Preview of Senate Democratic Chairs

It’s not clear who will end up where, but new Senate chairs will change focus and agenda of committees and debate over the next two years.

With the victories of Senators-elect Rafael Warnock (D-GA) and Jon Ossoff (D-GA), control of the United States Senate will tip to the Democrats once Vice President-elect Kamala Harris (D) is sworn in and can break the 50-50 tie in the chamber in favor of the Democrats. With the shift in control, new chairs will take over committees key to setting the agenda over the next two years in the Senate. However, given the filibuster, and the fact that Senate Republicans will exert maximum leverage through its continued use, Democrats will be hamstrung and forced to work with Republicans on matters such as federal privacy legislation, artificial intelligence (AI), the Internet of Things (IOT), cybersecurity, data flows, surveillance, etc. just as Republicans have had to work with Democrats over the six years they controlled the chamber. Having said that, Democrats will be in a stronger position than they had been and will have the power to set the agenda in committee hearings, being empowered to call the lion’s share of witnesses and to control the floor agenda. What’s more, Democrats will be poised to confirm President-elect Joe Biden’s nominees at agencies like the Federal Communications Commission (FCC), Federal Trade Commission (FTC), the Department of Justice (DOJ), and others, giving the Biden Administration a free hand in many areas of technology policy.

All of that being said, this is not meant to be an exhaustive look at all the committees of jurisdiction and possible chairs. Rather, it seeks to survey likely chairs on selected committees and some of their priorities for the next two years. Subcommittee chairs will also be important, but until the cards get shuffled among the chairs, it will not be possible to see where they land at the subcommittee level.

When considering the possible Democratic chairs of committees, one must keep in mind it is often a matter of musical chairs with the most senior members getting first choice. And so, with Senator Patrick Leahy (D-VT) as the senior-most Democratic Senator, he may well choose to leave the Appropriations Committee and move back to assume the gavel of the Judiciary Committee. Leahy has long been a stakeholder on antitrust, data security, privacy, and surveillance legislation and would be in a position to influence what bills on those and other matters before the Senate look like. If Leahy does not move to the chair on Judiciary, he may still be entitled to chair a subcommittee and exert influence.

If Leahy stays put, then current Senate Minority Whip Dick Durbin (D-IL) would be poised to leapfrog Senator Dianne Feinstein (D-CA) to chair Judiciary after Feinstein was persuaded to step aside on account of her lackluster performance in a number of high-profile hearings in 2020. Durbin has also been active on privacy, data security, and surveillance issues. The Judiciary Committee will be central to a number of technology policies, including Foreign Intelligence Surveillance Act reauthorization, privacy legislation, Section 230 reform, antitrust, and others. On the Republican side of the dais, Senator Lindsey Graham (R-SC) leaving the top post because of term limit restrictions imposed by Republicans, and Senator Charles Grassley (R-IA) is set to replace him. How this changes the 47 USC 230 (Section 230) debate is not immediately clear. And yet, Grassley and three colleagues recently urged the Trump Administration in a letter to omit language in a trade agreement with the United Kingdom (UK) that mirrors the liability protection Section 230. Senators Rob Portman (R-OH), Mark R. Warner (D-VA), Richard Blumenthal (D-CT), and Grassley argued to U.S. Trade Representative Ambassador Robert Lighthizer that a “safe harbor” like the one provided to technology companies for hosting or moderating third party content is outdated, not needed in a free trade agreement, contrary to the will of both the Congress and UK Parliament, and likely to be changed legislatively in the near future. It is likely, however, Grassley will fall in with other Republicans propagating the narrative that social media is unfairly biased against conservatives, particularly in light of the recent purge of President Donald Trump for his many, repeated violations of policy.

The Senate Judiciary Committee will be central in any policy discussions of antitrust and anticompetition in the technology realm. But it bears note the filibuster (and the very low chances Senate Democrats would “go nuclear” and remove all vestiges of the functional supermajority requirement to pass legislation) will give Republicans leverage to block some of the more ambitious reforms Democrats might like to enact (e.g. the House Judiciary Committee’s October 2020 final report that calls for nothing less than a complete remaking of United States (U.S.) antitrust policy and law; see here for more analysis.)

