U.S. markets closed
  • S&P Futures

    4,137.00
    +9.25 (+0.22%)
     
  • Dow Futures

    33,764.00
    +55.00 (+0.16%)
     
  • Nasdaq Futures

    13,781.00
    +30.75 (+0.22%)
     
  • Russell 2000 Futures

    2,245.60
    +17.30 (+0.78%)
     
  • Crude Oil

    61.78
    +0.35 (+0.57%)
     
  • Gold

    1,786.90
    +4.90 (+0.27%)
     
  • Silver

    26.23
    +0.05 (+0.17%)
     
  • EUR/USD

    1.2026
    +0.0009 (+0.07%)
     
  • 10-Yr Bond

    1.5540
    -0.0100 (-0.64%)
     
  • Vix

    18.71
    +1.21 (+6.91%)
     
  • GBP/USD

    1.3861
    +0.0018 (+0.13%)
     
  • USD/JPY

    107.9440
    -0.0160 (-0.01%)
     
  • BTC-USD

    49,848.57
    -3,744.97 (-6.99%)
     
  • CMC Crypto 200

    1,129.89
    -113.16 (-9.10%)
     
  • FTSE 100

    6,938.24
    +42.95 (+0.62%)
     
  • Nikkei 225

    28,983.31
    -204.86 (-0.70%)
     

$15 minimum wage not allowed in Covid relief bill, Senate official rules

Jessica Smith
·Chief Political Correspondent
·4 min read
Cristian Cardona, an employee at a McDonald's, attends a rally for a $15 an hour minimum wage Tuesday, Feb. 16, 2021, in Orlando, Fla. (AP Photo/John Raoux)
Cristian Cardona, an employee at a McDonald's, attends a rally for a $15 an hour minimum wage Tuesday, Feb. 16, 2021, in Orlando, Fla. (AP Photo/John Raoux)

Elizabeth MacDonough, the Senate parliamentarian, ruled on Thursday that the Senate cannot use the budget reconciliation process to pass a minimum wage increase. The decision is a blow to Democrats who have been pushing to raise the federal minimum wage to $15 an hour in the next coronavirus relief package.

Democratic lawmakers are using the reconciliation process to try and pass President Joe Biden’s $1.9 trillion relief plan without any Republican support. The procedure allows the Senate to pass certain legislation with just a simple majority, but there are restrictions about what type of legislation can be included. Under the so-called Byrd rule, the Senate can’t include “extraneous” provisions that are not budget-related.

The House is set to vote on the relief bill Friday. Despite the parliamentarian’s decision, House Speaker Nancy Pelosi (D., Calif.) said lawmakers would not remove the minimum wage provision before the vote.

“Democrats in the House are determined to pursue every possible path in the Fight For 15,” said Pelosi in a statement.

Sen. Bernie Sanders (I., Vt.) and Majority Leader Chuck Schumer (D., N.Y.) had been trying to make the case that the minimum wage hike is consistent with reconciliation rules. Biden, however, expressed doubts that the measure would be included in the package in an interview earlier this month.

Congressional staffers met with MacDonough to make their pitches on Wednesday.

[Read more: 83% of Americans say $7.25 minimum wage is not enough: poll]

"We are deeply disappointed in this decision," said Schumer in a statement. "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."

After the ruling, Sanders said he strongly disagreed with the decision and pointed to a recent CBO report that found the Raise the Wage Act would increase the deficit by $54 billion over 10 years as evidence that the provision would have a “substantial" impact on the federal budget.

Sanders said he would work on an amendment to the relief bill that would “take tax deductions away from large, profitable corporations that don’t pay workers at least $15 an hour.” He said the amendment would also provide small businesses with incentives to raise wages.

The White House has signaled it would not try to override the ruling. White House Press Secretary Jen Psaki said in a statement that President Biden was disappointed, 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. He urges Congress to move quickly to pass the American Rescue Plan,” said Psaki. 

The Ranking Member of the Senate Budget Committee, Lindsey Graham (R., South Carolina) said he was "very pleased" with the ruling.

"This decision reinforces reconciliation cannot be used as a vehicle to pass major legislative change - by either party - on a simple majority vote," said Graham. "This decision will, over time, reinforce the traditions of the Senate.”

WASHINGTON, DC - FEBRUARY 23: Sen. Joe Manchin (D-WV) and Sen. Lisa Murkowski (R-AK) speak as they arrive to vote in the U.S. Capitol on February 23, 2021 in Washington, DC. The Senate held confirmation hearings today for multiple Biden administration nominees as well as a hearing regarding the January 6 attack on the U.S. Capitol.  (Photo by Al Drago/Getty Images)
WASHINGTON, DC - FEBRUARY 23: Sen. Joe Manchin (D-WV) and Sen. Lisa Murkowski (R-AK) speak as they arrive to vote in the U.S. Capitol on February 23, 2021 in Washington, DC. The Senate held confirmation hearings today for multiple Biden administration nominees as well as a hearing regarding the January 6 attack on the U.S. Capitol. (Photo by Al Drago/Getty Images)

Even if the parliamentarian had ruled in Democrats’ favor, the minimum wage hike would still have faced a difficult path to the president’s desk. Two key moderate Democrats — Sen. Joe Manchin (D., W.V.) and Sen. Kyrsten Sinema (D., Ariz.) have already come out against including the measure in the relief bill.The 50-50 split in the Senate means Democrats are already banking on a tie-breaking vote from the vice president to pass the bill, and cannot afford to lose a single Democratic vote.

Manchin has previously said a federal minimum wage of $11 per hour would be more appropriate than $15 per hour.

[Read more: How a $15 federal minimum wage could affect hiring trends, inflation: Morgan Stanley]

Democrats have vowed to continue fighting for the minimum wage increase, whether or not the measure is in the final relief package. A majority of Americans say they support increasing the minimum wage.

Sen. Mitt Romney (R., Utah) and Sen. Tom Cotton (R., Ark.) offered a counter proposal on Tuesday that would gradually raise the minimum wage to $10 an hour, while cracking down on the hiring of undocumented workers.

Jessica Smith is chief political correspondent for Yahoo Finance, based in Washington, D.C. Follow her on Twitter at @JessicaASmith8.

Read more: