Secretary of Commerce Gina Raimondo Testifies Before House Energy & Commerce Committee

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Transcript

00:00:00Good morning everyone. Good morning. Good morning Madam Secretary. We appreciate you

00:00:06being here. Thank you so much. I'd like to welcome everyone to today's hearing where

00:00:12we will be examining and discussing the Department of Commerce's fiscal year 2025 budget request.

00:00:20I want to thank Secretary Raimondo for appearing before us. I look forward to conducting important

00:00:27congressional oversight of this agency as we look to find ways to strengthen our economy

00:00:35and compete on the global stage. This committee has been active on both fronts. Last month

00:00:42the House passed H.R. 6571, the Promoting Resilient Supply Chain Act, led by Representatives

00:00:50Bushon and Blunt Rochester, which would establish a mapping program at the Department of Commerce

00:00:57to examine our supply chains to better prepare our economy for any future shocks that we

00:01:03may see. Monitoring these trends will help protect us from reliance on our nation's enemies

00:01:10and instead help industries to adapt quickly. The department would also be tasked with partnering

00:01:17with the private sector to better understand the vulnerabilities in our supply chains,

00:01:22including supply chains for emerging technologies and provide recommendations for promoting

00:01:28emerging technologies and making critical supply chains more resilient and closer to home.

00:01:35Secretary Raimondo, again thank you for being here before us to discuss these issues. I'm

00:01:42interested to hear from you on these supply chain issues as well as the state of our country's

00:01:48global competition with China and the status of our travel and tourism sector. Last Congress

00:01:56we worked on a bipartisan basis with Representative Schakowsky, our ranking member, to pass the

00:02:02Restoring Brain USA Act and the Visit America Act to ensure the U.S. remains a top destination

00:02:09for visitors around the globe and that we have oversight mechanisms and a plan in place

00:02:16at Commerce to prepare the nation for the next decade in travel and tourism trends.

00:02:22I'm concerned that the U.S. is starting to lag behind other top nations in the travel

00:02:28sector, unfortunately, and I look forward to discussing ways to modernize and advance

00:02:34our nation's tourism priorities through your department by reducing red tape and bureaucratic

00:02:41barriers and instead embrace the power of our private sector and our greater, our great

00:02:48local economies. Lastly, I hope to be able to discuss the continued importance of American

00:02:54leadership in emerging technologies such as blockchain, AI, and quantum computing. Our

00:03:02subcommittee has again conducted bipartisan work on these topics, including passing H.R.

00:03:086571, the Deploying American Blockchains Act, in May, which will direct the Department of

00:03:15Commerce to take action in promoting U.S. competitiveness in the deployment and use

00:03:20of blockchain technologies. We cannot cede American leadership in these fields, I know

00:03:27you know that, and it is critical that we continue to employ new strategies that let

00:03:32innovators thrive here in the United States. That also includes the critical infrastructure

00:03:39manufacturing necessary to develop these emerging technologies. Representative Miller-Meeks'

00:03:45bill that we passed would do just that by finding pathways to increase our capacity

00:03:52for domestic manufacturing, reducing barriers to entry, and becoming less reliant on countries

00:03:59like China for critical components necessary for these innovations to continue. With all

00:04:06of these pieces of legislation, I hope we can get those passed. We've got to get it

00:04:12passed the Senate and across the finish line to the President's desk. Secretary Raimondo,

00:04:18I look forward to hearing from you about how we can align these goals, secure American

00:04:25leadership, reduce red tape for industry stakeholders. We cannot let a top-down approach get in the

00:04:33way and hope that we can instead let the American innovative economy thrive. The budget needs

00:04:41to reflect these key priorities without breaking the bank, and I'm interested to hear your

00:04:48perspective. So with that, I'll yield back, and I will recognize the gentlelady from Illinois,

00:04:54the ranking member of the subcommittee, Ms. Schakowsky, for her five minutes, her opening

00:05:00statement. You're recognized. Thank you, Mr. Chairman, and it is really an honor and a

00:05:05pleasure for me to welcome Secretary Raimondo to our subcommittee today. I really look forward

00:05:15to hearing what you have to say. I want to start with just a thank you. You have been

00:05:22to my district and to the Chicago area a number of times. I know you are traveling as well

00:05:28to hear from people, from workers, from manufacturers about what needs to be done, and the fact

00:05:37that you are out there is so very, very important. I appreciate it so much. And I also just want

00:05:45to compliment you on the incredible work that I think the Department of Commerce is doing

00:05:52right now. Let me just list a couple of the things that are so incredibly important. We

00:06:02are looking at the issues of, let me get my list here. We're talking about tourism.

00:06:13We are all interested in being promoted and the work that you're doing there. In the supply

00:06:23chain, which you have done great work in making sure that it is more resilient. Artificial

00:06:36intelligence, making it safer and more reliable. And high speed internet for all, which is

00:06:48certainly a priority of all of ours. So I want to thank you so much for those important

00:06:55things. I think that it will lower the cost for consumers and be good for our economy.

00:07:05And then of course I want to mention the 800,000 manufacturing jobs. This is such a remarkable

00:07:16advance and that is probably one of the most important things that I want to highlight.

00:07:27I did want to, let's see, what is that? I wanted to say I'm very disappointed that the

00:07:37Republicans have suggested that in the light of all the success, they actually want to

00:07:44diminish your budget. And we are looking at a recommendation of a 9% decrease in the

00:07:56budget. We really can't afford to do that. And I am disappointed that that is on the

00:08:04table, especially since they're asking you to do more and more and more. Can't do it

00:08:11without the money that is so desperately needed to make it happen. I did want to mention

00:08:21one issue that has been raised to me by some of my friends and your friends also in labor

00:08:32who have been concerned that when it comes to the CHIPS workers, and I'll ask you a question

00:08:46about that, that they are not getting what they need right now, they say, in the way

00:08:59of safety, in the way of wages, in the way of the hours that they are asked to spend

00:09:08in dangerous situations. So I will want to talk a bit about that when we get to the Q&A.

00:09:18But overall, I just want to thank you for all of your tireless efforts to make sure

00:09:26that we are advancing our economy and doing the kinds of things that we need to create

00:09:33the jobs that we need in our country right now. And I want to thank you so much for that.

00:09:40And with that, I'm just going to yield back. I thank the ranking member and I'll recognize

00:09:46the chair of the full committee, Mrs. Rogers, for five minutes for her opening statement.

00:09:51Thank you, Chair Bilirakis. I appreciate your continued leadership on so many issues important

00:09:56to this committee, many of which touch the Department of Commerce, like tourism and travel.

00:10:02And welcome back, Secretary Raimondo. We appreciate you being here and your cooperation with the

00:10:07committee as we work to ensure America's continued economic and technological leadership.

00:10:13This committee plays a vital role in preserving and bolstering that leadership, which is currently

00:10:19being threatened by countries like China. It's critical that we work together to ensure

00:10:24that America is setting the rules of the road for the technologies of tomorrow. In

00:10:29part, that requires that we make sure these technologies are developed here in the U.S.

00:10:34in an ecosystem that promotes America's values. As you know, this committee has a rich history

00:10:39of bipartisanship, and we've worked this Congress and past Congresses to advance U.S. priorities

00:10:45domestically and internationally. Your department plays a key role in implementing the policies

00:10:50we advance, from improving data privacy, to strengthening supply chains, to helping

00:10:55build emerging technologies. Those efforts are essential as we work towards our shared

00:11:01goals of winning the future and beating China. Tomorrow, this committee will mark up the

00:11:07American Privacy Rights Act. This bipartisan legislation will not only give Americans the

00:11:11right to privacy and control over their data, but it will also benefit the Department of

00:11:17Commerce when representing American business interests on the world stage. According to

00:11:22the most recent data from the International Association of Privacy Professionals, almost

00:11:2780% of developed countries have some form of comprehensive data privacy on the books,

00:11:34with one very notable exception, the U.S. This lack of comprehensive privacy protections

00:11:40puts us at a competitive disadvantage and prevents us from clearly articulating how

00:11:46to balance personal rights with promoting innovation. That's especially true when dealing

00:11:53with allies in the European Union who can disproportionately influence outcomes through

00:11:58GDPR and other laws. These overly burdensome foreign regulations hamper innovation at the

00:12:05expense of Americans. Passing APRA will send a clear message to the world that we are serious

00:12:12about protecting our data and provides the opportunity to put our imprint on future international

00:12:17laws, like rules on cross-border data flow. If we fail to do this, adversaries will fill

00:12:24the void and weaken our leadership ability, as well as leave Americans' information open

00:12:30to exploitation from them. Getting APRA across the finish line is also essential to our shared

00:12:36goal of cementing U.S. leadership in artificial intelligence. Your goals to promote cutting-edge

00:12:42semiconductor technology through the CHIPS program, as well as your efforts to promote

00:12:47AI safety, are not mutually exclusive. We need to ensure America is leading both in

00:12:53semiconductor and AI technology development. And that means fostering a healthy business

00:12:59environment, securing our supply chains and streamlining, rather than restricting, permitting

00:13:05to secure the domestic supply chain of critical materials necessary for these technologies.

00:13:11Otherwise, we will cede our leadership in AI and other technologies of the future to

00:13:16China and others. Money and mandates are not enough. We must

00:13:22have an approach that fosters the culture of ingenuity and entrepreneurship America

00:13:27needs to move our country forward. This subcommittee has worked on several important solutions

00:13:32this past Congress that Chair Bill Arrakis alluded to, and I hope that we can continue

00:13:38to move these priorities forward to improve the deployment of emerging technologies, encourage

00:13:44foreign investment into American companies, streamline permitting for our critical supply

00:13:48chains, and enhance our nation's cybersecurity. We look forward to working with you on these

00:13:54efforts and continuing to build on the economic legacy that has made this country great. I

00:14:00look forward to hearing your testimony, Madam Secretary, and I yield back.

00:14:05I thank the Chair and now recognize the gentleman from New Jersey, Mr. Pallone, for five minutes

00:14:11for his opening statement. Thank you, Mr. Chairman. I'd like to welcome

00:14:14Secretary Raimondo back to the committee and commend her on her tremendous leadership in

00:14:19growing the American economy for the future and implementing the Historic Chips and Science

00:14:25Act. I see you as the main person in this administration trying to improve our supply

00:14:32chain and leading the competitive battle against Beijing, if you will. This law, the Chips

00:14:39and Science Act, was enacted last Congress by President Biden in a Democratic Congress

00:14:43to bolster our economy, lower costs for consumers, create good-paying American jobs, and end

00:14:48our dangerous dependence on foreign manufacturers of critical goods. I know how hard you fought

00:14:54to get this bill signed into law and passed at Congress.

00:14:59So the Chips and Science Act strengthens American manufacturing supply chain to national security

00:15:04by investing in research and development, science and technology, and the workforce

00:15:09of the future. Congress allocated $52.7 billion to the Department of Commerce to spur American

00:15:15semiconductor research, development, and fabrication in the United States. For almost two years

00:15:20now, Commerce has been busy implementing this law. To date, the Secretary and the Department

00:15:26has announced more than $29 billion in grant awards and more than $25 billion in loans

00:15:31and loan guarantees to 19 projects in 12 states. These projects are projected to catalyze $348

00:15:38billion of total investment and create more than 100,000 good-paying jobs, manufacturing

00:15:44and construction jobs, I should say. And that's what success looks like. So thank you, really.

00:15:49I want to thank you. And this surge of investment in American semiconductor research and fabrication

00:15:55is going to help restore American technological leadership in chip production and strengthen

00:16:00this vital supply chain. It will ensure more semiconductors are produced here in the United

00:16:05States and not China. But only one Republican, I should point out on this committee, supported

00:16:09this legislation, unfortunately. When the COVID-19 public health emergency exposed serious

00:16:15vulnerabilities in our critical manufacturing supply chain, Commerce spearheaded the national

00:16:21response to the crisis. The agency launched a first-of-its-kind supply chain center that

00:16:26serves as the analytic engine for supply chain resilience within the federal government.

