Transcripts For CSPAN Commerce 20240703

Visit ncicap. Org] [captions Copyright National cable satellite corp. 2023] were going to break away here. You can continue watching this program on our website, cspan. Org. We take you live now to testimony from commerce secretaryse Gina Raimondo on semiconductor display chain investments. Live coverage here on cspan. Needless to say, our committee has been working very diligently on a lot of transformational policy. While were waiting for our colleague here, i think ill thank senator wicker again for his work on the chips and p science act. I think people may not remember but this committee i dont know how many amendments we processed. Sen. Cantwell ity know it was in the hundreds. It might have been in the 300s. But i definitely believe that that kind of regular order process was good for the institutioned good for institution, good for the debate about science, and hopefully people will continue in todays hearing to understand that and understand much of the debate that maybe wasnt as clear in a big public perspective as it was to all of us who were working behind the scenes daily to try to figure this policy out. Ok, well go ahead and get started and when my colleague gets here, hopefully hell be here soon, we will let him make his opening statement. But welcome, secretary raimondo. And director panchanathan. Thank you for being here with us today. I also want to mention that apparently there is a fema Emergency Alert test thats going to happen today so if everybody in the room gets a big alert message, thats what thats about. Not to be concerned about it. But Everybody Knows that its going to go off. So, a little more than a year ago, Congress Passed the landmark chips and science act and it was a clear commitment to americas competitiveness that we need to innovate in the United States. Clearly we were doing a lot in innovation, we were publishing a lot but we needed to translate more, patent more and really help our Manufacturing Base be competitive for the future. The two witnesses before us today led on the delivery of those commitments and are here to tell us today about the substantial progress their agencies are making during the first year of the implementation of this act. Weve already seen the chips and science act spur more than 200 billion in private Sector Investment from semiconductors across the country to other investments. And the federal governments role in this is so important because the commitment to the Chips Program office within the department of congress is generating more than 500 statements of interest from Companies Looking at new projects and innovation. So today well have a chance to ask the secretary about those proposals, building resiliency and longlasting Semiconductor Ecosystem in the United States. Since we have the chance to discuss this earlier, im pretty sure were going to hear today about how were never going to be in this problem again as it relates to legacy chips. That we are going to have a good plan to help on a supply chain doacht for that development for that, that our d. O. D. Stature is going to continue to be on the cutting edge of chips and i think youre going to tell us that the diversity of applications, the robustness of it, means that that ecosystem that we are trying to restore and grow is alive and well. Weve also seen n. S. Fmpt begin to roll n. S. F. Begin to roll out innovation engine with money going to planning grants to tap innovation across the country. I love that the director during our efforts basically coined the phrase, innovation anywhere, opportunity everywhere. And i definitely think that is what we were looking for in this both in the spreading of the amount of funding and in diversifying a work force opportunity across the United States. For example, in the state of washington, a spokane company won an award to advance energy decarbonization. We all know that innovation and expertise helps us generate jobs and tackle some of our most pressing problems. And we know that what we have to do on this committee, besides hearing from these Witnesses Today, is push our colleagues to fully fund the aspects of chips and science that were funded. In fact, the committees two previous attempts at competitive bills fell short because the funding was not realized. One, because we faced an economic down turn and the other just in our first, very first effort on competitiveness, also didnt make the mark from an appropriations perspective. So we know that our foreign adversaries are not waiting. We know that our strategic competitors are also moving ahead. And we need to make this investment to what we would say derisks the supply chain and makes sure that we are innovating and translating our science faster. As we look to the future, we need to Work Together to ensure that the u. S. Remains competitive in the global marketplace on other issues like artificial intelligence, 5g wireless systems and quantum computing. And that will require the United States to do a couple of things. The ability of the u. S. To produce and produce chips, to support this innovation. Thats why the advancement in hearing where we are with the applications is so important. Second, we need a resilient supply chain that with stand disruptions like we saw in the past, either geopolitical tension, natural disasters, global panchanathans, whatever pandemic, whatever. We need a more dependent supply chain. And a work force that is well skilled and technical to the tides of technology that are being produced today. I personally believe this is one of the biggest gaps left to be addressed in the chips and science act. We have some money both for Semiconductor Train and Work Force Training and work force advancement and some on the science side through n. S. Fmpt. But a lot n. S. F. But a lot more needs to happen. The United States, the jobs of tomorrow are here today, but the skill level of the work force to do them is not. And so the more that we can take advantage of the job creation thats happening by marrying that up, something the secretary knows from her days as governor, the more we can streamline that and marry that up together, the more this engine is going to rev and keep affecting the u. S. Economy. Today u. S. Manufacturers, only 12 of the worlds semiconductors, compared to where we were in the 1990s at 30 . So the question really today is, are we seeing the right level of investment to make a return to the market share that we think is important . My guess is were going to hear both from the private Sector Investment thats already been made and the robust response to the programs. Were going to hear that the investment wants to be in the United States. So, i think we cant emphasize enough how important it was to bring this manufacturing back, consumers saw car prices raise as much as 30 . Manufacturers werent able to get semiconductors, werent literally able to ship product. Supply chain resiliency also created deadlocks for other industries and impacted National Security. So, i hope that we will all Work Together on better tools for the future. Ill have some questions about that in the question and answer period. But the Semiconductor Industry today is facing a gap of 67,000 people by 2030. Thats just semiconductors. So i know we in my state, as it relates to just stem, have a gap of 60,000 workers across various sectors, not just semiconductors. So clearly we need to make the investments in the Scholarship Program and in the stem apprentices and work force for tomorrow to realize all this investment that is now being made in the United States of america. So welcome to our witnesses. Ill turn it over to my