FTC modernization, enforcement efforts jeopardized by cuts, officials say

Federal Trade Commission officials on Tuesday urged House lawmakers to reverse course on proposed funding clawbacks and provide the agency with more financial support for both enforcement and internal digitization efforts.

During a House Energy and Commerce Communications and Technology subcommittee hearing, FTC Chair Lina Khan said the enforcement entity requires continued support from Congress for modernization efforts and Commissioner Rebecca Slaughter noted that proposed fiscal year 2025 budget cuts would result in the agency passing “up important investigations and enforcement matters” in addition to considering furloughs and workforce reductions. 

In the latest House appropriations proposal, Congress would rescind $146.3 million from the FTC below the FY2025 budget and decrease the FY2024 budget by almost $40 million.

“Ensuring an effective FTC requires adequately resourcing,” Khan said. “Thanks to increased funding from Congress these past few years, we have been able to invest in our technological skills and IT infrastructure so that we can continue to keep pace with continued digitization across the economy. Ensuring the FTC can continue its good will require further support from Congress.”

In response to a question from Rep. Darren Soto, D-Fla., about how the agency might use artificial intelligence to help workflows, Khan said the FTC is working to track how AI tools could be used to “make our jobs easier.”

The organization is not yet at a place where it could harness AI, Khan said, which is partly due to the agency’s inability to invest in necessary infrastructure like data storage and improved in-house cloud capacity “rather than having to contract externally for those types of things.” 

“So I think there could be a world in which we’re able to get there but it will require upfront investments and we can only make those investments with continued support from Congress,” Khan said.

On the enforcement front, lawmakers disagreed about the effectiveness of the FTC’s efforts and its ability to deliver on mission goals. Rep. Gus Bilirakis, R-Fla., said the FTC has “lost its roots as a well-respected bipartisan law enforcement agency,” citing the FTC’s commercial surveillance and data security proposed rulemaking as an “overreach” that “raises significant legal concerns.”

Rep. Debbie Dingell, D-Mich., however, pointed to Republican cuts in FY2025 appropriations as an impediment to the FTC as it aims to finalize and enforce rules, such as its Combating Auto-Retail Scams rule. 

“I want to commend the commissioners and their staff for this incredible work, especially in the face of attacks from Republicans who would like to see the FTC hobbled and ineffective,” Dingell said.