Congress Races the Clock on Kids Safety and AI

If you follow the politics of AI and kids online safety, the last six weeks have been a firehose. The House passed a bipartisan kids online safety bill for the first time. The White House is negotiating with Sen. Marsha Blackburn on a package pairing kids safety bills with some form of AI preemption—though the scope remains unclear. Sen. Ted Cruz has signaled a Senate Commerce markup that could touch everything from social media design to catastrophic AI risk. And amid it all, the Trump administration intervened in the rollout of Anthropic's and OpenAI's most advanced models.

But this is Congress, and motion is not necessarily progress. Conventional wisdom says nothing significant passes after August recess in an election year unless it hitches a ride on a must-pass vehicle, and Democrats eyeing the midterms may figure their negotiating position improves in January. Still, the House did pass a package, the White House is actively negotiating, and Cruz is looking for a path. We shouldn't confuse motion for progress, but we shouldn't discount the motion either. The stakes are real—for AI developers, platforms, state governments, safety advocates, and the kids and families these proposals are supposed to protect.

Evan is joined by Ben Brody, technology reporter at Punchbowl News, where he covers congressional efforts to rein in technology companies, from social media platforms to frontier AI developers. His reporting is essential reading for anyone following these debates.

Transcript

SPEAKER_00 0:00

Welcome to the Center Edge. I'm Evan Swartzschrauber. If you follow the politics and policy debates on AI and kids' online safety, even casually, the last six weeks have you drinking from a fire hose. The House actually passed a bipartisan bill on kids' online safety. Remarkable in these times. The White House is negotiating with Senator Blackburn on a package to pair kids' safety bills with some AI preemption, but the exact scope remains unclear. And Senator Cruz has signaled a Senate Commerce markup that could touch everything from social media design to catastrophic AI risk. And during all this, the Trump administration intervened in the rollout of Anthropic and OpenAI's most advanced models. In Anthropic's case, there were formal export controls imposed and then lifted. In OpenAI's, it was a government requested delay that the administration insists was voluntary, but critics deride as voluntary in name only. Now, of course, this is Congress. It is important to remember that motion is not necessarily progress. Yes, there are three separate efforts in flight to get something done on AI and or kids before the end of the year, but time is running out, and the conventional wisdom suggests that nothing significant happens in an election year after Congress's August recess, unless it can hitch a ride on a must-pass end-of-year legislative vehicle, like the annual defense bill. Meanwhile, polls and prediction markets favor Democrats to take the House, while suggesting they have a decent, albeit lower chance at the Senate, too. So Democrats may be thinking their negotiating position is about to improve in January, and Republicans, on the flip side, might feel especial pressure to get something done before they lose gavels. So will something actually get done? The easy answer in Washington is always no. That said, the House did pass a package of bills. The White House is actively negotiating, and Senator Cruz is looking for a path through the Senate, which may include a bill like the NDAA, the defense bill. So while we shouldn't confuse motion for progress, we shouldn't discount motion either. The stakes are significant for AI developers, social media platforms, state governments, safety advocates, and most importantly, the children and families these proposals are supposed to protect. So it is worth taking a close look at what is actually happening, what the competing factions want, and what could realistically make it across the finish line. Fortunately, I'm joined by someone whose reporting has helped me make sense of all of it. Ben Brody is a technology reporter at Punch Bowl News, where he covers congressional efforts to rein in technology companies, including social media platforms, frontier AI regulation, and all of these topics. I've known him for years, going back to his days covering tech policy for protocol and Bloomberg before that. His reporting is must-read, essential reading for anyone following these debates, including me. And it's a pleasure to have him. So, Ben, thank you so much for joining. Thank you so much for having me on that and for that very kind introduction. And for those who are watching on YouTube, we really, you know, have some great visuals here. I'm at my in-laws in Connecticut. So, you know, the the center edge from DC to Connecticut, we've really got you covered. And Ben is Ben is in one of these secret rooms where they put reporters when they need a quiet place. Is that it?

SPEAKER_01 3:07

That's yeah, it's uh uh it's a space for reporters to make media hits. Um and I managed to nab one with this kind of really cool America 250 background here that uh listeners can't see, but we got the Capitol, we got the flag. Um, and hopefully uh folks tuning in on YouTube are enjoying it.

SPEAKER_00 3:24

And to be clear, you're not being detained, like you can come and go as you please from that room. I am blinking and saying no.

unknown 3:31

Okay.

SPEAKER_00 3:32

That's good. You know, I wouldn't I wouldn't want to, you know, I don't want this to be a hostage video. I want this to be my podcast. Um, so Ben, as I said at the start, right, motion is not necessarily progress, but it feels like this story has kind of taken over the oxygen for tech policy. Like you cover a much wider range of issues than just these two, right? The intersection between AI and kid safety. But I read your work. This has definitely taken a disproportionate share, I would say, uh, of your reporting over the past couple of months, like six weeks, whatever it is. Um, what does that say about where we are? Does that mean something is actually likely to happen? Or are you just kind of forced to follow the motion?

SPEAKER_01 4:14

Uh no, I actually think uh do I think it means something is likely to happen? No. Like you said, um, the it the easy bet is always against progress um here in Congress. Um, and all the sources I talk to say this is um gonna be really difficult. There are so many needles to thread and and so little time to do it. Um, but I think what there is is earnest desire um to try and earnest desire to make progress so that you're not starting um back at zero in a future Democratic Congress or uh, you know, in a in a future White House or whatever that looks like. Um and so I think if uh Congress manages to put something together here, and I think that we're gonna have a lot of conversation about what something means. Um, but if they're able to do that, it will be uh due to a lot of luck and and maybe a little bit of uh falling into it.

