Wyden releases draft data center tax and AI worker aid bills ahead of midterms

By Nora Pembrook

WASHINGTON — Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, has released draft legislation that would impose an excise tax on data center operators and expand unemployment benefits for workers displaced by artificial intelligence, an early look at what Democrats may pursue if they win control of the Senate on Nov. 3.

Wyden released the proposals Friday alongside Senate Democratic Leader Chuck Schumer of New York and Sens. Michael Bennet of Colorado and Elizabeth Warren of Massachusetts, who are co-sponsors of the worker measure, the Stability and Opportunity for Workers Act.

“Americans feel the looming fear of AI job losses, and Congress has a responsibility to help the country prepare,” Wyden said in a statement. “The support meant to protect workers from financial devastation when they lose their jobs is brittle and out of date, and needs to be updated before the next economic crisis.”

What the worker bill would do

The Stability and Opportunity for Workers Act would set new minimum standards for state unemployment insurance benefits, extend how long benefits are available during downturns, and expand the categories of workers covered, according to the Finance Committee’s summary. It would also create a jobseeker’s allowance meant to reach workers who do not qualify for regular unemployment insurance, including gig workers.

A new Transition Wages program would provide income support for up to two years for workers displaced by AI as they pursue education and retraining, Roll Call reported. The bill would also create a pilot program for tuition assistance and update the federal-state Extended Benefits program to allow up to 52 additional weeks of unemployment benefits.

The committee said the bill has been endorsed by the National Employment Law Project, the Economic Security Project Action and Employ America. It builds on Wyden’s earlier Unemployment Insurance Modernization and Recession Readiness Act.

The data center tax

The second measure, released as draft legislative text, would establish an excise tax on data center operators and remove several tax breaks for data center construction, including 100% bonus depreciation, Opportunity Zone benefits and the use of research credits for equipment expenses, according to the committee and Roll Call. The committee said the tax would be used to fund worker assistance.

Wyden first outlined the approach in a white paper released in August. The committee has not published a revenue estimate for the package.

Republican objections and the administration’s approach

Some Republicans have argued that taxing the industry would slow investment and cede ground to foreign competitors. “If you start to tax it, you slow it down, and it goes elsewhere, or it does not move as fast as it will in other parts of the world. That’s not good for America,” Sen. Mike Rounds of South Dakota, co-chair of the Senate Artificial Intelligence Caucus, said in June, according to Roll Call. “I’d rather have those decisions being made here at the forefront rather than in China.”

The Trump administration has pursued its own AI agenda, including a framework released in March for a national AI policy that would broadly preempt state laws, Roll Call reported.

Republicans hold a 53-47 Senate majority, and the draft would need Republican support to advance in the current Congress. Wyden released the text 11 days before the midterm elections, in which Democrats need a net gain of four seats to take control of the chamber, according to an analysis of polling averages.

The Inquisitor is seeking comment from Wyden’s office, the offices of Rounds and Senate Finance Committee Chairman Mike Crapo, the White House, the National Employment Law Project and the Cato Institute, and will update this story with any responses.