THE ESSENTIALS IN 30 SECONDS

  • The Congressional Progressive Caucus resolution, led by Reps. Greg Casar and Maxine Waters, opposes federal funds or special regulatory support for insolvent AI-related firms.
  • It says such firms should go through ordinary bankruptcy and that executives who took excessive risks should face civil and criminal liability.
  • The measure is non-binding; reports differ on whether it has been formally introduced, and the text published by The American Prospect has no bill number yet.

Progressive Democrats in the US House want to put on record, before any crisis, that Congress should not rescue artificial intelligence companies that run out of money. A resolution drafted by the Congressional Progressive Caucus and led by its chair, Rep. Greg Casar of Texas, and Rep. Maxine Waters of California, the top Democrat on the Financial Services Committee, was made public on October 28 by The American Prospect.

What the text says

The seven-page document is a "sense of the House" resolution, so it would carry no legal force even if adopted. It opposes any rescue of insolvent AI firms, any special assistance to AI-related or AI-exposed companies from the Federal Reserve, the Treasury or the FDIC, and the use of public money for such bailouts. Failing AI companies, it says, should be wound down or reorganised through ordinary bankruptcy, with priority for workers, consumers and pension holders. Executives who took excessive risks or broke the law should face civil and criminal liability and give up their gains.

In its preamble, the text compares the current AI investment boom with the 2000 dot-com crash and the 2008 financial crisis. It claims AI-related stocks have accounted for up to 75% of S&P 500 returns since October 2022 and that much AI debt sits in opaque private credit markets.

Status and context

The procedural status is unclear. The PDF published by the Prospect lists only Casar as sponsor and has no number, and Common Dreams reported that it had not yet been introduced, while The Daily Caller described it as introduced on October 28. No entry could be confirmed in official congressional records. According to the Prospect, Casar would like a vote early in the next Congress if Democrats win the House, or sooner.

The Prospect ties the timing to Anthropic's IPO prospectus, which it says shows fast-rising revenue alongside heavy losses, largely attributed by the company to an accounting change, and hundreds of billions of dollars in long-term commitments to partners such as Google and Amazon. Casar told the publication that the government should not try to make failing AI firms whole. Waters, in a statement quoted by Common Dreams, warned against letting history repeat itself.

With Democrats in the minority in the House, the resolution is mainly a political marker ahead of the midterm elections rather than a measure likely to pass soon.