2025 Summer Forum
July 9-13, 2025
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The Senate Presidents’ Forum met in Ljubljana, Slovenia, July 9–13, 2025. Senate President Ronald Kouchi (HI), Board Chair, welcomed Forum participants and introduced Executive Director Caroline Carlson and Guest Moderator Martha Wigton. Senator Hanna Gallo (RI) eulogized Senator Dominic Ruggerio (RI), a long-time participant and board member of the Senate Presidents’ Forum. Senator Bobby Joe Champion (MN) reported on the deadly attacks on Minnesota legislators and the need for greater vigilance for state lawmakers and other government officials.
This forum focused on Slovenia-US relations, examined apprenticeships as they are practiced in Switzerland and Slovenia, and assessed the future of U.S.-EU trade relations. The group explored the role of small- and medium-sized enterprises (SMEs) in fostering trade, and learned of artificial intelligence safeguards implemented by the EU. A lively roundtable discussion of challenges and accomplishments by the states was followed by a workshop focused on authentic leadership.
U.S.-Slovenia Bilateral Relations:
A Strategic Partnership
Greg Meier, Deputy Chief of Mission, U.S. Embassy, Slovenia, discussed the shared values and democratic principles of the U.S. and Slovenia, and described Slovenia’s role in regional leadership.
Shared Values and Democratic Principles
The U.S. and Slovenia maintain a strong and enduring relationship grounded in mutual respect for human rights, the rule of law, and transparent governance. These foundational values not only solidify the bilateral relationship between the two nations but also shape joint initiatives aimed at countering authoritarianism and disinformation around the world.
NATO Ally and EU and UN Member
Slovenia plays a significant strategic role as a NATO ally and a member of the European Union. Slovenia is a vocal advocate for the integration of Western Balkan nations into both the European Union and NATO. It views enlargement as critical to ensuring long-term peace, stability, and prosperity in Southeast Europe. Slovenia currently also serves as a non-permanent member of the United Nations Security Council (UNSC).
Slovenia is centrally located amid EU markets.
Slovenia has taken a firm stance in support of Ukraine following Russia’s full-scale invasion in 2022. It has provided political, humanitarian, and military assistance to Ukraine, while fully aligning with EU and U.S.-led sanctions against Russia.
Defense Cooperation and Partnerships
The U.S. and Slovenia share a robust 30-year defense relationship through the State Partnership Program with the Colorado National Guard, which facilitates joint military training, interoperability exercises, disaster response coordination, and capacity-building initiatives. The U.S. also makes use of Slovenian infrastructure for logistics and mobility in support of NATO operations and exercises.
Slovenia is engaged in ongoing discussions about increasing its defense spending from approximately 1.3% of GDP to the NATO target of 2%, with further considerations for reaching 3% in the future. This dialogue reflects the tensions between domestic resistance to changes in social spending and alliance expectations for more equitable burden-sharing.
Economic Ties and Trade Relationships
U.S.-Slovenia trade continues to grow steadily, despite the overall volume remaining modest compared to larger economies. Bilateral trade growth is driven by rising investor confidence and complementary strengths in innovation and industrial production. U.S. firms in sectors such as IT, pharmaceuticals, and advanced manufacturing have found a welcoming environment in Slovenia’s skilled workforce and EU market access. Leading U.S. brands, including IBM, Pfizer, Uber, and Salesforce, have expanded their presence in Slovenia, and Westinghouse, a U.S.-based company focused on nuclear technology, is working to modernize Slovenia’s nuclear energy infrastructure.
Leading U.S. brands including IBM, Pfizer, Uber, and Salesforce have expanded their presence in Slovenia.
Conclusion
The U.S.-Slovenia relationship is marked by a convergence of strategic interests, democratic values, and mutually beneficial cooperation across defense, economy, energy, and innovation. With strong foundations and emerging opportunities, the bilateral relationship is well-positioned for continued growth and collaboration in the years ahead.
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Discussion
Comments are paraphrased for brevity.
Sen. Gary Stevens (Senate President, Alaska):
Slovenia has cycled through many governments, which seems to show a shocking lack of stability.
Mr. Meier:
Slovenia has been independent for only 30 years since the breakup of Yugoslavia. For 30 years, the underlying structures have remained stable. The Constitution has not changed, and changes are made within the legal framework of parliamentary procedures. In a parliamentary structure, snap elections can be called if a government loses public confidence. New political parties often appear in response to specific issues, and coalitions are required to form a government.
Sen. Bill Ferguson (President of the Senate, Maryland):
I saw footage of a concert from Zagreb, in neighboring Croatia, with half a million people. Many of them were young people who seemed to embrace a nationalistic Balkan identity.
Mr. Meier:
As we are seeing worldwide, there is a rise of nationalistic governments, and this is happening across the Balkans. While this is a minority view here, Slovenia is not immune to it. These movements tend to be right wing, with many opposing the restrictions imposed during COVID and rejecting NATO alliances.
Sen. Bob Duff (Senate Majority Leader, Connecticut):
Are the top issues in Slovenia’s 2026 elections similar to those facing the U.S.?
Mr. Meier:
The pressure to increase defense spending equity across the EU led the prime minister, Robert Golub, to agree to increased defense allocations. However, this was not popular with voters who are concerned about losing their welfare and retirement benefits. As a result, the prime minister lost support over this decision, and defense spending will be subject to a public referendum to approve it. The elections are dominated by personalities, by economic issues and by the debate about Slovenia’s role in Europe.
Sen. Thomas Pressly (Vice Chair, Senate Labor and Industrial Relations Committee, Louisiana):
Are Russia and China making significant investments in Slovenia in the absence of major U.S. investments?
