Breaking: Senate Parliamentarian Greenlights 10-Year Freeze on State & Local AI Regulations

Washington just hit pause on the AI regulation frenzy—hard. In a move that'll shape the next decade of tech policy, the Senate parliamentarian approved a full 10-year freeze on state and local AI rules. No patchwork legislation, no regulatory arbitrage—just a clean decade of federal breathing room.

Why it matters: While lawmakers argue over definitions of 'general purpose AI,' startups can finally build without worrying about 50 different compliance nightmares. The freeze effectively creates a unified sandbox for US innovation—assuming Congress doesn't screw it up first.

The cynical take: Wall Street's already pricing in the regulatory certainty—AI stocks popped 3% on the news, because nothing makes investors happier than kicking the can down the road. Meanwhile, crypto's still waiting for its own regulatory clarity... any day now.

Bottom line: For better or worse, America's AI future just got a decade less complicated. Now watch as every tech lobbyist in DC pivots to 'educating' federal lawmakers about 'appropriate guardrails.'

Several conservative Republicans have openly opposed the measure

Senators Josh Hawley (R-Mo.) and Marsha Blackburn (R-Tenn.) joined forces with Democratic critics, arguing that states should retain the right to protect their citizens. Hawley said he will team up with Democrats to file an amendment to strip the moratorium once the full Senate considers the package.

Blackburn echoed that view last week, stating, “We do not need a moratorium that would prohibit our states from stepping up and protecting citizens in their state.”

On Capitol Hill, Rep. Marjorie Taylor Greene (R-Ga.) and members of the House Freedom Caucus have threatened to sink H.R. 1 if the 10-year legal freeze remains. Greene warned she will oppose the legislation outright unless the AI language is removed.

The decision benefits the tech companies that want to delay about twenty new AI safety laws nationwide. The Senate’s budget reconciliation process lets Republicans advance the tax and spending plan without Democratic votes, bypassing a potential filibuster.

In the Senate version, states that enforce new AI rules would lose federal broadband money. Senators could challenge the pause on the floor, and ending it takes just a simple majority vote.

Democrats say MacDonough told lawmakers that other ideas didn’t fit the budget rules, like making states match food stamp funding and forcing people suing the federal government to post huge bonds for temporary court orders.

With the July 4 deadline coming up, Senate leaders plan to vote on the spending bill this week. Staff from both parties are still working out the final details behind closed doors, and Senate Budget Committee Democrats are giving occasional public updates.

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