Senate Parliamentarian Elizabeth MacDonough’s ruling preserves a GOP-backed provision that prevents states from regulating artificial intelligence until 2035, creating a showdown between federal oversight and states’ rights advocates that could reshape America’s technological future.
Key Takeaways
- A Republican-backed provision in the One Big Beautiful Bill temporarily bars states from regulating AI for 10 years, requiring states to refrain from AI regulation to qualify for federal technology funding.
- The measure survived the Senate Parliamentarian’s review and can pass with a simple majority through the reconciliation process.
- The provision allocates $500 million to the Department of Commerce for IT and cybersecurity enhancements.
- Both Republicans and Democrats are divided on the issue, with some arguing it undermines states’ rights while others believe it promotes innovation and prevents regulatory fragmentation.
- President Trump’s AI adviser, David Sacks, supports the pause to prevent “AI Doomerism,” while opponents worry it gives Big Tech unchecked power.
Federal Technology Funding Tied to AI Regulation Pause
The Senate Parliamentarian has cleared a significant provision in President Trump’s One Big Beautiful Bill that temporarily blocks states from regulating artificial intelligence until 2035. This Republican-supported measure links states’ eligibility for federal technology funding to their willingness to refrain from creating independent AI regulatory frameworks. Initially proposed by Senator Ted Cruz, the provision has evolved from affecting the broader $42 billion broadband funding program to specifically targeting a $500 million AI fund administered by the Department of Commerce for technological upgrades and cybersecurity measures.
“History has shown that this light-touch regulatory approach to new technologies has been incredibly successful in promoting American innovation and jobs,” said Senator Ted Cruz, who championed the provision.
The parliamentarian’s decision is particularly significant because it allows the provision to move forward through Congress’s budget reconciliation process, requiring only a simple majority vote rather than the typical 60-vote threshold needed to overcome a filibuster. This procedural victory substantially increases the likelihood that the temporary AI regulation pause will become law, despite opposition from both sides of the political aisle.
Divided Opposition Across Party Lines
The AI regulation moratorium has created unusual political alliances, with both Democrats and Republicans finding themselves on opposing sides of the issue. Senator Marsha Blackburn, typically aligned with conservative policies, has emerged as a vocal opponent of the provision, expressing concerns about states’ rights and the protection of creative professionals. The Tennessee Republican has pledged to fight the measure through amendments, highlighting the complex cross-partisan nature of technology regulation.
“We cannot prohibit states across the country from protecting Americans, including the vibrant creative community in Tennessee, from the harms of AI,” said Senator Marsha Blackburn, expressing her opposition to the moratorium.
Members of the House Freedom Caucus and populist conservatives have also voiced opposition, but for different reasons. They worry that preventing state-level regulation could empower large technology companies to implement censorship policies affecting conservative voices. This concern resonates with many Trump supporters who have long criticized Big Tech for perceived bias against conservative viewpoints, creating an unexpected rift between different factions within the Republican party.
• Americans, please review the list below. Anything that you think should be changed/trimmed? The document link is at the bottom. @senategop, please consider improving the bill with the suggestions from House Freedom Caucus that didn’t get adopted.
• “Here are 50 reasons… https://t.co/ovO50zxFav pic.twitter.com/sKIl0Q1tnc
— Conservatism Prevents Tyranny (@SaveLibertyUS) June 8, 2025
The Case for Federal Standards
Proponents of the moratorium, led by Senator Cruz, argue that preventing a patchwork of varying state regulations will foster innovation in the rapidly evolving AI sector. They point to the internet’s development under minimal regulation as a model for AI advancement. The provision’s supporters, including President Trump’s AI adviser David Sacks, believe that excessive regulatory caution—what they term “AI Doomerism”—could severely hamper American technological leadership at a time when global competition in artificial intelligence is intensifying.
“This ten-year moratorium in the Big Beautiful Bill gives Big Tech the green light to censor conservatives,” warned Mike Davis, highlighting concerns from some right-wing groups about potential unintended consequences.
Cruz’s revised proposal represents a compromise from his original plan. “Cruz was quoted as saying that under his current version, states that regulate AI would only be shut out of the $500 million AI fund,” rather than the entire broadband funding program as initially proposed. This modification was necessary to gain broader Republican support and comply with Senate reconciliation rules, which require provisions to have budgetary implications to qualify for the simplified passage process.
What Happens Next
While the provision has cleared the parliamentary hurdle, its journey through the legislative process remains uncertain. Democrats, led by Senator Maria Cantwell, have signaled their intention to challenge aspects of the bill they believe harm American families. The provision must still survive potential floor amendments and the reconciliation of any differences between House and Senate versions of the legislation before reaching President Trump’s desk for signature.
“Cantwell said that 24 states last year started ‘regulating AI in some way, and they have adopted these laws that fill a gap while we are waiting for federal action. Now Congress is threatening these laws, which will leave hundreds of millions of Americans vulnerable to AI harm by abolishing those state law protections.”
The outcome of this legislative battle will have far-reaching implications for the United States’ approach to regulating artificial intelligence. If enacted, the provision would effectively create a decade-long period during which AI development would occur primarily under federal oversight, potentially accelerating technological advancement but also raising questions about consumer protection and algorithmic accountability. The tension between innovation and regulation continues to define America’s approach to emerging technologies under President Trump’s administration.
