$15 federal minimum wage in doubt as some lawmakers seek compromise
WASHINGTON (SBG) — The fight for a $15 federal minimum wage encountered a potentially insurmountable obstacle Thursday when a Senate arbiter ruled it could not be included in a $1.9 trillion coronavirus relief bill, but Democrats remain committed to finding some way to raise the federal wage floor.
Senate parliamentarian Elizabeth MacDonough determined increasing the federal minimum wage does not comply with the Byrd rule, which dictates what can be included in a bill passed through the reconciliation process. Democrats aim to pass the relief package through reconciliation because it only requires a simple majority in the Senate, but all provisions must be directly budget-related.
The White House said Thursday President Joe Biden was disappointed in the ruling, but he was eager to advance the relief bill without the wage provision. Biden had repeatedly cautioned that he did not believe the minimum wage increase would survive the parliamentarian’s review.
“He will work with leaders in Congress to determine the best path forward, because no one in this country should work full time and live in poverty,” said White House press secretary Jen Psaki. “He urges Congress to move quickly to pass the American Rescue Plan.”
The House planned to pass the $1.9 trillion package Friday with the minimum wage increase intact. The Senate will have to strip it out before it votes on the legislation, and then send the amended bill back to the House for final approval next month.
“House Democrats believe that the minimum wage hike is necessary,” House Speaker Nancy Pelosi, D-Calif., said Thursday night. “Therefore, this provision will remain in the American Rescue Plan on the Floor tomorrow. Democrats in the House are determined to pursue every possible path in the Fight For 15.”
An unelected bureaucrat stymying a major legislative priority stirred immediate anger from progressive activists at both MacDonough and Democratic leaders. They warned procedural hurdles would continue to stand in the way of Democrats’ agenda if they rely on reconciliation rather than changing the rules.
“We’ve done our job on behalf of the tens of millions of people across the country who desperately need a raise. Now, it’s time for our elected leaders to do theirs,” Maribel Cornejo, a Houston McDonald’s worker and Fight for $15 activist, said in a statement.
Congressional Progressive Caucus Chair Rep. Pramila Jayapal, D-Wash., urged Senate Democrats to eliminate the legislative filibuster so all bills could pass with a simple majority without consideration of “archaic” parliamentary rules. Several Senate moderates, most vocally Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, have resisted such demands in the past.
“We simply cannot go back to the Black, Brown, AAPI, Indigenous, poor and working-class voters who delivered us the White House and the Senate majority and tell them that an unelected parliamentarian advised us – based on arcane rules – that we could not raise the minimum wage as we promised,” Jayapal said.
Despite the frustration on the left, dropping the provision would make it much easier to get the American Rescue Plan through the Senate, where several Democrats expressed reservations. It would also undercut a central criticism Republicans have leveled at the bill, citing the ramifications of the minimum wage increase for businesses and a Congressional Budget Office projection that it would cost 1.4 million workers their jobs.
“Republicans in the Congress seem set on opposing the plan with or without the minimum wage increase,” said Richard Arenberg, a former Capitol Hill senior staffer and co-author of “Defending the Filibuster: Soul of the Senate.” “It may make selling the bill to Sen. Joe Manchin easier, and, of course, his vote is crucial if the bill is to pass without any Republican support in the 50-50 Senate.”
Democrats pressing for the first federal minimum wage increase in over a decade have several options at this point, some of which are more palatable than others. There is no clear consensus yet on how to proceed.
DO IT ANYWAY
As many progressives have noted, the parliamentarian’s decision is not necessarily binding. There are precedents for overruling them, but the White House has signaled Vice President Kamala Harris has no desire to do so.
“The vice president is not going to weigh in,” White House economic adviser Brian Deese told The Washington Post Friday.
Democrats could also do what Republicans did in 2001 after the parliamentarian prevented them from including certain provisions in a reconciliation bill: get rid of the parliamentarian. Then-Senate Majority Leader Trent Lott pressed the secretary of the Senate to remove parliamentarian Robert Dove.
“Abolish the filibuster. Replace the parliamentarian,” Rep. Ilhan Omar, D-Minn., tweeted Thursday. “What’s a Democratic majority if we can’t pass our priority bills? This is unacceptable.”
However, Manchin has made clear he would defend the Byrd rule, “hell or high water,” so he would likely object to passing a provision the parliamentarian deemed a violation. Sinema also indicated recently she did not approve of passing any kind of federal minimum wage increase through reconciliation.
TRY AGAIN
After the parliamentarian’s decision, Sens. Bernie Sanders, I-Vt., and Ron Wyden, D-Ore., outlined proposals to increase pay for some minimum wage workers that might be more compliant with reconciliation rules. They would impose tax penalties on large companies that do not pay workers at least $15 an hour and provide incentives for smaller businesses to hike wages.
“In the coming days, I will be working with my colleagues in the Senate to move forward with an amendment to take tax deductions away from large, profitable corporations that don’t pay workers at least $15 an hour and to provide small businesses with the incentives they need to raise wages,” Sanders said.