SPEAKER_00 5:07

So there are these three separate tracks that are you know maybe intersecting, maybe not. It really depends on what day you read the news and what outlet you read, frankly, because it there's a lot of conflicting reports. But you have, you know, track one is not an order of importance or when they started, but you know, one of the trains is the House. And, you know, on June 29th, they passed the Kids Internet and Digital Safety or Kids Act. You know, Congress loves their acronyms, and it was bipartisan. And you know, they got the supermajority required to kind of do the fast track called suspension of the rules. You know, the the it's Guthrie and Pallone, right? The two top members of the House Energy and Commerce Committee. It includes, you know, uh age verification for online pornography at the federal level, which is significant, right? The Democrats voted for that. I don't think years ago that would have been in the cards. Um, it includes a version of the Kids Online Safety Act, but critically it does not include that duty of care, which is the big split between the House and the Senate. So we'll get into that. Um, some other stuff about uh video games. So, you know, we're not gonna get into all 14 bills, but you know, this was significant. And and one of the big things about this was that for many years, Republicans in the House were wedded to this idea of preemption, right? Like there's no point in passing whatever it is. It could be a privacy bill dealing with consumer privacy, it could be a kids' safety bill, whatever it is on internet policy. The House Republicans have been pretty adamant that the purpose of federal policymaking for the internet is to preempt states, to prevent a patchwork and have a uniform national standard. Yet for Democrats, that was just not gonna happen because they didn't view the kids' bill in the House as strong enough to then tell the states you're not allowed to do anything else. So Republicans actually moved off that position, and this is a floor and not a ceiling. And if states want to go further than what this bill does, they can. That struck me as a significant development. Uh, you, as someone who talks to these offices, reports on this, you know, what do you think was the driving factor behind that, I guess, concession from the Republican side?

SPEAKER_01 7:17

Yeah, absolutely. I I mean, there's just um so much kind of grassroots energy on the left and the right uh that is deeply, deeply skeptical of preemption. Um, essentially last year, there were House Republicans and and the Senate Republicans, um, together with the White House, tried to do what you are saying. They tried to create this ceiling, they would call it a, you know, a federal standard, uh a national standard on national technology. Um, and the outcry was explosive. Um, all of the child safety groups who normally often line up um with the right or with conservatives uh were suddenly shouting about the importance of um having states uh put in place really strong um consumer protections for kids, especially on chatbots. Um, the data center coalition started to get involved in this. You had Republicans like Marsha Blackburn going up against Republicans uh like Ted Cruz. Um and uh ultimately there was this sort of very tense moment where it's the only thing that got stripped out of reconciliation last summer, just about this time, in this overnight vote. Um, and for various reasons, mostly so that nobody had to um had to put a position on something that had gotten so, I think a little bit unexpectedly controversial. It was 99 to 1. Um, how do you come back a year later and say, we're trying to do something that is was voted against 99 to one on the Senate side? Um, that is really hard. Um, I don't think they have, I don't think Republicans feel that they have all Republicans. There's some states' rights arguments here. Um, and certainly the Democrats are pretty united there. Um, but I will I will say, you know, in talking to Republicans, the thing I or Republican leadership on energy and commerce and uh house leadership more broadly, it goes back to this earnestness. Um they always say to me, we really do want to get something done. Um, we don't always work that legislating muscle, that compromise muscle. Um, and we wanted to get as many people as possible on the same page. And um, you know, I credit that. Um it isn't necessarily a compromise uh that was particularly popular actually outside of the house, but as you said, it did um it did kind of get that supermajority.

SPEAKER_00 9:31

Yeah, let's talk about the the reaction to it, right? Because now you have, you know, two competing efforts in the in the house in Congress, I should say, right? So you have uh in the House, right? You have this version of the Kids Online Safety Act that does, you know, have some of the same provisions as the Senate one, right? You have to default the highest privacy and safety settings for kids, et cetera. But that legal, that that strong legal mechanism that the that the advocates really value, this duty of care, this imposition on tech companies that in designing their products, they have to take certain steps to protect kids, right? There's a lot of liability potentially in that provision. It's not in there, but of course, the benefit from a kid's safety perspective is it's not preemptive, right? So they could go to state houses and lobby. But on a Senate side, you have a very strong bill from the perspective of kids' safety advocates that passed what 91 to 3 in 2024, right? It has over 70 co-sponsors, it's an extremely popular bill. It has that duty of care. But my understanding is that bill would say, you know, this is the national standard. We're not going to have 50 state-level COSA. So, you know, kind of pick your approach there, but both have some merit. Yet the reaction to your point, then, has been pretty critical of the House bill in some corners. You had uh Senator Blumenthal, you know, who is the how the Senate, you know, co-lead on the Senate COSA, he slammed it, right? Uh Blackburn slammed it. So a hundred or so kids advocates slammed it. You know, given how many Democrats in the Senate support their own version, if you're a House Democrat, are you just now operating in a different world? Like are you unaffected by Democratic senators? Because they they it seems like they're at odds on this one. And for many years, Republicans in the House were worried that this imposition on companies would lead to censorship of conservative speech somehow, right? But then it's not just them. In the in the house, there are some Democrats who are worried that you know it could lead to censorship of speech that they care about, like LGBT topics. So it seems like there's this big gap between the House and the Senate on whether or not the Senate version causes censorship. And now you have Democrats teaming up with Republicans in the House, much to the ire of kids safety and and people like Senator Richard Blumenthal from from uh the state I'm in, Connecticut. Um, what do you make of the decision of these House Democrats to, in some ways, buck their party line based on you know going against someone like Senator Blumenthal?

