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Democrats put up minimum fight on $15-an-hour wage

Analysis: Democratic leaders in Washington said they were "disappointed" they couldn't get a wage hike. But they didn't get too bent out of shape about it.
Image: BESTPIX - Majority Leader Schumer And Georgia Senators Hold Media Briefing On COVID-19 Relief
Senate Majority Leader Chuck Schumer speaks at the Capitol on Feb. 11, 2021.Drew Angerer / Getty Images file

WASHINGTON — Top Democrats didn't protest too much last week when the Senate parliamentarian threw cold water on a federal minimum wage hike.

"We are deeply disappointed," Senate Majority Leader Chuck Schumer, D-N.Y., said.

President Joe Biden, who promised to deliver the pay boost, was also "disappointed," according to White House press secretary Jen Psaki. She added that the former six-term senator now occupying the Oval Office "respects the parliamentarian’s decision and the Senate’s process."

Late Sunday, Senate progressives signaled they would abandon a "Plan B" effort to use the tax code to punish companies that don't raise wages to at least $15 an hour.

Biden and Schumer are well aware that the parliamentarian — a staff member — holds no formal power in the body of elected officials. It is the presiding officer of the Senate, Vice President Kamala Harris or a stand-in Democratic senator, who ultimately has the authority to rule one way or another.

Biden and Schumer backed down and let the parliamentarian take the heat.

The clamor for more action by the Senate is primarily coming from the House. Twenty-two House Democrats signed a letter Monday urging the Senate to act — an appeal likely to be roundly ignored in the upper chamber.

The question is why Senate Democrats are moving on so quickly. And the answer may have something to do with the influence of business leaders on Democratic officials.

"I don't know why they wouldn't do the thing they are able to do, when they know most people want them to do it," Democratic strategist John Davis, a former House aide, said. "I worry that we are in a moment where our leaders don't know how much people are hurting."

A Reuters/Ipsos poll released last week showed that 59 percent of adults support a $15 minimum wage, while 34 percent oppose it.

The White House framed Biden's position as one of deference to the Senate rules, an explanation that is consistent with the broad theme of a campaign that promised to support government institutions. Republicans would surely hammer Democrats for bending the process if the presiding officer took the highly unusual step of ignoring the counsel of the parliamentarian.

Sens. Joe Manchin, D-W.Va., and Kyrsten Sinema, D-Ariz., have spoken publicly about their opposition to the wage hike. But the proposition that they would vote to kill or significantly delay the much larger Covid-19 relief bill will remain untested because the provision was spiked.

On a list of pros and cons for Biden's position, observing norms would certainly fall on the pro side for the White House. But a more compelling reason for Democratic leaders to drop the wage hike is fear of a backlash from the business community. With the narrowest of majorities in the House and the Senate heading into next year's midterm elections, Democrats are nursing an improved relationship with business leaders.

Much of the business wing of the GOP turned on President Donald Trump in the last election and its aftermath. That creates an opportunity for Democrats in terms of fundraising and perhaps just keeping deep-pocketed commercial titans on the sidelines next November. But a $15 minimum wage, more than double the current level, is a nonstarter for much of the business community, even as some of the titans of corporate America like Amazon lobby for the hike.

“Far too many restaurants will respond by laying off even more workers or closing their doors for good," Sean Kennedy, executive vice president of the National Restaurant Association, told The Hill newspaper earlier this year. "As the pandemic has highlighted, the economic realities of each state are very different."

Lawmakers are getting earfuls from local businesses right now, according to a senior aide to one centrist House Democrat.

"The pandemic has really glorified small businesses and people are listening to them," the aide said. "When they say this will hurt them, members listen."

Still, only two Democrats defected when House Speaker Nancy Pelosi, D-Calif., decided last week to keep the wage provision in the House version of the $1.9 trillion Covid-19 relief package despite guidance from the Senate that it would be stripped out. Some moderates who voted for the package would have preferred to exclude the wage hike, said the aide, who noted "this was a tough vote" for "numerous" swing-district Democrats.

The Congressional Budget Office estimated that the proposal would cost $54 billion over the next decade to lift 900,000 people out of poverty while causing the elimination of 1.4 million jobs. The perceived risk of alienating donors — or inviting support for Republicans — could outweigh the political value of the wage increase.

No matter the degree of chagrin felt by Democratic leaders — "deeply disappointed" or just "disappointed" — progressives in Congress reacted by repositioning rather than criticizing the president and the Senate majority leader.

Senate Budget Committee Chairman Bernie Sanders, a Vermont independent who caucuses with Democrats, and Finance Committee Chairman Ron Wyden, D-Ore., tried to put together a "Plan B" that would apply a tax penalty as an incentive for businesses to raise pay.

But fitting the tax provision into the Covid-19 relief bill would have required a similar vetting of the provision by the parliamentarian and altered the calculus for hitting the $1.9 trillion, 10-year cost for the bill that was authorized by this year's budget. At best, that would have delayed the process of getting the rest of the relief money out of Washington.

Moreover, there would be no guarantee that wages would be raised.

"A tax law change would create incentives for employers, but could not ensure that all workers would get at least the minimum wage," a Senate Democratic source said in an email exchange with NBC News. "Some employers might choose to pay the tax and continue to underpay their workers."

Manchin, Sinema and any other Democrats who might have had private reservations won't have to vote on the wage.

In the end, congressional Democrats are left with the ability to tell voters they fought for a minimum wage increase while perhaps avoiding the pain of Republican arguments that they killed jobs and small businesses.

What the rest of the country is left with is a $7.25-an-hour minimum wage.