Not everything on Capitol Hill is totally partisan. Take the myriad of threats from China. Two senators from opposite parties recently urged the Federal Trade Commission to investigate the phenomenon of TikTok. For more on this and a few other topics, Virginia Sen. Mark Warner (D) spoke to the Federal Drive with Tom Temin.
Tom Temin: Sen. Warner, good to have you back.
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Mark Warner: Tom, thanks for having me.
Tom Temin: It let’s talk about the Federal Trade Commission and your call to have them investigate TikTok. And I gotta tell you, you and I are about a few months apart in age, I’ve never looked at TikTok and won’t put it on my phone, but apparently a lot of people do. So what is the major concern here now?
Mark Warner: Well, I’m not a regular TikTok user either, but TikTok is the only social media platform that’s still growing exponentially. I mean, we’ve seen decline in Facebook, we’ve seen decline in YouTube, but TikTok is extraordinarily popular. And it’s based on the presumption of you don’t want to be networked with people you know, necessarily, you want to be networked with people who have similar tastes or videos that they think based on your actions you might like. By definition, that means TikTok has to know a lot about you, before their algorithms can decide what are the kinds of crazy videos they want to send you. Our concern is that TikTok is owned by ByteDance, a Chinese firm. And while they’ve tried to separate the American branch and data from the Chinese data, it appears they’ve not been successful. There was a report that Chinese engineers were getting access to this information and this data. Part of that I think is due to the fact that the Chinese law requires the Communist Party to say to every business in China, your ultimately responsibilities not your shareholders, but is the Communist Party of China. So we’ve asked that the FTC investigate whether there’s been any kind of deceptive practices here, whether people’s information is appropriately protected. We’ve not gotten a formal response yet. And I’m not sure the FTC would actually say if they’ve started an investigation, they usually do that somewhat quiet. But there was another report that there may have even been some sale of data. I’m not sure. Well, I’m not saying I wouldn’t have my kids on TikTok. Frankly, my kids are in their 20s and early 30s. So I think they’re gonna make their own decision, but I would be cautious.
Tom Temin: Right, and what can the FTC even do about a Chinese-owned company if it finds the purloined and sold data?
Mark Warner: Well, first of all, this is may be unique coming out of me. But President Trump was right on this one, President Trump was the first to raise concerns. And they set up a relationship whereby Oracle was supposed to help guarantee the security of American data. That’s not been fully laid out yet. But the FTC does have the power, that TikTok is saying, your data is totally protected, no foreign actor has any access to it. And then it’s proven that there is access, foreign actors, Chinese engineers with Chinese government engineers I should say, have access. Then FTC could go all the way to shutting TikTok down. Now normally, FTC doesn’t go that far, but it does have the power.
Tom Temin: All right, well, then we’ll see what happens then. At this point, you say no answer. So it’s really a dark hole at this point.
Mark Warner: It’s still a dark hole. But I think we’ve definitely raised the focus level. TikTok and the U.S. government have been negotiating for some time on a new arrangement that would further guarantee data security. It would be good if we had a little more transparency on that.
Tom Temin: We are speaking with Virginia Sen. Mark Warner. And I also wanted to ask you about something else that’s apparently coming up in the Senate, if everyone can get healthy here. And that is the semiconductor spending prospects, that bill has ballooned a great deal. It’s basically an issue for the industry, but the government as party to the chip shortages, and having trouble sourcing its electronics, in some cases military platforms. How fast could that really have an effect? And are there too many strings attached to the money? Do you think that may work against the actual stated objectives of the bill?
Mark Warner: Well, Tom, this bill has really three component parts. It’s got the chips portion, and that is to make sure that we do the R&D and build additional chip manufacturing facilities here in the United States. Back in the 90s, we controlled about 35% of the total chip production in the world. Today, we’re down to about 12%. In East Asia, South Korea, Taiwan, and China, we’ve seen those numbers completely reversed. Taiwan controls most of the leading edge chip production in the world. And with Taiwan being vulnerable to China. That is a national security concern. China itself, PRC has put about $100 billion more than we’re even talking about into chip production. As we see shortages of chips from cars to leading edge chips in our military jets, to have more of American supply chain is critically important. You know, this is a worldwide competition. We passed the Senate bill and we passed the chips bill. But in that ensuing year, we’ve seen countries like Germany, France, and a number of European countries become very aggressive as well in this competition. This was in the original bill, but frankly, it never got as much attention and naturally we also have American and Western supply of next generation wireless technology. So some of your listeners may have recalled the debate about Huawei and 5G wireless technology. This really was the first time where a Chinese company, Huawei and another Chinese company ZTE started to dominate the marke. And Huawei in particular is proven to provide security concerns. If you go to a country and say, hey, don’t buy Huawei, there’s not a corresponding Western enterprise, there are a couple of Western companies, Samsung, Ericsson, Nokia. But what we’re trying to do is move out of this existing system into what’s called open ready access network, give Western companies a much greater dominance when we move to that next generation. And there’s about $1.5 billion in the bill for overhead. And then finally, those dollars are all actually committed, there are a couple $100 billion of additional potential funding. And let me add “potential,” none of this has been appropriated. It’s only authorized for development of technology hubs in various parts of the country. Different than, Silicon Valley or Boston or the Research Triangle. So we can try to spread some of the wealth, so to speak, around technology. There’s money in here to dramatically increase funding at the national labs, at the National Science Foundation. So it’s a pretty major bill.