Mr. Meier:
China has a very active trading partnership with Slovenia. Slovenia recognizes that China is a necessary partner but is aware of the inherent risks. After Tito broke with Stalin in 1948 [see Tito-Stalin split], Russia exerted less influence in Slovenia, but this is not a strong memory. Today, Slovenian security forces monitor Chinese and Russian intelligence assets.
Sen. Charles Schwertner (Chair, Senate Business and Commerce Committee, Texas):
Military defense is an important political issue. NATO countries are protected by the U.S. but are unwilling to pay their share. NATO countries agreed to increase their contributions from 2% of GDP to 5% of GDP by 2035. Meanwhile, people want NATO to expand into the Balkans and help to rebuild Ukraine, which will be costly to NATO. How is this viewed in Slovenia?
Mr. Meier:
That is the heart of the discrepancy; Slovenians want to be in NATO but not pay for it. They feel, “We are safe here, and defense spending should not impact our social services.”
Slovenian Economic and Political Analysis
Geographic and Historical Context
Slovenia’s modern identity has been profoundly influenced by its historical geography, especially its experience under the Habsburg Empire. This legacy fostered early industrial development, bureaucratic tradition, and a cultural orientation toward Central Europe, distinguishing it from other Balkan states. World War II brought significant trauma, including foreign occupation, ethnic conflict, and collaborationist violence, leaving scars that still shape historical memory.
In the aftermath of World War II, the country became part of socialist Yugoslavia under Josip Broz Tito, where it operated within a decentralized federal system that emphasized worker self-management and relative autonomy. This era provided both stability and limited prosperity, albeit under an authoritarian regime.
Slovenia declared independence in 1991, transitioning swiftly from a socialist republic to a democratic, market-based nation-state.
Post-Socialist Achievements
Since independence, the country has charted a path of strong integration with Western institutions, culminating in its accession to both the European Union and NATO. These achievements reflect its strategic alignment with liberal democratic norms and a commitment to regional cooperation and stability.
On the domestic front, substantial progress has been made in expanding social protections, healthcare access, and educational outcomes. These improvements are reflected in international indicators: the country now boasts high rankings in the Human Development Index and gender equality indices, signaling a relatively inclusive and equitable social system. Reforms in health, education, and employment have bolstered public trust and positioned the country as a post-socialist success story, capable of competing with its Western European counterparts in terms of governance and quality of life.
Slovenia has diverse and sophisticated export niches, including pharmaceuticals, automotive, and data management, plus a growing tourism sector.
Slovenia has a high Human Development Index.
Current Challenges and Immigration Policies
Despite these achievements, the country is grappling with several pressing challenges that test the resilience of its institutions and social cohesion. Political polarization has intensified, often paralyzing policymaking and undermining public confidence in democratic processes.
Economic productivity, particularly labor productivity, remains below EU averages, constraining long-term growth and wage convergence. An aging population adds fiscal pressure on pensions and healthcare systems, while debates over defense spending—heightened by regional security concerns—compete with demands for sustained investment in social programs. Moreover, the growing influence of social media is reshaping youth attitudes, sometimes undermining civic engagement and promoting misinformation.
In the realm of immigration, the country has adopted a relatively open and pragmatic approach, prioritizing the attraction of high-skilled workers to offset demographic decline. It has also responded humanely to the displacement caused by the war in Ukraine, offering protection and services to Ukrainian refugees. Notably, this proactive stance has occurred with minimal domestic backlash, suggesting a degree of societal resilience and openness to integration.
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Discussion
Comments are paraphrased for brevity.
Martha Wigton (Moderator):
What is the role of Slovenia’s government in the economy?
Dr. Spruk:
Slovenia has a socialist legacy and many Slovenians resist the idea of privatization; however, privatizing industries has been shown to contribute at least 1% of growth to the GDP.
Sen. John Arch (Speaker of Legislature, Nebraska):
Would you comment on the current state of immigration and strength of the workforce?
Dr. Spruk:
Slovenia aims to build a high quality workforce and attract highly educated people; however, after COVID, increased immigration led to conflict and anti-immigration sentiment and a number of new political parties emerged. Once people become employed, there was greater acceptance.
Sen. Bill Ferguson (President of the Senate, Maryland):
It seems that younger people are being attracted to a more nationalistic message.
Dr. Spruk:
As a professor at the University, I see stark generational shifts. The college students are getting their news of the world and their world view from TikTok and other social media. This leads to polarization and tension on campus here, as it does in the U.S.
Apprenticeships and Vocational Education: Lessons from Two EU Nations
Erik Swars
Head of International Affairs
Institute for Vocational Education and Training
Swiss Federal University
This session provided comprehensive exploration of legislative, diplomatic, social, and practical vocational education themes, with strong focus on examining and contrasting Swiss and Slovenian workforce development systems for the benefit of U.S. legislative leaders.
Swiss Dual Apprenticeship Model
Erik Swars of the Swiss Federal University described Switzerland's apprenticeship system, which operates under a federal structure where responsibility is shared across national, cantonal, and local levels, promoting decentralized oversight. The same Ministry oversees both economic affairs and education.
Almost 70,000 people, or two-thirds of school graduates, opt into Vocational Education and Training (VET) pathways, which offer training in 250 professions and operate in more than 25% of Swiss companies, including SMEs. The program is regulated nationally and offers full permeability into higher education and career pathways. Thus, VET is not a second class opportunity but part of an integrated educational progression.
The Swiss vocational education and training model is built on a "triple system" combining company-based work, theoretical instruction at vocational schools, and supplemental training at industry branch centers.
The $8 billion annual cost of the VET program is distributed among stakeholders, with companies in the driver’s seat to match training to evolving needs.
