Washington — The “Plan B” that some Senate Democrats had proposed for the minimum wage hike is now off the table, a senior Democratic aide told CBS News. The proposal involved a payroll tax penalty for large companies that pay their workers less than a certain amount.
The aide said they’re going to be looking at “all legislative avenues” in the future to get the minimum wage hike approved, and insisted, “we aren’t going to just throw up our hands and walk away.”
“I expect that you’ll be hearing a lot more about it this week, but it’s not going to go away as an issue, certainly,” the aide said.
The fate of the Democrats’ proposed $15-an-hour minimum wage hike has been in question since the Senate parliamentarian ruled last week that it couldn’t be included in the massive $1.9 trillion economic relief package if that package is passed through the budget reconciliation process. Budget reconciliation allows a bill pass with a simple majority, rather than the 60 votes normally required to move legislation through the Senate.
President Biden had previously said in an interview with CBS News in early February that he didn’t think a provision raising the minimum wage would be included in a COVID relief bill “because of the rules of the United States Senate.” The House early Saturday passed the relief bill, including the minimum wage hike.
After the Senate parliamentarian’s ruling, Democrats immediately moved to a “Plan B” to get the minimum wage hike approved through a tax process. This measure, drafted by aides to Senator Ron Wyden of Oregon and Senator Bernie Sanders of Vermont, would impose a 5% payroll tax penalty on “very large” companies that do not pay workers a certain amount. That amount is still unclear: Wyden favors $15 an hour, but is currently seeking feedback from fellow Democrats on that figure and on exactly which companies would face the penalties.
But a Democratic aide said on Sunday night that plan is dead. Extended unemployment insurance is set to run out on March 14 without the new economic relief package. The aide said they realized they would “have to go back through the parliamentarian,” something that wouldn’t be feasible given that “tight timeframe.”
“Because even though we think Plan B was much more likely to pass parliamentary muster than Plan A, you still need to go back through the parliamentarian on Plan B — and between the parliamentarian and finalizing the plan with the caucus, we just thought it would delay passage past the time where wouldn’t be able to avoid going over a benefits cliff,” the aide said.
The aide insisted the provision was not killed due to any opposition within the Democratic caucus from moderates such as West Virginia’s Joe Manchin or Arizona’s Kyrsten Sinema.
“It was really just working out all the details,” the aide said. “I think realistically we would have had to have all this nailed down in the next 24 hours.”
But the Biden administration’s tepid reaction to the proposal may have contributed to the decision to shelf it.
“The comments from [economic advisor] Dr. [Jared] Bernstein on Friday were pretty indicative of how they felt,” the aide said. “He just said that, you know, this is complicated, and obviously doing the tax penalty that we were thinking about is certainly more complicated than just a regulation to say you have to pay $15 an hour, and that he was concerned about being able to get it done in the amount of time we had, which is a very valid concern.”
The aide said there might be an effort to pass a bill with a minimum wage hike with 60 votes. But, the aide said, since Democrats can’t pass the minimum wage hike through a budget reconciliation process, the only other option would be a broader conversation about eliminating the filibuster.
Alan He contributed to this report.