The conventional wisdom in Washington always holds to not expect much from divided government, and those expectations only lower heading into a presidential election year because hyper-partisanship can turn the landscape into frozen tundra. But for every rule there is an exception. Despite the fierce headwinds, issues that are important to the technology industry cut across party lines to find common ground. While major legislative issues remain, the 114th Congress saw a flurry of congressional productivity for our industry despite divided government.
Specifically, the tech sector had a number of significant policy wins during the 114th Congress, including the successful passage of permanent tax extenders, the USA Freedom Act, cyber information sharing legislation, the Judicial Redress Act, legislation to protect trade secrets and expand trade, and the Every Student Succeeds Act (ESSA). A few major highlights for tech include:
Permanent R&D tax credit: For those in the tax world “R&D” often stood for ‘renewed in December.’ But thanks to the work of the House Ways and Means and Senate Finance Committees, the PATH Act, which was signed into law in December 2015, allows innovative industries to plan for the future with greater certainty. The PATH Act will also be instrumental in laying the ground work for pro-growth tax reform that includes a lower competitive corporate tax rate and a market-based international tax system.
Government Access to Data: In June of last year, the bipartisan USA Freedom Act became the law of the land. The bill contained a number of surveillance reform measures, including ending the indiscriminate bulk collection of call detail records and permitting companies to issue transparency reports with information about government orders they receive for user information. In another victory for the tech sector and digital trade at large, Congress also passed the Judicial Redress Act extending certain Privacy Act protections to non-U.S. citizens, a critical step in rebuilding confidence in the flow of digital information and achieving agreement on the EU-U.S. Privacy Shield.
Trade: In 2015, Congress passed, and the president signed into law, bipartisan trade promotion authority (TPA) legislation that enshrined the most forward looking technology and digital trade provisions ever captured in a TPA bill. Congress and the new administration must follow this blueprint to ensure that any new or renegotiated trade agreements meet the standards laid out in TPA which are necessary for U.S. technology companies to compete fairly in global markets. Opening new markets for goods and services, while protecting against data localization measures, is vital to ensuring the continued growth of the tech sector and our economy.
Cybersecurity: After several years of discussion, cybersecurity information sharing legislation successfully passed both chambers of Congress. Under the Cybersecurity Act, companies can voluntarily share vital cyber threat indicators with each other and with the Department of Homeland Security to protect both private and public systems. While implementation will be key, the Cybersecurity Act should be a valuable tool to help defend against growing and sophisticated cyber attacks.
Intellectual Property (IP): Trade secrets created through billions of dollars invested in research and development have increasingly become targeted by competitors in the global marketplace who use advances in technology to make them easier to steal. The patchwork of state trade secrets laws and the absence of a federal criminal penalty for trade secret misappropriation failed to meet the demands of the global nature of today’s theft. The tech sector combined forces with other industry sectors to successfully move the Defend Trade Secrets Act (DTSA) across the finish line. With DTSA, gaps in the law are now filled and provide our companies and law enforcement with greater tools to combat theft and encourage future innovation in the U.S. workforce.
Education: Computing occupations are the leading source of wage growth in the United States and account for two-thirds of all expected jobs in science, technology, engineering, and mathematics (STEM) fields. Congress improved the competitiveness of our future workforce by successfully passing the Every Student Succeeds Act (ESSA) and the American Innovation and Competitiveness Act; both bills included critical provisions for STEM education and research.
Without question, the Members of the 114th Congress accomplished much on a truncated schedule. In fact, more laws were enacted in 2015 than in the first year of any other two-year congressional term since 2009 alone.
The winds of change offer new challenges and new opportunities. The members of the 115th Congress have a historic opportunity to seize the momentum by reforming our anti-competitive tax code to make it work to grow our economy, open new markets with fairer trade deals, and to reform the way the federal government purchases and utilizes technology to do its job more effectively on behalf of the American people and protect our national security.
In the new year, ITI will offer the tech industry’s thoughts on how Congress can take on these unresolved issues—and, if done right—find solutions that will grow our economy and create a new era of job creation for years to come.