The House of Representatives narrowly passed a sweeping budget reconciliation bill early Thursday that would reshape how states, consumers, and companies interact with AI, clean energy, and government oversight. Dubbed the “One Big Beautiful Bill Act,” the legislation touches nearly every corner of the U.S. economy—from banning state-level AI regulation to dismantling green energy incentives and expanding border surveillance funding.
Though the bill faces a tougher road in the Senate, where even some Republicans have raised objections, President Donald Trump has made clear he wants it signed into law.
AI Oversight: States Would Lose Power for a Decade
One of the most controversial elements is a 10-year moratorium on state AI laws. If passed, states would be blocked from enforcing rules on artificial intelligence models and “automated decision systems”—a broad category that could include everything from machine learning algorithms to rules-based automation in government software.
The proposal could preempt over 60 AI-related laws already passed across the U.S., including measures targeting algorithmic bias, facial recognition, and automated hiring tools. Supporters argue the pause would give U.S. tech companies a better shot at global competition, especially against China. OpenAI is among those backing the move.
But critics say the language is so broad it could erase protections in many state-level bills, including those pushed by Republicans. Sen. Marsha Blackburn (R-TN), who has championed an AI likeness protection law for musicians in her state, warned, “We certainly know that in Tennessee we need those protections.”
Sen. Josh Hawley (R-MO) also voiced concern, calling the moratorium “a federalism issue.” He argued that states should be free to test and enforce their own rules. “We need sensible oversight that protects people’s liberties,” Hawley said.
The provision may also run into trouble under the Senate’s Byrd Rule, which prevents “extraneous” items in budget reconciliation bills.
Climate Credits, Consumer Protection, and Border Tech Get Overhauled
In addition to limiting AI regulation, the bill:
- Phases out EV and renewable energy tax credits from the Inflation Reduction Act within two years. These include the $7,500 electric vehicle credit and a $4,000 used EV credit, along with incentives for home EV chargers and solar projects.
- Scales back funding for the Consumer Financial Protection Bureau (CFPB), reducing its allowable draw from the Federal Reserve from 12% to 5%. This cut comes on top of prior rollbacks by Elon Musk’s Department of Government Efficiency (DOGE), limiting the agency’s ability to regulate fintech, credit fraud, and other consumer risks.
- Invests over $60 billion in border control and surveillance. That includes $46 billion for wall construction and modernization, $12 billion to reimburse states for border security, and $3.7 billion for high-tech surveillance tools like drones, tunnel sensors, integrated towers, and unmanned aerial systems (UAS).
Critics argue that while climate and consumer protections are being gutted, the bill dramatically expands federal surveillance capabilities.
Healthcare Restrictions Target Gender-Affirming Care
Starting in 2027, ACA marketplace plans would be banned from covering gender-affirming care, including hormone therapy and surgical procedures. Medicaid would also be barred from covering such treatments for both minors and adults, while simultaneously mandating coverage for detransition-related care.
This rollback reflects a broader push from conservative lawmakers to regulate medical access for transgender individuals at the federal level—potentially overriding state protections already in place.
