The president is trying to get his agenda in place as soon as possible. The GOP isn’t making things easy for him.
And Donald Trump is ripping his hair out over reports of Republican infighting.
UPDATE: The Senate has removed a 10 year AI moratorium from the One Big Beautiful Bill Act
This is a monumental win for Republican Governors, President Trump's one, big beautiful bill, and the American people.
— Sarah Huckabee Sanders (@SarahHuckabee) July 1, 2025
Thank you @MarshaBlackburn for leading the charge in the Senate to defend states’ rights. https://t.co/kRS0MAjgPX
AI Regulation Deal Falls Apart in Congress
A promising agreement between Senators Marsha Blackburn (R-Tenn.) and Ted Cruz (R-Texas) to shape state-level artificial intelligence (AI) regulations has unraveled, pulling a key provision from President Donald Trump’s “big, beautiful” bill. The deal, which aimed to balance federal funding with limits on state AI laws, collapsed after Blackburn withdrew her support, citing concerns over insufficient protections for vulnerable groups.
The now-defunct agreement tied access to substantial AI infrastructure funding in the “big, beautiful” bill to a requirement that states refrain from enacting new AI regulations for five years—a reduction from an initial 10-year moratorium.
It included provisions that allowed states to address critical issues like child s*xual abuse material, unauthorized use of a person’s likeness, and other practices that can be deemed deceptive. Despite these carveouts, the compromise failed to hold.
On Monday night, Blackburn announced her decision to back away from the deal. “For as long as I’ve been in Congress, I’ve worked alongside federal and state legislators, parents seeking to protect their kids online, and the creative community in Tennessee to fight back against Big Tech’s exploitation by passing legislation to govern the virtual space,” she told Fox News.
“While I appreciate Chairman Cruz’s efforts to find acceptable language that allows states to protect their citizens from the abuses of AI, the current language is not acceptable to those who need these protections the most,” she added. “This provision could allow Big Tech to continue to exploit kids, creators, and conservatives.”
Blackburn emphasized the need for federal legislation, such as the Kids Online Safety Act and a comprehensive online privacy framework, before restricting states’ ability to regulate AI. “Until Congress passes federally preemptive legislation like the Kids Online Safety Act and an online privacy framework, we can’t block states from making laws that protect their citizens,” she said.
In response to Blackburn’s withdrawal, Cruz remained optimistic, telling Punchbowl News, “the night is young.” However, Blackburn has since aligned with Senator Maria Cantwell (D-Wash.) to co-sponsor an amendment that would entirely remove the AI regulation moratorium from the bill.
Cantwell had previously criticized the Blackburn-Cruz deal, arguing it did “nothing to protect kids or consumers.” She described it as “just another giveaway to tech companies,” likening it to “Section 230 on steroids.”
Opposition to the AI provision extends beyond the Senate. Seventeen Republican governors recently sent a joint letter to Senate Majority Leader John Thune (R-S.D.) and House Speaker Mike Johnson (R-La.), urging the removal of the moratorium.
“AI is already deeply entrenched in American industry and society; people will be at risk until basic rules ensuring safety and fairness can go into effect,” the governors wrote.
They warned that AI’s transformative impact on industries, jobs, and society requires thoughtful regulation, not a blanket restriction on state authority. “That Congress is burying a provision that will strip the right of any state to regulate this technology in any way – without a thoughtful public debate – is the antithesis of what our Founders envisioned,” the letter stated.
House Republicans have also voiced concerns. Representative Marjorie Taylor Greene (R-Ga.) admitted on X that she was unaware of the AI provision when she voted for Trump’s spending bill.
“Full transparency, I did not know about this,” Greene stated. “I am adamantly OPPOSED to this and it is a violation of state rights and I would have voted NO if I had known this was in there.”
https://x.com/RepMTG/status/1929946902566494653
Stay tuned to The Federalist Wire.