Tom Temin: Sure. So then that would mean, the authorization though, if not the direct, immediate appropriation.
Mark Warner: The chips in the overhead money that’s been appropriated, these are emergency appropriations. The authorization dollars for the NSF or [Energy Department] labs, or the tech hubs, that still has to go through a normal appropriation process.
Tom Temin: Right. But they have the prospect of some really big plus ups then, say in fiscal ’23.
Mark Warner: Yes.
Tom Temin: All right, speaking of fiscal 23, is the Senate going to get his job done, and also the National Defense Authorization Act? You’re it.
Mark Warner: Well, I think we’re not going to get the NDAA done before the August recess. But I do believe when we return, the first order of business will be the NDAA. And Jack Reed (D-R.I.) is the chairman of the Armed Services Committee, does a good job of shepherding that bill through. The balance of the appropriations bills, it is very frustrating to me that they don’t seem to get done in a timely fashion. And we ended up with these omnibuses, which again, maybe your listening audience may be the only ones that understand what omnibus and some of the terminology mean. But I’m fearful that we will default to that vehicle rather than the individual appropriations bills. And obviously, it’s been made more difficult this year with Sen. Leahy as chairman of the Appropriations Committee having a broken hip and not been able to be in the Senate as much in the last few weeks.
Tom Temin: Sure. And in a related area, you’ve been looking at the Technology Modernization Fund, which agencies are finally starting to use to some degree. What are your prospects there?
Mark Warner: Really, there’s a kind of a dueling prospects. I mean, we all know that the IRS needs enormous amounts of additional funding, upgrading a technology, increase of personnel and that would have been included and maybe could still be included in some form of reconciliation. Although I think the IRS funding prospects have probably gone down. The funding for the IRS, which is critical, is in direct competition with the Technology Modernization Fund. This is a revolving fund of we would like $1 billion but it’s going to probably be closer to $100 million, that would upgrade the technology on a base savings then recoup to put back in the fund. And it’s just crazy that we’re not doing this. We decrease the efficiency of our federal workforce, we make their lives much more challenging without this technology upgrade. It’s kind of nuts and bolts-y, but it is really important. And it’s paired as well with an area where I’d like to see the results. So I’ve talked to the GSA Administrator Carnahan on a building development fund. I mean we have a lot of ageing buildings, post-COVID we’ve got excess capacity. So can we move out of some of this leased space that the government has taken, not just here in the DMV, but all over the country, and consolidate our federal workers back into federally-owned space? Tere’s been estimates that we could save up to $25 billion, if we could do that, but we again, need to both get some additional resources to start that off, but also some of this archaic congressional scoring process to make sure that if we actually save money, it can go back into some of this building redevelopment.
Tom Temin: Right. So the dueling TMFs that you mentioned, the duel is between whom, then?
Mark Warner: This is always an area that I think people in the past, legislators in the past, appropriators in particular have used a little bit as a piggy bank, because it’s always easy to punt on the building modernization, the tech modernization. But in many ways, when we punt all we are doing is simply increasing the long term cost to the federal government, to the taxpayer. And it doesn’t make good business sense.
Tom Temin: My guest is Virginia Sen. Mark Warner and with respect to the building modernization fund idea, that gets to the question of the return to work for the federal workforce, and there still seems to be a lot of uncertainty on the part of federal employees as what the final state will be with respect to telework, how many days, where they work, and somehow seems to tie in with the space requirements long term.
Mark Warner: I think it’s time to get the vast majority of our federal workforce back to work. I do think “back to work” may mean, I know that, for example, the FCC I think is ended up, they were in a negotiation that was going to, I think, by the demands of the workforce, allow a couple days a week at least to be out of the office, maybe even up to three days, I have not followed the latest status. But I do think, to give our federal workers the predictability they need and they deserve. I hope we could get this resolved. As an advocate of downtown Washington coming back to life, I hope people will get back. I have to tell you, I felt very strongly that my 40-plus people who work for me, in Washington, and around the Commonwealth of Virginia, that they need to be back in the office will still allow some level of telecommuting, but I do feel like, I work for 8.5 million Virginians and the vast majority of them do not have the ability to telawork on a regular basis. And so we need to be in the office. And my fear is, we got to get this settled down. Because whether it’s IRS checks, whether it’s Social Security checks, whether it’s passports, there is a huge backup due to COVID. And the sooner we can get this resolved and get new systems in place, in person, and on a remote basis, I think the better for federal workers, but also better for the folks that we all serve.
Tom Temin: And for wherever they work. There are some pretty bold proposals in Congress now for the size of the pay raise that federal employees would get in 2023. What is your view of what should happen? And what are the prospects there?
Mark Warner: I would like to see is as healthy a pay raise as possible. I mean, the last couple of years of COVID have been a real challenge. We know we’ve got inflation that’s been eating into federal workers purchasing power. So I hope some of us are going to be making some of that proposal shortly. I’m not going to give it away today. But I’m a big supporter of our federal workforce and believe they need the kind of substantial pay raises to both retain our federal workers, but also to attract new one.
Tom Temin: Virginia Sen. Mark Warner, thanks so much for joining me.
Mark Warner: Tom, thank you so much.
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