Our prediction that the legislative gears on Capitol Hill would come to a grinding halt is holding firm. As the first quarter comes to a close, there’s really nothing significant moving in Congress, but some effort is being made to get a head start on the debt-ceiling debate. That being said, there are a few measures worth watching, including rail legislation in response to the train derailment in East Palestine, Ohio, and its aftermath; a ban on TikTok moving through various committees; and, given recent events at home and abroad, China.
Red Storm Rising
In one of the few areas in which Congress agrees, the bipartisan consensus on China has been evinced in the creation of the Select Committee on Strategic Competition. The committee, which will focus on economic and security competition between the US and the Chinese Communist Party, held its first hearing in February and is working to build a foundation for future legislative action. Despite the committee’s overall agreement on curbing China’s economic and military power and targeting synthetic-drug manufacturing, fissures still exist on an approach. The Chinese spy-balloon takedown, China’s potential support of Russia in the Russia-Ukraine war, and the origins of COVID-19 have only served to turn up the heat in the halls of Congress.
Supreme Court Spotlight
While Congress ambles, we’re watching a handful of actions across the street in the hallowed chambers of the Supreme Court. While the first months of the current Supreme Court session were quiet, decisions due early this summer are shaping up to have significant economic, regulatory, and political consequences.
Questions … in Question
Arguments on the Biden administration’s student-loan forgiveness plan began at the end of February. Several states, including Missouri and Nebraska, argued that the program exceeds Congressional authority, invoking the Supreme Court’s “major questions” doctrine. The doctrine constrains regulatory action, demanding that agency actions with major economic and political impacts require clear Congressional authorization.
Typically, major-questions cases challenge a federal agency’s unusual or unprecedented attempt to stretch its statutory powers, beyond its normal or routine expertise, to achieve substantial and widespread policy goals.
For example, the alert was sounded when the CDC issued regulations over tenant evictions or when OSHA mandated COVID-19 vaccinations. Actions such as these may suggest political expediency, i.e., jamming “square peg” policy goals into “round hole” statutory provisions to bypass a reluctant Congress. The Supreme Court ultimately struck down these agency mandates.
Student Loans Hang in the Balance
In the student-loan forgiveness case, the Justice Department maintains the student-debt cancellation plan falls squarely within the statute, empowering debt relief in a national emergency. To ensure a borrower’s ability to pay isn’t impaired due to a declared national emergency (in this case the economic challenges of the COVID-19 pandemic), the law allows the waiver or modification of any statute or regulation that applies to student financial-assistance programs. Although the statute has been used to postpone or suspend loan payments, it hasn’t been deployed to cancel student debt.
Some justices, though, question the scope and impact of the program, namely Chief Justice John Roberts and Justices Clarence Thomas and Samuel Alito. The program’s value is also up for debate as some are asking why we might cancel the higher-education debt of students who now make more money in their careers than those who forwent college in an effort to avoid such debt or those who have already paid it off.
The program, estimated to cost the government $430 billion, would potentially serve 43 million borrowers—half of whom have already applied. Beyond that, the Supreme Court decision could have broader implications for the Biden administration’s regulatory strategy over the next 20 months as they aim to fill the policy vacuum created on Capitol Hill.
Denting the Internet’s Shield?
Section 230 of the Communications Decency Act, aimed at promoting internet innovation and growth, has been in effect for three decades and has largely insulated online platforms from liability stemming from third-party content. Under this law, an online platform won’t be deemed the publisher of content posted by users, providing a shield against defamation and other legal claims arising from such content. In addition, even when objectionable or harmful content does slip through a platform’s content moderation or other filtering measures, the platform doesn’t forfeit this liability protection.
In another case now before the Supreme Court, Gonzalez v. Google, an American studying in Paris was killed in an ISIS terrorist attack. The family sued Google (parent company of YouTube), claiming the platform allowed ISIS recruitment and propaganda videos on its site and, based on user data, affirmatively recommended these videos to users vulnerable to radicalization and violence. The lawsuit was brought under the Anti-Terrorism Act, asserting that Google effectively aided and abetted terrorism.
The Supreme Court will consider whether Section 230’s statutory liability protections extend to the content that the platforms’ algorithm recommends to users. A decision against social media and other digital platforms could compromise an important user-engagement tool and impact digital-advertising revenues.
We wouldn’t be surprised if the Supreme Court struggles with the outcome, leading to a fragmented decision and multiple opinions. The court’s conservative members have questioned the reach of Section 230 in other unrelated cases.
Advocates for a more sweeping interpretation of Section 230, however, suggest that a ruling against Google would expose platforms to liability for any organizational and navigational tools needed to make the chaos of the internet manageable and useful. According to the US Chamber of Commerce, which filed a brief in this case, more than 500 hours of video are uploaded to YouTube every minute. Arguments could provide additional insights, but the potential outcome is a major concern for the tech industry.
Timing Is Everything
Decisions in these cases are expected around the end of June, as the Supreme Court wraps up its term. June is also when the Treasury Department is expected to reach the end of its ability to deploy “extraordinary measures” on national-debt payments. It’ll be crucial for Congress and the Biden administration to come to an agreement in the next few months regarding the debt ceiling, or Capitol Hill could be headed toward one of the longest and hottest summers on record.