High tech often wins on the Hill

Microsoft case aside, both parties woo the industry.

Republicans and Democrats fight about everything from taxes to trade, but even in today's hyper-partisan era there's one issue they often cooperate on: high tech.

This week's lopsided House vote to extend the ban on e-commerce taxes is a case in point. On items where the nation's technology industry is united - such as looser immigration laws for skilled workers - it often gets what it wants.

Both parties have e-agendas, which sound remarkably similar. Both are desperate to associate themselves with the e-cachet of a glamorous business, and eager for e-cash to fill campaign coffers.

Politicians have yet to start referring to their second terms as "Release 2.0." But their interest in tech matters is likely to only increase, if for no other reason than that many tech firms are just beginning to participate in the great whirl of Washington lobbying.

High tech is "so obviously an economic driver that there is a competition between parties and various political coalitions to enhance that growth and take credit for it," says Thomas Hazlett, a technology and telecommunications specialist at the American Enterprise Institute here.

There's one exception that may prove the rule of the new Silicon Beltway: the Microsoft antitrust case.

How can a government that is asking the courts to split one of the nation's richest and most powerful technology firms possibly consider itself pro-computer?

That's a point Microsoft itself raised in its May 10 response to the Justice Department's breakup plan. Cleaving the company in two risks turmoil "in the single most productive and envied industry in the United States," said the Microsoft filing.

That may be true. But "Microsoft" does not equal "technology industry," at least in politics. Many of the firm's competitors urged the US to file charges against it in the first place.

On issues where Silicon America is itself divided - such as the Microsoft case, or what to do about Internet privacy - Washington, too, finds consensus elusive.

"You have some things that are divisive even within the high-tech sector. But where there is unity, there is a more powerful rationale for action," says Mr. Hazlett.

For evidence, just look at Wednesday's vote on Internet taxation. Without a single hearing, the House extended for five years a current ban on Internet-specific taxes that would have expired in October 2001. The margin of victory? A razor-thin 352-to-75.

Never mind that state governors of both parties are apoplectic over this issue, since they feel the ban undermines sales taxes - a key revenue source for many states. The ban is part of the new House Republican "E-Contract 2000," whose other priorities include increasing visas for highly skilled foreign workers, providing digital opportunities for the disadvantaged, and granting digital signatures the force of law.

"The high-tech industry is the future," said House Speaker Dennis Hastert (R) of Illinois after the vote. "The last thing we want to do is impede our future with high taxes and excessive government regulation."

The immigration issue will come to a vote soon - perhaps as early as next week, said Speaker Hastert. This measure would increase by 200,000 the number of US "H1B" visas, which are of a category often used by programmers and other tech workers.

For their part, Democrats say that they're the ones that pushed for "H1B" reform in the first place. It's a pattern, they say: The GOP has lifted many of its tech ideas from the other side of the aisle.

House Democrats will release their own "E-Genda 2.0" next week. It will differ from the GOP list mostly in the emphasis it puts on funding government programs such as ClickStart, which is aimed at getting low-income children connected to the Internet.

If nothing else, the relationship between Washington and the technology industry has come a long way since just a few years ago. Then, Silicon types thought of politicians as starchily dressed people who, incredibly, worked in an industry with no stock options. Lawmakers thought of computer executives as geeks whose idea of democracy was voting on what type of Chinese food to order.

The Microsoft case has been a wake-up call for tech executives about the amount of influence the government can have on their business. Tech businesses have tripled their campaign contributions in this election cycle, according to the Center for Responsive Politics. Firms such as eBay and DoubleClick have opened their first Washington offices.

"They've finally begun to realize that government is not just a neutral, benign agent," says Larry Gerston, a political scientist at San Jose State University. "They can't just look the other way."

(c) Copyright 2000. The Christian Science Publishing Society

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