The Big Story: Startups should watch as Congress works on reconciliation bill
The House this week moved ahead with two major legislative packages that will have varying impacts on the U.S. startup ecosystem. On Tuesday, the House voted to approve a budget resolution creating a path for Congress to write its $3.5 trillion reconciliation bill, which could include immigration, childcare, and tax provisions. It also set a deadline to vote on the $1 trillion bipartisan infrastructure bill in late September, which includes billions of dollars for broadband expansion.
The budget resolution provides a spending blueprint for Congress for an impending reconciliation bill, which could allow policymakers to fast track priorities through a simple majority. Multiple sectors, including the startup ecosystem, are waiting to learn what policies will ultimately be included within the final legislation.
Using the budget resolution, and the President’s FY2022 budget proposal as guides, it remains unclear how a future reconciliation bill will impact startups. While there are provisions that stand to support innovation—including universal pre-k to help address the childcare crisis, and a potential pathway to citizenship for Dreamers—other objectives, like potential tax increases, could create more challenges for startups and further barriers to growth and innovation. Ultimately, the reconciliation package has a long road ahead; multiple committees will work on the substance of the bill in the House, and it must pass procedural scrutiny from the Senate Parliamentarian. As policymakers move ahead in this process, it’s critical they consider the impact the bill could have on the startup ecosystem across the country.
Policy Roundup:
The innovation ecosystem needs a startup visa. We joined the National Venture Capital Association and the Center for American Entrepreneurship on a letter this week urging Congress to pass Rep. Zoe Lofgren’s (D-Calif.) Let Immigrants Kickstart Employment (LIKE) Act and provide foriegn-born innovators the opportunity to launch and grow their businesses in the U.S. Immigrant entrepreneurs are crucial to American innovation and economic success, especially as the country looks to recover from the pandemic.
House moves ahead on infrastructure without fixing crypto language. The House has agreed to move ahead on the Senate-passed infrastructure bill without any amendments, including a potential fix to the bill’s problematic cryptocurrency language. The bipartisan infrastructure bill includes a provision that expands the definition of “broker” under securities law to include—and create data collection and reporting requirements for—a wide swath of the cryptocurrency ecosystem, including startups.
Appeals court affirms steps to curtail gamesmanship in patent damages. This week, an appeals court in D.C. confirmed that trial courts are allowed to exclude damages evidence and theories raised very late in patent cases. Litigants are required to disclose relevant facts during discovery, but in MLC v. Micron, the plaintiff (a patent assertion entity) sought nearly $70 million in damages based only on an expert report it submitted close to trial. Those types of delay tactics prolong litigation and can be used to increase uncertainty and the costs of frivolous cases. As Engine argued in an amicus brief last year, allowing judges to enforce disclosure obligations (as this judge did) “will help safeguard innovators and innovation against the costs and burdens of abusive litigation.”
Hogan to steer $400 million towards universal broadband. Maryland Governor Larry Hogan launched this week new funding and programs to push towards universal broadband in the state. The new initiative, Connect Maryland, includes a new $100 million—for a total of $400 million—to go towards expanding broadband across the state as well as a new Maryland Emergency Broadband Benefit Subsidy Program, which, when combined with the federal subsidy program, will create a $65 discount per month for up to a year. Affordable, accessible broadband is crucial in helping close the digital divide and create equitable opportunities for innovation and entrepreneurship.
White House, tech companies talk cyber, supply chain. The White House met with industry leaders, including tech company CEOs, this week to discuss how the government and the private sector could work in tandem to improve cybersecurity in the U.S. The administration announced a new Commerce Department effort to collaborate with the private sector on technology supply chain security and integrity, and the companies announced several investments in cybersecurity resources and trainings.
Startup Roundup:
#StartupsEverywhere: Mount Laurel, New Jersey. TeacherCoach is an education technology company that is dedicated to providing accessible personal and professional development tools to educators and parents in school districts across the U.S. Based in Mount Laurel, N.J., Jared Scherz—Founder and CEO—told us about what led him to found TeacherCoach, the challenges he’s faced in building a social enterprise startup, and how he’s navigating the complexities of content moderation given their platform’s unique audience.
