wall street
Billions in Taxpayers Subsidies Shouldn't Be Used for Stock Buybacks to Enrich Greedy Investors
Public money should serve the public good.
The 2022 CHIPS and Science Act created a huge opportunity to boost domestic production of the semiconductors that power everything from refrigerators and trains to whatever electronic device you’re reading from right now.
The Biden administration has also taken important steps to make sure these and other public investment dollars create good jobs, particularly for disadvantaged workers.
For instance, CHIPS grantees must submit plans to provide affordable, high-quality child care services for their manufacturing and construction workers. And President Biden has ordered all construction firms involved in large public infrastructure projects to negotiate collective agreements with their workers.
But if you take a look at the track records of corporations in line to pocket CHIPS manufacturing subsidies, you’ll understand why some Democrats are urging the administration to do more to prevent corporate executives from misusing these funds to enrich themselves and wealthy shareholders.
Between 2019 and 2023, these companies spent more than $41 billion on stock buybacks — enough to provide 300,000 employees a $27,541 bonus every year for five years.
A new report from the Institute for Policy Studies and Americans for Financial Reform Education Fund provides detailed data on stock buybacks and CEO pay at the first 11 corporations to sign preliminary CHIPS agreements with the Department of Commerce: Intel, TSMC, Samsung Electronics, Micron Technology, Global Foundries, Microchip Technology, Polar Semiconductor, Absolics, Entegris, BAE Systems, and Rocket Lab. These companies are in line for subsidies totaling nearly $30 billion.
What did we find? Between 2019 and 2023, these companies spent more than $41 billion on stock buybacks — enough to provide 300,000 employees a $27,541 bonus every year for five years.
Intel had the largest outlay. With the more than $30 billion the company spent on buybacks from 2019 to 2023, the giant chipmaker could’ve given each of Intel’s 124,800 employees a $48,000 bonus every year. Intel is in line to receive as much as $8.5 billion in CHIPS subsidies – the most of any firm.
Stock buybacks have come under greater scrutiny as large corporations have spent record sums on this financial maneuver to artificially boost the value of their shares — and the value of CEO stock-based pay.
In many of the high-profile labor battles of 2023, unions skewered corporate executives for blowing profits on buybacks while claiming they couldn’t afford to raise worker pay. Analysts have also documented a connection between buybacks and reduced capital investment and innovation, as well as the exacerbation of economic inequality and the racial wealth gap.
In response to public concerns, the Commerce Department announced they would give a leg up in the awarding of CHIPS subsidies to companies that agree to forgo all stock buybacks. But so far, none of the companies in line for these subsidies have publicly committed to suspend existing share repurchase plans (which currently authorize $14.3 billion in buyback spending) or to refrain from adopting new plans during the grant period.
The CHIPS law does forbid subsidy recipients from spending CHIPS funds directly on stock buybacks, but since money is fungible, this is not a strong guardrail.
In a recent letter to Commerce Secretary Gina Raimondo, Senator Elizabeth Warren, Congressional Progressive Caucus Chair Rep. Pramila Jayapal, and several other lawmakers note that the federal agency has the “statutory authority to fully ban CHIPS grant recipients from engaging in stock buybacks as a condition of award.”
Unless the administration asserts this authority, the lawmakers warn, they will “leave the door open for semiconductor companies to take millions or even billions in CHIPS grants, move some money around, and then engage in more stock buybacks.”
Our report found that CEOs with preliminary CHIPS agreements are sitting on company stock holdings worth more than $2.7 billion ($306 million on average). In other words, these executives are positioned to reap huge personal windfalls from share price pops related to continued buyback spending.
President Biden has spoken out repeatedly against wasteful stock buybacks and his economic agenda centers on an industrial policy to create good jobs and long-term prosperity, particularly for communities and workers who’ve been left behind.
Strong buyback restrictions in final CHIPS contracts would help maximize the benefits of these vital investments. Public money should serve the public good — not narrow, private interests.
'War on Workers': Unions Denounce GOP Efforts to Undo Pro-Labor Biden Rules
"It is absolutely critical that those who want to stand with workers do so united in their opposition to these attacks on pro-worker rulemaking."
Nearly 50 labor organizations representing a wide range of U.S. workers—from teachers to letter carriers to mine workers—are urging members of Congress this week to oppose Republican efforts to roll back a slew of Biden administration rules aimed at protecting the nation's workforce from abusive employers and unscrupulous Wall Street investors.
Led by the AFL-CIO, the country's largest federation of labor unions, the groups sent a letter to lawmakers on Tuesday warning about the GOP's attempted use of the Congressional Review Act (CRA) to overturn pro-worker rules enacted by the Department of Labor and other U.S. agencies.
Since it became law in 1996, the CRA has been used to overturn just 20 federal rules, with 16 of those rolled back by the Republican-dominated 115th Congress during the first two years of former President Donald Trump's first term.
"Plainly, the CRA has become the latest weapon in a war on workers waged by special interests."
The new letter from labor unions lists more than a dozen recently finalized or pending rules that are in congressional Republicans' crosshairs, including ones designed to expand overtime pay protections for millions of workers and shield employees from junk fees in retirement investment advice—a change that's projected to save workers $55 billion over the next decade.
"Plainly, the CRA has become the latest weapon in a war on workers waged by special interests," the letter states. "Each of the above resolutions, some of which already passed the Congress, carry a threat of permanently undermining critical gains for working people across the country."
