The fault lines hindering plans for a strong U.S.-EU alliance on tech and trade

It’s a meeting of allies eager to show a united front as a bulwark against China.

U.S. and European Union officials gather in Pittsburgh on Wednesday for the first meeting of the EU-U.S. Trade and Tech Council, a trans-Atlantic effort aimed at tackling joint challenges to maintain the West’s influence in technology and trade.

But diplomatic skirmishes and industrial fault lines between the trading partners threaten to undermine those efforts before the group has made its formal debut.

These differences could compromise the council’s broader goal of determining how the world handles challenges posed by emerging technologies like artificial intelligence. And they do not augur well for President Joe Biden’s attempts to smooth over international alliances after trade wars and tensions set in motion by former President Donald Trump.

Officials from both sides of the Atlantic frame the meeting as a much-needed chance to reset their rocky relationship and tackle technological problems.

“Future conflicts will be fought very differently,” Valdis Dombrovskis, EU’s trade commissioner, said during a speech in Washington before the meeting. “The fight over tech will be the new battleground of geopolitics.”

Those charged with rebuilding the frayed relationship this week include Secretary of State Antony Blinken, Commerce Secretary Gina Raimondo and Trade Representative Katherine Tai on the U.S. side. In addition to Dombrovskis, the European Commission is sending Margrethe Vestager, its competition chief.

The leaders plan to emerge from the inaugural gathering with five areas to focus on, including how to regulate artificial intelligence, tackle export controls and conduct so-called investment screening. Though it is just the first of many expected meetings, it will set the tone for how they cooperate, particularly against the rise of China as a technological superpower.

“The U.S. and EU have aligned interests in ensuring the next generation of technology is based on democratic principles,” said Tyson Barker, head of the technology and global affairs program at the German Council on Foreign Relations, and a former State department official. “The potential is there, but it’s already been bogged down by the tyranny of headlines,” he added.

Practically, the council will need to overcome several other challenges. Here are four key issues that lie ahead:

Will France be a willing partner?

An unrelated flare-up this month between Washington and Paris nearly derailed the council’s start. A new security pact between Australia, the U.K. and the U.S. surprised EU officials and resulted in a Paris-backed company losing out on a multibillion-dollar submarine contract. France lobbied the EU to delay the Pittsburgh meeting and had help from the Germans, who asked Washington to postpone the event during bilateral talks last week.

Though the council is moving forward on schedule, U.S. relations with the French are not back to normal. France successfully pushed to water down the commitments on semiconductors to merely focus on the short-term global shortage of microchips. More in-depth discussions on linking U.S. and EU chipmaking will happen at the next transatlantic gathering planned in spring 2022, most likely somewhere in France, according to two U.S. and EU officials who spoke on the condition of anonymity.

Biden and French President Emmanuel Macron are scheduled to meet in Europe next month to continue smoothing over tensions. But some European leaders feel trust between the longtime allies has been broken, especially after Biden promised a hard reset following the contentious Trump era and Europe’s dissatisfaction with how the withdrawal from Afghanistan was handled.

European officials with hopes of rekindling greater ties with the U.S., though, have downplayed the standoff or sought to move past the issue.

“Especially in times of difficulties, it’s important that we keep our communication channels open; that we discuss how we overcome those difficulties,” Dombrovskis told reporters on Tuesday. “We, in a sense, should not allow those disagreements to cloud our outlook.”

What happens with data privacy?

Privacy and data ownership are at the core of several issues the Trade and Technology Council hopes to tackle. Those include plans to align the U.S. and EU approaches to regulating artificial intelligence and how governments regulate data. Other topics for discussion include how to stop authoritarian governments from gaining access to sensitive technologies and early-stage talks about combating online disinformation, according to draft versions of the meeting’s final communiqué obtained by POLITICO.

Washington and Brussels have been locked in parallel data talks trying to hammer out a successor to the so-called Privacy Shield, an agreement that allowed companies to move people’s personal information from the EU to the U.S. Europe’s highest court invalidated the current deal in July 2020.

It’s the second time the Court of Justice of the European Union has ruled that a transatlantic data deal does not sufficiently protect EU citizens’ information. The failed agreement raises questions about whether Europeans’ privacy rights can be upheld in the U.S., where surveillance laws give agencies wide scope to collect and use people’s information.

Dombrovskis insisted Monday the lack of a transatlantic privacy agreement won’t hamstring the council’s work. Officials on both sides have pledged to press ahead with those talks over the coming months, and a deal may be finalized by the end of the year.

The business sector is nevertheless ramping up the pressure on both sides to iron out a solution — even though the Privacy Shield deal will not be officially on Wednesday’s agenda.

