cnbc--2020-05-27--Schumer, Democrats claim outside Trump advisor helps rig the judicial nomination process

Senate Majority Leader Mitch McConnell , R-Ky. , right , and Senate Minority Leader Charles Schumer , D-N.Y. , make their way to the Senate floor after announcing a two-year deal on the budget earlier in the day on February 7 , 2018 .
Senate Minority Leader Chuck Schumer and several of his fellow Democratic lawmakers are scrutinizing one of President Donald Trump 's outside advisors and his multimillion-dollar `` dark money '' network for its work on the president 's judicial nominations .
Schumer , D-N.Y. , along with Sen. Debbie Stabenow of Michigan , chair of the Democratic @ @ @ @ @ @ @ Sheldon Whitehouse , D-R.I. , published a report on Wednesday that said that Leonard Leo , a conservative activist , and his influential network have rigged the judicial nominating and approval process .
The report said it is the first of what will be several attempts by congressional Democrats to highlight what they argue are examples of `` corruption and conflicts of interests now spreading around the Trump judiciary . ''
The future efforts will include proposed legislation , although the report did n't expand upon what those proposed laws will look like @ @ @ @ @ @ @ one of their goals with future legislation is to focus on revealing anonymous donors that fuel outside groups on both sides of the political spectrum .
`` They all have to go , they all have to disclose , '' he said .
`` This is not just for Republican leaning groups that have to disclose , '' he explained .
The move comes as the campaign to take control of the Senate heats up .
The GOP has a 53-47 majority , but it is defending more seats than the Democratic Party @ @ @ @ @ @ @ Senate approves nominees to the federal judiciary , including the Supreme Court .
Four Republican-held Senate seats — in Arizona , Colorado , North Carolina and Maine — have been deemed toss-ups by political analysts at the Cook Political Report .
The report also comes after Schumer and Whitehouse , along with other senators , co-signed a letter blasting Leo and his aligned group .
Since Trump became president in 2016 , he has turned to Leo to help guide his selections for judicial appointments , including to the Supreme Court .
Leo @ @ @ @ @ @ @ the buildup to their confirmations to the high court .
Leo 's guidance has led to close to 200 Trump judicial nominations being confirmed by the Senate .
The Democrats ' report said Leo and the nonprofit conservative Federalist Society are a key part of an all-out effort to swing the courts toward nominees that are often supported by Senate Republican Majority Leader Mitch McConnell .
Leo was the executive vice president of the group before he created a new group , CRC Advisors , which is dedicated to promoting Trump 's court @ @ @ @ @ @ @ Joe Biden .
Leo is still co-chairman of the Federalist Society , which focuses on conservative and libertarian legal theories .
Democrats argue , however , that it has become a tool for Republicans and is directly aligned with Trump .
`` While the Federalist Society develops and promotes pro-corporate , pro-Republican donor legal theories , it has also become the linchpin of Republican efforts to select and confirm judges , '' the report said .
Leo responded to Schumer and the Democrats ' claims in a text message to CNBC late Tuesday @ @ @ @ @ @ @ focused on responding to the coronavirus pandemic .
`` You know what they say , if you do n't succeed at first , try and try again .
Glad to see Senate Democrats are focused on Covid recovery , particularly those from New York , '' he said .
Citing news reports , including one from 2018 by CNBC , the Democrats ' study breaks down how the Federalist Society is funded by organizations linked to the Koch family and the U.S. Chamber of Commerce .
It goes on to show a web @ @ @ @ @ @ @ Leo that have attempted to have an impact on the nomination process either through public relations campaigns or various forms of lobbying .
These judicial groups are mainly funded by anonymous donors .
The report also highlights the political operatives behind the large-scale judicial campaigns , such as the Judicial Crisis Network , and their ties to Leo .
`` JCN spent $ 7 million opposing President Obama 's Supreme Court nominee Merrick Garland .
It then spent $ 10 million more to support the confirmation of President Trump 's Supreme Court nominee @ @ @ @ @ @ @ ' ) , and pledged another $ 10 million in advertising campaigns to support Brett Kavanaugh 's nomination , '' the report said .

Senate Majority Leader Mitch McConnell, R-Ky., right, and Senate Minority Leader Charles Schumer, D-N.Y., make their way to the Senate floor after announcing a two-year deal on the budget earlier in the day on February 7, 2018.
Senate Minority Leader Chuck Schumer and several of his fellow Democratic lawmakers are scrutinizing one of President Donald Trump's outside advisors and his multimillion-dollar "dark money" network for its work on the president's judicial nominations.
Schumer, D-N.Y., along with Sen. Debbie Stabenow of Michigan, chair of the Democratic Policy and Communications Committee, and Sen. Sheldon Whitehouse, D-R.I., published a report on Wednesday that said that Leonard Leo, a conservative activist, and his influential network have rigged the judicial nominating and approval process.
The report said it is the first of what will be several attempts by congressional Democrats to highlight what they argue are examples of "corruption and conflicts of interests now spreading around the Trump judiciary." The future efforts will include proposed legislation, although the report didn't expand upon what those proposed laws will look like.
Whitehouse told CNBC after publication that one of their goals with future legislation is to focus on revealing anonymous donors that fuel outside groups on both sides of the political spectrum.
"They all have to go, they all have to disclose," he said. "This is not just for Republican leaning groups that have to disclose," he explained.
The move comes as the campaign to take control of the Senate heats up. The GOP has a 53-47 majority, but it is defending more seats than the Democratic Party in this fall's elections. The Senate approves nominees to the federal judiciary, including the Supreme Court. Four Republican-held Senate seats — in Arizona, Colorado, North Carolina and Maine — have been deemed toss-ups by political analysts at the Cook Political Report.
The report also comes after Schumer and Whitehouse, along with other senators, co-signed a letter blasting Leo and his aligned group.
Since Trump became president in 2016, he has turned to Leo to help guide his selections for judicial appointments, including to the Supreme Court. Leo supported Brett Kavanaugh and Neil Gorsuch during the buildup to their confirmations to the high court. Leo's guidance has led to close to 200 Trump judicial nominations being confirmed by the Senate.
The Democrats' report said Leo and the nonprofit conservative Federalist Society are a key part of an all-out effort to swing the courts toward nominees that are often supported by Senate Republican Majority Leader Mitch McConnell. Leo was the executive vice president of the group before he created a new group, CRC Advisors, which is dedicated to promoting Trump's court appointees going into his reelection fight with Joe Biden.
Leo is still co-chairman of the Federalist Society, which focuses on conservative and libertarian legal theories. Democrats argue, however, that it has become a tool for Republicans and is directly aligned with Trump.
"While the Federalist Society develops and promotes pro-corporate, pro-Republican donor legal theories, it has also become the linchpin of Republican efforts to select and confirm judges," the report said.
Leo responded to Schumer and the Democrats' claims in a text message to CNBC, suggesting that they should be more focused on responding to the coronavirus pandemic.
"You know what they say, if you don't succeed at first, try and try again. Glad to see Senate Democrats are focused on Covid recovery, particularly those from New York," he said.
Citing news reports, including one from 2018 by CNBC, the Democrats' study breaks down how the Federalist Society is funded by organizations linked to the Koch family and the U.S. Chamber of Commerce. It goes on to show a web of nonprofits and outside groups linked to Leo that have attempted to have an impact on the nomination process either through public relations campaigns or various forms of lobbying. These judicial groups are mainly funded by anonymous donors.
The report also highlights the political operatives behind the large-scale judicial campaigns, such as the Judicial Crisis Network, and their ties to Leo.
"JCN spent $7 million opposing President Obama's Supreme Court nominee Merrick Garland. It then spent $10 million more to support the confirmation of President Trump's Supreme Court nominee Neil Gorsuch (targeting 'vulnerable Democrat Senators'), and pledged another $10 million in advertising campaigns to support Brett Kavanaugh's nomination," the report said.


cnbc--2020-05-27--Romney tells Trump to stop 'vile' attacks on Joe Scarborough: 'Enough already'

WASHINGTON — Sen. Mitt Romney , R-Utah , on Wednesday demanded that President Donald Trump halt his stream of baseless accusations against MSNBC host Joe Scarborough , calling them `` vile . ''
Romney was referring to a series of recent tweets from Trump , in which the president sought to revive an unfounded theory that the former Republican congressman and host of `` Morning Joe '' was somehow involved in the accidental death of an employee in his congressional office 19 years ago .
According to the coroner , Lori Klausutis , 28 , fainted due to an undiagnosed @ @ @ @ @ @ @ a desk in 2001 .
Scarborough was in Washington at the time of her death , which occurred in Scarborough 's Fort Walton Beach , Florida , district office .
Romney 's willingness to challenge Trump is well documented : During Trump 's impeachment trial in January , Romney was the only Republican senator who voted to convict the president and remove him from office for abusing his power .
Earlier this month , Romney criticized the Trump administration 's response to the coronavirus pandemic , saying it `` was not one that @ @ @ @ @ @ @ moment in American leadership . ''
Romney added that `` when it came to PPE , when it came to testing and just the speed of our response , it looked slow . ''
In response to Romney 's critiques , Trump has repeatedly lambasted the 2012 Republican presidential nominee , calling him `` a loser '' and tweeting insulting videos about him .
Romney is not the only figure on the political right who criticized Trump over his Scarborough attacks .
On Tuesday , The Wall Street Journal 's editorial board called @ @ @ @ @ @ @ '' `` Mr. Trump is debasing his office , and he 's hurting the country in doing so , '' declared the typically conservative-leaning editorial board .
Rep. Adam Kinzinger , R-Ill. , responded to one of Trump 's tweets about Scarborough by writing : `` Completely unfounded conspiracy .
Just stop .
Stop spreading it , stop creating paranoia .
It will destroy us . ''
On Wednesday , Rep. Liz Cheney became the highest-ranking Republican so far to take issue with the tweets , telling reporters at the Capitol , `` @ @ @ @ @ @ @ tweeting about Joe Scarborough . ''
`` We 're in the middle of a pandemic .
He 's the commander in chief of this nation and it 's causing great pain to the family of the young woman who died , '' Cheney continued , `` so I would urge him to stop it . ''
The Wyoming lawmaker serves as the House Republican Conference chair , the third-highest position in House GOP leadership .
Like Romney and Kinzinger , Cheney has also shown a willingness in the past to criticize Trump when @ @ @ @ @ @ @ accusations against Scarborough are not new .
Trump is the latest in a long line of both left-wing and right-wing conspiracy theorists who have disagreed with Scarborough 's politics in the past two decades and sought to damage the former GOP lawmaker by suggesting he had something to do with the tragedy .
That said , the added reach of Trump 's presidential bully pulpit combined with his suggestions that law enforcement authorities investigate Scarborough have effectively resurfaced the conspiracy theory , which until now had largely been relegated to the dustbin of @ @ @

