Senate Bans State AI Laws in Trump’s Budget Bill

As Republican lawmakers in Congress strive to push forward Donald Trump’s ambitious “Big Beautiful Bill” ahead of the July 4 deadline, the Senate parliamentarian has been diligently examining its extensive and impactful provisions. Although some contentious elements — such as proposed cuts to the Supplemental Nutrition Assistance Program (SNAP) — have been eliminated, one unexpected feature has remained: a 10-year moratorium that would prevent states from implementing regulations on artificial intelligence (AI).

Senate Budget Committee Democrats report that the Senate parliamentarian has confirmed that this AI moratorium conforms with the special budgetary regulations that Republicans are leveraging to expedite the passage of the bill. Should this measure pass, it would prohibit states from establishing new regulations surrounding Artificial Intelligence for a decade and impose penalties on states that attempt to do so by withholding crucial federal broadband funding.

This provision is not yet finalized — it remains open to challenge on the Senate floor and requires only a simple majority vote to be eliminated from the bill. Nevertheless, it has sparked significant bipartisan criticism. Notably, Georgia Rep. Marjorie Taylor Greene confessed she had not reviewed the bill and stated she would have opposed it had she been aware of the inclusion of this contentious provision.

If the spending package is approved in its current form, it would represent a significant victory for technology companies seeking to evade a disjointed landscape of state-level AI regulations. In the absence of a comprehensive federal framework governing artificial intelligence, states have been left to grapple with a complicated array of data privacy, copyright, and algorithmic governance challenges independently. This moratorium would effectively halt those state-level initiatives.

At this point, 47 out of 50 states in the US have either enacted or proposed various forms of legislation pertaining to artificial intelligence, showcasing a widespread and bipartisan concern over the rapid and unchecked expansion of this technology. Over 200 state lawmakers from both political parties have urged Congress to abolish the moratorium, warning that it could undermine a wide array of consumer protection laws.

These regulations include critical measures aimed at protecting children’s online safety, addressing potential harms arising from generative AI, and ensuring proper oversight regarding how governments implement and utilize AI systems.