Riding a Wave Election
The dust is beginning to settle following the national mid-term elections on November 2nd. The results are known: Republicans regained control of the House of Representatives, picking up 61 seats. Democrats retained control of the Senate, although their majority margin decreased by 6 seats. At this writing, the GOP now controls 29 gubernatorial offices across the country having picked up at least six seats. At least 19 state legislatures switched to Republican majorities. All in all, there was a decided Republican shift in our national political landscape.
Many pollsters and pundits have been busily divining the import of this election. What does it mean to have "three historic wave elections in six years?" What message did the American people mean to send? Is it about a fundamental shift in party affiliation or governing philosophy? Or is it simply a desire that someone do something that will create jobs? Those questions surely will continue to captivate political watchers for some time to come.
What do these developments mean for the issues and concerns of the IT industry and CompTIA members? Read on.
The offices of Senators Rockefeller and Lieberman currently are negotiating a compromise cybersecurity bill based on the Rockefeller/Snowe Cybersecurity Act and Senator Lieberman's Protecting Cyberspace as a National Asset Act. Among the key issues being negotiated include:
- updates to the Federal Information Security Management Act (FISMA), and
- expanded authority for the Executive Office to direct private sector providers to shore up critical infrastructures in the event of a major cybersecurity threat and/or attack.
In addition, Senator Reid has taken an interest in cybersecurity legislation and has directed the development of compromise legislation. In light of the recent election, it is currently unclear whether cybersecurity legislation will gain momentum during the lame duck session. Moreover, there tends to be a difference of approach between the House and Senate. The House tends to prefer to address cybersecurity in a number of smaller related bills, while the Senate has pursued a comprehensive Omnibus Bill. It is not clear yet how such a tactical difference will impact timing and substance. Nevertheless, cybersecurity legislation has bipartisan support and it is likely that some form of legislation will be passed during the 2011 legislation session.
The National Institute for Standards and Technology (NIST) convened a Cloud Computing Forum and Workshop for the purpose of providing a road map for the federal government's transition to cloud computing technology. As a result of the conference, a cloud computing working group was organized consisting of federal and private sector stakeholders to develop: (a) cloud computing business-use case based on "actual need based stories", cross-cutting functions and specific applications; (b) a neutral reference architecture and taxonomy; and (c) cloud security standards.
NIST staff was very clear during the conference that cloud computing technology was the new platform for addressing the IT needs of federal agencies, and they viewed their role as laying the technological groundwork for a smooth transition onto the new cloud platform.
Privacy and Data Breach
CompTIA President and CEO Todd Thibodeaux met with Congressman Stearns, a leading contender to serve as Chairman of the Committee on Energy and Commerce for the incoming 112th Congress. The meeting introduced Stearns to Thibodeaux and CompTIA. During the meeting, Stearns stated that he would likely pursue privacy legislation mirroring a "privacy legislation discussion draft" he co-authored with Congressmen Boucher even though Congressman Boucher lost his re-election bid.
As a potential chairman of the Energy and Commerce Committee, Congressman Stearns will be very receptive to the interests of small- to medium-size businesses. He is very supportive of CompTIA as an organization as it contributes to workforce development through IT certifications. As a former small business owner he is also very supportive of small- to medium-size businesses. In addition to privacy legislation, Congressman Stearns has indicated his support for a national data breach notification law.
Another contender for the chairmanship of the House Energy and Commerce Committee is Congressmen Joe Barton from Texas. Barton also has indicated a desire to pass consumer privacy and data breach legislation. Nevertheless, there is some indication that a Barton bill on data breach legislation could be less business friendly compared to legislation proposed by Stearns.
Other contenders for chair of his committee include Rep. John Shimkus (R-Ill.), and the current ranking Republican on the committee, Fred Upton (R-Mich.).
In the Senate, we also can expect data breach and privacy legislation from Senator Leahy's office. Although the Senator first proposed data breach legislation during the 2009 legislative session, it appears that data breach and privacy issues will pick up again as hot legislative items during the 2011 legislative session.
