Key policy changes this month include the implementation of the One Big Beautiful Bill Act (OBBB), which introduces a temporary $6,000 senior tax deduction and stricter SNAP time limits. Additionally, President Trump’s new Executive Order on National AI Policy establishes a federal framework that preempts conflicting state-level regulations, specifically targeting laws in states like Colorado. Fiscal reconciliation (H.R.1) is also underway to address the debt limit and reduce federal spending.
1. The National AI Policy Framework: Federal Preemption
The most significant shift in the regulatory landscape this month is the issuance of the Executive Order on National Artificial Intelligence Policy. For the past two years, businesses have navigated a patchwork of state-level AI regulations, with states like Colorado leading the charge in strict compliance requirements. This fragmentation created a “compliance nightmare” for tech firms operating across state lines.
The new Executive Order radically simplifies this by establishing a singular Federal Framework. The critical mechanism here is federal preemption. The order explicitly revokes prior barriers and directs the Attorney General to challenge state laws that obstruct national policy. This is not just a suggestion; it is a legal directive intended to unify the market for innovation and security.
Why This Matters:
If you run a business that utilizes AI for hiring, credit scoring, or customer service, you previously had to audit your algorithms against dozens of different state standards. Under this new order, the federal standard supersedes local ones. However, a common misconception is that this removes all regulation. In reality, it shifts enforcement to federal agencies, likely making the Department of Justice the primary arbiter of AI ethics violations.
2. One Big Beautiful Bill: Tax & SNAP Overhaul
The One Big Beautiful Bill Act (OBBB), signed earlier this year, is now hitting its implementation phase with provisions that directly impact household finances and social safety nets. The dual focus here is on tax relief for seniors and tightening welfare eligibility.
Tax Provisions: The Senior Deduction
For the tax years 2025 through 2028, the OBBB introduces an additional $6,000 standard deduction for taxpayers over the age of 65. This is a “cliff” provision, meaning it is designed to sunset automatically unless renewed. Simultaneously, the bill accelerates the expiration of clean vehicle and home energy credits, effectively ending these subsidies post-2025. This creates a rush for taxpayers to claim these credits before the December 31st deadline.
SNAP Program Adjustments
The USDA has released guidance on immediate changes to the Supplemental Nutrition Assistance Program (SNAP). The OBBB raises the age for time-limited benefits to 65+, impacting older adults who were previously exempt. However, it also codifies exceptions for homeless individuals and veterans, removing them from the strict ABAWD (Able-Bodied Adults Without Dependents) time limits. State agencies are currently scrambling to update their eligibility systems to reflect these waivers.
For a deeper dive into how these tax changes compare to previous business tax laws, read our detailed analysis on 2025 Business & Tax Law Changes.
3. H.R.1 & The Fiscal Reconciliation Strategy
H.R.1, the flagship reconciliation bill of the 119th Congress, is currently moving through the House. This bill is the legislative vehicle for reducing federal spending and raising the debt limit. Unlike standard bills that require 60 votes in the Senate, reconciliation bills can pass with a simple majority, making them powerful tools for fiscal policy.
The bill includes specific adjustments to the Dairy Margin Coverage program and further tweaks to SNAP waivers. The political strategy here is to bundle “noncontroversial” spending cuts with necessary debt ceiling hikes to force a pass. This is a recurring tactic in modern governance, often leading to what we describe in our Weekly Political Update as “legislative brinkmanship.”
4. Workplace Law: End-of-Year Compliance Targets
As December closes, HR departments face a “Workplace Law To-Do List.” The focus for December 2025 is compliance with the new federal standards emerging from recent court rulings and the OBBB implementation. Key items include updating employee handbooks to reflect the new AI usage policies and ensuring payroll systems account for the changes in tax withholdings for older employees.
A major pitfall for employers this month is failing to audit their compliance posters. With the new federal preemption on AI and changes to labor definitions, old state-mandated posters may now be obsolete or misleading. Ensuring you have the correct federal guidance is essential to avoid fines.
5. 2026 Regulatory Outlook: The SPEED Act
Looking ahead, the legislative calendar for early 2026 is dominated by Permitting Reform. The SPEED Act and the PERMIT Act are designed to streamline the environmental review process under NEPA (National Environmental Policy Act). The goal is to accelerate infrastructure projects, particularly in nuclear energy, which has received a boost from Executive Order 14300.
The mechanism of the SPEED Act is to place strict time limits on environmental impact statements, preventing the years-long delays that have historically plagued construction projects. While this is a boon for developers, environmental groups argue it may bypass critical safety checks. You can track the progress of these bills in our Morning News Briefing, where we cover daily congressional movements.
Frequently Asked Questions
Does the new AI Executive Order void state laws?
Yes, the Executive Order on National AI Policy explicitly asserts federal preemption. This means that if a state law (like Colorado’s AI Act) conflicts with the new federal framework, the federal rule takes precedence to ensure a unified national standard.
Who qualifies for the $6,000 OBBB tax deduction?
The additional $6,000 standard deduction is available to taxpayers aged 65 and older. It is effective for the tax years 2025 through 2028 and is intended to offset rising healthcare and living costs for seniors.
What changes were made to SNAP time limits?
The OBBB Act raised the age for SNAP time limits to include individuals up to 65 years old. However, it also introduced new exemptions for veterans, homeless individuals, and young adults aging out of foster care, removing time limits for these specific groups.
When do the clean energy tax credits expire?
Under the OBBB provisions, many clean vehicle and home energy credits are set to expire or phase out rapidly after the end of 2025. Taxpayers looking to utilize these credits should ensure their purchases are placed in service before December 31, 2025.
What is the SPEED Act?
The SPEED Act is a proposed piece of legislation for the 2026 session aimed at reforming the permitting process. It seeks to streamline NEPA reviews to accelerate the construction of infrastructure and energy projects, reducing bureaucratic delays.
