Report from the Washington Post
In Brief – The legislative recommendations proposed by the Chairman of the House Energy & Commerce Committee for the big budget reconciliation bill that is designed to carry out the major tax and spending policies of President Trump and the narrow Republican majority in Congress, includes a provision that would bar states from enforcing laws or regulations governing AI models and systems. It provides some exemptions for state measures that aim to “remove legal impediments” or “facilitate the deployment or operation” of AI systems, as well as those that seek to “streamline licensing, permitting, routing, zoning, procurement, or reporting procedures.” President Trump staked out a strong pro-industry position on AI development and investment during the 2024 campaign, revoked President Biden’s main AI executive order in January, and Administration officials have chided Europe for over-regulating the industry. Supporters of AI regulation criticized the Republican effort. Everything included in the budget reconciliation bill, which is a special legislative vehicle that can pass the Senate without the usual 60-vote super-majority, must comply with the “Byrd Rule” that requires each provision to meet a set of tests, including that it primarily involves federal taxes or spending.
Context – Some believe regulatory guardrails will benefit AI development by easing user uncertainty while others argue they will slow innovation and drive entrepreneurs and investment away. In 2024, the regulatory camp was notching wins. The EU enacted the AI Act. Biden issued his executive order. The UK focused on AI safety and pressure was building in Japan for AI rules. Colorado was the first state to enact broad AI regulation and many states pursued narrow AI bills on things like “deepfakes”. But no other state followed Colorado’s lead and at year’s end California’s governor vetoed broad-based AI regulation. Now, the US, UK and Japan are all moving away from AI regulation, and the large developers are arguing that innovators need freedom to develop lest China dominate AI. Even EU leaders are voicing concern over regulation.