Will a Dispute Over Minimum Wage Slow Down the Passage of Stimulus Checks?

by Christy Bieber | Updated July 25, 2021 - First published on Feb. 25, 2021

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Could an effort to increase wages mean Americans don't get their stimulus checks in March?

Democrats control the White House, the House of Representatives, and the U.S. Senate. Promises of generous coronavirus aid were part of what helped them earn that majority.

As a result, lawmakers on the left are very eager to provide more stimulus relief. Specifically, they're working aggressively to pass a $1.9 trillion plan based on a framework laid out by President Joe Biden shortly before he took office.

The plan includes $1,400 stimulus checks for each eligible American, including dependents. Expanded unemployment benefits, money for vaccines, and funds for schools are also part of the bill. Most of these provisions have unified support on the left. But there's one aspect of the bill that's proving a little more controversial: An increase in the federal minimum wage.

The federal minimum wage of $7.25 an hour hasn't changed since 2009. Biden's stimulus plan would increase it to $15 per hour, with the increase phased in over five years. It would also eliminate the lower tipped minimum wage that's currently in effect. This change has long been a priority for progressives, but it could create problems that have the potential to slow the passage of stimulus checks and other COVID-19 relief.

Here's why a change to the minimum wage could spell trouble for the stimulus plan

There are a few big problems with the plan to increase the federal minimum wage.

First, Democrats have the narrowest of majorities in the U.S. Senate. They have 50 votes, with Vice President Kamala Harris able to cast a tie-breaking 51st vote. But to overcome a Senate filibuster that can derail legislation, they'd need 60 votes (and the VP can't be one of them). It's inconceivable that 10 Republicans will vote to advance the $1.9 trillion bill that's currently moving forward

As a result, Democrats are planning to pass their legislation through something called "reconciliation" because reconciliation bills can't be filibustered. Only certain types of legislation can pass through reconciliation, though. And it's not clear if a change to the federal minimum wage is allowed.

For a bill to pass through reconciliation, every provision contained within it must be directly related to the federal budget. If not, the Senate Parliamentarian can reject it. The Parliamentarian, who is a neutral arbitrator, is reviewing senate rules and procedures to assess whether to allow the minimum wage change. If it's determined this isn't permissible, it will take time to modify the proposed legislation.

Even if the minimum wage provision is allowed, there are several Democrats who aren't on board with the bump up to $15 per hour. This includes Senator Joe Manchin of West Virginia and Senator Kyrsten Sinema of Arizona, who have already said they oppose this measure. There may also be other conservative Democrats who haven't yet stated their positions but may be reluctant to vote for a $15 minimum.

Democrats cannot afford to lose even a single vote among the senators who caucus with them, or they won't have the 51 votes to get the legislation to the president's desk.

Manchin has indicated he would try to amend the legislation to instead raise the minimum wage to $11 within two years instead of the $15 within five years. But wrangling over amendments could also slow down the process of passing legislation -- and some more progressive Democrats may not be in favor of the change.

It's difficult to imagine the Democrats will bring a reconciliation bill up for a vote unless they're certain they can pass it. And it's likely they will eventually come to a compromise that can get enough votes. But intra-party disputes over exactly what that looks like could definitely lead to a delay in getting much-needed money into American's bank accounts.

If you're waiting for relief from Washington, keep your eye on the negotiations this week to see if that happens.

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