EXCLUSIVE: Republican senators are urging the Biden administration to immediately reverse what they call a “racist” and “anti-American” policy for distributing CHIPS Act grants before it violates the law.
The top Republican on the Senate Commerce Committee, Ranking Member Ted Cruz, R-Texas, and members Sens. JD Vance, R-Ohio, and Cynthia Lummis, R-Wyo, penned a letter exclusively obtained by Fox News Digital to Commerce Secretary Gina Raimondo about the agency’s guidance stating it would consider the race of an applicant’s suppliers when awarding CHIPS Act funding.
The senators say that policy is a clear violation of the Fifth Amendment to the Constitution, Title IV, and the Civil Rights Act of 1866.
The guidance requires applicants to document “how the applicant intends to address the inclusion of … minority-owned business … through a supplier diversity plan” with “measurable targets,” including how much money it plans to spend on “minority-owned” suppliers by 2030.
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Sen. Ted Cruz, R-Texas, during votes in the U.S. Capitol Dec. 5, 2023. (Tom Williams/CQ-Roll Call, Inc via Getty Images)
The guidance also explains that the Commerce Department will consider an applicant’s diversity plan as part of the merit review process and access that plan based on the applicant’s strategy for engaging with minority-owned businesses and “commitment to tracking and disclosing disaggregated data on supplier diversity and contractor/subcontractor diversity.”
Commerce Secretary Gina Raimondo testifies before the Senate Appropriations Subcommittee on Commerce, Justice, Science, and Related Agencies during a hearing on expanding broadband access on Capitol Hill in Washington, D.C., Feb. 1, 2022. (Sarah Silbiger/Pool via Reuters/File Photo)
Cruz told Fox News Digital the Biden administration’s decision to “dole out CHIPS funding based on the skin color of an applicant’s supply chain is racist and anti-American.”
“I’m calling on the Commerce Department to immediately rescind its unconstitutional policy,” Cruz said. “If it fails to do so, it will most certainly face fierce opposition in the courts.”
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The bipartisan CHIPS and Science Act was signed into law in 2022 and works to strengthen American manufacturing, supply chains and national security.
In their letter to Raimondo, the senators warned that the policy is “illegal” and urged the secretary to “withdraw it before it causes real harm.”
Senator JD Vance, R-Ohio, during a Senate Banking, Housing and Urban Affairs Committee hearing in Washington, D.C., June 22, 2023. (Nathan Howard/Bloomberg via Getty Images)
“The Department’s Guidance intentionally treats certain applicants worse than others on the ground of the race of their suppliers. Title VI forbids such discrimination,” they wrote.
“In addition to instructing the federal government to violate the law, the Guidance also encourages private businesses to discriminate on the basis of race in violation of federal law, specifically Section 1981,” they continued. “Section 1981 makes it illegal for private companies to discriminate on the basis of race when making and enforcing contracts.”
Sen. Cynthia Lummis, R-Wyo., conducts a news conference Aug. 9. (Tom Williams/CQ-Roll Call, Inc via Getty Images)
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But the senators said the Commerce Department “has not yet finalized a grant for any CHIPS funding to any applicants,” meaning the agency “still has time to reverse course before it breaks the law.”
Cruz and his GOP colleagues demanded Raimondo respond to their letter and rescind the Commerce Department’s policy by Feb. 29. If she fails to rescind the policy, Cruz and his colleagues are demanding that she detail “the reasons you believe the Guidance does not violate the United States Constitution or Title VI, or induce private parties to violate Section 1981.”