Senator Ron Wyden has released draft legislation that would rebuild US unemployment insurance for an age of artificial intelligence, paying displaced workers while they retrain and extending benefits by up to a year when joblessness spikes. A second draft bill would fund that kind of support by putting a new excise tax on data centre operators. Neither is law; both were published on 23 October as draft text, according to the Senate Finance Committee release.
Wyden, the Oregon Democrat who is the committee’s ranking member, framed the package around workers. “Americans feel the looming fear of AI job losses, and Congress has a responsibility to help the country prepare,” he said. “The support meant to protect workers from financial devastation when they lose their jobs is brittle and out of date, and needs to be updated before the next economic crisis.”
The worker bill, the Stability and Opportunity for Workers Act, is co-sponsored by Senate Democratic Leader Chuck Schumer and Senators Michael Bennet and Elizabeth Warren. The National Employment Law Project, Economic Security Project Action and Employ America have endorsed it.
The committee’s summary is candid about the uncertainty, opening with the line “No one can be certain how artificial intelligence will transform the economy in the coming years”. CBS noted that economists say AI “hasn’t yet created major workforce displacements”.
Workers would get a higher floor under unemployment pay
The committee’s section-by-section summary sets out new federal minimums for state schemes. States would have to offer at least 26 weeks of benefits and replace 75% of a claimant’s average weekly earnings in their best quarter, with the maximum benefit set at no less than two-thirds of the state’s average weekly wage. The unpaid “waiting week” would go, claimants with dependants would get an extra $25 a week each, and more people, including part-time and temporary workers, would qualify.
Workers outside the system would be covered too. A new Jobseeker Allowance of $250 a week, fully federally funded, would reach the self-employed and new entrants to the labour market. The release says it is meant “to ensure no one falls through the cracks, including gig workers.” Unemployment pay would also count as earned income for the earned income tax credit from tax year 2027.
Benefits would stretch to 52 extra weeks in a deep downturn
The draft rewrites the Extended Benefits programme so that extra weeks switch on automatically as unemployment rises, with Washington paying the full cost rather than half. According to the summary, 13 extra weeks would be available at 5.5% unemployment, rising in steps to 52 weeks at 8.5%. CBS News reported the 8.5% trigger, describing it as “double the current standard of up to 26 weeks”, and Roll Call reported the “up to 52 additional weeks” from a bill summary.
For workers pushed out by AI, a new Transition Wages programme would add 26 weeks of federally funded payments for those in full-time approved training. In total, the summary says, people in training could receive up to 52 weeks of support, or 104 weeks when unemployment is high. A pilot would cover tuition for those unable to get other aid, and the bill aims to place workers in roles paying at least 75% of their previous wages.
Data centres would pay, at a rate yet to be set
The companion draft would establish an excise tax on data centre operators and remove tax breaks including bonus depreciation, opportunity zone benefits and research and development credits, the release says. Politico reported that the tax would fall on gross receipts from services such as cloud, data storage, AI training and inference, apply to facilities of 25 megawatts or more, and exempt internet infrastructure and traditional IT departments. Wyden will set the rate once congressional forecasters produce revenue estimates, Politico said.
The research credit point follows Wyden’s challenge to Meta, when Finance Committee Democrats asked the company to justify R&D credits linked to its AI data centres.
Industry is pushing back. “Data centers, like many other industries, utilize broadly available economic development and tax policies designed to encourage American job creation, infrastructure development, innovation, and overall economic growth,” Michele Nellenbach of the Data Center Coalition told Politico, adding that the group would seek “balanced, forward-looking solutions”. Politico reported that Microsoft and CoreWeave are lobbying on data centre taxes. Roll Call recalled a June warning from Republican Senator Mike Rounds: “If you start to tax it, you slow it down, and it goes elsewhere.”
Other governments are moving on the same worry. China has told officials to cushion AI job losses, a South Korean bill would require reporting of AI-driven layoffs, and Italy now bars fully automated decisions on workers. In Washington, President Trump has said large data centres should generate their own power.
A safety net built before the shock is the real proposal
The strongest idea here is timing. With large-scale AI displacement still a forecast rather than a fact, the uncertainty is the argument for acting early. Automatic triggers mean help arrives when unemployment rises, without waiting for Congress to agree emergency extensions in the middle of a crisis. For a worker in a sector hollowed out by automation, the difference between a payment that switches on and one that needs a vote can be months of rent.
The retraining design matters just as much. Paying people for up to two years while they learn new skills treats displacement as a career change rather than a short gap between similar jobs.
A blank tax rate leaves the hardest question open
The weak point is the funding side. Without a rate or a revenue estimate, there is no way yet to judge whether the data centre tax could pay for the benefits it is meant to support. Pairing the two keeps the politics coherent, but each draft will rise or fall on its own numbers. The industry case against new costs on investment will carry weight while those numbers are missing.
Timing cuts both ways. Roll Call described the drafts as an early signal of Democratic priorities if the party wins the Senate, and Politico noted that Wyden would be in line to chair the Finance Committee. Whether these drafts become a live bill depends on the 3 November midterms.
Sources
- US Senate Committee on Finance, “Amid AI Boom, Wyden Unveils Proposals to Ensure Wage Security, Fair Contributions from Data Centers”, 23 October 2026
- US Senate Committee on Finance, Stability and Opportunity for Workers Act section-by-section (PDF)
- CBS News, “As AI layoff fears mount, lawmakers weigh a bigger safety net for workers”, 23 October 2026
- Roll Call, “Wyden pushes bills to tax data centers, aid displaced workers”, 23 October 2026
- Politico, “Wyden unveils plan to raise taxes on data centers”, 23 October 2026
Related stories
- Senate Finance Democrats Ask Meta to Justify Billions in R&D Tax Credits Linked to Its AI Data Centres
- China Tells Officials to Cushion AI Job Losses as It Seeks New Roles
- South Korean Bill Would Make Firms Report AI-Driven Mass Layoffs, JoongAng Says
- Italy’s New AI Decree Bans Fully Automated Decisions on Workers
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