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After the battle to pass the budget reconciliation bill drew to a dramatic conclusion last week, the dust it raised will not have a chance to settle under the oppressive humidity of the swamp. Instead, as policymakers take a beat to reassess their priorities for the remainder of the year, the water vapor of their intentions clings to lingering political pollutants, forming foreboding thunderheads over the Hill.
Republicans passed what is likely the most significant legislative achievement of the year along party lines, via a process that requires only a simple majority to bring provisions from idea into law, so long as they are sufficiently connected to budgetary objectives. As often happens, the pressure to build consensus around this rare policy opportunity revealed fractures among the delicate coalition that makes up the majority party during President Donald Trump's second term.
Most revealing in the tech policy lane was the debate around the provision known as the "AI moratorium," a proposal that would have incentivized states to pause enforcing targeted AI laws. Democrats were uniformly opposed to the provision, but Republican perspectives varied widely, with states' rights and anti-Big Tech advocates clashing with libertarians and others who subscribe to the strongly deregulatory approach for artificial intelligence recently brought into fashion by Vice President JD Vance and others.
But even between those who ostensibly fit within one or the other of these groups, lingering disagreements led to the death of the AI moratorium provision — and now could jeopardize future tech policy priorities. On reflection, the debates reveal three distinct sets of narratives and perspectives dividing congressional Republicans. Though there is plenty of room for common ground, much work will need to be done in the coming months before these factions can coalesce around a clear set of policy priorities for AI, privacy and other major commercial tech issues.
The Commerce Chairs
Sen. Ted Cruz, R-Texas, and Rep. Brett Guthrie, R-Ky., have each embraced the main character energy their respective leadership roles bring to the Congressional term in their own unique ways.
The AI moratorium showed that Cruz and Guthrie may not be far apart on their approach to commercial AI policy. Guthrie first proposed the provision and rapidly won support for it among top leadership in the House, Senate and the White House. When the measure began to receive significant pushback from within his own caucus Guthrie opened the door for compromise, saying, "We didn't socialize it throughout the Republican conference as well as we should've."
As the new chair of the House Energy and Commerce Committee, Guthrie has seemed to embrace an approach big on socializing, intentionally setting himself apart from his predecessors. After a "reset" on comprehensive privacy discussions, his staff has set out to build consensus among Republicans on the committee throughout the drafting process, hoping a unified caucus will create a clearer path to eventual legislative success. Consulting with a wide set of stakeholders, and embracing an open comment period, also sets the new process apart — at least optically — from the closed-door one-on-one negotiations of the American Privacy Rights Act last term.
Meanwhile, Cruz, long seen as a firebrand, has also been closely watched as he embraces his first opportunity to lead in the Senate Committee on Commerce, Science and Transportation. In a recent review of his performance, Punchbowl News asked which of the versions of Ted Cruz has been on display: the constitutional conservative agitator, the MAGA convert or an "old-school Chamber of Commerce, pro-business Republican."
His legislative record — including, among other victories, the passage of the TAKE IT DOWN Act and his influence over the inclusion of spectrum auction authority in the budget reauthorization bill — shows that Cruz is closely balancing all three aspects of his political identity. As a supporter of the AI moratorium, he showed distance between himself and the MAGA base, which appeared to roundly reject the proposal as a secret Big Tech ploy.
The kids-first purists
But the biggest disagreement, and the one that ultimately appeared to derail the provision, was the debate between Cruz and Sen. Marsha Blackburn, R-Tenn. After negotiating new text for the provision, Blackburn abruptly — in a remarkably swift and public display for such a high-profile debate — reversed course.
In a statement, Blackburn said the final language still did not do enough to protect "kids, creators and conservatives," channeling three of her legislative priorities, which she had attempted to try to preserve the ability of states to regulate under the moratorium. "Until Congress passes federally pre-emptive legislation like the Kids Online Safety Act and an online privacy framework," the statement goes on, "we can't block states from making laws that protect their citizens."
Blackburn personifies a strong contingent of policymakers who have long prioritized legislation protecting kids and teens from digital harms over the passage of other tech policy priorities. On the substance, Blackburn's reversal appears to have been sparked by a letter from 130 organizations pointing out that the final language only exempting certain state laws if they did not pose an "undue or disproportionate burden" on AI could still doom state-level kids safety laws.
When Cruz wouldn't remove the language, Blackburn walked.
Ironically, however, Blackburn's reversal may have rapidly reset the priorities of both commerce committees, which for months have been signaling that kids legislation would be the next goal. Leaders in both committees are quietly — and even publicly — frustrated by the reversal, to put it mildly.
The short story: KOSA and other Blackburn priorities like the NO FAKES Act are much less likely to move forward this term, barring a major reset in these relationships.
The would-be guardrail builders
It is unclear what the defeat of the AI moratorium means for next steps toward federal legislative action on AI governance, as all sides seem to read into it a confirmation of their perspective.
For their part, those who want to tackle specific AI legislative priorities, including Rep. Jay Obernolte, R-Calif., saw in the moratorium the breathing room Congress needs to determine what to do about AI. Obernolte told Punchbowl he still supports "comprehensive" regulation on AI, but will also support a role for states to weigh in on some issues.
Similarly, Sen. Todd Young, R-Ind., who has been proactive on AI standards legislation, viewed the moratorium as a "hand-forcing mechanism for all of us, institutionally, to get the regulatory atmosphere in place." He apparently favored an even shorter moratorium, just to the end of President Trump's term.
Even without the moratorium, there is of course nothing stopping Congress from tackling AI priorities such as those laid out in the bipartisan House report from the end of last term.
For his part, Guthrie has said the moratorium idea is not going anywhere. The only question is whether it will be packaged with proactive federal policies on AI, or will again simply seek more time for Congress to come into alignment.
Please send feedback, updates and legacy reflections to cobun@iapp.org.
Cobun Zweifel-Keegan, CIPP/US, CIPM, is the managing editor, Washington, D.C., for the IAPP.
This article originally appeared in The Daily Dashboard and U.S. Privacy Digest, free weekly IAPP newsletters. Subscriptions to this and other IAPP newsletters can be found here.