colleague, senator cruz, for his opening statement. Sen. Cruz thank you, madam chair, for calling this important hearing. And welcome, secretary raimondo, director panchanathan, for both being here today. Semiconductors drive our modern economy. From cell phones and cars to supercomputers and medical devices. These integrated circuits have been integrated into our daily lives. Before 2020, however, when we suddenly couldnt get enough of them, most of us probably didnt realize just how big a role these chips play. It became very quickly apparent that in terms of economic and National Security, just how dependent and vulnerable we are on semiconductors. Yes, we rely on these chips for Consumer Electronics and cars, but theyre also in just about every [fema alarms blaring] it works. Sen. Cantwell yep. I think your time is up, senator. [laughter] sen. Cruz we have an emergency in semiconductors. [laughter] thats a first. I believe i think our first witness is a semiconductor. You done . [laughter] no. [laughter] [fema alarming blaring] you have to shut it off. Yeah, you have to shut it off. [fema alarm blaring] [laughter] sen. Cruz as i was saying. [fema alarm blaring] [laughter] sen. Cruz with great trepidation, i observe that just about every advanced weapons system in our military rely on semiconductors and most of them are not made in the United States. Recognizing this, there was a fleury of legislative activity to onshore and nearshore Semiconductor Manufacturing last congress. Culminating in the chips and science act. Parts of this law, like the fabs act, which i cosponsored and enthusiastically supported, provided tax credits to incentivize chip investments in the United States. The final bill, however, also included a whopping 52 billion in direct subsidies from taxpayers that in my view would predictably lead to government bureaucrats picking winners and losers. At worst, this kind of industrial policy can be rief with political interference and waste and even at best it is often done poorly and inefficiently. Thats why i ultimately voted against the by, despite it bill, despite it containing a number of things i strongly support. Were already seeing a number of these concerns realized. When i speak to companies in texas, many of them bemoan how the Biden Administration has imposed extraneous nonstatutory conditions on receipt of taxpayer support. Commerce isnt just asking if youve got the best technology or the cheapest manufacturing process. Instead, the bureaucrats want to know if you have proper plans to subsidize child care, or to support affordable housing. You have adequately engaged with labor unions . Are your suppliers sufficiently diverse . None of these topics are critical to the fundamental question of whether you can build the best chip at the lowest price. Maybe these issues are relevant, but does anyone think that officials in washington know better than the engineers and the investors behind these projects . Moreover, none of these strings were included in the law. But theyve nonetheless been attached by the Biden Administration to try to enact by regulation things that they dont have the votes to pass through congress. As many Commerce Committee republicans noted in the letter that we sent to secretary raimondo in march, this teamed at backdoor Progressive Social policy will only serve to make domestic chip production more expensive, less competitive, and more reliant on taxpayer subsidies over private investment. More recently, an area of mange concern has been major concern has been the onerous environmental requirements under nepa and the potential for this environmental process law to drive up Compliance Costs for manufactures and significantly slow new construction. Thats why senator mark kelly and i led a bipartisan amendment to the National Defense authorization act to exclude from nepa the overwhelming majority of chipsfunded semiconductor projects. Secretary ray moppedo, i want to raimondo, i want to thank you for your support on that effort and for explicitly endorsing our amendment during your house testimony last month. Secretary raimondo, we have also had good conversations about the importance of a strong u. S. Chip industry. We both want to see americas innovative capacity soar, and we agree that using these taxpayer funds appropriately is immensely challenging. Fortunately states like texas are showing us a path forward here. Texas boasted an established ecosystem of innovators, world class universities, low taxes, and a permissive Regulatory Environment that enables companies to grow and to thrive. As a result, we have already attracted 61 billion in private, new Semiconductor Investments and created over 8,000 new jobs, making texas the center of u. S. Semiconductor manufacturing. Texas has a storied history in the invention and production of semiconductors. And were proud to help lead Americas Semiconductor renaissance and i would encourage the Commerce Department to look to the model in texas and to see how to make this broader effort more successful. Finally, its worth noting that the other half of the chips and science act, director panchanathan, the n. S. F. Does substantial work advancing basic science that helps expand our scientific knowledge. And thats important work. But im deeply concerned over what appears to be the increasing politicization of n. S. F. Funded science and the feedback loop and the scientific stagnation that is creating. Im especially disturbed by recent reports that n. S. F. Has to the tunes of tens of millions of dollars, been funding projects on how to counter, quote, populous narratives and socalled, quote, mis and disinformation, which seements like little more than fund seems like little more than fundk the pseudo science of censorship. I look forward to hearing from both of our Witnesses Today on how theyre implementing this very important law. The taxpayers put a lot of skin in this game and we all owe it to them to get it right. Sen. Cantwell thank you. Well start now with secretary raimondo. Welcome. I cant imagine what a busy time it is for you and the organization thats implementing this act. We appreciate your time being here today. Sec. Raimondo it is my pleasure to be here today. Thank you, chairwoman, and thank you, Ranking Member cruz, and members of the committee. Thank you for the opportunity to come talk to you about how were implementing this historic legislation and of course im so pleased to be here with panch, a fantastic n. S. F. Director. I do want to begin by taking just a second to share my condolences with senator feinsteins family. She was a pioneer and a role model for so many women like me. So i wanted to just take a second to say that. Because of your hard work, in large part due to you, chairwoman cantwell, and bipartisan support of the committee, the Commerce Department now has the honor and responsibility to invest 50 billion in our domestic Semiconductor Manufacturing and research and development. And i concur, this is an enormous responsibility and a massive amount of taxpayer dollars. We opened the application process in february, just a few months after you passed the bill, we have since received more than 500 statements of interest from 42 states, from manufacturers large and small. They outline proposals to manufacture chips and the relevant equipment and materials here in the United States. Very importantly, all of the 500 statements of interest, weve received over 100 applications or preapplications. In the last two weeks, we finalized and put out the guardrails to protect u. S. Government investments and bolster our National Security. Were also developing our chips r. N. D. Program