The system is a well-established public-private partnership where companies, schools, and government collaborate closely in training design and delivery. One of its critical strengths is financial sustainability: businesses benefit directly from the productive work of apprentices during training. This economic incentive supports strong employer participation and keeps training relevant to labor market needs.
Individuals, companies, and society benefit from the VET program.
Outcomes are impressive, with Switzerland consistently showing low youth unemployment (around 2.7%) and high global innovation rankings.
Apprenticeship Path in Slovenian Vocational Education and Training (VET)
Darko Mali, who is Undersecretary at the Institute for Vocational Education and Training, described Slovenia’s apprenticeship and vocational system, which began in the 1990s following independence, building on European best practices while maintaining flexibility.
The system allows for high permeability between vocational and general education, enabling students to shift between academic and practical paths. Currently, about 65% of upper-secondary students are enrolled in vocational programs, indicating wide participation. Although Slovenia originally adopted a dual model, it was discontinued and later reintroduced in 2017 to enhance work-based learning.
In Slovenia, apprentices are formally students who receive stipends and retain access to social benefits, helping to preserve equity and attractiveness.
In this model, apprentices are formally students who receive stipends and retain access to social benefits, helping to preserve equity and attractiveness. The number of apprentices is steadily rising each year, with 637 apprentices in 2024. Participation among stakeholders is also growing, with more than 300 companies and 20 schools involved in the program; notably, one-third of all apprentices are concentrated in a single school. Despite this momentum, several challenges remain that affect the system’s effectiveness and scalability.
A key issue is the alignment of school curricula with the actual competency needs of companies, particularly when it comes to developing higher-level skills.
Ensuring companies are both interested and adequately prepared to support apprentices—through sustainable financial and non-financial means—is an ongoing concern. Schools must also be granted the autonomy to deliver more flexible and responsive curricula. However, the overarching challenge lies in fostering a strong social partnership and building a unified, long-term vision for the apprenticeship system, Mr. Mali concluded.
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Discussion
Comments are paraphrased for brevity.
Martha Wigton (Moderator):
How do your programs ensure the alignment between industry needs and the apprenticeships?
Mr. Swars:
Companies take the lead in defining the VET programs to align industry requirements with competencies and qualifications. Swiss programs are revised every five years to ensure that necessary skills are taught to address changing needs.
Martha Wigton (Moderator):
How do you assess effectiveness of the VET programs?
Mr. Mali:
There are professional standards that define the required competencies for each profession or trade. The Slovenian system is school based, so students receive a broad education that prepares them to be capable of adapting to new professions. The schools organize themselves to be responsive to the needs of local industries.
Sen. Thomas Pressly (Vice Chair, Senate Labor and Industrial Relations Committee, Louisiana):
What happens if the student apprentice doesn't work out? What is the timeframe during which they will be evaluated?
Mr. Swars:
About 25% of students stop their apprenticeships prematurely, either by their choice or at the company’s behest. Fully 50% of those who complete their apprenticeships stay in their training company, while the other 50% may go to a competitor or continue on for additional education.
Sen. Stuart Adams (President of the Senate, Utah):
A Swiss company is currently building rail cars in Utah, and they employ apprentices who earn a paycheck and also academic credit. Furthermore, the company identifies high-quality apprentices and pay for their additional education.
The Future Of EU-U.S. Trade Relations
L. Daniel Mullaney
Nonresident Senior Fellow
The Atlantic Council’s Europe Center and GeoEconomics Center
Daniel Mullaney, a former U.S. Trade Representative diplomat and current expert at the Atlantic Council, provided an overview of the transatlantic trade framework. He traced the roots of U.S.-European trade relations to the post-World War II formation of the global trading system through institutions like the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO). These institutions established foundational principles such as bound tariffs, negotiated reductions, and nondiscrimination in trade practices, which continue to guide global commerce.
New Dynamics
The current landscape is strained by the U.S. administration’s announcement of sweeping tariffs ranging from 10% to over 50%, which could take effect by July or August 2025. These proposed tariffs are currently under temporary suspension to allow time for negotiations with key trading partners, including the EU. The situation remains fluid as the U.S. seeks to leverage tariff threats to achieve broader trade objectives.
Proposed U.S. tariffs have triggered concern over the return of protectionist dynamics and the potential unraveling of trade norms that have long underpinned transatlantic commerce.
Diverse International Responses and Underlying Drivers
In response to these tariffs, countries have adopted different models: China has favored direct retaliation, while the EU has leaned toward negotiation and deeper systemic solutions. The European approach emphasizes dialogue and tackling root causes of tension, such as regulatory disparities and industrial overcapacity.
The U.S. position is motivated by long-standing frustrations over trade deficits with Europe, non-tariff barriers, and perceived unfair advantages enjoyed by state-supported foreign industries. Additional concerns include post-COVID supply chain fragility and the need to protect American manufacturing and jobs from global competition.
Policy Takeaways for State Legislators
Mr. Mullaney emphasized that U.S. state legislators have a critical role to play in shaping federal trade policy by communicating state-specific and sectoral concerns. Active engagement ensures that trade frameworks reflect the interests of local economies and employment sectors affected by tariffs and global shifts. He warned against the risks of escalating trade wars, which could harm both U.S. exporters and consumers. Finally, he highlighted the enduring value of international cooperation and multilateral trade frameworks in fostering economic stability and resolving disputes constructively.
U.S. state legislators have a critical role to play in shaping federal trade policy by communicating state-specific and sectoral concerns.
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Discussion
Comments are paraphrased for brevity.