Aides said Friday Senate Majority Leader Chuck Schumer, D-N.Y., would consider adding a tax penalty provision to the bill, but no final decisions had been made. Moderates who opposed mandating a $15 minimum wage for all workers have not indicated whether they would back that approach.
Given the clear impact on taxes, the plan is more likely to be considered budget-related, but there is no guarantee the parliamentarian would accept it. Repeatedly bumping up against the limitations of reconciliation could increase calls for Democrats to take more drastic steps like nuking the filibuster.
“There will be pressure from progressives to use the so-called ‘nuclear option’ to eliminate the filibuster in the Senate in order to pass the $15 minimum wage increase without any Republican votes,” Arenberg said.
COMPROMISE WITH DEMOCRATS
Convincing the parliamentarian to include a $15 minimum wage provision in the bill is only half the battle, and getting 50 votes to pass a wage increase might prove even more difficult. Procedural issues aside, Manchin has argued a $15 national standard is too high, and he might be willing to torpedo the whole relief package over it.
The West Virginia senator has proposed an $11 federal minimum wage as a potential compromise. However, several House progressives have warned they would not support the final legislation if Senate Democrats set a lower wage floor.
With a narrow Democratic majority in the House, a handful of defections could threaten the bill’s passage and hand President Biden an embarrassing defeat. Many progressives campaigned on the “Fight for $15,” though, and they would be reluctant to back down.
“We’re in a world now where the posturing is really important and communications are extremely important,” said Todd Belt, director of the political management program at the George Washington University Graduate School of Political Management. “If you continue to have something to fight for, you continue to have a reason for people to send you back to Congress.”
Something between $11 and $15 or a more gradual phase-in could satisfy both moderates and progressives and provide a significant boost to low-wage workers while creating less economic risk. A 2019 Congressional Budget Office report estimated increasing the wage floor to $12 by 2025 would raise pay for up to 11 million workers, lift 400,000 Americans out of poverty, and endanger 300,000 jobs.
COMPROMISE WITH REPUBLICANS
If Democrats cannot craft a wage increase that adheres to reconciliation rules and they lack the votes to eliminate the legislative filibuster, a standalone minimum wage bill would require 60 votes to survive in the Senate. There are not 10 Republican votes for a $15 minimum wage, if there are any, but there might be for something less dramatic.
In recent days, at least a half-dozen Republicans have announced support for some sort of minimum wage increase. Sens. Mitt Romney, R-Utah, and Tom Cotton, R-Ark., announced a plan earlier this week that would gradually raise the wage floor to $10 per hour and mandate employers use E-Verify to confirm the immigration status of workers.
“It’s been more than a decade since the federal minimum wage has been increased, leaving millions of Americans struggling to make ends meet,” Romney said in a statement. “Our proposal would raise wages for nearly 3.5 million workers without costing jobs.”
Three more Republicans—Sens. Rob Portman of Ohio, Susan Collins of Maine, and Shelley Moore Capito of West Virginia—have already signed on as co-sponsors of that bill. Others, including Sen. Lindsey Graham, R-S.C., have said they would favor a moderate increase in the federal minimum wage without specifying a figure.
Rep. Alexandria Ocasio-Cortez, D-N.Y., dismissed the $10 proposal as “legislated poverty.” The Economic Policy Institute estimated the Romney-Cotton plan would only benefit 3.2% of the workforce, compared to more than 20% of workers who would see a raise if the federal minimum wage is increased to $15 per hour.
Sen. Josh Hawley, R-Mo., who unveiled a plan Wednesday that would temporarily provide tax credits to workers earning less than $15 per hour, said Friday he supports requiring businesses with $1 billion in revenue or more to pay at least $15. That could align him with what Sanders and Wyden have discussed.
"Mega-corporations can afford to pay their workers $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.
KEEP FIGHTING FOR $15
Advocates for a $15 minimum wage have bristled at any suggestion of lowering their target, and some insist $15 by 2025 is still too low. An analysis by researchers at the Massachusetts Institute of Technology estimated a living wage for a family of four in 2020 was $21.54, and a living wage for a single individual was $15.41.
Still, experts say there is little hope of finding 50 votes for $15 in the current Congress, even with strong White House support, and historical trends point to Republicans retaking control of the House in the midterms. Meeting Manchin or a faction of moderate GOP senators in the middle might be the best progressives can do.
“The path to a minimum wage hike will likely require compromise perhaps on the size of the hike,” Arenberg said. “Otherwise, a Republican filibuster in the Senate would block a standalone minimum wage bill.”
One other option would be to attach a wage increase to a must-pass appropriations bill, which is how the last minimum wage hike made it through Congress in 2007. Again, though, winning enough votes for passage in the Senate would almost certainly mean accepting a smaller or slower increase.
“The question for some of the progressives in the Democratic caucus is, is half a loaf better than none?” Belt said.
