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Democrats eye new $1 billion effort to crack down on Big Tech in sprawling economic package

The new funding proposal comes as Democrats work to assemble a $3.5 trillion spending bill

House Speaker Nancy Pelosi (D-Calif.) and House Energy and Commerce Committee Chairman Frank Pallone Jr. (D-N.J.), whose panel will consider the proposal next week. (J. Scott Applewhite/AP)

One of the top federal agencies overseeing Apple, Facebook, Google and other Silicon Valley tech giants could see a boost to its budget as part of congressional Democrats’ sprawling $3.5 trillion economic package.

The proposal, unveiled by a panel of House Democrats on Thursday, would set aside $1 billion for the Federal Trade Commission to create a new digital-focused division that would police privacy violations, cybersecurity incidents and other online abuses.

The new spending could represent a roughly 30 percent increase in the commission’s total projected appropriations over the next decade — money that could add more legal firepower to an agency whose resources are badly outmatched by many of the companies it regulates.

Democrats announced their plan as part of a broader effort to craft a roughly $3.5 trillion economic package that encompasses President Biden’s fuller economic agenda. Party lawmakers envision the package as a sweeping overhaul of the country’s health care, education and tax laws, fulfilling promises they made during the 2020 elections.

Once the total spending plan is finalized, Democrats hope to pass it using a legislative maneuver known as reconciliation. The move allows the measure to be enacted without risk of a Republican filibuster in the narrowly divided Senate, provided that Democrats stay united in their cause.

While much of the proposal remains unsettled, the process for now has opened the door for Democratic lawmakers to seek to advance some of their long-stalled policy priorities — including their repeated commitments to take aim at Big Tech.

Democrats for years have criticized Amazon, Apple, Facebook and Google, arguing that some of the country’s most profitable companies have become too powerful — sometimes at the expense of their users. On Capitol Hill, Democrats have spearheaded sprawling antitrust investigations into the tech giants and called on top federal agencies to take a more aggressive stance against the industry.

But Democrats at times have found agencies including the FTC ill-equipped for the digital age. The roughly century-old watchdog’s laws predate Silicon Valley, and its $351 million appropriation in 2021 amounts to a fraction of the billions of dollars earned annually by the corporate giants it oversees.

The proposal is set for consideration by the House Energy and Commerce Committee, led by Rep. Frank Pallone Jr. (D-N.J.), starting next week, as Democrats race to finalize their bill by Sept. 15.

The new proposal would not remake the FTC’s powers, since the reconciliation process limits legislation to proposals that directly impact federal spending.

The proposal comes as Biden’s FTC chair, Lina Khan, is under intense pressure from members of her party to bring more aggressive action against tech giants. Khan, who was sworn in as FTC chair in June, has a reputation as a critic of tech giants’ power, and Democrats have praised her rise to lead the agency as a sign that the industry would be subject to greater antitrust enforcement.

At a July hearing, Khan told the House Energy and Commerce Committee that the agency’s current resources are strained amid a crush of merger applications.

Biden taps Big Tech critic Lina Khan to chair the Federal Trade Commission

Along with the FTC funding, Democrats also have proposed billions of dollars to address other digital challenges, including a $4 billion injection of cash in an emergency program that helps schools and students connect online. Lawmakers authorized the program as part of an earlier coronavirus aid package. Another $10 billion, meanwhile, aims to help the Commerce Department monitor supply chain issues for potential national security and cybersecurity threats.