to meet the unique r d program to meet the unique challenges to build a sustained r d pipeline, the standard of this is the Semiconductor Technology center or the nstc which we expect to launch this fall. So a great deal of activity since about a year ago that the bill was passed. And of course all of that research and Development Work were doing in collaboration with the n. S. F. The chips and science act also authorized two new programs, the Tech Hub Initiative and recompete, which we are administering through the e. D. D. A. E. D. Ampt. Weve received e. D. A. Weve received 400 applications for the tech hub grants. Its unbelievable. Ive never seen anything more oversubscribed. Later this fall, e. D. L. Will make e. D. A. Will make the announcements of the tech hub designations and then also invite an opportunity for additional funding for implementation. Similarly, were vifnting 2 investing 200 million in the recompete pilot program, to spur Economic Activity in geographically diverse and economicly disdressed communities complik less Distressed Community economicly disdressed communities across the country. We are making historically economically distressed communities across the country. If were successful, when were successful, the United States will become the premier destination in the world where new chip architectures can be invented in our research labs, designed for applications, manufactured at scale by welltrained, wellpaid American Workers, and packaged in the United States. So its a tremendous piece of work that we have, great progress since the bill has passed. Of course well answer any questions related to that. Before i close, just to mention how stressed we were about the possibility of a government shutdown, and how troubling it was to come within hours of that shutdown. So thank you for working hard to make sure that that did not happen. It goes without saying, china, russia, iran arent shutting down. The work were doing in the chips act is essential to our National Security and any shutdown would be massively disruptive to our ability to stay on the pace that were on in implementing this very important work. So with that, i will open for questions or turn it over to panch. Sen. Cantwell thank you. Director panchanathan, thank you for being here. Mr. Panchanathan thank you so much. Thank you, members of the Commerce Committee. Its great to be with all of you today. Particularly with a colleague, a friend, secretary raimondo. Before i begin, i would like to extend my deepest condolences to all of you for the loss of your colleague, senator dianne feinstein. Not only was senator feinstein an incredible leader and trailblazer, she was also a champion for science. Ins is grateful for her service to the nation. Thank you for the opportunity to discuss the National Science foundations implementation of the chips and science act and how the agencys building upon decades of successful investments in science, engineering and technology to ensure that the United States remains the Global Leader in innovation. For more than seven decades, n. S. F. Has been critical to powering our economy, transforming our quality of life and securing our National Defense. Many of the technological advances benefiting the nation today such as artificial intelligence, quantum information science, and biotechnology, are rooted in sustained n. S. F. Investments over many decades. However, we currently face intense global competition in the race to double up these Technology Develop these tech nothings and to train technologies and to train the work force of the future. N. S. F. s ability to enable scientific breaklose it and accelerate Technology Developments is central to our economic and National Security and our continued Global Leadership. With the passage of the chips and science act of 2022, congress put in place a road map for meeting this challenge, while spurring innovation in communities across our country. Over the past year and with the increased appropriations in f. Y. 2023, n. S. F. Has been able to make significant progress in implementing the chips and science act. The agency has moved quickly to launch new opportunities for innovation, implement Research Security measures, for safeguarding taxpayers investments, and engage talent and inspire the stem leaders of tomorrow. The n. S. F. Regional innovation engines will catalyze new businesses and Economic Growth in diverse regions of america. When the n. S. F. Engines program relieved its first funding opportunity last year, we received nearly 700 concept paipers from every state papers from every state and u. S. Territory of our nation. In may, n. S. F. Announced the first ever n. S. F. Engine development awards, consisting of 44 unique teams, spanning 46 states and u. S. Territories. Then in august, n. S. F. Announced its finists for the first finalists for the first fullscale n. S. F. Engines. For these two tracks, n. S. F. Plans to have invested nearly 200 million in Regional Innovation throughout our country by the end of this calendar year. I cannot understate how critical it is that we engage every part of our nation in these efforts. N. S. F. Has been intentional in implementing new opportunities and expanding existing initiatives to engage everyone who wants to participate in stem. In every state across every geographic boundary, drawing the full diversity of our nation. The chips and science act included a requirement that n. S. F. Grow its investment over time and im very pleased to report that n. S. F. Has met and even exceeded the target in the chips and science act of f. Y. 2023. It is also critical that we safeguard these investments and take steps to address Research Security while also cultivating vibrant international partnerships. N. S. F. Plays a leading role in federal efforts and we are expanding the agencys capabilities and competencies to protect taxpayer investments. The chips and science act includes valuable provisions that will help n. S. F. Build the capacity of the Research Community to make riskinformed decisions and strengthen the security of our National Research enterprise. Equally important to the nations competitiveness is n. S. F. s commitment to funding exploratorybased research that creates new knowledge and feeds the industries of tomorrow. For example, many of the a. I. Advancements making news today, we celebrate them, both the Innovative Products and the talent that is developing them were catalyzed by n. S. F. s continued investment over many decades, even through a. I. Winters. Likewise, the Technological Advancements of tomorrow will be borne out of todays investments. In just the past three years, n. S. F. Has established 25 national a. I. Research institutes in partnership with federal industry. The investment reaches into almost every state, supporting cuttingedge research that is applying a. I. To key economic sectors like agriculture, weather and public health. N. S. F. s ability to generate more breakthroughs and foster more innovations and to do so faster than ever before is critical to keeping our country as a Global Leader in stem. With the support of this committee, and congress, and through continued successful implementation of the chips and science act, n. S. F. Is strengthening our national and Economic Security and enabling innovation anywhere and opportunities everywhere. Across our nation. Thank you for the opportunity to testify before you today. Sen. Cantwell thank you, director. Colleagues know that a vote has started. Were going to have a couple of votes this afternoon. So i just ask you to use your discretion where you are in the queue to go back and forth and try to maximize time. Im going to turn it over to my colleague, and then go vote and come back and hell chair the meeting and go to senator cruz after that. Thank you. Director panchanathan, thank you for being here. I want to follow up on a conversation we had earlier this year. I know that you made 6. 