2024 Election Impact on US Labor Policy and AI Regulation: Policy Summit Insights

Speakers

• US Representative Ro Khanna (D-CA)
• US Representative Kat Cammack (R-FL)
• Moderated by Matthew Kaminski, Editor-at-large, Politico

Curious how the 2024 election could impact labor dynamics and regulation in the wake of AI? Watch Deel’s Future of Policy Summit on-demand here, or read on for the full panel recap.

In this panel discussion moderated by Matthew Kaminski, Editor-at-large, Politico, US Representative Ro Khanna (D-CA) and US Representative Kat Cammack (R-FL) discussed the following topics:

• Balancing AI regulation and innovation
• Ensuring fairness in automation and taxation
• Preparing for AI’s workforce impact
• Addressing social division exacerbated by AI

Regulating AI and data privacy

Mathew Kaminski opened the discussion by highlighting the rapid advancements in artificial intelligence and the comparatively slow pace of regulatory responses.

"...it is dizzying...how often you’re seeing the latest updates to AI models. There are use cases coming out every single day. Policymaking, let’s say, moves a little bit more slowly..."

Kaminski then asked Rep. Kat Cammack how Congress and the federal government should approach AI, especially in terms of protecting workers and considering the future of the labor market.

Rep. Kat Cammack highlighted the Republicans’ preference for industry-driven solutions over government regulation, emphasizing the importance of the REINS Act. This legislation mandates that any regulations with a significant economic impact must receive approval from Congress.

“as someone who is the flagship author and sponsor of the REINS Act, which is the largest regulatory reform bill in American history…what the bill would do is it would require that any rule or regulation that has $100 million or more of industry impact would come back to Congress for an up or down vote,” Cammack explained.

Rep. Cammack also expressed concern that overly strict AI regulations could stifle innovation.

“...what we have seen is a really aggressive administrative state, and as AI technology has really become a part of so many different sectors and continues to have a really important role moving forward, you get very nervous about the big players in the space coming in with a set of regulatory recommendations, which ultimately would hamper innovation and push out smaller players in the space.”

She advocated for focusing on fundamental elements such as data privacy, language models, and blockchain as a means of credentialing, all while avoiding overregulation that could hinder industry growth.

“...if we can get back to a place where we’re putting data and privacy as really the cornerstone of what the government is working on... I think us coming in and over-regulating in the space was really gonna be to our detriment,” Rep. Cammack urged.

Matthew Kaminski raised the question of whether last year’s presidential executive order (EO) was excessive, and if Donald Trump returns to the presidency, should he consider reversing any of its provisions?

Rep. Cammack acknowledged that the executive order contained some positive aspects but felt it was primarily a reaction to fear-mongering about AI rather than a proactive, industry-driven approach.

“Members get elected, and all of a sudden, they think that they're engineers, constitutional lawyers, MDs, and experts in all things. We need industry experts to come and really work with us as we craft this, but the key here is that it has to be industry-driven.”

Rep. Cammack shared that, in her view, AI holds great potential for benefits across various sectors.

“And I am not someone who believes that AI is the doomsday scenario, right? I think that we're gonna have tremendous benefits from AI being utilized in all sorts of industries. So the EO, it had elements that were okay, but I think the genesis really was a reactionary, "oh, we have to do something so we can say we’re doing something,” rather than it being a thoughtful, common sense, industry-driven approach,” Rep. Cammack added.

AI and automation: Striking a balance

Rep. Ro Khanna joined the discussion to emphasize the significant economic potential of AI, particularly in his district of Silicon Valley, which boasts a substantial market value. He raises concerns about whether the benefits of this innovation will reach ordinary Americans or remain concentrated in tech hubs.

“I'm very, very optimistic about the future of economic innovation. But the question is, is that economic gain going to be concentrated in places like Silicon Valley, or are ordinary Americans going to benefit from it? And a lot of policy decisions will go into that,” Rep. Khanna noted.

Rep. Khanna also advocates for centering workers in discussions about AI adoption to enhance their roles rather than replace them.

“What we have to do is center workers in the conversation about how we use AI to enhance their jobs so that they can think about what those jobs look like, as opposed to just rushing to adopt AI for excessive automation.

However, Rep. Khanna points out that there aren’t similar tax incentives for businesses that invest in worker training and enhancement. This situation raises apprehensions about how AI might exacerbate existing economic inequalities.

“We privilege capital expenditure and depreciation, and we don’t have the same tax credits for investing in worker training and in worker enhancement. So to me, that is the biggest challenge for AI— does it further our economic disparity, in the disparity between parts of this country that have been de-industrialized and left out of modern prosperity in places like Silicon Valley,” Rep. Khanna explains.

Robot tax and rethinking the tax code

In response to Matthew Kaminski’s question as to whether the congressman from Silicon Valley is in favor of a robot tax, Rep. Khanna explained:

“I think a robot tax is on the table, but I think the bigger issue is not whether we have a robot tax, but whether we have a better distribution between the taxation on capital and the taxation on labor…Right now…companies can deduct capital expenditure, but they don’t have the same ability to get tax credits for hiring people or investing in people. I’d rather we level that and give companies tax credits for investment in people and hiring people.”