It seems Senator Sherrod Brown (D-OH) will be the next chair of the Senate Banking, Housing, and Urban Development Committee which has jurisdiction over cybersecurity, data security, privacy, and other issues in the financial services sector, making it a player on any legislation designed to encompass the whole of the United States economy. Having said that, it may again be the case that sponsors of, say, privacy legislation decide to cut the Gordian knot of jurisdictional turf battles by cutting out certain committees. For example, many of the privacy bills had provisions making clear they would deem financial services entities in compliance with the Financial Services Modernization Act of 1999 (P.L. 106-102) (aka Gramm-Leach-Bliley) to be in compliance with the new privacy regime. I suppose these provisions may have been included on the basis of the very high privacy and data security standards Gramm-Leach-Bliley has brought about (e.g. the Experian hack), or sponsors of federal privacy legislation made the strategic calculation to circumvent the Senate Banking Committee as much as they can. Nonetheless, this committee has sought to insert itself into the policymaking process on privacy last year as Brown and outgoing Chair Mike Crapo (R-ID) requested “feedback” in February 2019 “from interested stakeholders on the collection, use and protection of sensitive information by financial regulators and private companies.” Additionally, Brown released what may be the most expansive privacy bill from the perspective of privacy and civil liberties advocates, the “Data Accountability and Transparency Act of 2020” in June 2020 (see here for my analysis.) Therefore, Brown may continue to push for a role in federal privacy legislation with a gavel in his hands.

In a similar vein, Senator Patty Murray (D-WA) will likely take over the Senate Health, Education, Labor, and Pensions (HELP) Committee which has jurisdiction over health information privacy and data security through the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH Act). Again, as with the Senate Banking Committee and Gramm-Leach-Bliley, most of the privacy bills exempt HIPAA-compliant entities. And yet, even if her committee is cut out of a direct role in privacy legislation, Murray will still likely exert influence through oversight of and possible legislation changing HIPAA regulations and the Department of Health and Human Services (HHS) enforcement and rewriting of these standards for most of the healthcare industry. For example, HHS is rushing a rewrite of the HIPAA regulations at the tail end of the Trump Administration, and Murray could be in a position to inform how the Biden Administration and Secretary of Health and Human Services-designate Xavier Berra handles this rulemaking. Additionally, Murray may push the Office of Civil Rights (OCR), the arm of HHS that writes and enforces these regulations, to prioritize matters differently.

Senator Maria Cantwell (D-WA) appears to be the next chair of the Senate Commerce, Science, and Transportation Committee and arguably the largest technology portfolio in the Senate. It is the primary committee of jurisdiction for the FCC, FTC, National Telecommunications and Information Administration (NTIA), the National Institute of Standards and Technology (NIST), and the Department of Commerce. Cantwell may exert influence on which people are nominated to head and staff those agencies and others. Her committee is also the primary committee of jurisdiction for domestic and international privacy and data protection matters. And so, federal privacy legislation will likely be drafted by this committee, and legislative changes so the U.S. can enter into a new personal data sharing agreement with the European Union (EU) would also likely involve her and her committee.

Cantwell and likely next Ranking Member Roger Wicker (R-MS) agree on many elements of federal privacy law but were at odds last year on federal preemption and whether people could sue companies for privacy violations. Between them, they circulated three privacy bills. In September 2020, Wicker and three Republican colleagues introduced the “Setting an American Framework to Ensure Data Access, Transparency, and Accountability (SAFE DATA) Act” (S.4626) (see here for more analysis). Wicker had put out for comment a discussion draft, the “Consumer Data Privacy Act of 2019” (CDPA) (See here for analysis) in November 2019 shortly after the Ranking Member on the committee, Senator Maria Cantwell (D-WA) and other Democrats had introduced their privacy bill, the “Consumer Online Privacy Rights Act“ (COPRA) (S.2968) (See here for more analysis).