WASHINGTON — Sen. Mitt Romney, R-Utah, on Wednesday demanded that President Donald Trump halt his stream of baseless accusations against MSNBC host Joe Scarborough, calling them "vile."
"Enough already," Romney wrote.
ROMNEY TWEET
Romney was referring to a series of recent tweets from Trump, in which the president sought to revive an unfounded theory that the former Republican congressman and host of "Morning Joe" was somehow involved in the accidental death of an employee in his congressional office 19 years ago.
According to the coroner, Lori Klausutis, 28, fainted due to an undiagnosed heart condition and hit her head on a desk in 2001. Scarborough was in Washington at the time of her death, which occurred in Scarborough's Fort Walton Beach, Florida, district office.
Romney's willingness to challenge Trump is well documented: During Trump's impeachment trial in January, Romney was the only Republican senator who voted to convict the president and remove him from office for abusing his power.
Earlier this month, Romney criticized the Trump administration's response to the coronavirus pandemic, saying it "was not one that will stand out as being a great moment in American leadership." Romney added that "when it came to PPE, when it came to testing and just the speed of our response, it looked slow."
In response to Romney's critiques, Trump has repeatedly lambasted the 2012 Republican presidential nominee, calling him "a loser" and tweeting insulting videos about him.
Romney is not the only figure on the political right who criticized Trump over his Scarborough attacks. On Tuesday, The Wall Street Journal's editorial board called the Trump tweets "a smear."
"Mr. Trump is debasing his office, and he's hurting the country in doing so," declared the typically conservative-leaning editorial board.
Rep. Adam Kinzinger, R-Ill., responded to one of Trump's tweets about Scarborough by writing: "Completely unfounded conspiracy. Just stop. Stop spreading it, stop creating paranoia. It will destroy us."
On Wednesday, Rep. Liz Cheney became the highest-ranking Republican so far to take issue with the tweets, telling reporters at the Capitol, "I do think the president should stop tweeting about Joe Scarborough."
"We're in the middle of a pandemic. He's the commander in chief of this nation and it's causing great pain to the family of the young woman who died," Cheney continued, "so I would urge him to stop it."
The Wyoming lawmaker serves as the House Republican Conference chair, the third-highest position in House GOP leadership. Like Romney and Kinzinger, Cheney has also shown a willingness in the past to criticize Trump when other Republicans remain silent.
These false accusations against Scarborough are not new. Trump is the latest in a long line of both left-wing and right-wing conspiracy theorists who have disagreed with Scarborough's politics in the past two decades and sought to damage the former GOP lawmaker by suggesting he had something to do with the tragedy.
Trump tweet
That said, the added reach of Trump's presidential bully pulpit combined with his suggestions that law enforcement authorities investigate Scarborough have effectively resurfaced the conspiracy theory, which until now had largely been relegated to the dustbin of the internet.


cnbc--2020-05-27--Democrats want Mnuchin to explain why bailed-out airlines are cutting workers' hours

House Democrats want Treasury Secretary Steven Mnuchin to explain why airlines are getting away with cutting workers ' hours after they received portions of $ 25 billion in government coronavirus relief funds aimed at maintaining worker payroll .
The lawmakers also want Mnuchin to explain whether he told the airlines they were permitted to cut the hours .
Airlines including Delta , JetBlue and United have announced or already cut the schedules of their hourly workers to reduce costs after air travel demand fell to the lowest in decades .
That 's despite having accepted government aid as part of @ @ @ @ @ @ @ the condition they wo n't lay off or cut worker pay rates through Sept. 30 .
`` United , Delta , and JetBlue airlines have all unilaterally cut workers hours — in some cases significantly decreasing these employees ' pay and benefits , '' Reps. Jan Schakowsky and Jesus Garcia of Illinois and Katie Porter of California wrote in a letter to Treasury obtained by CNBC that they delivered Tuesday .
`` The creative position held by these airlines is that an hours cut is somehow unrelated to compensation , which is protected @ @ @ @ @ @ @ cuts imposed by these carriers have made some workers eligible for unemployment assistance — a circumstance the legislation was explicitly designed to prevent .
These carriers are very clearly out of compliance with the letter and spirit of the law . ''
The House lawmakers in their letter pushed Mnuchin to release guidelines clarifying that reducing hours would be in violation of the CARES Act .
They also want to know whether he or other members of the department had any prior communication with airline carriers about whether it would be acceptable for @ @ @ @ @ @ @ Please disclose whether you or any other Treasury officials provided carriers with guidance that cutting worker hours would be allowable under the terms of the CARES Act , '' they wrote .
`` If so , which carriers did you and your team consult with and what guidance did you provide ? ''
The letter follows a similar letter from Sens .
Charles Schumer , D-N.Y. , Maria Cantwell , D-Wash. , and Sherrod Brown , D-Ohio to Mnuchin earlier this month .
And last week , 13 Senate Democrats wrote to the @ @ @ @ @ @ @ : `` When it comes down to what 's in an employee 's paycheck , reducing hours and cutting pay have the same effect : less money for workers to take care of themselves and their families . ''
New York-based JetBlue said it complies with the terms of the federal aid .
`` In full compliance with the CARES Act requirements , we put in place a variety of programs with an emphasis on voluntary time off and unpaid leave programs , '' it said in a statement .
`` Given that @ @ @ @ @ @ @ suspended and are significantly reduced in others , there are quite literally no hours for our crewmembers to work in many cases . ''
Delta said its `` work schedule reductions , which comply with the CARES Act , ultimately protect jobs . ''
Delta has reduced nonflight attendant and pilot work schedules , such as ground workers , by 25 % .
Those reduced schedules are set to continue for several months .
`` As I mentioned during our virtual town hall last week , given the substantially reduced current demand for @ @ @ @ @ @ @ ground-based hourly and merit employees will need to be extended through September , '' Delta CEO Ed Bastian said in a staff note Thursday , which was seen by CNBC .
`` This is consistent with the reduced flying schedule and hours for our flight crews . ''
Airlines have urged employees to take voluntary partially paid or unpaid leaves to help the airline reduce costs .
United said that under the CARES Act any employee furloughs are voluntary .
`` We are taking proactive , cost-cutting measures to offset an unprecedented drop @ @ @ @ @ @ @ achieve our overall goal to preserve as much financial flexibility now so we can not only survive this crisis , but thrive once it is behind us , '' United said in a statement .
The Chicago-based carrier earlier this month backed away from some mandatory schedule changes after an outcry and lawsuit from the union that represents its fleet and customer service workers .
Democrats , with the urging of unions , pushed to give airlines financial support in hopes of supporting an industry that employs close to 750,000 .
Providing federal @ @ @ @ @ @ @ politically thorny issue .
Lawmakers were criticized for granting airlines similar relief after the Sept. 11 .
2001 , attacks , only to leave some workers holding the bag .
Some of the airlines that took that government funds in the wake of the attacks , including United Airlines , ultimately filed for bankruptcy .
As part of United Airlines bankruptcy , it terminated four pension plans , which were then underfunded by more than $ 10 billion .
Meantime , in the past five years , the country 's largest U.S. carriers @ @ @ @ @ @ @ United — have collectively spent roughly $ 39 billion buying back their stock , according to a tally from S & P Dow Jones Indices .
`` The financial outlook is dire for the airline industry , which is why Congress supported U.S. commercial aviation in recent relief packages , '' the lawmakers wrote Tuesday .
`` However , our intent has always been to protect airline workers ( as the title of this section of the CARES Act makes clear ) , not corporate salaries or shareholders .
The need for protections @ @ @ @ @ @ @ the past several years as the commercial aviation industry spent record profits on stock buybacks , which overwhelmingly benefit institutional investors and individuals with stock options . ''
The lawmakers also took aim at Mnuchin for not helping 350 workers at Miami Air , a charter air company that filed for bankruptcy in March and later announced plans to liquidate .
`` Company executives were directly in touch with the Treasury to secure payroll assistance , to no avail , '' they wrote .