SPEAKER_01 12:10

Yeah, I I think there's a lot of things at play. Um one of them is the fact that we're actually not dealing with ECOSA versus a COSA here, right? We're dealing with a kid's online guardrails package versus ECOSA. And so, and we're not just dealing with like preemption on off, right? It's it's not a lever that's on or off. There's a lot of uh what's preempted and when is it preempted and for how long is it preempted. Um, these are all subtle policy gradations that I think just in negotiations, they came to this rather um nuanced place. Um, and uh, you know, I think that uh particularly led by Congressman Pallone, the top Democrat on energy and commerce who was basically in charge of these negotiations, um, you know, basically convinced a lot of his colleagues that this was a good place and that it wasn't just the House version of COSA with a pretty, pretty low amount of preemption. Um it was also his uh ban on, you know, uh, I'm sorry, his register, uh registry on data brokers dealing in in kids stuff. It was some of these chatbots. It was, yes, the age verification on explicit websites, which was more of a sweetener for Republicans, but it is uh again part of the whole package. And again, uh Pallone talked repeatedly about this need to do something now. Uh we can't fight this out. The duty of care um has always been this red line for House Republican leadership. They do say it leads to censorship. Um, and I think Polone and Guthrie's view was like, we have to do everything in our power to get as much as possible done as soon as possible. Um and that was their message, and it uh certainly resonated with uh a little over a hundred Democrats. And and then, of course, there were um some of those other concerns that you're talking about. I think there were some progressives who have been on record or have long been suspected to worry about LGBTQ speech, to worry about abortion speech, to worry about um all kinds of things. Um I think you have that. Um, you know, I think you just have a a variety of things here, not the least of which is like the house, the house doesn't like being treated like the younger sibling. It doesn't like being treated like the lower chamber. Um the house wants to put its stamp on things. They're lawmakers and they want to have a view on how these things should be done. Um, and they don't want the Senate to come in and say, you know, we we have the filibuster, and so you have to listen to us. Uh the house doesn't like that. The house, uh, you know, there's there's a there's a saying um in the house, it's it's that the other party is the opposition, but the senate is the enemy. Um, so I think that played a role here.

SPEAKER_00 14:39

And and just to put a finer point on the reaction, right, that this was not um they did not mince words. So you had you know, Blumenthal again, right? The the Senate lead on Senate COSA. This is what he said of the House package. COSA without a duty of care isn't COSA. It's a blank check to Mark Zuckerberg to exploit children. The House's toothless and tepid capitulation is dead in the Senate and a betrayal of families suffering from big tech screed, end quote. Like that is a hell of a quote, given that a hundred-ish Democrats voted for this package, right? And then you had from some um, you know, advocates, right? This lets them off the hook. It removes the most important obligation, you know, getting rid of it is makes the bill ineffectual. You gutted the heart and soul of COSO, right? This is just a sampling. Now, some advocates have said it's a good step, right? So you have the American Academy of Pediatrics, American Foundation for Suicide Prevention, right? They said it's an important step toward stronger online safety protection for kids. And even some conservatives are are uh and and uh kind of social conservatives are supportive of the house package because they like the the age verification for for pornography nationwide, and they feel like that's an important um provision as well. So now the reason I I give that wind up is because the guy who's supposed to maybe try to bridge this gap between the two chambers of Congress is is Senator Cruz, right? And you reported so this is July 13th. You reported yesterday about this on July 12th in Punch Ball. So I would I would uh encourage viewers and listeners to check out that report. He's you know, you noted he's signaled for months a markup on kids' safety, but also potentially on catastrophic AI risks. So, like a lot of things could come into there. He's got a bill to ban kids under 13 from social media, he's got a bill dealing with AI chatbot companions and and chatbots and saying like they need to have parental controls and authorization, um AI, like so. There's a lot he may want to get done. His biggest enemy is the calendar, right? So it's it's July 13th as we record. He has three weeks to get something done before August recess, or it's highly unlikely to happen. So, what's the latest on this situation? And do you think we're likely to see a markup of all these bills over the next three weeks?

SPEAKER_01 17:16

Uh, I do. I certainly think that a markup is likely. How how big the scope of that is will tell us a lot about um the corner that Cruz seems to feel, um, and certainly by some of the numbers, seems to look like he is um backed into. Um, he has been talking about this for months. This is a uh do you remember the metaphor I used? I think it was boil the potatoes or throw them in the compost.

SPEAKER_00 17:38

Yeah, no, I've got this. This is this is the brilliant, the brilliant writing that you get with with Ben Brody. Time to boil the potatoes or throw them in the compost heap. And you said that is that is what we have at reputable news outlets like Petrol.

SPEAKER_01 17:51

Yes, that's how we say it. Although we uh we certainly use cussin in our in our copy all the time. Um so it but there's no, there's just no, there is no teeing this up in September. Um they're not here in August, they're not here in October. Um, NDAA, national defense authorization, annual must-pass, end-of-year bill. Um, those, the committee priorities are already going into those. The Judiciary uh committee has already been public about what it wants in, and actually there's some um uh tech provisions there uh around exploitation and stuff like that. Um, so there just is no more time. Um, if Cruz can't do it, if he is too boxed in, um, then maybe he will hold a very modest markup that focuses on like how the commerce department does its AI evaluations. Um, but he has promised to hold this markup. And in fact, he has promised uh to bring forward uh COSA as part of it. Um, so I don't think he can actually totally whiff uh on those either. Um and of course, you know, uh think think like a Hill reporter here. Um, Commerce, Senate Commerce, of which Cruz is the chair, um, is normally very good about putting forward the agenda of upcoming markups um and hearings a week in advance, which is sort of supposed to be the standard, but doesn't always happen. Um so when you look, when you look actually at those three weeks, you're actually looking at like, we'll know in two weeks. Um, so the the time is really tight here. Um, and he's boxed in in some ways that I I think I've mentioned and we'll probably talk about a little bit. But um, what exactly happens? Um, because let's face it, the the Senate does kind of get to tell the House what it's gonna do, and at least some things. Um, and this may be one of them. And so um he also just hasn't gone. So uh it's kind of time.

