In a surprise move, Senate Parliamentarian Elizabeth MacDonough ruled that a proposed moratorium on state and local AI laws satisfies the Byrd Rule, the requirement that reconciliation bills contain only budgetary provisions and omit “extraneous” policy language.  While MacDonough’s determination allows the Senate Commerce Committee’s version of the moratorium to remain in the bill, its path to becoming law remains far from certain.

The Senate provision MacDonough examined differs from the version that already passed the House.  While the House language prohibits states and localities from enforcing most AI laws and regulations for ten years, the Senate language, championed by Commerce Committee Chair Ted Cruz (R-TX), instead requires states to comply with the moratorium as a condition for receiving funding under the Broadband Equity, Access, and Deployment (BEAD) program, a $42.45 billion program that would receive an additional $500 million under this bill.  This modification anticipated that the House’s blanket preemption provision would likely have violated the Byrd Rule; tying restrictions on state AI regulations to federal spending smoothed the path to a favorable opinion from the parliamentarian.

As a result, the moratorium can be included in the reconciliation text that the Senate will consider on the floor soon.  Lawmakers from both chambers, however, still need to approve it before it becomes law. 

Senators from both parties have raised concerns with the moratorium, including Commerce Committee Ranking Member Maria Cantwell (D-WA) and Senator Marsha Blackburn (R-TN), who have both sponsored bills to regulate AI at the federal level but expressed concern about limiting state regulatory authority.  Senators Ed Markey (D-MA), Josh Hawley (R-MO), and Ron Johnson (R-WI) have publicly opposed the moratorium as well, and other lawmakers remain skeptical.

Senators are expected to vote on amendments to the reconciliation bill, including potential amendments to modify or remove the moratorium, in a marathon “vote-a-rama” in the coming days.  Most Democrats are expected to oppose the provision.  With a simple majority vote needed to strip it from the bill, Democrats could join with a few Republicans to defeat the provision.  Proponents may continue to modify the language to secure the votes needed to preserve it in the bill.

Bipartisan skepticism of the moratorium in the Senate is not the only hurdle the policy faces.  Proponents must also consider new opposition in the House:  Rep. Marjorie Taylor Greene (R-GA), who voted for the initial reconciliation draft on the House floor, has since sworn to oppose it.

Photo of Holly Fechner Holly Fechner

Holly Fechner has two decades of legal, legislative and public policy experience in the public and private sectors.  Ms. Fechner has a broad-based practice handling legislative and regulatory matters for clients in areas including healthcare, tax, intellectual property, education, and employee benefits.  Drawing…

Holly Fechner has two decades of legal, legislative and public policy experience in the public and private sectors.  Ms. Fechner has a broad-based practice handling legislative and regulatory matters for clients in areas including healthcare, tax, intellectual property, education, and employee benefits.  Drawing on her extensive congressional and private sector experience, Ms. Fechner offers clients comprehensive advocacy services, including strategic advice, substantive legal and regulatory expertise, and policy and message development.  She has a proven track record in assisting clients fulfill their government affairs goals.

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Matthew Shapanka

Matthew Shapanka draws on more than 15 years of experience – including on Capitol Hill, at Covington, and in state government – to advise and counsel clients across a range of industries on significant legislative, regulatory, and enforcement matters. He develops and executes…

Matthew Shapanka draws on more than 15 years of experience – including on Capitol Hill, at Covington, and in state government – to advise and counsel clients across a range of industries on significant legislative, regulatory, and enforcement matters. He develops and executes complex, multifaceted public policy initiatives for clients seeking actions by Congress, state legislatures, and federal and state government agencies, many with significant legal and political opportunities and risks.

Matt rejoined Covington after serving as Chief Counsel for the U.S. Senate Committee on Rules and Administration, where he advised Chairwoman Amy Klobuchar (D-MN) on all legal, policy, and oversight matters within the Committee’s jurisdiction, including federal election law and campaign finance, and oversight of the Federal Election Commission, legislative branch agencies, security and maintenance of the U.S. Capitol Complex, and Senate rules and regulations.

Most significantly, Matt led the Rules Committee staff work on the Electoral Count Reform and Presidential Transition Improvement Act – landmark bipartisan legislation to update the antiquated process of certifying and counting electoral votes in presidential elections that President Biden signed into law in 2022.

As Chief Counsel, Matt was a lead attorney on the joint bipartisan investigation (with the Homeland Security and Governmental Affairs Committee) into the security planning and response to the January 6, 2021 attack on the Capitol. In that role, he oversaw the collection review of documents, led interviews and depositions of key government officials, advised the Chairwoman and Committee members on two high-profile joint hearings, and drafted substantial portions of the Committees’ staff report on the attack. He also led oversight of the Capitol Police, Architect of the Capitol, Senate Sergeant at Arms, and executive branch agencies involved in implementing the Committees’ recommendations, including additional legislation and hearings.

Both in Congress and at the firm, Matt has prepared many corporate and nonprofit executives, academics, government officials, and presidential nominees for testimony at legislative, oversight, or nomination hearings before congressional committees, as well as witnesses appearing at congressional depositions and transcribed interviews. He is also an experienced legislative drafter who has composed dozens of bills introduced in Congress and state legislatures, including several that have been enacted into law across multiple policy areas.

In addition to his policy work, Matt advises and represents clients on the full range of political law compliance and enforcement matters involving federal election, campaign finance, lobbying, and government ethics laws, the Securities and Exchange Commission’s “Pay-to-Play” rule, as well as the election and political laws of states and municipalities across the country.

Before law school, Matt worked as a research analyst in the Massachusetts Recovery & Reinvestment Office, where he worked on all aspects of state-level policy, communications, and compliance for federal stimulus funding awarded to Massachusetts under the American Recovery & Reinvestment Act of 2009. He has also worked for federal, state, and local political candidates in Massachusetts and New Hampshire.

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Samuel Klein

Samuel Klein helps clients realize their policy objectives, manage reputational risks, and navigate the regulatory environment governing political engagement.

As a member of Covington’s Election and Political Law practice, Sam assists clients facing Congressional investigations and offers guidance on ethics laws; with the…

Samuel Klein helps clients realize their policy objectives, manage reputational risks, and navigate the regulatory environment governing political engagement.

As a member of Covington’s Election and Political Law practice, Sam assists clients facing Congressional investigations and offers guidance on ethics laws; with the firm’s Public Policy group, Sam supports strategic advocacy across a breadth of policy domains at the federal, state, and local levels.

Sam spent one year as a law clerk at the Federal Election Commission. His prior experience includes serving as an intern to two senior members of Congress and helping clients communicate nuanced policy concepts to lawmakers and stakeholders as a public-affairs consultant.

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