Top Democrats drop back-up plan on $ 15 an hour minimum wage hike
WASHINGTON – Senior Democrats are dropping a backup plan to raise the minimum wage through a corporate tax penalty after encountering numerous practical and political challenges when drafting their proposal over the weekend, according to two sources close to internal deliberations.
On Thursday, the Senate parliamentarian said the $ 15 an hour minimum wage included in President Joe Biden’s $ 1.9 trillion stimulus package was unacceptable under the rules Democrats are using to pass the government. bill in the Senate.
After the move, Senate Finance Chairman Ron Wyden, D-Ore., And Senate Budget Chairman Bernie Sanders, I-Vt., Said they would instead look to add tax penalties to large corporations. who do not pay at least $ 15 an hour – an idea considered less likely to be struck down by parliamentarians and still useful to some minimum wage workers.
But now top Democrats – including Wyden and Sanders – are also stepping away from that backup effort, according to two people who spoke on condition of anonymity to share internal discussions.
Economists and tax experts have said the tax described by Sanders and Wyden could be easily avoided and difficult to implement, as large companies can reclassify workers as contractors to avoid possible penalties. “I would be extremely nervous to try out a whole new idea like this with virtually no verification,” Jason Furman, a former economist in the Obama administration, said on Twitter Friday.
Wyden and Sanders faced an uphill battle to convince the entire Senate Democratic caucus to support a proposal they would have days to draft. The White House has also not indicated its support for the idea of a corporate tax penalty.
The House passed the stimulus bill on Saturday, including the measure to raise the minimum wage to $ 15. It is unclear how the Senate will proceed, although the White House has ruled out overturning the parliamentarian’s decision.
Democrats have said they will seek to include the proposed $ 15 an hour minimum wage in a separate legislative package to be brought forward later in the Biden administration. It was not yet clear how they would do this, or how they would overcome the obstacles that were preventing them from getting the provision of the current stimulus package.
White House spokeswoman Jen Psaki told Fox News on Sunday: “We’re going to have to spend the next few days, if not weeks, figuring out what the best way forward is, but he’s committed to doing it. make.”
The Democrats ‘withdrawal from the backup plan leaves it uncertain whether the stimulus package will include measures to directly raise workers’ wages to minimum wage, a long-standing priority for the party and Biden. Democratic leaders want Biden to sign the stimulus package before unemployment benefits for millions of people expire in mid-March, which means there is little time for an alternative plan to emerge.
The United States has never been longer without raising the federal minimum wage in the history of the eight-decade law.