"It is absolutely critical that those who want to stand with workers do so united in their opposition to these attacks on pro-worker rulemaking," the letter continues. "Each vote for one of these CRA disapproval resolutions is a vote against labor," the letter continues. "We ask that you not allow private equity, the financial industry, multinational franchisors, unionbusters, or other special interests to use this tool to undo the progress that workers are making via federal rulemaking."
Should any of the Republican CRA resolutions pass both the House and the Senate, the labor organizations urged President Joe Biden to use his veto power to keep the rules in place—something he's done more than 10 times since taking office in 2024.
The labor groups' call came a day before the House Committee on Education and the Workforce convened a hearing Wednesday to consider H.J. Res. 142, a Republican-authored CRA resolution aimed at overturning a Labor Department rule that would—as Acting Labor Secretary Julie Su put it—"get junk fees out of the retirement savings market."
The rule is scheduled to take effect in September.
Liz Zelnick, director of the Economic Security and Corporate Power Program at Accountable.US, said in a statement Tuesday that the CRA resolution introduced by Rep. Rick Allen (R-Ga.) "was written by and for Wall Street lobbyists, and any vote for it is a vote against increasing retirement savings for middle-class workers."
"Rubber-stamping this resolution means giving greedy retirement advisers a free pass to put their own interests ahead of their clients—undermining retirement security for millions," said Zelnick. "Right-wing lawmakers are eager to do the dirty work of their big bank megadonors while saying no to lower costs for everyday families. These members should answer why they believe the workers they represent are undeserving of the same quality of advice from their financial advisers."
Elders Arrested Protesting Citibank Funding of Planet's Destruction
"We are on the cusp of a ruined planet, and the big banks like Citi are funding it, to the tune of trillions," said one organizer.
As Earth sizzles during what's likely to be its hottest summer on record amid a worsening planetary emergency, dozens of elder climate campaigners including 350.org co-founder Bill McKibben were arrested Monday in New York while protesting Wall Street giant Citigroup's continued fossil fuel financing.
Members of the group Third Act—who are mostly aged 60 and older—led a "funeral procession" near Citigroup's Manhattan headquarters in remembrance of the senior citizens who have died during recent dangerous heatwaves and to call out the bank "for being the number one funder of fossil fuel expansion in the world," according to Summer of Heat, which is organizing a series of ongoing climate protests.
Summer of Heat said McKibben was one of 46 demonstrators arrested Monday, and that "with today's protest, there have now been 305 total arrests in this summer's historic campaign of relentless, disruptive protests to stop Wall Street funding the oil, coal, and gas projects that are making our planet unlivable."
According to Summer of Heat:
Older Americans are worried about growing climate extremes and how Wall Street is using their savings to harm the planet and their grandchildren's future. Third Act supporters are retired teachers, healthcare professionals, lawyers, union members, parents, grandparents, great aunts, uncles, and now activists. They are taking action—together with youth and families—to make a difference! They are calling on banks like Citi to invest in a peaceful and livable world for all.
"It might feel very hot to us, but it was 122 degrees (Fahrenheit) in New Delhi two weeks ago. Lots and lots and lots of people died," McKibben told protest participants before his arrest. "Things like this now happen every day around the world, and they happen worst [and] first in the places that have done the least to cause this crisis."
"This is the deepest question of justice the world has ever come across," McKibben added. "And the bank that we're outside has done more than almost any institution on Earth to make it worse. Given full warning by scientists of all kinds for the last 30 years, they have decided instead to try to make profit off the end of the world."
Margaret Bullit-Jonas, an Episcopalian priest and author who took part in Monday's protest, said that "Citibank is destroying the world that God loved into being and entrusted to our care."
"At this decisive moment in history, we teeter on the brink of climate chaos," she added. "Now is the time for Citibank to choose life and to stop financing fossil fuels."
Third Act members were joined by activists from various climate, environmental, and social justice groups. Summer of Heat organizer Liv Senghor said that the campaign "is an intergenerational and intersectional movement."
"We know that there is no climate justice without social justice," Senghor said. "And we know that if we do not stop financial institutions like Citibank right now, we will all feel the deadly consequences today, tomorrow, and for generations to come."
HipHop Caucus president and CEO Rev. Lennox Yearwood Jr. asserted that "to limit ongoing damage, and ensure a bright future for the next generations, we need bold action now to curb emissions, transition to clean energy, and to help households and communities mitigate current and future risks."
Gus Speth, a former U.S. Council on Environmental Quality chair, warned that "we are on the cusp of a ruined planet, and the big banks like Citi are funding it, to the tune of trillions."
"It's time for the Citigroup board of directors to wake up to their responsibility," he added. "Citi talks about environmental sustainability but practices environmental destruction."
Citigroup contends that it is "supporting the transition to a low-carbon economy through our net zero commitments and our $1 trillion sustainable finance goal," and that its "approach reflects the need to transition while also continuing to meet global energy needs."
However, since the 2015 signing of the Paris agreement, Citi has provided $204.46 billion in financing for new fossil fuel projects, according to Stop the Money Pipeline, a Summer of Heat co-organizer.
"From the Bronx to the Gulf South, Black, Latine, Asian, Indigenous, and low-income communities living on the frontlines of the climate crisis—and the ones least responsible for it—face the highest asthma rates and staggering cancer rates while an unprecedented number of people are dying from heat waves," Summer of Heat said.
"Instead of staying home and hiding from the heat, organizers are calling on all New Yorkers and climate defenders from across the globe to take to the streets and demand that Wall Street stop destroying our future," the group added.