How Democrats can pass a minimum wage increase to $15 after a major setback from the Senate parliamentarian

Grace Panetta
·4 min read
Bernie Sanders
Senate Budget Committee Chairman Sen. Bernie Sanders, I-Vt., speaks during a hearing on Capitol Hill in Washington, Thursday, Feb. 25, 2021, examining wages at large profitable corporations. AP Photo/Susan Walsh, Pool
  • Democrats were dealt a blow to raise the minimum wage to $15 an hour on Thursday evening.

  • The Senate parliamentarian advised the wage hike doesn't meet the rules of budget reconciliation.

  • Here are the options Democrats have left in their toolbox to pass a minimum wage increase.

  • Visit the Business section of Insider for more stories.

The Senate parliamentarian Elizabeth McDonough dealt a significant setback to Democrats' efforts to increase the minimum wage to $15 an hour through President Joe Biden's stimulus package on Thursday evening.

Senators are gearing up to pass the $1.9 billion bill, which includes $1,400 direct relief checks for those who qualify, $350 billion in state and local aid, money for schools, housing assistance, funding for COVID-19 testing and vaccines, and child tax credits, through a process called budget reconciliation.

In reconciliation, Senators can pass budget-related proposals with just a simple majority of 51 votes as opposed to the 60 votes usually required to get past the filibuster in the Senate.

But reconciliation isn't a free-for-all, and there are important rules governing the process, particularly, the Byrd rule, which prohibits matters "extraneous" to the budget process from being passed through reconciliation. McDonough advised the Senate that the minimum wage increase is not permissible under that requirement.

Here's how Democrats can still try to pass a wage increase:

  • Pass a standalone bill that can withstand the filibuster. Because the Senate is evenly divided between 50 Democrats and 50 Republicans, the two parties would need to agree on a package to get to 60 votes. Democrats could try to find some bargaining room with Republicans to pass a more modest wage increase or have it be phased in over a longer timeframe, for example. Some Republicans, like Sens. Mitt Romney and Tom Cotton, have released their own plan to raise the minimum wage to $10 an hour instead of $15.

  • Include wage-related incentives and penalties in the bill through reconciliation. Some Democratic Senators, including Budget Committee chair Sen. Bernie Sanders, are proposing adding provisions in the stimulus bill to strip tax deductions from big corporations that don't pay workers at least $15 an hour, and give tax incentives to small businesses who do increase their wages.

    • While the measure would fall far short of the legislative mandate many lawmakers and activists want, it could have a better chance of being allowed in Biden's coronavirus relief bill under the parameters of the Byrd rule.

  • Overrule or ignore the parliamentarian's determination. The Senate parliamentarian's advice isn't a hard final rule, and VP Kamala Harris, as senate president, could ignore the advisory on the provision's compliance with the Byrd rule and keep the wage increase in the package.

    • "For me, the issue here is we made a promise to raise the minimum wage. We now have to deliver on that promise to 27 million Americans who are not going to be much convinced when we go back in two years and say, 'Sorry, the unelected parliamentarian told us we couldn't raise the minimum wage,'" progressive Rep. Pramila Jayapal told the Washington Post's Paul Kane on Friday.

    • But brushing off the parliamentarian could be risky and cost key votes. Two key moderate Democratic Senators whose votes will be required to pass the bill, Sen. Joe Manchin of West Virginia and Sen. Kyrsten Sinema of Arizona, have said that they do not support raising the minimum age to $15 through reconciliation.

    • Biden released a statement on Thursday after the parliamentarian's ruling saying that while he is "disappointed," he "respects" the parliamentarian's decisions, making it unlikely for Harris to go that route.

  • Fire the Senate parliamentarian. Some progressives argue that Senate Democrats should fire and replace McDonough, who was appointed to the post in 2012 by then-Senate majority leader Harry Reid. But especially given the narrow margins in the Senate, it's not clear that firing her would get Democrats any closer to their goal of getting more agenda items passed through reconciliation.

Read the original article on Business Insider