Sen. Robert Stivers (President of the Senate, Kentucky):
The World Trade Organization policies were designed to give a trade advantage to help rebuild Europe and Japan after WWII because the American economy was not impacted by the war, and Russia was seen as a global threat. Today, these policies are antiquated. Various policies were set to provide Europe and Japan with a trade advantage. New trade agreements are needed, but it is hard to identify what industries are critical when that situation changes daily. How can trade policies be developed to be responsive to such a dynamic environment?
Mr. Mullaney:
That’s a perfect assessment of why early trade policies were developed and now need to evolve. For example, after WWII, the U.S. was the dynamo in the automobile industry; therefore, a 2.5% U.S. tariff on European cars made sense despite the 10% tariff on U.S.-made cars. At that time, the U.S. was supporting European recovery and was not driving hard bargains. But today, the situation has radically changed.
Today, there are global supply chains that have local impacts, as was demonstrated during COVID, when masks became a critical commodity. The U.S. administration wants to ensure that critical industries are based in the U.S. But “critical” industries change weekly, and determining appropriate trade policies and identifying critical industries is a daily challenge. In the past, the U.S. took a gradual approach to redressing trade imbalances; but that hasn’t worked. So today a more abrupt approach is being tried.
Sen. Rob Wagner (President of the Senate, Oregon):
State legislators have limited resources and face many challenges. What can we state policymakers do to best position our states in the global economy?
Mr. Mullaney:
Foreign Direct Investment (FDI) is important to the states. The states want to be attractive to bring in specific investments, and state governments can influence federal directions to encourage this. State messaging to the federal bodies could focus on points such as:
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Retaliation on tariffs is not helpful.
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Constructive engagement to address the underlying issues contributing to trade imbalances is productive.
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Barriers to specific trade and specific trading partners must be individually tailored; for example, trade of agricultural products with China.
Furthermore, it’s important to realize that trade agreements take years to be formulated and agreed. What the administration is able to achieve in 90 days are a few specific agreements; the larger framework will still need to be negotiated.
Sen. Dafna Michaelson Jenet (Senate President Pro Tempore, Colorado):
Our SMEs rely on imports from many countries. Recently, a supplier in Canada announced they would no longer ship to the U.S. Ali Baba has moved shipping from China to Germany in to be able to continue shipping to the U.S. What are the impacts of tariffs on SMEs?
Mr. Mullaney:
SMEs are the heart of U.S. commerce, and the states need to promote and ensure their ability to participate in global trade. Uncertainty about tariffs hits SMEs the hardest. The administration should focus on the underlying issues and create new norms of international behavior.
Sen. Bob Duff (Senate Majority Leader, Connecticut):
Has the threat of U.S. tariffs awakened the rest of the world to look at other potential trading partners, such as China? Is there a greater awareness of the tariffs imposed by other countries?
Mr. Mullaney:
The threat of tariffs disrupts the whole world trade system. Europe and other countries may look to other non-U.S. trading partners. Current trade rules do not work with current reality. Many countries are recognizing this. The current existing trade rules are not fit for purpose.
Current trade rules do not work with current reality. Existing trade rules are no longer “fit for purpose.”
Sen. Charles Schwertner (Chair, Senate Business and Commerce Committee, Texas):
Who is calling the shots and providing input to the administration on tariff issues? What is the role of economist and presidential advisor Pete Navarro?
Mr. Mullaney:
President Trump has strong views on tariffs and trade imbalances and is the ultimate decisionmaker. He has many advisors, among them Peter Navarro, who is known for his hardline stance against China and belief in reducing trade deficits. Ambassador Jamieson Greer is the U.S. Trade Representative who has the extensive background and worldwide respect to advise the President on longer-term trade arrangements.
Slovenian Trade and Global Positioning
Ajša Vodnik is CEO of the American Chamber of Commerce in Slovenia and Chair of AmChams in Europe, which has a mission to strengthen transatlantic alliances.
Right-Sized and Innovative
Ms. Vodnik presented Slovenia as a “right-sized” country with a dynamic economic model centered on agility and innovation. Its economy is dominated by SMEs, which are supported by strong local and national innovation ecosystems. Efforts to develop and retain young talent are a key part of the strategy, with targeted programs that nurture entrepreneurship and digital skills. Slovenia’s strategic location in Central and Eastern Europe enhances its role as an export-oriented economy with growing appeal to foreign investors.
Slovenia boasts strengths in biotechnology, pharmaceuticals, electrical equipment, and aviation, while emerging industries such as artificial intelligence and software development are growing rapidly.
Foreign direct investment is encouraged through favorable geographic positioning and a skilled labor force, with major multinationals such as Goodyear and Textron maintaining operations in the country. Research and development capabilities are supported through both public institutions and private partnerships, reinforcing the country’s reputation for innovation. These sectoral strengths position Slovenia as a competitive hub in the regional and global economy.
Demographics, Healthcare, and Competitiveness
Slovenia benefits from a highly capable and productive workforce:
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57% of young people (20–24) enroll in higher education
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49% of graduates are in science, technology, engineering & math (STEM) fields
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Tuition-free university education is available for EU students
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96% of the working population speaks at least one foreign language
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60% speak two or more foreign languages
Slovenia’s population is well-educated, with high foreign language proficiency, gender equality, and the benefits of strong quality-of-life rankings.
Despite its strengths, Slovenia faces demographic challenges such as youth migration, prompting the government to implement retention strategies aimed at improving opportunities and quality of life.
The healthcare system offers universal coverage, but there are ongoing debates around the balance between public and private care, especially regarding wait times and the efficiency of specialist services. Businesses are increasingly involved in offering supplementary healthcare options, underscoring the intersection between health and economic policy.
High personal income and social-contribution tax rates present a challenge to attracting foreign investment, raising concerns about long-term competitiveness. While the system funds strong public services, it also adds to labor costs, which can deter multinational companies.
