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Minimum-wage increase imperiled in covid relief bill by Senate official’s ruling

Parliamentarian says the $15 hourly minimum wage, a liberal priority, not allowed in relief bill as written under Senate rules

Senate parliamentarian Elizabeth MacDonough, seated in the back second row third from right, talks as senators gather in the foreground during the second impeachment trial of former president Donald Trump on Feb. 10. (Senate Television/AP)

President Biden’s proposed $15-an-hour minimum-wage increase cannot remain in his coronavirus relief bill as written, the Senate’s parliamentarian said Thursday, imperiling a major Biden campaign promise and top priority for the Democratic Party’s liberal wing.

The ruling could be a major setback for liberals hoping to use Biden’s $1.9 trillion relief bill as the vehicle for their long-sought goal of raising the federal minimum wage from its current level of $7.25 an hour. And it could create divisions in the party as some push Democratic leaders for dramatic action to get around the parliamentarian’s ruling.

Democrats had been anxiously awaiting the decision, but their next steps are not clear. Liberals are pressuring Senate Majority Leader Charles E. Schumer (D-N.Y.) to challenge the ruling on the Senate floor, although the White House has dismissed that idea.

Schumer released a brief statement Thursday night vowing to fight on, without saying how.

“We are deeply disappointed in this decision. 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,” Schumer said. "The American people deserve it, and we are committed to making it a reality.”

White House press secretary Jen Psaki said in a statement that Biden was “disappointed in this outcome” but “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,” Psaki said. “He urges Congress to move quickly to pass the American Rescue Plan.”

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The ruling was made by Senate parliamentarian Elizabeth MacDonough, a nonpartisan official who is little known outside Washington but might command tremendous influence over certain elements of Biden’s agenda. Her ruling pertains only to the Senate, where the legislation will move forward under complex rules that prohibit certain items that don’t have a particular effect on the budget. MacDonough determined that, as written, the minimum-wage increase did not pass that test — an outcome that had been predicted by a number of Democrats, including Biden himself.

Despite her ruling, the House is preparing to vote Friday to pass the stimulus relief package with the $15 minimum wage included and send it to the Senate, House Speaker Nancy Pelosi (D-Calif.) said in a statement Thursday.

“House Democrats believe that the minimum-wage hike is necessary,” Pelosi said. “Therefore this provision will remain in the American Rescue Plan on the floor tomorrow. Democrats in the House are determined to pursue every possible path in the Fight for 15."

Pelosi’s decision to pass the $1.9 trillion relief bill with the minimum-wage language intact means Schumer will face a potentially consequential decision. He could take out the minimum-wage language before putting the bill on the Senate floor, or try to keep it in the bill — whether by challenging the parliamentarian’s ruling or trying to rewrite the provision in such a way that it could pass muster under the Senate’s complicated rules.

Senate Finance Committee Chairman Ron Wyden (D-Ore.) and Senate Budget Committee Chairman Bernie Sanders (I-Vt.) suggested late Thursday that they would consider pairing the wage increase with tax penalties on corporations that don’t pay a higher minimum wage, which might change whether it meets the parliamentarian’s criteria.

Schumer has not said what he will do. Liberals are pushing him and the Biden administration to try to overrule the parliamentarian’s decision, which Democrats could attempt to do on the Senate floor.

“We said we’d raise the wage. Now, we need to deliver,” Rep. Pramila Jayapal (D-Wash.), head of the Congressional Progressive Caucus, said on Twitter. “We must be prepared to use every tool in our toolbox to get this done, whether it’s overruling the parliamentarian if necessary or finally ending the filibuster. Not delivering is not an option.”

But White House Chief of Staff Ron Klain has publicly ruled out trying to overrule the parliamentarian, and Democrats probably would not command the necessary votes to succeed anyway, since at least one Senate Democrat — Joe Manchin III (W.Va.) — has said he would not vote to overrule the parliamentarian.

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The Senate is divided 50-50 between Democrats and Republicans, so Democrats need unanimity in their ranks to pass Biden’s coronavirus relief legislation and overcome procedural hurdles like the minimum-wage ruling. They are pushing the legislation forward over unified GOP opposition under a procedure called “budget reconciliation” that allows them to prevail with a simple majority, instead of the 60 votes normally required — but also limits what can be included in the package, such as the minimum-wage increase.

Manchin and a second Senate Democrat, Kyrsten Sinema (Ariz.), had indicated opposition to including the minimum-wage increase in Biden’s covid relief bill anyway, so even if the parliamentarian had allowed it, it’s not clear the provision would have been able to advance. Nevertheless, liberals had been holding out hope of being able to keep all Democrats onboard to approve the overall bill with the minimum wage included.

If the Senate sends the legislation back to the House without the minimum-wage increase, liberals in that chamber will have to decide whether to vote for it anyway. The legislation does include many other items Democrats widely support, including an increased child tax credit, a new round of $1,400 stimulus checks to individuals, increased and expanded unemployment insurance, and hundreds of billions of dollars for cities and states, schools, vaccinations and testing.

The House has advanced stand-alone bills increasing the minimum wage in the past, but it’s highly unlikely the Senate would agree to such legislation — at least not at the $15-an-hour level liberals support.

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One possibility is to find compromise at a lower level — Manchin has endorsed $11 an hour — and then to try to get it in the bill in a different way, for example by crafting it more narrowly.

Several liberal Democrats said Thursday they need to do whatever it takes to raise the minimum wage — including eliminating the filibuster, the 60-vote rule that gives the minority party enormous sway in the Senate. Manchin and Sinema have said publicly they oppose taking that step.

“We still need to pass the minimum wage, and if that means getting rid of the filibuster, so be it,” Sen. Elizabeth Warren (D-Mass.) said.

Mike DeBonis contributed to this report.