The Senate congressman blocks the $ 15 minimum wage.

Democrats who hoped to raise the minimum wage in their COVID relief project were defeated Thursday night. Senate parliamentarian Elizabeth MacDonough said the increase was not allowed in budget reconciliation legislation, the process that Democrats are using to circumvent a Senate obstruction in their relief bill COVID.

MacDonough’s decision was short and to the point, according to a Senate source. In his view, the budgetary impact of an increase in the minimum wage was “merely incidental” in relation to its non-budgetary impact. This would be a violation of Byrd’s Rule, the barrier status on what is and is not allowed in reconciliation.

Vermont Senator Bernie Sanders, both as chairman of the Budget Committee that manages the reconciliation process and the strongest supporter of a $ 15 minimum wage on the body, worked to build a case for the congressman that the increase would be exceeded by the procedures. The Congressional Budget Office showed that it would increase the deficit by $ 54 billion in ten years, which Sanders said “demonstrated that raising the minimum wage would have a direct and substantial impact on the federal budget”. (You don’t need to have a substantial deficit reduction he also requested and received a report from the CBO comparing the budgetary impact of the minimum wage increase with that of some items of the Republicans’ tax reduction law in 2017, also underwent reconciliation: the elimination of the ACA’s individual mandate penalty, and permission to lease oil and gas at the Arctic National Wildlife Refuge. The CBO concluded that the budgetary impact of the minimum wage increase was more substantial than another.

None of this, however, satisfied MacDonough that the budgetary effect of raising the minimum wage was more than an “incidental” by-product of changing labor legislation.

“We are deeply disappointed by this decision,” said Senate majority leader Chuck Schumer in a brief statement after his announcement. “We are not going to give up fighting to raise the minimum wage to $ 15 to help millions of American workers and their families. The American people deserve it and we are committed to making it a reality ”.

Democrats have a few options on how to proceed next.

They could try to restructure a wage increase under the tax code – incentives for small businesses to raise wages, penalties for large ones – to conform to the restrictions on reconciliation’s tax and spending policy. In a statement after the decision, Sanders said he would follow this Plan B.

“In the coming days, I will be working with my colleagues in the Senate to come up with an amendment to remove tax deductions from large, profitable corporations that do not pay workers at least $ 15 an hour and provide small businesses with the incentives they need to increase earnings. wages, ”said Sanders. “This change must be included in this reconciliation project.” Although it is certainly better than nothing, this setback would depend on the behavior of companies to get the job done.

In terms of procedure, Senate Democrats could vote to “annul” the parliamentary council and simply include the minimum wage increase in the bill. But the same Democrats who oppose the elimination of legislative obstruction – Arizona Senator Kyrsten Sinema, West Virginia Senator Joe Manchin, President Joe Biden – are firmly opposed to this option, as it could set a precedent for effective annulment obstruction. Democrats could also fire MacDonough and replace her with someone a little more go-with-the-flow on all these tedious “rules” issues. Over there It is precedent for that.

But Democrats are unlikely to raise the minimum wage in their final COVID relief product. (The House, which is expected to vote on its version of the aid package on Friday, still has a minimum wage of $ 15 in its bill.) And as long as some Democrats pledge to preserve legislative obstruction, Democrats will have to horse – negotiate with Republicans if you want a (smaller) increase in the minimum wage. The congressman’s decision may come as a relief to some Democratic senators who were – some publicly, more privately – bothered by a $ 15 minimum wage and their potential reduction of more than one million jobs. The 27 million Americans who are supposed to see salary increases will be less relieved.