00:16:31Bipartisan supply chain legislation, led by Representatives Blunt-Rochester, Kelly, Dingell-Wild,

00:16:37and Bouchon that passed the House in May out of this committee, too, would further supplement

00:16:43Commerce's supply chain efforts. And the Biden administration has also strengthened

00:16:47export controls on key technologies that could potentially support the military of countries

00:16:53of concern to our national security. The Department is tasked with administering a so-called entity

00:16:58list, which imposes export restrictions on entities that can harm our national security.

00:17:04And since President Biden took office, the Department has added 318 entities from the

00:17:09People's Republic of China to this list, more than any other administration.

00:17:13So the Commerce Department is also championing efforts to strengthen America's travel and

00:17:17tourism industry. I care a lot about it because I'm at the Jersey Shore. Commerce has released

00:17:22a National Travel and Tourism Strategy, which sets a five-year goal of attracting 90 million

00:17:27international visitors who would spend an estimated $279 billion annually by 2027. Reaches

00:17:35in my congressional district on a benefit from that. And I'm confident that Commerce

00:17:39will meet this ambitious goal. The Department is also playing a crucial role in our continued

00:17:44efforts to ensure every American has access to high-speed, affordable internet. President

00:17:49Biden and congressional Democrats delivered with a bipartisan infrastructure law, and

00:17:54that allocated nearly $60 billion to broadband programs operated by NTIA within the Commerce

00:17:59Department. And the agency is working closely with all 50 states and the territories to

00:18:04get affordable, high-speed internet to all Americans. I also wanted to mention the Department's

00:18:09helping build our nation's capacity to evaluate and mitigate the risks of AI. And this is

00:18:14going to help ensure safety, security, and trust. We're promoting an innovative, competitive

00:18:19AI ecosystem. Now all of this work needs money. It's already been mentioned by my colleague

00:18:25from Illinois that, unfortunately, Republican House appropriators have publicly pledged

00:18:29to cut non-defense programs by 6%. The initial allocation for Commerce, Justice, and Related

00:18:35Appropriations Bill is over $4 billion less than funding levels enacted for this current

00:18:40fiscal year. So if House Republicans were really more serious about being tough on China,

00:18:46they'd be increasing Commerce's budget, not slashing it. Because that's going to put on

00:18:50the chopping block policies that foster economic development and create a lot of jobs. So we

00:18:56should be building on the successful policies of the Biden Administration and the Secretary,

00:19:01not undermining them. Because our competitiveness, our national security, and our economic vitality

00:19:07depends on it. And again, thank you for all the things you've been doing to push all these

00:19:12initiatives that I mentioned. And I yield back, Mr. Chairman.

00:19:16I thank the Ranking Member. Our witness today is Gina Raimondo, the Secretary of Commerce.

00:19:22Welcome, Madam Secretary. You're recognized for five minutes for your testimony.

00:19:28Thank you, all of you. Thank you. Good morning. It's nice to be here. I've had the opportunity

00:19:33to get to know, I think, almost all of you and work with you, and I appreciate that.

00:19:38One of the best parts of being Commerce Secretary is it's really bipartisan. Working together

00:19:43on manufacturing, competitiveness, countering China, it's all bipartisan. And so it's really

00:19:49my pleasure to be here and to continue to work with you, you know, in the weeks and

00:19:54months ahead. I want to thank you for your time. Thank you to the Chair and to the Ranking

00:19:58Member and to all of you. We are, as has been said, and I appreciate all the kind remarks,

00:20:04we are working hard and doing our best. We are, as you have said, implementing some of

00:20:10the most significant initiatives passed by Congress in the past few years. We at the

00:20:16Commerce Department, through the Infrastructure Investment and Jobs Act and through the Chips

00:20:21and Science Act. And I want to say thanks to these laws and the funding that Congress

00:20:26has provided, we're able to do the work of the American people. The budget that I have

00:20:30before you requests $11.4 billion in discretionary funding and $4 billion in mandatory funding

00:20:37for the Department in FY25. I know you're not an Appropriations Committee, but your

00:20:43leadership matters. You've all demonstrated how passionate you are about these issues

00:20:47and your leadership matters. And so I'm here to ask you for your support of this funding.

00:20:53I just want to take my remaining time to briefly step through some of our top priorities. First,

00:21:01and this has been mentioned by almost all of you, this budget positions America to prevent

00:21:06China and other countries from obtaining U.S. technology, U.S. capital and expertise for

00:21:12activities that threaten our national security. As Representative Pallone said and McMorris

00:21:19Rogers, we have to beat China. That requires a strategy and that requires investment. The

00:21:26budget requests a total of $223 million, a $32 million increase for BIS to expand export

00:21:35control enforcement, as well as $5 million for ITA to address risks from outbound investments

00:21:42into technologies in China, which we believe could enhance their military. The budget promotes

00:21:48America's technological leadership and responsible innovation in AI. It requests $61.6 million

00:21:56for activities like research and development for AI safety. And we want to develop AI,

00:22:04but also mitigate risks. These funds will empower NIST to implement central components

00:22:09of President Biden's AI executive order, including significant investments in the AI

00:22:15Safety Institute, which we have already stood up and are working hard to develop AI guidance.

00:22:21We also request $8.9 million to BIS to gather vital information on bad actors who may be

00:22:29threatening our national security by trying to develop frontier AI models using U.S. cloud

00:22:35infrastructure. A number of you mentioned supply chains. The budget supports prioritizing

00:22:42investments in resilient supply chains. We need to go from being reactive to proactive.

00:22:48We can't just react in the instance of a COVID or a bridge collapse. We need to be proactive

00:22:53to building and strengthening our supply chains. So it includes money for the Manufacturing

00:22:59USA program, for the Manufacturing Extension Partnership, and money for ITA to support

00:23:07building a supply chain resiliency office. The budget provides resources to strengthen

00:23:13our relationship with our allies, to advance our shared values, and shape the strategic

00:23:18environment in which we operate vis-a-vis China. We need to outcompete China. Wake up

00:23:25every day asking ourselves, how do we outcompete China? That means we have to show up in the

00:23:30rest of the world. And this budget includes $379 million for ITA to expand exports and

00:23:37services so U.S. businesses can grow in foreign markets. The budget also requests new investments

00:23:45for EDA to build on tech hubs. A number of you have amazing tech hub proposals before

00:23:52us. I wish I could fund them all. We don't have the funds to do that. And I hope to work

00:23:57with you and others in Congress to figure out creative ways to get more funding to invest

00:24:03in tech hubs. Finally, the budget invests in our fundamental science infrastructure.

00:24:09It invests over $400 million in fundamental research infrastructure at NIST and NOAA and

00:24:17NTIA for maintenance, renovations, and improvements at NIST campuses. I just want to conclude

00:24:25by saying we need support from Congress. We will be efficient with taxpayer dollars, but

00:24:33we need your support to make these investments so we can outcompete and support American

00:24:38workers and businesses. And I look forward to working with all of you to do that.

00:24:43Thank you, Madam Secretary. I appreciate it very much. I'll begin with questioning

00:24:49and I'll recognize myself for five minutes. Families are strapped, Madam Secretary, I

00:24:55think you know this, for cash during this time of inflation and economic uncertainty.

00:25:02One way they have been able to make ends meet is by using their home for income as a short-term

00:25:08rental and welcoming travelers into the area. The gig economy is increasingly benefiting

00:25:16rural areas, which in turn brings new economic streams to these towns, and I've seen it in

00:25:22my district. So the question is, what is the Department doing to drive travel and tourism

00:25:28to rural areas and these new forms of income for families?

00:25:34First of all, I want to thank you for your leadership on travel and tourism. You come

00:25:39from a state where it matters, so do I. I was the governor of Rhode Island, the ocean

00:25:43state. I'm a huge believer in the economic value of travel and tourism. We are, within

00:25:49our budget, implementing the Visit America Act. We have hired a terrific DAS for travel

00:25:58and tourism, and we are, within our budget constraints, doing everything we can to work

00:26:04with states, including rural areas, to promote travel and tourism.

00:26:09I have a little bit of good news. As you know, the U.S. is the number one destination for

00:26:15foreign travelers. I wanted to report to you that the National Travel and Tourism Strategy

00:26:22had a goal of having 90 million international visitors to the U.S. by 2027. We think we're

00:26:29going to beat that goal. We think we'll have that done by 2026.

00:26:34To your point, I chair the Travel and Tourism Advisory Board. We have representatives from

00:26:39rural America. We're constantly listening to those stakeholders to figure out what more

00:26:44can we do. All of that being said, I'd be happy to follow up with you if you have ideas

00:26:49on what we could do more of, because I agree with you. Rural America is beautiful, and

00:26:54if we can get travelers to go experience it, we should.

00:26:58Thank you. I appreciate it. The National Travel and Tourism Strategy lays out, as you said,

00:27:04the five-year goal of increasing American jobs by attracting and welcoming 90 million

00:27:10visitors, and you say we're going to reach it by 2026, which we appreciate so much.

00:27:18You estimate that we'll spend about $279 billion by 2027. Can you speak to progress on reaching

00:27:27this goal? And you did. Maybe you want to elaborate a little bit. Are there specific

00:27:32areas you're seeking to prioritize?

00:27:35Yes. Let me say this. I know you're a leader in the Visit America Act, and I strongly support

00:27:46having an assistant secretary. Most other countries do, and I think we should, too.

00:27:52I know money doesn't solve every problem, but we are severely budget-constrained in

00:27:56this respect. I'm implementing it, but without the funds to hire an assistant secretary and

00:28:01the office and the tools to do that, it's very hard to do that. Last year, we took a

00:28:05$2 million cut, and this year, if we have the House Appropriations Committee proposed

00:28:13cut of another 9% for ITA, it'll just make this work that much harder. So I do want to

00:28:20put a marker down on that for all of you who care about travel and tourism. One of the

00:28:25things that we have done is really engage with this Travel and Tourism Advisory Board.

00:28:32I have personally met with them on numerous occasions. What I try to do is listen to them.

00:28:37What do you need? What can we do? We did a lot, for example, in COVID, helping the

00:28:43cruises to get people cruising again. We've done a lot in coastal communities to help

00:28:48them with workforce. You know, you can't operate your restaurant or hotel if you can't find

00:28:52the workers. So usually, my approach is listen to the people in the business of travel and

00:28:58tourism and ask them, how can we help you? And we try to meet their needs so they can

00:29:03do more business and hire more people.

00:29:06Very good. Again, can you specifically, if you can make any recommendations with regard

00:29:12to the gig economy in rural areas? Because, you know, we've got a lot of beautiful areas,

00:29:20hidden treasures, as you know, throughout the United States. Any specific recommendations

00:29:27you can make with regard to that?

00:29:30Permit me to come back to you on that, or maybe we could have a discussion about it.

00:29:35You know, with the rise of Uber and Airbnb and et cetera, you're exactly right that that's

00:29:40who is increasingly in that economy. I think it's important that they have high quality

00:29:45decent jobs. But let me follow up with you on that.

00:29:50Okay, very good. You know what, I'm going to go ahead and yield back and recognize the

00:29:57ranking member from the great state of Illinois, Ms. Schakowsky, for five minutes of questioning.

00:30:02Thank you.

00:30:03Thank you.

00:30:04Well, I'm excited to raise this issue. I understand that in commerce that what you're doing is

00:30:10requiring child care for some workers, that it be provided from companies that deal with

00:30:26semiconductors. Child care, can you talk about that?

00:30:33Yes, thank you. So, we are not actually requiring companies to provide child care, but what

00:30:41we are doing is saying to companies, if you want taxpayer money, you need to prove to

00:30:47us that you'll be successful, that you'll be a good steward of taxpayer money. That

00:30:52means prove to us that you're going to be able to hire the workers you need in the timeline

00:30:58that you need them. And so, we've asked every company who wants money to give us a workforce

00:31:03plan. Show us, what are you going to do to train people, to hire people from high schools

00:31:10and community colleges and the like? And how are you going to make sure you have women

00:31:16on the job?

