Topline
In a major setback for Democrats and President Biden, a key Senate advisor ruled Thursday that a $15 federal minimum wage cannot be included in President Biden’s $1.9 trillion stimulus plan, leaving the party to determine a new path forward for the major progressive priority—including possible tax penalties for large corporations that pay less than $15 per hour.
Senate Budget Committee Chairman Sen. Bernie Sanders, I-Vt., arrives for a hearing on Capitol Hill … [+]
Key Facts
House Speaker Nancy Pelosi (D-Calif.) called Thursday’s decision “disappointing” and said that House Democrats are “determined to pursue every possible path” to achieve a $15 national minimum wage.
White House economic advisor Brian Deese told CNBC Friday that Biden still supports the $15 wage and the administration would consult with congressional leaders to determine a path forward, while White House press secretary Jen Psaki said Thursday evening that Biden “respects the parliamentarian’s decision and the Senate’s process.”
While it is possible for Democrats to move ahead with the wage hike despite the decision, opposition from two key Democrats (Sen. Joe Manchin of West Virginia and Sen. Krysten Sinema of Arizona) means that measure would be virtually guaranteed to fail anyway.
Sen. Bernie Sanders (I-Vt.), head of the Senate Budget Committee, and Sen. Ron Wyden (D-Ore.), head of the Senate Finance Committee, both announced they were considering tax penalties for large corporations that don’t pay their workers a living wage in the aftermath of Thursday’s ruling.
Senate Majority Leader Chuck Schumer (D-N.Y.) is also considering adding this type of provision to the next relief bill, the Washington Post’s Erica Werner reported.
Tax changes that target only large companies might be more palatable to moderate Democrats like Manchin, who has said he believes $15 per hour would be too large and too expensive for his home state, but it’s not yet clear whether they would be more likely to get the green light from the parliamentarian.
Big Number
83%. That’s the portion of Americans who said the existing $7.25 per hour federal minimum wage is not enough, Yahoo Finance and the Harris Poll found earlier this month.
Surprising Fact
Republican Sen. Josh Hawley of Missouri introduced a plan on Friday morning that would require companies with revenues of $1 billion or more to pay their employees at least $15 per hour. After 2025, the minimum wage for these companies would be indexed to the federal median wage. “Mega-corporations can afford to pay their employees $15 an hour, and it’s long past time they do so, but this should not come at the expense of small businesses already struggling to make it,” Hawley said in a statement.
Key Background
Democrats are moving forward with the sweeping relief bill through a special legislative process called budget reconciliation, which will allow them to pass Biden’s $1.9 trillion American Rescue Plan with only a simple majority of 51 votes in the Senate rather than the usual 60 that are required to overcome a filibuster. Democrats hold 50 seats in the Senate, and Vice President Kamala Harris’ vote would break a tie in their favor. Reconciliation rules also require that every provision included in the legislation have a direct impact on the federal budget. Elizabeth MacDonough, the Senate’s parliamentarian, said Thursday that the wage hike does not meet that criteria.
What To Watch For
The House of Representatives will vote on its version of the $1.9 trillion rescue bill on Friday. Pelosi has said the $15 minimum wage hike will remain in the bill for the vote.
Further Reading
Republican Sen. Josh Hawley Proposes Legislation Requiring $15 Minimum Wage For Billion-Dollar Companies (Forbes)
A $15 Minimum Wage Can’t Be Included In Biden’s $1.9 Trillion Stimulus Plan, Senate Official Rules (Forbes)
Republican Senators Unveil $10 Minimum Wage Plan To Counter Democrats’ $15 An Hour Proposal (Forbes)
More Than 150 Top CEOs Rally Behind Biden’s $1.9 Trillion Stimulus Plan (Forbes)
