Senate Democrats Circulate AI Moratorium Text After Byrd Rule Approval
Senate Commerce Committee Democrats on Monday circulated updated text proposed by Chairman Ted Cruz, R-Texas, for an AI regulation moratorium (see 2506170054). The Senate Parliamentarian on Saturday approved the text under the Byrd rule, officially attaching the proposal to the budget reconciliation package.
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The committee’s reconciliation title bill requires states to refrain from enforcing AI-specific regulations for 10 years, enabling them to receive $42.5 billion in federal subsidies under the broadband equity, access and deployment (BEAD) Program. The proposal is dividing Republicans in both chambers and has drawn bipartisan opposition from state attorneys general and state lawmakers. This latest version rebrands the moratorium as a “temporary pause.”
A group of Democratic privacy enforcers sent a letter on Monday asking Senate leaders to drop the moratorium from the budget package. The California Privacy Protection Agency and all six Democratic attorneys general who formed the Consortium of Privacy Regulators in April signed the letter (see 2504160037). The group’s lone Republican, Indiana Attorney General Todd Rokita, didn’t sign. His office didn’t comment Monday.
The letter highlights how states have “consistently led on privacy and technology because they have the proximity and agility to identify emerging threats and implement innovative solutions. State privacy authorities are often the first to receive consumer complaints and identify problematic practices.” The letter also notes how the CPPA is mandated to develop regulations that “grant consumers the right to opt-out of or access the information processed by automated decisionmaking technology.”
The moratorium “would create a regulatory vacuum that benefits AI developers at the expense of privacy rights,” they said in the letter. “It is highly unusual for Congress to preempt state action in an area without any corresponding federal law, because while Congress deliberates on AI regulation, Americans are left unprotected from current harms.”
Senate Commerce Democrats highlighted the impact of the AI moratorium on a red state like Utah, which has received $317 million in BEAD funding, allocated by the National Telecommunications and Information Administration. Utah has passed laws requiring companies to inform consumers when they’re interacting with Generative AI systems. Commerce Democrats noted that if Utah doesn’t pause enforcement, NTIA Assistant Secretary Arielle Roth, a former staffer to Senate Commerce Committee Chairman Cruz, “has authority to redistribute unspent BEAD funds to other states.”
Sens. Marsha Blackburn, R-Tenn.; Josh Hawley, R-Mo.; and Rand Paul, R-Ky., oppose the moratorium language. Sen. Ron Johnson, R-Wis., has also signaled he’s not in favor of preempting states on AI regulation.
“I understand businesses’ need and desire for an overall standard because it would be impossible to comply with individual state and cities’ regulations on this,” Johnson told us last week. “I just don’t have a great deal of faith in the federal government to do the right thing. [I] need to look into this in greater depth. It’s a very complex issue.”
Rep. Marjorie Taylor Greene, R-Ga., has been outspoken in opposing the moratorium, a stance that got the attention of Connecticut Sen. James Maroney (D) (see 2506040051), who has been active on AI in his state.
Greene’s office issued a statement Monday saying she will vote against the budget package if it returns to the House with the moratorium language attached. “She doesn’t believe in placing a moratorium on states’ rights. And to be clear, a NO vote is not Congresswoman Greene stopping President Trump’s agenda. Whoever put this provision in the bill in the first place is trying to do that. The [budget package] is supposed to codify President Trump’s campaign promises on taxes, energy, border security, and immigration. AI legislation, which is extremely important, needs to be done separately and correctly.”
Sen. Richard Blumenthal, D-Conn., who is working with Hawley on a bipartisan amendment to strip the moratorium language on the Senate floor, told us Thursday he expects other Republicans to join in opposition. Sen. John Cornyn, R-Texas, told us he wasn’t expecting the provision to survive the Byrd rule. Sen. Dan Sullivan, R-Alaska, told us he knows the proposal is dividing Republicans, but he won’t have an opinion until he is able to “dig a little deeper.”
Sen. Shelley Moore Capito, R-W.Va., told us she’s “fine” with the moratorium proposal, but it’s not something that’s been widely discussed in Republican briefings on the budget package. “I just read about it in the media,” she said. “I’m fine with what’s in the bill.”