Senate Parliamentarian's AI Flip-Flop: "We'll See" Indeed

Well, well, well. Just when Senate Republicans thought they had their prized AI regulation moratorium locked and loaded for the reconciliation bill, the nonpartisan Senate parliamentarian decided to throw them a curveball worthy of a political thriller. After initially clearing the provision this weekend—giving Ted Cruz and company reason to celebrate their clever scheme to tie broadband funding to AI deregulation—she's now calling for a complete rewrite.

The response from senators has been a masterclass in political non-commitment. "We'll see," said Senate Majority Leader John Thune when asked if the provision would survive. "Let's see where we get to on that," added Josh Hawley, who's been waiting in the wings with an amendment to strip the whole thing. Even Maria Cantwell delivered the news with the casual tone of someone discussing weekend plans: "Last night they said they had to re-write it."

How refreshingly honest. After months of grandstanding about protecting American AI innovation from state-level regulatory "strangling," we're reduced to bureaucratic shrugs and parliamentary do-overs.

The $42 Billion Question Mark

Here's where this procedural soap opera gets particularly amusing. The parliamentarian's concerns apparently center on a rather fundamental question that somehow escaped initial scrutiny: which pot of money, exactly, is tied to this AI regulation ban? Is it the $500 million in AI deployment grants that Ted Cruz claims, or the entire $42 billion Broadband Equity, Access and Deployment (BEAD) program that Democrats and other observers insist is at stake?

This isn't exactly splitting hairs over decimal points. We're talking about the difference between a decent-sized government program and a transformational infrastructure investment. The fact that this basic question is causing parliamentary confusion suggests either breathtaking legislative sloppiness or deliberate ambiguity designed to sneak past procedural scrutiny.

One source familiar with the matter told Axios the confusion stems from uncertainty about "which pot of money is tied to the AI bills ban." Translation: Nobody's entirely sure what they've actually written into this bill, but they're hoping it survives long enough to find out.

The "Temporary Pause" Rebranding Campaign

The linguistic gymnastics around this provision have been particularly entertaining. What started as a 10-year "moratorium" on state AI regulation has been rebranded as a "temporary pause"—because apparently decade-long policy freezes sound less permanent when you use softer language.

The provision now conditions states' ability to receive federal broadband funding on pausing any AI regulations. As Americans for Responsible Innovation's Doug Calidas noted, "The most important part about this new text is that it allows the Trump administration to rescind BEAD grants and then only restart them if states agree to the AI pause."

So states get to choose: enforce laws protecting citizens from AI harms, or receive federal funding for critical broadband infrastructure. What a delightfully modern version of Sophie's choice.

The Byrd Rule Reality Check

The Senate parliamentarian's initial approval was supposed to clear the Byrd Rule hurdle—the requirement that reconciliation provisions must have budgetary rather than purely policy impacts. Legal experts had questioned whether a sweeping ban on state AI regulation could possibly meet this standard, and apparently the parliamentarian is having second thoughts too.

The Lawfare analysis was particularly cutting on this point, noting that the provision's budgetary effects would be "highly attenuated and incidental to the primary, non-budgetary purpose." In other words, this is policy legislation masquerading as budget legislation, and the parliamentarian might be catching on.

The precedent isn't encouraging for Republicans. The same parliamentarian previously ruled that immigration status changes and minimum wage increases were too policy-heavy for reconciliation, despite having more direct budgetary impacts than AI regulation preemption.

Bipartisan Opposition Meets Procedural Chaos

Perhaps the most telling aspect of this parliamentary ping-pong is the bipartisan opposition that's emerged. Josh Hawley has joined with Democrats to draft an amendment eliminating the provision. Marsha Blackburn appeared with Maria Cantwell to argue against it. Even Marjorie Taylor Greene, who voted for the original House bill, has since declared she would have voted against it if she'd known about the AI provision.

Ed Markey is ready with his amendment to strip the provision entirely. The opposition spans from progressive Democrats concerned about consumer protection to conservative Republicans worried about federal overreach and states' rights.

When your signature tech policy provision is opposed by both Chuck Schumer Democrats and MAGA Republicans, you might want to reconsider the merits.

The States' Rights Irony

The delicious irony here is watching the party of states' rights argue that states shouldn't have rights when it comes to AI regulation. More than 30 states have already passed AI-related laws, covering everything from deepfake restrictions to hiring discrimination protections. The federal government now wants to tell these states: nice laws you've got there, would be a shame if you lost your broadband funding.

Colorado's Consumer Protections for Artificial Intelligence and New York's RAISE Act would be effectively neutered by this provision. States that took initiative to protect their citizens from AI harms would be punished with infrastructure funding cuts.

This isn't federalism—it's federal blackmail with a tech industry bow on top.

The Parliamentary Uncertainty Principle

What makes this whole spectacle particularly rich is the complete uncertainty surrounding a provision that was supposed to provide regulatory certainty. The parliamentarian cleared it, then didn't. The funding amount is either $500 million or $42 billion, depending on who you ask. The provision is either a "moratorium" or a "temporary pause," depending on your preferred spin.

Cruz's office, showing admirable restraint, declined to comment "out of respect" for private consultations with the parliamentarian. Which is a polite way of saying they have no idea what's happening either.

Meanwhile, states are left wondering whether their AI regulations will be enforceable, their broadband funding will arrive, or both. The only certainty is uncertainty, which is exactly what business and regulatory environments need most.

"We'll See" Politics at Its Finest

Thune's "we'll see" response perfectly captures the state of contemporary tech policy: ambitious legislative schemes that crumble under basic procedural scrutiny, leaving everyone to shrug and see what happens next.

This is governance by parliamentary roulette, where major policy decisions depend on arcane procedural interpretations by unelected officials trying to figure out whether a bill's authors knew what they were writing.

The AI industry, state governments, and consumer advocates are all waiting to see whether a decade-long regulatory freeze will survive a procedural review that apparently should have happened more thoroughly the first time around.

If this is how we're making policy about transformational technologies that will reshape society, perhaps the states should keep their regulatory authority after all. At least state legislators can usually explain what their bills actually do.

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