“Data flows are the lifeblood of the modern economy, certainly the lifeblood of the trans-Atlantic economy,” said Marjorie Chorlins, senior vice president for European Affairs at the U.S. Chamber of Commerce. “If we can’t get that right, it’s hard to see how the TTC achieves really meaningful outcomes since so much of what is anticipated to be on the agenda of the TTC has a direct tie to data.”

What happens with China?

China has become a wedge issue between Brussels and Washington ever since Biden took office. That conflict, too, is playing out in the Trade and Tech Council.

The U.S. views the gathering as a prime opportunity to push back against China by forging common tech and trade standards, but the EU has taken pains to play down any sense that Beijing was a target.

EU countries, especially economic powerhouses France and Germany, are hesitant to push back too hard against China because of their significant economic ties to the world’s second-largest economy. Internal wrangling within the 27-country bloc has left Europe divided on how strongly to push back against China’s rise.

“We don’t speak with one voice on that issue,” one EU official said. “We still need to come together on an internal position before we can discuss that in detail.”

The differences about how to approach China were discussed until the final days ahead of the meeting, according to multiple officials directly involved in the discussions. For instance, there was disagreement over whether to include fisheries in the council’s final statement on combating forced labor, with several EU countries pushing back.

China has taken notice of the divisions. On Tuesday, Chinese Foreign Minister Wang Yi suggested Brussels and Beijing should hold their own high-level talks on trade and technology while praising the EU for not embracing the United States’ “new cold war” against China.

What happens with domestic politics?

The U.S. and the EU are still trying to bolster their respective semiconductor manufacturing with subsidies, while debating how to regulate A.I. and digital giants like Facebook. So far, Brussels has taken the lead on such digital rulemaking, but the U.S. Congress is starting to churn through the gears with its proposals.

The lack of clarity on what will happen to domestic rules could hamstring trans-Atlantic efforts to work together on areas like how to tackle online misinformation and what to do about tech’s online dominance.

Without agreements at home, U.S. and EU officials are not in a position to make commitments with each other internationally, and both sides still have differing views on the need for tech regulation. As part of Wednesday’s communiqué, Washington and Brussels will make it clear that the trans-Atlantic talks do not supersede whatever regulation may be passed domestically.

EU officials, for instance, were pleased that language about the need to reduce the harms from artificial intelligence was included in the official statement written for this week’s meeting. But neither Washington nor Brussels has settled on a domestic rulebook for the emerging technology, and it’s unclear to what extent lawmakers will be guided by the council’s discussions.

Barbara Moens contributed to this report.

Jan. 6 committee prepares legal arsenal for likely subpoena fights

The House committee investigating Donald Trump’s role in the Jan. 6 assault on the Capitol is quietly devising plans to pressure hostile witnesses to spill their secrets.

The select panel’s leaders are preparing a narrow set of legal and tactical options as they brace for Trump allies to invoke a wide range of constitutional protections to avoid testifying — from claiming executive privilege to invoking their constitutional right to avoid self-incrimination.

Whether it’s coaxing reluctant witnesses with offers of immunity or bludgeoning them with criminal contempt of Congress, lawmakers say they’ll be ready for whatever obstacles witnesses throw their way. The goal: prevent lengthy court battles that could derail the Jan. 6 investigation the way Trump stymied House and Senate investigators for his entire term.

“We have the full panoply of sanctions available for people who refuse to comply with a congressional subpoena,” said Rep. Jamie Raskin (D-Md.), one of the Jan. 6 Committee’s nine members. “We want the truth to come out, not just about the foot soldiers but about the generals too.”

“We’re very aware that time is of the essence,” added Rep. Zoe Lofgren (D-Calif.), a member of the panel and a veteran of three presidential impeachments.

The Jan. 6 panel signaled its impatience last week when it skipped the usual haggling over voluntary invitations to testify, instead slapping former White House chief of staff Mark Meadows, longtime Trump aide Dan Scavino, former Trump adviser Steve Bannon and national security aide Kash Patel with subpoenas. Only one of the witnesses would comment in public — Patel, who complained about the process.

Based on interviews with seven lawmakers on the Jan. 6 Committee, here are the options the committee is poised to pursue, should these witnesses and others decide to fight back:

1) Civil and Criminal Contempt

Rep. Adam Schiff (D-Calif.) previewed the possibility of holding resistant witnesses in contempt last week, emphasizing that while Congress’ citations often went ignored during the Trump presidency, the Biden Justice Department is less likely to stand in the way. It seems to be the first step the Jan. 6 committee will take if any Trump allies defy subpoenas.

Asked about the possibility of contempt proceedings, Rep. Elaine Luria (D-Va.) told reporters the committee had “discussed all the actions, and we will wait to see how people respond and then decide what the appropriate action is after that.”

2) “Use” Immunity

Congress has been reluctant to offer immunity to witnesses in politically sensitive investigations, fearing that extending even limited protection to potential wrongdoers could derail potential prosecutions. But the Jan. 6 investigation could be an exception.

