Trump Withholding Billions In Grants From States That Engage In Corporate Oversight

from the zero-oversight-of-corporate-power dept

Hoping to repay corporate America’s feckless support of authoritarianism, the Trump administration is once again attempting to illegally ban all state and federal oversight of corporate power. Both via executive order, and by withholding already awarded grants from states that refuse to play along.

The Trump administration has already done generational damage to federal consumer protection and corporate oversight. Now the rich donors pulling the strings are doing their best to take direct aim at any states that might try and fill the void on environmental, labor, or consumer protection.

The Trump administration has tried several times this year to push an unsuccessful blanket ban on “regulating AI.” They like keeping the press attention on “regulating AI,” to push the narrative that they’re protecting American innovation from the mean old government. As opposed to trying to impose a corrupt, blanket ban on all state or federal oversight of unchecked corporate power.

Case in point: earlier this year, Senator Ted Cruz came up with the idea of withholding billions in already awarded infrastructure broadband grants from any state that “regulated AI.” But Cruz’s effort also attempted to punish any state that attempted to enforce their own net neutrality laws, or even make sure that taxpayer-subsidized broadband was affordable.

Ted Cruz’s effort to include these restrictions in this year’s spending bill didn’t work. So the Trump administration is back again with a new executive order that attempts to, once again, withhold already awarded broadband grants from states that try to “regulate AI”:

“Trump’s draft order apparently would apply to about half of the funding available from the $42 billion program, which was created to deploy broadband to homes and businesses without modern access.”

By “regulate AI” it’s again important to understand the Trump administration means “do absolutely anything that upsets corporate America.” While the Supreme Court and circuit courts have done an impressive job destroying federal oversight of corporate America, state autonomy still remains a bit of a wild card in the Project 2025 and corporate quest for total immunity from literally all public accountability.

This isn’t about “protecting innovation from burdensome regulation.” It’s about completely destroying the state and federal government’s ability to protect labor, consumers, markets, or the environment from unchecked corporate power. I feel compelled to annoyingly repeat myself on this point because it’s so often buried in press coverage that tries to normalize corrupt anti-democratic extremism.

In addition to the hijacking of the courts to ensure all corporate oversight efforts fail (see the 5th Circuit’s recent decision to let AT&T off the hook for spying on Americans and selling their location data, the 8th Circuit attack on FTC consumer protection, or the entire Supreme Court Loper Bright mess), the administration has increasingly been hijacking already awarded taxpayer funds for states that don’t play along.

The poster child for this effort has been the $42.5 billion BEAD (Broadband, Equity, Access, and Deployment) broadband grant program created by the 2021 infrastructure bill. Republicans repeatedly demonized and voted against this bill, but love taking credit for its improvements.

Despite the fact that Republicans made a huge election season stink about how long it was taking BEAD to deliver broadband, the program was recently completely rewritten to ensure that Elon Musk and Jeff Bezos get billions in taxpayer dollars for doing absolutely nothing differently, introducing significant new delays for states that were finally on the cusp of oodles of fiber broadband deployment.

Republicans also stripped away any and all language requiring that taxpayer-funded broadband is actually affordable to the public. And they redefined core definitions to make the program generally less useful. Hijacking already awarded funds doled out by Congress is not, you may be surprised to learn, legal. But that’s generally not reflected in press coverage of the program’s sabotage.

As Ars Technica notes, Trump’s latest Executive Order also tries to magically imbue FCC boss Brendan Carr with the regulatory authority to punish states that try and regulate AI:

“The draft order would also require the Federal Communications Commission and Federal Trade Commission to take action against state AI laws. The FCC chairman would be directed to “initiate a proceeding to determine whether to adopt a Federal reporting and disclosure standard for AI models that preempts conflicting State laws.”

Again, that’s… not how any of this works.

With one hand, the Trump administration likes to insist that regulators have zero power to tell corporations what to do. They’ve made very clear progress in defanging all regulatory autonomy when it comes to protecting consumers, labor, or markets.

But with their other hand, the Trump administration likes to pretend they have all manner of vast regulatory authority to tell companies or states what they can or cannot do.

You’ve seen this reflected in the way FCC boss Brendan Carr routinely insists the government has no authority to crack down on Comcast’s shitty behavior, but all the authority in the world to regulate TikTok, punish media companies that engage in journalism that’s critical of Donald Trump, or harass companies that aren’t suitably racist or sexist enough for the president’s liking.

But U.S. courts (so far) have generally found that when the federal government abdicates its authority over federal consumer protection, it can’t then just turn around and tell states what they can or can’t do. This was most notable on the net neutrality front, when the FCC was repeatedly told by courts it couldn’t ignore consumer protection, then ban states from enforcing state net neutrality laws.

The corporate press buries the lede (because most affluent media owners really like this war on the regulatory state), but the goal here is a complete ban of government oversight of billionaires and corporate power.

The nation’s richest certainly don’t want states like Tennessee trying to prevent Elon Musk from engaging in rampant data center pollution of minority neighborhoods, they also don’t want states enforcing labor protections, policing consumer fraud, enforcing “right to repair” laws, punishing predatory telecom monopolies, or anything else.

The Trump election season lie that he’d be a Lina Khan populist antitrust enforcer was pushed by MAGA and assorted useful idiots. Instead we’ve seen a generational assault on state and federal corporate oversight. This has been broadly dressed up as sane policy by the corporate press, “free market” Libertarians and authoritarian zealots, but it’s really just anti-democratic corporatist extremism that’s going to leave a generation of suffering, chaos, and carnage in its wake.

Filed Under: ai, automation, brendan carr, consumer protection, donald trump, fcc, regulation, state rights, states, ted cruz