Congressional Action

Recently, three key investigative committees of the House of Representatives—the Oversight and Government Reform Committee, Judiciary Committee, and Energy and Commerce Committee—each adopted their respective committee’s oversight plan for the new Congress, offering a window into the committees’ investigative priorities for the next two years. The newly adopted oversight plans provide insights into the companies and industries most likely to draw congressional scrutiny from these three significant committees.

Under clause 2(d) of Rule X of the House, each authorizing committee is required to adopt and submit an oversight plan to the Committee on Oversight and Government Reform and the Committee on House Administration by March 1 after the start of a new Congress. The Oversight and Government Reform Committee collects the individual oversight plans and later publishes a comprehensive collection by April 15.

With some exceptions, the current oversight plans described below align with the plans adopted by these committees in the last Congress, and the Republican Members of the committees rebuffed the Democratic Members’ efforts to expand the plans to encompass oversight of the new Trump Administration. During a series of contentious markups, the committees rejected various amendments that would have expanded the scope of the oversight plans to include reviews of the Trump Administration directives, federal funding freezes, the activities of the Department of Government Efficiency, and other topics. As a result, the oversight plans tend to focus on private sector investigations, suggesting that investigations of private sector interests may take an outsized role in these committees’ oversight activities in the current Congress.

Below we highlight those elements of the committees’ oversight plans that are mostly likely to have implications for private sector entities. The plans are especially relevant to clients in industries including energy and environment, aerospace and defense, communications, technology, artificial intelligence, higher education, and pharmaceuticals.Continue Reading Preparing Now for Expected Congressional Oversight: Newly Released Oversight Plans Signal Investigations of Private Parties

Last month, DeepSeek, an AI start-up based in China, grabbed headlines with claims that its latest large language AI model, DeepSeek-R1, could perform on par with more expensive and market-leading AI models despite allegedly requiring less than $6 million dollars’ worth of computing power from older and less-powerful chips.  Although some industry observers have raised doubts about the validity of DeepSeek’s claims, its AI model and AI-powered application piqued the curiosity of many, leading the DeepSeek application to become the most downloaded in the United States in late January.  DeepSeek was founded in July 2023 and is owned by High-Flyer, a hedge fund based in Hangzhou, Zhejiang.

The explosive popularity of DeepSeek coupled with its Chinese ownership has unsurprisingly raised data security concerns from U.S. Federal and State officials.  These concerns echo many of the same considerations that led to a FAR rule that prohibits telecommunications equipment and services from Huawei and certain other Chinese manufacturers.  What is remarkable here is the pace at which officials at different levels of government—including the White House, Congress, federal agencies, and state governments, have taken action in response to DeepSeek and its perceived risks to national security.  

Federal Government-Wide Responses

  • Bi-Partisan Bill to Ban DeepSeek from Government Devices:  On February 7,Representatives Gottheimer (D-NJ-5) and LaHood (R-IL-16) introduced the No DeepSeek on Government Devices Act (HR 1121).  Reps. Gottheimer and LaHood, who both serve on the House Permanent Select Committee on Intelligence, each issued public statements pointing to grave and deeply held national security concerns regarding DeepSeek.  Rep. Gottheimer has stated that “we have deeply disturbing evidence that [the Chinese Communist Party (“CCP”) is] using DeepSeek to steal the sensitive data of U.S. citizens,” calling DeepSeek “a five-alarm national security fire.”  Representative LaHood stated that “[u]nder no circumstances can we allow a CCP company to obtain sensitive government or personal data.”

While the details of the bill have not yet been unveiled, any future DeepSeek prohibition could be extended by the FAR Council to all federal contractors and may not exempt commercial item contracts under FAR Part 12 or contracts below the simplified acquisition (or even the micro-purchase) threshold, similar to other bans in this sector.  Notably, such a prohibition may leave contractors with questions about the expected scope of implementation, including the particular devices that are covered.Continue Reading U.S. Federal and State Governments Moving Quickly to Restrict Use of DeepSeek

Barely noticed in the firehose stream of presidential activity since the inauguration was a brief Oval Office mention of cutting a deal with Ukraine for access to its critical minerals. Securing steady access to uranium, the rare earth elements, and other critical minerals is a natural priority for an America First agenda, so President Trump’s February 3 statement is unlikely to be his last. Changes to the tax code, permitting reform, regulatory incentives, and partnerships with allies as well as troubled nations are among the actions to watch for.

