Happy Wednesday and welcome back to On The Money. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
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THE BIG DEAL– Libra in limbo as lawmakers hammer Zuckerberg over Facebook controversies: Facebook CEO Mark Zuckerberg on Wednesday fielded sharp criticism and tough questions about nearly all aspects of his company’s business practices at a hearing about Facebook’s new cryptocurrency project Libra.
The aggressive questioning underlined how difficult it will be for the Libra project to move past the baggage of Facebook’s various controversies, which have angered lawmakers on both sides of the aisle.
{mosads}During the House Financial Services Committee hearing, Zuckerberg found some allies in Republican lawmakers who praised the tech executive’s “entrepreneurial spirit” and the “innovation” of the Libra coin.
But over the course of the day, Republicans and Democrats alike pummeled Zuckerberg over Facebook-related issues, including:
- The continued presence of hate groups on the platform,
- The company’s struggles to stave off foreign election interference,
- Its policies on disinformation,
- How the company treats its content moderators,
- And why it hopes to move into the financial services space when it is already facing intensifying scrutiny of its market dominance.
“You have opened up a serious discussion about whether Facebook should be broken up,” said Rep. Maxine Waters (D-Calif.), chairwoman of the House Financial Services Committee.
The Hill’s Emily Birnbaum and I take you there.
How Zuckerberg handled the heat:
- Zuckerberg remained serious and reserved throughout the six-hour hearing, and even seemed aggravated during particularly rough lines of questioning as the day wore on.
- Zuckerberg offered a staunch defense of the controversial cryptocurrency project, which has faced skepticism and pushback from regulators around the world since Facebook announced its plans over the summer. He said the cryptocurrency project could help bring financial services into the hands of billions of people worldwide.
“We’ve faced a lot of issues over the past few years,” Zuckerberg conceded. “I’m sure there are a lot of people who wish it was anyone but Facebook who is helping to put this forward.”
“But there’s a reason we care about this,” he continued. “Facebook is about putting power in peoples’ hands.”
Reactions:
- “Libra is Facebook, and Facebook is you,” said Rep. Ayanna Pressley (D-Mass.). “You’ve proven we cannot trust you with our emails, with our phone numbers, so why should we trust you with our hard-earned money?”
- “I think we should advance. I think we should seek innovation. I’m not opposed to some of the things that you’re trying to do,” said Rep. Barry Loudermilk (R-Ga.). “I’m gravely, gravely concerned about the implications they may have.”
- “You’re creating a whole new currency that could potentially be anonymous and could hide all types of criminal activity,” said Rep. Carolyn Maloney (D-N.Y.), who called Libra “a huge concern to all Americans and national security.”
- “I actually don’t know if Libra is actually going to work,” Zuckerberg said.
And to recap the hearing, check out our live blog on Zuckerberg’s testimony.
ON TAP TOMORROW:
- The Senate Banking Committee holds a hearing on data privacy, 10 a.m.
LEADING THE DAY
GOP chairman expects another funding stopgap, potentially through March: Senate Appropriations Chairman Richard Shelby (R-Ala.) on Wednesday said that deadlock over spending negotiations would likely require Congress to pass a new funding stopgap measure, called a continuing resolution, to prevent a shutdown after Nov. 21.
“Unless a miracle happens around here with the House and Senate, we will have to put forth another CR,” Shelby said.
- While the House has passed 10 of its 12 annual spending bills, the Senate has not yet succeeded in passing a single funding bill, largely due to disagreements over Trump’s proposed border wall.
- On Tuesday, the Senate introduced a package of four smaller, non-controversial spending bills and is expected to begin the process of voting on amendments next week.
- But the chances of getting any spending bills signed into law in the near future remain slim. Shelby and his House counterpart Rep. Nita Lowey (D-N.Y.) have been negotiating how to divvy up spending between the 12 appropriations bills, with controversy arising in particular over wall-related allocations that Democrats say pulls funding from other priorities.
Unlike the eight-week stopgap that extended funding past the start of the fiscal year on Oct. 1, Shelby said that rumors of a longer CR into February or March were “probably in the ballpark.”
The Hill’s Niv Elis explains why here.
Senate rejects Dem measure on SALT workarounds: The Senate on Wednesday rejected a Democratic effort to overturn IRS regulations blocking workarounds to a portion of President Trump’s tax law that is disliked by high-tax states.
The Senate voted against the Democrats’ resolution, introduced by Minority Leader Charles Schumer (D-N.Y.), by a vote of 43-52. It was a mostly party-line vote, with Sen. Michael Bennet (Colo.), a 2020 presidential candidate, the only Democrat to vote against the resolution and Sen. Rand Paul (Ky.) the only Republican to vote in favor.
While Democrats’ effort was unsuccessful, it is notable because it’s the first time they forced a vote to overturn IRS rules relating to Trump’s tax law. The vote highlights how Democrats from high-tax states — such as New York, New Jersey and California — view the tax law’s cap on the state and local tax (SALT) deduction as a top priority and the challenges they face in doing away with it.
“As bad as the Trump tax bill is for the whole country, it’s even worse for states like New Jersey,” Sen. Bob Menendez (D-N.J.) said on the Senate floor ahead of the vote.
The details: The tax law Trump signed in December 2017 imposed a cap on the SALT deduction of $10,000.
Republicans capped the deduction in order to raise revenue to pay for tax cuts elsewhere in the law, and because they viewed the deduction as subsidizing higher state taxes. They have noted that analysts have estimated that most people got a tax cut for 2018 under Trump’s law, even in high-tax states.
But efforts to repeal the SALT deduction cap have also faced criticism among progressives, because analysts across the ideological spectrum have estimated that repealing the SALT deduction cap would primarily benefit high-income taxpayers.
The Hill’s Naomi Jagoda has more on the vote and the complicated politics here.
House committee advances measure taxing nicotine in vaping products: The House Ways and Means Committee approved legislation Wednesday that would impose a federal tax on the nicotine used in liquid vaping products.
The panel approved the measure in a mostly party-line vote of 24 to 15, with Rep. Lloyd Doggett (D-Texas) voting present. Two Republicans, Reps. Tom Rice (S.C.) and Vern Buchanan (Fla.), voted with Democrats, while Rep. Stephanie Murphy (D-Fla.) joined Republicans in opposing the measure.
The move comes amid growing concerns over the health effects of vaping, as a respiratory illness linked to vaping products spreads across the country.
“A whole generation of our children are getting addicted to nicotine” through the use of vaping products, said Rep. Tom Suozzi (D-N.Y.) said at Wednesday’s markup. “For young people especially, who have less money and therefore higher price elasticity, taxes on vaping products are an effective way to decrease usage.”
The Hill’s Naomi Jagoda has more here.
GOOD TO KNOW
- An attorney for President Trump told a federal appeals court Wednesday that Trump could not be prosecuted even if he shot someone on Fifth Avenue in New York amid a legal fight over his financial records that seems destined for the Supreme Court.
- President Trump announced Wednesday that his administration would lift sanctions on Turkey after Ankara agreed to stop an offensive in northern Syria and agreed to a permanent cease-fire.
- Unemployment may be hovering near a 50-year low, but only 40 percent of America’s workers say in a new survey that they are working in “good” jobs.
ODDS AND ENDS
- Rep. Alexandria Ocasio-Cortez (D-N.Y.) grilled Facebook CEO Mark Zuckerberg about his company’s new political ad policy during a House Financial Services Committee hearing Wednesday.