5 million available in fiscal year 2023 for the continued development of the 30meter telescope. What are your planser to continuing plans for continuing the funding and the work to design it in fiscal 2024 . Mr. Panchanathan thank you. I very much enjoy talking to you and visiting the great state of hawaii recently. We lawrnged the worlds launched the worlds tallest telescope. To your specific question, im happy to tell you, as you said, just last week, n. S. F. Made a 6. 5 million award to the giant telescope for g. M. T. And a 30meter Telescope International organization to continue development and reduce risk on crucial optical and mechanical components. I want to tell you that there is a process that we take as we embark on large awards and this includes not only the recommendations that came, consultations from the Scientific Community and mathematical and physical sciences directorate, making sure that we are prioritizing these investments, working with our National Science bowl. Now were investing in the design and Development Phase and thats this investment. So we have plans in term of how do we move from here to the final Design Review and then the investment. Sen. Schatz so thats youre mostly talking about 2023. Whats your plans for 2024 . Mr. Panchanathan again, to continue with this process and we have asked for 30 million of investment so that we will be able to move these projects forward as the review processes happen. At the same time i would like to place this in front of congress. You know in the chips and science act, the science publishes were authorizations, not proposeses here. We need appropriations here. We need that also in place so we might be in the vanguard of innovation and scientific discovery for which instrumentation are very important. As we think about the future. Sen. Schatz thank you. Talk to me about Construction Funds for 2025. Obviously youre talking about design. Where are we on construction and can we Work Together on the pathway . I understand there are a lot of it is con tin jefnlt you have astro 2020. We obviously dont have it squared away on the hawaii side of this. So but we have to move in parallel paths in case everything comes together. So where are you with 2025 and construction money for e. L. T. . Mr. Panchanathan again, thank you for that and youre right. We are going through the process that we typically go through in the major research. So we are looking at the 2024, 2025, and beyond. In terms of right positioning for the request to be made for the construction project. Right now we have to go through the final resign design reveuvment were working with the state of hawaii to make sure that were positioning the appropriate investments in a way that they can be sequenced at the right type. So it is our we are working on the budgets to think through when the appropriate time is for putting in the construction request. But the final designs we go through as we think about how were moving forward in this progress and well be working closely with the National Science board on well keep on this. Well keep your staff closely informed and closely engaged to make sure youre getting all the answers you need. Sen. Schatz thank you very much. Senator cruz. Sen. Cruz thank you, mr. Chair. Secretary raimondo. The National Environmental policy act or nepa, the nepa reviews are currently required for chips grants and that could lengthen a project timelines by two years or more from the date the department decides to start an Environmental Impact statement. Some nepa reports arent completed for seven years or longer. When you were asked about hurdles posed by nepa to chips projects in a house hearing last month, you pointed out theres quote, theres currently a bipartisan amendment to the Defense Authorization act which would help a lot. So were going to do everything we can with our team to help streamline nepa and move it as quickly as is prudent. But if congress could pass the amendment, i think its the cruzkelly amendment in the authorization act, it would help us a lot to move faster. As you know, that bipartisan amendment passed the senate with overwhelming bipartisan support but it is not yet law. It still has to pass the house and ultimately be signed into law by the president. Could you briefly describe the benefits the amendment would provide as a word of encouragement to the house and the white house to make it law . Sec. Raimondo yes. Thank you. And thank you for your leadership on that. As you say, each of these projects, if they receive federal money, would be subject to nepa, which could take up to years. We do not have years. These are National Security imperative projects. Which is why i, again, thank you for your leadership. What we are doing, we built a team on the chips team in the Commerce Department just to focus on permitting. To help companies, help states streamline the process, accelerate the process, within the existing statute. Let me be clear. We dont want to, you know, Environmental Concerns matter. We are not in any way suggesting that we should do anything that hurts the environment or is unsustainable. That being said, we do need to, which your amendment would do, streamline the process, speed the process, make the process more efficient and user friendly. Interestingly, earlier today i was on the phone with members of the house on this exact issue, encouraging them to do their own d. C. Take your lead and pass something in the house. My view is its essential. Were going to do everything we can. We have a team, week working on it, but without legislation, its very difficult. Sen. Cruz thats very helpful. Thank you. Let me turn to the topic of spectrum. We all know that the United States needs more commercial access to midband spectrum. Recent studies project that u. S. Mobile traffic to increase more than 2 1 2 times over the next five years and almost sixfold in the next 10 years. We need a real midman spectrum pipeline so that the u. S. Can dominate in 5g and not fall behind our adversaries. Unfortunately access to mid spectrum has been almost impossible to come by because so much of it is under control of federal agencies who are resistant to sharing. The Defense Department recently completed its report on opening access to spectrum in the lower three giga hurts bands and gave it to your department at the end of last week. The report has not been made public but according to leaks, the report does not support sharing, let alone allowing full power 5g use in the bappeds. Secretary bands. Secretary raimondo, we had a very productive call yesterday and during that call you committed to sharing the report with me and briefing me on it. I appreciate that. Do you agree that we need more midman spectrum to be made available for 5g, including for full power use, and that it is not only imperative for our economy, but also for our National Security . Sec. Raimondo i do. Let me say this. As we said yesterday, i think id be very happy to have my staff at n. T. A. A. And flrvetion taa and the d. O. D. , i think we should do it together, to come and go through the report. And yes, i do. I spoke with secretary austin last week and i said, the d. O. D. Needs the spectrum they need to execute their mission. Period. Having said that, we also need to be more creative and innovative about how we share spectrum and how we use spectrum because