00:31:18Every one of you knows, in your districts, we are at a historically low unemployment

00:31:23rate. The unemployment rate in the building trades right now is essentially zero, a couple

00:31:28of percent. If you're building a fab, it will require somewhere between 5 and 10,000 construction

00:31:34workers to build that fab. You will not be successful unless you find a way to get women

00:31:39into these jobs. And you will not be successful at that unless you have a child care plan.

00:31:45So what we're saying to companies is, convince us you'll do a good job with taxpayer money,

00:31:50hiring and recruiting women, and making sure that they have access to high-quality, affordable

00:31:56child care. Otherwise, they're not going to get the job done. So I feel strongly about

00:32:00this. This isn't social policy. This is math. They have to get the job done with taxpayer

00:32:05money. They have to have women, engineers, construction workers, scientists, technicians.

00:32:10And that means thinking about child care.

00:32:13So though it may not be required, you are mentioning child care as a way to get the

00:32:19women more involved, right?

00:32:21Yes, absolutely.

00:32:23Excellent. Let me ask you this, or discuss this. I think it is really important that

00:32:33we are protecting abroad all the data and the privacy. We've been working on privacy

00:32:42issues here in this subcommittee and in this committee. So I am just wondering what Commerce

00:32:50is doing to protect Americans' data internationally, especially from China.

00:33:00Yeah. So first of all, I want to agree with you and Congresswoman McMorris-Rogers that

00:33:09we absolutely need a federal privacy legislation. And I applaud the work of this committee for

00:33:13getting us there. We're behind the rest of the world. So I support that.

00:33:20On top of that, a couple of areas where I'm very focused. You saw last week that the Commerce

00:33:25Department essentially banned Kaspersky, which is a Russian antivirus software company. We

00:33:33say you can't do business in America anymore because we think the Russians, Russian government,

00:33:38are going to take America's data and put it back to Russia. I've recently launched

00:33:43an initiative around connected vehicles. I literally shudder to think of the risks to

00:33:49America's data and privacy of, let's say, we had a million Chinese cars on the road,

00:33:56all connected, all collecting data from Americans, all of it going back to Beijing. So we are

00:34:02being very aggressive. Commerce Department has just put out, we're going through a rule-making

00:34:07process on that. So I think I could go on and on with AI. It's another risk. We're thinking

00:34:14hard about cybersecurity and data protection as it relates to AI. I think we have to move

00:34:19forward with technology. Absolutely. We have to lead the world. But more and more, we're

00:34:24getting concerned about protecting American consumers and children for making sure that

00:34:32our data doesn't get into the hands of the PRC.

00:34:35Thank you. I want to just go back to that issue that I had raised earlier about the

00:34:41workers who are concerned that, especially CHIPS workers. I have been hearing this from

00:34:52labor unions and the labor caucus. And I just wondered if you had any comment on that.

00:34:58Yeah. Look, it is concerning. It's unacceptable. It is concerning. We're working hand and

00:35:05glove with the Department of Labor. We have put out a set of good jobs principles, which

00:35:10we developed in partnership with the Department of Labor. If we're going to provide taxpayer

00:35:14money to companies, we expect the jobs that they create to be high paying and safe working

00:35:19conditions. So we expect workers in those fabs to have the right to unionize, should

00:35:28they choose. So it is a priority. President Biden obviously cares deeply about this. And

00:35:33so we're working on it. Thank you so much. I yield back. Thanks.

00:35:38The lady yields back now. I recognize the chair of the full committee, Mrs. Rogers,

00:35:43for her five minutes of questioning. Thank you, Mr. Mr. Chairman, Madam Secretary.

00:35:48Thank you again for appearing before this committee. As you may know, I think you've

00:35:52referenced it. Ranking Member Pallone, Senate Commerce Chair Cantwell and I have been working

00:35:58diligently to move forward on a comprehensive data privacy and security framework for the

00:36:03United States. In fact, our very first hearing in the subcommittee this Congress was about

00:36:07the importance of enacting a data privacy bill and promoting emerging technologies in

00:36:12our economic competition with China. The American Privacy Rights Act is going to provide Americans

00:36:19new rights over their data. It will also secure U.S. footing on the world stage on a number

00:36:25of tough topics. Can you discuss the challenges in demonstrating leadership abroad on cross

00:36:30border cross border data flows, trade agreements, promoting U.S. commerce without the U.S. having

00:36:38such a framework in place? Yeah. So, Chairwoman, I just want to applaud you for your work on

00:36:43this. I think it's essential. I strongly support your work. I appreciate you're doing it in

00:36:49a bipartisan way, making progress towards data privacy. And I would like to let you

00:36:56know I want to work with you on that so that that can be successful. It's so I just want

00:37:02to say a couple of quick things. First, America right now has the best tech companies in the

00:37:07world. That's a good thing. That's good for innovation. And we can outcompete China. However,

00:37:13they have to follow privacy rules to protect our consumers. You know, they have to have

00:37:18your bill and such. We have to set clear limits on how companies can collect, use, share personal

00:37:25data. And there have to be protections that are enforceable. And I know that's exactly

00:37:31what you're trying to do. I travel around the world. You know, I've been all over Asia,

00:37:36Europe, just Latin America just this year. When I go around the world, I try to convince

00:37:41these other countries to embrace our values, our values of, you know, freedom, data protection,

00:37:49openness, reliability, security. Well, how can we lead in the world if we're not doing

00:37:54it ourselves? So once again, I think this is an incredibly important, long overdue,

00:38:00I will add, piece of legislation. And I think it matters here. But as you say, I think if

00:38:06we're going to lead the world and want to have open and secure and reliable internet

00:38:13and cloud and AI, we need to have we need to have privacy legislation here at home.

00:38:21Thank you. Thank you. Yes, I want as a follow up. These big tech giants, technology companies,

00:38:33would you just speak? We do celebrate the innovation and leadership. Would you speak

00:38:39to what privacy rules are currently in place? You said, you know, that we need clear limits,

00:38:45how they collect, use, share, sell protections for enforcement. What what is currently in

00:38:50place to protect individuals data in the United States of America, from being manipulated,

00:38:56used, sold? Yeah, I mean, as you well know, it's a hodgepodge of state regulations or

00:39:06other, you know, regulations. But what we desperately need is a federal piece of legislation

00:39:15that sets out standards with that are enforceable, that every company in every state has to

00:39:22follow. So I would say the current protections are inadequate at best. And that's why we

00:39:28need a comprehensive piece of federal legislation. Thank you. And it's in it. And it's so foundational

00:39:34to when we think about America's leadership, which I believe really matters, we must balance

00:39:40the personal rights while promoting innovation. I also wanted, you know, to ask you, as we

00:39:45think about emerging technologies, it certainly has been a priority of mine for some time.

00:39:50I'm excited about the future of artificial intelligence. Semiconductor chips will certainly

00:39:55play an important role in achieving the promise of emerging technologies. You also know my

00:40:00concerns related to permitting. And the permitting that needs to take place takes way too long.

00:40:09I read an article again, it could be permitted in Japan in a year, it's taking three years

00:40:14in America, and we're not getting it done. How can the administration or when will the

00:40:22administration tackle the problems that can't just be solved with money, but that actually

00:40:27need to address the permitting and the duplicative and burdensome regulatory hurdles? Yeah. So

00:40:34look, I face this every day in the work with semiconductor companies, but even more so

00:40:40in the work we're doing on internet, you know, the labyrinth of permitting to lay a piece

00:40:45of fiber. I will say one piece of good news, which I haven't yet shared with you. When

00:40:50I was here six months ago, I was highly concerned about NEPA and the chips factories. I can

00:40:56report to you today that we've made a ton of progress on that. And we are on track to

00:41:02complete the environmental review for all of these companies before we issue the award.

00:41:07So I don't think that NEPA will be a holdup in any of that. Having said that, the president

00:41:12has called on Congress to pass comprehensive permitting reform. And I think that that is

00:41:18what is necessary. Obviously, we need to protect the environment, endangered species, clean

00:41:23water, clean air are a priority. But I agree with you, you are correct. It is too cumbersome,

00:41:30takes too long, is too confusing. And if we're going to have, not unlike what you're

00:41:38doing with privacy, I think it's time for a bipartisan, comprehensive piece of federal

00:41:44permitting legislation if we're going to improve the situation.

00:41:50Yes, thank you. Thank you for that. I completely agree. I'll just note for the record that

00:41:56TSMC, this was the article I was reading, the CEO was talking about building two fabs,

00:42:02one in Phoenix, one in Japan. They did the Japanese factory in one year. In the U.S.,

00:42:07they've been under construction for three years, and the factory's still not finished.

00:42:11Yeah. More to be done. I yield back. Sorry, I got

00:42:15we agree. I agree. Very good. Thank you.

00:42:18Thank you. General Lee yields back. We'll now take a brief recess for floor votes. We'll

00:42:23reconvene promptly ten minutes after the last vote is called.

00:42:29The subcommittee will come back to order. And I now recognize the ranking member of

00:42:35the full committee, Mr. Pallone, for your five minutes of questioning.

00:42:38Mr. Chairman, I know it's not your fault, but I do have to say that in the future, based

00:42:44on this last vote, where the vote was closed with 92 members not being there and approaching

00:42:50the floor, we can no longer assume that just because a certain number of members haven't

00:42:54voted that we can stay here and ask questions or continue our hearing. Again, it's a little

00:43:02ridiculous, but when I left, we had a discussion with Mr. Bilirakis about how there were 250

00:43:08people that hadn't voted. But the speaker doesn't care. I'm not saying our particular

00:43:14speaker. So when we got to the floor, there were almost 100 members that hadn't voted.

00:43:20They closed the vote anyway. So what I'm saying is from now on, I think once the gavel,

00:43:25the vote is called, one has to assume that you have to leave the committee and go vote.

00:43:30You can't look and say, oh, there's 200 or 100 or 300 that haven't voted yet. That doesn't

00:43:34mean anything. They're telling me now that they're going to close the vote when the time

00:43:39runs out. They're literally going to close the vote when the time runs out.

00:43:42Not on a first vote. Yeah. In other words, they'll call the vote,

00:43:46and when the 15 minutes or the five minutes is over, the vote is closed. And so we have

00:43:51to assume that it's going to take us whatever time it does to get there and that we can't

00:43:57look at how many people have yet to vote. It doesn't mean anything. They're just essentially

00:44:01saying when the time runs out, the board could be closed.

00:44:05So I'm not, I'm just a gentleman. Yeah, sure. I agree with you. I watched it happen today

00:44:12and I saw that several of our committee members that were here missed the vote. So I agree

00:44:18with you and I ask unanimous consent for the gentleman's time to be restored to five minutes.

00:44:25Thank you. All right. Thank you, Mr. Chairman. I wanted to ask Secretary Raimondo, I wanted

00:44:31to take this opportunity to issue about the important role of NTIA in helping to make

00:44:35sure Americans have access to affordable high speed internet service. For millions of Americans,

00:44:40the cost of internet service is too high. And that's why we included a broadband affordability

00:44:45provision in the bipartisan infrastructure law. Providers that receive grant funds from

00:44:49NTIA to build out broadband infrastructure must offer a low cost option to certain households

00:44:55in the build out areas. And the statute allows states to determine what that low cost figure

00:45:00will be. It also sets out a process for the NTIA to approve or disapprove of that number.

00:45:06Now, some Republicans have criticized this policy and characterized it as rate regulation,

00:45:13which I don't think that's true. So can you please tell us whether NTIA is engaged in

00:45:18rate regulation, if you would? Yeah, thank you for asking the question. I do want to

00:45:22testify here on the record that we are not engaged in rate regulation. The statute does

00:45:27not permit us to be engaged in rate regulation and I'm following the law. The statute does

00:45:32require us, though, to make sure that every state gives a low cost option. And that's

00:45:39because in this day and age, the internet isn't a luxury, not a luxury, it's a necessity.