House Small Business Committee
The House Small Business Committee will show a major shift in membership when the new Congress convenes in January. During the now-ending Congressional session, the Committee was composed of 17 Democrats, led by Chairwoman Nydia Velázquez (D-NY), and with 12 Republicans, led by Ranking Member Sam Graves (R-MO). Similar to the general House outcome, the Democrats on the committee took a severe loss. Of the 17 Democratic members, 2 did not run for re-election; of the remaining 15 members, only 8 were re-elected. On the Republican side, 1 of the 12 opted to run for governor, while the remaining 11 were all re-elected.
While the Committee has very limited jurisdiction (basically the SBA and its programs), it serves a very important function in highlighting small business issues for referral to other committees of jurisdiction. Under the leadership of Chairwoman Velázquez, the Committee has addressed a wide spectrum of small business issues, ranging from tech to tax, and everything in between. Staff has been especially welcoming to CompTIA in its representation of the small tech entrepreneur.
When Congress reconvenes with its Republican majority, we understand that Ranking Member Sam Graves most likely will assume the role of committee chair. Anticipating this change, we have met with minority staff a number of times this year and have had discussions around the anticipated agenda for the committee under Graves' leadership. We anticipate more oversight hearings, especially for SBA programs and other key issues, such as small business contracting. Consistent with this prediction, we were pleased that Graves sent a letter to SBA Administrator Mills questioning the failure of the SBA to properly convene and staff a task force on small business and cybersecurity. The SBA has missed key legislative deadlines required under law to launch the task force. We view this as a good indication that under his expected leadership, the committee will take firm steps to cause the SBA to carry out its role of serving small business in a timely fashion.
We also understand that Graves is very interested in data and cybersecurity issues affecting small businesses, so, this could lead to a hearing focused on this issue, which again would emphasize the importance of this issue for small businesses. Certainly, CompTIA expects to play an important role in this effort.
So, while the Committee membership and staffs will undergo a major change, we continue to see support for our small business agenda, and we certainly anticipate an excellent working relationship with the incoming majority staff.
Senate Small Business Committee
While the House Small Business Committee membership and personnel will undergo major changes, all of the current members of the Senate Small Business survived Election Day. For the Democrats, this was largely because none were involved in an election. For the Republican members, only three stood for re-election, one was unopposed. Still as a result of Democrats losing six seats in the Senate, there could be a change in the number of Republican and Democratic seats on the committee. Still, we expect Sen. Landrieu (D-La.) will continue as the Chair, and Sen. Snowe (R-Maine), as Ranking Chair; although we do expect the dynamics to change drastically, as a result of the change in House leadership.
During the current Congress, much of the legislation passed out of the House was replaced by legislation passed in the Senate. That is, due to the thin margins required to avoid a filibuster, in order to hold the 60-vote margin, legislation agreed to in the Senate, as a practical matter, trumped provisions passed out of the house. This was true for most legislation. A prime example is the small business lending bill enacted in September where a House bill was essentially replaced in the Senate by a version that was sure to garner 60 votes.
Now, with the split control of the Senate (Democratic) and House (Republican), it is conceivable that we could return to a more robust negotiation between the House and Senate Committees; or the Senate could become a defensive edifice for House proposed legislation. We hope bipartisan negotiation will get a foot hold in the new session but much is left to be determined.
House Ways and Means Committee
The House Ways and Means Committee, as a whole, fared much better than their counterparts on the House Small Business Committee with 21 of the 26 Democratic members returning. Three Ways and Means Democrats lost their seat, and two did not run. On the Republican side, of the 15 members, two did not run, while the remaining 13 all won re-election.
