Just the Facts… Reconciliation and why we won't see a minimum wage increase anytime soon.

Congress and the executive branch? This post will explain the procedural road bumps that prevented the proposed minimum wage increase in the latest Covid relief bill (also known formally as the American Rescue Plan) and where Democrats can go from here.


The Senate passed the Covid relief bill on Saturday, March 6, and the House is expected to vote on Tuesday's final iteration. This bill would provide $1.9 trillion in relief, including $1,400 stimulus checks, an extension of unemployment benefits, rental assistance, loans for small businesses, greater access to health insurance, and more. Notably missing from the Senate's bill is the $15 minimum wage provision included in the House's version on February 25.


Why is this the case? There are several possible answers to this question, but let's begin with why the House had the opportunity even to bring this provision into the bill's current negotiations. As you have probably heard or read, Congress is using a procedural process known as reconciliation to pass the Covid relief package. The primary benefit to using reconciliation is that a reconciliation bill only needs a simple majority in the Senate. This means Democrats can pass the bill with no Republican votes and with Vice President Kamala Harris casting the tie-breaking vote in the current Senate. Suppose the bill was going through the typical legislative process instead of reconciliation. In that case, Republican Senators could filibuster (use varying tactics to block or delay Senate action on a bill, such as debating it at length, or by any other delaying or obstructive action), and the bill would be subject to the standard number of 60 votes to pass. In this case, it is improbable that Democrats could gain 10 Republican votes on this relief package so reconciliation was the only way to move this legislation through the Senate.


However, the expedited process for reconciliation bills comes with limitations beyond the need for the bill's substance to "meaningly" effect budget issues such as taxes and other federal spending/saving tools. The Byrd Rule allows senators to block provisions of reconciliation bills that are extraneous to reconciliation's primary purpose of implementing budget changes. The rule's purpose is to prevent Senators from adding in unrelated provisions and making significant policy changes with only 51 votes instead of the more stringent 60 through standard procedures. The Byrd Rule essentially constrains the House as well because any provisions in the House bill that do not comply with the Byrd Rule cannot pass the Senate.


Any senator can raise a point of order against anything in the reconciliation bill that they find extraneous. The Senate's presiding officer (Vice President Harris or a senator designated to fill the role in her absence) makes the ultimate decision as to whether the provision is extraneous or germane to the bill. The presiding officer often relies on the Senate Parliamentarian for advice on precedent. The parliamentarians are experts on Senate rules and history and advise the presiding officer based on rulings on amendments to previous reconciliation bills. The parliamentarian's advice is just that – non-binding advice (under certain circumstances).


In the Covid relief package case, a point of order was raised against the minimum wage amendment. The parliamentarian ruled that the minimum wage amendment did not meet the Byrd Test and was therefore not germane to the reconciliation bill. As presiding officer, Vice President Harris could have ignored the parliamentarian's decision and ruled that the amendment was germane and moved forward with a vote. However, President Biden had already signaled that his administration would respect the parliamentarian's conclusion and would not break from Senate tradition. With that decision, the minimum wage amendment was removed from the bill. Senator Sanders tried to bring the amendment back during the Senate's floor vote, but it was defeated 42-58.


There has been no explanation offered from the parliamentarian to the public about the specific precedent for the decision. However, the most common cause is that the amendment's budget impacts were merely incidental to the policy implications. In other words, it was not meant strictly as a spending provision that happened to change the minimum wage; rather, it is a minimum wage amendment that happens to increase federal spending. Confused? Think of it this way. Was the bill intended to change policy? Doing so unintentionally impacted federal spending/debt or, was the bill designed to impact specific financial issues directly correlated to the federal spending/debt? No doubt, a lot of fuzzy math in there!


So, where does the minimum wage stand now? The major obstacles to its passage seem to lie within the Senate, as noted above. The Senate has three primary options:

· Pass the minimum wage increase with 60 votes.

  • Try again on the next reconciliation bill.

  • Eliminate the filibuster.

Recent history suggests that it is unlikely that Democrats could secure 60 votes from the current Senate.


The second option is to include the minimum wage increase in the next reconciliation. Congress will have the opportunity to pass a second reconciliation bill this year for the 2022 fiscal year. In preparation for that next bill, Senators could draft a new amendment to increase the minimum wage that would stand up to any points of order. Finally, Democrats could propose a minimum wage bill without the filibuster and pass it with no Republican support if all Democrats vote yes.


So, what does this all mean? With the House, Senate Democrats, and the President supportive of passing a minimum wage bill, it would seem as though they need to use this time to figure out just how to eliminate the various obstacles before them. Possible? Only time will tell, so stay tuned!



Contributing Author: Kimberly Curtis

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