Elizabeth MacDonough, the U.S. Senate's nonpartisan parliamentarian, has ruled that an increase of the federal minimum wage to $15 can not be included in President Joe Biden's proposed $1.9 trillion COVID-19 relief bill, Democratic Senate aides told The Associated Press.
The move potentially puts the prospect of increasing the federal minimum wage, which has been set at $7.25 since 2009, in peril.
MacDonough, the arbiter of the Senate's rules since 2012 and the first woman to hold the role, ruled that it does not meet the strict set of guidelines required for the budget reconciliation process, which would allow Democrats to bypass the 60-vote threshold – and Senate Republicans – to pass the relief measure.
Progressives have aggressively pushed for an increase to the minimum wage since taking the Senate and White House, but moderate Democrats – namely Sens. Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) – had previously objected to including the minimum wage hike in the $1.9 trillion COVID-19 relief bill.
Republicans have been staunch opponents of the increased minimum wage, believing that it would cost jobs and impact businesses; they have also opposed the relief bill, saying it is too expensive.
Removal of the minimum wage hike might ultimately make the bill easier to pass, as it would likely all but guarantee Manchin and Sinema's support, giving Democrats the 50 votes they need to pass President Joe Biden's top legislative priority of his early presidency.
In a statement from White House Press Secretary Jen Psaki, the president expressed disappointment in the decision, 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 continued. "He urges Congress to move quickly to pass the American Rescue Plan, which includes $1400 rescue checks for most Americans, funding to get this virus under control, aid to get our schools reopened and desperately needed help for the people who have been hardest hit by this crisis."
The decision marks the end of a weeks-long battle in the Senate over a minimum wage increase, led by Senate Budget Chairman Sen. Bernie Sanders (I-VT).
Sanders, one of the Senate's leading progressives, did not hide his disappointment in a statement issued after the ruling.
“I strongly disagree with tonight’s decision by the Senate Parliamentarian," Sanders wrote. "The CBO made it absolutely clear that raising the minimum wage to $15 an hour had a substantial budgetary impact and should be allowed under reconciliation. It is hard for me to understand how drilling for oil in the Arctic National Wildlife Refuge was considered to be consistent with the Byrd Rule, while increasing the minimum wage is not."
Citing that a majority of Americans want to see an minimum wage increase, as well as the House, Senate, and President Biden and Vice President Kamala Harris, and slamming what he called "the archaic and undemocratic rules of the Senate," he pledged that the fight to increase the minimum wage will continue.
"In the coming days, I will be working with my colleagues in the Senate to move forward with an amendment to take tax deductions away from large, profitable corporations that don’t pay workers at least $15 an hour and to provide small businesses with the incentives they need to raise wages," Sanders concluded. "That amendment must be included in this reconciliation bill."
"We are deeply disappointed in this decision," Senate Majority Leader Chuck Schumer (D-NY) said in a statement, adding that Democrats are not giving up on increasing the minimum wage. "The American people deserve it, and we are committed to making it a reality."
Sen. Lindsey Graham (R-SC), the ranking Republican on the Budget committee, said that he was "very pleased" by MacDonough's decision.
“Very pleased the Senate Parliamentarian has ruled that a minimum wage increase is an inappropriate policy change in reconciliation," Graham said in a statement. "This decision reinforces reconciliation cannot be used as a vehicle to pass major legislative change - by either party - on a simple majority vote."
MacDonough, the little-known but well-respected parliamentarian, is a rare figure in Washington – she has wide bipartisan support.
Sanders has called her "very solid" and said that "she listens to all the evidence," while a spokesperson for Republican Minority Leader Mitch McConnell (R-KY) described MacDonough as "a thorough and fair referee and a walking encyclopedia of Senate precedent and procedure."
Democrats have a fallback option: Vice President Harris could act as the tie breaking vote to overrule the parliamentarian – but that’s tricky politics. It would force the White House to decide whether to upset its base by backing off a key progressive priority, or to upset Republicans with a move that breaks with modern Sentate precedent.
A study from the non-partisan Congressional Budget Office found that increasing the minimum wage to $15 an hour by 2025 would cost the US 1.4 million jobs by 2025, but also increase wages for 17 million Americans directly and lift 900,000 Americans out of poverty.
The $1.9 trillion COVID-19 relief bill is Biden’s first legislative priority, aimed at combating a year-old pandemic that’s stalled much of the economy, killed half a million Americans and reshaped the daily lives of virtually everyone.
The pandemic relief legislation would provide millions of people with $1,400 direct payments. It contains billions of dollars for vaccines and COVID-19 testing, schools, state and local governments, the ailing restaurant and airline industries and emergency jobless benefits while providing tax breaks to lower earners and families with children.
Democrats are pushing the $1.9 trillion measure through Congress under special rules that will let them avoid a Senate filibuster by Republicans, a tactic that Democrats would need an unattainable 60 votes to defeat – and one that Republicans used to pass the 2017 Tax Cuts and Jobs act.
But those same Senate rules prohibit provisions with only an "incidental" impact on the federal budget because they are chiefly driven by other policy purposes. The parliamentarian decides if provisions pass that test.
The Associated Press contributed to this report.