SPEAKER_00 19:38

And now we have to talk about this other senator that is in the mix, of course, Blackburn. We've mentioned already, because there's some history here, right? As as you as you reminded us, Senator Cruz about a year ago was trying to spearhead a 10-year ban on state AI regulation. There was a huge backlash, and the and the leader in the Senate of that backlash was Senator Marsha Blackburn, uh, encouraged along and and and partnered with activists like Mike Davis and kids safety groups, and they killed that that moratorium. So um, as one article put it, the the water under the bridge is still frozen, uh some some uh metaphor like that. Um, but Senator Blackburn has been negotiating with the White House, uh, and there's a lot of different reporting about what is is or is not in this package. So I want to get your take. So what it seems like most people agree is in it, right, is Senate Cosa, right? Her version, right, with the duty of care, of course, because she cares a lot about that. The App Store Accountability Act, which is age verification at the App Storyer. Um, so Google and Smartphone, right? Yeah, smartphone age verification, right? So that is one that so far Democrats have not gotten behind. There's no co-sponsor in either the House or the Senate. So it's interesting that that's being talked about, but that bill has been passed on wide bipartisan margins in some states like Texas, Louisiana, Utah, et cetera. So there's some momentum there. It's already law in some states with significant populations. The companies are implementing it. It was just uh allowed to go into effect by the Supreme Court while they figured out uh the case. So that's an interesting one. Then there's a no-fakes act, which deals with like unauthorized digital replicas. So this is not not necessarily a kid's bill, but it's something Blackburn cares a lot about because she represents uh Nashville, of course, as a senator from Tennessee, and musicians are really worried about people faking their image, faking their voice using AI. So that's a big one as well. Those three, it seems like, have always been in based on what you read. Then the question is well, what is it uh the AI provision? Is it there? Is it not? And you know, whether it's the Washington Post on June 10th or Political on June 11th or Daily Signal and whatever, right? It's gone back and forth. But it seems like the White House wants to get some level of AI preemption in exchange for these bills. And the question is, what? Is it model development? Is it, is it chatbots? Like what is it? I can't seem to get a clear answer. Do you have one that you'd like to break on my show today?

SPEAKER_01 22:12

I would love to, and unfortunately, I do not. Yeah, I mean, my sources describe the deal mostly along the lines that you outlined. Um obviously, when we talk about preemption, um model development has been uh the source of a lot of uh conversation here in the house. Uh I'm sitting on the house side right now. Um, so I think that's a very good uh possibility. Um there's also Blackburn has described it as subject matter, so basically going uh bill by bill. And so her no fakes act would overrule uh no fakes is basically actually built on a Tennessee law called the Elvis Act. Right. Yes. Um and so Elvis Act is gone. Um, and Blackburn will be governor of Tennessee, barring something crazy happening uh soon. So that's you know, that's a concession of hers. Um and then social media design regulation would be uh would be done. You know, I I think one of the things that's important to remember, and you probably know this better than I do, uh, the White House is not monolithic. Um people disagree really furiously. They disagree within the administration, they disagree within the White House offices, um, they disagree with the political side. Um, and so I think what you're probably seeing here is um, well, two things actually. One is more players in the room than are necessarily being reflected. Blackburn is obviously a part of this conversation, but the White House knows that it needs to talk to um House and Senate leadership, it needs to talk to folks like Guthrie, it needs to talk to folks like Cruz. Um so I think that's in there. And then I think there's just uh inter ongoing internal discussions about like, does it make sense for the administration um to come out and take a particular position? And if so, what that position exactly um looks like. Um but yeah, there is no doubt that um Blackburn is the power player here. Um and uh it's interesting, you know, you talk to um, there's a lot of folks, I would say, in industry who are not very happy with Blackburn. She's kind of been an antagonist, particularly to social media, for a long time. Um, and you know, to her credit, um, she has um managed to put herself on top of all of these negotiations. Now, you know, there are other folks in the room, and and you know, she is not a committee chair, and um, although she's a subcommittee chair. Um, what exactly comes out of it, I don't know. Um, but there's no doubt she's in the middle of um some of these crucial negotiations on what she wants to be, what she told me uh about a year ago. She wants to be her legacy items.

SPEAKER_00 24:35

And so you have two senators who have some history, not necessarily a great history, although, you know, I'm not going to speak to their maybe they get along just fine and it's, you know, whatever the water isn't as frozen as one writer suggested. But it seems like, you know, given the committee of jurisdiction is cruise, given that Blackburn is the one in the White House doing these negotiations, kid safety groups are watching her very closely. Some are like, any preemption, I oppose it. One of them even disinvited her from an event just because she was having these conversations. You reported that. Um it just seems like a really like a powder keg type situation to have like the White House dealing with Blackburn while Cruz wants to kind of take over this um family of topics. Um, do you think there's any way that that works? That a package could come together in the Senate when you have these two senators that are that have been on odds in the past, and then you know, one is dealing with the White House, one isn't. Like how does that work?

SPEAKER_01 25:34

Well, I think uh Cruz has told us repeatedly he is part of the White House conversations. He is in touch with the White House. Um so I don't think they're quite distinct. Um I think certainly there there are regular order conversations, Congress doing what it sees fit on on in legislative matters, and of course keeping the White House in the loop, but maybe not sitting through these long, you know, I don't know if they're overnight negotiations or whatever those look like. Um, but there's there's being in the room, and then there's like eating, eating the takeout at 2 a.m. in the room, and um where exactly uh Cruz is on that, uh I'm not exactly sure. I I think it's really important to say what Blackburn has is not just um the force of her Tennessee personality. What Blackburn has is 76 co-sponsors. Blackburn can even override a veto, assuming all of those co-sponsors uh are are authentic in their ardor for the duty of care. And I have every reason to think that they are. Um when I talk to them, nobody says like, yeah, I just signed on to it because it's what you know, it's what was passing through. No, like they say, like, we need the duty of care. Um, and and they what they say is like the tech moves so fast that yes, we need to, we need to finally, as a matter of justice, um, impose a level of liability on these companies that you would get from a car manufacturer or a toaster manufacturer, as Blumenthal likes to say. Um, but I think as a policy matter, the other reason that they like the duty of care is that they don't need to come back and re-legislate in three years when chatbots look a certain way, or whatever the future of the technology is, they can put this reasonable care, you know, exercise reasonable care and design standard. And then as they see it, the tech, the tech firms will have to do right by their users, finally, in a way that they have not before. Um, and that is the real goal of the duty of care. Um, and that is that is what seemingly 76 senators stand for.

