Cozen Currents: Populism is Popular 

March 5, 2024
The Cozen Lens
  • Regardless of which candidate is victorious in November’s presidential election, populism will be sure to shape the next administration’s policies.
  • In an age of populism, Big Tech has increasingly become a bipartisan punching bag. Issues including online speech, data privacy, and children’s online safety have become more populist than partisan in nature.
  • Sabre-rattling against the eye-watering prices of prescription drugs has become a common refrain on both sides of the aisle, even the typically pro-business GOP.

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Populism is a Guaranteed Election Winner

Everything Old is New Again. Populism has a long history in US politics, dating back at least to Andrew Jackson, but its form has evolved.

  • Jackson’s ideology was focused primarily on economic populism and opposition to financial elites. More recently, cultural populism emerged in the 1960’s with George Wallace as a central figure. This strain was more focused on pushing back on intellectual elitism.
  • Observers credit the rise of populism in today’s political system with voter apathy and a growing sense of disenchantment with the government. Past populist eras have rarely seen the ideology so prevalent in both parties.

Populism’s Modern Face. Populism in the US today has taken on different forms in the two dominant political parties. Still, the movement’s connection to nationalism has taken hold in both parties, creating a strong bipartisan consensus on certain issues.

  • Jackson's economic populism has primarily been championed by Democratic progressives like Senator Bernie Sanders (I-VT) and the House’s Squad. This group focuses on pushing against big business, particularly financial elites. This sentiment has also extended to the Biden administration’s antitrust enforcers, who have embraced an “anti-Big” anything approach.
  • In Republican circles, former President Trump pushed populism in his image to the party’s forefront with a heavy emphasis on cultural issues and resisting intellectual elitism. This message has also been combined with a traditional GOP focus on a smaller government. While populists' reasons to reform the government vary from the more classic limited government.
  • In both parties, there has been growing bipartisan support for nationalist policies, such as Buy America requirements and industrial policies like the CHIPS program. While the embrace has been stronger in Republican circles, even President Biden, who is not a Democratic populist, has shown a nationalist streak. This approach from Biden reflects the populist movement’s wider impact throughout Washington.

Power to the People. As part of this populist drive, there has also been bipartisan interest in empowering individuals and returning autonomy to voters.

  • One issue that has benefited from this aspect of the populist movement is right-to-repair legislation and regulation. This effort appeals to populist instincts looking to limit large corporations’ power and has seen strong support from the White House and the Federal Trade Commission under Biden. Federal legislation has been elusive, but there has been significant progress at the state level, and interest remains high in Congress, which could lead to a bill passing in the not-so-distant future.
  • Another area aligned with this effort to empower individuals is the rise of digital rights, such as the right to data portability and the right to opt-out. The most progress in establishing these regulations has been at the state level, primarily through comprehensive data privacy legislation. Still, there is an increasing focus among federal agencies to write rules creating similar standards for individual sectors, like the Consumer Financial Protection Bureau’s open banking rule.

Populists Target Big Tech

Online Speech. Content moderation and free speech on the internet has become a populist issue.

  • In recent years, tech platforms have seen scrutiny rise from both sides of the aisle around online speech. Democratic critics of Big Tech generally focus more on harm to disadvantaged communities and misinformation. At the same time, Republicans are more focused on alleged “conservative bias in tech.
  • Lawmakers from both parties have called for reforms to Section 230, the provision of federal law that generally shields tech platforms from liability for content generated by its users. Despite bipartisan calls to reform or even eliminate Section 230, Democrats’ and Republicans’ grievances are rooted in different issues making changes to the law a challenging legislative proposition.
  • The Supreme Court last week heard oral arguments in two cases challenging Florida and Texas laws that restrict content moderation by social media platforms. It’s not clear exactly how the justices will rule. Oral arguments touched on tech platforms’ role as a modern town square and to what extent content moderation comprises censorship or editorial discretion. Depending on how narrowly or broadly the Court rules, advocates of reining in content moderation could try again, seeking to craft measures that can pass legal muster.
  • Expect that Section 203’s harshest critics will use misinformation and fraudulent campaign content to bolster their arguments for why reforms are needed.

Data Privacy. Strengthening online privacy protections is more of a populist issue than a strictly partisan one.

  • Both sides of the aisle on Capitol Hill agree that a federal privacy framework is sorely needed, but disagreements on the details are aplenty. While Democrats generally take a more consumer-friendly approach to privacy and support a private right of action than Republicans, GOP lawmakers are often supportive of a federal data privacy bill that would preempt a growing patchwork of state laws. Of the 13 states that have enacted comprehensive privacy laws, six are Republican controlled. In a seventh, New Hampshire, a bill has passed both GOP-majority chambers of the legislature and awaits Governor Chris Sununu’s (R-NH) signature.
  • The Federal Trade Commission’s (FTC) privacy rulemaking is still pending. On Capitol Hill, the American Data Privacy and Protection Act has seemingly stalled, after it sailed through the House Energy and Commerce Committee last Congress. President Biden’s nominees for the FTC’s vacant GOP seats, Virginia Solicitor General Andrew Ferguson and Utah Solicitor General Melissa Holyoak, said that Congress should pass a federal privacy law, leaving enforcement to the FTC, in a confirmation hearing last fall.

