His proposal to increase the minimum wage to $15 per hour was perhaps the most newsworthy piece of President Biden’s “American Rescue Plan.”
In the last few weeks, the prospects of the increase actually being attainable as a piece of the coronavirus relief bill have looked dim. The input of some pretty important Democrats, Biden and key centrist Sens. Kyrsten Sinema of Arizona and Joe Manchin of West Virginia among them, established cause for doubt.
In any case, Democrats elsewhere are still vying for it, and it is by no means out of the question that a $15 minimum wage makes it over the finish line in the final relief package. Here’s the state of play.
Democrats decided to tackle their coronavirus relief package through budget reconciliation rules rather than regular order because, under reconciliation, they don’t need any Republican votes for passage. The catch is, something called the Byrd Rule limits what can be included in reconciliation. “Extraneous matter” cannot be included.
There are six tests of a provision’s extraneousness, as summarized here by former Heritage Foundation scholar James Wallner, but the relevant test being floated with regard to the minimum wage proposal is whether it “produces changes in outlays or revenues which are merely incidental to the non-budgetary components of the provision.” If it does, it’s extraneous.
That determination, though — and this detail is foundational — is a judgment call that the Senate parliamentarian, as “the Senate’s adviser on the interpretation of its rules and procedures,” makes on questionable provisions.
It must be said that she does not truly get the final say. The presiding officer, either the vice president or the Senate pro tempore, does, but the parliamentarian’s judgment is typically deferred to on these matters.
For her part, Sinema made it clear that she doesn’t think the minimum wage belongs. “The minimum wage provision is not appropriate for the reconciliation process,” she told Politico in an interview. “It is not a budget item. And it shouldn’t be in there.”
In the event that the parliamentarian agrees with Sinema, that leaves Democrats with the option of dropping it or of having the presiding officer overrule the parliamentarian, which, again, does fall within the presiding officer’s authority but is not common practice.
Bill Dauster, who was deputy chief of staff to former Senate Majority Leader Harry Reid, wrote in an op-ed in January that Democrats should do just that in the event that the parliamentarian calls the minimum wage extraneous. “Vice President Kamala Harris or, in her absence, President Pro Tempore Patrick J. Leahy are empowered to make this call,” Dauster wrote. “If the Senate parliamentarian does not advise them that Congress can include the minimum wage in budget reconciliation, Harris or Leahy should exercise their constitutional authority to say that it can.”
Biden has not concurred, indicating that he thinks the parliamentarian would deem it extraneous and that it would be the end of the line. With regard to passing the minimum wage increase in the reconciliation package, Biden said in a CBS News interview aired earlier this month, “Well, apparently, that’s not going to occur because of the rules of the United States Senate,” continuing, “My guess is it will not be in it.” That also assumes that the presiding officer won’t follow through with Dauster’s recommendation to overrule, which Biden does have reason to expect in the event that the minimum wage is deemed extraneous.
Manchin told CNN, “My only vote is to protect the Byrd Rule: Hell or high water,” and he told that to Biden “straight up.” Overruling the parliamentarian would be a violation of the practice of deferring to her judgment, and this package can’t pass without Manchin’s vote.
Manchin reiterated his commitment in an interview with the Washington Examiner. “I will defend the Byrd rule the same way I defend the filibuster,” he said.
Democrats are not in the position of having to choose on that course of action yet, and so the minimum wage effort is not at all dead. The House Education and Labor Committee took a key step by including language to increase the minimum wage in the recommendations for its portion of the reconciliation package, so the seed has been planted.
Additionally, as Dauster points out in his op-ed, things that could be deemed extraneous through a reasonable interpretation of the “merely incidental” standard made it through the Tax Cuts and Jobs Act in 2017. Those were the zeroing of the Affordable Care Act’s insurance mandate and the permitting of drilling on the Arctic National Wildlife Refuge.
Sen. Bernie Sanders, who chairs the Senate Budget Committee, is working to build his case that a new minimum wage requirement would not be extraneous to reconciliation and asked the Congressional Budget office to compare the budgetary effects of the Raise the Wage Act, whose framework the House Education and Labor Committee used in its measure on the minimum wage, with the same examples: the insurance mandate repeal and ANWR drilling.
The Congressional Budget Office said this: “The analysis of the Raise the Wage Act encompasses a much broader range of behavioral effects than that of the 2017 tax act, and the increased minimum wage would in turn affect a broader range of budget functions than CBO estimated that the change in the mandate penalty would.”
It also said this: “The estimated budgetary effects of the ANWR provisions of the 2017 tax act fell within budget functions 270 (energy), 300 (natural resources and environment), 800 (general government), and 950 (undistributed offsetting receipts). As the list above shows, increasing the minimum wage would affect more budget functions than CBO estimated that the ANWR provisions would.”
Remember that the test is “merely incidental,” a highly subjective standard, especially as compared with another of the six tests that explicitly says a reconciliation provision is extraneous if it would change Social Security. That being said, the “room full of lawyers” that Sanders said is working to argue the minimum wage’s case to the parliamentarian likely sees their case strengthened by the CBO’s response about its larger budgetary effect.
To conclude, Sinema and Manchin are obviously wary of the $15 minimum wage. Manchin suggested it was unreasonable as policy, not simply with regard to its belonging in a reconciliation package, and it may well fall short. But if Democrats get the minimum wage past the parliamentarian and into the final bill, it would presumably be politically untenable for Sinema and Manchin to vote against the bill over that.
