The Senate passed an amendment to the One Big Beautiful Bill Act by an overwhelming vote of 99-1 to strip the controversial moratorium on state enforcement of AI regulation from the reconciliation bill. Senate Commerce Chair Ted Cruz (R-TX) championed the provision and previously vowed to include it in any future AI legislation. House Energy and Commerce Chair Brett Guthrie (R-KY) said this week he would continue to push for the measure.

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Congress

Hearings

• Last week
  • No hearings were scheduled for the July 4 recess.
• This week
  • On July 8, the House Oversight and Government Reform Subcommittee on Cybersecurity, Information Technology, and Government Innovation will hold a bipartisan roundtable on Artificial Intelligence in the Real World to view demonstrations from Anthropic, Knightscope, and Fiddler AI and discuss how these technologies will impact the use of AI across industry.  
  • On July 8-11, the Senate Armed Services Committee will mark up the FY2026 National Defense Authorization Act (NDAA).

Legislation

• Sens. Ron Wyden (D-OR), Elizabeth Warren (D-MA), Cory Booker (D-NJ), Martin Heinrich (D-NM, Ben Ray Lujan (D-NM), Jeff Merkley (D-OR), Mazie Hirono (D-HI), and Brian Schatz (D-HI) introduced the Algorithmic Accountability Act to direct the Federal Trade Commission to require impact assessments of automated decision systems and augmented critical decision processes. (Text)

• Sen. Marsha Blackburn (R-TN) and Senate Committee on Commerce, Science and Transportation Ranking Member Maria Cantwell (D-WA) offered an amendment to the One Big Beautiful Bill Act to remove the state AI moratorium provision from the bill. The amendment passed in a vote of 99-1. (Text)

Correspondence

• Senate Finance Committee Ranking Member Ron Wyden (D-OR) and Sens. Elizabeth Warren (D-MA), Bernie Sanders (I-VT), and Kirsten Gillibrand (D-NY) sent a letter to Social Security Administration (SSA) Commissioner Frank Bisignano requesting information about SSA installation of an AI program into its phone systems that blocked people from accessing their earned Social Security benefits. (Letter)(Press release)

Trump Administration

Office of Management and Budget (OMB)

• OMB released annual internal guidance throughout the federal agencies on artificial intelligence use case reporting. The guidance provides an updated process for agencies to report to OMB their uses of AI, including stage of development, whether it was developed in-house or purchased, and whether the use case involves personally identifiable information collected by the agency. The guidance sets a November 4 deadline, with a December 2 publication date. (AIScoop)

White House

• The White House announced that over 60 organizations signed the Pledge to America’s Youth: Investing in AI Education to support the goals and mission of Trump’s executive order Advancing Artificial Intelligence Education for America’s Youth by providing “resources for youth and teachers through funding and grants, educational materials and curricula, technology and tools, teacher professional development programs, workforce development resources, and/or technical expertise and mentorship” over the next four years, working in partnership with the White House Task Force on Artificial Intelligence Education. (Press release)

Noteworthy Quotes and Events

CONGRESS

AI Moratorium

• Sen. Marsha Blackburn (R-TN) issued a statement saying, “For as long as I’ve been in Congress, I’ve worked alongside federal and state legislators, parents seeking to protect their kids online, innovators, and the creative community in Tennessee to fight back against Big Tech’s exploitation by passing legislation to govern the virtual space. Until Congress passes federally preemptive legislation like the Kids Online Safety Act and an online privacy framework, we can’t block states from standing in the gap to protect vulnerable Americans from harm – including Tennessee creators and precious children. This provision could allow Big Tech to continue to exploit kids, creators, and conservatives, and I am pleased it will no longer be included in the One Big Beautiful Bill Act…” (Press release)

• Blackburn tweeted, “Yes, we did. I was pleased to introduce this amendment on behalf of our children, states, creators, and individuals nationwide. Thank you to the bipartisan group of colleagues who agreed with me on this.”

• Blackburn also tweeted, “It was an honor to lead this fight on behalf of kids, parents, states, creators, and all individuals who would suffer the consequences of an AI moratorium. Until Congress passes federal legislation like my NO FAKES Act and the Kids Online Safety Act, we cannot remove these protections. Thank you to all 98 of my colleagues who supported this effort.”