the truth of the matter is, our National Defense depends on, as you say, continued private Sector Innovation and continued innovation in 5g. My point to him and my point to you and anyone who wants to hear from me is that this shouldnt be a zerosum game. Right . We shouldnt think every time the d. O. D. Shares or gives something up theyre losing capacity. We have to find creative ways where we can have more spectrum be made available in the midrange band, as you say, and also the d. O. D. Has what they need to do their mission. And im committed to working with you and with them to do that. Sen. Cruz thank you, madam secretary. Director panchanathan, during fiscal year 2001 and if is cal year 2021 and if is cal year and fiscal 2022, there were grants focused on both the quoteunquote science of countering social media misand disinformation, as well as the developments of Digital Tools to track and censor socalled mis or disinformation. One of the projects was called expert voices together and it is to, quote the n. S. F. , quote, creating a comprehensive system of care that addresses the harms journalists experience due to online harassment. Its mission, incredibly enough, is to, quote, support journalists in moments of crisis, while helping the Media Industry build resilience longterm. In other words, taxpayerfunded therapy for leftwing journalists who find actual facts traumatizing. Im sure people like taylor will be excited about that. But where on earth in the n. S. F. s mandate is there a justification for these sorts of projects and do you believe that venturing into such politicized topics undermines broader support for the n. S. F. . Mr. Panchanathan first of all, let me tell you that i hope through the hearing today youll get to see n. S. F. s broad impact all across our nation through stem Talent Development to economic vibrancy that n. S. F. Makes possible and, yes, National Security objectives also being fostered. I hope that the example that i will give you and the answer im not trying to package all of that. But i hope that that will come through very clearly. Were doing a lot of work about how to make sure the talent everywhere and innovation everywhere is energized. Sen. Cruz could you answer the question i asked . Mr. Panchanathan im going to come to that. I just want to make sure the n. S. F. Mission is clearly understood also. I want to say one thing very categorically. We do not, n. S. F. Does not engage in censorship. We do not regulate any content and engage with anybody who also does so. But what we do is how do the technologies operate and how are they being used and provide the public and policymakers the information that they need so that you can make the informed decisions about needed regulations and guard rails and guardrails and for the users, so that they have the tools so that they can safely navigate content. That is what n. S. F. Is engaged. In. Were not in the business of censorship, were not in the business of controlling content. I can tell you, for example, even in this conversation that were having right now, in the deepfake crowd, this conversation can be completely altered and presented in a form that you and i will say, how did it even happen that this conversation that were having right now is being transformed into something thats even unrecognizable . These kinds of things have happened. Were trying to find how can we build, how can we invest in those projects and how can we invest in tools and techniques that can help safeguard . And thats all were doing. Were not censoring. I want to repeat that. Were not altering content. Sen. Cruz whether youre funding others that are engaged in censorship, youre undermining support for your very important agency. Mr. Panchanathan im happy to work with any of you to go through this with you in more of a oneonone setting and explain what these projects are doing so they can be helpful. Happy to take your suggestions, happy to take your inputs. I always say n. S. F. Is a learning agency. We learn constantly because we cannot be an agency that says, this is how we do it. Were a learning agency. Happy to take the input and see if you find n. S. F. Appearing to be we are not, but im happy to have the discussion with you. Sen. Cruz thank you. Sen. Tester thank you. I appreciate the flexibility. Gina and panch, thank you for being here. I appreciate the work youve done. I appreciate everything youre doing to bring jobs back to this country and i appreciate everything youre doing on a National Security front. Look, for decades we have outsourced jobs in this country and it hasnt been a good idea. The Chinese Communist party is our facing threat and you both know this. Both economically and militarily. And they want to take our place on the world stage. But i have faith in this country. And i have faith in our ability to be able to emerge from a time when weve outsourced our jobs to a time when we can bring the jobs back here again and create what we need in this country to meet the needs of this country. A little over two years ago, congress started debating the chips and science act. I started talking to a group of montanans about building a Technology Hub in montana. Using the Regional Technology innovation Hubs Initiative that this committee created. Division for this tech hub would be to establish montanas wellestablished photonics industry and build it into a World Class Center that can outcompete everyone in technology thats critical to our Economic Growth and National Security. Madam chair, i am blown away by the effort that montanans have put forth on this opportunity. Our best, our brightest have worked together, joosts, labor group university, labor groups, financial groups, State Government have all worked to craft a tech hub plan that work force our state, but, most importantly, works for this country. Like any state, funding for universities is not what it should be. And so these universities are used to fighting and beating the hell out of one another to get the money they needed. And the truth is, we have watched them Work Together. I come from a state that was built over 100 years ago by people who moved in, where there was no grass, and built farms. Where there was just grass and built communities and churches and built hospitals and now the people in this state of montana are working together to make sure that montana can reclaim what we need to have from a technology standpoint, to be the nations or the worlds leader. So my question is this. To both of you. When it comes to Rural America, congress has addressed it in a certain in several different ways. But you both lead implementation of programs at your respective agencies, how do you address the issue of Rural America and making sure that your initiatives will work for Rural America and do not leave them behind . I dont care which one goes first. Go ahead. Sec. Raimondo thank you. Ill go first. And ill be brief. We, as i said earlier, we have been overwhelmed by the quality and quantity of the tech hub applications. As you recall, it was authorized for 10 billion. We received 500 million and we have over 400 applications. So if you come away with nothing else, clearly this is worthy of more funding. We will do a minimum of to tech hubs, possibly more, and i promise you some will be rural. I cannot promise you it will be montana. But i promise you some will be rural. Sen. Tester i was hoping for a different answer. Sec. Raimondo i know but im trying to be honest here. I promise well look at yours and all of yours and there will be rural representation. We are determined to do it. Statute requires it. Were doing a huge amount of outreach. I tell