House Democrats want Treasury Secretary Steven Mnuchin to explain why airlines are getting away with cutting workers' hours after they received portions of $25 billion in government coronavirus relief funds aimed at maintaining worker payroll.
The lawmakers also want Mnuchin to explain whether he told the airlines they were permitted to cut the hours.
Airlines including Delta , JetBlue and United have announced or already cut the schedules of their hourly workers to reduce costs after air travel demand fell to the lowest in decades. That's despite having accepted government aid as part of the $2.2 trillion CARES Act on the condition they won't lay off or cut worker pay rates through Sept. 30.
"United, Delta, and JetBlue airlines have all unilaterally cut workers hours — in some cases significantly decreasing these employees' pay and benefits," Reps. Jan Schakowsky and Jesus Garcia of Illinois and Katie Porter of California wrote in a letter to Treasury obtained by CNBC that they delivered Tuesday.
"The creative position held by these airlines is that an hours cut is somehow unrelated to compensation, which is protected under the CARES Act. The hour cuts imposed by these carriers have made some workers eligible for unemployment assistance — a circumstance the legislation was explicitly designed to prevent. These carriers are very clearly out of compliance with the letter and spirit of the law."
The House lawmakers in their letter pushed Mnuchin to release guidelines clarifying that reducing hours would be in violation of the CARES Act. They also want to know whether he or other members of the department had any prior communication with airline carriers about whether it would be acceptable for them to cut worker hours.
"Please disclose whether you or any other Treasury officials provided carriers with guidance that cutting worker hours would be allowable under the terms of the CARES Act," they wrote.
"If so, which carriers did you and your team consult with and what guidance did you provide?"
The letter follows a similar letter from Sens. Charles Schumer, D-N.Y., Maria Cantwell, D-Wash., and Sherrod Brown, D-Ohio to Mnuchin earlier this month. And last week, 13 Senate Democrats wrote to the CEOs of Delta and JetBlue, saying: "When it comes down to what's in an employee's paycheck, reducing hours and cutting pay have the same effect: less money for workers to take care of themselves and their families."
New York-based JetBlue said it complies with the terms of the federal aid.
"In full compliance with the CARES Act requirements, we put in place a variety of programs with an emphasis on voluntary time off and unpaid leave programs," it said in a statement. "Given that our flights in many cities are completely suspended and are significantly reduced in others, there are quite literally no hours for our crewmembers to work in many cases."
Delta said its "work schedule reductions, which comply with the CARES Act, ultimately protect jobs."
Delta has reduced nonflight attendant and pilot work schedules, such as ground workers, by 25%. Those reduced schedules are set to continue for several months.
"As I mentioned during our virtual town hall last week, given the substantially reduced current demand for our product, the schedule reduction for ground-based hourly and merit employees will need to be extended through September," Delta CEO Ed Bastian said in a staff note Thursday, which was seen by CNBC. "This is consistent with the reduced flying schedule and hours for our flight crews."
Airlines have urged employees to take voluntary partially paid or unpaid leaves to help the airline reduce costs.
United said that under the CARES Act any employee furloughs are voluntary.
"We are taking proactive, cost-cutting measures to offset an unprecedented drop in travel demand and to help us achieve our overall goal to preserve as much financial flexibility now so we can not only survive this crisis, but thrive once it is behind us," United said in a statement.
The Chicago-based carrier earlier this month backed away from some mandatory schedule changes after an outcry and lawsuit from the union that represents its fleet and customer service workers.
Democrats, with the urging of unions, pushed to give airlines financial support in hopes of supporting an industry that employs close to 750,000. Providing federal grants to protect workers was a particularly politically thorny issue. Lawmakers were criticized for granting airlines similar relief after the Sept. 11. 2001, attacks, only to leave some workers holding the bag.
Some of the airlines that took that government funds in the wake of the attacks, including United Airlines, ultimately filed for bankruptcy. As part of United Airlines bankruptcy, it terminated four pension plans, which were then underfunded by more than $10 billion.
Meantime, in the past five years, the country's largest U.S. carriers — Delta, American, Southwest and United — have collectively spent roughly $39 billion buying back their stock, according to a tally from S&P Dow Jones Indices.
"The financial outlook is dire for the airline industry, which is why Congress supported U.S. commercial aviation in recent relief packages," the lawmakers wrote Tuesday.
"However, our intent has always been to protect airline workers (as the title of this section of the CARES Act makes clear), not corporate salaries or shareholders. The need for protections like these has been made clear over the past several years as the commercial aviation industry spent record profits on stock buybacks, which overwhelmingly benefit institutional investors and individuals with stock options."
The lawmakers also took aim at Mnuchin for not helping 350 workers at Miami Air, a charter air company that filed for bankruptcy in March and later announced plans to liquidate.
"Company executives were directly in touch with the Treasury to secure payroll assistance, to no avail," they wrote.


cnbc--2020-05-27--Op-ed: Digital taxes are an even bigger threat to the US economy during the pandemic

Much of the recent trade discussion has focused on how the coronavirus has increased tension between the United States and China , energized efforts to localize supply chains , and spawned countless export control measures .
But the coronavirus has also contributed to another disturbing trend – momentum for digital service taxes in countries around the world .
The United States is engaged in bilateral trade negotiations with many of the key culprits , and must condition outcomes on clear commitments to refrain from adopting unilateral and discriminatory tax measures that target America 's most innovative companies .
Digital services @ @ @ @ @ @ @ .
France , a primary proponent , has been working on its policy for years and encouraging its European neighbors to follow suit .
France claims the tax is necessary to address the under-taxation of digital companies , but the measure 's design and comments by local politicians suggest a more discriminatory intent .
Indeed , the U.S. Trade Representative 's Section 301 investigation into the French measure reveals that policymakers carefully calibrated it to squeeze as much revenue from American companies as possible while exonerating local competitors .
And many French politicians @ @ @ @ @ @ @ true purpose , simply calling the measure the `` GAFA '' tax , shorthand for Google , Amazon , Facebook and Apple .
Unfortunately , the pressure to fund coronavirus-related fiscal stimulus has helped turn a largely European problem into a global one .
In recent weeks , India and Indonesia adopted new digital service taxes .
Kenya continued its consideration of a similar policy .
Brazil and Chile , among others , have openly debated the merits of taxing big tech to fund their economic stimulus .
The European Commission itself is @ @ @ @ @ @ @ should be a core part of the continent 's `` recovery '' strategy .
And , as for France , Finance Minister Bruno Le Maire recently declared that `` never has a digital tax been more legitimate or more necessary . ''
Digital tax policies have always posed a threat to the U.S. economy and tax base , but this threat is exacerbated by the coronavirus .
Increasing taxes on our companies will make our own economic recovery more difficult , and looting our tax base will make an already troubling fiscal situation @ @ @ @ @ @ @ to address this problem through multilateral negotiations and trade enforcement investigations , but as more discriminatory taxes appear , new incentives appear needed .
Fortunately , the United States is actively negotiating with the European Union , the United Kingdom , Kenya , India , and Brazil – all of whom are considering digital services taxes and have much to gain from a U.S. deal .

Much of the recent trade discussion has focused on how the coronavirus has increased tension between the United States and China, energized efforts to localize supply chains, and spawned countless export control measures. But the coronavirus has also contributed to another disturbing trend – momentum for digital service taxes in countries around the world.
The United States is engaged in bilateral trade negotiations with many of the key culprits, and must condition outcomes on clear commitments to refrain from adopting unilateral and discriminatory tax measures that target America's most innovative companies.
Digital services taxes are nothing new, of course. France, a primary proponent, has been working on its policy for years and encouraging its European neighbors to follow suit. France claims the tax is necessary to address the under-taxation of digital companies, but the measure's design and comments by local politicians suggest a more discriminatory intent.
Indeed, the U.S. Trade Representative's Section 301 investigation into the French measure reveals that policymakers carefully calibrated it to squeeze as much revenue from American companies as possible while exonerating local competitors. And many French politicians did not even try to hide the true purpose, simply calling the measure the "GAFA" tax, shorthand for Google , Amazon , Facebook and Apple .
Unfortunately, the pressure to fund coronavirus-related fiscal stimulus has helped turn a largely European problem into a global one. In recent weeks, India and Indonesia adopted new digital service taxes. Kenya continued its consideration of a similar policy. Brazil and Chile, among others, have openly debated the merits of taxing big tech to fund their economic stimulus. The European Commission itself is reportedly considering whether taxing American tech companies should be a core part of the continent's "recovery" strategy. And, as for France, Finance Minister Bruno Le Maire recently declared that "never has a digital tax been more legitimate or more necessary."
Digital tax policies have always posed a threat to the U.S. economy and tax base, but this threat is exacerbated by the coronavirus. Increasing taxes on our companies will make our own economic recovery more difficult, and looting our tax base will make an already troubling fiscal situation worse.
The United States has sought to address this problem through multilateral negotiations and trade enforcement investigations, but as more discriminatory taxes appear, new incentives appear needed. Fortunately, the United States is actively negotiating with the European Union, the United Kingdom, Kenya, India, and Brazil – all of whom are considering digital services taxes and have much to gain from a U.S. deal.


cnbc--2020-05-27--Congress will 'probably' have to pass another coronavirus stimulus bill, Mitch McConnell says

Congress will `` probably '' have to pass more legislation to mitigate the damage from the coronavirus pandemic , Senate Majority Leader Mitch McConnell said Tuesday .
The Kentucky Republican said a measure to lift the U.S. economy would have a more narrow scope than the $ 3 trillion package House Democrats approved earlier this month .
He said states ' progress in restarting their economies in the coming weeks will help to inform what Congress does .
McConnell noted that `` we need to make sure we have unemployment insurance properly funded for as long as we need , @ @ @ @ @ @ @ lose paychecks .
`` So , in the next few weeks , we 'll determine whether there is yet another bill , '' he told reporters Tuesday in his home state .
Congress has passed four bills to respond to the crisis , most recently approving a plan to replenish a small business aid program about a month ago .
Many lawmakers and Federal Reserve Chairman Jerome Powell have argued Washington should take more steps to jolt the economy as the unemployment rate stood at 14.7 % in April and pockets of the @ @ @ @ @ @ @ health .
While Democrats have pushed for more legislation for weeks , the GOP has started to warm to another round of stimulus in recent days .
President Donald Trump and his top advisors signaled their support for another rescue bill last week .
The president mentioned the possibility of a second direct payment to individuals — which McConnell did not address Tuesday .
The Senate Republican leader again insisted he would push for liability protections for doctors and businesses as the economy reopened .
Democrats have been uneasy about creating shields from @ @ @ @ @ @ @ want additional relief for state and local governments to be tailored only to increased expenses and revenue lost due to the coronavirus outbreak .
Democrats included nearly $ 1 trillion for cash-strapped states and municipalities in their bill as leaders from both parties ask for more money .
It is unclear for how long and at what level McConnell would want to fund federal unemployment insurance benefits .
Last week , the senator said the next congressional bill would not extend the $ 600 per week sum the U.S. government added to what @ @ @ @ @ @ @ extra federal benefit is set to expire at the end of July .
The Democratic bill passed earlier this month would extend it through January .

