a global key G, plus one key U_C for each chip C. The user can choose a
new session key K_P for each phone call P he makes. Chip C knows three
keys: G, its own U_C, and the user's K_P. The government as a whole
knows G and every U_C. Apparently a message M is encrypted as
E_G(E_{U_C}(K_P),C) , E_{K_P}(M). That's it.

The system as described here can't possibly work. What happens when
someone plugs the above ciphertext into a receiving chip? To get M
the receiving chip needs K_P; to get K_P the receiving chip needs U_C.
The only information it can work with is C. If U_C can be computed
from C then the system is cryptographically useless and the ``key
escrow'' is bullshit. Otherwise how is a message decrypted?