The massive domestic policy bill that recently passed the House includes a proposed 10-year ban on state and local government regulation of artificial intelligence. It’s notable in a bill aimed more broadly at lowering tax rates and imposing new immigration restrictions. However, its legislative future is unclear since Senate Republicans have promised a dramatic rewrite of the proposal, a cornerstone of President Donald Trump‘s domestic agenda in his second term.
The AI measure, introduced as part of Trump’s “one big, beautiful bill,” would block enforcement of AI bills already enacted by states and prevent new ones from going into effect. The provision defines AI broadly, encompassing technologies such as facial recognition and generative AI, and would apply to new AI laws around hiring, housing, government benefits, and more.
Recommended Stories
- Your movie ticket, should you choose to accept it…
- Michael Ledeen, 1941-2025
- Jake Tapper and Alex Thompson’s 'Original Sin' claims to tell the story of the cover-up of Biden’s decline. Is it just another chapter?
It says, “No State or political subdivision thereof may enforce any law or regulation regulating artificial intelligence models, artificial intelligence systems, or automated decision systems during the 10-year period beginning on the date of the enactment of this act.”
The broader bill passed the House largely along party lines, 215 to 214, as part of the larger tax and immigration measure.
There are approximately 1,000 regulatory AI bills enacted or pending in state legislatures and localities across the United States. The proposed moratorium aims to establish a uniform federal framework for AI oversight and avoid the state patchwork currently taking shape. If the provision becomes law, Congress would be asserting its constitutional authority over interstate commerce, making itself the sole regulator of AI.
Proponents have argued that a consistent national standard is essential for fostering innovation and maintaining global competitiveness. They have said federal preemption of state AI laws is needed to prevent a fragmented regulatory landscape, with potentially 50-plus distinct sets of rules. Moratorium supporters have argued that the compliance burden of so many regulatory regimes risks putting U.S. companies and entrepreneurs at a disadvantage to their global competitors, including those in China.
“If America is going to beat China in the great global AI race, we need to make sure we’re not shooting our own innovators in the foot at the starting line,” senior fellow at the R Street Institute, Adam Thierer, told the Washington Examiner.
He continued, “An AI moratorium will help stop the proliferation of thousands of costly, confusing, contradictory technocratic mandates, which would hold back life-enriching innovation and hurt America’s ability to compete globally.”
However, this federal preemption has faced strong opposition from state officials and lawmakers, especially in California. The Democrat-dominated state enacted 42 AI laws between 2015 and 2024, more than any other state.
Gov. Gavin Newsom (D-CA) has opposed the federal moratorium. A bipartisan group of 35 California legislators has urged Congress to reject the provision, arguing that it could obstruct California’s enforcement of laws against AI-generated child pornography, deepfake scams, and other AI-related harms. They have contended that the clause would, if enacted, threaten public safety, state sovereignty, and innovation, especially in the absence of comprehensive federal AI regulation.
Additionally, in a letter to Congress, a bipartisan group of 40 state attorneys general expressed concern that the moratorium would strip states of their ability to protect consumers from high-risk uses of AI.
Despite that opposition, the moratorium remained intact to advance out of the House, but it still must pass through the Senate and survive budget reconciliation hurdles to be enacted.
The moratorium can only enjoy the lower threshold of a simple majority (51 votes in the Senate) instead of the normal 60 votes needed to avoid a filibuster if the Senate parliamentarian agrees it is appropriately included in the budget reconciliation vehicle. This means that it is relevant to matters of spending and debt, a standard known as the “Byrd Rule.” If not, the provision will be stripped out of the bill.
But House Republicans may have made the moratorium germane to budget matters by tying it to AI spending. The House bill would appropriate $500 million to the Department of Commerce “to modernize and secure Federal information technology systems through the deployment of commercial artificial intelligence, the deployment of automation technologies, and the replacement of antiquated business systems.”
If definitional obstacles can be overcome, the politics of the Senate may also prove challenging for the moratorium’s survival. Senate leadership’s top priority is making permanent the bill’s tax cuts that were signed into law by Trump in the 2017 Tax Cuts and Jobs Act and are set to expire at the end of this year. So, if a senator opposes the moratorium, its removal from the reconciliation bill could be used as a bargaining chip by leadership to secure their support for the greater priority of supporting the larger bill and preserving tax cuts.
GAZA AID GROUP CHIEF RESIGNS OVER ‘HUMANITARIAN PRINCIPLES’
Thierer is hoping an AI moratorium will come to pass.
“For innovation and competition to blossom, we need a national policy framework that protects interstate algorithmic commerce and speech, just like we had for the Internet and personal computing,” he said.
Jessica Melugin is the director of the Center for Technology and Innovation at the Competitive Enterprise Institute and a 2025 Innovators Network Foundation antitrust and competition policy fellow.