SPEAKER_00 27:32

I'm curious if Republicans being willing to back off on preemption, right? You already said it part of it is is just understanding the politics of this issue, but you're already seeing Democrats kind of stake out some ground on this topic. And maybe 10 years ago, if or maybe five years ago, right, if you had said Democrats are going to try to outflank Republicans by being more willing to pass kids-related restrictions on social media companies, that that might not be your prediction five years ago, but it seems like now they're trying to do that. So they've got this project 2029, which is a play on the project 2025, which was the Trump kind of what he disavowed it, but right, this Republican blueprint um for when and if he took over. So Democrats now have project 2029, and there's a kids over clicks plank, right? That talk calls for banning social media for kids under 16, right? Privacy and safety by default mandates, uh, making sure AI companies aren't shielded from liability for chatbot outputs, right? Some pretty aggressive stuff in here, right, from Democrats that maybe even sitting members uh on the Democratic side are not super thrilled about. But there just seems to be a ton of political pressure on both parties, right, to have the correct viewpoints on these issues, right? The ones that match where the voters are. Um, yet at the same time, Democrats have a political question of should we just wait, right? Like we we are predicted, we are polls project us to take the house, right? Like a, you know, depending on what you're looking at, some 70% to 80% in the prediction markets. On the Senate, it's a bit less uh of a clear path for them. But some are saying maybe a 45% chance for Democrats, that's pretty good, right? Considering that the map doesn't necessarily favor them. So they have a decent chance at having both legislative gavels. Are there conversations you're hearing as you're reporting? Are some offices, you know, maybe confidentially because they don't want to come off as cynical, but are they saying things like, why are we doing this? Right? Like, why are we partnering up with the Republicans right now? Why are we giving Donald Trump potentially a win and the Republicans a win right before we're trying to beat them? You know, I, as an American citizen, I love to see bipartisanship, even if the the bill isn't perfect and maybe I would fix some things. So I commend them for doing it. But I was almost surprised to see it because the cynic in me suggests it's an election year. Why would Democrats give ours a win? Are you hearing murmurings around this thread of the issue?

SPEAKER_01 30:03

Yeah. So what's really interesting is uh I probably about two months ago, so there's this House AI commission. Um and it's Josh God, Heimer, Ted Lew, and Valerie Fushi. Um, and these are the Democrats AI Commission, right? Yes. And and and their job is to come up with a House Democratic answer for like what um AI policy should be. Um Hakeem Jeffries, um Democrat and minority leader, um, put them together and charge them with this mission. Um and it's fun because they're three members who who are uh chatty and thoughtful and and I've enjoyed kind of getting to know them. Um Ted Lou is particularly interesting because he is um very converted, he's from California, he's very conversant in AI, but he's also the vice chair uh of the House Democrats, who he's like really plugged into the politics of this stuff. Um and for months I was like, Congressman Lou, Congressman Liu, when when are you gonna come out with this? Um and he said, you know, we will have our report ready for the fall. What do we talk about? It's everything doesn't matter after August. We will have our report ready for the fall means we are waiting for power to switch. We don't want to give the, we don't want to give the Republicans a win. Uh we don't think the time uh for negotiation with them is now. We think it's in the future when we have a stronger hand. Um and we want to um that is our plan. And uh I I think a lot of the um progress or motion, whatever you want to call it, that we've seen the last six weeks or so has happened outside of that sort of framework. Um so I think it's interesting, number one, that um that assumption that that they're putting off things till the fall has started to fall apart. Um but I think more broadly, as I talk to members and staff and just people who are generally plugged in uh up here in the house, what I hear is like there are cracks in that model. There is a sense um that things are moving too fast and we have to at least think about what we want to come next on some of these issues like frontier or cyber or whatever. Now, I at this point, you know, halfway through July, you are still looking actually to next year, to the fall, which means to next year. Um, so it's not necessarily different, but I do think some of that progress suggests that um there was a sense that that this stuff um got ahead and moved faster than I think a lot of lawmakers uh were prepared to deal with. And um they said, fine, let's get let's get something done and then build on it.

SPEAKER_00 32:28

I'm gonna take a quick detour into AI, but it's going to make sense to you because these these two topics are completely connected, inexorably connected, as you know, and and we've already kind of hinted at that connection throughout this show. But I wrote a piece for my Substack, you know, congrats to me. I've joined, you know, 100% of people who have a Substack. Uh, but I wrote a piece for my Substack essentially arguing that if AI companies were as worried about state AI laws, right, the quote unquote patchwork, as as they as they seem to communicate through their trade associations and through allies and academia, et cetera, they would be more willing to come to the table and make significant concessions on issues like chatbot regulation for minors, right? And and we've seen these bills like banning kids from chatbots that are AI companions or having parental controls or a new one that you just reported on that would say they that the AI companies can't use children's chats for AI training, right? There's all these measures out there. It doesn't seem like the AI companies have really been enthusiastically supporting them, right? So this is a major concern for voters. And you would think if you're an AI company and you're so worried that the Democrat states are going to stifle the development of your product with this terrible patchwork of laws, you would think you would come more hat in hand to Congress and say, here's what I'm willing to accept. Yet that hasn't really happened. So my thesis was the patchwork isn't as much a problem as they actually seem to claim that it is. And they are dealing with it just fine. And Illinois, California, and New York can have their AI bills, and we're not going to all of a sudden lose the AI race to China. Right. That was my assessment. That was before this frack us with Anthropic and OpenAI, where we basically had this like formal or informal AI regulation from the Trump administration. Where in Anthropic's case it was a formal export control that led to the pulling of the model fable, and then now it's back. And then with OpenAI, it was a voluntary quote unquote, can you delay this release so we can evaluate your product? And then they and then they released it. But the White House was very careful to say that was all voluntary. Critics like Adam Theater at R Street say it's not voluntary in practice because every AI company knows if you don't play ball with the administration, they can really do things to harm you. So now you have AI companies dealing with this informal, right? It's not written into law, it's very much driven by Trump executive orders or just asks from the White House, right? People call up a company and say, here's what I need. Does that change their perspective on these topics, right? Have you noticed in your conversations in Congress or with companies that the month or two of Fable and OpenAI experiencing this back and forth with the White House and with export controls and Trump administration? Are they now thinking, wait a second, we really need a national bill yesterday? Or are they in the same spot as before where they're just like, we're not willing yet to commit to strong national guardrails, none of the bills we actually like that much. So we're just going to keep rolling the dice with the states and with the Trump administration.

