WASHINGTON – President Joe Biden’s plan to plow billions of dollars into semiconductor manufacturing represents a sharp turn in American economic policy, one aimed at countering China by building up a single, critical industry. But Biden is going even further. He is using the money to change how corporations behave.

If semiconductor manufacturers want a piece of the nearly $40 billion in aid that Biden’s administration began the process of handing out Tuesday, they will need to provide child care for employees, run their plants on low-emission sources of energy, pay union wages for construction workers, shun stock buybacks and potentially share certain profits with the government.

That decision is a bet on the power of the federal government to transform private industry. But it is also a distinct break from how the United States has traditionally engaged with corporate America. The president is essentially incorporating disparate policy objectives into a big spending bill that was sold as an effort to shore up a supply of semiconductors critical for the economy and national security.

The approach could amplify the effects of the CHIPS Act and other economic bills Biden has signed into law over the past two years, by accomplishing multiple goals at the same time. Administration officials say the money and the guidelines will drive American industry toward Biden’s vision of an economy with more U.S. production, better conditions for workers and fewer of the fossil fuel emissions driving climate change.

But in testing the limits of a new industrial policy, the strategy may also carry significant risks. Some economists, even some who favor robust federal spending to bolster strategic industries, say Biden is in danger of drowning his core economic goals.

“Everyone acknowledges what we are trying to do here, in trying to make a larger, more globally competitive U.S. semiconductor industry, is a difficult challenge,” said Adam Ozimek, the chief economist for the Economic Innovation Group, a bipartisan think tank in Washington. “We’re making that challenge much harder by trying to accomplish another dozen unrelated things at once.

“Advocates of industrial policy should worry that not only is this going to fail, but it’s going to discredit industrial policy for a generation,” Ozimek said.

Biden officials say that they are not asking companies to do anything outside their own commercial interests and that the steps they are taking are not meant to be punitive. They are emboldened by the amount of money they have to hand out and confident that companies will accept it with the conditions they have attached. If anything, those officials essentially said, they are not unduly burdening businesses; they are helping them do what is necessary to attract workers and avoid wasting federal dollars.

In an interview, Commerce Secretary Gina Raimondo repeatedly cast the lack of access to child care as an economic issue and a key contributor to the labor shortages that American manufacturers frequently complain they are experiencing. Entrenched bias against working women has prevented corporations and the government from addressing that issue, she said, in ways that have hurt companies.

“I am kind of requiring them to pay attention to this because I know this is what they need to be successful,” Raimondo said.

Raimondo has described the financial rules for companies that take federal funds as a way to ensure taxpayer dollars are not wasted. Requiring companies to share some unexpected upside profits with the government will encourage companies to be accurate and honest with their financial projections, so the department can send dollars where they are needed most. The limitations on stock buybacks will prevent taxpayer dollars from going to enrich company shareholders and CEOs, administration officials said.

But after reviewing the rules, industry lobbyists and some economists said they worried that companies would be forced to siphon money away from the new law’s central objectives. Several complained that administration officials had not coupled the CHIPS funding announcements with efforts to shrink, not expand, environmental regulations and other government rules covering construction projects.

“We should be focused on removing regulatory barriers – particularly in the permitting space – and we have to be careful about adding ancillary new requirements that only increase cost and delay bringing production online,” said Neil Bradley, an executive vice president at the U.S. Chamber of Commerce, a heavyweight business organization in Washington.

And some congressional Republicans accused the administration of undermining the intent of the law by trying to force liberal priorities on companies competing for subsidies.

Rep. Frank Lucas, R-Okla., the chair of the Science, Space and Technology Committee, said the administration had been “adamant” that the United States needed to incentivize chip production, or else companies would choose to build in other countries that offered more attractive policies.

“That’s why it’s troubling that now that the administration has the $52 billion in funds they requested,” Lucas said, “they’re focusing less on the urgent need for chip production and more on attempting to impose their labor agenda on this critical industry.”

Shortages of chips and other critical products in the pandemic helped underscore how reliant the country is on foreign factories. More broadly, U.S. dependence on China for key products like electric vehicles, solar panels, steel and rare earth metals has helped to turn the tide in Washington, D.C., toward a more interventionist economic policy and dampened concerns about government interference in markets.

The Biden administration appears confident that the $52 billion carrot it is offering to chipmakers, suppliers and research facilities is a big enough incentive for companies to overpower any corporate complaints about the administration’s efforts to influence their behavior. Officials note that some chipmakers already comply with some of the requirements in other locations: Taiwan Semiconductor Manufacturing Co., which is building a new facility in Arizona, provides child care at several of its plants in Taiwan. Chipmakers operating in other countries, China for example, may have to go to great lengths to support government initiatives or national security objectives.

CEOs have privately grumbled about the restrictions, but most continue to publicly praise the program. Most major semiconductor makers have already broken ground on expensive new U.S. facilities. Since early 2020, companies have pledged nearly $200 billion for U.S. chip manufacturing projects, many in anticipation of the funding.

One of those companies, Intel, said in a release Tuesday that the CHIPS guidelines released by the Commerce Department were “an important step for American semiconductor companies to be globally competitive and will help to restore balance in the global chip making industry.” The Semiconductor Industry Association said it was “carefully reviewing” the rules but welcomed the Commerce Department’s steps to set the program in motion.

This article originally appeared in The New York Times.