my team, theres no substitute for showing up. Show up in rural community, let them know were there and help them to put forward a good application. So were highly conscious of it and were doing a lot of outreach. Look, the only thing i would say is, if we pick, say, 20, hypothetically, 20, every one of those would be worthy of, say, 100 million grant to really move the needle and create a hub. Thats 2 billion. We have 500 million. And youve altogether riesessed 10 rawght rise altogether rides 10 billion authorized 10 billion. I guarantee you were focused on rural and youll be pleased with the results and i guarantee you this program is worthy of more funding. Sen. Tester thank you. Mr. Panchanathan thank you very much, senator. It was nice meeting with you and when i spoke to you, n. S. F. s commitment of energizing talent and ideas everywhere across our nation is in full force and is actioned everywhere now. Even as we speak. But let me address your question about two projects that even just got funded very recently in terms of unleashing innovation in the state of montana. Montana State University in boozman, theyre leading an bozeman. These awards are meant to bring capacity in every region to see how we can lift them up through partnerships as well as n. S. F. Investments that can then be further be built with the higher level of n. S. F. Type two awards and partnering with commerce and e. D. A. , we have original Technology Hubs, we can Work Together. We are like this, we are not like this anymore. Because of the secretarys leadership and a commitment to working in partnership, the two of us are working closely together, our departments are working closely together and we dont want anything to fall in between. This project, for example, is focused on advancing quantum and supporting technologies in the northern intermountain states. Montana, wyoming and idaho. The university of montana in missoula is leading the n. S. F. Engine development focused on advancing precision forestry, which is, you would agree, there is much more in place innovation, and rangelands technologies. So these are just the awards were made just a few weeks ago. So you can see that we are constantly exploring options, working with the communities to see what we can do in terms of Talent Development, as well as innovation energization. Mr. Wicker thank you very much. Thanks to our two witnesses. I believe neither one of you is surprised that weve had questions already about Rural America. Since you were specific to montana which is a state i really admire, could you tell us the epscore part of the legislation, how thats already perhaps benefiting researchers in other rural states . Mr. Panchanathan thank you very much, senator, for posing the question. Thank you first of all for hosting me. Sen. Wicker yes. I believe mississippi was the first state simultaneous mr. Panchanathan it was a great launch effort. It was one to meet all the different institutions in the state of mississippi. Community colleges, all the Higher Education institutions coming together. And that we were able to interact with the research institutes. Now to the state of mississippi. In the state of mississippi, we have now invested and im going to go through a few projects in the state of mississippi, again, very recent ones, again, the n. S. F. Engines development award. The first of those to jackson State University. Focused on advancing Food Security and client resilience. Sen. Wicker we have a new senator who is an alum of jackson state. Mr. Panchanathan and then the next one is to mississippi State University in starksville where we were together. This is an advancing autonomous technologies for advanced manufacturing. The research is there. In addition to that, we have invested almost 1 million in mississippi Golf Course Community college on two projects, to broaden participation in emerging technology programs, as well as increasing the supply and diversity of the i. T. Work force in the mississippi gulf coast region. These are real projects making a real difference in terms of unearthing the talent and ideas in mississippi. And if you recall, in your office we said, you asked me the question, do you think that you will meet those targets for f. Y. 2023 and then going on to f. Y. 2029 . Im happy to report to you today in f. Y. 2023 we met and exceeded the target and these are mutually beneficial. Sen. Wicker you may want to supplement your answer further. But let me just say, i really dont think this legislation would have passed so easily had we not been able to include the fscore provision. I do want to thing thank the char foyer her help thank the chair for her bipartisan help on that basis. In that regard. You may want to answer on the record about Rural America, madam he can is. Let me see if madam secretary. Let me see if i can follow up on something that senator cruz mentioned. Do i understand that you have you and your office have seen a completed report concerning the lower three giga herts study . Sec. Raimondo we got it at the end of last week, yes. Sen. Wicker so do i understand you to say that there are areas of the report that you disagree with . Sec. Raimondo i have not gone through it all myself. So you could not understand me saying that. Sen. Wicker what did you say that with that regard . Sec. Raimondo what i said is this. We need to do a better job of being more creative in figuring out ways to have more of that midband spectrum available for commercial use to power innovation. In ways that do not interfere with or in any way degrade the d. O. D. s mission. Sen. Wicker let me just say, i agree with that statement that you just made, as you said it, and to the extent that the report coming from the department of defense is more restrictive in that regard, i wouldnt have a problem with that. When are members of the committee and members of the senate going to be able to see this report . Sec. Raimondo we just received it i think on friday of last week. Were going through it now and id be happy to follow up and well have a Briefing Schedule where the d. O. D. And ntaa can come over whenever you want. Sen. Wicker i like the idea of a briefing. I really think its less formal and theres more of an opportunity forgive and take for give and take. I think to the extent you say there is room for both sides to benefit and for neither side to have a loss, im reluctant to say side, either department or area of endeavor, to have a loss, thats not necessary. In splitting the blanket in this regard. Sec. Raimondo that is my point. I think historically the debate has been approached, any time d. O. D. Gives up anything, it is a loss. And i think we have to modernize our thinking. There are ways that, if were creative, they can have everything they need and also we must make more available for private innovation. Private innovation. Cspan cspan cspan senator klobuchar . Sen. Klobuchar thank you for your visit to bloomington, minnesota, youre a big hit there at normandale Community College and we are just one of a few states with a full Semi Conductor chain and integrators, tool producers, deathing, packaging, you name it. Can you talk about how the Commerce Department is looking to support smaller Companies Looking to get involved in that supply chain. Sec. Raimondo of the 35 billion 10 will be mature legacy and supply chain and there will be a great amount of money for Small Companies and supply Companies Like the ones we met with. So i can assure you that will happen. And i said earlier weve received 500 statements of interest from i think 42 states and over a hundred applications or preapplications, many are smaller companies, supply