Cantwell could also take a leading role on Section 230, but her focus, of late, seems to be on how technology companies are wreaking havoc to traditional media. released a report that she has mentioned during her opening statement at the 23 September hearing aimed at trying to revive data privacy legislation. She and her staff investigated the decline and financial troubles of local media outlets, which are facing a cumulative loss in advertising revenue of up to 70% since 2000. And since advertising revenue has long been the life blood of print journalism, this has devastated local media with many outlets shutting their doors or radically cutting their staff. This trend has been exacerbated by consolidation in the industry, often in concert with private equity or hedge funds looking to wring the last dollars of value from bargain basement priced newspapers. Cantwell also claimed that the overwhelming online advertising dominance of Google and Facebook has further diminished advertising revenue and other possible sources of funding through a variety of means. She intimates that much of this content may be illegal under U.S. law, and the FTC may well be able to use its Section 5 powers against unfair and deceptive acts and its anti-trust authority to take action. (see here for more analysis and context.) In this vein, Cantwell will want her committee to play in any antitrust policy changes, likely knowing massive changes in U.S. law are not possible in a split Senate with entrenched party positions and discipline.

Senator Jack Reed (D-RI) will take over the Senate Armed Services Committee and its portfolio over national security technology policy that includes the cybersecurity, data protection and supply chain of national security agencies and their contractors, AI, offensive and defensive U.S. cyber operations, and other realms. Much of the changes Reed and his committee will seek to make will be through the annual National Defense Authorization Act (NDAA) (see here and here for the many technology provisions in the FY 2021 NDAA.) Reed may also prod the Department of Defense (DOD) to implement or enforce the Cybersecurity Maturity Model Certification (CMMC) Framework differently than envisioned and designed by the Trump Administration. In December 2020, a new rule took effect designed to drive better cybersecurity among U.S. defense contractors. This rule brings together two different lines of effort to require the Defense Industrial Base (DIB) to employ better cybersecurity given the risks they face by holding and using classified information, Federal Contract Information (FCI) and Controlled Unclassified Information (CUI). The Executive Branch has long wrestled with how to best push contractors to secure their systems, and Congress and the White House have opted for using federal contract requirements in that contractors must certify compliance. However, the most recent initiative, the CMMC Framework will require contractors to be certified by third party assessors. And yet, it is not clear the DOD has wrestled with the often-misaligned incentives present in third party certification schemes.

Reed’s committee will undoubtedly delve deep into the recent SolarWinds hack and implement policy changes to avoid a reoccurrence. Doing so may lead the Senate Armed Services Committee back to reconsidering the Cyberspace Solarium Commission’s (CSC) March 2020 final report and follow up white papers, especially their views embodied in “Building a Trusted ICT Supply Chain.”

Senator Mark Warner (D-VA) will likely take over the Senate Intelligence Committee. Warner has long been a stakeholder on a number of technology issues and would be able to exert influence on the national security components of such issues. He and his committee will almost certainly play a role in the Congressional oversight of and response to the SolarWinds hack. Likewise, his committee shares jurisdiction over FISA with the Senate Judiciary Committee and over national security technology policy with the Armed Services Committee.

Senator Amy Klobuchar (D-MN) would be the Senate Democratic point person on election security from her perch at the Senate Rules and Administration Committee, which may enable her to more forcefully push for the legislative changes she has long advocated for. In May 2019, Klobuchar and other Senate Democrats introduced the “Election Security Act” (S. 1540), the Senate version of the stand-alone measure introduced in the House that was taken from the larger package, the “For the People Act” (H.R. 1) passed by the House.

In August 2018, the Senate Rules and Administration Committee postponed indefinitely a markup on a compromise bill to provide states additional assistance in securing elections from interference, the “The Secure Elections Act” (S.2593). Reportedly, there was concern among state officials that a provision requiring audits of election results would be in effect an unfunded mandate even though this provision was softened at the insistence of Senate Republican leadership. However, a Trump White House spokesperson indicated in a statement that the Administration opposed the bill, which may have posed an additional obstacle to Committee action. However, even if the Senate had passed its bill, it was unlikely that the Republican controlled House would have considered companion legislation (H.R. 6663).