Congress will "probably" have to pass more legislation to mitigate the damage from the coronavirus pandemic, Senate Majority Leader Mitch McConnell said Tuesday.
The Kentucky Republican said a measure to lift the U.S. economy would have a more narrow scope than the $3 trillion package House Democrats approved earlier this month. He said states' progress in restarting their economies in the coming weeks will help to inform what Congress does. McConnell noted that "we need to make sure we have unemployment insurance properly funded for as long as we need," as tens of millions of people lose paychecks.
"So, in the next few weeks, we'll determine whether there is yet another bill," he told reporters Tuesday in his home state.
Congress has passed four bills to respond to the crisis, most recently approving a plan to replenish a small business aid program about a month ago. Many lawmakers and Federal Reserve Chairman Jerome Powell have argued Washington should take more steps to jolt the economy as the unemployment rate stood at 14.7% in April and pockets of the country remain under restrictions to protect public health.
While Democrats have pushed for more legislation for weeks, the GOP has started to warm to another round of stimulus in recent days. President Donald Trump and his top advisors signaled their support for another rescue bill last week. The president mentioned the possibility of a second direct payment to individuals — which McConnell did not address Tuesday.
The Senate Republican leader again insisted he would push for liability protections for doctors and businesses as the economy reopened. Democrats have been uneasy about creating shields from lawsuits.
McConnell also said he would want additional relief for state and local governments to be tailored only to increased expenses and revenue lost due to the coronavirus outbreak. Democrats included nearly $1 trillion for cash-strapped states and municipalities in their bill as leaders from both parties ask for more money.
It is unclear for how long and at what level McConnell would want to fund federal unemployment insurance benefits. Last week, the senator said the next congressional bill would not extend the $600 per week sum the U.S. government added to what recipients normally get from states. The extra federal benefit is set to expire at the end of July.
The Democratic bill passed earlier this month would extend it through January.


cnbc--2020-05-28--China approves controversial national security bill for Hong Kong

Red flags fly in front of the Great Hall of the People as the third session of the 13th National People 's Congress ( NPC ) opens on May 22 , 2020 in Beijing , China .
China 's parliament , the National People 's Congress , on Thursday approved the proposal to impose a new national security law for Hong Kong , and paves the way for the legislation to be finalized and implemented in the city .
The NPC voted 2,878 to 1 in favor of the bill , which will pave the way for its Standing Committee @ @ @ @ @ @ @ proceed to working out details of the legislation to be implemented in Hong Kong .
Six abstained from the vote .
Premier Li Keqiang , the country 's second-in-command , said after the vote that the decision to implement the law was `` designed for steady implementation of 'one country , two systems ' and Hong Kong 's long-term prosperity and stability . ''
Hong Kong is a special administrative region of China that is ruled under a `` one country , two systems '' principle , which allows the city some freedoms @ @ @ @ @ @ @ have .
That includes self-governing power , limited election rights , and a largely separate legal and economic framework from mainland China .
Ahead of that decision , protests in Hong Kong reignited .
Large crowds in the Chinese territory were out in force after the legislation was first proposed last Friday at the start of the annual parliamentary meeting .
The U.S. has criticized Beijing 's move and said it undermines the freedoms and autonomy of Hong Kong , a former British colony that returned to Chinese rule in 1997 .
Details @ @ @ @ @ @ @ but it will target secession , subversion of state power , terrorism activities and foreign interference , the Chinese government has said .
The process to enact the law bypasses Hong Kong 's legislature and could take a few months to complete .

MAY 28: Chinese president Xi Jinping listens during the closing session of the National People's Congress, which included a vote on a new draft security bill for Hong Kong, at the Great Hall of the People on May 28, 2020 in Beijing, China. Kevin Frayer | Getty Images
China's parliament, the National People's Congress, on Thursday approved the proposal to impose a new national security law for Hong Kong, and paves the way for the legislation to be finalized and implemented in the city. The NPC voted 2,878 to 1 in favor of the bill, which will pave the way for its Standing Committee — a smaller decision-making body — to proceed to working out details of the legislation to be implemented in Hong Kong. Six abstained from the vote. Premier Li Keqiang, the country's second-in-command, said after the vote that the decision to implement the law was "designed for steady implementation of 'one country, two systems' and Hong Kong's long-term prosperity and stability." Hong Kong is a special administrative region of China that is ruled under a "one country, two systems" principle, which allows the city some freedoms that those on the mainland do not have. That includes self-governing power, limited election rights, and a largely separate legal and economic framework from mainland China.
Chinese President Xi Jinping walks past officials wearing face masks following the coronavirus disease (COVID-19) outbreak as he arrives for the closing session of the National People's Congress (NPC) at the Great Hall of the People in Beijing, China May 28, 2020. Carlos Garcia Rawlins | Reuters
Ahead of that decision, protests in Hong Kong reignited. Large crowds in the Chinese territory were out in force after the legislation was first proposed last Friday at the start of the annual parliamentary meeting. The U.S. has criticized Beijing's move and said it undermines the freedoms and autonomy of Hong Kong, a former British colony that returned to Chinese rule in 1997. Details of the law are still scarce — but it will target secession, subversion of state power, terrorism activities and foreign interference, the Chinese government has said. The process to enact the law bypasses Hong Kong's legislature and could take a few months to complete.
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In response to China's approval of the bill, Hong Kong leader Carrie Lam sought to assure the territory's citizens that their rights and freedoms remained intact. In a statement welcoming Beijing's decision, she said the legislation "aims to prevent, curb and sanction an extremely small minority of criminals who threaten national security, safeguarding the prosperity and stability of Hong Kong and maintaining 'One Country, Two Systems.'" "It will not affect the legitimate rights and freedoms enjoyed by Hong Kong residents. 'One Country, Two Systems' has been Hong Kong's top advantage, and a stable and safe society will provide a favourable business and investment environment," the statement read. China's decision to press ahead with the new legislation — which was widely expected — followed a controversial week that saw protests surge again in Hong Kong after weeks of relative calm as the territory observed social distancing measures during the coronavirus outbreak. On Wednesday, U.S. Secretary of State Mike Pompeo declared that the city was no longer independent from China. In a joint statement on Thursday, the foreign ministers of the U.K., Australia, Canada and the U.S. warned that Beijing's national security law would "dramatically erode Hong Kong's autonomy and the system that made it so prosperous." They said that by imposing the law, China was breaching its international obligations under the Sino-British Joint Declaration — the treaty that established the territory's "one country, two systems" framework. "We are also extremely concerned that this action will exacerbate the existing deep divisions in Hong Kong society; the law does nothing to build mutual understanding and foster reconciliation within Hong Kong," the ministers said. "The world's focus on a global pandemic requires enhanced trust in governments and international cooperation. Beijing's unprecedented move risks having the opposite effect." Last year, proposed changes to law that would have allowed extradition to China sparked widespread protests in Hong Kong. That later morphed into broader pro-democracy demonstrations that swamped the city for much of last year, sending its economy into a recession.
Riot police patrol the streets at the Central district of Hong Kong during demonstrations against the new proposed national security law. Ivan Abreu | Barcroft Media | Getty Images


cnbc--2020-05-28--Beijing approves national security proposal for Hong Kong. Here's what we know so far

China 's parliament approved national security legislation for Hong Kong on Thursday afternoon in Beijing .
While details about the bill remain scarce , the move will bypass Hong Kong 's legislature , prompting concerns over eroding freedoms in the special administrative region .
What is the proposed national security legislation ?
Why is the law sparking protests ?
Beijing has governed Hong Kong under the `` one country , two systems '' principle since the former British colony returned to Chinese rule in 1997 .
Before the transfer of sovereignty , the two sides signed a joint treaty , @ @ @ @ @ @ @ United Nations , to guarantee a high degree of autonomy for Hong Kong , including a separate judiciary system , for 50 years after the handover .
The proposed national security law will bypass the regular lawmaking process in the Hong Kong legislature , raising concerns over whether it is a breach of Hong Kong 's autonomy .
There is fear the national security laws could lead to Chinese intelligence agencies setting up bases in Hong Kong and enforcing law directly .
Critics also say that Beijing may use the law to crack @ @ @ @ @ @ @ .
The Hong Kong Bar Association said there were `` a number of worrying and problematic features '' to the proposed law .
It appears Beijing has no legal power to enact the law , the association added in a statement .
Why is China imposing the law in Hong Kong ?
The Hong Kong legislature is obliged to craft and pass a national security law on its own under Article 23 of the Basic Law , the territory 's mini constitution .
In 2003 , a previous attempt to introduce national security @ @ @ @ @ @ @ mass protests .
A Hong Kong official to China 's National Congress told CNBC on Tuesday that Beijing is imposing the law on Hong Kong as the territory 's legislature has simply failed to do it in the last 23 years since the transfer of sovereignty .
Recent social unrest in Hong Kong also spurred China 's decision to push on national security , he said .
How Beijing will impose the law Passing laws in Hong Kong requires the legislature to debate and vote on the proposed law .
Often , there @ @ @ @ @ @ @ Beijing is likely to simply introduce its national security measures using Article 18 of the Basic Law .
Under that clause , national laws to be applied to Hong Kong if they are under Annex III and related to defense , foreign affairs or `` other matters outside the limits '' of Hong Kong 's autonomy .
When will the law kick in ?
The expected date is not yet known , but it is expected to be implemented in months , after details are drafted and passed by Beijing .
Reuters reported @ @ @ @ @ @ @ enacted ahead of Hong Kong 's legislative elections in September .
This story has been updated to reflect that since the article 's publication , Beijing has approved the national security bill for Hong Kong .