00:45:44As you well know, go to school, go online, file for benefits, get a job, go to see your

00:45:49doctor. So we're going to hold states feet to the fire to follow the law. They have to

00:45:56have a low cost option. You know, $200 a month, $100 a month is not low cost. And it's

00:46:03not rate regulation, but we're going to comply with the statute. By the way, I should tell

00:46:07you we've already approved almost 20 states' plans and we'll have the rest of them approved

00:46:14in the coming months. So we're on path. All the money will be obligated by the end of

00:46:18the year. And I firmly dispute the allegation of rate regulation. All right, thank you.

00:46:26I wanted to turn to the supply chain issue again. In response to the supply chain crisis,

00:46:33the Department of Commerce launched a first-of-its-kind supply chain center that serves as an analytic

00:46:38engine for supply chain resilience within the federal government to help identify and

00:46:43mitigate supply chain risks and drive down the prices for critical consumer goods. So

00:46:48Madam Secretary, how does this supply chain center identify and address supply chain challenges

00:46:54and specifically help drive down the cost of critical consumer goods, if you will?

00:46:59Thank you. Look, we all learned the hard lesson in COVID. When supply chains get disrupted,

00:47:05prices go through the roof. And by the way, it could be COVID. We just saw the bridge

00:47:10collapse in Maryland, weather, floods, semiconductors. So what we are doing is we have built in the

00:47:20Department of Commerce, in ITA, a supply chain office. We have built an amazing analytical

00:47:25tool, which I'd be happy to show any of you, welcome you to the office, or I'll come to

00:47:29you, that allows us to analyze the supply chain and predict ahead of time where we see

00:47:36vulnerabilities. So for example, if in a supply chain, 100% of the goods come from one country,

00:47:44that's a vulnerability. And we say to ourselves, and it could be critical minerals, it could

00:47:48be chips, anything. And then we want to be more proactive saying, okay, if 100% of this

00:47:55comes from Malaysia, that's a risk. If there's a typhoon in Malaysia, that goes out, that's

00:48:00a risk, and we're trying to get ahead of the problem. It will bring down costs. It will

00:48:05bring down, exactly as you said, I'm looking at Representative Dingell, 10,000 workers

00:48:11were put out of work in Michigan for want of a single semiconductor chip that operated

00:48:16the windshield wipers. And we saw during COVID, car prices and used car prices and

00:48:22rental car prices went through the roof, all because of supply chain disruption. So in

00:48:27any event, I think we're doing a good job. We're not out of the woods. It's a continuous

00:48:31thing. And we have to continue to do more. I am asking for money in this budget to build

00:48:37out that supply chain office. And I do want to say we need the money to do the job.

00:48:43Well, I think you have 45 seconds left, but I was going to ask you how, if the budget

00:48:49was cut the way the Republicans have proposed, you know, how is that going to affect your

00:48:54effort to reduce the cost of goods?

00:48:57Yeah, we won't be able to do it. Listen, I was a governor. I watch every penny. I'm not

00:49:02here to say money solves every problem. But if you want us to do this work, we do need

00:49:08money to hire the people, buy the software, do the analysis, reach out to companies. And

00:49:15we won't be able to do the work. You know, that's a fact. By the way, the money I'm asking

00:49:19for for artificial intelligence, semiconductors, workforce, supply chain, countering China,

00:49:24it's all bipartisan. And it's not fat. It's necessary. And it'll be devastating.

00:49:30All right. Thank you. Thank you, Mr. Chairman.

00:49:35I thank the gentleman. I recognize the gentleman from Indiana, Mr. Brachan.

00:49:42Thanks to Chair Bill Arrakis for calling today's hearing. And thank you, Secretary, for being

00:49:46here and taking your time today to answer our questions. I think it is critical that

00:49:50Congress and the Department of Commerce do everything in their power to ensure that the

00:49:53United States remains the world's leader in innovation and that companies of all sizes

00:49:57are able to compete globally. That is why I'm pleased that this committee and the House

00:50:01of Representatives have recently passed the Promoting Resilient Supply Chains Act and

00:50:06the Deploying American Block Chains Act, both of which I co-led with Representative Blunt-Rochester.

00:50:11Secretary, the supply chain exposure tool highlighted in your testimony is exactly the

00:50:17kind of work that Promoting Resilient Supply Chains Act is meant to promote and codify.

00:50:23How do you ensure small and medium-sized businesses are aware of supply chain vulnerabilities

00:50:29and solutions? Because it's critical to utilize all the players in the American economy to

00:50:33strengthen our supply chains, not just the largest companies and participants.

00:50:38First of all, thank you for your leadership, sincerely, on both of those issues, supply

00:50:43chain and blockchain, both important, and I appreciate your leadership. This is a challenge.

00:50:50Like there's no quick answer to this one, and I worry about it a lot. The biggest companies

00:50:54have the resources. It's actually the little companies who struggle the most. I'll tell

00:51:00you a couple things we're doing, but I would also look forward to working with you on this.

00:51:04We run the Manufacturing Extension Partnership Program at the Commerce Department, MEP. We

00:51:11have made sure that in, and all they do is work with small manufacturers. Your state

00:51:17has one. Every state has one. We've put a supply chain person in every MEP. If you're

00:51:23a little manufacturing company in Indiana and you're going to the MEP, there is a supply

00:51:29chain representative who will help you think through your supply chain. We have the Manufacturing

00:51:35USA Institute, same thing, focused on supply chains. The Commerce Department also has,

00:51:41in every state, a local representative, a business agent, that person we're equipping

00:51:48with our supply chain resources. I will tell you, of all the things I do, reaching small

00:51:54companies is the hardest. It's a real concern, and that's what we're doing, but of course

00:52:00if you have any other ideas, I'd like to work with you.

00:52:04Well, thanks for that response. It was important, I think, to get that on the record out there

00:52:08so small and medium-sized companies understand there are resources available to help them

00:52:13assess the supply chain vulnerabilities that they may have. We can always do more, of course,

00:52:17but as you outlined, there are resources for that to happen.

00:52:21I'm also deeply concerned about the trend of blockchain developers leaving the United

00:52:25States or forming in adversarial nations like China, which is why we introduced the Deploying

00:52:31American Blockchains Act. Are you aware of any efforts to help the private sector deploy

00:52:38and implement various distributed ledger technologies throughout the U.S. economy that you're doing

00:52:44at the Department of Commerce? Is there things we can do?

00:52:48As you may know, or others may know, NIST, which reports up to me, a couple of years

00:52:53ago put out a report on blockchain on exactly this issue. What are the standards? How does

00:52:59it work? They do a lot of work with small companies, by the way, NIST, and so it's a

00:53:06tool, the blockchain report, to help companies learn how to implement blockchain, which is,

00:53:14as you know, distributed ledger technology is obviously very important for things other

00:53:19than just crypto.

00:53:20Sure, that's exactly right.

00:53:22You know, I think when people hear blockchain, they think crypto. Don't think that. Think

00:53:27blockchain, think industrial, manufacturing.

00:53:29Agreed. In fact, that was a challenge when we did the legislation to change that. Another

00:53:35issue that we share concern with is around the possible cyber and security threats to

00:53:39consumers. In April, the Department of Commerce issued an advance notice of proposed rulemaking

00:53:43to investigate possible security risks associated with information and communications technology

00:53:48and services from countries of concern like China. I think it is important and critical

00:53:54that the government work alongside industry to help ensure that we do not stifle innovation.

00:54:01Have we had any instances where our foreign adversaries are attempting to, for example,

00:54:05hack a connected vehicle out there? Because the concern is, you know, a broad attack on

00:54:12connected vehicles in the United States could be a pretty serious national security risk.

00:54:17Huge. Fortunately, truthfully, fortunately, right now, China doesn't sell many vehicles

00:54:24in the U.S., and that's why we want to get on top of this, you know, before they do.

00:54:30The new cars, not autonomous vehicles, but a new electric vehicle has thousands of sensors. It'll

00:54:37blow your mind, as it did mine. They listen to what you say in the car. They track where you go.

00:54:42They track your patterns. It's run by software. All the data can get back to Beijing. So what we

00:54:49are doing, we're in the process right now. We hope to put the rule out later this year.

00:54:54To make sure that that data can't be collected and go back to the Chinese.

00:54:58I'm out of time, but I just wanted, with your indulgence, Mr. Chairman, I wanted to say this.

00:55:02I hope that you can commit to following the formal rulemaking process and collect industry feedback

00:55:08on the proposed rule before it's finalized. Yes, I will do that.

00:55:11Thank you very much. I yield back.

00:55:13Thanks, gentlemen. I recognize the gentlelady from Florida, Representative Castor.

00:55:17Thank you, Mr. Chairman. Welcome, Madam Secretary. You are a champion for American businesses,

00:55:23American workers, American competitiveness. You are a strong and effective

00:55:28leader for the Commerce Department, and it is appreciated.

00:55:33Some of the economic development grants that come out of Commerce have paid such huge dividends for

00:55:39my booming Tampa Bay area. Many of the, just the simple EDA grants to help our tech accelerators

00:55:50have turned the Tampa Bay area into what was an economy relying on tourism and real estate and

00:55:59some, and we have a good active port, but now we're a tech startup community.

00:56:05We're a community. We don't have a lot of big Fortune 500 companies and big corporations.

00:56:09We rely on the entrepreneurial spirit, and it has paid huge dividends. We have small businesses

00:56:16growing and thriving. The wages are higher, and the Tampa Bay Wave is one of our leading

00:56:24accelerators in the area, and I just want to thank your entire team for what they've done

00:56:30over the years in targeting those investments to our accelerators.

00:56:36Most recently, Tampa Bay Wave has received a grant from NOAA under the Ocean-Based Climate

00:56:42Resilience Accelerators Initiative funded by the landmark Inflation Reduction Act.

00:56:49What they are telling me is that they now are bringing together new startup companies across

00:56:57the state of Florida. They heard the message that the agency put out to do more partnering,

00:57:03so they're partnering with South Florida Accelerator. They're taking your design and

00:57:09development funds and now are going for the next round of funding to support startups and

00:57:14entrepreneurs working on ocean-based climate resilience, attracting capital, maturing their

00:57:20technology, scaling business models for climate challenges and economic developments, but I'm a

00:57:27little bit worried now looking ahead, looking at the proposed budget, the fiscal year budget

00:57:34proposed by the Republicans, that their partisan bill would cut commerce, economic development

00:57:40assistance for local communities by a large amount. It looks like maybe more than 10%.

00:57:46What will this do to our ability to grow these small businesses and entrepreneurs if you have

00:57:54to suffer through significant cuts like this? Thank you for your question. The work that I

00:58:00do that gets all of the attention, of course, is the CHIPS Act, you know, six billion dollars to Intel,

00:58:06eight billion dollars to TSMC. The reality is that's a small number of companies. Most Americans,

00:58:12the vast majority of Americans, work for small businesses, entrepreneurial businesses, family-owned

00:58:17businesses, and that's the work of EDA, like small grants, one community at a time, rural, coastal,

00:58:25urban, and a cut to EDA will hurt every community in America, like literally. Red states, blue states,

00:58:33rural, urban, because these are small amounts of money for workforce training, building facilities,

00:58:40incubators, and sometimes it's the only money that these partnerships are really eligible for.

00:58:49You know, they're not going to get venture capital money. These aren't going to be, it's not, your

00:58:53companies aren't, it's not the next Google necessarily, but it's a nice business. So, I think

00:58:59it would be deeply unfortunate. This is bipartisan work. It helps support communities all over America.

