No Minimum Wage Hike in Relief Package Senate Parliamentarian Rules

Will a hike in the minimum wage be part of the Democrats’ $1.9 trillion relief bill? A decision by the Senate parliamentarian has thrown a monkey wrench in progressive plans. Elizabeth MacDonough has reportedly determined that a provision to raise the wage floor for millions of Americans violates the special rules that allow the relief package to pass in the Senate with a simple majority.

That does not mean a minimum wage hike is completely dead for 2021, rather that raising it will require a standalone bill, subject to the usual 60 vote threshold in the Senate. A $15 minimum wage was a stretch even for conservative Democrats. It’s unlikely a wage higher than $10 an hour can garner bipartisan support, and even that’s not a safe bet.

Outside of Washington, the minimum wage offers a rare sweet spot in U.S. politics. As a policy mechanism it works — communities across the country have raised the minimum wage to more livable levels without a meaningful hit to jobs. As a matter of politics it’s also extremely popular. In Florida in 2020 a $15 minimum wage passed with 61 percent support, and received hundreds of thousands more votes than either Donald Trump or Joe Biden. National polls show a $15 wage enjoys broad, majority support.

The current minimum federal minimum wage is $7.25 an hour, where it has been stuck since 2009. While many states have higher standards, the federal minimum wage stands as the floor in 21 states. A recent study by the Congressional Budget Office found that a $15 minimum wage would give raises to 27 million Americans and lift 900,000 out of poverty, with only modest impact on the job market. As Sen. Bernie Sanders (I-VT) highlighted in a hearing this week, the hike would also move many families off of government assistance, forcing companies like WalMart to shoulder a greater responsibility for their workforces:

Progressive Democrats have been eager to deliver a minimum wage increase to begin the Biden administration. And House Democrats had vowed a $15 minimum wage would be in their version of the massive COVID relief bill. The politics and the mechanics were far more complicated in the Senate. In the upper chamber, the relief package will be passed under an exception to the filibuster known as “reconciliation” that permits a bare majority (50 Democratic votes and a tie-breaker by Vice President Kamala Harris) to put the legislation on Biden’s desk.

But reconciliation bills are subject to a thicket of arcane limitations — most famously the Byrd Rule. For each controversial provision, the Senate parliamentarian must find a path — as if with a divining rod — or announce, after a mysterious interlude of doleful contemplation, that the way is blocked. In this case, MacDonough found that the minimum wage hike was “merely incidental” to the federal budget and therefore could not proceed.

In some ways the parliamentarian’s ruling lets Democrats off the hook. An increase to $15 dollars was unlikely even had MacDonough given the green light. Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona — critical votes to reach 50 for Democrats — had both opposed the $15 dollar wage. Manchin has advocated a “responsible and reasonable” increase to something like $11.

For his part Sanders is not giving up on the potential to gain minimum wage traction through the reconciliation measure. Decrying the “archaic and undemocratic rules of the Senate,” he’s vowing to introduce an amendment to the relief package that strips tax deductions from “large, profitable corporations” that don’t pay at least $15 an hour, while providing incentives to small businesses to hike wages.

This is a developing story and will be updated.