Republican lawmakers just proposed a sweeping 10-year ban that would strip states of their power to regulate artificial intelligence, potentially clearing the path for Big Tech to operate with minimal oversight across America for the next decade.
Key Takeaways
- House Republicans advanced a provision in the budget reconciliation bill that would prohibit states from regulating AI systems for 10 years
- The moratorium would nullify existing state laws in California and New York designed to protect consumers from AI misuse
- Critics claim the bill is a “giant gift to Big Tech” while proponents argue it prevents regulatory fragmentation
- The provision includes $500 million for modernizing federal government IT systems with AI technologies
- The bill’s fate depends on Senate approval and potential legal challenges from affected states
GOP Lawmakers Advance Controversial AI Restriction Bill
In a significant move that has alarmed privacy advocates and state lawmakers, the U.S. House Committee on Energy and Commerce recently voted to advance a measure that would impose a 10-year moratorium on state-level regulation of artificial intelligence technologies. The provision, introduced by House Republicans as part of the federal budget reconciliation bill, would effectively prevent states from enforcing any laws or regulations governing AI models, systems, or automated decision-making systems for the next decade, regardless of potential risks to consumers.
The sweeping definition of AI systems covered by the bill includes everything from facial recognition technology to generative AI tools and hiring algorithms – technologies that increasingly make consequential decisions about Americans’ access to housing, employment, and public benefits. Representative Brett Guthrie, one of the bill’s proponents, frames the measure as necessary for technological leadership: “Through investments to modernize the Department of Commerce, we can integrate AI systems to make the Department more secure and effective. To protect the integrity of this project, we are implementing guardrails that protect against state level AI laws that could jeopardize our technological leadership,” said Representative Brett Guthrie.
Political Division Over Federal vs. State Control
The proposal has sharply divided lawmakers along both party and ideological lines. Democrat Jan Schakowsky didn’t mince words in her assessment, calling the moratorium “a giant gift to Big Tech” that would undermine crucial consumer protections. “This ban will allow AI companies to ignore consumer privacy protections, let deepfakes spread and allow companies to profile and deceive consumers using AI,” said Jan Schakowsky, a Democratic Representative. The moratorium would effectively nullify numerous state-level protections, including California’s upcoming law requiring AI developers to document their training data.
“No one is suggesting that AI should be unregulated. … But the appropriate body for doing that regulation is the U.S. Congress,” said Representative Jay Obernolte.
Senator Ted Cruz has likened the proposal to the 1998 Internet tax moratorium, which prevented states from imposing taxes on internet transactions for a decade. “In 1998, Congress enacted a 10-year Internet tax moratorium so that state laws wouldn’t balkanize and stymie the promise of e-commerce,” said Senator Ted Cruz, drawing parallels to the current AI regulation debate. However, not all Republicans support the measure, with Senator Josh Hawley expressing concerns about federalism and states’ rights to enact their own protections.
Implications for Existing State Regulations
If enacted, the moratorium would have immediate consequences for state-level regulatory efforts. Currently, more than 500 state bills addressing AI safety and consumer protections could be sidelined. States like New York and California that have already enacted AI regulations would see their laws nullified. The proposal would specifically prevent states from enacting laws unless they facilitate AI deployment or operation, rather than providing consumer protections against potential harms.
“This bill is a sweeping and reckless attempt to shield some of the largest and most powerful corporations in the world – from big tech monopolies to RealPage, UnitedHealth Group and others – from any sort of accountability,” said Lee Hepner from the American Economic Liberties Project.
The timing of the proposal is particularly significant as it follows several high-profile lawsuits against companies like RealPage and SafeRent for alleged misuse of AI in decision-making processes affecting housing and rental markets. Critics argue the moratorium would protect these corporations from meaningful accountability at the state level where regulatory action has been most aggressive. President Trump’s administration has consistently supported reduced regulatory barriers for technology companies, aligning with Silicon Valley’s opposition to what they term “inconsistent” state regulations.
Federal Funding and Final Hurdles
The controversial provision includes a $500 million appropriation to modernize federal IT systems with AI technologies, positioning it as an investment in government modernization rather than just a regulatory moratorium. However, there remains substantial uncertainty about whether the provision will survive the legislative process. It could potentially be removed from the budget resolution if deemed extraneous by the Senate under the Byrd Rule, which restricts reconciliation bills to provisions that affect federal spending or revenue.
“State lawmakers across the country are stepping up with real solutions to real harms – this bill is a pre-emptive strike to shut those down before they gain more ground,” said Lee Hepner, articulating the concerns of state legislators who have been actively addressing AI-related issues.
The ultimate fate of this sweeping moratorium will depend on Senate approval and potential legal challenges from states with existing AI laws. As artificial intelligence continues to expand into every aspect of American life, the question of who should regulate these powerful technologies – federal legislators, state governments, or minimal oversight at all – remains hotly contested with significant implications for consumer protection, innovation, and corporate accountability in the AI era.