00:59:08It doesn't get a lot of attention, but people in your community and all of your communities will

00:59:13feel it if it gets cut. It gets a lot of attention across the Tampa Bay Area because of the

00:59:19small investment from commerce and EDA now is attracting 10, 20 times the amount in private

00:59:26investment and capital. And then, sticking with NOAA a little bit, it's an interesting

00:59:33part of commerce, but it's an important one. You said you're going to focus on growing

00:59:38fundamental science research and then combine it with a new outlook for supply chains, and that

00:59:44sounds like that would help us with the nascent offshore wind industry that we're trying to

00:59:51grow in America. It would pay great dividends if we can lower the cost of energy, use clean energy,

00:59:59and I'd like to know how is Department of Commerce and NOAA thinking about wind research, permitting,

01:00:06development, and how the new emphasis on supply chain focus could help

01:00:12lift this industry in the good paying jobs it provides? Yeah, exactly. President Biden has set

01:00:17a goal of 30 gigawatts by 2030 of offshore wind. I will say, as the governor of Rhode Island,

01:00:23we had the first offshore wind installation in North America. I know a lot about this. It created

01:00:30so many jobs, lowered the cost of energy and electricity, and got a lot of people in Rhode

01:00:36Island off of diesel and oil. Permitting still takes too long. I'll be the first to say it,

01:00:42and so we are working very hard. I personally have been engaged in an effort to try to streamline the

01:00:49permitting. We've asked for money in the budget to help to do that, to streamline the permitting,

01:00:55so we can go faster to hit the goal and also create jobs. Thank you very much. I yield back.

01:01:00General, ladies, time has expired. I now recognize myself for questioning.

01:01:06Madam Secretary, thank you for being here today. Thank you. We saw hundreds of billions of dollars

01:01:11spent by the administration and Democrats in Congress through the IRA, IIJA, and other COVID

01:01:17area packages. Unfortunately, though years have gone by since these funds were appropriated,

01:01:24very few projects have been completed or even started. From broadband to semiconductors to

01:01:30EV chargers, our constituents are still waiting to see where their tax dollars are going. There

01:01:37are many excuses for why this is the case. Washington's bureaucracy, permitting delays,

01:01:42as you just mentioned, and more. But one of the biggest issues I hear is workforce.

01:01:49The Biden administration has made no secret of their intent to use the CHIPS Act to benefit

01:01:55labor special interest. The CHIPS Act was first passed as a national security imperative,

01:02:02not a bill to increase the union roles. The data is clear. Across the country,

01:02:08fewer and fewer U.S. workers are members of unions. I've seen that in my Michigan district.

01:02:14At the same time, many of these semiconductor facilities are struggling to find qualified

01:02:19workers to build their facilities. It would then be reasonable to ask, why then is the

01:02:25administration asking these companies to acquiesce to big labor and increase union workforce at their

01:02:31sites, even in states where union workforce is at an all-time low, like Texas and Arizona?

01:02:37Secretary Armando, why then add these regulations requiring unions' workforce conditions when

01:02:45doing business with the federal government? Does this not go against the intent of the law,

01:02:50and how does increased union participation in building CHIP facilities improve the national

01:02:56security imperative of establishing a secure and domestic semiconductor supply chain?

01:03:03Thank you for the question. Look, I want to be clear. It is a national security program. I say

01:03:08it all the time. There is no union requirement. There is no child care requirement, as we talked

01:03:14about earlier. My first phone call I took early this morning was with the CEO of TSMC to talk

01:03:21about workforce, because as you say, every one of these companies is struggling to find enough

01:03:26workers. We believe if you're going to take taxpayer money, these people ought to have good

01:03:32jobs with decent wages, good working conditions, safe working conditions. We believe if Americans

01:03:40in a facility want to unionize, they ought to be able to give them that opportunity.

01:03:45There is no such requirement, but what we are requiring is a workforce plan. I stand by that

01:03:55requirement. We require every company to tell us what your plan is. How are you going to hire

01:03:59the workers? How are you going to attract women? How are you going to train people? I think that

01:04:05that's just taxpayer protection. Fundamentally, I work very hard to make sure this is a national

01:04:11security priority and push back against any special interests, to use your words, who try to

01:04:18get us to veer from that national security objective. I encourage you to make it very clear

01:04:25of that position to our president as well. The incentive is there for unionization, especially

01:04:32using the CHIPS Act. I think that's a great concern to us. Let me move on. Since I listed

01:04:38all the spending bills enacted, won't that cause inflation to rise and have a harmful effect on

01:04:44small and medium-sized businesses who are struggling, not only in the area of workforce, but

01:04:50just staying alive? I don't think so. I mean, look, if anything, the fact that we don't make

01:04:58any leading-edge semiconductor chips in America, that's driving inflation.

01:05:03The fact that we buy them all from one company in Taiwan is a national security risk and lack

01:05:09of supply drives inflation. These investments, whether it's in broadband, roads, bridges, water,

01:05:15they're investments. It's not profligate spending. I believe it'll make America stronger,

01:05:20able to outcompete the world, able to compete with China. With respect to your issue,

01:05:27I can't speak to EV chargers and such, but there are cranes all over Arizona and Texas

01:05:35because of CHIPS plans. Can we go faster? I'm sure we can. I'm always trying to go faster.

01:05:40Drive my team crazy. But, you know, we had a middle-mile ribbon-cutting this past Monday,

01:05:45putting money out the door to connect people to the internet. So I'll work with you to do more,

01:05:52go faster, be more transparent, but I don't think these are inflationary. I think it's

01:05:56what America needs to thrive. Thank you. My time has expired. Now I recognize the gentlelady from

01:06:03Pure Michigan, Representative Dingell. Thank you, Mr. Chairman, and thanks to the committee for

01:06:08holding this important hearing, and Secretary Raimondo for being here. I have so much to ask,

01:06:13I'm not going to do a lot of flowery language, because this really does matter. When, you know,

01:06:19I'm not old, but I'm seasoned, and at one point we made 100 percent of the CHIPS in this country.

01:06:24When I started in the industry, we made 40 percent, and now we're down to 7 and 8 percent,

01:06:29and not even did the last, as the Secretary pointed out, the lack of CHIPS contribute to

01:06:35inflationary issues for the auto companies, but it's a national and economic security issue,

01:06:41and until we get them as fast as we can being built here by American workers and trained,

01:06:45we are going to continue to have economic and national security issues. So I want to thank you,

01:06:51Madam Secretary, for the proactive leadership you're taking to secure our automotive and

01:06:56information communication technology services supply chains from threats posed by foreign

01:07:01adversaries, which is something I'm very worried about, particularly China. I appreciate the

01:07:06efforts outlined in your advance notice of proposed rulemaking to inform regulations for securing

01:07:12and safeguarding supply chains for connected vehicles. Can you elaborate quickly on the

01:07:18action the Department of Commerce is taking as it relates to the risks associated with ICTS

01:07:24components in connected vehicles that are made by foreign entities of concern? Yes, so as you just

01:07:30said, we're in the middle of the process. We received a lot of comments. The comment period

01:07:34closed in April. We have to go through all of those comments. I hope to have the rule out, I don't know,

01:07:40later in the fall, certainly by the end of the year, and I don't know how we could go from

01:07:46everything from banning Chinese EVs on the roads in America to regulations, regulations on their

01:07:54software, maybe all the data has to be housed in America. I want to make one very important point,

01:07:59and I'll be brief. USTR recently said they're going to put 100% tariffs on Chinese EVs. I support

01:08:06that. I think that's great. America can compete if the level playing field is level. That's an economic

01:08:13issue. What I'm worried about, what I'm doing, is the national security issue of all this data

01:08:19making its way back to the Chinese military. So anyway, we're working on it. I'll have the rule

01:08:24out by the end of the year, and we're working with industry to make sure we don't have unintended

01:08:29consequences. It's very important that we do that. The fact of the matter is, as you know, and I've

01:08:34discussed it, and I know my colleague Sarah agree, is that China's on our street testing their

01:08:41vehicles, collecting data, and not letting us on their streets in China to collect data. Yes, you know,

01:08:48it's interesting. You can't drive your Tesla to the airport in Beijing or Shanghai. Can't do it.

01:08:54China doesn't allow it. You can't drive your American-made, American electric vehicle near

01:09:02military bases, hospitals, airports in China. So why are we doing that here? And what you're doing

01:09:09matters. As our vehicles become smarter, safer, and cleaner with emerging technologies, it's

01:09:14essential to fully understand the implications and the potential, the real, not potential, the

01:09:21real security risk, particularly when this technology comes out of countries like China.

01:09:26What are they tracking? What are they putting? So let me ask you this, Madam Secretary. Should the

01:09:30Department of Commerce determine that vehicle-generated data from components of connected

01:09:36cars under the control of a country of concern present an uneffectual risk to national security?

01:09:42And if you do find that, what steps could the Department of Commerce take to protect the

01:09:47American people? Yeah, in the most extreme case, we could say no Chinese connected vehicles allowed

01:09:54in America. We could say the software has to be American-made. We could say the data has to reside

01:10:03in the U.S. Like, we have different, and we haven't decided that yet. We're going through the comments.

01:10:08Fundamentally, I would tell you the more work I've done on this, the scarier it is.

01:10:13These connected vehicles are so sophisticated. The data that they can collect on you, your kids,

01:10:20your family, U.S. military members, drive around in them. So I don't know precisely what we will do,

01:10:26but I tell you we're going to be very, very, very serious and diligent and do what we need to do to

01:10:33protect the American people. Thank you, and I think it's imperative as we are doing this that

01:10:38we educate the American people, because I think too many people do not understand what the risk is.

01:10:44I'm running out of time. No, no, that's a good point. I'm so off script, but I'm going to ask you

01:10:49one other question, which is that you've seen Chinese companies like BYD, Citing Manufacture

01:10:58and Assemble capabilities in Michigan to skirt the UMC rules, and that's something we've got

01:11:04to talk about in trade as well. But as part of the rulemaking, are you considering Chinese

01:11:10vehicles assembled in Mexico? I believe that we are, yes, but that's an excellent question,

01:11:15and let me look into it. Thank you. I have four seconds left, so I guess I better stop. Thank you,

01:11:20Mr. Chairman. Gentlelady yields back. Now we'll recognize the gentleman from South Carolina,

01:11:26Mr. Duncan, for his five minutes of questioning. Thank you, Mr. Chairman. Madam Secretary,

01:11:29thanks for being with us today. Would you agree with me that we're in a new economic cold war

01:11:33with China, and that economic policy is central to the great competition with China,

01:11:39the communist China, including section 301 tariffs against the Chinese products?

01:11:48I agree we're in a great competition with China, and 301 tariffs help us, and I agree we have to

01:11:53win. So I believe in free trade. I think you do as well, but I believe in fair trade. Exactly.

01:12:01Bottom line is China cheats. Exactly. Unfortunately, the Chinese Communist Party is now seeking to

01:12:05circumvent section 301 by taking Chinese steel and Chinese parts to Thailand and setting up shell

01:12:12companies that then dump cheap goods in the United States. This includes top mount refrigerators.

01:12:19As you may know, Electrolux has been making Frigidaire refrigerators in the heart of my

01:12:23district, Anderson, South Carolina, for the past 25 years. Because of the entry of Chinese dump

01:12:29top mount refrigerators into the American market, Frigidaire has seen its market share go down. My

01:12:35Chinese company, Madea, has grown its market share from 8% in the third quarter of 2023 to 28% last

01:12:42quarter. They've done this with 40 pounds of Chinese steel in each unit while advertising

01:12:48their no tariff product at half the price of its U.S. competitors. The impact of my district has

01:12:55already cost 160 jobs and counting. That's why Electrolux has now filed an anti-dumping petition

01:13:03with your office against Madea, and I believe my staff has given your staff the details on that

01:13:08petition. Madam Secretary, can you assure my constituents that you will give this situation

01:13:13the thorough investigation that it deserves in light of this second cold war with China and the

01:13:18economic impacts that is already having in my district? Yes, absolutely. As you know, this is a

01:13:26quasi-judicial process, so I'm limited in what I can say here. 100%. Look, China cheats. You're

01:13:32right, China cheats. They subsidize their companies, they don't pay fair wages, they dump, they

01:13:39circumvent, whether it's Thailand, Malaysia, Vietnam, etc., and it's not fair. American workers can

01:13:45out-compete anyone if we have a fair fight. So if I can follow up with you, you know, in a

01:13:52private setting, but as I said, 100%, we will look into it, we'll take it seriously, and if we assess

01:13:58that we need to, we'll levy a duty to level that playing field. Level the playing field. Finally,

01:14:04I'd be remiss in my duties as chair of the Energy Subcommittee if I didn't at least put a plug in

01:14:09for the application for recognition of the South Carolina Nexus for Advanced Resilient

01:14:14Energy under the CHIPS and Science Act funding. It's critical to our energy future that we solve

01:14:19the problems of getting more power onto our grid and do it in an environmentally and ecologically

01:14:24sound way, and I hope you'll consider our state's application to partner with you in that way. With

01:14:29that, Mr. Chairman, I yield back. Yes, we will. The gentleman yields back. Now we'll recognize

01:14:34a gentleman from the great state of Florida, Mr. Soto, for his five minutes of questioning.

