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Newsletter | Revolving Door Project Newsletter | August 2, 2023

Following Failed Hearing, Jim Jordan And Republicans Try New Tacks To Take Down Khan and Kanter

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Following Failed Hearing, Jim Jordan And Republicans Try New Tacks To Take Down Khan and Kanter

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Two weeks ago, Federal Trade Commission (FTC) Chair Lina Khan entered a House Judiciary  Committee hearing with a target on her back. 

In the leadup to the hearing, Republicans readied their trumped-up attacks against Khan and the agency she leads: a barely relevant memo from a conflicted ethics officer, a list of unfounded grievances from bitter former Commissioner Christine Wilson, and absurd defenses of Elon Musk’s lazy privacy practices at Twitter. But Khan emerged unscathed, and by the end, the Republicans had lost all their fire. 

Khan was able to deftly return the focus of the hearing to the FTC’s mission to protect consumers and maintain competition by highlighting the agency’s successes under her leadership. And she had plenty of wins to draw upon to tamper the Republican’s fire. In her words, the FTC has been “firing on all cylinders.” Since Khan took over, the FTC has filed consumer protection lawsuits against companies like Intuit for their “free” tax filings most Americans can’t use, Walmart for money transfer fraud that cost consumers as much as $1.3 billion, and pesticide manufacturers who kept competitors off the market and raised prices for farmers. The FTC moved to enforce the right to repair, helping consumers and independent entrepreneurs across the country. They’ve opened investigations into harmful practices and industries including pharmaceutical benefit managerscommercial surveillancesupply chain disruptions, and fraudulent ads on social media platforms. Under Khan, the FTC moved to block illegal mergers such as Microsoft’s acquisition of Activision Blizzard and Facebook’s acquisition of Within.

Some of the FTC’s antitrust challenges have even caused corporations to drop the transactions altogether, as was the case with defense contractor Lockheed Martin’s purchase of Aerojet, HCA Healthcare’s purchase of a hospital system in Utah, and Berkshire Hathaway Energy’s purchase of Domino’s Questar Pipeline. 

As we and others have repeatedly stressed, House Judiciary Chair Rep. Jim Jordan (R-OH) and his fellow corporate shills are not only seeking to smear one of Biden’s boldest appointments. Their concerted attacks are in service of corporations’ clear desire to reverse the successes of the FTC and its fellow antitrust law enforcer, the Department of Justice Antitrust Division, and return them to the sleepy regulators they have been for much of the last few decades. Monopolists are worried sick by Biden’s moves to revitalize the enforcement of antitrust law. And the actions of their allied Republicans during and following their failed inquisition of Khan only make that truth more obvious.

During the hearing, Representative Ben Cline (R-VA) revealed the game: to use these spurious attacks to justify huge reductions in the agency’s budget. First, Cline chastised Khan for not responding to Congressional inquiries that she confirmed during the hearing her staff had, in fact, responded to (~1:26). Cline then used the back-and-forth to justify why, according to him, the House appropriations committee is “seeking a 25 percent reduction in funding for the FTC,” (~1:29) ending his tirade with a self-satisfied smirk. This would amount to a decrease of over $100 million in the FTC’s current budget of $430 million. 

While Cline’s specific threat has yet to materialize, Republicans are trying to force the issue of antitrust funding to the appropriations table. This month, the Senate appropriations committee released a marked up bill that would appropriate $278 million to the DOJ Antitrust Division, but then move $50 million of the DOJ Antitrust Division budget to elsewhere in the DOJ (page 36). We have yet to understand the logic of that convoluted proposal, but the change would amount to a measly net budget increase from FY2023 to 2024 of $3 million, or an overall decrease when accounting for inflation. On the other side of the Capitol, the House appropriations committee released a bill that would appropriate only $192 million to the Antitrust Division, a 15 percent decrease from the ATR’s 2023 budget of $225 million.

Not only would a decrease in funding be a huge blow to the consumers and workers the FTC and DOJ ATR protect – anything short of a significant increase does everyday Americans an injustice by hobbling much-needed enforcement. As my colleagues previously wrote at length for Democracy Journalincreasing funding for enforcement programs means agencies can bring in more money in fines and fees than they spend, making these proposed budget cuts both harmful and fiscally indefensible. 

And as we’ve researched at the Revolving Door Project, antitrust funding has been woefully inadequate for decades. This chronic underfunding is the result of a conscious effort by corporations and the lawmakers they lobby to keep antitrust enforcement as weak as possible. It’s worked wonders. With scant resources and an ever-spinning revolving door at the FTC and DOJ, monopolists have run amok, leading to an explosion of corporate mergers that were waived through with little thought or preconditions. Now that Biden has put the people in place to reinvigorate the regulators, big business Republicans are pumping the brakes harder than ever, hoping to return the agencies to their former rubber-stamping selves.

Which leads us to yet another desperate attempt by Republicans to undermine the FTC, this time by abusing congressional oversight powers. This week, a letter from Chair Khan revealed that House Judiciary leader Jim Jordan has been intimidating and harassing career FTC staff who supervise merger enforcement. Not only are his subpoenas of these government servants unprecedented, his harassment is clearly part of a plan to “obstruct and chill the agency’s critical work,” in Khan’s words. It’s shameful that Jordan is using his oversight power to subpoena the professional government servants who are just trying to do their jobs, rather than the corporations that use underhanded tactics to swindle unwitting consumers.

Recent efforts like the new Merger Guidelines would codify new understandings of how illegal mergers harm American consumers, workers and small businesses into the regulators’ everyday work, and inoculate the regulators from the type of enforcement inaction they were once known for. But every stride Khan and Kanter take will bring more attacks from Republicans who have proven they are willing to openly harass government officials just to keep monopolists safe. If the anti-monopoly wing of the Republican Party wants to be taken seriously, they should fight tooth and nail with their Democratic colleagues to fully fund the FTC and DOJ Antitrust Division and cement trust-busting as a cornerstone of the American political economy. 

Photo credits: This image is clipped from C-SPAN footage of a House Judiciary oversight hearing.

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