WSJ What’s News - The Fight Over Biden’s Regulatory Agenda

Episode Date: September 4, 2024

P.M. Edition for Sept. 4. The battle over President Biden’s regulatory push is in full pitch. Wall Street Journal reporter Dylan Tokar says it will be a while before a winner comes out on top. And reporter Emily Glazer explains why AI risks are keeping corporate board members up at night. Plus, Kamala Harris proposed a more modest capital-gains tax increase, breaking with Biden’s plan from earlier this year. Tracie Hunte hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Introducing TD Insurance for Business with customized coverage options for your business. Because at TD Insurance, we understand that your business is unique, so your business insurance should be too. Contact a licensed TD Insurance advisor to learn more. Kamala Harris is planning to break with President Biden over his capital gains tax proposal. And the fight over Biden's regulatory agenda is in full pitch. The bottom line here is no matter what happens during the election, a lot of Biden's key regulatory proposals and achievements are vulnerable because of the way that the courts

have shifted and because of the number of legal challenges. Plus, at least four people were killed in a shooting at a Georgia high school. It's Wednesday, September 4th. I'm Tracy Hunt for the Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. We're going to start with a developing story. Law enforcement officials say at least four people are dead and nine were taken to hospitals

with injuries after a shooting at a Georgia high school today. Officials say a suspect is in custody. Georgia Governor Brian Kemp says he directed all available state resources to Apalachee High School, which has about 1,900 students. President Joe Biden said he and First Lady Jill Biden are in mourning over the deaths. For more on this developing story, go to wsj.com. Worries about a softening U.S. labor market pushed the S&P 500 and NASDAQ lower for a second straight day. Ahead of Friday's monthly jobs report,

a key reading that could influence the pace of the Federal Reserve's expected rate cuts. Today, the JILTS report showed that job openings fell in July to a lower than expected 7.7 million. The NASDAQ fell 0.3 percent, while the S&P 500 shed 0.2 percent. The Dow edged up. Vice President Kamala Harris today proposed a less drastic increase in the top capital gains tax rate, breaking with a plan President Joe Biden outlined in his budget blueprint earlier this year. The Democratic presidential nominee unveiled her plans in a speech at a New Hampshire brewery detailing her plan to promote small businesses. People familiar with the plan said that the all-in

top rate would be 33%, which would include a new 28% capital rate cited by Harris Today, as well as Biden's proposal to raise investment income tax to 5%. Biden wanted a near doubling of today's top rate to 44.6%, taxing capital gains at roughly the same rate as ordinary income. AI's rapid rise has many company boards racing to catch up. Board members are on the front lines of making rules on where and how it should be used, guidelines that could be crucial to the course of the powerful and fast evolving technology.

More board members say they are educating themselves on how generative AI can affect a company's profit, potentially boosting productivity, but also bringing risk that will be difficult to assess. My colleague, Anthony Banty, spoke with our reporter, Emily Glazer, about how company directors plan on using generative AI to boost productivity and assess risk.

I cannot find a board member that doesn't tell me that they are worried about AI. The issue at hand is that a lot of them have said they don't fully understand the emerging technology, so they're trying to educate them to understand how artificial intelligence, especially generative artificial intelligence, especially generative artificial intelligence, might impact the business or companies in general. They're trying to figure out how they measure this and how they have oversight over it. And they're also trying to figure out how to stay on top of this. So it's a whole bunch of things and it all has to do with a really complex emerging technology

that is having impact over so many different types of the business world across sectors, across functions, and really disrupting a lot. Okay, so let's get into some of those risks. What are the biggest risks that AI brings onto a company's plate that they have to manage? Most companies now expect that employees are using it, but employees might be using this in a manner like accidentally putting the company's secrets in an open-sourced platform or using it

and getting something that might not be factual or might not be completely correct, and then having that get plugged back into company work. And it's not just risks, it can also have a lot of opportunity and a lot of cost savings. And so board members also wanna make sure that if there are ways to cut costs using generative AI, that the company is doing that.

Have there been any guidelines put in place to handle AI in the meantime? I spoke with Clara Shi, who is the CEO of Salesforce's AI division. She said that they actually publicized the guidelines that they have for Salesforce because other companies were interested in them. And she said that they actually publicized the guidelines that they have for Salesforce, because other companies were interested in them. Also a lot of universities, Stanford, Brown, and others are convening people about this. There's a lot of talk right now.

There's a lot of education. There is some action, and I think we should expect a lot more, especially as we start to hear more about problems with AI in the workplace. That was our reporter Emily Glazer speaking with my colleague Anthony Bansi. Coming up, Biden's regulatory agenda is in flux. Why are businesses hating it? That's after the break.

