Buffalo is our friend.
Senate Majority Leader Chuck Schumer, D-New York, is our friend, too, even if you don’t share the politics associated with the party letter that comes after his name.
That’s because Schumer’s advocacy of Buffalo could well set in motion a chain of events that leads to either Southwest or Southside Virginia – but probably not both – getting showered with millions in federal research dollars.
Let me explain: Congress last week passed a bill generally described as boosting domestic production of semiconductors the so-called CHIPS-Plus Act, which stands for Creating Helpful Incentives to Produce Semiconductors for America Act because apparently Congress can’t bear to just call something by its official name, such as H.R. 4346. Sen. Mark Warner, D-Virginia, was one of the driving forces behind this bill. Warner has long been most interested in wonky, technical things and this is sure one of those.
Semiconductors are those little microchips that make computerized things “go.” There’s a long history behind them – dating back to the German scientist Thomas Johann Seebeck in the 1800s and the Bengali scientist Jagadish Chandra Bose around the turn of the 20th century – but for our purposes today, they were developed in their current form in the United States. They just aren’t produced here anymore, at least not very much. Now, Taiwan produces 65% of the world’s microchips, the United States just 7% in 2021. That’s not healthy for our economy – or our security, especially if China someday decides that invading Taiwan is worth whatever price it will have to bear. This bill is designed to help rebuild a “made in America” semiconductor industry. It turns out Donald Trump isn’t the only one promoting an “America First” strategy.
As with many things in Washington, things are more complicated than they should be. Originally the CHIPS Act was part of a much more massive technology bill aimed at making the United States more competitive with China. Republicans thought it was too expensive, complained that House Democrats had loaded it up with too much extraneous stuff (especially related to climate change), and eventually blocked passage. The semiconductor part has more bipartisan support so Democrats produced what was generally called a “slimmed-down” version – “slimmed-down” being relative in Washington terms – and that’s what passed both the Senate (64 to 33) and the House (243-187) and now goes to the president, who is eager to sign.
There were other things in the bill, too, still too many other things for some Republicans – presumably the “plus” part of the “CHIPS-Plus” name. All four Virginia Republicans – Ben Cline, Bob Good, Morgan Griffith and Rob Wittman – voted against the bill. Griffith put out a statement explaining his “no” vote this way: “I want the United States to compete and win against China in the global economy and support efforts that would enhance our country’s position. The CHIPS-Plus bill that the Senate sent to the House does not do so. If the bill simply supported domestic production of semiconductors, I would have looked at it favorably. Instead, the bill was loaded with extra spending and bad policies that would not benefit American economic performance. It doles out more money for the National Science Foundation than for semiconductors. In fact, it doubles the amount authorized for spending on the National Science Foundation. Further, it authorizes projects with little relevance to economic competitiveness, such as ocean acidification research. As happens too often in Washington, a proposal with widespread agreement gets tied together with unrelated matters. Both the Senate and House bills included far too many provisions pushed by both Democrats and Republicans with little relation to semiconductors. It is a poor way to do the nation’s business. Our country now confronts economic difficulties that highlight the need for targeted and effective legislation. CHIPS-Plus fails to meet this standard.”
This makes the vote on the CHIPS-plus Act a fascinating – and classic – case of competing political philosophies. Here’s something that, in theory, virtually every member of Congress seems to support at some level – boosting domestic production of a vital component of our economy. The dispute is ostensibly over how “pure” a bill must be. Do you vote against a worthy thing because there are some unworthy things attached to it? Back in 2020, Griffith wrote in his weekly newsletter: “An analogy I like to use for the legislative process invokes candy apples and toads. Legislation rarely includes only things I like – the candy apples – or omits the things I really dislike – the toads. Considering whether to support a bill usually means weighing whether there are enough candy apples to cover up the bad taste of a few toads.” Clearly here Griffith felt there were too many toads.