Riot police in Hong Kong round up a group of protesters during the demonstration protesting against a bill that would criminalise insulting the Chinese national anthem, demonstrators marched on the streets and chanted songs and slogans. Willie Siau | SOPA Images | LightRocket via Getty Images
China's parliament approved national security legislation for Hong Kong on Thursday afternoon in Beijing. While details about the bill remain scarce, the move will bypass Hong Kong's legislature, prompting concerns over eroding freedoms in the special administrative region.
What is the proposed national security legislation?
The law is aimed at prohibiting secession, subversion of state power, terrorism activities and foreign interference. Details of the legislation have not been revealed.
Why is the law sparking protests?
Beijing has governed Hong Kong under the "one country, two systems" principle since the former British colony returned to Chinese rule in 1997. Before the transfer of sovereignty, the two sides signed a joint treaty, the Sino-British Joint Declaration registered at the United Nations, to guarantee a high degree of autonomy for Hong Kong, including a separate judiciary system, for 50 years after the handover. The proposed national security law will bypass the regular lawmaking process in the Hong Kong legislature, raising concerns over whether it is a breach of Hong Kong's autonomy. There is fear the national security laws could lead to Chinese intelligence agencies setting up bases in Hong Kong and enforcing law directly.
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Critics also say that Beijing may use the law to crack down on political opposition and free speech. The Hong Kong Bar Association said there were "a number of worrying and problematic features" to the proposed law. It appears Beijing has no legal power to enact the law, the association added in a statement.
Why is China imposing the law in Hong Kong?
The Hong Kong legislature is obliged to craft and pass a national security law on its own under Article 23 of the Basic Law, the territory's mini constitution. In 2003, a previous attempt to introduce national security legislation in Hong Kong was shelved after mass protests. A Hong Kong official to China's National Congress told CNBC on Tuesday that Beijing is imposing the law on Hong Kong as the territory's legislature has simply failed to do it in the last 23 years since the transfer of sovereignty. Recent social unrest in Hong Kong also spurred China's decision to push on national security, he said.
How Beijing will impose the law
Passing laws in Hong Kong requires the legislature to debate and vote on the proposed law. Often, there are public consultations. This time, Beijing is likely to simply introduce its national security measures using Article 18 of the Basic Law. Under that clause, national laws to be applied to Hong Kong if they are under Annex III and related to defense, foreign affairs or "other matters outside the limits" of Hong Kong's autonomy.
When will the law kick in?


cnbc--2020-05-28--Coronavirus fraud: Foreign government wired $317M for millions of N95 masks that didn't exist

In this file photo , face masks are stacked before getting technical information printed on them at a new factory in Mexico City , Thursday , May 21 , 2020 .
Federal authorities busted up a massive coronavirus scheme to sell a foreign government 50 million N95 face masks that did n't actually exist , prosecutors revealed Thursday .
Authorities said that the unidentified government actually wired $ 317 million to a bank to pay for the fictional masks —but the purchase was stopped at the last moment by the U.S. Secret Service before it could be completed .
At @ @ @ @ @ @ @ Penn , has been charged in the alleged fraud , according to the U.S. Attorney 's Office for the Southern District of Georgia .
Penn is accused of criminal attempt and conspiracy by a charging document known as an information .
The charge carries a maximum possible sentence of 20 years in prison .
Criminal informations are typically filed when a defendant in a federal case is cooperating with authorities and has agreed to plead guilty .
The information refers to two other unidentified people who allegedly participated in the scheme .
Prosecutors @ @ @ @ @ @ @ others , tried to swindle the foreign government by offering to sell it 50 million 3M Model 1860 Respirator Masks , `` which he and his associates did not actually possess , '' said U.S. Attorney Bobby Christine .
Christine 's office said that Penn , through his company Spectrum Global Holdings , agreed to act as a middleman in exchange for a small cut of the $ 317 million sales price .
There is a company with that name registered in Norcross , Georgia , which is located 20 miles north of @ @

In this file photo, face masks are stacked before getting technical information printed on them at a factory in Mexico City, May 21, 2020.
Federal authorities busted up a massive coronavirus scheme to sell a foreign government 50 million N95 face masks that didn't actually exist, prosecutors revealed Thursday.
Authorities said that the unidentified government actually wired $317 million to a bank to pay for the fictional masks —but the purchase was stopped at the last moment by the U.S. Secret Service before it could be completed.
At least one person, Georgia resident Paul Penn, has been charged in the alleged fraud, according to the U.S. Attorney's Office for the Southern District of Georgia.
Penn is accused of criminal attempt and conspiracy by a charging document known as an information. The charge carries a maximum possible sentence of 20 years in prison.
Criminal informations are typically filed when a defendant in a federal case is cooperating with authorities and has agreed to plead guilty. The information refers to two other unidentified people who allegedly participated in the scheme.
Prosecutors said that Penn, together with the others, tried to swindle the foreign government by offering to sell it 50 million 3M Model 1860 Respirator Masks, "which he and his associates did not actually possess," said U.S. Attorney Bobby Christine.
Christine's office said that Penn, through his company Spectrum Global Holdings, agreed to act as a middleman in exchange for a small cut of the $317 million sales price. There is a company with that name registered in Norcross, Georgia, which is located 20 miles north of Atlanta.


cnbc--2020-05-28--Trump targets social media companies with executive order after Twitter fact-checks his tweets

U.S. President Donald Trump holds up a front page of the New York Post as he speaks to reporters while signing an executive order on social media companies in the Oval Office of the White House in Washington , U.S. , May 28 , 2020 .
President Donald Trump on Thursday signed an executive order cracking down on `` censorship '' by social media sites , a move widely seen by critics as retaliation against Twitter 's decision to slap fact-checking labels on the president 's tweets .
The executive order targets companies granted liability protection through Section 230 of @ @ @ @ @ @ @ statute , large social media companies can not be sued for much of the content posted by others using their sites .
Without congressional action , however , there are limits to what Trump can do with the executive order .
The president said Thursday that he would indeed pursue legislation in addition to the order .
Attorney General William Barr , who also attended the signing , said the Justice Department would seek to sue social media companies , saying the statute `` has been stretched way beyond its original intention .
@ @ @ @ @ @ @ Communications Commission to set new rules on some websites ' protections under Section 230 .
It would also encourage the Federal Trade Commission to take action against companies that engage in `` deceptive '' acts of communication , and it would form a working group of state attorneys general to review relevant state laws .
Barr earlier this year signaled the department 's intention to look `` critically '' at the law , originally designed to allow growing technology companies protection .
But critics of the law have argued it allowed social media @ @ @ @ @ @ @ unlawful content .
It is unclear , though , on what grounds the Justice Department might sue .
While Barr said that the president 's order does not repeal Section 230 , Trump added shortly after : `` One of the things we may do … is remove or totally change [ Section ] 230 . ''
The executive order came two days after Twitter , for the first time , added warning links to two of Trump 's tweets , inviting readers to `` get the facts . ''
The tweets made @ @ @ @ @ @ @ voting services , an issue Trump has railed against in recent weeks .
The labels , when clicked , led Twitter users to a page describing Trump 's claims as `` unsubstantiated . ''

U.S. President Donald Trump holds up a front page of the New York Post as he speaks to reporters while signing an executive order on social media companies in the Oval Office of the White House in Washington, U.S., May 28, 2020. Jonathan Ernst | REUTERS
President Donald Trump on Thursday signed an executive order cracking down on "censorship" by social media sites, a move widely seen by critics as retaliation against Twitter's decision to slap fact-checking labels on the president's tweets. The executive order targets companies granted liability protection through Section 230 of the Communications Decency Act. Under the statute, large social media companies cannot be sued for much of the content posted by others using their sites. Without congressional action, however, there are limits to what Trump can do with the executive order. The president said Thursday that he would indeed pursue legislation in addition to the order. Attorney General William Barr, who also attended the signing, said the Justice Department would seek to sue social media companies, saying the statute "has been stretched way beyond its original intention."
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The order would push the Federal Communications Commission to set new rules on some websites' protections under Section 230. It would also encourage the Federal Trade Commission to take action against companies that engage in "deceptive" acts of communication, and it would form a working group of state attorneys general to review relevant state laws. Barr earlier this year signaled the department's intention to look "critically" at the law, originally designed to allow growing technology companies protection. But critics of the law have argued it allowed social media firms to turn a blind eye to unlawful content. It is unclear, though, on what grounds the Justice Department might sue. While Barr said that the president's order does not repeal Section 230, Trump added shortly after: "One of the things we may do … is remove or totally change [Section] 230." The executive order came two days after Twitter , for the first time, added warning links to two of Trump's tweets, inviting readers to "get the facts." The tweets made a series of claims about state-led mail-in voting services, an issue Trump has railed against in recent weeks. The labels, when clicked, led Twitter users to a page describing Trump's claims as "unsubstantiated."
Source: Twitter
"Trump falsely claimed that mail-in ballots would lead to 'a Rigged Election.' However, fact-checkers say there is no evidence that mail-in ballots are linked to voter fraud," Twitter's fact-checking page said, citing reporting from CNN, The Washington Post and other news outlets. Trump said Thursday that social media companies selectively choosing who to fact-check is tantamount to "political activism, and it's inappropriate." Twitter on Thursday night called Trump's executive order "a reactionary and politicized approach to a landmark law, saying attempts to erode it "threaten the future of online speech." tweet Facebook issued the following statement Thursday evening: "Facebook is a platform for diverse views. We believe in protecting freedom of expression on our services, while protecting our community from harmful content including content designed to stop voters from exercising their right to vote. Those rules apply to everybody. Repealing or limiting section 230 will have the opposite effect. It will restrict more speech online, not less. By exposing companies to potential liability for everything that billions of people around the world say, this would penalize companies that choose to allow controversial speech and encourage platforms to censor anything that might offend anyone."
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Google also released a statement which said the company had "clear content policies and we enforce them without regard to political viewpoint." "Our platforms have empowered a wide range of people and organizations from across the political spectrum, giving them a voice and new ways to reach their audiences," the statement said. "Undermining Section 230 in this way would hurt America's economy and its global leadership on internet freedom." On Wednesday night, Trump lashed out — on Twitter — accusing the social media giant of "interfering" in the 2020 presidential election and trying to "CENSOR" him. "If that happens, we no longer have our freedom. I will never let it happen!" Trump tweeted Wednesday night. The president had earlier tweeted that "Republicans feel that Social Media Platforms totally silence conservatives voices. We will strongly regulate, or close them down, before we can ever allow this to happen." While Section 230 has critics on both sides of the aisle, including apparent Democratic nominee Joe Biden, who has said he believes Section 230 should be "revoked," the executive order was swiftly panned by House Speaker Nancy Pelosi. "The proliferation of disinformation is extremely dangerous, particularly as our nation faces the deadliest pandemic in history," Pelosi said in a statement. "Clearly and sadly, the President's Executive Order is a desperate distraction from his failure to provide a national testing strategy to defeat COVID-19." Social activists condemned the order as unconstitutional. "Much as he might wish otherwise, Donald Trump is not the president of Twitter," said American Civil Liberties Union senior legislative counsel Kate Ruane after a draft of the executive order was made public earlier Thursday. "This order, if issued, would be a blatant and unconstitutional threat to punish social media companies that displease the president." Still, the order had some supporters, including the Internet Accountability Project, a conservative opponent to Big Tech that is funded, in part, by Oracle. "The social media platforms, regardless of whether or not they are bound by the First Amendment, should be held accountable to their end-users," said Rachel Bovard, senior adviser for Internet Accountability Project.
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"There are many lawmakers looking to recalibrate the law in order to foster the accountability and transparency that achieves that goal. President Trump's Executive Order seeks those same ends." Sen. Josh Hawley, R-Mo, who has introduced legislation tackling section 230, took to Twitter to remind his followers of own battle with Big Tech, though did not address the President's order directly. "Gotta remember that key to #BigTech dominance/monopoly is advertising, and how they have manipulated [section 230] to create behavioral advertising machine," he wrote. Tweet Trump's opponents have long pressured Twitter to take action against his frequent, and frequently criticized, use of the platform. Of the 18,000-plus false or misleading claims Trump has made as president, more than 3,300 were made in tweets, according to The Washington Post. Those calls for action reached a fever pitch this week, as Trump continued making baseless suggestions that MSNBC anchor Joe Scarborough might have been involved in the death in 2001 of his former staffer when he served in Congress. The staffer's widower asked Twitter CEO Jack Dorsey to remove Trump's tweets on the matter. "I'm asking you to intervene in this instance because the President of the United States has taken something that does not belong to him — the memory of my dead wife — and perverted it for perceived political gain," the widower wrote in a letter to Dorsey. Twitter refused to delete Trump's tweets about Scarborough. But Dorsey on Wednesday defended his company's fact-checking labels, saying Twitter will "continue to point out incorrect or disputed information about elections globally."