Policymakers are exploring regulatory and fiscal reforms to streamline the business environment and improve Slovenia’s global economic standing. Overall, the economic environment is marked by innovation, human capital strength, and strategic openness to global markets, balanced with structural reforms still in progress.
Conclusion
Ms. Vodnik concluded by reviewing compelling reasons for U.S. states and businesses to connect with Slovenia, including:
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High-tech industrial base with an innovation-driven economy
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Strategic EU location – gateway to European markets
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Well-established supply chains and trade routes
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A workforce that is exceptionally well educated, multilingual, and efficient
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Supportive and dynamic business and startup environment
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Open, reliable, and welcoming to foreign investors
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High quality of life and family-friendly environment
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Proven U.S. investment success stories (Textron, Goodyear, Loftware)
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Strong R&D ecosystem and access to EU innovation funds
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Discussion
Comments are paraphrased for brevity.
Sen. J. Walter Michel (Vice Chair, Senate Rules Committee, Mississippi):
You mentioned universal healthcare, which works great unless you need a specialist, in which case it can take a long time. Do companies provide specialist healthcare coverage?
Ms. Vodnik:
We do not differentiate between private or state-offered healthcare plans. The turning point is how healthcare is implemented. Some people advocate for state-run healthcare only, but others say the delays in that system are too long. However, reform is headed in the direction of state-run healthcare.
Sen. Thomas Pressly (Vice Chair, Senate Labor and Industrial Relations Committee, Louisiana):
Why are young people leaving Slovenia, and do those in the apprenticeship programs stay here?
Ms. Vodnik:
We have many young people in AmCham; however, young people also need exposure to new opportunities and they leave to explore new experiences. Companies invest to retain their apprentices, and, as Slovenia has become a hub for research and development, more R&D talent stays here. However, for industries beyond R&D, people must take jobs out of the country. When they have families, they often come back to Slovenia for our safe environment, good education, and high quality of life.
Sen. Charles Schwertner (Chair, Senate Business and Commerce Committee, Texas):
What is the tax rate in Slovenia?
Ms. Vodnik:
Taxation is a major issue that interferes with FDI [Federal Direct Investment], and it’s a challenge for Slovenia. The corporate income tax is 19% and personal income taxes are progressive, ranging from 16% to 50% — among the highest in Europe.
AI Safeguards and Innovation:
Lessons from the EU’s digital policy framework
Mark Boris Andrijanič of the Atlantic Council, who was Slovenia’s first Minister for Digital Transformation, outlined the EU’s comprehensive digital governance approach as structured around three major legislative pillars: the Digital Services Act, Digital Markets Act, and the EU’s AI Act. These laws form the foundation of the EU Digital Rulebook and aim to protect consumers, promote fair competition, and regulate emerging technologies responsibly.
Regulating Content and Competition
The Digital Services Act (DSA) targets illegal content and enhances transparency and accountability of large online platforms, including algorithmic decision-making and content moderation practices. It also introduces strong child-protection provisions and user-appeal mechanisms, and mandates annual audits for major platforms.
The Digital Markets Act (DMA) focuses on regulating large technology companies deemed “gatekeepers,” introducing pro-competition measures to prevent self-preferencing and enforce data separation between services. It empowers users by requiring that pre-installed apps can be uninstalled and default settings adjusted, while also mandating that small businesses gain fairer access to data and interoperability tools.
Together, the DSA and DMA seek to curb tech monopolies, increase digital fairness, and rebalance power toward consumers and smaller market players. These acts are seen as ambitious efforts to modernize the European digital space in line with fundamental rights and market fairness.
The EU Digital Rulebook aims to protect consumers, promote fair competition, and regulate emerging technologies responsibly.
AI Act and European Innovation Landscape
The AI Act, approved in May 2024, introduces a risk-based regulatory model categorizing AI systems into unacceptable, high, limited, and minimal risk. Prohibited uses include social scoring and most biometric surveillance, while high-risk systems in areas like healthcare, education, and law enforcement face strict requirements.
The Act also includes rules on emotion recognition, transparency of foundation models, and copyright obligations, alongside provisions for innovation sandboxes to support responsible experimentation. Notification duties and safeguards are designed to balance innovation with ethical oversight and public trust.
Critics argue the EU lags behind the U.S. and U.K. in venture capital, tech commercialization, and startup scalability.
However, concerns are mounting over whether the EU’s regulatory rigor might stifle AI innovation, particularly for SMEs which may lack the resources to comply. The debate centers on the “Brussels effect,” where EU standards shape global norms, but also risk slowing domestic competitiveness. In response, policymakers are pursuing reforms including regulatory simplification, enhanced public-private investment, stronger university-industry collaboration, and investment in nuclear and hydro energy to support AI’s growing energy demands.
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Discussion
Comments are paraphrased for brevity.
Sen. Charles Schwertner (Chair, Senate Business and Commerce Committee, Texas):
Is EU regulation stifling innovation in AI? It seems that a pro-growth, hands-off approach is more productive than a regulatory approach.
Mr. Andrijanič:
I agree that the EU regulation is interfering with innovation in AI. A complex set of reasons have caused the EU to be behind in AI: first, there is a higher level of investment in the U.S. largely based on capital from pension funds; secondly, the transfer of knowledge from universities to production is more effective in the U.S. than in the EU. In fact, this is a make-or-break moment for AI innovation in the EU.
This is a make-or-break moment for AI innovation in the EU.
In the U.S., the absence of a national standard means the 50 states are each making their own AI rules. This gives the competitive edge to the biggest companies who can afford to hire people to interpret and abide by these 50 different rule sets. In the U.S., companies will launch their AI projects in those states with easier rules.
