Move in House to block state AI laws draws bipartisan fire; Senate support questionable

The U.S. House of Representatives this week passed a sweeping budget reconciliation package that includes a controversial provision that would impose a ten-year federal moratorium on state and local regulation of AI. The measure has ignited a backlash of opposition from state governments, civil organizations, and members of the Senate, casting doubt on its future.

Embedded within the massive 1,116-page bill, Section 43201(c) explicitly prohibits any state or political subdivision from enforcing laws or regulations concerning AI models, systems, or automated decision-making tools for a decade following the bill’s enactment. Proponents, primarily House Republicans, argue that this moratorium aims to prevent a fragmented regulatory landscape, thereby fostering innovation and maintaining U.S. competitiveness in AI development.

Critics, however, contend that the provision would nullify over 60 existing state laws addressing issues like algorithmic discrimination, AI-generated deepfakes, and consumer protections. They warn that, in the absence of comprehensive federal AI legislation, this moratorium could leave consumers vulnerable to unchecked AI-related harms.

The moratorium faces mounting bipartisan resistance from state officials and advocacy groups. A coalition of 40 state attorneys general, including Republicans from Ohio, Tennessee, Arkansas, Utah, and Virginia, urged Congress to reject the measure, emphasizing the importance of state authority in protecting residents from emerging AI threats.

In California, a bipartisan group of 35 lawmakers, including three Republicans, expressed concern that the moratorium would undermine state efforts to regulate AI-related harms such as deepfake scams and AI-generated child pornography. Similarly, more than 140 organizations – including unions, civil rights groups, and academic institutions – have warned that the provision could lead to “unfettered abuse” of AI technologies that compromise civil rights and privacy protections.

The bill’s prospects in the Senate are uncertain. While Republicans hold a narrow majority in the Senate, some GOP senators have voiced reservations. Republican Sen. Marsha Blackburn criticized the moratorium for potentially overriding state laws like Tennessee’s ELVIS Act, which was designed to protect against AI impersonations. Missouri Republican Sen. Josh Hawley also has expressed concerns about the provision’s implications.

“Our task is to protect our citizens and ensure that we don’t cede U.S. AI leadership,” said Rep. Gus Bilirakis, the Florida Republican who chairs the House Committee on Energy and Commerce Subcommittee on Commerce, Manufacturing and Trade. “Heavy-handed regulations may ensure that the next great American company never makes it. If we fail in this task, we risk ceding American leadership in AI to China, which is close on our heels.”

Bilirakis pointed to the European Union AI Act that was approved by the EU in May 2024. He and opponents of state AI regulation assert that such measures stifle innovation. And stifling perceived innovation is something the Trump administration has worked to prevent, whether legitimate or not.

Republican Rep. Rep. John Joyce said the EU AI act is “overly complex and restrictive,” and compared it to state-level laws in the United States.  “Just since January,” he bemoaned, “there have been over 1,000 AI bills introduced across the United States. These measures vary widely in their definitions, in their requirements, their enforcement mechanisms, and in their scope. These emerging patchworks of regulations are creating confusion and inconsistency.”

“Let’s be honest about what’s really being argued here, that any regulation, Federal or state will slow innovation – that’s the real claim the majority seems to be making, and I believe it’s a false choice, I believe balance is possible,” said Rep. Kevin Mullin, a Democrat. “Let states continue innovating and leading where appropriate, especially in protecting democracy.”

“The stakes are so high, this technology is moving so fast – three months is a long time, ten years is an infinity,” said Rep. Yvette D. Clarke. “I want to urge my Republican colleagues to stand up for their constituents. They’re doing this in the wrong order. First pass essential national protections then deal with preemption. We are here to work with you. This is a common goal.”

Republican Rep. Jay Obernolte, who chaired the previous Congress’s task force on AI, said “no one wants this to be ten years … “It really hurts my heart that it’s being painted in such a divisive, partisan issue, because I don’t think it is.”

Amba Kak, co-executive director of the AI Now Institute, a AI-focused research organization said AI-related state laws [are] working at a time when there are minimal federal laws in place … while we’re learning of the social implications of unregulated AI innovation.  Why … treat these companies with kid gloves at a moment when they need more scrutiny, not less, is what should be in focus today, and we don’t have ten years to wait.”

Additionally, the inclusion of the AI moratorium in a budget reconciliation bill raises procedural questions. Under the Senate’s Byrd Rule, provisions deemed extraneous to budgetary concerns can be removed from reconciliation bills. Given that the AI moratorium may not have a direct budgetary impact, it could be subject to removal during Senate deliberations, and likely will be, forcing a showdown between Senate and House conferees.

A Republican aide who spoke on the condition of anonymity acknowledged that the bill’s architects are “still squaring away” some of the concerns raised under the Byrd rule, but said, “We have a lot of support,” including in the Senate and from Trump. Whether that translates to enough support in the Senate remains to be seen.

The AI moratorium’s future hinges on Senate negotiations and potential amendments. Given the bipartisan opposition and procedural hurdles, the provision is likely to be revised or removed entirely.

Article Topics

AI  |  data privacy  |  deepfakes  |  legislation  |  U.S. Government  |  United States