Children on Social Media. Few topics rally as much bipartisan support as keeping children safe online, an area in tech that presents a golden opportunity for enactment of reforms.

  • Several states have passed laws governing children’s safety on the internet. They include California’s Age-Appropriate Design Code Act, which would impose requirements on platforms to prevent harms to minors, and laws in Ohio and Arkansas requiring parental consent for underage users to make social media accounts. All have been blocked in court. Last week, Governor Ron DeSantis (R-FL) vetoed legislation that would have banned children under 16 from social media on the basis of parents’ rights but lawmakers are at work on a new bill.
  • On the federal level, lawmakers of both parties are focusing on children’s online safety. Senators held a contentious hearing with tech CEOs on the issue in late January, which was followed by a surge in support for the bipartisan Kids Online Safety Act (KOSA) last month. KOSA would require platforms to take “reasonable care” to prevent harm to young users. A group of senators are now advocating for KOSA to be bundled with their proposal to ban children under 13 from social media, require parental consent for those under 18, and block platforms from algorithmically delivering content to minors. This move could make it more difficult to gain consensus.

Populists Target Big Pharma

An Old Refrain for the Left. The Democratic Party has long tried to increase government involvement in healthcare to ensure all Americans have affordable coverage.

  • The Affordable Care Act was a market-focused healthcare reform that shared many features with then-Governor Republican Mitt Romney (R-MA) health reform plan. Since Senator Bernie Sanders’ (I-VT) primary run against Hillary Clinton in 2015, the progressive wing of the party has shown increased willingness to buck incrementalist, bipartisan reforms in favor of large-scale changes to the healthcare system. Although this approach has failed to gain traction in the party overall.
  • President Biden’s health care plan in 2020 can be seen as a minimum floor for mainstream Democrats today. It called for a public option, lowering the Medicare eligibility age from 65 to 60, installing external reference pricing, capping drug price increases to inflation, and permitting importation from foreign countries. Another unified Democratic government could see some of these changes come to pass. While some polling at the time even suggested the majority of Democratic voters supported Medicare-for-All proposals, Democratic policymakers showed little appetite to fundamentally overhaul American healthcare in this manner.
  • The Biden administration has been unable to enact any of the ground-shaking changes above but have made major reforms to healthcare in the United States. For the first time, Medicare will negotiate on the price of drugs. Subsidies for the Affordable Care Act marketplaces were expanded, and insulin costs were capped at $35 a month for Medicare enrollees.

A New Refrain from the Right. Former President Trump’s populist tone has shaken up the traditional relationships between the Republican Party and private industry.

  • One of candidate Trump’s very first campaign policies released in January 2016 was a threat that Medicare should use its leverage as the biggest buyer of prescription drugs in the US to negotiate prices sharply down. For someone without much of an interest in policy, its “Art of the Deal” style playbook and passionate advocacy implies a rare personal involvement in its development. Although he hewed much closer to the traditional industry line when elected, this was the first sign a new populism was beginning to overtake the traditional GOP outlook.
  • While in office, Trump spent political capital trying to end surprise out-of-network billing in healthcare. Late in his term, he signed an executive order directing the Department of Health and Human Services to begin rulemaking on an international reference pricing model as an alternative payment model, as well as a program to begin the importation of prescription drugs. These policies could see a return under a second Trump term, and with less guardrails from the Reagan-wing of the party to contend with.

The Political Future of Pharma. Across the nation and the aisle, politicians are getting increasingly bold on taking on an industry that once appeared invincible.

  • Both blue Colorado and red Florida have petitioned the Food and Drug Administration to allow each state to import prescription drugs from another country (Canada) for the first time (the latter’s request was approved). A swath of mostly blue states are enacting prescription drug affordability boards, some of which have the power to cap drug prices in the state.
  • In the executive branch, the Centers for Medicare & Medicaid Services sent initial offer letters to participating drug companies of the first ten prescription drugs selected for negotiation a month ago.
  • The Biden administration has also been crafting guidance extending the circumstances in which they can license a drug’s patent to another company (known as march-in rights) to include high prices. Other initiatives include limited Medicare Advantage broker compensation and broadening biosimilar access for Medicare Part D enrollees. President Biden is likely to lean on healthcare as an issue Democrats perform better on in the run-up to the election.
  • A health policy focus for both Republicans and Democrats has been health care price transparency. The Lower Costs, More Transparency Act passed the House with strong bipartisan support in December. The bill would install price transparency rules for labs, hospitals, and imagers, enact a ban on PBM spread-pricing, and require site-neutral drug payments for hospitals. Nevertheless, major negotiations are still needed with the Senate.
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Authors

Howard Schweitzer

CEO, Cozen O’Connor Public Strategies

hschweitzer@cozen.com

(202) 912-4855

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