Multiple members of the panel said that, if necessary to cajole testimony from a reluctant witness, immunity offers were in their arsenal. And they emphasized that their decisions are carefully coordinated with the Justice Department to ensure they don’t disrupt the DOJ’s parallel Jan. 6 investigation.

“There has been ongoing conversation with the Department of Justice as we move forward,” Thompson said.

Congressional investigators could drill down even further on this tactic and offer a specific immunity known as “use” immunity, according to Lofgren. Use immunity permits witnesses to testify about their conduct without risking prosecution for anything they say in the deposition.

Though prosecutors could theoretically still bring charges based on evidence collected separately, the Justice Department has encountered major problems in the past in prosecuting witnesses who testified under such immunity. As such, “use immunity” provides significant protection for witnesses to discuss potentially criminal actions that they or their associates might have committed.

One odd wrinkle could aid the committee’s information gathering. Lofgren noted that anyone pardoned by Trump for conduct connected to the committee’s investigation would be unable to invoke a Fifth Amendment right to decline testimony. It’s unclear which witnesses might fit this description, but Trump issued post-election pardons to a handful of witnesses the Jan. 6 committee has expressed interest in obtaining information about: Bannon, Roger Stone, Michael Flynn, Bernard Kerik and George Papadopoulos.

3) Outside pressure

Members of the Jan. 6 committee say they have one cudgel that wouldn’t require them to go to court at all: fear of the unknown. An untold number of witnesses have come forward to provide voluntary testimony — and their cooperation could spook some ex-Trump hands to work with investigators, rather than let others speak for them.

“At a certain point, these people might begin to wonder what kind of information we already have,” Raskin said. “Nobody should be telling himself that they’re going to sweep the facts under the rug.”

“We have a number of individuals who have reached out to us who are coming in without subpoenas coming in to talk to us,” said Committee Vice Chair Liz Cheney (R-Wyo.). She added that the committee had already met with some witnesses “in some cases.”

The committee has even gleaned useful information from a public tip line, including “valuable leads and additional people,” Luria said.

4) Joe Biden

Perhaps the most important weapon in the Jan. 6 Committee’s arsenal is the current president. Only Biden — the chief executive — can invoke executive privilege to prevent the disclosure of a predecessor’s secrets. And the White House has signaled that Biden is strongly considering waiving the privilege when it comes to material sought by the Jan. 6 panel.

That might also apply to the testimony of former White House aides, some of whom would conceivably have been considered part of Trump’s inner circle.

5) Inherent Contempt

Perhaps the least likely option in the committee’s toolbox is inherent contempt: Congress’ unilateral authority to fine or even jail recalcitrant witnesses.

Though there’s little dispute Congress has this authority, it has languished in disuse for a century. And in recent congressional probes — despite howls from some Democratic factions to dust it off — House Counsel Doug Letter has made clear this option simply would not be feasible, both practically and politically.

Schiff has noted that attempting to wield inherent contempt might still wind up before federal courts, bogging down the process for months and undermining the decision to deploy it in the first place.

But that hasn’t stopped lawmakers from musing about the possibility. House Majority Leader Steny Hoyer, asked Tuesday about the prospect of inherent contempt, said the process “is on the table and will remain on the table.”

Raskin confirmed the committee hasn’t ruled it out.

“There is a growing appetite for using Congress’ own contempt powers,” he said.

Josh Gerstein contributed to this report.

There are just 9 female governors. Both parties want change.

Before she was elected to the Kansas state Senate and before she was elected governor, Laura Kelly needed a nudge to run. Both times she got it from a friend, neighbor and fellow rare woman in politics: Kathleen Sebelius, a former Kansas governor herself and secretary of Health and Human Services in the Obama administration.

It was the whisper network at work. The not-so-secret support system has put thousands of women in power at every level of government, slowly changing the face of a profession once the sole domain of men. But for all its successes — women now account for a third of state lawmakers, more than a quarter of the U.S. House of Representatives and nearly as much of the Senate — women in many states have yet to shatter the highest glass ceiling: the governorships.

Today, just nine women hold the title, with power split among six Democrats and three Republicans. Four of those women took over the role by succession, most recently in New York, where Kathy Hochul became the state’s first female governor in August after Andrew Cuomo resigned over sexual harassment allegations.

Now there’s growing urgency among leaders in both major parties around bolstering the chances of women running in the 2022 gubernatorial elections, when voters in 36 states will pick their next state executive. The nation could be left with fewer female governors if vulnerable Democratic women don’t hang onto their seats and Republicans fail to pick up power in multiple states where women are expected to be on the ballot.

Whatever happens hinges on whether both parties follow through on their pledges to recruit more women to run for statewide office — and whether that whisper network can give the final nudge.