Senator Gary Peters (D-MI) may be the next chair of the Senate Homeland Security and Governmental Affairs Committee, and if so, he will continue to face the rock on which many the bark of cybersecurity legislation has been dashed: Senator Ron Johnson (R-WI). So significant has Johnson’s opposition been to bipartisan cybersecurity legislation from the House, some House Republican stakeholders have said so in media accounts not bothering to hide in anonymity. And so whatever Peters’ ambitions may be to shore up the cybersecurity of the federal government as his committee will play a role in investigating and responding to the Russian hack of SolarWinds and many federal agencies, he will be limited by whatever Johnson and other Republicans will allow to move through the committee and through the Senate. Of course, Peters’ purview would include the Department of Homeland Security and the Cybersecurity and Infrastructure Security Agency (CISA) and its remit to police the cybersecurity practices of the federal government. Peters would also have in his portfolio the information technology (IT) practices of the federal government, some $90 billion annually across all agencies.

Finally, whether it be Leahy or Durbin at the Senate Appropriations Committee, this post allows for immense influence in funding and programmatic changes in all federal programs through the power of the purse Congress holds.

Further Reading and Other Developments (20 June)

First things first, if you would like to receive my Technology Policy Update, email me. You can find some of these Updates from 2019 and 2020 here.

Other Developments

  • The House Financial Services Committee’s National Security, International Development, and Monetary Policy Subcommittee held a virtual hearing titled “Cybercriminals and Fraudsters: How Bad Actors Are Exploiting the Financial System During the COVID-19 Pandemic.”
  • The Senate Appropriations Committee’s Financial Services and General Government Subcommittee held a hearing titled “Oversight of FCC Spectrum Auctions Program.”
  • The Commerce, Science, and Transportation Committee held a hearing on a number of nominations, including a re-nomination of Federal Communications Commission Commissioner Michael O’Reilly for another full term.
  • The Department of Commerce’s Industry and Security Bureau released an interim final rule to amend “the Export Administration Regulations (EAR) to authorize the release of certain technology to Huawei and its affiliates on the Entity List without a license if such release is made for the purpose of contributing to the revision or development of a “standard” in a “standards organization.” The Department added in its press release “The rule returns U.S. industry to the status quo ante, from an Entity List perspective, with respect to disclosures of such technology to Huawei and its affiliates in legitimate standards development contexts only, and not for commercial purposes. Disclosures for commercial purposes remain “subject to the EAR” and are still subject to recordkeeping and all other applicable EAR requirements.” Comments are due on 17 August 2020.
  • The National Transportation Safety Board (NTSB) released its “Safety Recommendation Report” that “called for a change in air cargo shipping requirements for some types of lithium-ion batteries” following its investigation “into the shipment of lithium-ion batteries that ignited while in transport on a delivery truck in Canada.” The NTSB recommended that the Pipeline and Hazardous Materials Safety Administration:
    • Propose to the International Civil Aviation Organization to remove its special provision A88 from its Technical Instructions for the Safe Transport of Dangerous Goods by Air allowing special permits for low-production or prototype lithium-ion cells or batteries shipped by airplane and eliminate any exceptions to the testing of United Nations Manual of Tests and Criteria, Part III, Sub-section 38.3 requirements for all lithium-ion batteries before transport by air.( A-20-31)
    • Once the International Civil Aviation Organization removes special provision A88 from the Technical Instructions for the Safe Transport of Dangerous Goods by Air, remove the exemption from United Nations Manual of Tests and Criteria, Part III, Sub-section 38.3 testing from Title 49 Code of Federal Regulations 173.185(e) for low-production or prototype lithium-ion batteries, when transported by air. (A-20-32)
  • The Carnegie Endowment for International Peace’s Partnership for Countering Influence Operations (PCIO) released “The Challenges of Countering Influence Operations” with these “Key Takeaways:”
    • Influence operations defy easy categorization. Influence operations often fail to fit neatly into boxes outlined by individual policies or legislation. They are run in a complex environment where actors overlap, borders are easily crossed and blurred, and motives are mixed—making enforcement challenging. In this case study, actors share highly politicized online content but also appear to benefit financially from their actions, making it difficult to ascertain whether their motives are primarily political, commercial, or both.
    • Relevant policies by social media platforms tend to be a patchwork of community standards that apply to individual activities of an influence campaign, not the operation as a whole. Policies published by social media companies often focus on individual components of influence operations. This approach attempts to neatly categorize and distinguish actors (foreign versus domestic), motives (political influence and profit), activities (including misrepresentation, fraud, and spamming behavior), and content (such as misinformation, hate speech, and abuse). This piecemeal approach to enforcement raises questions about whether officials within social media platforms fully understand how influence operations work and how such campaigns are more than the individual behaviors that compose them.
