The chances of Congress passing a comprehensive bill to regulate artificial intelligence this year are very slim, despite a push from the White House, according to legal analysts.
Preemption of state AI laws is one of several complex issues lawmakers would need to resolve in advancing a sweeping federal measure, analysts told CFO Dive. The upcoming midterm elections are further clouding the prospects.
“The outlook is very bleak,” said Ross Broudy, an attorney in the cybersecurity and data privacy practice at Roanoke, Virginia-based law firm Woods Rogers Vandeventer Black. He noted that lawmakers have struggled for years to pass nationwide data privacy legislation, suggesting AI faces similar headwinds.
A White House AI proposal unveiled earlier this month has not significantly improved the odds, according to David Adams, an attorney at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo.
“A sweeping federal AI bill is still a heavy lift in the near term,” he said. “The more realistic path is narrower federal legislation on issues like child safety, fraud, digital replicas and workforce impacts rather than one statute that settles the whole field.”
As part of its proposed legislative framework, the White House called on Congress to preempt state AI laws that “impose undue burdens to ensure a minimally burdensome national standard,” while respecting “key principles of federalism.” Federal law should particularly govern in areas such as the setting of standards for AI development and testing, as well as requirements that would otherwise impose extra-territorial obligations on companies operating across state lines, according to the plan.
“Unfortunately, the White House framework fails to address key issues, including strong accountability for AI companies, under the guise of protecting children, communities, and creators,” Rep. Josh Gottheimer, D-N.J., said in a statement. Gottheimer added that preemption “only makes sense if federal law effectively replaces what states have built with a standard that is truly comprehensive and protects Americans.”
The Democrat serves as vice chair of the House Problem Solvers Caucus, which describes itself as a bipartisan group of lawmakers “committed to advancing common-sense solutions to key issues facing our nation.”
Disagreements over preemption mirror long-standing divisions that have stalled federal privacy legislation for years, analysts said.
“There’s going to be a huge fight there,” said Tyler Thompson, a partner at the law firm Reed Smith, describing tensions between lawmakers who favor a business-friendly federal framework and those who want to preserve states’ ability to impose stricter rules.
“It doesn’t always break cleanly along party lines,” he added. “You can’t just expect every Republican to support an AI-friendly bill, because some are hearing from constituents who are very skeptical of big tech. So, it’s very complex.”
Shawn Helms, a partner at the law firm McDermott Will & Schulte, also pointed to political hurdles. Some Republicans may resist federal efforts that could limit state authority, even as others support national standards to avoid fragmented regulation. “You’re going to have some very conflicted Republicans on this point,” he said.
Helms added that Congress has historically been reluctant to impose restrictive rules on emerging technologies, further dampening expectations for comprehensive legislation.
Natasha Allen, a partner at the law firm Foley & Lardner, said the outlook is “probably grim,” noting the difficulty of crafting legislation that can keep pace with rapidly-evolving technology. “I do think the business community would certainly appreciate having one comprehensive approach,” she said.
The lack of a unified federal AI standard potentially means ongoing compliance headaches for businesses, attorneys said.
“For CFOs, the practical mistake would be to wait for Washington to resolve the federal-state fight before building an AI compliance plan,” Adams said.
