits. They'd also be exchangeable with U.S. dollars on a one-to-one basis, and entities issuing them would be overseen by bank regulators at the Office of the Comptroller of the Currency. But there are deregulatory provisions in his draft, too — the bill would short-circuit an escalating debate around whether cryptocurrencies are assets or securities by defining "qualified" stablecoins as neither. That would take the currencies out of the regulatory reach of both the Securities and Exchange Commission and the Commodity Futures Trading Commission. — Senate chimes in: The draft House bill comes the same morning that Nellie Liang, the Treasury undersecretary for domestic finance, is slated to testify before the Senate Banking Committee on the President's Working Group recommendation to regulate stablecoin backers as if they were banks (a key provision in Gottheimer's draft bill). More on all this from our Zach Warmbrodt. Liang testified on the same question last week in front of the House Financial Services Committee, but faced lawmakers divided over the wisdom of the Biden administration's recommendations. Some House members worried that an inadequate reserve of U.S. dollars pegged to cryptocurrencies could cause investors to lose their holdings should confidence in these stablecoins suddenly collapse. (More on this for Pros from POLITICO's Sam Sutton). CORRECTION: Monday's edition of Morning Tech misstated the state represented by Rep. Cathy McMorris Rodgers. She is a House member from Washington state.
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