U.S. Senate Majority Leader Chuck Schumer (D-NY) speaks with reporters in The Senate Reception Room during the second day of Trump’s second impeachment trial in Washington, February 10, 2021.
Brandon Bell | Swimming pool | Reuters
Senate Democrats will abandon plans to help raise workers’ wages through tax fines and other economic incentives that some lawmakers had considered as an alternative to raising the federal minimum wage, one person familiar with the issue said.
Some lawmakers last week introduced a “plan B” in President Joe Biden’s Covid incentive bill worth $ 1.9 trillion that would have punished companies that paid employees below a certain threshold.
Senators had put forward the backup plan Thursday and Friday, after the Senate MP ruled that a proposed federal minimum wage increase to $ 15 an hour did not meet the requirements Democrats must follow to pass the stimulus bill without Republican backing.
The “Plan B,” championed by Senate Treasury Secretary Ron Wyden, D-Ore., And Senate Budget Chairman Bernie Sanders, I-Vt., Would have punished billion-dollar businesses that weren’t paying their employees enough using various tax breaks.
Lawmakers considered a variety of penalties, including a 5% levy on a large company’s total payroll if employees earned less than $ 15 an hour.
The fate of the Biden government’s first major legislation now rests in the Senate after the House passed its version of the bill largely along party lines early on Saturday.
Democratic lawmakers say haste is key in passing the big boost. They’re trying to send a final bill to Biden’s office by March 14, when the unemployment programs expire. The House bill includes $ 1,400 direct checks to many Americans, funds for vaccine distribution, and $ 350 billion in aid to state and local governments.
Senators are expected to seriously consider the bill starting this week and propose amendments to the legislation they have received from Parliament. Given the MP’s setback and tight timeline, party leaders will likely choose to pursue an increase in the federal minimum wage in future legislation.
That is likely to please certain outside groups, including unions and the Business Roundtable who had raised concerns that a protracted battle for a wage increase would delay urgently needed aid to workers and industries hardest hit by the coronavirus pandemic.
Since the lower house has passed the bill with a minimum wage increase of $ 15 an hour, it is likely that the Senate will pass a different version of the bill. The two chambers would then have to make a final proposal in a conference committee.
Democrats, who have a thin majority in the House and Senate, decided to push forward with the latest stimulus bill without input from Republicans, using a process known as budget reconciliation. While reconciliation allows a bill to be passed by simple majority, it also limits the provisions that can be incorporated into legislation to those that have a material impact on the federal deficit.
Some progressive lawmakers have urged the Biden administration – notably Vice President Kamala Harris – to override Senate MP Elizabeth MacDonough’s ruling to rule out the minimum wage hike.
While some unions and business groups may be relieved, any decision to delay the pay increase is likely to infuriate the progressive wing of the party and put it back at odds with democratic leadership.
Progressive Caucus Deputy Whip Rep. California’s Ro Khanna and 22 other lawmakers offered fresh encouragement to the president and vice president on Monday to challenge the MP’s ruling.
“This statement is a bridge too far. We have been politely but firmly asked to compromise on almost all of our principles and goals. Not this time,” Khanna said in a letter. “If we don’t override the Senate MP, we approve poverty wages for millions of Americans. That’s why I’m leading my colleagues in urging the Biden administration to lean on the clear precedent and overrule this misguided decision.”
Administrative officials, including White House Chief of Staff Ron Klain, said there are no plans for Harris to override the MP. House Speaker Nancy Pelosi, D-Calif., Said Friday that she believes the House would “absolutely” pass the bill if it comes back from the Senate without a minimum wage increase.
CNBC’s Ylan Mui and Jacob Pramuk contributed to this report.