SPEAKER_01 35:43

Uh, yes. So first, I I think among Democrats, that's some of the crack. That's the source of some of the crack that I was um talking about, about this notion that we can hold firm, we can have a wall, um, and we will act next year. Um, that I think is what is starting to break down. Um, and I think that absolutely the the White House's handling of Frontier AI um and the capabilities that are being presented by Frontier AI are absolutely a part of that. Um on the Republican side, I think it actually fuels it as well because uh Republicans want a stable regulatory environment so that business can flourish. Um, the the imposition of ad hoc or the threat of ad hoc export controls of questionable, dubious, or at least debatable uh constitutionality um threatened but not imposed, or imposed but then withdrawn. Um, that is the opposite of a stable, predictable regulatory environment that provides an opportunity for innovation and investment. Um, that is, and so uh you're not necessarily going to hear Republicans come out and say, uh the White House is completely messing up um all of this stuff that we um, you know, base our industry around. Um, but behind closed doors, they are starting to say it. And I do think um one of the things I'm watching is the venture, the venture community, which swung hard to the right on this exact question. They thought Biden was gonna come down and create AI licensing, and they thought um that Trump and Vance and all these folks were their ticket to a either permissive or stable regulatory environment, depending on um what you want to see. And then David Sachs goes into the White House and kind of has that view prevail. Um, they are not happy. Um, and so those are the allies that I'm watching because they they um, you know, depending on how late they're tweeting and and um how long they've been awake, um, they will say, like, these are exactly the things that we um swung to the right to avoid. Um, so that that's been really fascinating to me.

SPEAKER_00 37:52

I I loved your not so subtle suggestion that some of them are on stimulants late into the night. Oh, I know completely. So now bringing it back to kids safety, and yeah, the there's a lot here to follow, and I'm sure I've confused some of our listeners, but that's okay. So, you know, when we look at what does a national bipartisan AI framework look like, there's really only one bill out there that that has bipartisan support, and it's the Trahan Ubernolti bill. Lori Trahan is a Democrat House uh member for Massachusetts, and Jay Olbernolti is a Republican California, right? California, yeah, right. And he's seen as like he speaks the language, he has a background in software, et cetera. Um and they're both they both really took some risk, I would say, politically in putting this together because the leadership in both of their parties didn't like it, right? It's a typical Washington story. The Republican leadership said this doesn't preempt enough, it doesn't solve enough state AI laws, it doesn't do enough for the for innovation or the industry, depending on your view. And of course, the House Democrat leadership said this doesn't uh regulate enough, right? This doesn't do enough protection of AI. Now, this bill is is not really focused on kids. Like some people are looking at the language and trying to read that into it, but this is about catastrophic risk, this is about um model deployment, um, it model development, right? It's it's about like dealing with these advanced, you know, frontier AI companies and trying to get a handle on that because that's something that clearly the administration is concerned about, which is why they were willing to put an export control on anthropic and ask OpenAI to delay, right? The voters seem to be really worried about it. There's a the whole movement, right? Effective altruism that's very worried about it. They have a lot of money. So there's clearly a lot of desire to deal with catastrophic risk. Even Senator Cruz, who's like one of the most pro-innovation, anti-regulation members of Congress, right? He wants to deal with this too. Now it's interesting that this bill, being such a what I thought was a thoughtful attempt, right, and say we're gonna do all these rules at the national level. It's only a three-year moratorium on the states, it's not 10-year, right? We're trying to make some compromise. It got just pilloried by both the leadership of both parties. White House didn't exactly get behind it, right? At least not publicly. Um, why why did this bill, given the environment we're in, get so slammed? And why is this not being talked about more as part of a deal on the kids stuff, right? It's like if the if you're thinking about it from the industry's perspective, right, you just went through this whole situation with anthropic and open AI. Now you're scared, right? You you were fine with no regulation before, but now you're like, oh wait, the White House can just like do regulation by default. So we actually do need Congress to step in. So if you're worried about this kind of what you're the VCs that you're talking about, they view it as haphazard. Trump administration wouldn't agree with that, but they view it as haphazard. Why wouldn't you say, yes, I will accept these kids-related regulations in exchange for the regulatory certainty? And why isn't this Treyhan Obernalty bill being discussed more prominently as part of a COSA deal, uh uh no fakes, age verification, right? To me, this seems like the obvious thing to include in that package to give the AI companies a win, but that also addresses real concerns about stable regulation that now is bipartisan. Like, do the kids' safety, do something on chatbots, do something on likeness, do something on age verification, throw this in. It's about model development. So it's not kids, it only preempts on model development. Why is that not the deal? Like, am I just being Pollyannish and thinking that that would be a good deal? Um, I think if you step back, it is the deal.

SPEAKER_01 41:48

Right? If you step, if you step at the level that you just described it, not the level of like legislative text or the level of like the exact definition of the word model development, I think that is the deal. I think that is the framework. Um, but uh, and I should say Obernulti-Trahan is a is a draft, is a discussion draft. It is not a bill. Um if you go to uh Obernulti-Trahan, you are talking about a bill of hundreds of pages, um, that a lot of which is on those frontier issues that you're talking about, but some of which is on workforce and some of it's on education, and some of it's on like scams and all these other things. It's several hundred pages of legislation um that was developed in in consultation, mostly in Obernulti's office, as he he was head of the AI task force last Congress, as he kind of went through those recommendations and then kind of between him and Trahan, um, Obernulti always says, you know, I always kept the committees um in the loop as I was developing this. Um that is what he says. I when when the bill came out, um, all of the chairs came, or you know, I asked all of the chairs of the relevant committees, and it's a multi-committee exercise. Um, are you ready to go? And all of them said, like, we have to work through this. This is a this is a ton of legislation, um, and it spans our committees, and some of them are multi-committee, and we don't know how it interacts. We don't know what our members' priorities are, and we don't um we just need to to deal with that. And so I think there were the preemption issues on the leadership level. Um, so you had folks like uh Steve Scalise, um, the House Majority Leader, Republican leader, kind of saying that it didn't go far enough on preemption, or Speaker Mike Johnson kind of damning it with faint praise. Like, yeah, it's a it's a great effort. Thanks, Jay. You know? Um, but I think um what has been really fascinating to me is there was all this craziness around how this bill was gonna look. And it came out and then it kind of got panned, and then a couple of weeks went by. Um, and right before the July 4th recess, um, the House Science Committee advanced a bunch of measures, um, some of which were taken. From this great American AI Act that Obernulte Trahan had, Gaia, if you will. And it wasn't everything, and it wasn't exactly the same. And but they pushed it through and it had Chairman Babin's um name on the bill, and it just quietly went through. And so as the House, particularly the House, which is a little more nimble here, moves these issues through committee, um, I think the details matter a lot, but actually, what are they moving through? It's it's the compromise that you are talking about with a lot of inspiration from Open Ulti, though not always the entirety of its exact language. Um, and then things that are outside of it, like data centers.