“Women who decide to run have to work very hard at convincing people that they are tough enough to deal with the complexities of the job and balance that out with not appearing to be too aggressive, because that tends to turn people off too,” Kelly, a Democrat, said in an interview. “It’s a real balancing act and not an easy one. You just don’t have a whole lot of people out there who want to put themselves in that position.”

The struggle across parties for women to rise to the top within states speaks to the inherent bias against women that persists in politics. Research shows that women have to be more likeable, raise more money and generally work harder than their male counterparts in order to win. That’s why both the Democratic and Republican parties have vowed to invest more money and resources into supporting women gunning for governor in 2022.

But their strategies differ. Democrats tend to be more explicit with their dollars and messaging about the importance of electing women while Republicans take a more subtle approach that’s still similarly focused on building a pipeline of qualified women holding federal and state-level positions.

Some of the most vulnerable Democratic governors also happen to be women. Kelly is one of them. Republicans have flagged Kansas, where nearly two thirds of voters voted Republican in the 2020 presidential race, as a pickup opportunity and she’s bracing for a bruising reelection fight.

Michigan Gov. Gretchen Whitmer and Maine Gov. Janet Mills also face formidable challengers and tough reelection odds. And Oregon Gov. Kate Brown is term limited, potentially reducing the tally for the Democratic Party by at least one.

That’s why the Democratic Governors Association is pouring more dollars into a fund that supports female Democratic gubernatorial candidates. This year, the Women Governors Fund has a fundraising goal of $5 million — five times what it raised at its inception in 2018 — and will be overseen by Brown and New Mexico Gov. Michelle Lujan Grisham. The two will travel the country and lead fundraisers for the fund.

But the fund has limits. It can only be used to support women who make it out of their primaries, and $5 million doesn’t go very far in the campaign finance world, especially as it gets more expensive to run with every cycle. The cost of the 2018 Oregon governor’s race that Brown won in 2018, for example, exceeded $37 million, approximately double the previous record of $18 million set in 2010 by Democrat John Kitzhaber and Republican Chris Dudley.

“We have several extremely talented, very hardworking female incumbents that we need to reelect,” Brown, who has served as Oregon’s governor since 2015, said in an interview. “I’m hoping that we will be able to increase our numbers.”

Brown, who is the second woman to serve as Oregon’s governor, said she’s had multiple conversations with women mulling runs, like Jennifer McClellan, who lost this year’s Virginia primary to former Gov. Terry McAuliffe, and Nellie Gorbea, who is running for governor in Rhode Island.

When she was a caucus leader in the Oregon Legislature, Brown said, “Women used to say to me, ‘I’m not qualified, I’ve got too much on my plate.’ And men just wake up and run for Congress without any preparedness. I say that to be funny, but there is some level of truth to that.”

There have long been institutional barriers that have held women back in politics. But politicians and strategists contend part of the reason why women remain so underrepresented in governor’s mansions is that they are more likely to see themselves fitting into state or federal legislatures — a job that requires cooperation and consensus — rather than as a top executive acting unilaterally.

A woman, of course, has never been elected president. And that mindset may also be reflected by the paltry number of female Fortune 500 CEOs: Just 8.1 percent, or 41 out of the 500 biggest businesses are run by women, and that’s a record high.

Forty-four women have served as governors in the U.S., according to data from the Center for American Women in Politics at Rutgers University. Thirty were first elected in their own right; three replaced their husbands and 11 became governor by constitutional succession, six of whom then later won full terms. Nineteen states have never had a woman governor.

Many women became governors because of extenuating circumstances rather than outright winning, like Hochul in New York.

There’s also a long history of women stepping into the role to fill in for their deceased husbands. The first woman governor was Nellie Tayloe Ross, a Democrat from Wyoming, who won a special election to replace her husband in 1925. Ross remains the only woman to ever serve as governor of Wyoming.

It wasn’t until 1975 that a woman was elected governor: Ella Grasso, a Democrat from Connecticut.

The record number of women serving simultaneously is nine, and was first achieved in 2004 and again this year. Of the current governors, seven are white women. Neither a Black woman nor a Native American woman has ever been elected governor.

Recently, there’s been an uptick in women being elected to statewide office, which Democratic groups credit to years of work recruiting and supporting women interested in politics. Typically, women are far more likely to run as Democrats than as Republicans.

“It was not just a flash in the pan, we see that as a sea change and a moment we can build upon,” said Jessica Mackler, vice president of federal and gubernatorial campaigns at EMILY’s List, which works to elect women who support abortion rights. EMILY’s List is looking toward 2022 by “continuing to invest in the rising stars that will be the candidates for governor and other offices.”

She added that they’re excited about opportunities in Arizona, a state where multiple women on both sides of the aisle have declared gubernatorial runs, and Georgia, where Stacey Abrams may make a second attempt after losing by 1.4 percentage points in 2018.

Republican operatives say they’re equally serious about recruiting women for office as Democrats. And 2020 was a banner year for the party: Two-thirds of the 27 newly elected female House members were Republicans.