01:14:38Thank you, Chairman, and welcome back, Madam Secretary. I remember it was the middle of 2021

01:14:46in the height of the pandemic, and we saw that supply chain havoc hurting our economy.

01:14:53Chip shortages that were especially affecting vehicles, computers, and appliances

01:14:59increased costs, and that's when we all started talking about rebuilding our national capacity

01:15:04for microchips, and the CHIPS and Science Act started being the talk of the town.

01:15:13I just want to thank you because I remember you convening members of Congress,

01:15:17industry leaders, defense leaders, and your leadership was critical as we worked on this

01:15:22issue, and also thank you for your support of NeoCity's aerospace and space microchip

01:15:29manufacturing. It's been a game changer for central Florida. We have great partners like

01:15:33Osceola County, Skywater, IMAC, Plug and Play, Lockheed Martin, a lot, and it aligns with NASA

01:15:40and our local aerospace industry in East Orange County and Cape Canaveral just a few miles away,

01:15:46and this is a community where it's been transformational, especially being a majority

01:15:50Hispanic community, and we've seen our first technicians for microchip manufacturing graduating

01:15:56from certification programs at Valencia College as well as engineers coming out of UCF. How is

01:16:03the implementation of the CHIPS and Science Act going, and how is it affecting manufacturing and

01:16:09costs for the American people both in Florida and across the nation? Yeah, thank you for what you

01:16:14said. I think it's going very well. You know, we always want to be better, but we were allocated

01:16:2139 billion dollars to invest in companies. We've already committed more than 30 of the 39 billion,

01:16:32so we're moving I think at a pretty fast clip, and you will see like hundreds of thousands of jobs

01:16:39created in America because of that. We're now turning to the part of the work where we will

01:16:44invest in smaller companies and supply chain companies. We don't just want to have the big

01:16:50factories. We need the suppliers, the wafer companies, substrates, chemicals, etc. Importantly,

01:16:58and I think I know this is important to you and all of us, we're also standing up a workforce

01:17:04center of excellence because we need the workers. You know, we need the workers to build the fabs,

01:17:11work inside of the fabs, so we are collaborating with colleges, universities, community colleges,

01:17:19HSIs, as many institutions of higher education that we can in this workforce center of

01:17:29excellence to make sure that every American has a shot to get one of these jobs and they have the

01:17:35skills they need to be qualified for the jobs. And we're seeing that in central Florida, private

01:17:40industry being empowered by the CHIPS Act, public institutions like Valencia College training that

01:17:46new workforce. We literally have to work to stand up ecosystems and we've seen a tripling of factory

01:17:53construction across the U.S. There are a lot of folks who a year or two ago thought we're going to

01:17:57go ahead and straight into a recession and yet laws like this really helped us avoid that along with

01:18:05amazing workforce. And Orlando tourism is our top industry and we're proud to have world-class

01:18:12theme parks like Disney, Universal, SeaWorld. I'm a big fan along with the chairman of Brand USA

01:18:18and the work that Commerce is doing. We also are big fans of the 2022 National Travel and

01:18:25Tourism Strategy promoting diverse, inclusive, and accessible tourism. We got the Air Carrier

01:18:33Access Advisory Committee back into the FAA. What is the department doing or how is it critical to

01:18:41have full funding in the president's budget to ensure accessible travel for all Americans and

01:18:48foreign tourists including those with disabilities? Yeah, by the way on the point you said, one really

01:18:53cool thing is for every dollar of CHIPS money that we are public money we're putting out, we've seen

01:18:59$12 of private capital. Yeah. It's exactly what you said, we're pulling forward the private capital

01:19:05which is what gets the engine going. We talked earlier about travel and tourism, we need the

01:19:11funding. You know, we want to hire an assistant secretary for travel and tourism and that for

01:19:17that person to have a team and the tools they need to do the job. We took a cut last year, there's a

01:19:22proposed cut for this year, so we're implementing to the best of our abilities within our budget

01:19:27constraints. We have a fantastic deputy assistant secretary, we've engaged with the travel and

01:19:33tourism advisory board, fantastic people and listen, I'm a believer. I'm from the ocean state,

01:19:43I get it. These are good jobs, these are real jobs and we want to do whatever we can and all of your,

01:19:48you know, not just a place like Florida but rural places that we talked about to stimulate the

01:19:53travel and tourism economy. We appreciate your commitment to tourism and have to get you the

01:19:57funding to do the job and welcome. Thank you. Gentleman yields back, now we'll recognize Mr.

01:20:03Falter from the state of Idaho. You're recognized for five minutes of questioning. Thank you Mr.

01:20:08Chairman, Madam Secretary, thank you for being here today for your testimony and I had a

01:20:15opportunity to hear your opening statement and you made the statement that we need to out-compete

01:20:19China and I agree with that. We do need to out-compete China. I would share from my

01:20:26perspective some of the policies the administration, not directly due to you, but some of the policies

01:20:31the administration don't necessarily agree with that and I'll just give you one example and that's

01:20:36the mandates on electronic vehicles as they're coming around now. While we're doing a mandate

01:20:42on electronic vehicles or at least attempting to, we're simultaneously restricting access to

01:20:49their domestic supply chain for those electronic vehicles. Those same electronic vehicles we're

01:20:53trying to to mandate the use of and that in my view is kind of playing into the hands of China

01:21:00and where they are positioned and I'll give you a specific example and kind of move to our

01:21:07discussion point, but critical minerals is one of those things. We have critical mineral

01:21:13resources here in China, excuse me, in the U.S., many of which are are needed for the production

01:21:21of electronic vehicles and batteries and so on, but yet we have such restrictions on the access to

01:21:27those and periodically when we do get a permitting done, which is always an onerous process, then we

01:21:37have other issues and that's where I kind of wanted to just get some dialogue going with you.

01:21:42We have a specific situation in my state of Idaho where there's a cobalt mine, took years to get

01:21:48permitted and magically when it did, the market price fell through the floor and the business

01:21:58person in me starts to take a look at that and peel that onion back and all of a sudden

01:22:03it appears that some foreign competition has magically lowered prices and increased supply

01:22:14and they don't abide by the same rules that we do when it comes to environmental

01:22:21compliance. They don't abide by the same rules that we do when it comes to labor and the type

01:22:26of labor that is utilized and so this is, I've kind of covered a lot of ground there, but I just

01:22:32wanted to get your dialogue there, some input. Is this something that you're watching? Is it, you

01:22:40know, we need to outcompete China, but we're not playing by the same set of rules when it comes to

01:22:48a lot of these things. Other examples have been mentioned. I'm bringing up the issue of mining

01:22:53and the harvesting of critical minerals. Could I get your feedback on that? Yeah,

01:22:58thank you for the question and thank you for highlighting this issue. Back to what

01:23:03Representative Dingell said, I'm not sure people understand the implications of this. So lithium,

01:23:11cobalt, nickel, these are things that are primarily mined and processed not in the United States.

01:23:19We are far too dependent on China, far too dependent on China, which means they can do

01:23:24exactly what you just said. They can tank the spot price and hurt all U.S. businesses or they could

01:23:30raise the price and take us hostage. To the extent that we have lithium, cobalt, etc. in the United

01:23:37States, we have to figure out how to access it. And so we are working hard on this. We also have

01:23:44to work with our allies. So for instance, the Philippines or Indonesia or Japan. These are

01:23:52allies, critical mineral rich, and we should try to figure out how do we work with Australia.

01:24:00Australia is getting hurt by China and China's coercion, not playing by the rules. So

01:24:05while we work to figure out how to work with you in Idaho, Nevada. Nevada has a lithium deposit.

01:24:12How do we access what's in the U.S.? We also have to work with our allies around the world

01:24:18to create a club of allies so we can stand together against China's unfair,

01:24:25coercive practices. The only thing, and I'll work with you on it. I'd be happy to work with you on

01:24:31it. Come out to Idaho. We can talk about it. The exciting thing with, you know, meeting climate

01:24:38change with EVs and such and chips is exciting. It all depends on critical minerals. So electric

01:24:45vehicles, semiconductors, silicon. We are about to become batteries, lithium batteries. We're about

01:24:53to become more critical minerals, like reliant. And so the issue you raise is about to become

01:25:01so much more important and we've got to get after it. I thank you for that. And I'll just close my

01:25:05comments because I'm out of time by saying some of these organizations that are trying to do this

01:25:10work, we put them through so much. The permitting process, another topic totally, but it's so

01:25:16incredibly difficult. And these organizations that are truly trying to be very respectful of the

01:25:23process and do so in a responsible fashion. So I will take you up on that opportunity to converse

01:25:28further. And thank you for your response. I yield back. Yeah, thank you. Thank you. I'll recognize

01:25:37now Ms. Clark from the state of New York for your five minutes of questioning. And good afternoon

01:25:42and thank you, Mr. Chairman. And I thank our Ranking Member Tchaikovsky for convening this

01:25:46hearing and to Secretary Raimondo for joining us today to discuss the important work of the

01:25:52Department of Commerce. Under the leadership of Secretary Raimondo, the Commerce Department

01:25:59has helped our economy emerge from the COVID-19 pandemic stronger than that of any other country

01:26:05in the world, ensured that America remains a global leader in emerging technology like artificial

01:26:11intelligence, and strengthened our national security through its work to promote more resilient

01:26:17supply chains. Commerce has done such important work in implementing the key legislative

01:26:22accomplishments of the Biden administration. The Chips in Science Act, as many of my colleagues

01:26:28have noted today, enacted last Congress charged Commerce with allocating funds to spur semiconductor

01:26:34development and manufacturing in the United States. To date, Commerce has announced nearly

01:26:40$30 billion in grant awards and up to $25 billion in loan and loan guarantees.

01:26:47These grants and loans will not only supercharge our economy as we ensure more critical technology

01:26:54sectors, but strengthens our national security by lessening our dependence on foreign countries

01:27:00for this essential technology. And I commend the Department of Commerce for its work in this space.

01:27:07In addition to the Chips in Science Act, the Commerce Department, through NTIA,

01:27:11has done more extensive work in our collective effort to close the digital divide. The bipartisan

01:27:17infrastructure laws, historic broadband investments, demonstrate Congress's strongest

01:27:22attempt to date to bridge the digital divide and bring all Americans reliable, affordable access.

01:27:30Fortunately, one of our key broadband adoption affordability programs, the Affordable

01:27:35Connectivity Program, experienced a lapse in funding this month due to the House Republican

01:27:41leadership's refusal to move my bipartisan, bicameral legislation to provide additional

01:27:46funding. This abstinence has forced the 23 million ACP-enrolled American households to

01:27:56make their near-impossible decision between paying for broadband and the critical lifeline to work,

01:28:04education, and financial opportunities, and other essentials like medicine and food.

01:28:09Despite Republican leadership's intransigence, I remain open to finding a way forward for this

01:28:16crucial program. Additionally, the bipartisan infrastructure law included a separate,

01:28:23bead-specific affordability provision assigning NTIA administrative oversight and programmatic

01:28:30support responsibilities. Under the bipartisan infrastructure law, service providers that

01:28:36accept funding from the BEAD program to build broadband networks must offer a low-cost service

01:28:42option. Despite these statutory requirements, some on the other side of the aisle incorrectly claim

01:28:49that this is improper rate regulation. Secretary Raimondo, can you please explain for the committee

01:28:57how the ACP and other broadband affordability requirements will fully unleash the historic

01:29:03investments made in the BEAD program, and could you also speak to the importance of each state

01:29:08adopting a robust, low-cost broadband option? Yes, thank you for your question and thank you

01:29:16for your leadership. ACP is necessary. It's literally a life-or-death situation for many

01:29:23people. I have personally spoken with people in rural America, all over this country, who

01:29:34the nearest hospital or doctor is 100 miles away. If you don't have the internet, you don't get to

01:29:38see the doctor. The internet isn't a luxury. It's not a luxury. It's a necessity. It's a necessity.

