ICR D.C. Insider: December 2022


In the December 2022 edition of The ICR D.C. Insider, we share our insights and analysis about developments in Washington that could have an immediate and long-term impact on your business.

What’s Next In Washington

As 2022 comes to an end, the current “lame duck” session of Congress continues to struggle to enact two “must pass” pieces of legislation:

  • Federal Budget – Current federal government spending expires on December 16th and Congress has not yet agreed on a new plan. Given Republican’s 2023 control of the House, the debate focuses on whether to approve a short-term funding package into early 2023 (a continuing resolution, or CR), a longer-term one-year stopgap solution, or the actual FY2023 budget (which seems very unlikely at this point). While a federal government shutdown around the holidays is not ideal and likely to be avoided, the duration of the interim CR remains unclear.
  • National Defense Authorization Act (NDAA) – Enactment of the FY2023 NDAA, authorizing $847 billion in defense spending, is required by December 31st. The NDAA – which has been continuously passed and enacted for 61 years – has been approved by a bipartisan 350-80 vote in the House and is now with the Senate. Sen. Joe Manchin (D-W.Va.) had hoped his permitting reform initiative for infrastructure projects would be attached to this legislation, but it will not be included.
  • Negotiations continue in Congress with Democrats, who support continuing the American Rescue Plan’s expanded version of the Child Tax Credit, and Republicans, who want changes in how businesses treat research and development expenses for tax purposes. Even if they do reach an agreement, it would likely need to be included in a broad federal-spending package. Lawmakers are more optimistic about attaching retirement-savings legislation to a must-pass spending bill. That measure would increase the minimum age for required distributions from tax-deferred accounts. It would also expand a savings tax credit for lower-income households.


  • New Crypto, Inflation & Diversity Disclosure Requirements – The SEC has issued a series of rules and proposals for more corporate disclosures around three key issues:
    • Crypto Exposure – The Commission has asked public companies to detail their exposure to distressed crypto entities. The SEC said companies may have disclosure obligations related to the direct or indirect impact that recent crypto bankruptcies may have had on their businesses.
    • Inflation Impact – Sarah Lowe, Deputy Chief Accountant in the Division of Corporation Finance, told a conference for finance executives that companies need to do more than simply say inflation was “affecting their business.” Lowe said that companies should explain how inflation has affected results of operations, sales, profits, capital expenditures and maintenance, and they should also discuss how business goals and pricing strategies were changing as a result.
    • Workforce Diversity – Democratic SEC Commissioner Jaime Lizarraga said that the SEC should require companies to publicly disclose workforce diversity data, as well as their policies on diversity, equity, and inclusion, among other workforce facts.
  • Climate Change Disclosure Rule – As the SEC considers its climate change disclosure rule proposal, criticism is coming from both political parties.
    • Senate Republicans – Republican senators John Boozman (R-Ark.) – ranking member of the Senate Agriculture Committee – and Mike Braun (R-Ind.) – another committee member – have introduced a bill that would block implementation of the disclosure requirements for greenhouse gas emissions from a company’s supply chain. The Protect Farmers from the SEC Act would  exempt family farmers and ranchers from certain reporting requirements, ensuring they are not required to track and disclose granular on-farm data regarding individual operations and day-to-day activities in order to stay compliant with the companies that purchase their products.
    • Senate Democrats – Sen. Jon Tester (D-Mont.) sent a letter to SEC Chair Gary Gensler focused on concerns about the proposal’s Scope 3 reporting mandate, which would require certain public companies to disclose indirect emissions generated throughout their value chains. Sen. Tester argued that the SEC should not impose “unnecessary red tape” on family farmers and ranchers.
  • Gensler Draws Ire From Both Sides of the Aisle – Chair Gensler faces a growing political problem: he has a shrinking number of allies in Washington. Wall Street and Republicans are out to get him, and even some Democrats are fuming. At the same time, Gensler is facing unrest among SEC staff over a growing workload and return-to-office policies.
  • FY22-26 Strategic Plan Published – In publishing its Strategic Plan, the Commission established three primary goals:
    • Protect the investing public against fraud, manipulation and misconduct.
    • Develop and implement a robust regulatory framework that keeps pace with evolving markets, business models and technologies.
    • Support a skilled workforce that is diverse, equitable, and inclusive and is fully equipped to advance agency objectives.

The plan cites the rapid growth of crypto assets as an “evolutionary risk” that requires new authorities from Congress to address.