The AI Act was not intended to be a bureaucratic monster. The EU wanted a simple, straightforward guideline. However, once you start such a project, with many stakeholders, it snowballs. The resulting AI Act is 100-pages long, but a uniform set of guidelines is essential.
Sen. Bill Ferguson (President of the Senate, Maryland):
AI can be used for good or for ill; it’s the output that matters. How is the AI Act enforced? Can an AI vendor be issued a stop-use restriction or are there financial penalties?
Mr. Andrijanič:
The same enforcement strategies apply to builders and to deployers or implementers of AI platforms. Penalties are significant, ranging from 7% up to 20% of the annual turnover. The AI act supports the EU’s regulation of free speech, which seeks to remove illegal speech; for example, child pornography. The social media platforms themselves impose these regulations.
Sen. Thomas Alexander (President of the Senate, South Carolina):
In the administration’s recently passed budget bill, the House attempted to prevent the states from regulating AI for 10 years. However, governors and the states resisted this and the provision was deleted. They spoke with one voice. The states are actively implementing AI regulations because the federal government has not created a national framework.
Mr. Andrijanič:
Certain guardrails are required, especially in response to citizens’ concerns. In fact, less than half of Americans have a positive view of AI. The U.S. needs a federal AI bill for consistency and not to have 50 state versions. The current lack of a federal AI guideline interferes with innovation. AI startups need that guidance.
In contrast to the views of U.S. citizens, people in the Middle East, Kuwait, and China have a more positive view of AI, and they have sufficient energy sources to power data centers.
The current lack of a standard federal AI guideline interferes with innovation. AI startups need that guidance.
Sen. Dafna Michaelson Jenet (Senate President Pro Tempore, Colorado):
Is there support for age verification in the EU rules for AI?
Mr. Andrijanič:
Yes. Age verification is part of the legislation in the DSA and the DMA. These are common-sense regulations designed to protect vulnerable people. The U.S. needs to develop a coherent set of rules so that there is a common principle making it easier for businesses to follow and comply with the rules.
Sen. Robert Stivers (President of the Senate, Kentucky):
The EU lacks sufficient energy to power AI. That’s why the Middle East can be so much more positive about AI, with their access to significant energy sources.
Mr. Andrijanič:
Agreed. The cost of energy is higher in Europe due to the Russian invasion of Ukraine and the cutoff of the Russian oil sources. But the EU is developing nuclear energy where the price for electric is lower. In the Nordic states there is a lot of hydro energy, and Europe is investing in fusion energy, which could be a significant game-changer. The Middle East sees “compute” as a commodity where the price of energy is practically zero.
ROUNDTABLE DISCUSSION
Legislative Session:
Challenges and Accomplishments
In a session facilitated by Corina Mulder, SPF Consultant, senators provided a snapshot of their perceptions of their respective state’s fiscal health, revealing a mix of optimism and concern across regions. State-by-state reports highlighted major achievements from the 2025 legislative sessions, including budget agreements, policy reforms, and innovative programs. Legislators shared updates on current economic conditions, budget surpluses or deficits, and the status of reserve funds. Many states are actively pursuing tax reforms—ranging from income and corporate taxes to property and grocery taxes—while also tackling long-standing and emerging policy priorities.
Common Issues Across States
Despite geographic differences, states reported recurring themes in their fiscal and policy landscapes. Medicaid and broader healthcare reforms remained dominant concerns, alongside investments in K–12 and higher education, including school-choice policies. Pension reform efforts were noted in several states, as were challenges tied to infrastructure upgrades, affordable housing shortages, and responses to natural disasters. Federal funding uncertainties, volatile insurance markets, and efforts to boost tourism and economic development were also common threads in state-level discussions.
Policy Priority Poll and Emerging Focus Areas
The most frequently cited priorities included Medicaid, energy policy, infrastructure investment, workforce development, and housing affordability. These results reflect a growing consensus around the interconnectedness of economic stability, public services, and long-term growth. The exercise helped identify areas of bipartisan interest and potential collaboration for future legislative sessions.
Participating senators were polled on their state’s fiscal condition and then asked to elaborate in group discussion.
An interactive poll asked legislators to rank their top policy concerns, generating a word cloud that offered visual insight into critical issues.
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Discussion
Comments are paraphrased for brevity.
Sen. Robert Stivers (President of the Senate, Kentucky):
Kentucky is in a great fiscal position, and we are cautiously optimistic. A major achievement was to decrease the state income tax to 3.5% for tax year 2026. We also made record investments in K–12 and post-secondary education. Our pension rating has improved from C to AA+, and we currently have $131 million in excess income and $4.5 billion in reserve funds, with $225 million remaining in the state safety account. Our concerns focus on the new federal tariffs which may affect sales of bourbon. Also we don’t know what the current administration’s budget bill will mean to healthcare and Medicaid costs to the states.
Sen. Thomas Pressly (Vice Chair, Senate Labor and Industrial Relations Committee, Louisiana):
Louisiana’s fiscal position is stable. We had a special session in November 2024, where we changed the tax code, decreasing both personal and corporate taxes. In this session, we reorganized state agencies and restructured our regulations to encourage companies to move to Louisiana. Our budget is at a standstill, but we are investing in economic development activities such as improving roads. Insurance rates are a significant challenge due to our hurricanes and severe winter weather.
Sen. Hanna Gallo (Senate President Pro Tempore, Rhode Island):
Rhode Island is dealing with a challenging fiscal environment, so the legislature didn’t have a lot of room for funding enhancements. In terms of a policy achievement, the legislature was able to ban some guns; however, no one was happy about the regulation from either side. We increased taxes on the sale of property over $1 million, but otherwise very little changed in the state’s budget.
