Kudlow: COMPETES Act has nothing to do with competing with China

I want to begin tonight with: Save America, kill the Bill. 

But in this case, it's not "BBB." It's a down-sized big government socialist bill called the COMPETES Act. It isn't $5 trillion, but it is $350 billion coming out of the House following a $250 billion bill out of the Senate. It will move to conference. 

It's a terrible waste of taxpayer money for industrial policies, corporate subsidies – more Green New Deal spending, more unionization, and more central planning and controlling by the federal government in Washington, D.C. 

This bill has nothing to do with competing with China. In fact, the trade part of the bill will actually undermine the Trump Phase One China trade deal. Now, take a listen to a brief exchange between my pal, David Asman, and Sen. Todd Young earlier today on FOX Business: 

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ASMAN: I'd say kill the bill, as Larry Kudlow would.  

YOUNG: Well, listen we're... going to..listen (cross talk)  

ASMAN: I don't think there is any way you can get the pork out of this one. Senator, we got it to leave it at that…

YOUNG: Xi Jinping is lobbying against the legislation, so you and he seemed to see eye to eye on this.  

ASMAN: Woah! Excuse me, senator. No, I just don't like corporate welfare. 

So, Todd Young lashes out at David Asman, saying he and Xi are allied against the bill. No, they're not, and it's a cheap shot by a senator, who's a former naval officer and ought to know better. 

What this bill really is: the "be more like China" act. Mr. Young is not opposing China. He is emulating China and their socialist, centrally-planned, state-run economy. 

Young apparently spent time in business, but he must have not learned much. And, by the way, 17 other Republicans are in the same boat. 

Here's a quick story: President Biden was in the White House today, promoting a new Intel plant outside of Ohio, near Columbus. And then Biden said, "Well, if we pass this COMPETE Act, we'll have much more like this."

But, but, but, but  … Intel invested $20 billion of its own money to build the plant and create the high-paying jobs, and good for them. What's more, they say they're going to park up to $100 billion in total over the coming years to complete the project. Good! 

Here's my point: It was Intel's private investment, not government subsidies. There may have been some state and local help, but that's different than a $50 billion federal subsidy or a $350 billion federal spending bill. Dr. Kelvin Droegemeier, former director of the White House Office of Science and Technology Policy and former head of the National Science Foundation, tells me that the American private sector has invested $200 billion in the semiconductor space, and it's not over yet. 

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So, we don't need $50 billion from Uncle Sam with lord knows how many woke and racial strings attached. 

Nor do we need $45 billion for another Energy Department slush fund. Nor do we need another $78 billion to the National Science Foundation, which has an $8 billion budget presently and couldn't possibly process something 10 times that amount. 

Nor do we need another $45 billion for the Commerce Department to finance something called critical goods, whatever that is. Nor do we need another $3 billion for solar manufacturing – anyone remember Solyndra? Nor do we need $8 billion going to the UN Green Climate Fund. 

If Sen. Young can tell me how these massive federal subsidies, controlled by government bureaucrats, made up mostly of former egghead professors who have never worked a day in their life in the private sector – if Mr. Young can tell me or my pal David Asman what this stuff has to do with competition, I welcome him to come on this show and explain it to me and our viewers. 

By the way, speaking of Intel and private investment, Intel's also building two factories in Arizona for $20 billion. Taiwan semiconductor is building in Arizona for $12 billion and chipmaker Samsung is building in Texas for $17 billion. They may have some state and local help, but it's predominantly private money, and there is no federal subsidy because if it pays to invest, then capital will shift to take advantage of high market returns. That's called free enterprise capitalism, Sen. Young.  

Now, let's think about increasing these market returns. Well, instead of $350 billion in federal money – which, by the way, is not paid for by tax hikes or spending cuts – and I don't want to pay for anything anyway, we could make the Trump tax cuts permanent because they start to expire in the next few years.  

Those tax cuts made America super competitive and were a great success for working families and minority groups. 

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We could stop the Biden regulatory and tax assault on American businesses. That would make us more competitive. We could think of America first as the most hospitable investment environment in the world. That would allow us to win the global race for capital and production. Just a thought. 

But $350 billion so we can be central planners and state-run economy controllers just like China is not the answer, Sen. Young. And as always, in the spirit of civility, respect, and open dialogue, not to speak of First Amendment freedom of speech, you are invited on this show anytime, Mr. Senator, to discuss your bill, which I aim to kill and save America. 

This article is adapted from Larry Kudlow's opening commentary on the February 8, 2022, edition of "Kudlow."