Democrats can't include a $ 15 an hour minimum wage in their $ 1.9 trillion aid package for coronavirus, a Senate official ruled Thursday, derailing for the time being a party priority and increase for millions of Americans.
The impartial Senate MP Elizabeth MacDonough ruled that lawmakers could not incorporate politics into the budget vote, CNBC confirmed. She and her staff heard arguments from Democrats and Republicans as to whether the proposal met strict standards of deficit effects that were required to include it in the process.
The reconciliation allows the Senate to pass bills with a simple majority – in this case without Republicans, who fear another massive bailout. However, the Democrats faced the challenge of getting the raise going regardless of whether the Chamber's rules allowed it in legislation.
The House Democrats included the minimum wage of $ 15 an hour in the bailout bill they want to approve on Friday. House spokeswoman Nancy Pelosi, D-Calif., Said in a statement Thursday that the provision "will remain" in the relief bill as Democrats "are determined to take every possible route to a federal pay raise".
The decision means the Senate will likely pass a different version of the bill than the House and the officials will have to approve the plan a second time.
A protester attends a rally held by fast food workers and supporters to celebrate an order from the California Labor Commissioner that the company hire and compensate workers on February 18 in Los Angeles, Calif Protection of Coronavirus Disease (COVID-19) went on strike. 2021.
Lucy Nicholson | Reuters
"We are deeply disappointed with this decision," said Chuck Schumer, Senate majority leader, D-N.Y., In a statement. "We're not going to give up the fight to raise the minimum wage to $ 15 to help millions of struggling American workers and their families. The American people deserve it, and we're committed to making it a reality."
President Joe Biden was also "disappointed with this result," said White House press secretary Jen Psaki in a statement.
Bernie Sanders, Chair of the Senate Budget Committee, I-Vt., Said Thursday that "I disagree with the MP's decision at all". He added that he would work to add an amendment to the Discharge Act "to remove tax deductions to large, profitable companies that don't pay workers at least $ 15 an hour and to give small businesses the incentives they can need to raise wages. " ""
The bill would raise the federal wage floor to the threshold by 2025 and then indicate future inflation hikes. It would lift 900,000 people out of poverty but cost 1.4 million jobs, the Congress' impartial budget bureau estimated earlier this month.
The proposal would allow up to 27 million people to get a raise, the CBO said.
Democrats consider raising the minimum wage, which has stood at $ 7.25 an hour since 2009, as a priority while controlling both the Chambers of Congress and the White House. However, with Republicans questioning whether a $ 15 wage floor will hamper small businesses in parts of the country, politics will not get 60 votes in a Senate split between 50 and 50 parties.
Senate Budgets Committee member Lindsey Graham, R-S.C., Welcomed MacDonough's decision Thursday.
"The Senate MP was very pleased to decide that an increase in the minimum wage would be an inappropriate change in reconciliation policy. This decision reinforces reconciliation and cannot be used as a means to pass a major change in the law – by both parties – by simple majority "he said in a statement.
Republicans used the reconciliation in 2017 to approve tax cuts for businesses and households and to abolish the individual mandate of the Affordable Care Act.
Republican Sens. Mitt Romney and Tom Cotton gave a GOP response to the minimum wage hike, proposing a plan that would raise the wage floor to $ 10 an hour and restrict the hiring of undocumented immigrants. Arkansas, the state of Cotton, has a minimum wage of $ 11.
Democratic leaders will oppose the framework proposed by Romney and Cotton.
Democratic Sens. Joe Manchin from West Virginia and Kyrsten Sinema from Arizona opposed a minimum wage of $ 15 an hour. Manchin said he supported $ 11 an hour instead.
The ruling removes the biggest remaining point of conflict among Senate Democrats, who seek to pass the bailout package before March 14, when unemployment assistance programs expire.
– CNBC's Ylan Mui contributed to this report
Subscribe to CNBC on YouTube.