Republican Sarah Huckabee Sanders is widely expected to take the Arkansas governorship next year. And the stakes are high in Arizona, where several Republican women have declared runs, including state Treasurer Kimberly Yee, Secretary of the Arizona Board of Regents Karrin Taylor Robson and former TV anchor Kari Lake. On the Democratic side, Secretary of State Katie Hobbs is mounting her own campaign.

There’s no pot of funds at the Republican Governors Association specifically earmarked for supporting women. But party leaders say they’re committed to building out the bench of female candidates.

The Republican State Leadership Committee, which works to elect Republicans to state offices, is putting a “concentrated effort” to working with caucuses and teams in states to recruit candidates and support their runs, with an emphasis on finding qualified women, said Kamilah Prince, director of recruitment and training for the RSLC. They have also partnered with groups such as the Women’s Public Leadership Network to hold workshops for female politicians to help them through challenges that may hold them back from public office, such as balancing child care needs with their careers.

Fifty-four percent of women candidates supported by the RSLC were successful in 2020. And the group knows that recruiting and training female candidates for down ballot races could lead to more female GOP governors in the future: Ten of 27 current Republican governors previously served as lieutenant governors. Today, there are six female Republican lieutenant governors.

Olivia Perez-Cubas, vice president of communications for GOP group Winning for Women, pointed out that 11 of the 15 seats flipped by Republicans in the House in 2020 were Republican women.

“That’s proof that when we invest in strong, qualified female candidates, they win,” Perez-Cubas said. “As the number of Republican women in both state and federal offices increase, the bench for female governors will inevitably grow.”

Inside Lina Khan’s war on monopolies

In July, the CEO of the biotech giant Illumina flew to D.C., checked into a hotel room off M Street and tried to conduct a routine piece of business: Persuading the Federal Trade Commission to let his company buy a cancer startup.

But nobody from the FTC would meet with him.

In the Obama and Trump eras, a pilgrimage to Washington was a tried-and-true strategy for CEOs seeking to resolve antitrust logjams — often yielding a flurry of meetings between commissioners and companies like Google, T-Mobile and Apple. But as Illumina’s Francis deSouza learned, that was a different FTC.

Under new FTC Chair Lina Khan, the century-old regulatory agency long accustomed to blessing corporate mergers is veering back to its original trustbusting mission and becoming markedly less friendly to the businesses it regulates. The shift has inspired cheers from her fellow progressives while unsettling many GOP lawmakers, the agency’s two Republican commissioners and even some longtime FTC employees, according to interviews with more than 20 FTC employees, commission alumni and people on Capitol Hill.

The 32-year-old law professor’s most prominent target is the tech industry, whose biggest players swelled to behemoth size on the commission’s watch. Nearly a decade after the commission overruled its own attorneys and declined to file an antitrust suit against Google, Khan is trying to prove that the agency is capable of taking on the nation’s wealthiest companies, including in Silicon Valley.

Some executives from other industries, like deSouza, say they’re being caught in the crossfire.

“There is an anti-big-company, anti-tech sentiment,” deSouza said of the FTC’s refusal to meet with him. “We’re the baby in the bathwater.”

Khan: ‘We can deliver’

President Joe Biden’s decision to elevate Khan as the FTC’s chair on June 15 stunned many in D.C. Those included some of the nearly two dozen Republican senators who had voted hours earlier to confirm the outspoken anti-monopolist, thinking she would be just one of the agency’s five commissioners.

The choice elated progressives who say the FTC, an antitrust and consumer agency created during Woodrow Wilson’s administration, has lost its antitrust firepower since the Reagan era.

Khan, a self-described FTC history nerd, has been outspoken in criticizing the agency. For decades, she told Congress this month, commissioners of both parties had pursued a philosophy that “recommended enforcers err on the side of inaction, on the assumption that monopoly power would be disciplined by the free market.”

Those days are over, she said in a memo to her employees last week that laid out her priorities: “American consumers, workers, and honest businesses depend on the Commission to champion a fair and thriving economy for all, and I am confident that we can deliver.” She said her top priority is taking on a massive wave of proposed mergers and other forms of “rampant consolidation.”

The other changes that Khan has pushed target a wide range of corporate behavior, from employee non-compete agreements to warranties that prevent customers from repairing their own electronic devices. Some steps the FTC has approved in 3-2 party-line votes have also enhanced Khan’s own authority. For instance, letting her approve antitrust subpoenas without agreement from the other commissioners.

“With only a few months on the job, Lina Khan has proven she is committed to strengthening competition policy and taking on monopolies,” said Sen. Amy Klobuchar (D-Minn.), who chairs the Senate Judiciary Committee’s antitrust panel. Klobuchar is drafting legislation that could give the FTC more resources to take on anti-competitive behavior.

