The 535 | August 2019

Summer in the “swamp” has been anything but quiet. From increased calls for President Trump’s impeachment to drama within the Democratic ranks and the ongoing border crisis, Congress heads into its August recess with many unanswered questions and a mounting workload for the fall. Here are some key Congressional takeaways from the past few months.

Intra-Party Squabbles

Pelosi v. The Squad

Not unlike the Greens in Europe, the progressive wing of the Democratic Party has put existing leadership under more pressure than they are accustomed to. An ongoing political and generational rift within the Democrats threatens party unity ahead of 2020 elections. In July, House Speaker Nancy Pelosi (D-CA) made headlines when she chided a left-wing coalition of Democrats known as “the Squad,” which includes Representatives Alexandria Ocasio-Cortez (also known as “AOC”) (D-NY), Ayanna Pressley (D-MA), Ilhan Omar (D-MN), and Rashida Tlaib (D-MI). Pelosi urged them to air grievances privately and not on social media, telling the New York Times, “All these people have their public whatever and their Twitter world…but they didn’t have any following.” When Congress resumes in the fall, it will be interesting to see how party unity within the Democrats plays out and whether or not Speaker Pelosi can overcome a new generation of progressives, the likes of which she has not had to confront during her career.

A Republican Leaves His Party

Michigan Representative Justin Amash, who has served the state in Congress as a Republican since 2011, declared he is leaving the Republican Party and will proceed as an Independent in Congress. According to Amash, his decision follows a series of problems within the GOP, including the refusal of many fellow Republicans to read the Mueller report. Interestingly, another one of Amash’s considerations in leaving the party is similar to a gripe that AOC has with her fellow Democrats: that internal party rules have reduced individual members’ power, leaving the majority of power concentrated among very senior officials at the top.

#MoscowMitch

Senate Majority Leader Mitch McConnell (R-KY) has been trending in the news lately for his refusal to back legislation that would protect U.S. elections from foreign interference, namely from Russia. While not alone in his refusal to hold votes on election security, an increasing number of Republicans have come forward to support bipartisan measures that would increase election security, particularly following the July testimony in Congress of Special Counsel Robert Mueller. In late-July, Senator Susan Collins, a Maine Republican, signed on to support election security legislation from Senator Mark Warner, a Virginia Democrat. Also in late-July, Senator Mark Rubio (R-FL) joined Senator Chris Van Hollen (D-MD) in urging fellow Senators to act more exigently on election security. However, those skeptical of giving too much power to the federal government, such as Senator Roy Blunt (R-MO), have come to the defense of McConnell, arguing the at increased federal control of elections would ultimately weaken election integrity.

Transatlantic Policy Predicaments

Trade Policy

Failure to get a vote before the August recess does not bode well for the U.S.–Mexico-Canada Agreement (USMCA). Democrats are wary of giving the Trump Administration such a substantial victory ahead of the 2020 election, and Mexico has been slow to revise its labor laws, which would in part placate Democrats’ concerns about the agreement. House Speaker Pelosi has likely delayed holding a vote on USMCA for precisely these political motivations. If the Trump Administration cannot negotiate a floor vote by mid-fall, the prospects for passing the USMCA diminish even further.

Unfortunately for the Europeans, Executive Branch trade professionals will work through August, leaving open the possibility of new tariffs on European Union countries or tariffs on third-party countries, such as India. In July, Germany’s Peter Beyer, a Member of the Bundestag, and Economic Minister Peter Altmaier were in D.C. discussing trade, as was EU Director-General for Trade, Sabine Weyand. A best-case scenario for Germany is that the U.S. moves away from auto tariffs over the course of August.

Meanwhile, a best-case scenario for the EU is that the U.S. continues to work diligently on last summer’s Juncker-Trump mandate to move forward with negotiations for a transatlantic free trade agreement. The worst case scenario for the EU is, of course, more tariffs, whether on German autos or French goods. The U.S. is overdue in signaling its ability to conclude major trade agreements and would, therefore, do itself a major favor by ensuring, at last, the conclusion of a transatlantic trade deal.

Digital Affairs

Digital policy, from 5G to digital taxes, has made waves across the Atlantic throughout the summer. Facebook’s David Marcus testified in Congress, where he took questions regarding Facebook’s Libra cryptocurrency. He faced significant bipartisan concern about the continually increasing power of the tech giant, including regarding Facebook’s decision to headquarter Libra in Switzerland, effectively shielding it from U.S. regulation. Also in July, the Federal Trade Commission (FTC) finalized its $5 billion fine against Facebook for privacy violations, leading many U.S. lawmakers on the left to decry the move, saying it was a mere slap-on-the-wrist for a company the size of Facebook. Aside from additional privacy-related fines, stay tuned for mounting antitrust inquiries into Facebook, Amazon, and Google.

In the wake of French and British announcements that the countries would impose 3% digital taxes on firms with over 750 million euros in revenue each year, the U.S. has been quick to respond with the threat of increasing tariffs on a wide range of goods from France, starting with wine. If e-commerce talks do not speed up at the WTO, we could be looking at a new type of trade war—this one digital. On August 19, the U.S. Trade Representative will begin hearings for its investigation into France’s digital tax law in order to determine whether or not the French policy directly and unfairly targets American firms. This Section 301 inquiry to assess unfair trade practices follows a number of other 301 hearings that have made headlines during this Administration and led to steep tariff increases.

Transatlantic Diplomacy

One of the biggest shocks to Washington’s diplomatic community this summer was the Trump-instigated ouster of UK Ambassador Kim Darroch, following the release of private diplomatic cables in which Ambassador Darroch critically assessed President Trump. While the U.S. executive branch’s relationship with the European diplomatic community continues to be strained, there is a growing realization in Congress of the imminent need to build in greater protections for the transatlantic relationship. In other words, there is no better time than now to rebuild and fortify this foundation.

Conclusion

Upon the return of Congress on September 9, immediate questions will be whether or not Democrats can solve intra-party problems, and whether or not Senate Republicans will continue to block essentially all legislative initiatives from the Democrat-controlled House. While Democrats continue to push for additional investigations into the White House, whether regarding violations of record-keeping standards or Hatch Act violations, Republicans will continue to push for border security, including by defending the border camps and the Administration’s deterrence-based immigration policy.

The 535 is a publication of the Bertelsmann Foundation from our offices in Washington, DC. It connects the European Parliament and German Bundestag to U.S. Congressional policy and politics and contributes to a common transatlantic political culture. The 535 is a quarterly publication that highlights issues, legislation, and policymakers relevant to transatlantic legislative cycles.

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