Sen. Ronald Kouchi (President of the Senate, Hawaii):
We are cautiously optimistic and have stabilized the budget. We have an unexpected $550 million windfall due to a settlement of a lawsuit against Plavix. [In May, the state of Hawaii won a 12-year, $700 million battle over the efficacy of Plavix, a blood-thinning medication, for Asians, Pacific Islanders, and Native Hawaiians — Ed.] Insurance is a big challenge in our state especially following the Maui fires. We are putting a liability cap on claims to stabilize rates from the utility. We’ve also imposed a 2% “Green Fee,” an increase on hotel room rates which should produce about $100 million per year for infrastructure development. The major unknown is what impact federal actions may have on tourism.
Sen. Amy Sinclair (President of the Senate, Iowa):
Our fiscal situation is stable and we have a $1 billion surplus. We’ve revamped the unemployment system, halving the number of people receiving unemployment and the number of weeks benefits are payable.[1] Some of that money is going back to employers to invest in workforce development and retraining for reemployment. We implemented tax cuts, reducing to a 3.8% flat tax rate for individuals and also lowering corporate tax rates.
Sen. Bob Duff (Senate Majority Leader, Connecticut):
We are cautiously optimistic. Our Rainy Day Funds are about 15% of revenue. Our major achievement is that we started an early childhood trust fund for early education and preschool (S.B. 1). It is supported by the employers, employees, and state funds, and is designed to improve the start children have in school. We currently have a surplus and are paying down our pension debt; but pensions remain an issue. Our concerns are focused on what we don’t know about how the administration’s new budget bill will impact the state.
Sen. Kenneth Bogner (Senate President Pro Tempore, Montana):
The state is in a great fiscal position. We’ve had significant population growth after 2016 and housing prices skyrocketed. In 2025, we implemented housing reforms to spur housing development, and this is our biggest achievement. However, our concerns are about access to healthcare. We passed Medicaid expansion, but will have to see the impact of the federal budget on our costs.
Sen. Mary Felzkowski (President of the Senate, Wisconsin):
Wisconsin enacted a new two-year state budget for 2025–2027, totaling $111 billion. The bipartisan agreement was driven by urgency to ensure access to $1.5 billion in federal Medicaid match that we would lose under President Trump’s tax and spending cuts package. However, Medicaid continues to be a concern with $7.8 billion being allocated. This is our biggest challenge as the state has the fifth highest Medicaid costs in the U.S.
Sen. Bart Hester (Senate President Pro Tempore, Arkansas):
Our fiscal outlook is very optimistic. We have a $370 million surplus and $3.5 billion in savings. We’ve cut the income tax to keep people in Arkansas. We are willing to do what it takes to be a preferred state for people to live in.
Our focus has been on improving education. We’ve gone from having some of the worst outcomes in education to being the number one state for school choice. We found that if cell phones are not seen in the classroom, violence goes down and scores go up. We also changed the public school system so that a degree can be earned in three years, and when an applicant applies to one school, they are automatically applied to all schools.
Sen. Mattie Daughtry (President of the Senate, Maine):
Our fiscal situation is challenging. Our major achievement was getting our budget passed while keeping our good bond rating and maintaining historic levels in our Rainy Day Fund. We also enacted tax reform, offering a tax cut and equity to create a stable environment for business. The challenges we face focus on what the federal impacts will be on children and seniors who are on Medicaid.
Sen. Kelly Anthon (Senate President Pro Tempore, Idaho):
Our fiscal situation is very optimistic. Our economy has been on fire for the past seven to eight years; Micron, for example, is building a $15 billion chip manufacturing facility. We’ve created a school choice- tax credit, allocating $50 million for private schools. Real estate prices are up. We grew jobs even through COVID. We cut income taxes four times and also cut property and grocery taxes. We’re focused on deregulation. However, our rural infrastructure is aging and is a time bomb.
Sen. Thomas Alexander (President of the Senate, South Carolina):
We are cautiously optimistic. We are focused on economic development to increase jobs and to encourage more investment from companies. Our focus on energy reform seeks to add additional generation capability through natural gas to power our data centers. We also have $300 million in income tax relief and no additional earmarks this year. We have a goal of getting to a 3.99% tax rate. We also have had success in tort reform. Our tourism and income from lodging levies continues to increase.
Like many other states, the major challenge will be to see how the administration’s new budget will impact Medicaid costs and impact our natural resources. The federal government funds many state agencies, so we will have to adjust to these federal changes.
Sen. John Arch (Speaker of Legislature, Nebraska):
Passing our budget was a major accomplishment. We were able to decrease taxes despite revenue drops. We have 12% in cash reserves and are moving money from the general fund into property tax relief. We have older infrastructure that requires support and renewal. The challenges we face are about commodities prices. We export agricultural commodities, and tariffs could damage our agricultural sector, so we are concerned about the fiscal impacts of agricultural federal tariffs.
Sen. Marilyn Dondero Loop (Senate President Pro Tempore, Nevada):
Mining and tourism are the major industries in our state, and tourism has declined 6% since 2024 with Canadians boycotting the states. We have no state taxes, so people keep moving in, but affordable housing has become a problem, and unemployment is high when tourism is down. Our major achievement is a focus on education, looking at how to address rural versus urban needs. We are fiscally concerned, especially about the federal impact on Medicaid as we have 100,000 people on Medicaid, including seniors and children.
Sen. Stuart Adams (President of the Senate, Utah):
Our fiscal outlook is very optimistic—we have a very strong and diversified economy with aerospace, IT, and biomed leading the way. Our GDP has increased by 4.5%. We’ve cut income taxes, increased teacher salaries, and built data centers. Energy is a big focus for us because our data centers require energy, but we don’t want to increase the cost of electricity to our residents. Therefore, we are funding water and energy development projects in cooperation with other states, including Wyoming and Idaho. A full 20% of our sales tax goes to developing our infrastructure. The challenge we face is very high housing costs. To address this, we have allocated $50 million to give a $20,000 credit to first-time homebuyers, who will then pay that money back.