  • Comment Period for Buyback Disclosure Rule Reopened – The SEC reopened the comment period regarding the disclosure required about an issuer’s repurchases of equity securities, as a result of provisions in The Inflation Reduction Act of 2022.
  • Enforcement Priorities – In a speech, Enforcement Division Director Gurbir S. Grewal discussed the public’s decline in trust for the SEC and how the division will work to re-establish it, noting three areas:
    • Obtaining penalties and remedies that deter misconduct and meaningfully hold bad actors accountable, protect investors and where possible, helping harmed investors recover their losses.
    • Proactively investigating and charging cases across a spectrum of market participants and harm.
    • Continuing to incentivize proactive compliance and meaningful cooperation.
  • Oversight into Private Companies Expanded – The rule for quoting the price of debt offered by private companies have been updated, per an SEC no action letter.
  • In the States
    • Democrat AGs Fight Congressional Republicans on ESG – Democratic attorneys general in 17 states have accused some Republicans of “kowtowing” to certain corporate interests in their efforts to prevent consideration of environmental, social, and governance (ESG) factors – which, this group says, can help grow and protect Americans’ retirement savings. District of Columbia Attorney General Karl A. Racine led the group in warning the chairs and ranking members of the Senate Banking, Housing and Urban Affairs Committee, as well as and the House Financial Services Committee about Republican efforts to interfere with financial institutions’ ability to make sound investment decisions on behalf of hardworking Americans.
    • Republican AG’s Scrutinize SEC’s Technology-Driven Delays – Spearheaded by Montana Attorney General Austin Knudsen, 18 Republican state attorneys general sent Chair Gensler a letter raising concerns about the technological missteps that led to the disappearance of an unknown number of public comments on almost a dozen different regulatory proposals. The letter asks the agency to extend the comment period for the affected rules from 30 days to 60 days.


  • Expansion of Law Against Anticompetitive Practices – The FTC said that it plans to expand its use of a century-old statute that could allow the agency to bring more lawsuits against what it sees as anticompetitive corporate behavior. The move – which broadens the interpretation of the 1914 law that created the FTC – opens the door to more legal challenges against businesses engaging in alleged coercive or deceptive conduct that undermines competition. Commissioner Christine S. Wilson dissented.
  • Business Opportunity Rule & Possible Expansion – The agency announced that is exploring changes to the Business Opportunity Rule and will seek public comment on the rule’s effectiveness and a potential expansion to cover other types of money-making opportunities. Those include coaching or mentoring programs, e-commerce opportunities or investment opportunities.
  • Compliance Deadline for Parts of Data Security Rule Extended – June 9, 2023 is the new deadline for companies to comply with some of the changes the agency implemented to strengthen the data security safeguards financial institutions must put in place to protect their customers’ personal information. The Safeguards Rule requires non-banking financial institutions, such as mortgage brokers, motor vehicle dealers and payday lenders to develop, implement and maintain a comprehensive security program to keep their customers’ information safe.

Additional Key Developments

  • NDAs in Sexual Harassment Cases Limited – President Biden signed legislation that curbs the use of confidentiality agreements that block victims of sexual harassment from speaking publicly about misconduct in the workplace. The law would make existing nondisclosure agreements unenforceable. It also would apply to any agreements between providers of goods and services and their customers.
  • U.S. Steps up Efforts to Enforce Ban on Products Made With Forced Labor in China – Attempts to defy a law meant to crack down on the use of forced labor in China’s Xinjiang region won’t succeed, an undersecretary in the Department of Homeland Security said, adding that the government has cast a wide net as it seeks out offending goods. Under the Uyghur Forced Labor Prevention Act, which went into effect in June, goods with links to China’s Xinjiang region are presumed to be tied to forced labor and in most cases banned from the U.S.
  • U.S. Audit Watchdog Looks to Strengthen Rules on Quality ControlsThe Public Company Accounting Oversight Board (PCAOB) has proposed to tighten the rules that govern the controls audit firms use to assess the quality of their audits, a move aimed at improving the effectiveness of audits and better protecting investors.
  • Labor Department Clears Path for 401(k) Plans to Offer ESG FundsMore retirement savers could soon have the option to invest in funds based on environmental, social and governance principles, under final regulations issued by the Labor Department.


  • Next Up & FTX Fallout – The fallout from the collapse of the cryptocurrency firm FTX– continues apace. The SEC, Commodity Futures Trading Commission, and other regulators continue to receive intense criticism even as they work to expand their regulatory remits. High-profile congressional hearings in December will likely produce headlines, even as any meaningful legislation will not be proposed until the new Congress takes office in January 2023.
    • In one example, House Financial Services Committee member Rep. Ritchie Torres (D-N.Y.) sent a letter to Comptroller General Gene Dodaro asking the Government Accountability Office (GAO) to conduct an independent review of the SEC’s failure to regulate FTX and protect investors.