Federal legislation to “pause” state artificial intelligence regulations will not become law—for now—after the Senate stripped the measure from the budget reconciliation package, the One Big Beautiful Bill Act (H.R. 1).

The Senate voted 99–1 to strike the moratorium language from the bill during a marathon 27-hour “vote-a-rama” on July 1. The Senate voted 51–50, with Vice President J.D. Vance breaking the tie, to pass the bill (without the moratorium) and send it back to the House.  The House passed the Senate-amended bill on July 3 by a vote of 218–214, with all Democrats and two Republicans voting against.  President Trump signed the bill into law on July 4.

The vote to remove the moratorium concluded a multi-week negotiation during which senators, led by Senate Commerce, Science and Transportation Committee Chair Ted Cruz (R-TX), revised the House-passed version of the measure to comply with Senate rules.  Rather than adopt the House’s approach of imposing a ten-year moratorium on states, the initial Senate version was modified to overcome the Byrd Rule, which restricts the Senate from passing provisions through reconciliation that primarily relate to non-budgetary policy matters.  The initial Senate version would have made states comply with the moratorium—rebranded as a “temporary pause”—in order to remain eligible for additional Broadband Equity, Access, and Deployment (BEAD) funding. 

While the Senate parliamentarian concluded that Senator Cruz’s proposal complied with the Byrd Rule, the proposal drew bipartisan opposition in both chambers of Congress, state legislators from all 50 states, 40 state attorneys general, and 17 Republican governors.

One opponent, Senator Marsha Blackburn (R-TN), ultimately reached an agreement with Senator Cruz to modify the moratorium, arguing in part that the initial Senate language would undermine state laws protecting child safety online and consumer privacy.  The proposed compromise would have reduced the moratorium period from 10 years to 5 years and exempted certain state laws from the pause.

However, during the Senate’s vote-a-rama, the deal collapsed and a bipartisan group of senators, including Senator Blackburn, Senate Commerce Committee Ranking Member Maria Cantwell (D-WA), and Senators Ed Markey (D-MA) and Susan Collins (R-ME), offered an amendment to strip the moratorium from the reconciliation bill.  The amendment passed 99–1, with only Senator Thom Tillis (R-NC) voting “no.” Although a pause on state AI regulations did not become law in the One Big Beautiful Bill Act, Congress could still consider similar legislation in another vehicle later this year.  While the strong bipartisan resistance to the moratorium casts doubt on future attempts to pause state AI regulations, at least one member, House Energy and Commerce Committee Chair Brett Guthrie (R-KY) has pledged to keep trying: “We’re still gonna work it, and hopefully we’re gonna have to have state preemption in the end.”

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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