Senate Freezes AI Rules for a Decade, Tying Funds to Compliance

- The Senate parliamentarian ruled on a 10-year AI regulation freeze in a tax and spending bill. - This decision ties the moratorium to federal broadband funding and aims for a unified national AI regulatory approach. On June 22, 2025, Cryptopolitan and POLITICO reported that the Senate parliamentarian, late Saturday, June 21, 2025, allowed Republicans to include a 10-year freeze on state and local AI regulations within a major tax and spending bill. This action secured the controversial AI moratorium in the Republican-led bill. Senate Commerce Chair Ted Cruz (R-Texas) advocated for the revised provision, which links the moratorium to federal broadband funding. Consequently, if states and localities implement their own AI regulations within the next 10 years, they would risk losing access to billions of $ from federal broadband expansion funds, an approach that aligns with the Senate's budget rules. Senator Cruz and Representative Jay Obernolte (R-Calif.) support the moratorium, asserting it as good policy. They believe this freeze is necessary to create a uniform national AI regulatory framework, which they argue would prevent a "labyrinth of regulation" from emerging due to 50 different state laws. The move represents a significant win for GOP lawmakers, and tech companies aiming to delay a surge of new state-level AI safety laws also stand to benefit. However, the measure faces substantial opposition, including from some conservative Republicans. Senators Josh Hawley (R-Mo.) and Marsha Blackburn (R-Tenn.) joined Democratic critics, arguing that states should retain the authority to protect their citizens. Senator Hawley announced plans to file an amendment with Democratic backing to remove the moratorium when the full Senate reviews the bill. Concurrently, in the House, Representative Marjorie Taylor Greene (R-Ga.) and members of the permeated caucus threatened to oppose the broader legislation if the AI freeze persists. It was also reported that earlier in June 2025, a bipartisan group of 260 state lawmakers from all 50 states sent a letter to Congress expressing strong opposition to a federal preemption of state AI laws. Republicans are advancing the tax and spending bill through the Senate's budget reconciliation process, a method that allows them to pass the bill without needing Democratic votes, thereby avoiding a potential filibuster. Despite the parliamentarian's ruling, opponents could still challenge the AI pause on the Senate floor, as a simple majority vote there can remove it. According to Cryptopolitan and POLITICO on June 22, Senate leaders aim to finalize and vote on the bill this week, before the July 4th deadline, while staff from both parties are reportedly still negotiating the final details behind closed doors. On June 22, at 12:00 UTC, CoinMarketCap reported that Bitcoin (BTC) was trading at $36,750 and that its 24-hour trading volume had decreased by 1.8%.