SPEAKER_00 44:44

Now, in terms of the ability to get anything done before the end of the year, right, Cruz is potentially looking at end-of-year bills. I am a little surprised to hear the NDAA just because it seems like it would be out of scope, right? It's a defense bill. Obviously, things get attached to that in the past in past Congresses that are not about defense, but this stuff seems like it's hotly debated. There's so many efforts to negotiate. I don't know. Like, is that a realistic option? Or is there are there other end-of-year bills I'm not thinking about that that listeners and viewers should be thinking, okay, this bill that has to pass the end of the year, I should look out for AI and kid stuff being attached to it? Like, so you know, two two questions. Is it realistic? And what are the potential vehicles?

SPEAKER_01 45:30

Uh, it's certainly possible. I don't know if it's realistic. Um, I think um uh so whatever Cruz wants to do, he needs to do alongside Cantwell, uh Pallone and Guthrie on the house side, uh, potentially Babin and Lofgren from House Science. Um so the nature of this multi um committee effort um creates more players in the room and more people who have to sign off. It gets more complicated. And it's a big part of the reason that I, you know, am bearish um on this getting done. Um and I think that uh a lot of folks share that. It's a really tough needle to thread. It may very well be out of scope, although the NDAA can get loaded up on things and certainly um AI competitiveness um is uh something that a lot of people believe is is part of how we like beat China. Um so you can make the argument, um, but uh there are just so many equities in the room. Um, and you you do kind of want the White House much more on board um in that phase of the process. That is the main vehicle um going out. There's a third reconciliation. Um uh the death of Senator Graham over the weekend kind of throws that um into question marks. Um, that was going to be kind of skinny anyway. And so it doesn't seem like, first of all, it would conform with budget rules to put it in there, um, nor would, nor is there any interest in opening the aperture that broad among leadership. Um, that's not just not the plan they're talking about. Um, you know, there's some good news and bad news in appropriations bills going a little bit slowly. Um, is there a possibility that there actually has to be a funding omnibus at the end of the year that this goes into um that's possible, but then you're looking at a scenario where um we're operating on a CR after a continuing resolution after September, the end of the fiscal year, and Congress hasn't done its job to fund the government. So it's not a great outcome by anybody's imagination. But those omnibuses can be um sometimes those are the real the Christmas trees, as they say, where you just hang anything on them. Um, but those are the main things that I'm thinking about, and all of them are somewhat unlikely and and um uh certainly difficult.

SPEAKER_00 47:46

So I share your bearishness, but I do think there are some Overton window shifting things that that I should note. And then I I want to get your take on whether you think that these are kind of the starting points for maybe the next Congress. Um, you know, big developments, right? Meta dropped its opposition to Senate COSA, right? I thought I thought that was a pretty big deal. You know, you can attribute it to the lawsuits that are going around the states, potentially of victims of social media abuse or addiction or whatever, suing Meta, Meta starts to see potentially massive liability. I think they put the number at $1.4 trillion, which is their entire market cap, assuming judges all just wanted to destroy the company. That yeah, it's a far-fetched scenario, but potential liability is up there. Um, and maybe they believe that having federal safety laws that they can comply with, right, gives them something they can point to the next time a victim sues them and say, well, we comply with the federal standard rights. So that's that's a big change. Um, this anthropic open AI stuff, I think, definitely changes the vibe on not having a national standard, right? I think prior to that, maybe companies thought, I'm in a pretty good situation, right? Like I've got the Trump administration suing Colorado over their AI law because it's too restrictive. I've got three bills, Illinois, New York, California, none of which are a big deal, right?

SPEAKER_01 49:01

Despite what's sort of coordinated.

SPEAKER_00 49:03

Yeah, sort of coordinated and not stopping AI development. Um, you know, the stat, a thousand AI bills, whatever 10,000 AI bills, right? That doesn't mean they all pass. So it doesn't seem like AI development's being stifled. However, now you have these events that may change that conversation. So that might get both parties to see the value in a national standard, even if it's not preemptive, right? You had House Republicans moving off of their, you know, uh insistence on preemption and kids' safety, right? They they made a concession there. Um, so these are all significant developments in some ways, even if our bearishness is correct and nothing passes by the end of the year. Um, are you getting the sense from your conversations and your reporting that people are appreciating that these are significant events, that they do change the negotiating table, that that they do potentially set precedence for where things start in January under a new Congress?