Sen. Bobby Joe Champion (President of the Senate, Minnesota):
We are cautiously optimistic. Our achievement was to balance our budget despite splits in the legislature. We were able to preserve good programs such as universal meals for children. We increased pensions for police, fire, and teachers, and we made college available for free for some students. Small business and economic development activities have been a focus. We are interested in developing data centers, and not over-regulating them but planning for the future. In healthcare, we cover all people no matter their status, so we face some uncompensated care. Our goal is to build people’s lives while respecting our budget.
Sen. Charles Schwertner (Chair, Senate Business and Commerce Committee, Texas):
Texas is among the fastest growing states, with a $2.7 trillion GDP and a $28 billion Rainy Day Fund. We have no personal or corporate taxes. We are one of the best states for business development and enjoy a 4.1% unemployment rate. We’ve allocated $51 billion in tax relief.
Our biggest challenge is managing rapid growth and building the infrastructure to support growth. Today’s data centers require 88 gigawatts per day in power; by 2030, they will draw 130 gigawatts per day. Entitlements with Medicaid are also a significant challenge.
People come to Texas for jobs and for their families. There is protection of their constitutional rights, especially the Second and Fifth Amendments. We want to maintain the values of ruggedness and self-reliance that built Texas.
Sen. Mamie Locke (Chair, Senate Rules Committee, Virginia):
Virginia enjoys a surplus and was able to give back a rebate to taxpayers. We have a stable reserve fund. We also were able to remove the support cap on public education, which will have a $200 million impact, and we have raised state worker and teacher salaries.
An area of concern is that Virginia is a stepchild to Washington, DC. We have many federal employees and an active defense industry, so we have concerns about the continued federal investment in these areas and about the impact of federal decisions on our Medicaid expenditures.
Sen. Lonnie Paxton (Senate President Pro Tempore, Oklahoma):
The State Legislature was able to overcome the Governor’s vetoes through bipartisan agreements. We are on the path to lower the income tax rate to zero. Our big challenge is being a neighbor to Texas. Oklahoma educates the students, but then they go to Texas for jobs. However, this year, more Texans moved to Oklahoma.
Sen. Rob Wagner (President of the Senate, Oregon):
In Portland, there is a mismatch between resources that are available and the demand from lobbies to support projects. The federal tariffs are a significant issue because Nike and Intel currently shipped their surplus to China. Oregon is also a big agricultural state. Furthermore, Oregon spends $1 billion in Medicaid for undocumented people. We will be hungrier and sicker due to federal policies.
Sen. J. Walter Michel (Vice Chair, Senate Rules Committee, Mississippi):
We are looking at realigning the tax system to eliminate the income tax by 2040. Our grocery taxes are down by 5%. We added three cents per gallon to the gas tax that is allocated for infrastructure improvement. We are implementing telemedicine to reach rural areas. Our major challenge is funding our retirement system.
Sen. Gary Stevens (President of the Senate, Alaska):
Alaska has an optimistic fiscal outlook, with our Permanent Fund holding $83 billion. Our major achievement has been for the House and Senate to come together in opposition to the Governor.
Sen. Chris Karr (Senate President Pro Tempore, South Dakota):
Our achievements have been good governance, accountability, and transparency. We implemented a Whistleblower Protection Act to protect public employees who blow the whistle on governmental misconduct, and started a government operations audit, which holds government agencies accountable for their outcomes by specific metrics. Twenty years ago we created an omnibus bill to update our water infrastructure. A current challenge for us is providing EMS services to remote rural areas.
Sen. Dafna Michaelson Jenet (Senate President Pro Tempore, Colorado):
Colorado’s fiscal outlook is pessimistic. We were able to pass a budget, which was our major achievement, but there is a $1 billion shortfall in that budget due to declines in revenues from tourism. However, we did not touch our reserves; instead, every program had cuts.
Authentic Leadership:
Leading with trust and integrity in times of complexity
Dr. Alenka Braček Lalić of the Authentic Leadership Institute facilitated a dynamic workshop centered on the principles of courageous and values-based leadership.
Integrity First
The session emphasized leading with integrity and authenticity, while also exploring how trust is built through a combination of empathy, logic, and genuine presence. Participants reflected on the tension between personal authenticity and societal expectations, as well as the balance required to manage leadership polarities. The concept of stewardship and institutional legacy was also highlighted, encouraging leaders to think beyond their individual roles to long-term impacts.
Trust is built through a combination of empathy, logic, and genuine presence.
Breakout Discussions
Attendees engaged in small-group breakout sessions at themed tables designed to explore real-world leadership challenges. Topics included how to remain grounded and authentic under pressure; strategies for sustaining trust amid complexity; and the role of core values in shaping consistent leadership behavior.
Participants also examined the importance of fostering openness, community connection, and a leadership style that positively influences organizational culture and continuity. Legacy was a key focus, encouraging leaders to think about how their decisions today shape institutional credibility tomorrow.
Shared Values and Leadership Qualities
Across group discussions, several key leadership values emerged consistently: Integrity, honesty, and transparency were foundational traits viewed as essential in any public or institutional role. Empathy and active listening were recognized as powerful tools for building relationships and navigating conflict with respect. Consistency, reliability, humility, and a sense of responsibility were highlighted as vital for long-term leadership credibility. Finally, participants underscored the importance of mentorship, relationship-building, and protecting institutional processes as central to trustworthy and effective leadership.