Congress Moves to Block State AI Laws with 10-Year Moratorium
In a bold federal step, the U.S. House has advanced a provision in its budget reconciliation bill (H.R. 1) that proposes a 10-year moratorium on state and local regulation of artificial intelligence. If passed, the legislation would prevent local governments from enforcing any law specifically targeting AI systems, AI models, or automated decision-making tools, except for laws that apply equally to non-AI technologies.
This move comes as states have surged ahead in AI governance. In 2024 alone, 113 AI-related state laws were enacted, addressing issues ranging from deepfakes to the use of AI in hiring, insurance, and healthcare. California alone introduced 39 AI bills this year, building on nearly 60 from 2023. While the moratorium is pitched as a way to avoid a patchwork of inconsistent state laws that hinder innovation, critics argue it could stifle much-needed public protections.
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Federal vs. State Authority in AI Governance
The proposed ban has drawn sharp division. Supporters, including several industry groups, claim a national pause would prevent regulatory confusion for companies operating across state lines. However, 40 bipartisan state attorneys general have pushed back, emphasizing that many state-level AI laws are not hypothetical but already impacting real-world applications. They argue that a cooperative federal-state model, rather than a top-down ban, is crucial to protecting consumers.
The moratorium’s inclusion in a budget reconciliation bill raises procedural questions, notably whether it can withstand scrutiny under the Byrd Rule, which prohibits unrelated measures in budget legislation. But its presence highlights a deeper tension: whether states should act in the absence of federal regulation, or if Washington should halt local oversight while it deliberates.
What’s at Stake for AI Developers and the Public
For AI developers, a nationwide pause on local AI laws could simplify compliance, but at the risk of delayed accountability. As definitions of AI evolve and international regulations tighten, the uncertainty could create friction rather than clarity. Consumer advocates warn that the lack of local oversight could leave people exposed to unchecked algorithmic harms.
Even if the moratorium is removed from the final package, lawmakers have indicated that standalone AI governance bills are forthcoming. The bigger question: who gets to define how America governs artificial intelligence?