    • Social media networks have more opportunities to counter influence operations through their platform policies than governments do with existing legislation. Social media companies have implemented various policies to govern how their platforms are used, providing opportunities for combating influence operations. They also have greater access to information about how their platforms are used and have domain-specific expertise that allows them to create more tailored solutions. Fewer avenues exist for countering such influence operations using government-led legal mechanisms. This is not only because of the relative paucity of laws that govern online activity but also because law enforcement requires attribution before they can act, and such attribution can be difficult to ascertain in these cases. This means that governments have generally done little to help private industry actors determine what kinds of influence operations are unacceptable and should be combated. In the absence of such guidance, industry actors are de facto drawing those lines for society. Governments could do more to help guide industry players as they determine the boundaries of acceptable behavior by participating in multi-stakeholder efforts—some of which have been set up by think tanks and nonprofits—and by considering legal approaches that emphasize transparency rather than criminalization.
    • The influence operations uncovered by media scrutiny are not always as easy to counter as those writing about them might hope. Savvy influence operators understand how to evade existing rules, so that their activities and content do not breach known policies or legislation. Media coverage that showcases examples of influence operations seldom explains whether and how these operators violate existing platform policies or legislation. This is a problem because distasteful influence operations do not always overtly violate existing policies or laws—raising questions about where the lines are (and should be) between what is tolerable and what is not, and, moreover, who should be determining those lines. Even when existing policies clearly do apply, these questions persist. Stakeholders should more clearly assess what constitutes problematic behavior before rushing to demand enforcement.
  • A number of privacy and civil liberties groups released “principles to protect the civil rights and privacy of all persons, especially those populations who are at high risk for the virus and communities of color, when considering the deployment of technological measures in response to the COVID-19 crisis.” These groups also sent these principles in letters to both the House and the Senate.
  • The Technology Coalition, formed 15 years ago “when industry leaders came together to fight online child sexual exploitation and abuse (CSEA),” announced “Project Protect: A plan to combat online child sexual abuse – a renewed investment and ongoing commitment to our work seeking to prevent and eradicate online CSEA” with these elements:
    • Execute a Strategic “Five Pillar” Plan to reinforce the cross-industry approach to combating CSEA, putting in place the structure, membership models, and staffing needed to support the Technology Coalition’s long term objectives.
    • Establish a multi-million dollar Research and Innovation Fund to build crucial technological tools needed to more effectively prevent and work to eradicate CSEA.
    • Commit to publishing an Annual Progress Report on industry efforts to combat CSEA.
    • Create an annual Forum for CSEA experts bringing together industry, governments, and civil society to share best practices and drive collective action.
  • Amnesty International’s Security Lab named Bahrain, Kuwait and Norway as having “some of the most invasive COVID-19 contact tracing apps around the world, putting the privacy and security of hundreds of thousands of people at risk.”
  • The Knight Foundation and Gallup released “Free Expression, Harmful Speech, and Censorship in a Digital World,” “a study to gauge Americans’ opinions on [social media companies, the internet, and the role of government], delving specifically into two potential paths forward — amending Section 230 of the Communications Decency Act, which largely shields internet companies from legal liability for content shared on their sites, and the relatively new notion of content oversight boards” with these topline findings:
    • Americans prefer social media apps and sites to be places of open expression.
    • Even as Americans voice a preference for open expression, there are several forms of online content that many say should be restricted or never allowed
    • Many Americans have personally been targeted by harmful online behavior.
    • Americans are somewhat divided on Section 230 of the Communications Decency Act, which largely shields major internet companies from liability for content posted on their websites and apps by third parties.
    • A majority of Americans do not trust social media companies to make the right decisions about what content appears on their sites or apps.
    • Despite misgivings about major internet companies making the right decisions related to harmful online content, Americans are more likely to favor the companies, rather than government, setting policies to regulate such content
    • Americans’ opinions of content oversight boards are largely favorable, tending to prefer them to social media companies or the government to make decisions about what can and cannot appear on social media websites and apps. 
    • Americans’ favorability toward content oversight boards increases when they know more about them.
    • The most important content oversight board attributes for Americans are transparency and diversity, followed closely by independence — i.e., who appoints board members. Less valuable is the board’s ability to compel social media companies to enact its decisions or guidelines.
    • Americans’ trust in a social media company will not automatically increase solely because the company adopts a content oversight board. Rather, trust can be gained based on the board’s features relating to its independence, transparency, diversity and ability to enforce decisions.
  • Graphika released a report titled “Exposing Secondary Infektion: Forgeries, interference, and attacks on Kremlin critics across six years and 300 sites and platforms,” “a long-running Russian information operation, encompassing multiple campaigns on social media run by a central entity, which was already active in 2014 and that was still running in early 2020.”
  • The University of Toronto’s Citizen Lab and Amnesty International released a report on “nine Indian lawyers, activists, and journalists….targeted in 2019 in a coordinated malware campaign” with “NetWire, a commercially available spyware.”