But GOP critics like Utah Sen. Mike Lee accuse Khan of mounting a “progressive putsch.” Others, including the agency’s two Republican commissioners, say she is risking a repeat of the 1970s when a congressional backlash against alleged FTC overreach hobbled the commission’s authority.

“I am very concerned about giving the agency more power under current leadership,” Republican Commissioner Christine Wilson told the House Judiciary Committee in a hearing Tuesday. Under Khan, she said, “decades of tradition have been thrown out the window to the detriment of our decision making and consumers.”

Facebook and Amazon have demanded — unsuccessfully — that Khan abstain from decisions on their companies, citing her history of work and statements criticizing tech monopolies. The Wall Street Journal has published at least six editorials and four op-eds on Khan since mid-June, including one editorial that dismissed her as “a 32-year-old academic who has no experience running anything.”

“American business should get ready. The Khan FTC is coming after you,” the July opinion piece said.

She is also taking fire from sources closer to home. Even some people in the Biden administration grumbled this month after POLITICO reported that Khan’s newly appointed top antitrust adviser, Shaoul Sussman, had predicted to an Israeli newspaper last spring that Congress will break up Google and Facebook.

Some of the FTC’s 1,100 employees, meanwhile, complain that Khan has largely walled herself from rank-and-file staff and clamped down on decision-making, while limiting what the staff is allowed to say in public.

“She doesn’t care at all what we think,” one longtime staffer said in an interview, requesting anonymity to speak openly about their boss. The person added that during a Zoom meet-and-greet with staff in August, Khan read from a prepared statement and only took one or two questions. “There’s just no respect there.”

The FTC declined a request to interview Khan. The new chair hasn’t done any media interviews — except for a roundtable with reporters in July after her first congressional appearance — nor spoken publicly aside from the commission’s three open meetings so far. After the agency initially said Khan would give her maiden speech at a prominent international antitrust conference that begins Wednesday at Fordham University in New York, the FTC backpedaled and said she would attend the conference to meet with European competition heads but wouldn’t be speaking.

At the same time, Khan has sought to tamp down accusations that she’s politicizing a traditionally bipartisan agency. In her letters to lawmakers in early September, she noted that several of the initiatives she has led, such as investigating and suing big tech platforms like Facebook, “were also priorities identified by the Trump administration.”

Khan’s aim is to revive the FTC’s original role as a zealous enforcer, said Matt Stoller, a friend and former colleague of Khan’s at the antimonopoly group Open Markets. That’s an FTC people haven’t seen in a while, he said.

In the 1980s and ‘90s, FTC chairs “defanged the commission, put economists in charge and made it an agent of monopolists,” said Stoller, now director of research at the anti-monopoly group American Economic Liberties Project. “The Big Tech giants are all creations of those shifts. What Lina is doing is going back to the pre-1980s model.”

‘They want to do everything’

The FTC’s internal changes began soon after Khan moved in.

One was a blanket moratorium on public engagements by FTC employees, causing scheduling headaches for several American Bar Association conferences where the staffers had been slated to speak. That order, still in place three months later, also barred the FTC’s economists from publishing their research.

Such a temporary pause on outside communications isn’t unusual when the FTC gets a new chair, allowing the agency to adjust to the new boss’ priorities. But Khan’s chief of staff, Jen Howard, caused internal grumbling by ordering the employees to withdraw even from already-approved engagements. Her rationale was that the agency is too busy.

Khan has also declined to allow staff attorneys to brief her on cases, instead requiring their division managers to attend — a move that some staffers have perceived as a snub. Khan’s predecessor, Trump-nominated Republican Joe Simons, had a reputation for being especially deferential to the staff, making Khan’s reversals appear particularly abrupt.

And for all the talk of bold action, Khan has been slow to hire her own staff, bringing in only one adviser — Sussman — and a paralegal plus naming new competition and consumer protection chiefs so far. That shortage of trusted employees, coupled with what former colleagues describe as Khan’s eagerness to delve into the weeds of cases, has led to slow action on rulemakings she has identified as a priority for the agency.

“They don’t have enough people to run the trains,” a former FTC employee said. “They want to do everything but don’t have the personnel and they don’t trust anybody else to do anything.”

Change has always come slowly at the FTC, in part because of the staff’s longevity and the high turnover of their politically appointed bosses. Longtime staffers have a term for that, former FTC chief technologist Ashkan Soltani said: They call themselves the “Weebies,” as in “we will be here after you go.”

Soltani recalled that he got significant pushback from the staff in 2014, when he set out to create a dedicated group of technology experts within the agency to consult on cases.

“There is a view among some of the staff at the agency that the commissioners and chief technologists come and go, but the staff has been there throughout,” Soltani said. “And for better or worse they are the ones who make the calls as to what the agency does.”