Ways and Means will be at the center of the Republican agenda, as it holds jurisdiction over both taxes (Think: extension of Bush tax cuts) and healthcare (Think: repeal of healthcare reform). The dynamics of the incoming majority and its strategies to accomplish these two priorities are yet to unfold. However, we expect the reality facing Ways and Means (and the House as a whole) will be similar to that faced by the Democratic-run Committee. That is, (1) while the incoming Ways and Means Committee most likely will vote bills out of committee to repeal healthcare and to extend all Bush tax cuts (including high earners), and (2) these bills will certainly be passed by the Republican House, and (3) such legislation would face a potential filibuster in the Senate - if not, a veto by the President.
It is therefore conceivable that the upcoming Congressional session (starting in the Lame Duck session) could be characterized by high-stakes strategies to push an agenda destined to be vetoed by the President. But, backing off from such an approach, there are a number of other smaller steps that could lead to some much-needed bi-partisanship.
Repeal of the new Form 1099 reporting requirement now has the apparent agreement (in principle) of both parties. In his post-election news conference, the President specifically noted that the Form 1099 reporting requirement was an unintended consequence of the health care reform bill. We will be looking to encourage moving beyond bi-partisan support for repeal, to achieve bi-partisan action.
Another provision that we will watch out for in Ways and Means is the proposal that found its way into a House-passed bill last year that would have subjected S corporation distributions to employment taxes. CompTIA is firmly opposed to this. So, while we would not expect this provision to come up in a Republican controlled Ways and Means, we must be cautious. Because of the revenue generated by such a tax, this provision could be a much-needed revenue raiser to pay for things such as an extension of the Bush tax cuts. Not likely, but the symbolic nature of extending all tax cuts could outweigh the inconsistency created by taxing S corporation these distributions.
It is clear that Ways and Means will face a lot of action during the next session. But it is not clear what will or can be accomplished.
Senate Finance Committee
Much like the Senate Small Business Committee, the Senate Finance Committee survived the election with little change. On the Democratic side, Blanche Lincoln (AR) lost her seat, while fellow-Democrat Ron Wyden won handily. On the Republican side, Jim Bunning (KY) retired, but no other members were involved in a race. As in House Ways and Means, CompTIA will be focused on the 1099 repeal and monitoring for revenue raisers such as the S Corp matter
During the prior session, the Senate Finance Committee played an important role, particularly on healthcare reform, in seeking consensus to gain the 60 votes needed to avoid a filibuster; because of this fragile majority, Senate agreement on legislation generally trumped that passed by the House. During this next Congress, it's more likely that the Democratic Senate Finance Committee (and the Democratic Senate) will act as a foil for the House and the Ways and Means Committee. That is, as opposed to crafting legislation and gaining consensus for the 60-vote margin, it is more likely that the Senate will act to deflect legislation passed by the House.
The Bush tax cuts will be a first test. Keep in mind that while the Bush tax cuts are principally thought of as "lower tax rates", the Bush tax cuts also include many other provisions, such as capital gains taxes, estate taxes, child care tax credit and marriage penalty relief - all of which are very popular provisions. How the Committee, and the larger institution, addresses the expiration of the tax cuts is not yet clear. Some compromise could be reached during the Lame Duck session; the issue could be put off entirely until the next session; or some aspects of the package could be addressed and others delayed. It is simply too early to call.
Whatever transpires, we see both the Finance Committee and the entire Senate taking on more of a defensive role against the Republican House, as opposed to the leading role it played in the last session in crafting legislation that could hold together a 60-vote majority.
INNOVATION & COMPETITIVENESS
Reauthorization of the Workforce Investment Act (WIA)
There are two House Committees that are central to the reauthorization of WIA. First is the Appropriations Committee. Current Ranking Member Jerry Lewis (R-Calif.) would like to serve as chairman though he must obtain a waiver from House Republican rules limiting their members to six years as chair or ranking member of a committee. Representative Hal Rogers (R-Ky.), who currently chairs the Homeland Security Appropriations Subcommittee, has made moves to challenge Lewis for the chairmanship; and there is some thought that another dark horse contender could still yet emerge in the contest to lead this powerful committee.
