Senate Parliamentarian Throws Out $15 Minimum Wage from COVID-19 Relief Package

The setback, reported on below by Axios, means that if any increase to the federal minimum hourly wage makes it into the final COVID-19 relief package, it will likely be for a smaller increase. However, ANCOR expects efforts to raise the minimum wage to $15 to continue to gain momentum through other means throughout the year. As such, we are still educating members of Congress on how a wage increase will benefit the Direct Support Professional workforce as long as proper Medicaid funding mechanisms are developed, given the fixed rate structure of the Medicaid program that leaves disability providers as rate-takers, not rate-setters. This is in addition to our advocacy on another provision in the COVID-19 relief bill: a temporary increase in the Federal Medical Assistance Percentage rate specific to the Home and Community-Based Services program to assist with pandemic costs. See Forbes’ coverage of the HCBS FMAP bump here.

“The Senate parliamentarian ruled Thursday that the provision to increase the minimum wage to $15/hour cannot be included in the broader $1.9 trillion COVID relief package.

Why it matters: It’s now very likely that any increase in the minimum wage will need bipartisan support, as the provision cannot be passed with the simple Senate majority that Democrats are aiming to use for President Biden’s rescue bill. [ANCOR note: another bone of contention which will require bipartisan collaboration is increased insurance subsidies for unemployed workers, according to Politico Pulse.]

Between the lines: The process, called ‘reconciliation,’ allows any bill in which each provision affects the federal government’s finances to be voted on by a 51-vote majority, as opposed to the regular 60 votes needed to overcome a filibuster.

• The provision cannot be ‘merely incidental’ to the government’s finances, according to a statute known as the Byrd rule. The interpretation of this vague requirement was up to the parliamentarian, Elizabeth MacDonough, to decide.

What they’re saying: ‘We are deeply disappointed in this decision,’ Senate Majority Leader Chuck Schumer said after the Thursday evening 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,’ he added.
• ‘The American people deserve it, and we are committed to making it a reality.’

House Speaker Nancy Pelosi said in a statement late Thursday that “House Democrats believe that the minimum wage hike is necessary. Therefore, this provision will remain in the American Rescue Plan on the Floor tomorrow.”

• She added, ‘Democrats in the House are determined to pursue every possible path in the Fight For 15.’

White House press secretary Jen Psaki said President Biden was ‘disappointed’ in the outcome, but ‘respects the parliamentarian’s decision and the Senate’s process.’

• Biden ‘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 added.

What’s next: Biden has promised to support a standalone bill to raise the minimum wage to $15/hour, but it’s unlikely to get any Republican support.

The other side: Republicans have introduced their own versions of bills to increase the minimum wage.

• Sens. Mitt Romney (R-Utah) and Tom Cotton (R-Ark.) proposed an increase to $10/hour by 2025. This bill, however, contains a provision that would mandate E-Verify for all employers to ensure the rising wages go to ‘legally authorized workers,’ which likely would not get any Democratic support.
• Sen. Josh Hawley (R-Mo.) introduced an alternative to the Democrats’ proposal that would use federal dollars to increase low-earning workers’ income. One foreseeable problem: the subsidy would disproportionally benefit those in states that have kept their minimum wages low.”

ICYMI – we previously shared a rundown of alternative mechanisms congressional Democrats are exploring for the $15 federal minimum wage.