Tech Policy and the Midterm Elections Roslyn Layton OCTOBER 2018 AMERICAN ENTERPRISE INSTITUTE Executive Summary onsidering the 2018 midterm election, this is a Surveys and conventional wisdom on elections Ctimely opportunity to review the key accomplish- suggest that voters focus on topline issues such as the ments of technology policy in the past two years. Both economy, education, health care, and security. More- political parties laid out goals in their respective plat- over, Democrats and Republicans have considerable forms for the 2016 presidential election. After a brief agreement on most tech policy issues. While this overview of the midterm elections, this report reviews bipartisanship has fostered effective policymaking the progress made on both sets of goals and key tech and American preeminence in the technology indus- policy accomplishments by the Federal Communica- tries over the years, it offers limited points of differ- tions Commission, the Federal Trade Commission, ence during elections. the presidential administration, and Congress. The report also examines the salience of tech pol- The report also reviews arguably the two most icy as a wedge issue and tech policy communication salient tech policy issues in the midterm cycle: net as it relates to the midterms. Additional issues such neutrality and online privacy. Following claims by as mergers, international internet regulation, dig- policymakers, advocates, and journalists that net neu- ital trade, political bias on software platforms, and trality internet regulation will be a defining issue for online election security have also emerged in the the 2018 midterm election, this report investigates midterm debate, but these are outside the scope of tech policy’s role in the midterms using theories of this report. This report does not endorse a political political science, historical midterm statistics, and party or candidate. other political dynamics. 1 Tech Policy and the Midterm Elections Roslyn Layton ech policy is the set of norms, rules, regulations, Globally, the tech industry topped $4.5 trillion in Tand institutions that govern technology indus- revenue in 2017 and is expected to reach $4.8 trillion tries. More generally, tech policy is a set of principles in 2018. The US is the single-largest tech market in and actions about technology, the way in which goods the world and accounts for 31 percent of the global and services are produced in an economy.1 It is a syn- tech market. The US tech economy was $1.6 trillion in thesis of the official strategic efforts to promote specific 2018, 9.2 percent of GDP.9 The numbers are even more sectors of the economy through scientific and indus- staggering from an equities perspective; the American trial policy and broader economic and social policy. tech industry accounts for a quarter of the value of the The intellectual origins of tech policy include Frie- US stock market, some $34 trillion.10 There are half a drich List’s argument for national support of “infant million tech companies in the US, with 34,000 new industries”2 and Alexander Hamilton’s Report on the startups in 2017 alone.11 Subject of Manufactures in 1791, which advocated for modernizing the American economy to break eco- nomic dependency on slavery in the South and super- The 2018 Midterm Election sede England in manufacturing.3 Economist Thorstein Veblen is credited with introducing the German con- Midterm elections are held two years after the pres- cept of die Technik into American discourse as “tech- idential election. All 435 seats in the House of Rep- nology,” meaning more than just the useful arts but resentatives and 33 seats in the Senate are up for the practices and principles in the “state of the indus- election. Additionally, 34 state governors are up for trial arts.”4 He is also credited with coining the term reelection, including Vermont and New Hampshire, “technological determinism,” suggesting that soci- which have only two-year terms for governors. The ety’s technology drives the development of its social other 48 governors serve four-year terms. Further- structure and cultural values.5 more, 35 state attorneys general, key legal actors in Tech policy is also intertwined with military each state, are also up for election in 2018. In many research and development (R&D), though a full dis- states, the ballot features elections for state legisla- cussion is out of scope here. About 1.5 percent of gross tures, local officers, and initiatives. The election will domestic product (GDP) goes to R&D efforts focused be held November 6. on “maintaining strategic technological advantages The midterms are frequently described as a refer- over potential foreign adversaries.”6 Recent examples endum on the president and his party. Since the 1840s, include Congress’ recent reauthorization and budget political scientists have observed that the president’s