Discussing a range of economic topics with The Dispatch Oct. 16, U.S. Treasury Secretary Scott Bessent justified U.S. financial interests in private businesses, including Intel, in order to keep manufacturing revenue and jobs from leaving the country.
The U.S. now owns 10% of Intel, which is building a computer chip foundry in New Albany. The Department of Commerce recently announced a 4% ownership stake in GlobalFoundries, another chip manufacturer in which Japanese investors plan to invest $21 billion to build a foundry campus in Malta, N.Y.
The Council on Foreign Relations U.S. Government Deal Tracker, has identified more than 40 private businesses that the government has direct or partial equity stakes, mostly in the defense and tech sectors.
Asked about the plans for more, when the New Albany plant has repeatedly been delayed and its completion postponed until 2031, Bessent told The Dispatch that a "market failure in many of our strategic industries" by competing against non-free-market economies like China's, during the Biden administration, required the re-shoring of industries like semi-conductors and medicines.
"If you think what we are seeing in the Straight of Hormus, in terms of it being a bottleneck or a choke point, 98% of the advanced chips in the world are made on the island of Taiwan," he said.
"We are trying to bring back the chip making to the U.S.," he told The Dispatch. "By the end of this administration, we could on-shore between a third and 50% of semiconductors. That's a start."
Already, he said, the $10 billion in Intel has returned $50 billion to the U.S. Treasury, as Intel's stock price rose following the August 22 announcement.
Both Bessent and Sen. Jon Husted met with The Dispatch following a meeting Oct. 16 to discuss a federal program to provide tax credits for those who invest in scholarship programs for public and private K-12 schools.
Both men told The Dispatch that the roundtable with stakeholders at Crown Preparatory Academy to discuss the Education Freedom Tax Credit program was not political. Husted is running against Sherrod Brown for the U.S. Senate.
The credits up $1,700 are for qualifying contributions to Scholarship Granting Organizations (SGOs), or up to $3,400 for married couples filing jointly.
Bessent said he was not familiar with Intel's delays in New Albany, noting, "The main thing is keeping Intel viable as a U.S. company."
Husted said it's essential that manufacturing that requires rare earth minerals, "everything from our batteries or our bombs" return to the U.S. "if we're going to have the supply chain we need for our economic and national security. There's just no other choice."
Husted dismissed Intel delays, saying the company is "moving forard at the pace that they said they would."
Intel had originally planned to complete construction on the foundry campus — estimated to cost more than $30 billion — in 2025. It is now slated to begin operating in 2031.
Bessent on $5,000 pledge if Republicans control Congress
Bessent was asked about President Donald Trump's offer of $5,000 payments to all American adults contributing to inflation, a gambit estimated to cost the U.S. Treasury more than $1.2 trillion.
"I think it will depend on how it's rolled out," Bessent said. "Could it be $5,000 of value in terms of allocating the Intel stake, allocating the $50 billion that we have in Venezuela. It doesn't have to be inflationary."
Bessent said the Trump administration has been creating private sector demand combined with deregulation to spur growth to offset the federal deficit of almost $2 trillion this year and the national debt that rose above $40 trillion on Aug. 18.
Inflation: Perception versus reality
Bessent was asked if he agreed with Trump's recent statementsthat grocery and gas prices are falling.
Bessent said groceries are up 2.1% or 2.2% this year. "So that's right near the (Federal Reserve's) target."
He became animated after a question about the perception of affordability and a recentPew Research poll that showed 44% of Amerricans struggled to afford basic necessities in the past year.
"A lot of times I feel like I'm an emergency room doctor ... that the American people were backed over by a Mack truck. That 21.5% inflation during the Biden administration, but more importantly wages only went up by 17.5%. So they lost 4% real purchasing power."
"For working Americans, their bundle of goods and services inflated more than 30%," he said, citing rent, insurance, used car prices. "This is a very high level. And it is very difficult to bring those levels down."
He admitted to a "supply shock" due to the price of gasoline. "We will get on the other side of that. I think it's actually going to be lower than it was at the beginning of the year."
On NBC's Meet the Press Oct. 16,Bessent described "persistent" wage increases that will offset the 3.7% inflation rate, stating "we will own the economy." He also defended the administration's Oct. 16 announcement exempting Russia from a diesel embargo, saying it is not a reward for Russia's invasion of Ukraine. Instead, he blamed European countries for "gorging" on Russian fuel, saying "Why should the U.S. go it alone?"
Asked if Americans should be reassured or skeptical by his optimism, Bessent said "I hope so ... I don't blame people for feeling like they were hit by a truck, because they were.
"When you get hit, you've got to recover. And, importantly, the bottom quintile (20%) of Americans are doing the best, in terms of the wage increases (up 5.7%)," Bessent said. The wage increases will keep going. And the supply shock from gasoline will come down. When the war ends, gasoline's going to plummet."
Husted said Ohio's economy is doing better than many other states, with work to do on lowering prices.
"We have things like permitting reform and other things that we are literally working on in Congress, that are being blocked by the Democrats, that we have to get done if we want to lower these prices," Husted said.
Growth and development reporter Dean Narciso can be reached at dnarciso@dispatch.com.
This article originally appeared on The Columbus Dispatch: Treasury Sec. Bessent says U.S. Intel gains could help finance Trump's $5k payouts
