BIDEN PUSHES CONGRESS ON DATA PRIVACY: The president had a message last night for lawmakers who've struggled for years to pass significant data privacy reforms, especially to protect children: What are you waiting for? "We must hold social media companies accountable for the national experiment they're conducting on our children for profit," Biden told Congress in his first State of the Union address. The speech featured an appearance by Meta whistleblower Frances Haugen, and the president thanked her for the "courage" she showed in leaking reams of company documents, including some suggesting that content on Facebook and Instagram can harm young users' mental health. Biden called on Congress to "strengthen privacy protections, ban targeted advertising to children [and] demand tech companies stop collecting personal data on our children." — Needed boost? Lawmakers in both parties have long sought to pass comprehensive privacy legislation, and have made some limited progress in the past few months on bills to specifically protect children's privacy online. But it's been tough to find consensus — and some Democrats hope Biden's nudge can boost prospects for real progress. Sen. Ed Markey (D-Mass.) — who introduced a bipartisan bill, S. 1628, with Sen. Bill Cassidy (R-La.) to update the 1998 Children's Online Privacy Protection Act — said he was pleased to see Biden "identify specific steps forward to protect the privacy of children and teens in this country." "Congress should recognize the urgency of this moment," Markey said. — R&D, China and chips: As expected, Biden also called on Congress to send to his desk the competitiveness package being negotiated between the House and Senate. "Let's not wait any longer," he told lawmakers. "We used to invest 2 percent of our GDP in research and development. We don't now. China is," Biden said, addressing the long-term decline in federal R&D spending in a departure from his prepared remarks. Though details have yet to be worked out in conference, the competitiveness package is expected to retool America's federal R&D apparatus to focus more on applied technologies in a bid to match China's rapid technological progress. Also as expected, Biden also gave an extended shout-out to Intel for its plans to invest $20 billion in an Ohio chip manufacturing plant. The president said Pat Gelsinger, Intel's CEO, has also pledged to boost that investment to $100 billion — as long as Congress first passes the competitiveness package, which includes $52 billion in subsidies for chipmakers like Intel. "That would be the biggest investment in manufacturing in American history — and all they're waiting for is for you to pass this bill," Biden said. — No love for tech antitrust: While Biden spoke at length about competition in other parts of the economy, he had nothing to say about the bipartisan effort in Congress to rein in the market power of some of the largest tech companies. It's an issue the president has struggled to address, as his administration seeks to tamp down aggressive antitrust legislation targeting Silicon Valley companies in Europe while members of his own party pursue similar bills here at home. FIGHT BREWING OVER CHIP TAX CREDITS IN USICA: As Biden zeroes in on domestic microchip manufacturing, Senate Finance Committee Chair Ron Wyden (D-Ore.) is working to shoehorn another gift to the chip industry — billions of dollars in tax credits for chip manufacturers — into the competitiveness legislation as part of an impending conference on rival House and Senate bills. It's an effort that's piqued the interest of Senate leadership. But it's so far unsupported by top House Democrats, who are wary of adding tax provisions to what's already shaping up to be a "brutal" conference. — Finding a ride for the FABS Act: Chipmakers are already poised to receive $52 billion in research and manufacturing subsidies from Congress, as long as lawmakers can reconcile other provisions between the Senate's U.S. Innovation and Competition Act (S. 1260) and the House's America COMPETES Act (H.R. 4521). But Wyden's bipartisan FABS Act (S. 2107 ) would provide additional — and sustained — support for chipmakers who build chip manufacturing plants (often known as "fabs") in the U.S., granting them a 25 percent tax credit for most of their manufacturing activities and expenses. A November report from the Joint Committee on Taxation estimates the legislation would cost the U.S. Treasury a little more than $10 billion over 10 years. The chip industry has clamored for FABS' passage for months, and last fall Wyden managed to tack it on to the Build Back Better reconciliation framework — a legislative vehicle that, for now at least, seems to be going nowhere. — Pivot to USICA: With BBB stalled, Wyden is now setting his sights on the coming conference on competitiveness legislation. "Sen. Wyden is looking to move it in the first moving package," said Wyden spokesperson Ashley Schapitl, adding that there is a "serious effort" to include the FABS Act as part of the USICA conference. — Democratic leadership divided: The chambers appear to be split on the wisdom of including FABS in negotiations over the competitiveness package. One Senate Democratic aide, who requested anonymity to speak candidly, said Senate leadership expressed openness to the bill's inclusion in discussions with staff. But top House Democrats are opposed. A senior House Democratic aide, who also requested anonymity, said that while House leaders are supportive of the FABS Act (it passed as part of the House's version of BBB), they're worried inserting tax provisions into a conference where none now exist would only further complicate what promises to be a difficult process. "We need to focus on resolving differences between the bills … before we start considering new provisions for the bill," the House aide said.
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