SPEAKER_01 49:54

Um, yeah, one of the things that was interesting is that as kids, as the Kids Act, the the House social media guardrails moved to the floor. You had these family groups who were very, very opposed, particularly to the lack of duty of care, but some of the provisions around chatbots they felt were really weak on what in what is like they see as an emerging concern. Um, but there was a couple who came out and said, okay, this let's start the negotiation here. We we are supporters of Senicosa. That is our perfect, that is our good, um, that's where we want to get to. Um, but okay, this is moving, so let's start the negotiation here. Um, so I thought that that that group was interesting and they were taking uh a bit of a nuanced position. And and I think mostly the family and parents groups um weren't really there. So I I wouldn't really take it uh as representative, but I I think that that was interesting. Um I also think there's there there is the personality aspect of this, right? Like Pallone and Guthrie decided they wanted to get something. Like if Cruz and Cantwell decide that they want to get something, and and you know, Cantwell's priorities, which are you know things on on commerce department, AI and stuff like that, like they they can make a lot of things happen um if they show that they are interested, if they show that they are interested in it. Um so I think um that that that is a reason um for for interest. Um it's also why, you know, why waste the work? Um, you know, you've put in a lot of staffer hours, um, you've defined some of the problems. Like one of the things that I think just like takes forever up here is like, how do we, in words, define what artificial intelligence is that we can plug into every future law that mentions AI, including the NDAA, including, and the working definition is actually from the NDAA. And so just like that's the kind of thing that doesn't go away is like once once we've got the words right, um, that sort of staffer, person hour, um, that kind of stuff doesn't go away. And they're not gonna, they're not gonna start uh from zero and just be like, let's define AI differently.

SPEAKER_00 52:02

Like that's that's not gonna happen. I'm gonna get you out of here. My last question is this, right? So you already gave us a couple of things to look out for. Within the next two weeks, about we'll know if Cruz gets his markup. Um, and if that does happen, that would be very interesting to watch because it could include almost everything we talked about on the show or or or some subset of it, right? That like the the potential scope is wide. Um we are looking out for potential NDAA reconciliation, but lower likelihood. I agree with you on that. Um, what else, if you're following this, because uh just as someone who works in tech policy, the even people who aren't affected by these bills are very interested in what's happening because I think there are just potential implications, right? These are this is like a litmus test. Can Congress even do anything on tech policy? Like I think this, this, the, these issues, even if if you're whether you're dealing with semiconductors or you're dealing with whatever copyright, whatever issue you care about, this package of of things that the voters care about and the members care about, this kind of decides is this a functioning legislative body or not. And I think that's why a lot of people in tech policy are watching, even if they're unaffected. So there's a lot of people interested in this. What else besides the the end-of-year stuff or the markup with crews or or you know what comes out of Blackburn, White House, what else should folks be looking out for? Or is that kind of the the those the big things?

SPEAKER_01 53:27

Yeah, I'll tell you um one thing that I think I've alluded to, and then one thing that is a little bit different. Um, I keep talking about the Commerce Department's work to evaluate um regular AI systems, frontier AI systems. Um, that work is just basically by executive order, but also sort of just the way that the standards and technology folks over at Commerce, who are the world's best, have just kind of decided to do it. Um, and and Congress has not put its stamp on that. Um, and so the process of formally authorizing, in other words, for the legislators to say this is exactly how we want it done, and we don't want a future president to change it because it has kind of gone back and forth. Um, that process can take into account a lot of the things that we've been talking about, about particularly around cybersecurity, frontier AI. Um, it's a priority for um Senator Cantwell, top Democrat on Senate Commerce. Um, it is if you read between the lines of what Cruz is saying about catastrophic AI, and you go back to some of his pillars from even a year ago, um, and you go back to some previous markups when when Senator Cantwell was chair, um, that is the thing that has become the umbrella for all of the things that um lawmakers want done on these advanced systems. And so I am watching that really closely. Like it's kind of easy to say, like, uh, you know, it's Center for AI, um, security and innovation, standards and innovation? Casey uh C A I S I. Yes. Um uh it's really easy to talk about uh C C authorization, but it actually is really important um and could just become the C C authorization. What does that mean? It could actually just become the umbrella for a lot of these things besides besides the kit stuff. Um so that's number one. Number two, this isn't so much, I think, for the next two weeks, um, but it's something that I always watch, which is this has moved so fast. We always talk about the states as laboratories of democracy. Um, and that used to be something that took 15 years. And it was like one state would like pass this like credit card bill and then it would like burble up through all the other states and then burble up to Congress and then be fought about for three Congresses. It would take like 15 or 20 years. And now it's like 15 or 20 weeks to burble up from the states. Um, you know, Obernalty Trahan has uh a frontier AI audit requirement, third-party auditing. Um, that was something that was considered anathema in the states, like literally six weeks before. Um, but it popped up in Illinois and it was something that Obern LT and Trahan knew that they wanted to make progress on. And by the time it came out in Obernell to Trahan, Illinois had done it. And because of the politics or whatever, the companies had gotten behind it. And it so it just was non-controversial, but it was just this thing where just like it was this new layer of how we're gonna deal with frontier AI systems. Um, and it was essentially non-controversial because of the politics having been worked out in Illinois with the companies already. And then all of a sudden it was just the default national idea. Um, I want to see states aren't going to stop. And so where, you know, they have summers too, but as they come into their fall, as they come into their legislative sessions, how do they want to push this stuff forward? They're talking to one another, how are they coordinating on these issues? What do they want to do next? Um, and how quickly can that become actually a default assumption here in Congress?

SPEAKER_00 56:48

Yeah, you might see some bills pass and then very quickly a federal version of that or a federal way to preempt it and a loophole into it, right?

SPEAKER_01 56:57

Yeah.

SPEAKER_00 56:57

Well, Ben, you've been very generous with your time. I know you're busy. You're literally in the in the seat of power uh with this, with this, you know, nice flag capital thing behind you. So uh thanks for joining. Ben Brody is a tech reporter at Punchbowl News. If you have to read his work, if you're reading his work, you're up to date on all the things we talked about today. Previously, he wrote for Protocol and Bloomberg and some other publications as well. Ben, so fun. Thanks for joining. Thank you so much for having me. The Center Edge is sponsored by Digital Progress Institute and produced by Vulgate Media. You can find it in Apple Podcasts, Spotify, YouTube, or wherever you get your podcast. Please leave us a review. It will help others find the show. Shoot me an email at Evan at CorePointstrategies.com with anything you'd like to say, guest suggestions, topic suggestions, etc., comments, good and bad feedback. I prefer good feedback, but I'll take the bad. Otherwise, we will catch you next time.