— Reaching the end: Democrats say they could be close to a framework for their massive social spending package. Some senators told MT this week they hope the tech provisions will remain.
— First in MT: House Republicans are requesting an update from the FCC on its rural broadband efforts.
— Meh: Tech trade groups welcomed the administration’s progress on getting rid of other countries’ digital services taxes, but it wasn’t quite the victory they were hoping for.
IT’S FRIDAY, OCT. 22. WELCOME TO MORNING TECH. I’m your host, Benjamin Din. I have no comment on this, except that sometimes lawmakers want to have fun, too.
House Democrats included a boatload of tech and telecom cash in the original $3.5 trillion version of their spending package, which the party is planning to pass without GOP support under a process called reconciliation. The version that cleared House Energy and Commerce last month would set aside $1 billion to create an expansive FTC privacy bureau, $10 billion to upgrade the nation’s 911 calling system and $4 billion to bolster the FCC’s Emergency Connectivity Fund, aimed at subsidizing digital connectivity for students and library patrons.
WHAT DOWNSIZING DEMOCRATS’ SPENDING BILL COULD MEAN FOR TECH — As Democrats attempt to shrink their social spending plan by hundreds of billions of dollars in order to reach consensus between moderates and progressives, the fate of several of its tech provisions hangs in the balance.
— Price tag: The overall price will likely fall to around $2 trillion (or perhaps lower), given the protests of moderate Democratic Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, whose votes will be vital for passage. President Joe Biden himself is deep in the negotiating trenches this week to figure out which parts of the bill will stay, shrink or be cut entirely. To that end, Democratic leaders are debating whether to invest the smaller total sum in fewer priorities or retain more of the bill’s original provisions and simply shrink how much cash each one would receive.
— As for those tech provisions: “They’re all still there, in the mix,” Senate Commerce Chair Maria Cantwell (D-Wash.) told John this week when asked about that trio of planned tech investments. (Her committee has held multiple hearings related to that would-be FTC privacy bureau in recent weeks.)
Broadband investment, in particular, is one priority some Democrats are intent on keeping in the bill. “We’re going to be fighting to those provisions in place,” Sen. Ben Ray Luján (D-N.M.) told John. “We’ll keep a watchful eye as the conversations continue to the end of the week. But these matter, and they’ll make a difference in people’s lives.” And Sen. Chris Van Hollen (D-Md.) stressed he hopes the social spending plan delivers “more continuity and permanence” to the Emergency Connectivity Fund, which was initially created as a pandemic relief emergency subsidy.
— Clock ticking: Democratic leaders are trying to lock down a framework by week’s end and still hope to move this measure and the Senate-passed bipartisan infrastructure bill in tandem. TECH SHRUGS AS USTR MAKES HEADWAY ON DIGITAL TAXES — The tech industry offered a tepid response for the Biden administration’s announcement on Thursday that it had reached agreements with five European countries to rescind their unilateral taxes on major American tech companies — taxes the U.S. had labeled as discriminatory.
— What they worked out: In exchange for each of those countries — France, Austria, Italy, Spain and the U.K. — dropping their digital services taxes, the Office of the U.S. Trade Representative said it would scrap its plans to impose retaliatory tariffs against them. The agreement followed a deal the U.S. struck earlier this month with more than 130 other countries and jurisdictions on a new global tax regime. The five European countries’ individual digital services taxes are expected to remain in place while the global tax treaty is ratified. However, the money that U.S. companies pay as a result of those taxes will be credited toward future tax payments.
— Industry response: Although they welcomed the news, tech trade groups that represent industry giants like Google, Amazon, Facebook and Apple argued that the Biden administration should have pushed trading partners to eliminate their digital services taxes immediately. Matt Schruers, CEO of the Computer and Communications Industry Association, said “the most appropriate action would be an immediate withdrawal of these discriminatory unilateral measures in exchange for terminating the trade investigations.” Jason Oxman, president and CEO of the Information Technology Industry Council, urged Biden to keep pressure on countries to “urgently and fully withdraw” their taxes.
— Works in progress: Two other countries with digital taxes that hit U.S. tech companies, Turkey and India, could still be hit with retaliatory tariffs unless they essentially agree to what the five European countries did, USTR indicated. Both have signed on to the global tax pact, which raises the possibility that the Biden administration could reach similar transitional agreements with them. THIRD JUDGE’S THE CHARM? — Judge Haywood Gilliam recused himself on Thursday from Trump’s suit to force Google-owned YouTube to restore the former president’s account and invalidate Section 230 of the Communications Decency Act, the tech industry’s broad liability shield law. Gilliam is the second judge to step back from the case, following Judge Susan Illston’s recusal on Wednesday. The case is being heard in the Northern District of California, after a Florida judge dismissed Trump’s objections to moving the suit close to Google’s home base in Silicon Valley.
- Are tech provisions going to cut the Democrats’ spending bill?
- Check all news and articles from the latest Security news updates.