The U.S. legislative landscape is shifting to address the evolving threats and opportunities presented by artificial intelligence. As lawmakers recognize the growing influence and potential risks of AI, new bills are being introduced to both protect national interests and prepare for the economic challenges ahead. These legislative efforts focus on safeguarding the United States' position in AI innovation, addressing potential job displacement, and ensuring responsible use of the technology across various sectors. This includes education and finance.
Countering Foreign AI Threats
In response to growing concerns about foreign adversaries exploiting American AI systems, Sen. Bill Hagerty, R-Texas, has introduced the Blocking Large-Scale Adversarial Distillation Efforts — or BLADE — Act of 2026. The legislation targets the issue of model distillation, a process where foreign actors train their own AI models using data derived from U.S. systems. This has become a national security issue, particularly in light of reports indicating that Chinese developers are engaging in such activities.
The BLADE Act mandates that the Executive Branch identify and list foreign entities suspected of engaging in illegal distillation. Once these entities are named, the Department of Commerce and the Department of Treasury would impose export controls and financial sanctions, respectively. This comprehensive approach is designed to deter unauthorized replication of American AI models and to protect the intellectual property behind them.
Hagerty emphasized the critical need for such legislative action, stating that the United States must remain a leader in AI development. He warned that if adversaries continue to steal AI advancements, the country risks losing its competitive edge and national security could be compromised. Hagerty's comments were echoed by the bill's bipartisan supporters, including Sens. Tim Scott, R-S.C., Andy Kim, D-N.J., and Catherine Cortez Mastro, D-Nev. Together, they argue that these measures are necessary to counteract the threat posed by hostile actors who seek to undermine American innovation.
Taxing AI to Prevent Job Loss
A new legislative proposal, the AI Tax and Work Protection Act, aims to address the potential economic fallout from the rise of AI in the workplace. Introduced by Reps. Greg Casar, D-Texas, Valerie Foushee, D-N.C., and Sara Jacobs, D-Calif., the bill is designed to fund job creation in response to anticipated AI-driven unemployment. Casar, a leading voice in this effort, has called the issue an 'emergency,' warning that without intervention, millions of workers may lose their jobs.
The bill proposes the creation of the Work Protection Administration, an independent office funded by a tax on AI developers. The tax would be calculated based on the number of input tokens required for a given AI system. Or it could be based on the total revenue generated from AI products, whichever is higher. The funds collected will be directed into initiatives that create jobs in vital sectors. These include housing construction, infrastructure modernization, child care, and elder care. These investments will be made through local grants to ensure community-level impact.
Casar has stressed that the tax structure is dynamic. As unemployment rises, so too will the tax rate. This ensures that resources scale in accordance with the economic need. He has also criticized the potential for AI to benefit a select few at the expense of the broader workforce. Casar warns against letting AI CEOs accumulate vast wealth through job displacement. By investing in essential job sectors, the administration seeks to provide a counterbalance. This is to the disruption caused by automation and artificial intelligence.
Evaluating AI in Education and Finance
Rep. George Whitesides, D-Calif., introduced the Understanding AI in the Classroom Act. This bill calls for the National Science Foundation to conduct comprehensive studies. The studies will evaluate the impact of AI in education. The initiative includes the development of workshops designed to evaluate how artificial intelligence affects children's attention spans. These workshops also assess cognitive development, social, and behavioral growth. The goal is to understand whether AI's presence in classrooms is beneficial. Or if it poses hidden risks to students' learning and development.
Once the workshops are completed, the National Science Foundation is required to compile a detailed report on the findings. This report will be shared with the House Committee on Science, Space and Technology and the Senate Committee on Commerce, Science and Transportation. The information gathered through this process is intended to inform policy decisions and ensure that AI is integrated into educational environments responsibly.
In another development, Sen. Mark Warner, D-Va., introduced a bill to amend the Financial Stability Act of 2010. The amendment seeks to expand the oversight responsibilities of the Financial Stability Oversight Council to include the evaluation of AI models, particularly in relation to cybersecurity risks. This move follows a letter from Warner and other Democrats to the Trump administration, urging officials to release their framework for assessing the risks associated with AI in the financial sector.
The proposed amendment aims to ensure greater transparency and regulatory clarity in the financial industry. With AI playing an increasingly significant role in financial decision-making, Warner argues that the oversight framework must evolve to keep pace with technological advancements and prevent potential disruptions in the market.
The legislation, part of the Health Insurance Transparency for Patients Act, seeks to enhance transparency and ensure that AI use in healthcare is properly communicated to patients and regulators alike.