A Bipartisan Issue

Leaders of both parties agree that action is needed. “Whether it’s critical minerals with China … or uranium from Russia, we can’t be dependent on them,” Secretary of the Interior Doug Bergum asserted in his confirmation hearing. “We’ve got the resources here. We need to develop them.” Virginia Senator Mark Warner (D, VA) recently charged, “China dominates the critical mineral industry and is actively working to ensure that the U.S. does not catch up.” He urged, “The U.S. must, alongside allies, take meaningful steps to protect and expand our production and procurement of these critical minerals.” President Biden’s State Department was even more blunt, asserting that China is intentionally oversupplying lithium to “lower the price until competition disappears.”

Several recent developments have increased U.S. policymakers’ concerns about future supplies of critical minerals. New technologies, including artificial intelligence, promise to dramatically boost demand. China, meanwhile, is using new export control laws to curtail exports to the United States. A resurgent war in the eastern provinces of the Democratic Republic of the Congo (DRC), ostensibly over tribal rivalries, is actually a fight over the country’s rich mineral resources. These include gold and diamonds, but also coltan, an ore from which tantalum is extracted. Tantalum is extremely valuable for its use in the capacitors found in smartphones, laptops, and medical equipment.

The number of minerals in question (51), the usual number of steps in the production chain (4), and the variety of international agreements, public laws, private initiatives, and emerging technologies add up to a dizzyingly complex set of issues. Nevertheless, the bipartisan alignment evident in the above statements signals that impacted industries should watch closely for fast-moving legislative and regulatory developments.

Market Overview

Critical minerals are essential for a long list of industrial and defense-related needs. Attention is often focused on the 17 ‘rare earth elements,’ (REEs) but the U.S. Geological Survey (USGS) has a broader list of 50 mineral commodities that are critical to the nation’s economy and national security. Uranium is excluded by a statutory definition but is often tracked in parallel. Together, these 51 elements are used for a far wider array of products than is often recognized. The 17 REEs alone are also needed for oil refining, guided missiles, radar arrays, MRI machines, computer chips, hydrogen electrolysis, lasers, aluminum manufacturing, cameras, jet engines, satellite manufacturing, and a long list of other advanced applications.Continue Reading What President Trump Might Do on Critical Minerals

Likely the most significant legislation Congress will consider this year is a budget reconciliation bill.  For weeks, congressional Republicans and President Trump have been laying the groundwork to agree on a process for advancing Trump’s agenda via the special legislative process of reconciliation, with the original aim to have a…

Continue Reading Budget Reconciliation:  Process Primer and FY25 Senate Budget Resolution Overview

The Senate Intelligence Committee’s January 30, 2025, confirmation hearing for former Representative Tulsi Gabbard, President Trump’s nominee for Director of National Intelligence, previewed a potentially difficult reauthorization path for Section 702 of the Foreign Intelligence Surveillance Act (“FISA”).  While Gabbard appears to now publicly favor reauthorization of Section 702, her…

Continue Reading Tulsi Gabbard’s Confirmation Hearing for Director of National Intelligence: A Preview of a FISA Section 702 Reauthorization Fight?

On January 29, Senator Josh Hawley (R-MO) introduced the Decoupling America’s Artificial Intelligence Capabilities from China Act (S. 321), one of the first bills of 119th Congress to address escalating U.S. competition with China on artificial intelligence.  The new legislation comes just days after Chinese AI company DeepSeek…

Continue Reading Senator Hawley Introduces Sweeping U.S.-China AI Decoupling Bill

With the 119th Congress now assembled, Republicans control both the House and Senate, and will control the White House starting on January 20th.  If history is any guide, this change in party control of the White House, plus unified control of Congress by the president’s party, will pave the way for Republicans to deploy the Congressional Review Act (CRA) to overturn a number of regulations issued by the Biden Administration.  When President Trump first took office in 2017, congressional Republicans used the CRA to overturn more than a dozen rules promulgated by the Obama Administration.   