01:29:46We saw it in COVID. It's a necessity to go to school, get a job, see the doctor, run a business,

01:29:50run a dairy farm. I've been in rural Wisconsin. It is heartbreaking to hear these dairy farmers

01:29:56who say, I can't predict the weather, I can't buy my equipment, etc. ACP, if you don't renew that,

01:30:04and I'll do anything I can to work with anybody to get that renewed, it's pulling the rug out from

01:30:09under 23 million Americans who just deserve a shot. $100, $200 a month is not affordable.

01:30:16Sometimes $50 a month isn't affordable. Like I said, this is not a luxury. We are not engaging

01:30:22in rate regulation. Statute doesn't permit it. I have no interest. I'm not a regulator. I don't

01:30:27want to be a regulator. I'm not getting into the business of regulating. Statute says every state

01:30:33has to provide a low-cost plan. We're not rubber stamping the plans. I think between 15 and 20

01:30:41states have already had their plans approved. We'll approve them as soon as we can, but you

01:30:46have to make sure, you know, we're going to hold their feet to the fire to make sure that they have

01:30:52a truly low-cost plan, which, by the way, varies from state to state. We are providing states

01:30:57flexibility. It's more expensive to lay fiber in, you know, a rural mountainous area than in the

01:31:04state like Rhode Island. We get that. So we'll work with you and provide flexibility, but you have to,

01:31:09you know, do what the law says. Very well. I thank you, and it's 23 million households,

01:31:14so more than 23 million people. We estimate maybe around 98 million individuals or more

01:31:20who unfortunately are... Gentlelady's time has expired. Yes, I yield back, Mr. Chairman.

01:31:26I yield time to the gentlelady from Tennessee, Ms. Harshberger. Thank you, Mr. Chairman. Thank

01:31:32you for being here, Secretary. The Commerce Department's Assistant Secretary for Travel

01:31:38and Tourism is responsible for helping promote the tourism industry in the United States.

01:31:43In Tennessee, our music heritage has long been a draw for visitors across the country,

01:31:48specifically in Northeast Tennessee, my hometown. We have Bristol, the birthplace of country music,

01:31:55and the Northeast Tennessee is also home of Dolly Parton. We have a world-renowned theme park,

01:31:59Dollywood, and Pigeon Forge. And today, Congresswoman Baraghan and myself introduced

01:32:05the American Music Tourism Act and legislation to explicitly include the promotion of music

01:32:12tourism in the role of the Assistant Secretary for Travel and Tourism. We think it's just common

01:32:18sense to recognize tourism as a catalyst for U.S. economic development. It's a fast-growing industry

01:32:24for the entire country, with projections estimating it will generate more than 11 billion dollars

01:32:30in revenue by 2032. Does this sound like legislation you'd be willing to

01:32:36work with me to get signed into law? Absolutely. First, I do have to say I'm a huge, huge Dolly

01:32:43Parton fan. I had the opportunity to meet her a few years ago in Rhode Island. I was the governor

01:32:49and she came to the Folk Festival, and I was totally starstruck. But besides that, yes,

01:32:57we've talked with a lot of members today about how important it is. These are good jobs. There's a

01:33:01misperception that tourism jobs are low-quality jobs, and that isn't true. So I would absolutely

01:33:09love to work with you in a bipartisan way. I'll follow up with you and see if I can help.

01:33:13That would be great. The National Marine Fisheries Service, which is part of the

01:33:18National Oceanic and Atmospheric Administration at the Department of Commerce, is working on a

01:33:23biological opinion resulting from an Endangered Species Act Section 7 consultation request from

01:33:31the Department of Interior to assess potential impacts to endangered species in the Gulf of

01:33:36Mexico. And as a result, the Department of Interior permitted oil and natural gas activities.

01:33:43Is the National Marine Fisheries Service still on schedule to complete the biological opinion in

01:33:49early 2025, as was previously indicated? Let me find you. I don't know off the top of my head,

01:33:56but I will get back to you later. Yeah, that would be great. And the next question is,

01:34:01the National Marine Fisheries Service is also slated to publish the final rule designating the

01:34:06Ras's Whale critical habitat in the Gulf of Mexico in the coming months. The designated area will be

01:34:12analyzed by the National Marine Fisheries Service and could be used as a reason to impose restrictions

01:34:18on oil and gas activities in the critical habitat area. It could also lead to severe disruptions for

01:34:23other marine industries, and my understanding is that there's little evidence to suggest the Ras's

01:34:30Whale is present in any meaningful capacity in the central and western Gulf of Mexico, and imposing

01:34:37harmful restrictions on Gulf users could even have more safety implications for Gulf mariners.

01:34:44In your opinion, is there sufficient science on Ras's Whales to determine critical habitat, or are

01:34:50you familiar with that? I am very familiar with this. This is in the middle of an active rule

01:34:57making, so I really am not permitted to comment on the details. Here's what I promise you.

01:35:03We're committed to following the science. We are reading every comment and engaging broadly with

01:35:09stakeholders, and we are committed to finding that right balance between, you know, I'm a Commerce

01:35:14Secretary, commerce, enabling commerce, and also, though, like you said, following the science.

01:35:20We don't want to stifle these guys who make a living in the Gulf, so that would be great.

01:35:26The last question that I have time for is the United States is a world leader in the development

01:35:30and deployment of open RAN wireless networks, and as we know, the Commerce Department through NTIA

01:35:36continues to administer the Public Supply Chain Innovation Fund to help entrants open the,

01:35:42enter the open RAN ecosystem, and my question is, what additional steps can you and the

01:35:48administration take to ensure that we remain the world leader of open RAN networks?

01:35:54Yeah, thank you. So, for those of you who aren't totally familiar with O-RAN, this is how we compete

01:36:00with China. Huawei is all over the world because it's cheap. Go to Latin America, Asia, they all

01:36:05buy Huawei because it's cheap. We need them to buy American, and so the secret to that is O-RAN,

01:36:11the software. It allows us a product which is competitive, so we are putting grants out. I will

01:36:19let, I'll get back to you and let you know exactly where we are. I know we've, well, I don't want to

01:36:23say the wrong thing. We're working hard to get the money out the door. It's a, it's a new technology,

01:36:29so what we need to do is work with companies and entrepreneurs to quickly develop the technology

01:36:34so they can deploy it. As far as I'm concerned, we have to develop as fast as possible so we can

01:36:40be competitive. Well, I look forward to you getting back with me, and with that, I yield back,

01:36:45Mr. Chairman. Thank you. The gentlelady's time has expired. I now yield five minutes to the

01:36:49gentlelady from Illinois, Ms. Kelly. Thank you so much, Chair and Ranking Member Schakowsky,

01:36:56for holding this morning's hearing, and I want to thank Secretary Armando for your testimony.

01:36:59Always good to see you. We know that good thing, the good things that AI can do, but we will not

01:37:05be able to realize the full potential of this revolutionary technology of AI if it's not

01:37:11developed and deployed responsibly. What safeguards are necessary to ensure AI is deployed in a manner

01:37:19consistent with our fundamental American values and rights? Yeah, it's an awesome question.

01:37:24We're right now in the Commerce Department. We have stood up the AI Safety Institute,

01:37:31and I will say that we are asking for funding for that. We need to figure out, for example,

01:37:38what is adequate testing of these models? You know, these companies say they red team.

01:37:44Well, what defines adequate red teaming to test them before they come out? We need to define

01:37:49watermarking. We're all worried about deep fakes, so they have to put a proper watermark on it,

01:37:54so you know it's a real person or AI generated. So anyway, we're in the early innings of figuring

01:38:00this out. I think that these, what I'm trying to figure out, and will work with anyone to do,

01:38:05is like how do we regulate it in a way that doesn't stifle the innovation in these early

01:38:10innings, but also how do we keep Americans safe? I will say, you know, we're asking for a modest

01:38:17amount of money for this AI Safety Institute, less than what Europe, the UK, Korea are putting

01:38:25into this, way less than China, and we need the money to figure out how to keep Americans safe

01:38:31from AI. I think you knew my future questions, because that's what I was going to ask.

01:38:36How would the House Republicans' proposed budget cuts affect Commerce's ability to carry out

01:38:42the executive order that the President released last year? Yeah, I mean look, we're spending,

01:38:48thank you for the 10 million dollars last year. We're making good use of it. We're asking for

01:38:52about 45 this year. I mean, China will spend multiples of that. Even the UK is spending more

01:39:00than that. So I don't know how we cannot make those investments. If we're going to lead the

01:39:06world in AI, which we need to do, then we need to make these investments in the basic science,

01:39:12to figure out the best ways to keep Americans safe. So on the opposite end, how would funding

01:39:18levels proposed in President Biden's budget strengthen Commerce's mission to boost American

01:39:24innovation and competitiveness? We could do the job, right? We can do the job on behalf of the

01:39:29American people. So AI flourishes and we lead the world. As simple as that. Thank you and I yield back.

01:39:34Hard job. It's not that simple, but that's the plan. I know it's not simple. You're saying

01:39:40it. Money helps. Thank you. Necessary. I thank the gentlelady for the simple answer, simple question.

01:39:48We'll see. I now recognize the gentleman from California, Representative Obernolte.

01:39:56Thank you very much, Mr. Chairman. Secretary Raimondo, it's very nice to see you again.

01:40:01I'd like to continue the line of questioning from Representative Kelly about artificial

01:40:06intelligence. I know you and I share a recognition of the importance of that topic. As you know,

01:40:11I'm the chairman of the House Artificial Intelligence Task Force, and we have been

01:40:15working very diligently to try to put together a regulatory plan and framework for AI. And I know

01:40:20you've been working on this topic as well. Your budget request requested $8.9 million for the

01:40:28Bureau of Industry and Security to implement mandatory reporting requirements under the

01:40:35Defense Production Act for domestic AI developers. And this is a topic that you and I have had a

01:40:40discussion of before. I don't want to talk about the reporting requirements because this is a

01:40:46debate that we're having within the task force, but I specifically want to ask about your invocation

01:40:52of the Defense Production Act as the authority to make these requirements because, as you know,

01:40:58the DPA was intended to be used in times of wartime to secure our procurement supply chains

01:41:05for munitions. And we seem to be far afield from that. We have no declarations of war.

01:41:11We've withdrawn from Afghanistan. And the producers that you're proposing to apply this

01:41:18requirement to have nothing to do with our defense supply chain. So how is the Defense Production Act

01:41:24an appropriate source of authority for the Department of Commerce to require this reporting?

01:41:28Yeah, so I've enjoyed working with you on AI and we need a lot more for us to do.

01:41:35We think that whether it is legacy semiconductor chips, we're using the DPA for that,

01:41:42or AI or cloud infrastructure, it is national security. Yes, it's not tanks and missiles,

01:41:49but today in the modern world, AI, semiconductors, data centers, satellites, unmanned vehicles,

01:42:02drones, this is all technology. And when I think of protecting America, I don't just think of

01:42:09tanks and missiles and munitions. I think of this. I mean, AI, for example, in the hands of the

01:42:16Chinese military, our sophisticated AI in the hands of the Chinese military, or Russia or a

01:42:22nation state as applied to nuclear weapons, bioterrorism is unbelievably scary. So we have

01:42:33assessed that in the light of those threats, it is appropriate to use the Defense Production Act,

01:42:37like legacy chips, for example, we were talking before with your colleagues. China is not playing

01:42:42by the rules. They are subsidizing the crap out of their industry. And it's going to hurt us going

01:42:50to hurt our ability to make those chips. So and that'll hurt us in times of war. Right? Every

01:42:56Javelin missile has 300 chips, F-15 fighter jet, these are chips, chips, chips, we need to make

01:43:02them. And China will undermine our ability to do that. So anyway, we could talk about it. I hear

01:43:08your concern. But I think that in this day and age, technology is the frontline of

01:43:16of our defense, as it relates to, you know, new new age of war, and I think DPA is appropriate.