Rep. Cammack believes the Republicans will not be in favor of additional taxes. Rep. Cammack advocates for a tax code that encourages growth rather than punishing success, suggesting that the current approach to R&D tax deductions is flawed. Rep. Cammack also highlights the need for long-term investment certainty to foster innovation and job creation.

Rep. Cammack explained: “In this race, and we’re at the height of it, you have one side that wants to not only increase the corporate tax rate but then wants to see an increase in capital gains and even a tax on unrealized gains, which would have exceptionally detrimental effects.”

“When you are in an innovative space, we want to see more investment in R&D. We want people to grow and create these jobs. The government doesn’t create jobs. It’s our entrepreneurs. It’s our folks from Silicon Valley all the way down to Miami Beach and everywhere in between that are creating these jobs. So we need to be facilitators rather than debilitators of this,” Rep. Cammack continued.

Matthew Kaminski argues that the approach of corporate tax cuts and deregulation since the 1980s has resulted in negative consequences, such as the decline of the manufacturing sector and poor trade agreements.

“It led to the concentration of wealth in places like New York and Silicon Valley. Silicon Valley companies benefited enormously from the tax cuts, but they didn't put the factories in Johnstown, Pennsylvania, or in Ohio or Pennsylvania,” Kaminski explains.

Talks of an AI regulatory commission

Rep. Khanna expressed optimism about Kamala Harris’s potential presidency. However, he acknowledged that if Trump were to become president, he would have the support of Elon Musk, who has suggested the establishment of an AI regulatory commission.

"I know Elon very well. Elon and I did a chat on X with Mike Gallagher, who was no longer in Congress, but a Republican...Elon proposed...having an AI regulatory commission, a federal agency on AI to make sure that we had basic safety tests, to make sure that we had clear regulation in terms of something being AI or not, and a disclosure about that, to make sure that we don't have as many bots.”

The need for national data privacy standards

Matthew Kaminski asked the government officials where they agreed on policy solutions regarding AI. Both called for a national data privacy standard to replace the current state-by-state regulations, believing that a unified approach is essential for companies to manage compliance effectively.

“We have to have a national data privacy standard. Because the piecemeal work that has been done state by state, it’s just not sustainable. No company has the bandwidth to comply with 50 different states’ data privacy regulations. And so that’s something that we collectively, as Americans, we need to get that across the finish line in a way that is common sense, that puts people in charge of their privacy, that is favorable to industry,” Rep. Cammack urged.

The potential of AI and future job opportunities

Matthew Kaminski settled the discussion by asking the panel their predicted timeframe for AI to show tangible impacts on the labor force when AI will truly affect job roles, and company resource allocation.

Rep. Cammack highlighted AI's significant impacts on various sectors, including the military, medicine, and education.

“I'm on the armed services ranking member of the AI Innovation Technology Committee. And we need AI in so many of our drone technology and our defenses and our targeting and our cyber defense. AI is having an impact on medicine already in terms of doctors and nurses being able to use it. The person who won the Nobel Prize at Google used AI to help discover new proteins. We’re going to be having AI already helping in new educational platforms.”

Rep. Khanna agreed on the promise of AI. He believes that America’s production capabilities will expand dramatically, preventing widespread worker displacement. However, he emphasizes the need for the country to ensure that everyone can participate in this prosperity.

“Americans want to, they’re entrepreneurial, they want to produce things, they want to make things, they want to engage in prosperity. And what we have to figure out is how do they build wealth themselves in a modern economy—not beyond the dole of a couple of billionaires,” Rep. Khanna explained.

Rep. Cammack also shared her experiences with autonomous vehicles in San Francisco and a conversation with an Uber driver contemplating a career shift. Rep. Cammack stressed the need for a more supportive tax code for gig economy workers and predicted that AI would create new industries and job opportunities.

“The tax code is getting increasingly hostile to our 1099 employees, our independent contractors. We need to facilitate where these people who want to do side work and create businesses and contract with companies, they should be able to do that. And we shouldn’t penalize people for that,” Rep. Cammack urged.

Rep. Cammack believes that AI’s impact will likely lead to the emergence of new industries that are currently not being considered.

“Maybe 10 years from now, there’ll be an entire new workforce that we haven’t thought about that will be required,” Rep. Cammack enthused.

The deeper issues underlying AI and politics

To conclude, Matthew questioned how AI has impacted politics and political campaigns.

Rep. Khanna shared concerns about the role of AI and bots in spreading propaganda and misinformation. While acknowledging that technology exacerbates issues, Rep. Khanna emphasized that the deeper problem lies in the country’s division and the decline of respectful communication. Rep. Khanna advocated for teaching kindness and civic education in schools as a more fundamental solution.

“We often blame technology for something that is much deeper. And that is that this country is deeply divided. We have lost the ability to talk to each other with respect, to listen to each other with civility,” Rep. Khanna explained.

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