State of Play
It’s day 20 of the shutdown, making it the third-longest in US history.
The Senate votes today for the 11th time on the House-passed CR with no expectation that the funding measure will pass, leaving 750,000 federal employees furloughed.
The House has been frozen for over a month as Speaker Mike Johnson refuses to reconvene.
Driving the News
Politically, President Trump has stayed mostly disengaged while Democrats eye November 1st ACA lapses as a potential off-ramp to claim a political win without a policy deal, even as the Senate is poised to again reject the House CR and a GOP measure to pay unpaid federal workers.
The real-world impacts are rapidly materializing, as many federal employees will miss their October 24 paychecks, small-business and farm loans are stalled, air traffic control staffing is at risk, OMB has threatened mass layoffs, and WIC/SNAP face mounting strain despite temporary funding stopgaps.
Three Things to Watch in Tech
White House and Anthropic Clash on State AI Moratorium: White House AI czar David Sacks is at odds with AI frontier model company Anthropic for its staunch support of state regulatory action on AI. Sacks, calling Anthropic's strategy "regulatory capture,” is calling for federal preemption of state AI rules.
Sacks and allies, including Senate Commerce Chair Ted Cruz (R-TX), argue preemption is needed for competitiveness, but GOP divisions and the absence of a partisan vehicle make passage unlikely.
Democrats say any preemption must come with a real federal standard. Rep. Ted Lieu (D-CA) warned that “you can’t preempt with nothing,” while Senator John Hickenlooper (D-CO) wants to incorporate state policies with proven records in place as a base for federal policy. However, there is no clear path forward for either federally regulatory approach.
What’s Happening with the Senate Crypto Bill: With the House passing crypto market structure legislation prior to August recess, the ball is now in the Senate’s court.
However, bipartisan negotiations have hit a gridlock over Senate proposed legislation, with Republicans pushing for a rapid markup and rejecting Democrats’ new DeFi proposals, while Democrats accuse the GOP of leaking drafts and rushing the process.
The fight highlights broader partisan divides over how to split authority between the SEC and CFTC and how to regulate decentralized finance, wallets, and related applications.
In response to the stalemate, Senator Kirsten Gillibrand (D-NY) is organizing a meeting with crypto industry CEOs to restart talks this week. This effort to bridge divides has garnered support from other crypto-friendly Democrats like Senator Ruben Gallego (D-AZ). Other crypto hardliners, however, like Senator Elizabeth Warren (D-MA), remain opposed.
Patent Policy Changes Happening Quickly: The USPTO is taking big steps to restrict access to the inter partes review (IPR) process, an important mechanism created under the America Invents Act in 2011.
IPR empowered the PTO to review validity of patents before they became part of costly litigation, ultimately improving overall patent quality.
Last week, the PTO issued an NPRM and the PTO Director made an announcement, building on several other actions over the past few months, to expand the use of the discretionary denial of IPR petitions.
These latest steps threaten to bring back the bad old days of patent trolls, but this time financed by private equity.
How long do you think the government shutdown will last?
🏛️ Tech Hearings
No relevant hearings.
🗓️ Upcoming Events
The Brookings Institution - Virtual Discussion on "The American AI stack and the world" - Tuesday, October 21 at 9:00 AM EST
Defense One - Virtual Discussion on "Genius Machines: The Next AI Breakthrough; What U.S. Military Research Reveals About the Next State of AI Development" - Tuesday, October 21 at 2:00 PM EST
The Johns Hopkins University Bloomberg Center - Event on "Lightning Showcase of Critical Tech Innovations in National Security" - Tuesday, October 21 at 5:00 PM EST
The National Defense Industrial Association and MITRE - Virtual Discussion on "AI for Requirements: Modernizing DOD's Requirements Process" - Wednesday, October 22 at 1:30 PM EST
Axios - Future of Defense Summit - Wednesday, October 22 at 3:00 PM EST
The Government Executive Media Group's NextGov/FCW, Washington Technology, and ATARC - Summit on "Cybersecurity Futures: Built on Zero Trust" - Thursday, October 23 at 9:00 AM EST