Now, here’s where things get interesting – and directly relevant to Southwest and Southside. One of the provisions in the bill calls for the federal government to invest $10 billion in “at least 20 technology hubs” around the country. The goal here is to geographically diversify the nation’s technology sector, which right now is clustered in a relative handful of places: Bloomberg says nearly 70% of the nation’s investment capital goes to just five places, all on the coasts: San Francisco, New York, Boston, San Jose and Los Angeles in that order. Some see this concentration of wealth as bad both for the nation’s economy and its civic health. Spreading that tech sector (and it’s high-paying jobs) around has become a focus of people as diverse as former America Online chairman Steve Case – who has led a group called “The Rise of the Rest” – and, interestingly, the congressman from Silicon Valley, Rep. Ro Khanna, D-California. (He spoke in Blacksburg in June as part of the Cardinal News Speaker Series and offered advice on how smaller communities can attract more tech jobs). This call to geographically diversify the nation’s technology base has generally been something embraced more by Democrats than by Republicans. Democrats often bemoan that rural voters seem to vote against their own economic interests by voting for Republicans; here’s a case where some Democrats are seemingly voting against their own interests. Those top five tech capitals are all strongly Democratic; some of the places that might win one of those 20-plus technology hubs probably won’t be. In fact, the two places in Virginia that are known to be seeking such hubs are the most Republican parts of the state – Southwest and Southside – yet Democrats voted for this and those regions’ Republican representatives voted against. See the candy apples and toads reference above.
The bill that passed is more generous on the technology hub provision than previous versions were. The original House version called for “no fewer than 10,” the original Senate version called for 18. We wound up with “at least 20.” Maybe “at least 20” winds up as exactly 20 but even that minimal number creates reasonable hope that one of them might be located in either Southwest or Southside.
The bill, soon to be law, says there should be at least three in each of the Economic Development Administration’s six regions – so that’s 18, which means two regions might get four apiece to make 20. Virginia is the southernmost state in an EDA zone that runs all the way up to Maine, so let’s scope out the competition.
The act goes on to say that “no fewer than one-third” of these hubs should “significantly benefit a small or rural community.” The definition of “small or rural community” is “a noncore area, a micropolitan area, or a small metropolitan statistical area with a population of not more than 250,000.” That rules out the Roanoke (314,496) and Lynchburg (262,258) metro areas but rules in the New River Valley (165,293) and virtually all of Southwest and Southside. (Bristol’s in a tricky situation; it’s counted as part of the larger Bristol-Kingsport-Johnson City MSA, which has a population of 308,661).
As I read the act, there’s no requirement that tech hubs in “small or rural” communities be evenly distributed. In theory, they could all be in just a few EDA zones, with the zones covering the Midwest, the West being most likely, simply because there are fewer big metros there. However, this is ultimately a political process, no matter how much the act talks about a “competitive, merit-review process.” It seems most likely to be that the Secretary of Commerce – which is who will eventually be making this decision – would make sure there’s one small community awarded in each of the six EDA zones. “No fewer than one third” of “at least 20” hubs is 6.66, so effectively seven. Maybe somebody gets shorted but I’m guessing one per each EDA zone with two zones getting a bonus site. Those two bonus sites are aimed at benefiting “underserved communities in and near metropolitan areas,” so think “inner city.”
Since the Northeast corridor is in our EDA zone, that means this zone might actually get a fourth site but let’s err on the side of caution and assume our EDA zone gets just three hubs.
Again, we need to factor in politics. It would not be politically astute to put all three in the same part of the zone, so they’ll probably be spread out. We could probably count on one, but probably no more than one, in the southern part of the zone – Maryland, Virginia, West Virginia.
So, who’s our competition? Here’s where Buffalo comes in – in a good way.
Schumer has been particularly passionate about these tech hubs (which is why that provision made the final version of the bill) and particularly passionate about getting one for Buffalo.
He told the Buffalo News that the city has a “darn good chance” of being picked. “”Guess which city is one of the top contenders for a regional tech hub in the country?” Schumer told the paper
“Buffalo, N.Y. Because of our high concentration of manufacturers, a strong labor presence and great research at UB, it’s the perfect ecosystem to receive one of these designations.” He went on to say that he had already spoken to Commerce Secretary Gina Raimondo “repeatedly” about Buffalo.