cnbc--2020-05-28--Op-ed: The coronavirus pandemic should change the way we look at national security

The Covid-19 pandemic is changing how we approach national security .
It is giving tangible form to issues that had been brewing in the emergent digital environment and putting America 's security challenges in urgent relief .
Despite effort and some accomplishment , advancement against new threats has been slow .
This is in part because the effects of a changed world were not immediately visible , and the limitations of our existing approach were not strategically relevant enough to command attention and action .
And , democracies tend to be slow to act short of crisis .
The current @ @ @ @ @ @ @ changed world .
It has pulled the future forward , forcing a new look at national security .
Now , we must adapt how we operate to reflect this reality , and act with urgency .
Here are five things that should change about our approach to national security because of this crisis .
The definition of national security .
Today , national security is disproportionately the purview of the federal government ; military and political threats command most of our resources ; and , defense against physical threats to the homeland and @ @ @ @ @ @ @ National security now must encompass protection from , and response to , influence operations ; rampant cybercrime ; pandemics ; humanitarian crises ; and climate change .
The threat surface and responsibility .
Our private sector is increasingly exposed to actions of adversaries and competitors because in a technical , interconnected world , they are foundational to national strength , they are reachable through cyberspace , and because our laws limit the ability of the federal government to protect them .
More , the private sector is a national-security decisionmaker with technology choices @ @ @ @ @ @ @ 5G and offshore supply chains — that must account for the impact of profit-based decisions on national interests .
Global information sharing and partnerships .
What we needed most with the pandemic was trusted data , willingness and ability to share information before crisis with entities with whom we do n't have relationships , and a baseline to understand change .
The same is true for other global phenomena that manifest slowly and locally but have widespread impact over time .
Even more , we need to exercise not just wiring diagrams and @ @ @ @ @ @ @ planned actions across geographic , hierarchical , and organizational boundaries .
The priorities and craft of intelligence .
No crisis better demonstrated the need for objective truth than the Covid-19 crisis .
That is fundamentally the role of intelligence : to know the truth , to see beyond the horizon , and to allow decisions before events dictate .
It is possible that if the details about the origin of the virus , its spread , and the numbers of affected were known earlier , different life-saving decisions could have been made .
@ @ @ @ @ @ @ its priorities to consider these new threats , develop new collection strategies and collectors , sell out on data-analytic and AI superiority , use abundant unclassified data in its analytic products and anticipatory analyses , and produce more products , at the appropriate classification level , to provide advantage for emergent decision makers .
Commitment to digital and the importance of data superiority .
Resolution of every issue in 2020 and beyond goes to and through data .
So three things need to happen : we need to make our infrastructure digital , @ @ @ @ @ @ @ to do every function from wherever we are located ; and the United States must be the world 's leader in the data science , analysis , and use , according to our values of security , privacy and civil liberty .
The existence of bad actors .
Even though we have all been affected by Covid-19 and our fortunes were tied together , that does n't negate the threat of bad actors .
All the traditional adversaries and competitors are still pursuing their interests at the expense of ours .
Our perennial @ @ @ @ @ @ @ attack vectors are always being used : state-sponsored cyberattacks to obtain advantage in therapies and vaccines ; acceleration in opportunistic cybercrime against unprotected networks ; and influence operations to shape public opinion , whether for fraud or to undermine democracy , are all evidence of that truth .
Each of these create opportunities for leadership , innovation , and partnership that will shape our future — and almost all require technical capability to support .
To address these changes , we need technologies to protect the edge , to allow decision-making and culture-building @ @ @ @ @ @ @ analysis of massive amounts of data that matter , to make disadvantaged populations less disadvantaged , technological solutions to trusted networks and true data , to reimagine government .
Sue Gordon is a CNBC contributor and the former Principal Deputy Director of National Intelligence , where she advised the president on intelligence matters and provided operational leadership of the 17 agencies and organizations of the intelligence community .
She is an active board member , university fellow , and advises private companies in the areas of technology , strategy and leadership .

The Covid-19 pandemic is changing how we approach national security. It is giving tangible form to issues that had been brewing in the emergent digital environment and putting America's security challenges in urgent relief.
Despite effort and some accomplishment, advancement against new threats has been slow. This is in part because the effects of a changed world were not immediately visible, and the limitations of our existing approach were not strategically relevant enough to command attention and action. And, democracies tend to be slow to act short of crisis.
The current pandemic has accelerated our response to this changed world. It has pulled the future forward, forcing a new look at national security. Now, we must adapt how we operate to reflect this reality, and act with urgency.
Here are five things that should change about our approach to national security because of this crisis.
The definition of national security. Today, national security is disproportionately the purview of the federal government; military and political threats command most of our resources; and, defense against physical threats to the homeland and our foreign interests dominate our attention. National security now must encompass protection from, and response to, influence operations; rampant cybercrime; pandemics; humanitarian crises; and climate change.
The threat surface and responsibility. Our private sector is increasingly exposed to actions of adversaries and competitors because in a technical, interconnected world, they are foundational to national strength, they are reachable through cyberspace, and because our laws limit the ability of the federal government to protect them. More, the private sector is a national-security decisionmaker with technology choices and global enterprises — two examples are 5G and offshore supply chains — that must account for the impact of profit-based decisions on national interests.
Global information sharing and partnerships. What we needed most with the pandemic was trusted data, willingness and ability to share information before crisis with entities with whom we don't have relationships, and a baseline to understand change. The same is true for other global phenomena that manifest slowly and locally but have widespread impact over time. Even more, we need to exercise not just wiring diagrams and communications paths, but how we execute planned actions across geographic, hierarchical, and organizational boundaries.
The priorities and craft of intelligence. No crisis better demonstrated the need for objective truth than the Covid-19 crisis. That is fundamentally the role of intelligence: to know the truth, to see beyond the horizon, and to allow decisions before events dictate. It is possible that if the details about the origin of the virus, its spread, and the numbers of affected were known earlier, different life-saving decisions could have been made. The intelligence community needs to look at its priorities to consider these new threats, develop new collection strategies and collectors, sell out on data-analytic and AI superiority, use abundant unclassified data in its analytic products and anticipatory analyses, and produce more products, at the appropriate classification level, to provide advantage for emergent decision makers.
Commitment to digital and the importance of data superiority. Resolution of every issue in 2020 and beyond goes to and through data. So three things need to happen: we need to make our infrastructure digital, and protect it accordingly; be able to do every function from wherever we are located; and the United States must be the world's leader in the data science, analysis, and use, according to our values of security, privacy and civil liberty.
Here's one thing that won't change.
The existence of bad actors. Even though we have all been affected by Covid-19 and our fortunes were tied together, that doesn't negate the threat of bad actors. All the traditional adversaries and competitors are still pursuing their interests at the expense of ours. Our perennial competitors are still advancing, and new attack vectors are always being used: state-sponsored cyberattacks to obtain advantage in therapies and vaccines; acceleration in opportunistic cybercrime against unprotected networks; and influence operations to shape public opinion, whether for fraud or to undermine democracy, are all evidence of that truth.
Each of these create opportunities for leadership, innovation, and partnership that will shape our future — and almost all require technical capability to support.
To address these changes, we need technologies to protect the edge, to allow decision-making and culture-building at distance, to allow collection and analysis of massive amounts of data that matter, to make disadvantaged populations less disadvantaged, technological solutions to trusted networks and true data, to reimagine government.
Sue Gordon is a CNBC contributor and the former Principal Deputy Director of National Intelligence, where she advised the president on intelligence matters and provided operational leadership of the 17 agencies and organizations of the intelligence community. She is an active board member, university fellow, and advises private companies in the areas of technology, strategy and leadership.


cnbc--2020-05-28--Trump meets with attorney general to discuss death of Minnesota black man in police custody