01:43:22Well, we are in furious agreement on the fact that AI is critical to our national security.

01:43:29But what we disagree on is whether or not the Department of Commerce has the authority under

01:43:34the DPA to require this reporting. And I mean, we're on the same team about this. And let me

01:43:40tell you, we're going to get there. We're the AI Task Force, we're having our ninth hearing

01:43:46this week, ironically, on the topic of transparency and privacy. So we're going to get there. But you

01:43:53know, please, let's continue to work as a team and not let this turn into a tug of war between

01:43:59the legislative branch and the executive branch. And I mean, because this is part of a budget

01:44:03request. Now you're going to force us to put language in our appropriations to you that says

01:44:09you can't use this to do something that we don't think you have the authority to do. And I just,

01:44:14I'd prefer not to go there. One other thing I wanted to ask about is you are asking for funding

01:44:22to stand up the AI and Emerging Technologies Policy Lab at NTIA. And one concern I have about

01:44:31this, and I think NIST and the AI Safety Institute are doing great work, NTIA is doing great work,

01:44:36but I'm concerned about possible duplication and the efficient use of taxpayer dollars. Because

01:44:43the last thing that we want, we know AI is the shiny new object, the last thing that we want

01:44:47is multiple agencies at multiple places within the executive branch working on the same thing.

01:44:53So can you explain how we're going to avoid that kind of duplication? Yeah, so I have one second,

01:44:58so I'm going to follow up with you on that. That's my time, that's not your time. Oh, okay.

01:45:02Look, I just want to say on the other thing. I would say it's all of our time. Okay, okay. I'll

01:45:07concede the point, Mr. Chairman, so finish it quickly. Ten seconds. We need different tools.

01:45:12We need to modernize our tools at BIS. I'd be the first to work with you on that, right? That's why

01:45:17ICTS, codify it. So we'll follow up because I don't want to fight about this, I agree with you,

01:45:22but you've got to give us the tools to fight the fight. Second thing on AI, it's two very

01:45:27different things. NIST is focused on the science of standards, the science of safety of AI.

01:45:33NTIA is focused on like AI for good, you know, discrimination, bias, etc. But I'd be very happy

01:45:41to sit with you and have a proper discussion. Right, we'll do that. Thank you for the flexibility,

01:45:45Mr. Chairman. Gentleman's time has expired and I'll recognize the gentlelady from Massachusetts,

01:45:49Representative Strahan. Thank you, Mr. Chair and Ranking Member Schakowsky for holding

01:45:53this hearing and thank you to Secretary Armando. It's great to see you again. It's

01:45:57great to have you leading the Department of Commerce. Your department is at the epicenter

01:46:02of our nation's efforts to strengthen our supply chain, responsibly develop new technologies and

01:46:09respond to the ongoing climate crisis. And I commend you on your commitment on all those

01:46:15important issues. That's why I share with my colleagues in their disappointment that

01:46:21the Republicans' draft appropriations package for the department fails to meet this moment

01:46:26by fully funding the department's programs that keep our economy strong and competitive. It's

01:46:32especially true of the Bipartisanship and Science Act, which this committee had an outsized role

01:46:37in crafting and passing last Congress. The legislation included billions of dollars for

01:46:42the department to invest in American superconductor manufacturing, strengthen our supply chain and

01:46:47prepare our workers for the 21st century. And again, commend the department for its progress

01:46:53in rolling out these programs. However, like many of my colleagues, I was disappointed that

01:46:59three and a half billion dollars in funds for CHIPS grants was diverted away from their intended

01:47:05purpose in the must-pass government funding package that became law earlier this year. Those

01:47:11funds went to Secure Enclave, which deserves to be funded and is an important defense and

01:47:16intelligence priority to build semiconductors in a secure facility for our national security

01:47:22critical purposes. But I struggle to see why it couldn't be funded independently through the

01:47:27Department of Defense rather than being diverted away from the CHIPS funding meant to strengthen

01:47:34our semiconductor manufacturing industry. So Secretary Raimondo, can you just speak to the

01:47:40importance of fully funding the CHIPS manufacturing programs and the impact that unforeseen cuts

01:47:46will have on the ability for the department to sufficiently carry out Congress's intent?

01:47:51Thank you. Taking that money and earmarking it for Secure Enclave puts us at a significant

01:47:57disadvantage. We are oversubscribed. Good news. We're oversubscribed. There are many more

01:48:07excellent companies, big and small alike, who we should provide grants to so they can expand in

01:48:14America so we can be stronger, like we were talking about. It's a national security priority.

01:48:18Having said that, Secure Enclave is incredibly important, too, and deserves to be funded,

01:48:23and we're working literally every day with the DOD and ODNI to make sure it's funded.

01:48:32We need to find the money. It is a national security imperative to get the CHIPS money

01:48:38reinstated in whatever way you can figure out how to do that, but it is absolutely essential.

01:48:47You're right about oversubscribed. Unfortunately, not every project can be

01:48:52funded. That was the case for Hellfridge Brothers, a manufacturer of industrial pressure vessels in

01:48:58the city of Lawrence, which I have the privilege to represent. I know you know well, Madam Secretary.

01:49:03Pressure vessels are critical requirements for the semiconductor supply chain as they store

01:49:08high-purity gases needed in the manufacturing process. Hellfridge Brothers is currently

01:49:14at production capacity due to the increased demand from the semiconductor industry,

01:49:19which could create a bottleneck in the supply chain that CHIPS and science was meant to

01:49:25strengthen. I remain committed to fully funding the programs necessary to strengthen our

01:49:30semiconductor manufacturing process at every phase, and I look forward to our continued work

01:49:36together on that front. Finally, I, too, would like to switch to artificial intelligence,

01:49:41and I'm pleased that the department is working hard to implement the president's executive order

01:49:46on safe, secure, and trustworthy AI. Part of that order directed the department to work with

01:49:52our international allies to develop responsible global standards for AI. I know you've talked a

01:49:59lot about AI already, but hoping that you could describe for us what the department is doing to

01:50:05engage in international efforts to establish standards and policies for AI and how Congress

01:50:11can support those efforts. I think it's critical we work with our allies. We can't do this, we

01:50:17cannot do this alone. In fact, at one o'clock I have a meeting with my Korean and Japanese

01:50:22counterparts to talk exactly about this. We started to work with the EU. You know, we have to get a

01:50:29group of like-minded countries who share our values, who are committed to our values, to commit

01:50:36themselves with us around the safety guidelines for how AI is developed, and the very first thing

01:50:45you can do is fund the AI Safety Institute, because this stuff has to be based on science, and we need

01:50:50the money to fund the science and lead the world, lead Korea, lead Japan, lead India, to come to

01:50:59align standards of safety. Message received. I yield back. Thanks, gentlelady, and I recognize

01:51:06the gentleman from Pennsylvania, Mr. Joyce. Thank you, Chairman, for allowing me to wave on to this

01:51:11hearing today, and thank you, Secretary Raimondo, for coming back to the Hill to testify again.

01:51:17Secretary Raimondo, both you and Assistant Secretary Davidson have testified before

01:51:23various congressional committees that you are deferring to the states in the administration

01:51:28of the BEAD program and not forcing states to rate regulate. Just last year, in December,

01:51:34Mr. Davidson assured this committee that you would not engage in rate regulation and that you

01:51:40would, and I'm quoting, embrace the sort of laboratory of democracy. Let different states approach this

01:51:47in different ways, unquote. In fact, last month, you testified in the Senate that the Department

01:51:53of Commerce is, again, I'm quoting, not in the business of rate regulation. Despite these

01:51:59statements, we have heard repeatedly that this does not align with the reality that's occurring

01:52:04on the ground. You have approved only a small number of state plans, all of which appear to

01:52:10regulate broadband rates by adopting a specific price for broadband service. We've heard from

01:52:17numerous states that NTIA is requiring them to specify rates for various broadband offerings in

01:52:24order to receive that final approval of its initial proposal. Multiple broadband offices have told us

01:52:32that the pressure from NTIA is real and that the threat of losing funds was too great not to give

01:52:38in to these demands. Some states have also complained that you specifically, Madam Secretary,

01:52:46are calling their governors and demanding that the state comply with NTIA's direction

01:52:51on specific price points for low-income and other broadband plans. You said to Senator Kennedy just

01:52:58last month that you're, quote, pretty hands-off on this, unquote. Congress never envisioned NTIA

01:53:06circumventing the explicit prohibition on rate regulation by implicitly conditioning NTIA

01:53:13approval of these plans on such regulation. I'm very troubled by these developments, especially

01:53:20in light of your and Mr. Davidson's prior sworn testimony to this committee that the NTIA was not

01:53:27engaging in such pressure tactics, which are prohibited by the IIJA. So I'm going to ask you

01:53:34once again, will you assure me and this committee that you and your staff, number one, cease these

01:53:40pressure tactics, number two, approve state plans that do not set a specific price for low-cost

01:53:47broadband planned or for certain service tiers, such as symmetrical gigabyte service, and third and

01:53:54finally, that you will reject state B plans that propose to mandate such price regulations?

01:54:02So I will again testify and promise to you we are not engaged in rate regulation. The statute

01:54:09is crystal clear. Every state must provide a low-cost option. I did not write the statute. I

01:54:16will implement the statute. The statute is crystal clear. That is referenced throughout the statute.

01:54:22By the way, you referenced Senator Kennedy. His plan has already been approved. Louisiana's been

01:54:26approved. No problem. I think we're up to almost 20 states have been approved. We are not slowing

01:54:32this down. We are not using, as you say, pressure tactics. But the truth of it is, as I have said

01:54:38numerous times today, the internet is not a luxury. It is a necessity. And every state is

01:54:46free to decide what is low cost, how much does it cost to, you know, lay fiber over a mountain range

01:54:53or in a rural area. It'll cost more. I'm not going to tell them, you know, $20 a month or you're not

01:54:59going to get your money. But I am going to hold their feet to the fire to make sure they follow

01:55:04the statute and have a low-cost plan. Are you calling specific governors, asking them that

01:55:10their states comply with NTIA's direction on specific price points? No, but I am. I'm doing

01:55:17my job. A lot of these governors are dragging their feet and I'm saying, we want to get this

01:55:23money out quickly. Please get us your proposal and work with us so that we can get the money out the

01:55:30door. I am not calling anyone and saying, you know, you have to do this cost. What I am saying is...

01:55:39There are no cost specifics that you're directing to any individual state regarding the implementation

01:55:45of the bead funds? No. Thank you. My state is one of those states. I represent south-central

01:55:52Pennsylvania with many hills and valleys, with many nooks and crannies, with many hills and

01:55:57hollers, which make the laying down of fiber impractical. We need an all-of-the-above approach

01:56:03to be able to successfully roll out this bead money and the success of this program hangs in

01:56:09balance. And I am deeply concerned that the NTIA's heavy-handed rate regulation requirements, among

01:56:16others, will push this program towards failure, leaving the rural Americans that I represent

01:56:22in south-central and south Pennsylvania without that necessary broadband access, without that

01:56:28connectivity for the farmers, for the teachers, for the patients who need to connect with their

01:56:33doctors. I fear that the concerns of what we have discussed here today have not been adequately

01:56:39answered without that firm commitment that there will not be heavy-handedness directed towards

01:56:44those who are trying to comply, who are trying to utilize this bead money successfully in areas

01:56:51throughout America. Thank you, Mr. Chairman. My time has expired and I yield back. Thank you. I

01:56:56thank the gentleman. I thank the secretary for being here today. I think this has been a helpful

01:57:01hearing. I remind members that they have 10 business days to submit questions for the record

01:57:06and I ask the witness to respond to the questions and specifically the secretary

01:57:11to respond to the questions promptly. Members should submit their questions by the close of

01:57:15business on July 10th. Without objection, the subcommittee is adjourned. Thank you for your time.

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