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a membership to save on Uber and Uber Eats. With deals this good, everyone wants to be a student. Join for just $4.99 a month. Savings may vary. Eligibility and member terms apply. The fight over President Biden's regulatory agenda is in full pitch, but it could be months or even years before a winner is declared. As of late May, Biden's administration has issued 273 economically

significant rules. That's more than any of the past six administrations have done in the entire four years of their first term. And regulators say more are coming. The size and scope of Biden's regulatory push, meanwhile, has been met with stiff resistance by business groups and the Supreme Court. Joining us now to unravel all of this is Dylan Tokar, a reporter for The Wall Street Journal. Hi, Dylan. Hi. Thanks for having me.

So have we seen an uptick in activity by the various agencies to finish rules before a new president comes into office? Yes, we have. It's pretty common for administrations and their agencies to have a big push to finalize regulations prior to an election or an incoming administration. But what we've been seeing is that Biden's regulators are doing that early this year. And a lot of that has to do with likely the concerns around a possible incoming Trump administration using something called the Congressional Review Act to undo a lot of the regulations that Biden's

regulators have been working on. So what should we expect in a former President Donald Trump or Kamala Harris win this election? So when Trump ran the first time you saw him saying that dismantling the Obama state was going to be a big part of what he did. And when he came into the office, he used the Congressional Review Act to roll back regulations within a certain time window. And you see Trump on the campaign trail making similar promises in terms of what he's going

to do with Biden's last four years. If Vice President Harris wins the election, that's going to keep a lot of Biden's regulations safe from repeal and replace and from the Congressional Review Act. But one thing that we found through our reporting and trying to take stock of the last three and a half years in Biden's regulatory agenda is this focus on the legal challenge, this is what's happening in the courts. Let's talk a bit more about this. As you said, business groups have challenged many of these

rules. What have they achieved so far? They've been quite successful. It's going to take some time for these legal challenges to work their way through the courts to have a full view on just how much of Biden's regulatory agenda survives and how much is struck down at court. But what we've seen is a pretty big shift in how courts approach the regulatory process. What's driving that is there has been, from the conservative majority at the Supreme Court,

some landmark rulings around regulation. People view these rulings as really significant, and there's a feeling that this is really going to change the game but exactly how things are going to work out, no one's really sure yet. How does all this unpredictability affect businesses? It's true that there are a lot of businesses in a lot of industries where less regulation is simply what they would prefer but more than anything what they want is predictability and they want some sort of consistency and stability

throughout the process. I mean, regulation is always gonna be around, but what's happening now is that when one political party gains power, they're trying to undo everything that the other administration did and vice versa. So this is affecting businesses quite a bit. And with some of these big, ambitious Biden regulations,

they are stuck deciding, are we going to start preparing for this, or are we going to wait and see what happens? And that makes it difficult for businesses to plan and figure out where they're going to spend their money and which sorts of investments they're going to make. money and which sorts of investments they're going to make. Dylan Tokar is a reporter covering corporate crime and regulatory policy for The Wall Street Journal.

In other business news, we can exclusively report that Verizon is in advanced talks to acquire frontier communications. That's according to people familiar with the matter. They also said that an announcement could come this week. Granted, the talks don't hit any last-minute snags. The deal would bolster Verizon's fiber network to compete with rivals, including AT&T. And it would be sizable,

given Frontier's market value of more than $7 billion. And the Nordstrom family is moving to take their namesake retailer private. The 3.8 billion dollar offer is its second attempt to revive the ailing department store out of public view. Nordstrom is one of many traditional department stores that have struggled for years as shoppers spend less time browsing their aisles and more money shopping on their phones. The Nordstrom family aims to own 50.1% of the business in a joint bid with the Mexican retail group El Puerto de Liverpool, which will own 49.9%.

And finally, would you spend $1,000 on a trash can? Well, WSJ Personal Technology Bureau Chief Wilson Rothman had a chance to try one out. The Mill Food Recycler is an indoor composting machine that slowly and quietly turns food scraps into what looks like coffee grounds. Wilson spoke to our tech news briefing podcast about his experience. It looks like a trash can and you throw your food waste in there, you know, the scraps from your kitchen or the leftovers from your plate and you see these two kind of plastic, like little propellers in there that kind of churns them around for three to four hours, and out comes something that looks like coffee grounds but smells more like dog treats. So what I know is after two months, I have turned 74 pounds of my family's food waste

into 14 pounds of these dried up grounds. And to hear more about the $1,000 trash can and what Wilson made of it, you can listen to today's tech news briefing podcast. And that's what's news for this Wednesday afternoon. Today's show was produced by Anthony Bansi and Pierre Bienneme with supervising producer Michael Kosmitis. I'm Tracy Hunt for The Wall Street Journal. We'll be back with a new show tomorrow morning.

Thanks for listening.