Bessent asks lawmakers to megabill's 'revenge tax,' citing progress in global talks

Politico

26-06-2025

The Senate parliamentarian is asking the Senate Commerce Committee to rework its 10-year moratorium on enforcing state artificial intelligence laws, according to ranking member Maria Cantwell.
The parliamentarian had asked Commerce Chair Ted Cruz (R-Texas) to rewrite the language in the GOP megabill to make clear it wouldn't impact $42 billion in broadband funding, Cantwell (D-Wash.) told POLITICO.
'That's what was a last night request from the parliamentarian,' Cantwell said. 'Yeah, that's what's going on.'
Cruz's communications director Macarena Martinez said in a statement to POLITICO Thursday, 'Out of respect, we are not going to comment on private consultations with the Parliamentarian,' and added, 'The Democrats would be wise not to use this process to wishcast in public.'
What's the problem? At issue is the scope of funding that will be conditioned on states complying with a 10-year pause on enforcing their AI laws.
Cruz has said enforcing the moratorium would be required for states to tap into a new $500 million fund for building out AI infrastructure.
The parliamentarian approved that language, a narrowed version of an earlier proposal to tie the moratorium to the $42 billion Broadband Equity, Access, and Deployment program.
Democrats have argued that the latest moratorium would still affect all $42 billion.
Talking points circulated by Cruz on Wednesday saying his bill 'forbids states collecting new BEAD money from strangling AI deployment with EU-style regulation' only added to the confusion, suggesting the provision could apply to the entire broadband program.
Cruz's office told POLITICO Wednesday that the Congressional Budget Office 'has confirmed this applies only to the unobligated $500M.'
The Senate parliamentarian is under fire after striking major pieces of Medicaid policy from being included in the megabill on Thursday. Majority Leader John Thune has said the GOP would not seek to override decisions from the Senate's rules referee.
Republican doubts: The AI moratorium has divided Republicans. A group of GOP senators, including Sens. Marsha Blackburn of Tennessee, Josh Hawley of Missouri and others, sent a letter to Thune on Wednesday urging the removal of the moratorium language, according to a person familiar with the matter.
'States should not be punished for trying to protect their citizens from the harms of AI,' Blackburn said in a post on X on Thursday.
Sen. Kevin Cramer (R-N.D.) said he is concerned about the scope of the provision and needs to 'get clarity' on if it would apply to the whole BEAD program.
'There's some communication challenge here about whether we're talking about a $500 million pot, or whether we're talking about the entire $40 billion — and the difference is significant. It matters,' Cramer told POLITICO. 'If I can't get assurances that it's not just the smaller pot, it'd be hard for me to get to yes.'
The Article 3 Project, a prominent conservative advocacy group, said it would 'fully support these bold and fearless Republican Senators and their effort to protect America's children, creators, and foundational property rights.'
Arkansas Gov. Sarah Huckabee Sanders, who served as White House press secretary in the first Trump administration, came out against the moratorium language in The Washington Post on Thursday.
She warned it would lead to 'unintended consequences and threatens to undo all the great work states have done to protect our citizens from the misuse of artificial intelligence.'
Tech support: The tech industry has lent broad support to the moratorium. The National Venture Capital Association praised it in a letter to Thune on Thursday.
'The current fragmented AI regulatory environment in the United States creates unnecessary challenges for startups, stifles innovation, and threatens our dominance in the industry,' wrote Bobby Franklin, the organization's president.
Other major tech groups, including the Business Software Alliance, the Consumer Technology Association and NetChoice, have also strongly supported the language.