Further Reading

  • The Economy Is Reeling. The Tech Giants Spy Opportunity.” – The New York Times. All of the large technology companies are continuing the same pace of acquisition and product roll outs as last year. Critics fear that companies’ expansion through buying new businesses, technologies, and platforms will further cement their dominance of the United States (US) and world economies. Moreover, these companies have also been rolling out new services to compete with upstarts (e.g. Google’s meeting service to try to grab market share from Zoom.) It remains to be seen whether antitrust and anti-competitive actions in the US, European Union and elsewhere will stop or even reverse the continued growth of Google, Apple, Amazon, and others.
  • Amazon’s Ring has 29 new police agreements since the killing of George Floyd” – Protocol. In spite of its pledge to hold off on selling its facial recognition technology to police departments for a year, Amazon has continued to sign up local law enforcement for participation in partnerships using its Ring and Neighbors technology platforms. These systems make available to police footage from the camera/doorbell system Amazon is marketing as a security must have. Critics of the system and how Amazon operates it argue it has already disproportionately affected African Americans and other minorities in gentrifying areas and offers a workaround to warrant requirements for officers would not need to go to court to obtain this footage since private parties are not bound by the Fourth Amendment like government agencies.
  • Big Tech’s Pandemic Power Grab” – The Atlantic. This article foresees government regulation of large technology companies in the United States (US) that solidifies their preeminence, in large part, because these companies have been partnering with and working for the US government. And, in making this bargain, these companies are using every lever and all the leverage at their disposal to strike the type of bargain they want. There may be pushback against this impulse to grow, but it is worth keeping in mind that the trustbusting era in the US may have divided up corporate giants like Standard Oil but their progeny are still very powerful (e.g. Exxon Mobil.)
  • New York lawmakers want to outlaw geofence warrants as protests grow” – Protocol. A bill introduced in April to address the law enforcement practice of requesting geofencing data from technology companies receives renewed scrutiny in the New York State legislature in the midst of protests against racism and police violence in the United States. The article cites a Google filing in a Virginia lawsuit alleging “Between 2017 and 2018, Google saw a 1,500% increase in geofence requests…[and] [b]etween 2018 and 2019, that figure shot up another 500%.” Technology companies with troves of data on where people are at virtually every hour of the day are treading carefully as critics of geofence requests and warrants are pushing to ban law enforcement agencies from using these data.
  • Australian leader says unnamed state increasing cyberattacks” – Associated Press. Australia’s Prime Minister Scott Morrison told reporters “Australian organizations are currently being targeted by a sophisticated state-based cyber actor.” He contended “[t]his activity is targeting Australian organizations across a range of sectors, including all levels of government, industry, political organizations, education, health, essential service providers and operators of other critical infrastructure.” In concert with Morrison’s statement, the Australian Cyber Security Centre (ACSC) and the Department of Home Affairs issued an advisory describing “the tactics, techniques and procedures (TTPs) identified during the ACSC’s investigation of a cyber campaign targeting Australian networks.” Some experts are saying it must be the People’s Republic of China (PRC), especially after Canberra named the PRC as the entity that hacked into Parliament.
  • Eric Schmidt: Huawei has engaged in unacceptable practices” – BBC News. The former Google head claims the People’s Republic of China (PRC) has accessed Huawei’s routers to exfiltrate information. Schmidt conceded that Huawei’s products are superior to other offerings on the market, which poses a challenge for networks and nations. He also flagged the research and development budgets Huawei and other PRC companies have that eclipse other multinationals.
  • French Court Strikes Down Most of Online Hate Speech Law” – The New York Times. A French court struck down the core of President Emmanuel Macron’s new statute to police offensive online speech, finding two provisions would impinge freedom of expression. Macron’s party has vowed to take another run at such legislation.
  • Europe threatens digital taxes without global deal, after U.S. quits talks” – Reuters. After the United States withdrew from Organisation for Economic Cooperation and Development (OECD) talks on digital taxes, prompting promises from the European Union to proceed with such taxes.

