$15 Minimum Wage Dead for Now
The Senate parliamentarian has ruled against ramming it through in the COVID relief bill.
POLITICO (“Biden’s minimum wage increase runs afoul of budget rules“):
The Senate parliamentarian has ruled that President Joe Biden’s minimum wage hike violates arcane budget rules that could jeopardize the rest of his $1.9 trillion relief package, dealing a blow to progressives in a highly anticipated decision that has left much of Washington holding its breath for days.
The ruling, confirmed by three sources — and predicted by Biden himself — has thrust the future of the wage hike into uncertainty. The $15 hourly wage increase that Democrats are seeking could pass only on party-line votes, and they needed the protections of the so-called budget reconciliation process to shield the language from a Republican filibuster.
Speaker Nancy Pelosi announced shortly after the ruling that the House would plunge ahead with including it in its coronavirus relief bill, which is set for a vote on Friday night.
But Democrats in both chambers acknowledge that the policy will be stripped out in the final version of the bill — a setback for the left wing of the party, which has pushed for the policy for a decade.
Biden, who had proposed the wage hike as a key plank of his $1.9 trillion package, said through a spokeswoman that he was also “disappointed in this outcome,” but added that he “respects the parliamentarian’s decision and the Senate’s process.”
Democrats for weeks have argued that the minimum wage hike could be included in the package through reconciliation, citing analysis from the Congressional Budget Office that found the boost would increase the deficit by reducing reliance on social services. But Republicans counter that the same CBO report suggests the increase would result in the loss of 1.4 million jobs and say it’s an extraneous provision.
“This decision reinforces reconciliation cannot be used as a vehicle to pass major legislative change — by either party — on a simple majority vote. This decision will, over time, reinforce the traditions of the Senate,” said the Senate Budget Committee’s top Republican, Lindsey Graham of South Carolina.
NYT (“Top Senate Official Disqualifies Minimum Wage From Stimulus Plan“) adds:
Democrats suffered a major setback on Thursday in their bid to push through a $15-an-hour minimum wage as part of President Biden’s $1.9 trillion stimulus package, after the Senate’s top rule-enforcer said that the increase could not be included in the bill.
The decision effectively knocked out a crucial plank of Mr. Biden’s plan championed by liberals, and demonstrated the perils of Democrats’ strategy to fast-track passage of the sweeping pandemic aid legislation, part of an effort to steer around Republican obstruction.
It underscored that even with control of the White House and both chambers of Congress, Mr. Biden and Democrats still face formidable challenges in delivering on their most ambitious promises given their slim majorities and opposition from Republicans.
The decision also poured fuel on a smoldering debate among Democrats about how to use their Senate majority to achieve Mr. Biden’s agenda. Progressives who have pushed for the elimination of the filibuster — which effectively requires 60 votes to advance any major legislation — pointed to the ruling as evidence that Democrats had no choice but to change the rules of the Senate to enable them to push through crucial policy changes that have been stalled time and again amid Republican opposition.
The episode also touched off a bitter round of finger-pointing among Democrats, who are divided over how hard to push for the wage increase. Mr. Biden, a longtime creature of the Senate, had publicly professed skepticism that the provision would survive the procedural thicket facing his stimulus plan.
Two moderate Democrats, Senators Joe Manchin III of West Virginia and Kyrsten Sinema of Arizona, had also said they did not support including such a large increase to the federal minimum wage in the package, although some Democrats believed they might ultimately relent.
“I’m confident that we have a majority in the United States Senate, including the vice president, that would vote to increase the minimum wage to $15 an hour as part of President Biden’s ‘American Rescue Plan,'” Senator Bernie Sanders, independent of Vermont and the chairman of the Budget Committee, said in a statement. “Yet because of the archaic and undemocratic rules of the Senate, we are unable to move forward to end starvation wages in this country and raise the income of 32 million struggling Americans.”
He said he would try an alternative approach, proposing an addition to the stimulus measure that would take tax deductions away from companies that fail to pay their workers at least a $15 hourly wage.
President Biden, having spent 36 years in the Senate, was rightly skeptical that this could happen through reconciliation. An excellent primer from the House Committee on the Budget explains the process. Key here is the so-called “Byrd Rule.”
Named for Senator Robert Byrd, the Byrd rule (Section 313 of the Congressional Budget Act) was first adopted in the mid-1980s to limit extraneous provisions from inclusion in reconciliation bills. Because reconciliation bills are considered using expedited procedures in the Senate, the Byrd rule is aimed at preventing the use of reconciliation to move a legislative agenda unrelated to spending or taxes, and to some extent it limits Congress’ ability to use reconciliation to increase deficits – at least over the long-term. The Byrd rule prohibits the inclusion of “extraneous” measures in reconciliation, defining “extraneous” as follows:
*measures with no budgetary effect (i.e., no change in outlays or revenues);
*measures that worsen the deficit when a committee has not achieved its reconciliation target;
*measures outside the jurisdiction of the committee that submitted the title or provision;
*measures that produce a budgetary effect that is merely incidental to the non-budgetary policy change;
*measures that increase deficits for any fiscal year outside the reconciliation window; and
*measures that recommend changes in Social Security.
Any Senator may raise a point of order against an extraneous provision in the reconciliation bill, amendments, or the conference agreement. The Senate Parliamentarian decides whether there is a Byrd rule violation, and provisions struck through a Byrd rule point of order cannot be offered later as amendments. However, Byrd rule points of order can be waived by a vote of 60 Senators.
This was clearly extraneous to a COVID relief bill and the arguments to the contrary were rather silly.
“I strongly disagree with tonight’s decision by the Senate Parliamentarian,” Sanders said in a statement Thursday evening. “The (Congressional Budget Office) made it absolutely clear that raising the minimum wage to $15 an hour had a substantial budgetary impact and should be allowed under reconciliation. It is hard for me to understand how drilling for oil in the Arctic National Wildlife Refuge was considered to be consistent with the Byrd Rule, while increasing the minimum wage is not,” Sanders added, referring to the rule — named after the late Sen. Robert C. Byrd — that prohibits including “extraneous” measures as part of the budget process that Democrats are employing to send the Covid-19 relief package to Biden’s desk by early March.
“Let’s be clear: raising the minimum wage is COVID-19 relief,” Washington Rep. Pramila Jayapal, the chair of the Congressional Progressive Caucus, said in a statement responding to the ruling. “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,” she added, calling on the Senate to reform the filibuster “to allow populist and necessary policies like the $15 minimum wage to pass with a majority of the Senate.”
The whole point of the process is to expedite taxation and spending bills. If any pet program can be attached, then it’s simply normal order.
That the minimum wage increase is quite popular and has more than enough support in the House and Senate to pass in a straight up-down vote is, certainly, more evidence that the filibuster—especially a filibuster that is itself normal order—is incredibly undemocratic. That’s particularly true given that equal representation of the 50 states in the Senate regardless of population further skews the process, requiring a supermajority of the public to get a bare Democratic majority.
But the two Democratic Senators who oppose the minimum wage increase, Manchin and Sinema, also oppose ending the filibuster. Absent Democrats expanding their majority in the 2022 elections—which would go against historical norms—this state of affairs will remain in effect.