Some top staffers are actively looking to leave the agency, three former FTC staffers who have heard from job-seeking colleagues said — a trend some at the agency believe is being encouraged by companies under investigation and their law firms. Such a brain drain would worsen FTC’s difficulties: It’s already hemorrhaging money, a problem it blames on its record amounts of litigation, and has about 600 fewer staffers than it did in 1979.

Many complaints about Khan from both inside and outside the building revolve around her age — she’s the youngest chair in the agency’s history — and the fact that she has never practiced law. Her supporters see that as a coded attack on her as a young Asian American woman (Khan is of Pakistani descent).

In fact, she has spent years as an influential figure in the tech antitrust world, starting with a Yale Law Journal article that she wrote as a student in 2017 that spawned a broader rethinking of how regulators should approach dominant tech companies like Amazon.

She later served as a House Judiciary Committee aide during the panel’s 16-month antitrust probe of Amazon, Apple, Google and Facebook. Together with her fellow Columbia Law School professor Tim Wu — now a member of Biden’s National Economic Council — she has led a legal movement that critics label “hipster antitrust,” which argues that the government should challenge corporate power to prevent any company from exerting too much economic or political control.

Khan’s allies say she is facing a backlash from a business establishment that became accustomed to getting its way at the agency.

“The antitrust bar that represents the defense side has always felt an entitlement to the chair of the FTC, whether it’s a Democrat or Republican,” said Ed Mierzwinski, who oversees the nonprofit advocacy group U.S. PIRG’s federal consumer program and has worked with the FTC since the 1980s. “It’s great to see the president pick someone outside Big Law.”

Republicans: FTC abandoning its traditions

Khan is also getting public complaints from Wilson and fellow Republican Commissioner Noah Phillips, who have voted no on nearly all the votes she has led as chair.

Those included the decision in August to file a new antitrust suit against Facebook, replacing a Trump-era lawsuit that a federal judge had tossed out.

Khan and her fellow Democrats have also repealed an Obama-era policy statement that had limited the commission’s ability to challenge anti-competitive behavior. In mid-September, they rescinded Trump-era guidelines that Democrats called overly favorable to so-called vertical mergers, which unite companies in the same industry that aren’t direct competitors. (Think AT&T’s purchase of Time Warner, or Amazon’s proposal to buy MGM Studios.)

Republicans fear that Khan is setting the stage for an even more momentous change — a repudiation of a decades-old antitrust doctrine, beloved by economists and federal judges, that looks to rising consumer prices as the yardstick for whether a market lacks competition.

Khan and other critics of this “consumer welfare” standard call it ill-suited to the online age, when companies like Facebook and Google earn enormous fortunes while offering products for free or low cost. (Amazon, Khan wrote in her 2017 law review article, “has evaded government scrutiny in part through fervently devoting its business strategy and rhetoric to reducing prices for consumers.”) But the doctrine’s defenders say shredding it would allow massive government intervention in the economy.

Beyond losing on all these votes, the FTC Republicans say they’ve started feeling a chill on the information they receive from the agency’s staff.

“We have lost a window into what staff is doing,” Wilson said at a July congressional hearing, accusing Khan of jettisoning “long-standing norms and procedures.”

Wilson went even further in September, complaining on Twitter that she’d been unable to find out what questions the FTC staff had sent to some companies seeking merger approvals. Instead, she said, she asked the companies themselves for copies.

“So much for a new era of transparency at the @FTC,” Wilson tweeted.

Howard, Khan’s chief of staff, responded on Twitter with an eyeroll emoji. But on Tuesday, the FTC announced new merger review procedures that include ensuring that such information requests are “securely accessible to all Commissioners.”

As chair, Khan gets to fill key positions at the agency with staffers who report to her directly. Some chairs have interpreted the agency’s chain of command loosely, allowing any commissioner to request briefings on case updates. Others have banned staff from providing information to the minority party’s commissioners without explicit approval.

In response to Wilson’s complaints, the agency pointed to testimony by Democratic Commissioner Rohit Chopra that he routinely received less information on ongoing cases while he was a minority commissioner during the Trump years than he does now with Democrats in charge.

Course correction?

The FTC’s risk aversion can be traced to a Carter-era dust-up known as “Kidvid,” in which the agency sparked a political backlash by seeking to create rules for television advertising directed at children. Under pressure from advertisers and business groups, Congress significantly curtailed the FTC’s rulemaking authority.

With the agency’s powers and budget slashed, then-President Ronald Reagan’s FTC chair — the first economist, rather than lawyer, to helm the agency — greatly expanded the role of economics in the commission’s work and moved toward industry self-regulation.

To this day, agency staffers and alumni have “deeply, deeply personal” feelings about Kidvid and its aftermath, said Stoller — Khan’s former colleague — which helps explain some of the visceral reactions to the new chair.

“It’s like the FTC was born again at that moment,” Stoller said. “Everything after was moral and correct and everything before was crazy and radical.”