increase for NASA7 and the president’s announce- party generally loses seats in the midterm election, ment to launch a sixth branch of the military, the often called the “presidential penalty.”12 In rare cases, United States Space Force.8 the president’s party has netted gains, but the average 3 TECH POLICY AND THE MIDTERM ELECTIONS ROSLYN LAYTON net loss is 30 seats in the House and four seats in the Center reports that voters are more focused on Con- Senate.13 Since 1946, the average loss for the presi- gress and the presidency than in past midterms. A dent’s party when his approval is below 50 percent is record 68 percent of survey respondents say the vote 36 seats in the House; when approval is above 50 per- is about the party that controls Congress, and 60 per- cent, the average loss is 14 seats.14 cent say they will vote as a referendum either for or Instead of a midterm penalty, some researchers against the president.25 note that there could be a midterm reward. Research Another suggestion for the differences in presi- examining the 2009 midterm found that districts dential and midterm years is that there are two elec- where people evaluated their own lives in more hope- torates: a smaller, older cohort of Americans that ful terms were more likely to reelect incumbents.15 leans Republican and reliably votes in both mid- To date, the highest loss of party seats in the terms and general elections and a larger, younger House of Representatives was 77 seats in 1922, fol- cohort that leans Democrat but tends to vote only lowing the election of Republican President War- in the general.26 ren Harding.16 For the Senate, a record 13 seats were Along that same vein, another theory is that the flipped in Dwight D. Eisenhower’s second term two electorates are split along the lines of education, in 1958.17 In 2010, 63 House seats were flipped to those with higher education and those without. Pat- Republicans.18 rick Ruffini of Echelon Insights, a firm specializing Presently, there is a razor-thin margin in the Senate in polling, election analytics, and data intelligence, with 51 Republicans, 47 Democrats, and two indepen- notes, “Usually in midterms there is a turnout drop dents who caucus with the Democrats. In the House, off with 1) younger voters and 2)non-college edu- Republicans are defending 40 open seats; Democrats, cated voters. The dropoff with #1 favored the GOP. 20.19 Democrats need to net only 24 seats to win the The dropoff with #2 didn’t matter, until 2016, and majority. As of this writing, political experts observe now it could hurt the GOP.”27 that polls are so close that it is difficult to predict a While reviewing the history and statistics of mid- clear party winner.20 term elections is interesting, it tells us little about Midterm elections tend to have lower turnout than the role of tech policy in elections. A later section presidential elections. James Campbell’s seminal explains some theories of the role of policy in elec- “surge and decline” theory of elections suggests that tion. But first, a review of the parties’ 2016 tech policy a surge of interest and information during presiden- platforms is in order. tial elections helps one party, while the voters of the disadvantaged party are more likely to stay home.21 Campbell argues that voter turnout in midterm elec- 2016 Tech Policy Platforms tions declines as interest returns to normal levels and patterns. Republicans’ and Democrats’ respective tech policy The 2014 midterm marked the lowest voter turn- positions were described in their 2016 party platforms out in 72 years; just 36.4 percent of eligible voters and in subsequent communications. Both parties’ participated.22 In the 2016 presidential election, platforms describe the importance and role of tech- 58 percent did. For 2018, one predictive analytic model nology in employment, education, innovation, part- based on patterns from 2012 to 2016 indicates there nerships, and infrastructure investment. Both sides will be a drop of 39.8 million voters from the 139 mil- also recognize the importance of broadband, 5G, the lion who voted in 2016, about a 29 percent drop.23 Internet of Things, intellectual property, outer space, However, interest in politics has not declined in cybersecurity, and online privacy. 2018, with many new voter registrations and enthusi- The 2016 platforms offered a road map to voters asm strong in both parties,24 suggesting that turnout as to how each party would address key tech policy in November could be different. The Pew Research issues. For example, it was clear that Republicans, 4 TECH POLICY AND THE MIDTERM ELECTIONS ROSLYN LAYTON should they win the presidency, would protect inter- women and people of color, promote inclusion, net freedom, returning to the light-touch bipartisan attract and retain talented people from all over the framework that governed the internet until 2015.