GOP budget bill seeks to reshape AI regulation and roll back climate incentives

House Republicans’ sweeping “One Big Beautiful Bill Act” would dramatically reshape the regulatory landscape for AI, climate initiatives, and consumer protections if enacted. The narrowly-passed budget reconciliation bill faces an uncertain future in the Senate, despite President Trump’s backing. This legislation represents a significant potential shift in how emerging technologies like AI are regulated in the U.S., with implications for state authority, environmental policy, and consumer financial protection.

The big picture: The bill would impose a 10-year moratorium on state AI regulation, effectively nullifying hundreds of existing and proposed state laws governing artificial intelligence and automated decision systems.

• Republican supporters and OpenAI argue this pause is necessary to help U.S. companies innovate and compete with China.
• The sweeping language could potentially affect more than 60 AI-related state laws already enacted, according to the National Conference of State Legislatures.

Environmental impact: Biden-era tax credits for electric vehicles and renewable energy would face significant cuts within two years if the package becomes law.

• The legislation would eliminate the $7,500 credit for purchasing eligible EVs, the $4,000 credit for eligible used EVs, and credits for home refueling infrastructure.
• Renewable energy credits would also be phased out early and face new restrictions that would disqualify many projects.

Consumer protection rollbacks: The Consumer Financial Protection Bureau would see its funding further restricted, continuing the agency’s dismantling that began under Elon Musk’s Department of Government Efficiency.

• The bill would cap CFPB funding from the Federal Reserve at 5 percent of the system’s total operating expenses, down from the current 12 percent.

Border security investment: The legislation allocates substantial funding for border enforcement technology and infrastructure.

• The package includes $46 billion to build and “modernize” the U.S.-Mexico border wall.
• An additional $1 billion would fund technology to detect drugs and contraband at border crossings.
• States would receive $12 billion in reimbursements for their border security expenditures.

Healthcare restrictions: Starting in 2027, health care plans purchased through the Affordable Care Act marketplace would be prohibited from covering gender-affirming care.

• The ban would include hormone therapy and surgical procedures.