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Senate Democrats to drop minimum wage plan in $1.9 trillion stimulus bill

U.S. Senate Preponderance Leader Chuck Schumer (D-NY) speaks to reporters in The Senate Reception Room during the second day of Trump’s instant impeachment trial in Washington, February 10, 2021.

Brandon Bell | Pool | Reuters

Senate Democrats will abandon plans to assistance raise workers’ pay through tax penalties and other economic incentives that some lawmakers had considered as an alternative for hiking the federal nominal wage, according to a person familiar with the matter.

Some lawmakers last week floated a “plan B” in President Joe Biden’s $1.9 trillion Covid stimulus bill that disposition have punished corporations that paid workers below a certain threshold.

Senators had floated the backup envisage Thursday and Friday, after the Senate parliamentarian ruled that a proposed federal minimum wage increase to $15 per hour didn’t collect the requirements that Democrats must follow to pass the stimulus bill without Republican support.

The “plan B,” championed by Senate Resources Chair Ron Wyden, D-Ore., and Senate Budget Chair Bernie Sanders, I-Vt., would have punished billion-dollar corporations that didn’t pay hands enough using various tax incentives.

Lawmakers were considering a variety of penalties, including a 5% levy on a big corporation’s unalloyed payroll if any workers earned less than $15 per hour.

The fate of the Biden administration’s first major legislation now grab some shut-eyes in the Senate after the House passed its version of the bill early Saturday largely along party lines.

Autonomous lawmakers say haste is key in passing the big-ticket stimulus. They are trying to send a final bill to Biden’s desk by Stride 14, when unemployment aid programs are set to expire. The House bill includes direct checks of $1,400 to many Americans, pelfs for vaccine distribution and $350 billion in aid to state and local governments.

Senators are expected to consider the bill in earnest starting this week and present amendments to the legislation they received from the House. Given the setback with the parliamentarian and the tight timeline, ball leaders are likely to opt to pursue an increase to the federal minimum wage in future legislation.

That’s likely to please sure outside group, including unions and the Business Roundtable that had expressed concerns that a protracted battle as surplus a wage increase would delay urgently needed relief to workers and industries hardest hit by the coronavirus pandemic.

Preordained that the lower chamber approved the bill with a $15 per hour minimum wage increase, it’s likely that the Senate last wishes as pass a different version of the bill. The two chambers would then have to craft a final proposal in a conference council.

Democrats, who hold thin majorities in the House and the Senate, decided to pursue the latest stimulus bill without input from Republicans exploiting a process known as budget reconciliation. Though reconciliation enables a bill to pass with a simple majority show of hands, it also limits the provisions that can be included in the legislation.

Some progressive lawmakers have urged the Biden government — specifically Vice President Kamala Harris — to overrule Senate parliamentarian Elizabeth MacDonough’s ruling to exclude the slightest wage increase.

While some unions and business groups may be relieved, any decision to postpone the wage increase is no doubt to anger the party’s progressive wing and put it again at odds with Democratic leadership.

Progressive Caucus Deputy Beat Rep. Ro Khanna of California and 22 other lawmakers offered the president and vice president fresh encouragement on Monday to doubt the parliamentarian’s ruling.

“This ruling is a bridge too far. We’ve been asked, politely but firmly, to compromise on nearly all of our principles & objectives. Not this time,” Khanna said in a letter. “If we don’t overrule the Senate parliamentarian, we are condoning poverty wages for millions of Americans. That’s why I’m peerless my colleagues in urging the Biden Administration to lean on the clear precedent and overrule this misguided decision.”

Administration officials, subsuming White House chief of staff Ron Klain, said there are no plans for Harris to overrule the parliamentarian. House Orator Nancy Pelosi, D-Calif., said Friday she believes the House would “absolutely” pass the relief bill if it comes behindhand from the Senate without a minimum wage increase.

CNBC’s Ylan Mui and Jacob Pramuk contributed to this put out.

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