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Why Recent Disruptions in Congress Just Gave Tech a Big Boost

June 23, 2014
The very abrupt exit of Rep. Eric Cantor (R-VA) as House majority leader may be described as a blow to so-called “establishment Republicans” and to his suburban Richmond, Virginia, district, but it may translate into a boon for the tech and digital industry. The former leader’s defeat at the hands of a little-known economics professor certainly rippled through Washington, yet it also created an opening for an active tech sector looking for friends and leverage on Capitol Hill. 

That the technology sector—now epitomized by digital giants like Google, Facebook, Amazon, Microsoft and others—is aggressively pushing its interests in the nation’s capital is no secret. Combined tech industry lobbying and campaign contributions now outpace longtime stalwarts of K Street lore such as the defense industry. The overall communications and electronics sector, according to the Center for Responsive Politics, is ranked seventh out of the top 13 interests either lobbying or dropping cash into electoral cycles. The computers and internet industry ranks at the very top of five industries within that sector space, spending over $35 million thus far on lobbying in 2014. 

Cantor’s loss may have offered an opportunity for clarity and progress on numerous legislative challenges facing the tech industry. Enter House Majority Whip Rep. Kevin McCarthy (R-CA), a relatively young Bakersfield, California, native and former deli owner turned consummate Hill insider. McCarthy’s ascension to Cantor’s No. 2 slot as majority leader, right behind House Speaker John Boehner (R-OH), could very well work policy wonders for Silicon Valley business leaders who have desperately sought a way to crack through the impasse on contentious issues such as immigration, patents and surveillance. 

McCarthy, as Politico reports, is a well-liked and unapologetic friend to tech who makes frequent pilgrimages to Northern California (not such a difficult lift given the proximity of his district). As majority leader, McCarthy is certain to support a tech agenda that rejects the perceived equivocation of Cantor on key issues such as immigration reform. While political observers and partisans don’t anticipate passage of an immigration reform bill anytime soon considering the current congressional midterm climate, the innovation industry needs it now: Reforming the troubled immigration system, as far as tech sees it, can resolve its talent shortage crisis by eliminating caps on H1-B visas and opening the country to needed foreign talent with STEM-based skills. 

Cantor’s ambiguity on immigration reform, driven by tense internal divisions within his party and district, was viewed as one reason for the impasse. McCarthy’s presence as majority leader appears to have changed that sentiment, and he is expected to support a number of tech-favored policy pushes that could potentially reshape innovation and disruption in the technology space. In addition, not only is McCarthy one of the top 20 recipients of communications and electronics sector support, but so is Speaker Boehner, who ranks among its top 5; interestingly enough, Cantor has always ranked higher than McCarthy, but that should obviously change given the current set of circumstances. 

The election of McCarthy as House majority leader may have also helped to reshape the immigration reform debate to tech’s favor. Tech industry lobbyists had long worried that their concerns were being overshadowed by a debate that focused too much on the controversial issue of undocumented migrants in the United States, particularly those from Latin America. The challenge for the slot from Rep. Raul Labrador (R-ID) appeared to illustrate this split on the topic, with Labrador—as a member of the tight-lipped House “Gang of 8”—seeming anxious to resolve the issue of undocumented migrants. For McCarthy, that issue may be easier to reconcile politically given his district is 30 percent Latino. But his relationship with the innovation industry (with its soul centered in McCarthy’s home state) also helps him balance the immigration issue much more effectively than his predecessor. 

Charles Ellison is a senior analyst relations strategist for TEKsystems. He keeps close tabs on changes and public policy shaping the innovation space. He is also a former congressional staffer, senior aide to state and local elected officials and an expert advocacy strategist.

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