chain company, so rest assured were looking at those opportunities, not just the very Big Companies we all know about. Sen. Klobuchar thank you. Considering you visited the Community College there, normandale Community College, can you talk about given that we need 100,000 Semi Conductor technicians and another 140,000 people in the trades to build Semi Conductor manufacturing facilities and we think we have a shortfall of 300,000 engineers and 90,000 skilled technicians in the u. S. , can you talk about the importance of Community Colleges and one and two year degrees and all this . Sec. Raimondo in the time the bill was signed between then and now, we know of at least 50 Community Colleges in 19 states that have announced new programs to help American Workers find jobs in the Semi Conductor industry. I think thats amazing. Just the fact the passage of the bill, Community Colleges are mobilizing to say how do we fill the gap of 100,000 technicians were currently short . We will establish the national Semi Conductor Technology Center and a huge component of that will be work force an well do that in collaboration with the n. S. F. Everyone has a role to play, high school with career and Technical Education and Community Colleges have a role to play and fouryear colleges and t. H. C. Programs up and down the ladder. Community colleges in training technicians, cybertechnicians, analyst, etc. , have a particular role to play and were already working with them. Sen. Klobuchar what a great transition and i know youll be eceviting the university of minnesota and met the interim president when you were visiting secretary. Can you talk about, i know theyre one of the finalists in the n. S. F. Innovative regions program, in your view how can publicprivate partnerships help with education . Mr. Panchanathan our program was created with the purpose to learn how to bring the parts together to make sure its energized and catalyzed. So our regional program, 44 awards have been made and 46 states and territories are involved in this. Every one of those awards have a number of Industry Partners and governments partnering and even technicians and other partners and we have Community Colleges, technical colleges, technical institutions as well as universities. So its exceedingly important. Let me give you a couple examples to illustrate the point. We earlier talked about 6g, the next g, we should say, the next Generation Program has 35 Companies Participating in the rinks program and the total amount of resources they bring to the table is 50 million in kind and actual investments and then match with another 50 million and we have rebust program how do we build the next Generation Networks including broadband being accessible so talents and ideas can have access to all the content were generating through our nation. The Community College, i cannot help but tell you about this Community College and the technical college. Is leading an n. S. F. Advanced Technical Education and this program has been there a long time. Essentially Community Colleges which are invested in new curriculum as well as the students. Sen. Klobuchar i look forward to your visit, wearing a gopher hat and brother professor fisher from her nebraska team. I want to thank her for her leadership on this bill and we wouldnt be where we are today if it wasnt for senator cantwell. Sen. Cantwell thanks for your witnesses being here today. Between your two agencies you received more than 54 billion in appropriations under the chips and science act so far. This is an enormous amount of taxpayer money. Earlier this year the Commerce Departments Inspector General described the novel challenges facing the implementation of chips. The i. D. Highlighted the need for new controls and appropriate oversight for this unprecedented influx of funding stating it may require additional upon toring and reporting to ensure project recipients comply with statutes achieved intended outcomes and used funds efficiently. Ms. Fisher close quote. The Inspector General noted contract and grant fraud now account for 65 of the o. I. G. s department of commerce cases. Mrs. Fisher before fiscal 2021 they represented roughly 35 . Secretary raimondo, have you planned to implement any specific oversight measures to respond to this concerning development were seeing . Secretary raimondo thank you, senator and thank for you the question. Youre right, this is unprecedented and the Commerce Department never implemented anything of this size and i take that responsibility incredibly seriously. I have a job to achieve goals and stewards of taxpayer money. We are building a team since the time the bill passed, we built a team, about 150 professionals, i would invite you to meet them any time. Theyre incredibly talented people, and were building a risk team, specifically devoted to the issues that you highlight. The risk team is a risk professionals to make sure were evaluating all the risks and also after we put the money out to make sure the companies are doing what they said they would do. Also, we dont plan to put the money out to these companies in one lump sum but plan to put it out on milestone based achievement, so some money to see what they do. So we are going to be massively transparent, provide notice as were required to do for congress for investments of 10 million or more and have were doing an incredible amount of due diligence, all of which will be documented. As i said, have a whole team devoted to management of risk and compliance of the companies to the promises that they make us in exchange for the money. In this report were there any patterns that you see when you see the increase in fraud, were there any patterns, anything specific that Companies May be doing that would be red flags to be able to help this risk team to be able to identify them at an earlier time . Serves ec. Raimondo something were obsessed with and trying to get better, no, not particularly. As was said earlier, putting a few billion dollars of taxpayer money out in partnership with other companies is a challenge. Theres not one answer but can simply tell you the team we have is built with professionals that have 10, 20, 30 Years Experience in track record and building new systems, whole new systems of due diligence, compliance, every company for example will have to give us a security plan, an r d plan, open their books to us, share their finances with us and well use all that information to hold them accountable. Mrs. Fischer you mentioned youre putting payment out, first payment, second payment to keep track of it easier, if you were to see something, would you cancel grants . Sec. raimondo we would not fund them if they didnt reach the conditions required. I would put a mrs. Fisher i want to plug in nebraska and the good things that we see. I do have a question on how do you define what a region is and also, dr. Panch, if you could say nice things about my state. Look it up. Mr. Panch i have it ready to go. Sec. Raimondo we have to have several is awardees within the region. We have to have some of them in each region. Mr. Panchanathan the investment of chips in science, theyve gotten 200 million over five years. The science portion of n. S. F. Is still an authorization, not an appropriation. Were hoping we will have the investments planned in the organization for appropriations but were not waiting for that to energize the innovation across the nation that you heard that i mentioned that. The 200 million is being used in order to be able to generate 100,000 Semi Conductor technicians and researchers our nation needs rapidly. The secretary talked about 2030 but its even beyond 2030 and