“I wrote these provisions, in fact, with Buffalo and upstate New York in mind,” he told the Buffalo paper.
Now, maybe Schumer is just saying all that. He’s up for re-election this year and western New York is where his party is weakest (although he still carried most of the counties there last time around). Still, I am generally inclined to take most politicians at their word. Think of it this way: Schumer’s talked up Buffalo as a tech hub so much that if Buffalo isn’t picked, he looks weak.
Politicians don’t like to look weak. Schumer’s also a Democrat, not just any Democrat but the top Democrat in the Senate. He’s also dealing with a Democratic administration – right now, an embattled one – that is indebted to Schumer for helping produce a bill that it can sign. The Biden Administration owes Schumer. If he wants Buffalo as a tech hub, I bet he gets Buffalo as a tech hub.
Why is that good news for Southwest and Southside? It’s because Buffalo is not one of those “small or rural” communities, and Schumer’s probably only going to get one hub for New York. So that means this EDA zone’s lone small community (if that’s how they’re apportioned) will
probably be in New England, or somewhere from Pennsylvania south to Virginia. If communities outside Virginia have started campaigning for one of these hubs, they haven’t made the news yet – although that may say more about the enfeebled state of most local news organizations than the communities they serve. (Here’s the obligatory pitch for readers to help fund us so we can stay strong and expand). But we know – because Warner’s staff has told Cardinal News – that business groups in both Southwest and Southside are putting together bids. Yes, there’s much irony here, because the House members representing those areas voted against the bill that might result in one of them getting this coveted federal designation. I also think the New River Valley could be a stronger contender, thanks to Virginia Tech, although if Tech were somehow a part of either the Southwest or Southside bid, that would make them even stronger.
I’ll admit to being a “homer” on this – I’m obviously rooting for Southwest or Southside to win. The prospect of getting millions in federal research spending seems potentially transformative in a good way. This seems economically akin to getting an interstate highway in a different era (Lynchburg still complains that it lost out to Charlottesville on getting Interstate 64). This is an opportunity to grow a whole new economic sector. These opportunities do not come along often. However, there do seem to be some factual reasons to think that Southwest, in particular, could put together an especially competitive bid.
The act lists some other factors for the Commerce Secretary to take into consideration in picking sites. One is “to leverage institutions of higher education serving populations historically underrepresented in STEM, including historically Black Colleges and Universities, Tribal College or Universities, and minority-serving institutions.” We don’t have any historically Black colleges
in Southwest or Southside, although you might be able to make an argument that rural areas in general are “historically underrepresented in STEM” but that might be seen as a stretch in some Washington eyes. However, another provision says the secretary should “encourage proposals”
from places “whose economy significantly relies on or has recently relied on coal, oil or natural gas production or development.” Ka-ching! That’s definitely Southwest Virginia right there. Of course, that description also fits much of West Virginia and western Pennsylvania, so that’s the competition Southwest Virginia needs to worry about.
Both Southwest and Southside might benefit around the margins from another provision. The act wants the Commerce Secretary to encourage collaborations between “government entities, institutions of higher education, the private sector, economic development organizations, labor organizations, nonprofit organizations and community organizations that promote broad-based regional innovation initiatives.” That sure sounds like the GO Virginia program to me (with the exception of the reference to “labor organizations.”) We already have this existing structure in place; I’m betting other states probably don’t. So that’s why Buffalo is our friend. Schumer’s push for Buffalo helps clear the field in a way that might – key word, might – help Southwest or Southside to cash in. So go cheer for the Bills and the Sabres. Put on your Ani DiFranco records (the singer from Buffalo once sang “every tool is a weapon if you hold it right,” which seems one of the best pieces of advice ever). Go watch “Bruce Almighty” (a movie set in Buffalo) or “The Natural” (a movie filmed in Buffalo). Schumer’s campaign for Buffalo might be bad for, say, Richmond or Hampton Roads because it takes up a major metro slot but it seems potentially a good thing for Southwest and Southside, even if those regions’ congressmen did vote against the bill because they feared too many toads.