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Appropriators Have Work To Do

Now that Congress and the White House have agreed on the FY 2020 top line numbers for defense and non-defense discretionary spending, both the House and Senate need to adjust the numbers they have put forth as their working caps.

The House did not pass a budget resolution and instead passed a deeming resolution (H.J.Res. 293) in April that functions in much the same way with respect to setting the top-line numbers for appropriations. During debate on the deeming resolution, Representative James Morelle (D-NY) explained the caps put forth by Democrats:

In fiscal year 2020, defense spending would be capped at $664 billion, with nondefense discretionary spending capped at $631 billion. The Investing for the People Act (H.R. 2021) would also provide up to $8 billion, annually, for nondefense overseas contingency operations, OCO, activities that do not count against the spending caps, while limiting OCO designation of defense spending in 2020 and 2021 to no more than the fiscal year 2019 level of $69 billion dollars.

In my this post, I detailed the new spending caps under the as the “Bipartisan Budget Act of 2019” (P.L. 116-37) raised the caps

  FY 2020 FY 2021
Defense (aka Security) $666.5 billion $671.5 billion
Non-Defense (aka non-security) $621.5 billion $626.5 billion

For FY 2020, House Democrats will need to trim roughly $10 billion from the non-defense side of appropriations and slightly boost for the defense side. The House Appropriations Committee will need to trim the non-defense funds from the bills with non-defense funding, and it is not immediately clear what their approach will be. Is an across-the-board reduction equitable? Or should the committee eliminate funds based on need and priorities? I’d say it is likely to be the latter approach, but the process for how the House does this is not clear beyond the Appropriations Committee reporting a new 302(b) allocation. Will the Appropriations Committee essentially draft new bills and hold them until the Senate has finished work on their bills all the while negotiating on final numbers for programs? This seems like the likeliest outcome although it is possible the House could bring new bills to the floor, but I suspect they wouldn’t do so unless there was some leverage to be gained against or pressure exerted on the Senate.

In the other body, appropriators are more or less working from a blank slate as Senate Majority Leader Mitch McConnell (R-KY) prevailed upon Senate Appropriations Committee Chair Richard Shelby (R-AL) to not begin the appropriations process until agreement had been reached on top-line numbers. Undoubtedly, the committee has bill language and report language that has been negotiated on; all that was missing was the top-line funding numbers. Having said that, it didn’t exactly take a crystal ball to project a reasonable range of top-line funding numbers and work from those. I’m assuming this is, in fact, what happened, and so the committee may hit the ground running next month.