n. S. F. Is working towards that and in partnership again to the earlier question with publicprivate partnerships, were working with micron and intel and others in the state of nebraska as you asked. N. S. F. Investment spans all parts of our nation, energizing Community Colleges and universities and so on. Let me give you a couple examples from neaps, the epscor is to track 21 million for 2212026, part of the bidding is in the second quantum revolution and launching a enter departmental and ultimatey Campus Research and education structure focused on Quantum Materials and technologied called equate, to increase the competitiveness in the area of quantum science and technologies as one example and under the project again we have an award to nebraska, lincoln which is part of the project and were supporting a c. M. S. Detector and supporting software being developed at the university of nebraska and i want to reemphasize this point, balance and i. D. S. Are everywhere and it is our responsibility to find them, nurture them, motivate them and bring them to life. Thats the only way well outcompete other nations. Mrs. Fischer there is no place like nebraska. Thank you, madam chair. I need to run and vote and following you is senator moran. Mr. Moran only after i put in a plug for colorado. Thank you, madam chair. Its great to see such a crowd here. I feel like were sunday night football with taylor swift and travis kelce, i havent seen as many people in this room in quite a while. But dr. Panchanathan, i know you attract a crowd and have devoted yourself to these issues. Mr. Chicken blooper and i know mr. Hickenlooper i know you didnt have more of a bipartisan support in looking for the best outcome and we stole her ideas and she stole our ideas and how it works. Mr. Panchanathan, as a former governer, i see how ideas thrive when you have an active seat at the table and weve been listening to our need and colorado is a leader in startup creation and supporting entrepreneurs and generating a work force in a range of Technology Fields with manufacturing, clean energy, quantum. So i dont have to go on, i think the other senator has done a good job of pitching their states and dont have to go on in either of these questions, regional hubs or regional engines why colorado is well suited. But id like to ask both of you to describe how the department and n. S. F. , how will you coordinate regional tech hubs and Regional Innovation engines . Mr. Panchanathan let me start before the chips and science act, secretary is raimondo and i before she took office spoke the very next week and said were going to hyper partner, if there is a term like that, because bahama we believe its in those that invest in both our departments and we have a chip Steering Committee in the office of the director that works almost on a daily basis and weekly basis in organization with the secretarys office and their Steering Committee. Every program the secretary talked about, the national Technology Center, the Work Force Development activities, the regional Technology Hubs, every one of those activities are highly coordinated. In fact when the regional Technology Hub announcement was made, even the verbiage of the announcement was coordinated between n. S. F. And commerce and vice versa. Thats the level of coordination we have because it means we dont want to lose any of these innovation, innovators by having any of these values of debt as we call them. Were making sure theyre tightening those gaps that can carry the innovation from research to the foundational work and then to the innovation outcomes. One quick addition to that. Sec. Raimondo i agree and everyone well knows, if you talk to industry and academia, n. S. F. Job Training Programs are world class, the curriculum and the approach. So we want to learn from that and then of course expand it because we have all this additional money. But in the s. E. C. , for example, which is going to establish this fall, n. S. F. Is a Founding Member of that. So were really trying to bake in the n. S. F. To everything we do and frankly leverage their great work especially around Work Force Training. Youre way ahead of us and thats very encouraging. Secretary raimondo, the shapes and science directs the office of science and Technology Policy to develop the technical science strategy to establish National Research goals and especially in terms of emerging technologies, and weve been looking at how research standards, new commercial applications in the field of a. I. Are going to transform not just our chicago but our global competitiveness. I thought it useful to get what priorities does the department see are important in this kind of forthcoming strategy to reflect in the field of a. I. Sec. Raimondo we should visit on this when we have more than 19 seconds to talk about it, but nist is a standard setting body, theyre kind of the lead agency in the administrations work on a. I. And have put out their Risk Management framework which is voluntary risk guides for Developers Developing a. I. And the special sauce of nist because theyre a neutral third party, everyone trusts them so industry will collaborate with them, universities will collaborate with them and thats the entity that will be forming the new standards and candidly, i know im out of time, i think there will be a u. S. Led ecosystem and we need of a. I. We lead the world. We need to make sure the standards that fuel that are consistent with our Democratic Values so we can have a further discussion. Mr. Hickenlooper to our large audience, nist is one of the most effective organizations we have in the government and do a remarkable job, almost impossible job, with remarkable success. Ill yield and get to ask questions later and im chairing so now get to come back. Senator thune . Sen. thune i would yield to senator moran who is waiting patiently to ask questions. Sen. Moran i would not take up my time, much of my time anyway to reiterate whats been said time and time again in regard to rural and small business, thank you, director, we might have a conversation in the future aboue epscor, that you met the standard, the goal and would be interested in knowing if there are challenges you would face in continuing to meet that or exceed that goal in the future. Secretary raimondo, could you assure the committee on your efforts to ensure rural states benefit from the chips and science act, via the tech hub and Chips Program . Sec. Raimondo thank you, senator. As i said, we will be putting up the tech hub designations this fall and we will ensure there will be geographic representation including rural representation. Much of that is because weve been doing outreach to Rural Communities to let them know the money exists, we want them to apply and help them apply. As i said before, its so oversubscribed that i have no doubt there will be rural places, we would have liked to have invested in that we wont be able to. With the chips part of it, just last week we put out a funding opportunity for small and medium sized supply chain companies, and i promise you, we are going to work overtime to have small pliers, small Chip Companies eligible for the money. Sen. Moran youve assured me at least 16 times and im sure its available today. Would you assure your process in evaluating tech hub applications and what role does the e. D. A. Play in that process . Sec. Raimondo its a merit based process and we have National Security goals we need to achieve and those are primary and the other thing we evaluate is likelihood of success and how strong is the partnership, is there full buyin from the community . The decisions will be made by a committee in