In a recent development, House Republicans introduced a provision in the Budget Reconciliation Bill that seeks to impose a ten-year moratorium on state and local enforcement of laws regulating artificial intelligence (AI) models and systems. This move has drawn criticism from bipartisan organizations representing state policymakers, who argue against its passage for various policy reasons. They also claim that the provision is procedurally inappropriate.
The reconciliation process, established by the Congressional Budget Act of 1974, allows Congress to pass certain bills related to taxation, spending, and debt limits with limited amendments and without being subject to Senate filibuster. To prevent misuse of this tool for non-fiscal matters, the Senate adopted the "Byrd Rule," named after Senator Robert Byrd. The rule prohibits including "extraneous matters" in reconciliation bills—those that do not impact federal budgets.
Proponents of the AI preemption language argue it is necessary for utilizing $500 million allocated to the Department of Commerce for IT and cybersecurity updates involving AI. Congressman Jay Obernolte emphasized safeguarding this investment due to regulatory complexities across states. However, critics argue this reasoning is flawed since federal procurement is not bound by state regulations under the Supremacy Clause.
State-level AI regulations often pertain only to government use within those states. For instance, Kentucky's law requires risk management policies for high-risk AI tools used by public agencies but does not affect federal operations. Critics say imposing a moratorium would unjustly infringe on state powers concerning their own AI usage.
Some supporters suggest state regulations could hinder federal IT modernization efforts by complicating procurement processes. Critics counter that many IT systems are custom-developed according to federal standards and not affected by state rules.
The broad preemption language lacks substantive federal protections on AI use, leaving AI largely unregulated at the federal level while states have enacted laws addressing potential harms like discrimination or misuse in employment and healthcare sectors.
Opponents warn that such a moratorium would benefit major tech companies capable of advancing AI models while leaving smaller businesses vulnerable without protective regulations. They stress the need for a comprehensive federal framework balancing technological benefits with individual protections and allowing states to address any gaps.
The inclusion of this provision in a budget reconciliation bill under the guise of enhancing cybersecurity infrastructure at the Commerce Department has been challenged as unjustifiable under the Byrd Rule's criteria for budget-related initiatives.