The briefing comes one day after Trump announced that he had ordered an expedited inquiry to be conducted by the Department of Justice and the Federal Bureau of Investigation .
On Wednesday , Trump said the agencies were `` already well into an investigation as to the very sad and tragic death in Minnesota of George Floyd . ''
President Donald Trump was briefed Thursday by Attorney General William Barr on the status of a federal investigation into the death of a black man in Minnesota whose violent arrest at the hands of a white officer has sparked calls for @ @ @ @ @ @ @ Kayleigh McEnany said .
U.S. President Donald Trump , with Attorney General William Barr , speaks in the Oval Office before signing an executive order related to regulating social media on May 28 , 2020 in Washington , DC .
Floyd 's death in police custody in Minneapolis on Monday has so far led to the firing of the four police officers who were involved in his arrest and prompted a wave of protests in the city , the state 's largest .
Tape of the arrest shows Floyd handcuffed and crying out @ @ @ @ @ @ @ white police officer , Derek Chauvin , kneels on his neck .
McEnany told reporters at a press briefing on Thursday that Trump watched the video and was `` very upset by it . ''
`` It was egregious .
Appalling .
Tragic , '' McEnany said .
`` And it prompted him to pick up the phone , or the chief of staff to pick up the phone , and say , 'We need to expedite ' what was already an FBI investigation . ''
David Bowdich , deputy director of the @ @ @ @ @ @ @ , McEnany said .
The Justice Department and the FBI put out a joint statement earlier in the day announcing that the investigation was a `` top priority . ''
`` The federal investigation will determine whether the actions by the involved former Minneapolis Police Department officers violated federal law , '' the statement said .
`` It is a violation of federal law for an individual acting under color of law to willfully deprive another person of any right protected by the Constitution or laws of the United States . ''
Anger @ @ @ @ @ @ @ protests in Minneapolis this week that has led to at least one death , according to the Minneapolis Star Tribune , a local outlet .
Dozens of businesses were looted or torched , the newspaper reported .
Mayor Jacob Frey called in the National Guard to help manage the situation .
Benjamin Crump , an attorney representing Floyd 's family , has urged activists to protest peacefully .
`` We can not sink to the level of our oppressors and endanger each other as we respond to the necessary urge to raise our @ @ @ @ @ @ @ '' Crump wrote in a post Thursday on Twitter .
`` Looting and violence distract from strength of our collective voice . ''

The briefing comes one day after Trump announced that he had ordered an expedited inquiry to be conducted by the Department of Justice and the Federal Bureau of Investigation. On Wednesday, Trump said the agencies were "already well into an investigation as to the very sad and tragic death in Minnesota of George Floyd."
President Donald Trump was briefed Thursday by Attorney General William Barr on the status of a federal investigation into the death of a black man in Minnesota whose violent arrest at the hands of a white officer has sparked calls for criminal charges, White House press secretary Kayleigh McEnany said.
U.S. President Donald Trump, with Attorney General William Barr, speaks in the Oval Office before signing an executive order related to regulating social media on May 28, 2020 in Washington, DC.
Floyd's death in police custody in Minneapolis on Monday has so far led to the firing of the four police officers who were involved in his arrest and prompted a wave of protests in the city, the state's largest. Tape of the arrest shows Floyd handcuffed and crying out that he cannot breathe as a white police officer, Derek Chauvin, kneels on his neck.
McEnany told reporters at a press briefing on Thursday that Trump watched the video and was "very upset by it."
"It was egregious. Appalling. Tragic," McEnany said. "And it prompted him to pick up the phone, or the chief of staff to pick up the phone, and say, 'We need to expedite' what was already an FBI investigation."
David Bowdich, deputy director of the FBI, also participated in the briefing, McEnany said.
The Justice Department and the FBI put out a joint statement earlier in the day announcing that the investigation was a "top priority."
"The federal investigation will determine whether the actions by the involved former Minneapolis Police Department officers violated federal law," the statement said. "It is a violation of federal law for an individual acting under color of law to willfully deprive another person of any right protected by the Constitution or laws of the United States."
Anger over the arrest spawned a wave of protests in Minneapolis this week that has led to at least one death, according to the Minneapolis Star Tribune, a local outlet. Dozens of businesses were looted or torched, the newspaper reported. Mayor Jacob Frey called in the National Guard to help manage the situation.
Benjamin Crump, an attorney representing Floyd's family, has urged activists to protest peacefully.
"We cannot sink to the level of our oppressors and endanger each other as we respond to the necessary urge to raise our voices in unison and in outrage," Crump wrote in a post Thursday on Twitter. "Looting and violence distract from strength of our collective voice."
Crump tweet


cnbc--2020-05-28--House votes to ease restrictions on coronavirus small business loans

U.S. Speaker of the House Nancy Pelosi ( D-CA ) delivers remarks during a weekly news conference on Capitol Hill in Washington , May 28 , 2020 .
The House passed a bill Thursday designed to give small businesses owners more flexibility in how they spend money from a key coronavirus aid program .
The chamber approved the legislation in a nearly unanimous 417-1 vote .
The Senate has put forward a plan similar to the House bill , but has not yet passed it .
Senators will not convene again until next week .
The Paycheck Protection Program , @ @ @ @ @ @ @ $ 2 trillion pandemic rescue package passed in March , includes standards for how companies have to use their loans in order to get them forgiven .
The measure passed Thursday would ease those rules .
• Reduce the share of aid money small business are required to spend on payroll from 75 % to 60 % ( the PPP 's architects aimed to encourage companies to keep workers employed ) • Extend the window businesses have to use the funds from two months to six months • Extend the time recipients have @ @ @ @ @ @ @ that get loan forgiveness defer payroll taxes Democrats and Republicans approved the tweaks to the small business loan program as they struggle to find a consensus on the next phase of relief from the economic devastation wrought by the pandemic .
Democrats want a broad package to give relief to state and local governments , send more direct payments to individuals and extend an enhanced federal unemployment insurance benefit .
As the GOP questions the need to spend more taxpayer money on recovery efforts , it has pushed for liability protections for businesses @ @ @ @ @ @ @ restarts commerce .
Democrats have criticized the potential for a broad shield from lawsuits .

U.S. Speaker of the House Nancy Pelosi (D-CA) delivers remarks during a weekly news conference on Capitol Hill in Washington, May 28, 2020.
The House passed a bill Thursday designed to give small businesses owners more flexibility in how they spend money from a key coronavirus aid program.
The chamber approved the legislation in a nearly unanimous 417-1 vote. The Senate has put forward a plan similar to the House bill, but has not yet passed it. Senators will not convene again until next week.
The Paycheck Protection Program, one of the core parts of the $2 trillion pandemic rescue package passed in March, includes standards for how companies have to use their loans in order to get them forgiven. The measure passed Thursday would ease those rules.
The plan would:
Reduce the share of aid money small business are required to spend on payroll from 75% to 60% (the PPP's architects aimed to encourage companies to keep workers employed)
Extend the window businesses have to use the funds from two months to six months
Push back a June 30 deadline to rehire workers
Extend the time recipients have to repay the loan
Let companies that get loan forgiveness defer payroll taxes
Democrats and Republicans approved the tweaks to the small business loan program as they struggle to find a consensus on the next phase of relief from the economic devastation wrought by the pandemic. Democrats want a broad package to give relief to state and local governments, send more direct payments to individuals and extend an enhanced federal unemployment insurance benefit.
As the GOP questions the need to spend more taxpayer money on recovery efforts, it has pushed for liability protections for businesses and doctors as most of the country restarts commerce. Democrats have criticized the potential for a broad shield from lawsuits.


cnbc--2020-05-28--Trump calls 100,000 U.S. coronavirus death toll 'very sad milestone' on Twitter

A man wearing a face mask walks by a memorial for COVID-19 victims in front of Green-Wood Cemetery in Brooklyn borough of New York , the United States , May 27 , 2020 .
President Donald Trump in a Twitter post on Thursday said that the United States reaching 100,000 deaths from the coronavirus was `` a very sad milestone . ''
The tweet was published a day after that number actually was hit .
`` To all of the families & friends of those who have passed , I want to extend my heartfelt sympathy & love for everything @ @ @ @ @ @ @ represent .
God be with you !
, '' Trump wrote .
By the time Trump posted his tweet on Thursday morning , there were at least 100,442 official Covid-19 deaths reported in the U.S. , with nearly 1.7 million confirmed cases in the country .
The U.S. accounts for more than 28 % of the reported deaths from Covid-19 in the world .
A White House spokesman a day earlier had issued a statement after the 100,000 tally was reached , saying , `` President Trump 's prayers for comfort and strength @ @ @ @ @ @ @ loss of a loved one or friend as a result of this unprecedented plague , and his message to this great Nation remains one of resilience , hope and optimism . ''
`` The American people have always been strong and resilient , and the President is proud of their spirit , courage and determination every single day to defeat this virus , '' the spokesman said .
But Trump did not tweet about or publicly address the grim milestone until Thursday .
On Wednesday , when that threshold was reached , the @ @ @ @ @ @ @ who had called him `` arguably the greatest president in history . '

A man wearing a face mask walks by a memorial for COVID-19 victims in front of Green-Wood Cemetery in Brooklyn borough of New York, the United States, May 27, 2020.
President Donald Trump in a Twitter post on Thursday said that the United States reaching 100,000 deaths from the coronavirus was "a very sad milestone." The tweet was published a day after that number actually was hit.
"To all of the families & friends of those who have passed, I want to extend my heartfelt sympathy & love for everything that these great people stood for & represent. God be with you!," Trump wrote.
Tweet
By the time Trump posted his tweet on Thursday morning, there were at least 100,442 official Covid-19 deaths reported in the U.S., with nearly 1.7 million confirmed cases in the country. The U.S. accounts for more than 28% of the reported deaths from Covid-19 in the world.
A White House spokesman a day earlier had issued a statement after the 100,000 tally was reached, saying, "President Trump's prayers for comfort and strength are with all of those grieving the loss of a loved one or friend as a result of this unprecedented plague, and his message to this great Nation remains one of resilience, hope and optimism."
"The American people have always been strong and resilient, and the President is proud of their spirit, courage and determination every single day to defeat this virus," the spokesman said.
But Trump did not tweet about or publicly address the grim milestone until Thursday.
On Wednesday, when that threshold was reached, the president did retweet a Fox Business host who had called him "arguably the greatest president in history.'


