Congress Pushes for Federal Freeze on State AI Rules

In a significant development within the 2025 federal budget bill, lawmakers have proposed a 10-year moratorium on state-level AI regulation. This provision, supported by major tech lobbying groups and some Republican legislators, aims to establish a uniform national standard for AI governance. Proponents argue that avoiding a fragmented regulatory patchwork will reduce legal complexity and foster innovation and economic competitiveness.

However, the proposal has sparked strong opposition from a broad coalition of over 260 state legislators, civil rights groups, privacy advocates, and legal scholars. Critics warn that the freeze would dismantle crucial protections designed to mitigate AI harms at the state level. For example, Illinois’ Biometric Information Privacy Act protects residents from the misuse of facial recognition and biometric data, laws that could be permanently frozen under this moratorium.

Civil rights organizations highlight the stakes: this isn’t just a legal debate but a fight over who controls AI’s future, local communities, or corporate interests. Concerns include the potential inability of states to address discriminatory policing, algorithmic job screening, and invasive surveillance through updated or new regulations.

Activists and advocacy groups are mounting campaigns to raise public awareness and pressure Congress to remove or amend the provision. Meanwhile, states such as California and New York are exploring independent legislative strategies, including declarations of AI sovereignty and potential legal challenges to any federal preemption.

The budget bill’s mark-up session is ongoing, and the issue is quickly gaining attention across media and policy circles.

The Verge - Congress AI law preemption federal moratorium
https://www.theverge.com/2025/06/12/congress-ai-law-preemption-federal-moratorium/