While the Senate did not pass a budget resolution as McConnell undoubtedly wanted to protect those Senate Republicans up for reelection from uncomfortable votes, the Senate Budget Committee did mark up a budget resolution. In S.Con.Res. 12, the Senate Budget Committee set the following caps in FY 2020: $576 billion for defense (plus the majority of $67 billion in OCO funds) and $542 billion for non-defense. Consequently, the Senate has just gained a huge amount of breathing room on both sides of the discretionary divide, and yet, because the Senate Appropriations Committee has not marked up any bills, the process of effecting the new caps will be somewhat easier. In any event, the nominal, not-real numbers the Senate started with will be adjusted upwards by $90 billion on the defense side of the ledger and $79 billion for non-defense.

Opening the aperture on appropriations reveals an uncertain view. Sure, we have top-line numbers, but will Fox News rile up the President after Republicans and Democrats have reached agreement on full-year appropriations for FY 2020. However, more immediately, it seems unlikely we will have all 12 bills enacted before the end of FY 2019 on September 30 and has been common practice there will almost certainly be a continuing resolution (CR) for some portion of the federal government through December. It’s just a question of which agencies will have FY 2020 appropriations in place and which will be operating under a CR, which does cause some problems. In any event, it will quite the ride as always.

FY 2020 Appropriations Starting

It’s a been a while.

In any event, it’s a big week. The House Appropriations Committee begins work on FY 2020 appropriations bills even though top-line numbers haven’t entirely been decided in the Democratic Caucus, and the Congressional Budget Office (CBO) releases its revised baseline on this coming Thursday, May 2.

This week’s House Appropriations Committee markup schedule is

Over in the Senate, the Appropriations Committee will hold these hearings:

Subcommittee Hearing: Review of the FY2020 Budget Request for the Department of Homeland Security   05/02/19 10:00AM
Subcommittee Hearing: Review of the FY2020 Budget Request for Department of Labor   05/02/19 10:00AM
Subcommittee Hearing: Review of the FY2020 Budget Request for the U.S. Nuclear Regulatory Commission   05/01/19 02:30PM
Subcommittee Hearing: Review of the FY2020 Budget Request for NASA   05/01/19 02:30PM
Subcommittee Hearing: Review of the FY2020 Budget Request for the Navy and Marine Corps   05/01/19 10:00AM
Subcommittee Hearing: Review of the FY2020 Budget Request for the Indian Health Service   05/01/19 09:30AM
Subcommittee Hearing: Review of the FY2020 and FY2021 Budget Request for the VA   04/30/19 02:30PM
Subcommittee Hearing: Review of the FY2020 Budget Request for USAID   04/30/19 02:30PM

Also, Senate Appropriations Committee Chair Richard Shelby (R-AL) said yesterday that his committee will not work on their appropriations bills until there is a deal in place on the caps. He remarked that “[t]hat’s what we’d like to do because we’d have more certainty.”

Of course, where the caps are ultimately set is a major stumbling block in enacting FY 2020 appropriations. At present, the caps for defense funding would be $576 billion (without uncapped Overseas Contingency Operations (OCO) funding) and non-defense $542 billion (without OCO, Disaster relief, and other adjustments). House Democrats are split on how much to raise the caps, but House Appropriations Committee Chair Nita Lowey (D-NY) seems to be willing to work with the cap adjustments in the “Investing for the People Act of 2019” (H.R. 2021) of $664 billion for defense (plus $69 billion for defense OCO for a total of $733 billion) and $631 billion for non-defense (plus add ons pushing the cap up to $662 billion.) Consequently, House appropriations bills will likely meet those top lines as reported out of committee.

The Senate Budget Committee, however, opted to remain with the current cap levels for FY 2020 with the hopes that a deal will soon be reached for both FY 2020 and FY 2021. Their budget resolution, S.Con.Res.12, would keep the FY 2020 caps of $576 billion for defense and $542 for non-defense.

There’s still a supplemental appropriations bill floating that Congress hasn’t passed, which seems to be held up on whether Puerto Rico would receive more funding to recover from Hurricane Maria. However, the White House opposes more funds, and Democrats are insisting on it. Hence, an impasse even though a number of the states waiting on relief via supplemental appropriations for FY 2019 include states Trump will need to carry in 2020, including Florida, Georgia, and Iowa.