Joe Biden’s hopes of including a federal minimum wage increase in his $1.9tn stimulus plan were dealt a setback when the Senate’s parliamentarian ruled that it could not be approved by a simple majority in the upper chamber of Congress.
The highly anticipated decision comes on the eve of a vote in the House of Representatives as early as Friday to approve the US president’s package, which will deliver a big fiscal jolt to the US economic recovery.
The House version of the relief legislation includes an increase in the federal minimum wage from $7.25 an hour to $15 an hour, one of Biden’s top priorities that he shares with many progressive Democratic lawmakers.
But even if the full plan passes the House, the minimum wage increase will have to be stripped from the legislation in the Senate, complicating the political calculations for the White House and congressional Democrats.
An increase in the federal minimum wage has been championed by the White House and many Democrats as a matter of economic equity, particularly to help low-wage workers on the front lines of the coronavirus pandemic because of their employment in essential services. Republicans have balked at the increase, saying it would have an adverse effect on employment.
The ruling by Elizabeth MacDonough, the Senate parliamentarian, who advises on the interpretation of the chamber’s rules and precedents, on the minimum wage was pivotal because Biden and his Democratic allies in the Senate want to use a manoeuvre called “budget reconciliation” so they can pass the stimulus bill with a simple majority that would avoid the need for Republican support.
The upper chamber is evenly split at the moment, with 50 Democrats and 50 Republicans. Kamala Harris, the US vice-president, would cast the tiebreaking vote. Ordinary legislation requires bipartisan support and 60 votes to advance — an insurmountable obstacle for much of Biden’s agenda.
Only measures with an effect on government revenues are eligible to be inserted in a “budget reconciliation” bill, however, and the Senate parliamentarian decided that the minimum wage was an extraneous provision.
“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. The American people deserve it, and we are committed to making it a reality,” Chuck Schumer, the Democratic senator from New York and majority leader in the upper chamber, said in a statement.
In a statement on Thursday night, Jen Psaki, the White House press secretary, said Biden was “disappointed” with the decision but “respects” it. “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.
The ruling threatens to raise tensions between the White House and the left of the Democratic party, since some progressive lawmakers, particularly in the House, have called on Biden to overrule the parliamentarian — a move that the new administration is not inclined to do.
However, it will be met with relief by some conservative Democrats, including senators Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, who are sceptical of the minimum wage increase to $15, which could make the stimulus bill easier to pass in the upper chamber.
Republicans were pleased. “This decision reinforces reconciliation cannot be used as a vehicle to pass major legislative change — by either party — on a simple majority vote. This decision will, over time, reinforce the traditions of the Senate,” said Lindsey Graham, the top Republican on the Senate budget committee.