In a surprising twist, the U.S. House of Representatives is moving forward with a sweeping provision in a budget bill that would bar states from passing new AI laws for the next 10 years. While we generally support the administration’s approach to emphasize beneficial usage of AI and the goal may be to avoid a patchwork of regulations and maintain national consistency, the approach is flawed. This isn’t a blanket ban on all AI regulations, and many essential consumer protections remain unaffected, but the proposed moratorium would kneecap state innovation and oversight in a rapidly evolving technological landscape at precisely the wrong moment. Without a federal regulatory framework in place, this moratorium creates a legal vacuum. It’s no wonder 40 bipartisan state attorneys general have voiced strong opposition. 

Let’s unpack why this provision is not only unnecessary but potentially harmful, and why support for a consistent, preemptive federal law should not translate into halting all state action in the interim. 

Misunderstood Intent: What This Ban Actually Does and Doesn’t Do 

To understand the stakes, we first need to clarify what this proposed moratorium would actually entail. 

What It Would Do: 

• Prevent states from enacting laws that specifically regulate artificial intelligence for 10 years. 
• Prohibit state-level legislative or regulatory efforts that distinguish AI from other forms of decision-making. 

What It Would NOT Do: 

• Ban consumer protection laws: Statutes like the California Consumer Privacy Act (CCPA), the Video Privacy Protection Act (VPPA), and the Children’s Online Privacy Protection Act (COPPA) still apply, even if the offending tech uses AI. 
• Legalize bias or discrimination: Existing civil rights and anti-discrimination laws remain fully enforceable, regardless of whether the bias originates from a human or an algorithm. 
• Override consent requirements: States can still demand transparency and require informed consent for data collection and processing. 

In short, AI is still subject to laws that apply to broader business practices. But states would lose the ability to tailor regulations specifically to the unique risks AI presents which is a risky limitation given how fast this technology is moving. 

A Regulatory Vacuum in a Rapidly Evolving Space 

We are witnessing an unprecedented surge in AI adoption across sectors, from education and healthcare to law enforcement and public benefits. At the same time, bad actors and untested systems pose significant threats, from privacy violations to biased decision-making and misinformation. 

Without new legislation designed specifically for AI: 

• Risky deployments can continue unchecked, particularly in sectors like policing, housing, and employment, where algorithmic bias can reinforce existing inequalities. 
• Innovative safeguards could be stalled, as states would be unable to pilot new accountability measures or data transparency rules. 
• Public trust may erode, especially if citizens see AI systems impacting their lives in high-stakes areas without adequate oversight or redress. 

The problem isn’t state activity, rather it’s the absence of an overarching federal standard to guide and coordinate it. 

States as Crucibles of Innovation—and Protection 

Historically, states have served as “laboratories of democracy,” testing out new ideas and frameworks that often pave the way for national reforms. Privacy laws like CCPA and biometric protections in Illinois are perfect examples of how states can lead the way when the federal government is slow to act. 

By banning new AI-specific laws, this moratorium would: 

• Block urgently needed experimentation in regulation. 
• Penalize proactive states trying to protect their residents. 
• Stall progress in creating adaptable governance models for fast-changing AI tools. 

Key areas where state action is currently essential include: 

• Facial recognition technology: Several states have proposed or enacted laws restricting its use by law enforcement. 
• Education algorithms: States are examining how automated systems shape student outcomes and access to resources. 
• Employment screening tools: AI-driven hiring systems are under scrutiny for discriminatory practices, and states are stepping in with audits and transparency requirements. 

Preventing states from addressing these issues as they arise is not just shortsighted, it’s negligent. 

Strong Bipartisan Opposition—and for Good Reason 

One of the most striking aspects of this debate is the broad, bipartisan coalition opposing the moratorium. Forty state attorneys general, from both red and blue states, signed a letter opposing the ban. Their rationale is compelling: 

• Local governments are often first to see the impact of emerging technologies on their residents and need tools to respond swiftly. 
• AI is not a one-size-fits-all issue. What works in California may not apply to North Dakota. States must retain flexibility to address region-specific concerns. 
• A federal law may be years away. Congress has yet to pass even a basic AI accountability bill. In the meantime, tying states’ hands is dangerous. 

In an era when political consensus is rare, this level of unity should be a clear signal: the proposed ban is out of step with both public need and political will. 

A Better Path: Preemptive Federal Legislation 

This debate should not be mistaken for a rejection of a unified national approach. It’s quite the opposite as many of the voices criticizing the moratorium are also calling for a strong federal law that: 

• Sets minimum safety and transparency standards. 
• Preempts state laws only where they conflict or duplicate federal efforts. 
• Creates a framework for dynamic rulemaking as AI evolves. 

Such legislation would enhance consistency while still allowing states to act where federal rules fall short. Crucially, preemption should be earned and not granted in a regulatory void. 

Don’t Ban, Build 

A decade-long freeze on state-level AI laws is not a step forward, it’s a halt on progress at the worst possible time. While the proposed moratorium may be well-intentioned, it is misguided and poorly timed. AI is advancing at breakneck speed, and policymakers must be allowed to keep up. Blocking state-level innovation in the absence of a comprehensive federal standard will leave consumers, workers, and communities vulnerable.