The CRA mandates federal agencies to submit all final rules to Congress before the rule takes effect.  Then, Congress has 60 days to overturn a rule by enacting a joint resolution of disapproval that withdraws the rule and prohibits the agency from issuing a rule that is “substantially the same.”  However, if a rule is submitted to Congress within 60 days before adjournment, the CRA’s “lookback period” allows additional time—a new 60-day period—for the new Congress to review the rule and introduce a resolution of disapproval.  If a rule has already taken effect when a CRA resolution is signed into law, the rule “shall be treated as though such rule had never taken effect.” 5 U.S.C. § 801(f). 

Although the House and Senate parliamentarians make the official determination of whether a particular rule falls within the lookback period when a disapproval resolution is introduced, the Congressional Research Service estimates that rules submitted to Congress on or after August 1, 2024 are likely subject to possible nullification. The CRA allows members of Congress to introduce resolutions of disapproval starting on the 15th day of the new session. Under the current congressional schedules, Senators may introduce CRA resolutions starting around January 23, 2025, and Representatives may introduce CRA resolutions starting around February 5, 2025.

Many federal agencies operated under an earlier deadline and thus prioritized finalizing and submitting high-priority rules this spring—including those “significant rules” defined in Executive Order 12866, as amended by Executive Order 14094, that are predicted to have an annual impact of $200 million or more on the economy.  Because these rules were submitted earlier, they will likely fall outside the CRS’s estimated CRA lookback window.  The George Washington University Regulatory Study Center estimates approximately 100 of these significant rules may fall into the CRA window, which is likely fewer than in prior changes in administrations, in part due to early agency action.  However, there are more than 1,000 rules that could ultimately be subject to disapproval under the CRA in the new Congress.    Continue Reading Biden Administration Rulemakings at Risk for Congressional Review Act Cancellation in New Congress

The results of the 2024 U.S. election are expected to have significant implications for AI legislation and regulation at both the federal and state level. 

Like the first Trump Administration, the second Trump Administration is likely to prioritize AI innovation, R&D, national security uses of AI, and U.S. private sector investment and leadership in AI.  Although recent AI model testing and reporting requirements established by the Biden Administration may be halted or revoked, efforts to promote private-sector innovation and competition with China are expected to continue.  And while antitrust enforcement involving large technology companies may continue in the Trump Administration, more prescriptive AI rulemaking efforts such as those launched by the current leadership of the Federal Trade Commission (“FTC”) are likely to be curtailed substantially.

In the House and Senate, Republican majorities are likely to adopt priorities similar to those of the Trump Administration, with a continued focus on AI-generated deepfakes and prohibitions on the use of AI for government surveillance and content moderation. 

At the state level, legislatures in California, Texas, Colorado, Connecticut, and others likely will advance AI legislation on issues ranging from algorithmic discrimination to digital replicas and generative AI watermarking. 

This post covers the effects of the recent U.S. election on these areas and what to expect as we enter 2025.  (Click here for our summary of the 2024 election implications on AI-related industrial policy and competition with China.)

The White House

As stated in the Republican Party’s 2024 platform and by the president-elect on the campaign trail, the incoming Trump Administration plans to revoke President Biden’s October 2023 Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (“2023 AI EO”).  The incoming administration also is expected to halt ongoing agency rulemakings related to AI, including a Department of Commerce rulemaking to implement the 2023 AI EO’s dual-use foundation model reporting and red-team testing requirements.  President-elect Trump’s intention to re-nominate Russell Vought as Director of the Office of Management and Budget (“OMB”) suggests that a light-touch approach to AI regulation may be taken across all federal agencies.  As OMB Director in the prior Trump Administration, Vought issued a memo directing federal agencies to “avoid regulatory or non-regulatory actions that needlessly hamper AI innovation and growth.”Continue Reading U.S. AI Policy Expectations in the Trump Administration, GOP Congress, and the States

Technology companies will be in for a bumpy ride in the second Trump Administration.  President-elect Trump has promised to adopt policies that will accelerate the United States’ technological decoupling from China.  However, he will likely take a more hands-off approach to regulating artificial intelligence and reverse several Biden Administration policies related to AI and other emerging technologies.Continue Reading Tech Policy in a Second Trump Administration: AI Promotion and Further Decoupling from China