Schumer, Dems at odds as leader aims to kill Ohio Republican’s data center bill

Senate Democratic Leader Chuck Schumer (N.Y.) is aiming to kill a bill sponsored by Republican Sen. Jon Husted (Ohio) to protect taxpayers from additional costs posed by AI-driven data centers, but his Democratic caucus isn’t fully on board after House Democrats overwhelmingly voted for the proposal.

The looming Senate floor fight over artificial intelligence and data centers has big implications for the Ohio Senate race, where the Democratic challenger, former Sen. Sherrod Brown (Ohio), has made Husted’s support for data centers a central issue in the campaign.

Senate Democrats say something needs to be done to protect taxpayers from rising energy costs due to data center growth, but they see the Husted bill — the Ratepayer Protection Act, which attracted huge bipartisan support in the House — as a political life raft for the GOP incumbent, who is trailing in the polls.

“It seems like it’s kind of a political bailout,” said Democratic Sen. Tina Smith (Minn.), alluding to the political damage Husted has suffered after getting pummeled with ads framing him as “the face of data centers” who cut “sweetheart tax deals” for them.

A YouGov poll of 1,000 likely voters in Ohio conducted earlier this month found that 75 percent of respondents opposed or strongly opposed the construction of data centers in their local communities. Nearly half of Ohio voters — 47 percent — said a candidate’s stance on data centers is extremely important or very important to their vote in November.

Brown has spent more than $430,000 on online ads that talk about data centers, according to a study by Absecon Group, a public affairs group that studies media strategy.

Senate Majority Leader John Thune (R-S.D.) is expected to file a cloture motion on Husted’s bill Monday, which would set up the first procedural vote to advance it on the floor Wednesday.

Republicans say there is heavy pressure on Democrats to vote for the bill after it passed the House by an overwhelming margin of 417-3 on Sept. 16. Only three House Democrats voted against it.

Schumer, however, is looking to quash Husted’s bill, which would deprive the vulnerable GOP incumbent of a political victory that he could use in the weeks ahead to defend himself from political attacks that he is Big Data’s ally in Washington.

But it will be a major test of his leadership strength whether he can convince almost his entire caucus to sink the bill.

Schumer on Wednesday dismissed Husted’s bill as a “fraud,” signaling that he will urge Democratic colleagues to block it on the floor later this week.

“Sen. Husted’s bill is a fraud, it’s voluntary, no company has to do it. The bill we have is mandatory. It is much stronger, and it is what is needed,” the New York senator said.

Sen. Martin Heinrich (D-N.M.) — the ranking member of the Senate Energy and Natural Resources Committee, who blocked Husted’s bill on the floor last week when the Ohio Republican asked for unanimous consent to pass it — argued that it would not require data centers to pay the full cost of energy they consume.

“The Ratepayer Protection Act does nothing to meaningfully address the rising costs of AI data center development. Instead, it relies on a voluntary framework that does not require AI data centers to pay the full cost of the energy they consume or the strain they place on the grid,” he said.

Husted argues, however, that his bill would “force” data centers “to pay their own way” because it would outline a federal standard and require states to consider that standard when determining regulations for data centers.

“Many states have already said they want to protect ratepayers by making data centers pay for their own electricity grid and production—and his bill does just that,” said Olivia Tripodi, a spokesperson for Husted.

Some Democratic senators see Husted’s bill as a step in the right direction — albeit a modest step — and favor voting to proceed to his bill so that it can be debated and amended on the Senate floor.

“My view is that this is a tiny step forward, but we shouldn’t miss this opportunity to strengthen it,” said Democratic Sen. Chris Van Hollen (Md.).

Van Hollen said Husted’s bill “doesn’t do nearly enough,” but he thinks Democrats will miss a valuable opportunity if they simply defeat the motion to proceed to the legislation.

“I’ve got a proposal called Power for the People Act that I’ve been trying to get passed for a while, which would actually protect ratepayers, make sure they don’t have to subsidize the richest corporations on the planet,” he said.

The Maryland Democrat said his colleagues should vote to get on Husted’s bill but not let it proceed to final passage unless Senate Republicans allow votes on amendments to strengthen it.

Van Hollen’s bill would direct states to consider whether to establish separate electricity rate classes for data centers so that they cover any higher energy costs they generate. And it would direct the Federal Energy Regulatory Commission to issue a rule to ensure data centers pay for transmission upgrades that would not otherwise be needed if they were not consuming massive amounts of energy.

Van Hollen said Democrats should “take the step of getting on the bill” while “making it clear” they will not advance it to final passage without substantial improvements.

But that’s a strategy that Schumer and other Senate leaders have avoided in recent years, calculating that once the Senate votes to begin debating legislation, it generates a lot of momentum and becomes much tougher to block the bill from moving to final passage.

Husted said that Democrats will find themselves on the political defensive if they block his bill this week, noting that House Minority Leader Hakeem Jeffries and Rep. Alexandria Ocasio-Cortez — both New York Democrats — along with “Democrats all on the House side voted for it and thought it was a great bill because they understood that it would lower energy prices.”

“And if Senate Democrats want to be the lone obstacle to passage, then shame on them,” Husted said. “That shows that they don’t really care about affordability.”

Sen. Sheldon Whitehouse (D-R.I.), the ranking member on the Senate Environment and Public Works Committee, isn’t a fan of voting to begin debate on Husted’s bill — as some fellow Democratic senators are proposing.

“Everybody’s entitled to their views,” he said, arguing that a better approach would be to challenge Trump’s opposition to building out the nation’s clean-energy infrastructure to increase total energy supplies.

Whitehouse has negotiated the outlines of a permitting reform deal with Republicans that one Senate Democratic aide said would include Heinrich’s Guarding Ratepayers from Increased Demand-costs (GRID) Savings Act.

Senate Democrats say that the GRID Savings Act would actually require large-load customers like data centers to pay for the facilities they need to connect them to the energy grid.

But Whitehouse said the permitting deal needs to be put into legislative language, a lengthy process that he suggested couldn’t get done before senators are scheduled to adjourn for an extended preelection recess.

The muddled situation leaves some Democrats on the fence about how to vote on Husted’s bill next week.

Sen. Bernie Sanders (I-Vt.), an outspoken critic of artificial intelligence who has called for a federal moratorium on building AI data centers, declined two requests to comment on Husted’s Ratepayer Protection Act.

Senate Democratic Whip Dick Durbin (D-Ill.) said he hasn’t taken a position on Husted’s bill yet.

“I’d have to read it. I haven’t read it yet,” he said.

Other Democratic senators also told The Hill they remain undecided.