Sen. Marsha Blackburn (R-Tenn.) and Senate Commerce Chair Ted Cruz (R-Texas) have struck a deal over a hot‐button issue in President Trump’s expansive tax legislation. Their compromise cuts a five‑year moratorium into the measure—instead of a decade—meaning states can’t impose their own AI rules if they want to tap into $500 million earmarked for AI infrastructure. At the same time, the deal leaves room for state-level actions addressing issues like unfair business practices, the protection of children online, child sexual abuse material, and publicity rights.
Blackburn, who has long championed stronger safeguards for children on the internet, explained, “For decades, Congress has struggled to keep pace with Big Tech’s growing influence. This move is about ensuring that federal protections prevent exploitation and shield our most vulnerable communities.” She also commended Cruz for revising the language to better support these protections without completely sidelining state efforts where they’re needed most.
Adding further momentum, Blackburn has reintroduced the Kids Online Safety Act (KOSA) with bipartisan backing from Sen. Richard Blumenthal (D-Conn.), Senate Majority Leader John Thune (R-S.D.), and Senate Minority Leader Chuck Schumer (D-N.Y.). Her efforts underline the urgency for a national framework that empowers consumers and holds major tech companies accountable.
While the agreement marks a significant step forward, some legislators, including Sens. Ron Johnson (R-Wis.) and Josh Hawley (R-Mo.), remain cautious. Meanwhile, Senate Parliamentarian Elizabeth MacDonough has confirmed that the five-year AI moratorium complies with the Byrd rule, thereby paving the way for its inclusion in the reconciliation bill. Now, as the Senate gears up for a series of votes in a race to meet President Trump’s July 4 deadline, all eyes remain on how these regulatory tweaks will play out.