cnbc--2020-05-28--Op-Ed: Antitrust hawks spot new prey through Covid-19 eyes

In this illustration photo , Uber and Grubhub logos are displayed on mobile phone screens in Ankara , Turkey on May 19 , 2020 .
More specifically , the Pandemic Anti-Monopoly Act sets its sights on companies with more than $ 100 million in revenues or market capitalization , and anything involving hedge funds and private equity firms .
How encompassing would this proposed merger ban be ?
Some observers estimate that it would shut down more than 80 % of M & A transactions — overnight .
That 's big .
Huge .
Congressional admonishment of the Uber-GrubHub deal @ @ @ @ @ @ @ of antitrust sentiment among lawmakers .
Selected members of Congress are also rallying behind the Pandemic Anti-Monopoly Act , sweeping legislation that would outlaw most mergers and acquisitions until the COVID-19 pandemic ends — with limited exception for those transactions involving companies that are bankrupt or about to fail .
( How kind : at least the retail industry can die with dignity . )
The antitrust hawks have clearly been circling Big Tech for some .
Heck , executives from Amazon , Facebook , and Google might as well rent second apartments @ @ @ @ @ @ @ the Capitol .
However , a new theme is emerging from the cacophony of would-be antitrust enforcement agents : advancing old agendas under the guise of a new pandemic .
In a letter dated May 20 to the FTC , the senators implored that it is `` particularly troubling '' that this merger is `` being contemplated during a pandemic . ''
As reports heighten about a potential Uber and GrubHub merger , four members of the U.S. Senate are calling on both the Department of Justice and the Federal Trade Commission to @ @ @ @ @ @ @ into the potential combination of two of the three largest food delivery services in the United States .
M & A volume in North America declined roughly 25 % year-over-year in the first quarter , with deal volume nosediving sharply in March as the epidemic gripped New York , our country 's financial capital .
Why the attack ?
The argument is that antitrust agencies — which , like most organizations , are under strict work-from-home orders to support social distancing — are overwhelmed and incapable of keeping pace with filings .
This @ @ @ @ @ @ @ giant corporations and private equity vultures '' to `` gobble up struggling small businesses and increase their power through predatory mergers , '' thereby thwarting competition , reducing innovation , and raising prices , according to a statement by Senator Elizabeth Warren .
Let 's think about this practically .
Are the antitrust regulators truly overwhelmed at this moment ?
M & A volume in North America declined roughly 25 % year-over-year in the first quarter , with deal volume nosediving sharply in March as the epidemic gripped New York , our country @ @ @ @ @ @ @ , deal volume is expected to decline by as much as 50 % year-over-year in the second quarter .
How does this decline compare to the Great Recession ?
Well , from 2007 to 2008 , the total number of M & A transactions in North America eased a mere 15 % .
Even if we were to extend the timeframe from 2007 to 2009 , the aggregate decline in deal volume was roughly 28 % .
Painful at the time ?
Of course .
Compared to today ?
Hmm… Not so much @ @ @ @ @ @ @ Phillips went so far as to appear on CNBC to denounce the Pandemic Anti-Monopoly Act , citing a dramatic decline in M & A and defending his agency 's enforcement efficacy .
To compound matters , the acquirers in some large transactions have been trying to back out of deals signed pre-Covid .
Likewise , the second week of April was the first time since September 2004 that no M & A deal worth more than $ 1 billion was announced globally .
Simply stated , the M & A cycle is at @ @ @ @ @ @ @ regulators are not overwhelmed .
Moreover , the plain truth is that the vast majority of M & A transactions are so small that the antitrust regulators have n't historically even cared about them in the first place .
In 2018 , only 22 % of M & A deals were large enough to land on regulators ' desks for review .
So why outlaw 80 % -plus of transactions ?
Now , let 's also put the Pandemic Anti-Monopoly Act into some political and legal perspective .
The bill is essentially the @ @ @ @ @ @ @ Promotion Act of 2017 ( the `` CPCPA '' bill ) , which sought to make it significantly easier for antitrust authorities to challenge M & A transactions .
Under the CPCPA , as it was originally proposed , the burden of proof in large transactions would have shifted the burden of proof from the government to the merging companies to prove that efficiencies , synergies , and other pro-competitive benefits would outweigh any anti-competitive harms .
Can you imagine any other legal scenario in which the defendant is guilty until proven innocent @ @ @ @ @ @ @ reduced the burden of proof for the government in blocking any merger ( not just large transactions ) that might have `` materially '' lessened competition ( which was defined as `` more than a de minimis amount '' ) rather than `` significantly '' lessened competition .
These revisions would have overturned more than a century of well-settled antitrust law .
Here again , that 's big .
Huge .
The Pandemic Anti-Monopoly Act takes the proposed injustices of the CPCPA a significant step forward by overreaching even further to solve a @ @ @ @ @ @ @ Nobody — not even the regulators themselves — have declared a state of emergency here .
These were bad ideas in 2017 , and they are still bad ideas in 2020 .
Peter Nesvold is a former chief operating officer of Financial Services Investment Banking at Raymond James .
Prior to that he was managing director and head of strategy at Silver Lane Advisors .
For more insight from CNBC contributors , follow @ CNBCopinion on Twitter .

In this illustration photo, Uber and Grubhub logos are displayed on mobile phone screens in Ankara, Turkey on May 19, 2020.
More specifically, the Pandemic Anti-Monopoly Act sets its sights on companies with more than $100 million in revenues or market capitalization, and anything involving hedge funds and private equity firms. How encompassing would this proposed merger ban be? Some observers estimate that it would shut down more than 80% of M&A transactions — overnight. That's big. Huge.
Congressional admonishment of the Uber-GrubHub deal is just the latest in a groundswell of antitrust sentiment among lawmakers. Selected members of Congress are also rallying behind the Pandemic Anti-Monopoly Act, sweeping legislation that would outlaw most mergers and acquisitions until the COVID-19 pandemic ends — with limited exception for those transactions involving companies that are bankrupt or about to fail. (How kind: at least the retail industry can die with dignity.)
The antitrust hawks have clearly been circling Big Tech for some. Heck, executives from Amazon, Facebook, and Google might as well rent second apartments in Georgetown given how often they frequent the Capitol. However, a new theme is emerging from the cacophony of would-be antitrust enforcement agents: advancing old agendas under the guise of a new pandemic.
In a letter dated May 20 to the FTC, the senators implored that it is "particularly troubling" that this merger is "being contemplated during a pandemic."
As reports heighten about a potential Uber and GrubHub merger, four members of the U.S. Senate are calling on both the Department of Justice and the Federal Trade Commission to gear up for a vigorous antitrust investigation into the potential combination of two of the three largest food delivery services in the United States.
M&A volume in North America declined roughly 25% year-over-year in the first quarter, with deal volume nosediving sharply in March as the epidemic gripped New York, our country's financial capital.
Why the attack? The argument is that antitrust agencies — which, like most organizations, are under strict work-from-home orders to support social distancing — are overwhelmed and incapable of keeping pace with filings. This, in turn, might allow "giant corporations and private equity vultures" to "gobble up struggling small businesses and increase their power through predatory mergers," thereby thwarting competition, reducing innovation, and raising prices, according to a statement by Senator Elizabeth Warren.
Let's think about this practically. Are the antitrust regulators truly overwhelmed at this moment? M&A volume in North America declined roughly 25% year-over-year in the first quarter, with deal volume nosediving sharply in March as the epidemic gripped New York, our country's financial capital. By many accounts, deal volume is expected to decline by as much as 50% year-over-year in the second quarter.
How does this decline compare to the Great Recession? Well, from 2007 to 2008, the total number of M&A transactions in North America eased a mere 15%. Even if we were to extend the timeframe from 2007 to 2009, the aggregate decline in deal volume was roughly 28%.
Painful at the time? Of course. Compared to today? Hmm… Not so much. In fact, FTC Commissioner Noah Phillips went so far as to appear on CNBC to denounce the Pandemic Anti-Monopoly Act, citing a dramatic decline in M&A and defending his agency's enforcement efficacy.
To compound matters, the acquirers in some large transactions have been trying to back out of deals signed pre-Covid. Likewise, the second week of April was the first time since September 2004 that no M&A deal worth more than $1 billion was announced globally. Simply stated, the M&A cycle is at its lowest point in 15-plus years and regulators are not overwhelmed.
Moreover, the plain truth is that the vast majority of M&A transactions are so small that the antitrust regulators haven't historically even cared about them in the first place. In 2018, only 22% of M&A deals were large enough to land on regulators' desks for review. So why outlaw 80%-plus of transactions?
Now, let's also put the Pandemic Anti-Monopoly Act into some political and legal perspective. The bill is essentially the reincarnation of the Consolidation Prevention and Competition Promotion Act of 2017 (the "CPCPA" bill), which sought to make it significantly easier for antitrust authorities to challenge M&A transactions.
Under the CPCPA, as it was originally proposed, the burden of proof in large transactions would have shifted the burden of proof from the government to the merging companies to prove that efficiencies, synergies, and other pro-competitive benefits would outweigh any anti-competitive harms. Can you imagine any other legal scenario in which the defendant is guilty until proven innocent?
Similarly, the CPCPA would have reduced the burden of proof for the government in blocking any merger (not just large transactions) that might have "materially" lessened competition (which was defined as "more than a de minimis amount") rather than "significantly" lessened competition. These revisions would have overturned more than a century of well-settled antitrust law. Here again, that's big. Huge.
The Pandemic Anti-Monopoly Act takes the proposed injustices of the CPCPA a significant step forward by overreaching even further to solve a purported problem that doesn't exist. Nobody — not even the regulators themselves — have declared a state of emergency here. These were bad ideas in 2017, and they are still bad ideas in 2020.
Peter Nesvold is a former chief operating officer of Financial Services Investment Banking at Raymond James. Prior to that he was managing director and head of strategy at Silver Lane Advisors.
For more insight from CNBC contributors, follow @CNBCopinion on Twitter.