covid stimulus

Senate Democrats Bail on Backup Plan for $15 Minimum Wage As Part of Biden Stimulus

Senate Finance Committee chair Ron Wyden. Photo: Getty Images

Last week, Senate Democrats heeded the ruling of the body’s parliamentarian, who determined they were not allowed to increase the federal minimum wage to $15 as part of the $1.9 trillion coronavirus relief plan. According to parliamentarian Elizabeth MacDonough, tacking on the proposal to President Biden’s stimulus plan would violate the rules of budget reconciliation, the process Democrats are using to pass the $1.9 trillion package with just 51 votes. While one previous administration had fired the legislative rule-keeper as a simple workaround, Biden and Vice-President Kamala Harris wanted to “respect” the will of the unelected official, rather than secure an immediate win for the widely supported benefit, which would be the first increase to the minimum hourly wage in over a decade.

Immediately after the play was spiked, Democrats scrambled to get an imperfect $15 minimum into the bill: Aides for Senate Finance Committee chair Ron Wyden, consulting with Senate Budget Chair Bernie Sanders, wrote up a proposal requiring “very large” companies like Walmart and Amazon to pay a 5 percent payroll tax if they did not pay their workers at least $15 per hour. Smaller businesses, meanwhile, would be encouraged to raise their employees’ wages by providing income tax credits equal to 25 percent of wages, up to $10,000 per employer per year.

Now, this backup plan has also been spiked, according to the Washington Post, which reports that the “the tax outlined by Sanders and Wyden could be easily avoided and difficult to implement, with large corporations able to reclassify workers as contractors to avoid potential penalties.” Sanders and Wyden, who have reportedly walked away from the proposal, would have also had to convince a hesitant caucus to support a wage increase — one that still doesn’t cover rent for a two-bedroom apartment in all but six states in the nation — while hashing out the stimulus details before March 14, when the extended unemployment from the last stimulus runs out.

Though the $15 minimum returns to the policy waiting room, the $1.9 trillion bill passed by the House last week includes other unprecedented (if less permanent) expansions of the safety net amid the pandemic, including $400 weekly unemployment payments through August 2, a 15 percent increase to SNAP benefits through September, and a $1,400 payment for Americans making less than $75,000.

Senate Democrats Bail on Backup Plan for $15 Minimum Wage