DeSouza, the Illumina CEO, argued that the FTC is overcorrecting to make up for its past mistakes with the tech industry, such as opting not to challenge Facebook’s $1 billion purchase of Instagram in 2012. The FTC’s suit against Facebook now seeks to unwind that deal.

The FTC is also being aggressive in challenging llumina’s attempt to buy Grail, a startup it had spun off in 2015. Illumina controls roughly 70 percent of the market for DNA sequencing technology, while Grail has developed a blood test to detect 50 types of early-stage cancer.

“I’ve been asked whether this is like Facebook-Instagram,” deSouza said in an interview in a conference room at the Jefferson Hotel in Washington. “This isn’t like that.”

The FTC confirmed to POLITICO that deSouza’s hoped-for meetings with the agency never happened, but declined to comment on why.

But Khan’s admirers say the agency is finally back on the right track.

“The FTC is pushing as hard as they can right now, which is what we have needed for so long,” said Charlotte Slaiman, competition policy director for the advocacy group Public Knowledge, during POLITICO’s Tech Summit this month. She added: “I expect great things from the FTC.”

Julia Arciga contributed to this report.

Democrats back off debt fight to stop shutdown

The Senate is expected to vote as early as Wednesday on a revamped spending bill that would forestall a government shutdown at the end of the week after Democrats ditched action on the debt limit amid staunch Republican resistance.

The standalone continuing resolution comes after Senate Republicans refused to fast-track a package on Tuesday that pairs government funding with suspension of the debt ceiling through the midterms next year. Several GOP senators have said they will support a bill to prevent a shutdown and deliver disaster aid to storm-battered states, as long as the package does not lift the cap on how much the government can borrow.

Senate leaders circulated the legislation on Tuesday night, launching an expedited process to check for last-minute opposition. The House could also take up the stopgap spending bill on Wednesday, once it clears the upper chamber. The bill would fund the government through Dec. 3, according to a copy obtained by POLITICO.

If the House and Senate pass the spending bill before midnight on Thursday, Congress would stave off the more immediate crisis of a federal funding lapse. But the move pushes off action to prevent the Treasury Department from defaulting on its loans — a breaking point the nation could reach in less than three weeks.

While Senate Democrats have insisted on a bipartisan vote to avert the debt cliff, they are not willing to risk a government shutdown over the issue.

“I have no doubt that Democrats aren’t going to let the government shut down, and we’re not defaulting on the debt,” said Sen. Tim Kaine (D-Va.). “Even if Republicans want to flirt with it, we don’t.”

The revised funding package does not include extra money for Israel’s Iron Dome missile defense system. Israel has requested, and the Biden administration backs, $1 billion to replenish hundreds of Iron Dome interceptors that knocked down rockets fired from Gaza in a standoff between Israel and Hamas this spring.

House Democrats initially included the Iron Dome funding in the stopgap they passed last week, but the money was stripped amid progressive resistance.

Senate Minority Whip John Thune said Republicans may want to add back the money for Israel’s missile defense system in the short-term funding bill.

“So we’ll see what they agree to and what comes back on the hotline,” he said. “Stripping out the debt ceiling obviously makes this much easier.”

House Appropriations Chair Rosa DeLauro (D-Conn.) said she was waiting on Senate Democratic leaders to decide next steps on avoiding a lapse in federal cash after GOP senators blocked the House-passed continuing resolution and debt limit suspension on Monday night.

“We will see what the Senate does,” DeLauro said after the Senate’s failed vote. “The goal is not to shut the government down. We can’t shut the government down. So we’ll see where the Senate goes and what our direction is from there.”

The last-minute continuing resolution comes as the Biden administration has warned federal agencies to brush up on their contingency plans in case federal funds dry up. The annual appropriations process has taken a backseat this year as Democrats have sought to pass trillions of dollars for policy priorities without GOP votes and both parties push to send a bipartisan infrastructure deal to the president’s desk.

House Democrats have passed a number of their annual spending bills along party lines, but Senate appropriations action has remained at a standstill. Republican appropriators in the upper chamber want to cement a bipartisan agreement on overall funding levels for the military and non-defense programs before marking up individual spending bills.

Any government funding deal for the new fiscal year that begins on Oct. 1 will require bicameral, bipartisan agreement, including support from at least 10 Republican senators.

Before resorting to the easier route for preventing a shutdown this week, Democratic leaders discussed with President Joe Biden their options for raising the debt limit through the same budget reconciliation process they are using to pass a multitrillion-dollar social spending bill without GOP votes.

Top Democrats have insisted, however, that they are not pursuing the budget maneuver to handle the debt limit. Such a process could take weeks, putting Democrats in uncharted territory on a host of procedural issues the Senate parliamentarian would have to weigh.

Jennifer Scholtes and Connor O’Brien contributed to this report.