• Senate Commerce Ranking Member Maria Cantwell (D-WA) said, “The Senate came together tonight to say that we can’t just run over good state consumer protection laws. States can fight robocalls, deepfakes and provide safe autonomous vehicle laws. This also allows us to work together nationally to provide a new federal framework on Artificial Intelligence that accelerates U.S. leadership in AI while still protecting consumers.” (Press release)

• Sen. Ed Markey (D-MA) said, “Early this morning, the Senate overwhelmingly voted to reject a dangerous provision to block states from regulating artificial intelligence, including protecting kids online. This 99-1 vote sent a clear message that Congress will not sell out our kids and local communities in order to pad the pockets of Big Tech billionaires. I am proud to have partnered with Ranking Member Cantwell and Senator Blackburn on an amendment to strip this dangerous language, and I look forward to working with my colleagues to develop responsible guardrails for AI.” (Press release)

• Sen. Elizabeth Warren (D-MA) tweeted, “Big Tech companies snuck a line into the Republican bill that’d stop local and state governments from having ANY rules about AI for TEN YEARS. But we fought back — and won! This fight is not over, but we are not powerless.”

• Sen. Dick Durbin (D-IL) tweeted, “This provision would have forced states to choose between regulating AI or accepting federal funding for high-speed internet access. Democrats worked to strip it from Republicans’ Big, Ugly Bill. Glad to see it go.”

• Rep. Marjorie Taylor Greene (R-CA) tweeted, “I told the White House I couldn’t support the One Big Beautiful Bill with the AI moratorium inside. Banning states from regulating AI for 10 years is a gift to Big Tech and a disaster for American workers and states’ rights. Thanks to Senator MarshaBlackburn, we got it OUT. That’s a huge win for federalism and the America First agenda.”

• Rep. Luz Rivas (D-CA) issued a statement saying, “We should be learning from how states address current and new challenges from Artificial Intelligence (AI) systems, not blocking their progress and their ability to innovate. From healthcare to education to finance, AI has shown tremendous potential to improve and enhance everyday life – but its quick rise comes with challenges. House Republicans’ 10-year AI moratorium provision would leave us unprepared to tackle these challenges as they arise, which is why I led an amendment to their Big Ugly Bill to remove this provision. The Senate’s overwhelmingly bipartisan vote to reject House Republicans’ AI moratorium provision allows states to enforce their current AI laws and enact new ones as AI continues to become more prominent in our lives. We must continue to ensure that all levels of government are able to address current and future challenges emerging technologies like AI can pose. While the AI moratorium provision was removed, House Democrats will continue fighting back against Republicans’ Big Ugly Bill that will result in millions of Americans losing their healthcare.” (Press release)

• Rivas tweeted, “The Senate overwhelmingly STRIPPED the AI moratorium provision from the Big Ugly Bill, with a 99-1 vote overnight. This dangerous provision would have stymied AI innovation and prevented states from protecting their residents from current and future challenges. I led an amendment in the House to remove this provision, but HouseGOP prevented it from getting a vote.”

• Rep. Yvette Clarke (D-NY) tweeted, “The Big Ugly Bill is an unmitigated disaster, but it could have been even worse if the dangerous 10-year moratorium on state AI regulations wasn’t struck down in the Senate. While Congress dithers and wastes time without passing meaningful AI policy, states have to be there to pick up the pieces and protect our people. This moratorium would have prevented any action to stop nonconsensual deep fakes, or to defend artists from an algorithm ripping off their work, or even to stymie the tide of AI robocall scams from ripping off seniors. It would have prevented anything and everything necessary to keep Americans safe from the harms of AI – a technology that only continues to develop in capability and decrease in cost.”

• Rep. Doris Matsui (D-CA) tweeted, “A 10-year ban on state AI regulations would’ve handcuffed states, endangered consumers, and put Big Tech profits over safety. That’s why I fought it from day one. Last night, the Senate voted 99-1 to strike the moratorium from the Big Ugly Bill. Now, let’s finish the job—and stop the rest of this reckless legislation.”

• House Energy and Commerce Committee Chair Brett Guthrie (R-KY) said, “I’m not sure why it went that way when people advocating for it voted against it. I don’t know the dynamics of that. Everybody has their own vote.” (Punchbowl)

Miscellaneous

• Sen. Bernie Sanders (I-VT) tweeted, “Robotics and AI are revolutionizing the economy. Who benefits? Who gets hurt? How do we make the new technologies benefit ALL, not just the few. That is the major economic issue of our time.”

• Sen. Todd Young (R-IN) tweeted, “My AI Public Awareness and Education Campaign Act would go a step further by carrying out a public awareness and education campaign so individuals can better understand how to benefit from the opportunities that will be created by this technology.”

What I’m Reading This Week

• New Push for National AI Rules Likely After State Ban Fails, April Rubin and Maria Curi, Axios.

About Zero One Strategies

Zero One Strategies is a boutique government relations practice dedicated to navigating the complex landscape of U.S. federal policy in emerging technologies. As advancements in technology continue to outpace regulatory frameworks, Zero One Strategies aims to provide strategic guidance and bipartisan advocacy for innovators and businesses operating at the forefront of technological development.

The practice focuses on key areas such as artificial intelligence, blockchain, decentralized technologies, cybersecurity, data, and digital infrastructure, as well as the multiple policy issues impacting these sectors, including tax and financial services.

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