By Kristina Peterson and Andrew Duehren 

WASHINGTON -- The Senate prepared to move ahead this week with Democrats' sweeping coronavirus relief proposal without an increase in the minimum wage, after a backup plan to raise the wage through tax penalties and incentives fizzled over the weekend.

Senate Democrats had tried late last week to see if they could fashion a way to penalize large companies through the tax code if they didn't pay workers at least $15 an hour after the Senate parliamentarian said an across-the-board minimum-wage increase didn't comply with the chamber's rules. But Democrats decided late Sunday to scrap the tax plan as its complexity and limitations emerged and it became clear that some Senate Democrats were skeptical of it.

The relief package would provide a $1,400 payment to many Americans; extend and enhance federal unemployment assistance; expand a child tax credit, send $350 billion in aid to state and local governments; and pour new funding into vaccine distribution, food stamps and schools.

The decision to move forward without the minimum-wage increase will intensify divisions among Democrats. The House already passed the $1.9 trillion coronavirus package early Saturday morning with the minimum-wage increase and progressive Democrats made clear they didn't want to see the Senate strip it out. Liberal Democrats have been urging Senate leaders to ignore the parliamentarian's advice and retain the wage boost, a step that the White House and several Senate Democrats have indicated they don't want to take.

"We can't let a parliamentarian decision stop a wage increase for Americans," Rep. Ro Khanna (D., Calif.) said on a call with reporters Monday. "We respectfully are asking that they disregard the parliamentarian, allow this vote." Mr. Khanna was one of nearly two dozen House Democrats to sign a letter Monday urging Democratic leaders to keep the minimum-wage increase in the bill, despite the parliamentarian's ruling.

But the Senate appeared ready to begin debate later this week on the package without the minimum-wage increase. The boost faced opposition from some centrist Democrats, including Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona. Democrats are using a process known as reconciliation to try to pass the aid package, which enables them to pass it with just a simple majority, rather than the 60 votes most bills need. That would allow them to clear the bill without GOP support, so long as they don't lose even a single Democrat in the evenly-divided Senate, with Vice President Kamala Harris casting the tiebreaking vote.

Using the reconciliation process requires that measures be closely tied to the budget. The Senate parliamentarian on Thursday ruled that Democrats' initial proposal to raise the federal minimum wage to $15 an hour over four years didn't comply with those rules. The White House has said it would abide by Senate rules.

The parliamentarian is also expected to weigh in on healthcare subsidies, an expansion of paid leave and support for multiemployer pensions.

If the Senate passes the bill later this week without the minimum-wage increase, it will return to the House, where liberals could imperil its passage if they refuse to vote for the aid package without it. Democrats hold a narrow majority in the House, where they can lose no more than four Democratic votes if all Republicans vote against the bill. On Saturday, two Democrats joined all Republicans in opposing it.

Republicans have said the aid package is too broad and pressed Democrats to wait to see where more funds are needed, after Congress passed nearly $4 trillion in relief efforts since the pandemic began.

"The Democrats' spending bill is too costly, too corrupt, and too liberal for the country," House Minority Leader Kevin McCarthy (R., Calif.) said before the House vote. "To those who say it is urgent, I say it is unfocused. To those who say it is popular, I say it is entirely partisan and has the wrong priorities."

But Democrats would face immense pressure to not derail President Biden's inaugural legislative accomplishment and thwart the delivery of many other forms of aid for Americans.

"The bill that we are passing cuts child poverty in half and people on here are saying almost nothing about that and I think that's a mistake," Sen. Brian Schatz (D., Hawaii) said on Twitter over the weekend.

Democratic leaders haven't yet said what their plans are for addressing the minimum wage. House Speaker Nancy Pelosi (D., Calif.) has indicated that if it wasn't part of the Senate's bill, she would move to bring up stand-alone legislation increasing the wage to $15 an hour. But that would need 60 votes in the Senate, where Republicans have shown some willingness to increase the wage from its current level of $7.25, but most have balked at the $15 level.

The prospect of a stand-alone bill could spark negotiation with Republicans to see if a compromise could be reached on adjusting the federal wage. If a bipartisan agreement can't be reached, some liberals would likely push to eliminate the 60-vote threshold most legislation still requires.

 

(END) Dow Jones Newswires

March 01, 2021 11:37 ET (16:37 GMT)

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