August 28, 2024
It's Wednesday, and it's still recess! We've got a special all-Pro Policy edition today breaking down the upcoming funding fights on the Hill.
- We'll be back in your inbox with our final recess deep dive next week, or sooner if there's breaking tech policy news.
💼 Changed jobs recently? Let us know here, and we'll include you in our next newsletter detailing who's working where.
🗓 Join Axios Pro next month for a series of virtual conversations and live Q&As unpacking the policy impacts of the 2024 election.
1 big thing: Appropriations lame duck preview
The House and Senate will have to resolve differences over everything from NIH reorganization to antitrust spending and EPA funding for next year's appropriations bills — so get ready for a busy lame duck.
Why it matters: That's not a lot of time for Congress to figure this out. Here's a cheat sheet for what to watch when they're ready to work, compiled by Ashley with Pro's Mackenzie Weinger, Victoria Knight and Nick Sobczyk.
Tech
Antitrust spending: The Justice Department is angling for more money for its antitrust division as they ramp up efforts to reel in tech companies, but House Republicans are targeting the agency's appropriations as part of their campaign against what they call the "weaponization of the federal government."
- The antitrust unit would get at least $288 million, a record level, in the Senate's bipartisan Commerce-Justice-Science bill, compared to the House GOP bill's $193 million.
R&D dollars: The heads of tech agencies including NIST and NSF have been on the Hill this year warning that cuts will hurt efforts to outcompete Beijing and make it difficult to protect existing federal staff.
- House Republicans are looking to give NSF a 2% increase above FY24 to $9.3 billion, while the Senate's aiming for $9.55 billion.
- In the House GOP bill, NIST would get $1.4 billion, 3% below this year's level and $83.5 million below the president's ask.
- The Senate bill would provide about $1.54 billion, and notably would fund the U.S. AI Safety Institute, which is housed at NIST.
Health care
HHS funding: There's about a $15 billion difference between the House and Senate, with the House pursuing a 7% cut to the department, citing spending pressures under the caps outlined in the Fiscal Responsibility Act of 2023.
- The blueprint calls for a 22% cut to the CDC and would eliminate programs for climate change and gun research. Funding for Title X family planning would be zeroed out.
- Senate appropriators would give the CDC a small funding increase and maintain Title X while adding spending for pandemic preparedness.
NIH reorganization: The House's Labor-HHS bill also proposes a large-scale reorganization of NIH that would reduce the number of institutes from 27 to 15, streamline research areas and establish a new oversight entity to review high-risk research proposals.
- The Senate has no such plans and would boost NIH spending by $2.05 billion over FY24 levels.
- The GOP argues the overhaul would restore trust in science post-pandemic. But Democratic critics say any discussion of the subject needs to be bipartisan and bicameral.
Energy
EPA funding: House Republicans' proposed 20% cut to EPA isn't going to stand, but the agency is headed for another year of constrained funding.
Riders: The big ones include an attempt by House Republicans to toss out the Biden administration's LNG export permitting pause and halt EPA auto emissions and power plant rules.
- But on energy-water, the House is in something of a weak position after leadership was forced to pull the bill from the floor last month.
- Republicans were threatening to vote against it over perceived excessive spending, parochial water project funding and a battery storage provision.
What we're watching: Proposals in the spending bills to force Interior to list copper as a "critical mineral" and respond to the so-called Rosemont decision on mine waste have bipartisan support.
- Sen. Joe Manchin's permitting overhaul is a candidate to ride on a year-end omnibus if he can get the blessing from House Republicans.
2. Exit interview with IBM's Chris Padilla
IBM's lead on global government and regulatory affairs Chris Padilla announced in June that he was retiring, so Maria sat down with him to discuss where the company and the country is headed.
Why it matters: The world is figuring out how to regulate emerging technologies, and the U.S. is fighting to remain competitive.
Below is an excerpt from the conversation, which has been edited and condensed for clarity.
How has IBM changed in the 15 years that you were there?
Hugely. It's a completely different company. When I came to IBM, hardware was still a much bigger part of the company's revenue and profitability. No one knew what the cloud was. Now we are a hybrid cloud and AI company.
- One of the good things about IBM is it has shown throughout 113 years that it can transform itself by getting out of commoditizing businesses and getting into new, emerging businesses.
- We're a leader on quantum. It's the next big thing in computing and IBM will be a big part of that and that's really cool.
Are you generally optimistic or concerned about the future of tech regulation?
I'm generally optimistic, because when I came into this role 15 years ago there wasn't as much appreciation of the need for what I'll call global consistency of regulation.
- Now I think there's a recognition, whether it's on semiconductors or quantum or AI, that there needs to be much more international cooperation and that doesn't mean global regulation.
3. The AI bill that's dividing the tech world
Since Congress hasn't acted yet on AI, you should keep your eye on state legislation — like the California effort to regulate AI that Ashley and Axios' Ina Fried wrote about in today's AI+ newsletter.
Why it matters: The proposal has divided the tech world, with some leaders trying to crush what they see as overreach by a single state and others supporting the push.
Catch up quick: California's S.B. 1047 would require AI developers to comply with certain rules before developing their models.
- It passed the State Senate 32-1, with the Assembly facing an Aug. 31 deadline to approve the measure in time for it to head to Gov. Gavin Newsom.
Rep. Nancy Pelosi — and several other Californian members of Congress — have urged their home state to reject the bill.
The bottom line: As with many tech policy challenges, California is determined to be the first mover while Congress drags its feet.
4. Catch me up: CHIPS, net neutrality and more
💸 CHIPS cash: HP Inc. is set to receive up to $50 million in CHIPS Act money to modernize and expand its campus in Corvallis, Oregon.
🇨🇳 Downsizing: IBM will completely shut down its China R&D department, impacting about 1,000 jobs.
😷 COVID-19 content: Meta CEO Mark Zuckerberg said Monday that the Biden administration was "wrong" to pressure the company to censor certain inaccurate content during the COVID-19 pandemic.
- "I believe the government pressure was wrong, and I regret that we were not more outspoken about it," Zuckerberg wrote in a letter to the House Judiciary Committee.
👨⚖️ Net neutrality case: The U.S. Court of Appeals for the Sixth Circuit announced that it will hear oral arguments in the net neutrality case on Oct. 31, per Broadband Breakfast.
🔦 Telegram spotlight: Axios cybersecurity reporter Sam Sabin writes about how Telegram became a destination for criminals.
✅ Thank you for reading Axios Pro Policy, and thanks to editors Mackenzie Weinger and David Nather and copy editor Bryan McBournie.
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