A new chair of the Labor-HHS Appropriations Subcommittee also must be chosen, as the lead Republican stepped down to unsuccessfully run for a Senate seat. The Republican leadership must choose whether to elevate someone currently on the Labor-HHS Subcommittee, such as Dennis Rehberg (R-Mont.) or designate as Labor-HHS Chair a more senior member not currently on the subcommittee. Democrats also must choose a new ranking member on the Labor-HHS Subcommittee, as its current leader, David Obey (D-Wisc.), is retiring. Conventional wisdom is that it will be between Nita Lowey (D-N.Y.) and Rosa DeLauro (D-Conn.).
Another key committee of interest regarding WIA is the House Education and Labor Committee. It is widely expected that current Ranking Member John Kline (R-Minn.) will assume the chairmanship. Republican committee staff had indicated before the election that WIA reauthorization will be one of the two key pieces of legislation considered before the committee this coming year.
It is widely expected that there will be an exceptionally large number of new Republican members on the Education and Labor Committee this coming year, not only because Republicans will have more seats on the committee as the majority party, but also because a number of senior Republican members are expected to leave the committee for other posts.
In the Senate, a bipartisan bill should be introduced early in the new Congress. This bill has been negotiated over the course of the last nine months. In discussions with majority and minority staff, the impression was that there are still some areas of disagreement over the composition of the bill, but that they hope to be able to circulate in the near term a draft among members of the committee for comment and revision. Later a public version of the bill would be introduced.
America Works Act
Despite the House passing the America Works Act just before adjourning for recess in late September, it does not appear likely that the Senate will move this bill separately from the WIA Reauthorization. The Minority Staff were clear that such a bill would have to be seen against the broader context of the WIA reauthorization.
Your Chance to Get Involved
In the wake of last week's pivotal midterm elections, it is vital that CompTIA members be aware of how elections like this one and other events in Washington, D.C., may affect our industry and what they can do about it. Moreover, as reports on the vast changes in Congress suggest, it will be crucial that member companies engage directly with new representatives and senators to educate them on the issues that are of importance to the IT industry.
CompTIA Public Advocacy is working on initiatives that will assist members in learning the issues and getting involved in the advocacy process: CompTIA's Political Action Committee (PAC), establishing a grassroots process, and rolling out events in locations near you.
A political action committee is a political committee established and administered by corporations, labor unions, membership organizations or trade associations. CompTIA's PAC is a nonpartisan PAC that exists to help support IT industry-friendly candidates in the U.S. Congress. The CompTIA PAC is funded by individual, voluntary contributions from CompTIA members and CompTIA employees. It is an essential tool in our effort to advocate effectively on Capitol Hill, as it raises awareness about CompTIA among elected officials. To learn more about the CompTIA PAC, contact Matthew L. Evans.
The most effective efforts to advance policies important to the IT industry are when the tech entrepreneur carries that message directly to political representatives. CompTIA is working to create tools and opportunities for our members that will activate a grassroots wave in support of IT and the tech entrepreneur. In the coming months, we'll launch an advocacy website where members will be able to read and learn about relevant legislation, write their elected officials, and learn how to get involved and become an effective advocate for the IT industry.
Finally, we're launching a series of regional events where member companies will be able to interact with political officials and stakeholders. Keep an eye out for upcoming announcements.
The importance of getting involved in the advocacy process cannot be understated. In Washington, D.C., members of Congress respond to effective lobbying from people who can share with them real-world experiences. CompTIA Public Advocacy staff is committed to carrying those messages, but when CompTIA members get personally engaged it makes the message even more powerful. With the new Congress beginning in January, opportunities abound.
COMPTIA EVENTS & ACTIVITIES
How the Election Impacts the IT Industry
Join CompTIA for a webinar on December 14 from 1:00-2:00 (CT) that will seek to move beyond the statistical score-keeping and address the very real-world consequences of the 2010 election for the IT industry and particularly for small and medium sized technology firms. Register.
To read previous issues of CompTIA Policy Watch click here.
A brave new world in online privacy
Taps Uneasy Alliance with Hackers
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