Top Senate Official Disqualifies Minimum Wage From Stimulus Plan

WASHINGTON — Democrats suffered a major setback Thursday in their bid to push through a $15-an-hour minimum wage as part of President Joe 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 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, Biden and Democrats still face formidable challenges in delivering on their most ambitious promises, given their slim majorities and opposition from Republicans.

Speaker Nancy Pelosi of California said the House would keep the provision in its version of the stimulus plan, which is set to be voted on Friday. But the ruling from Elizabeth MacDonough, Senate parliamentarian, all but sealed the fate of Democrats’ push to gradually raise the wage to $15 by 2025, which faces enough opposition from Republicans that it is all but certain to die on its own.

The decision also poured fuel on a smoldering debate among Democrats about how to use their Senate majority to achieve 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. 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, Sens. Joe Manchin 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.

“President Biden is disappointed in this outcome,” said Jen Psaki, White House press secretary, said in a statement. “He respects the parliamentarian’s decision and the Senate’s process. 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.”

Professing deep disappointment and disagreement, top Democrats vowed to continue fighting for the increase, which would be the first such raise since 2009.

“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,’ ” Sen. Bernie Sanders, I-Vt., 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.

“We are not going to give up the fight to raise the minimum wage to $15 to help millions of struggling American workers and their families,” said Sen. Chuck Schumer, D-N.Y., the majority leader. “The American people deserve it, and we are committed to making it a reality.”

But the decision by MacDonough, the arbiter of Senate procedure, gave Republicans grounds to jettison the provision when the Senate considers the stimulus measure under a fast-track process known as budget reconciliation, which shields it from a filibuster, allowing it to pass without Republican support.

That means it would need the support of at least 10 Republicans in the chamber to pass on its own, a hurdle it cannot scale.

MacDonough told Senate offices Thursday that the provision as written violated the strict budgetary rules that limit what can be included in a reconciliation package. Democrats are working to win enactment of the pandemic aid package before mid-March, when federal unemployment benefits begin to lapse. Doing so through reconciliation ensures speed, but it also comes with stringent rules that aim to prevent the process from being abused for policy initiatives that have no direct effect on the federal budget.

Republicans had argued that the minimum wage increase championed by Biden and top Senate Democrats was such an abuse, arguing it had a “merely incidental” effect on the budget. MacDonough, after hearing arguments from both parties, agreed, ruling that it was in violation of the so-called Byrd Rule, named for former Sen. Robert Byrd, D-W.Va., a master of procedural tactics.

Republicans applauded her ruling.

“This decision reinforces reconciliation cannot be used as a vehicle to pass major legislative change — by either party — on a simple majority vote,” said Sen. Lindsey Graham of South Carolina, the top Republican on the Budget Committee. “This decision will, over time, reinforce the traditions of the Senate.”

While the majority typically follows advice from the parliamentarian, Democrats could also try to overrule her guidance, effectively insisting on including the wage increase in the legislation anyway, or try to rewrite the provision in a way that adheres to the Senate rules. In 2001, the parliamentarian at the time, Robert Dove, was unceremoniously ousted from his position after Republican leaders found fault with his rulings. But top White House officials, including Ron Klain, the chief of staff, have publicly said that Vice President Kamala Harris, in her role as president of the Senate, would not vote to overrule MacDonough. MacDonough, the first woman to hold the post, has retained both the position and bipartisan respect under the leadership of both parties since she was named in 2012.

Some Democrats groused privately Thursday night that Klain’s comments in a televised interview Wednesday, combined with Biden’s public admission this month that he did not think the wage increase would survive, gave MacDonough the “permission structure” to essentially kill the proposal, according to one Democratic aide who described their thinking on condition of anonymity.

It was not clear whether Democrats could have mustered a majority for overruling the parliamentarian. Liberal Democrats, who have already been mounting calls for the abolition of the 60-vote threshold, seethed over the procedural defeat and called for Harris to intervene to change the decision.

“I’m sorry—an unelected parliamentarian does not get to deprive 32 million Americans the raise they deserve,” Rep. Ro Khanna, D-Calif., wrote on Twitter. “This is an advisory, not a ruling. VP Harris needs to disregard and rule a $15 minimum wage in order. We were elected to deliver for the people. It’s time we do our job.”

Some Republicans have come out support of legislation that would gradually raise the minimum wage to $10, instead of $15.