Senate Democrats have jettisoned an alternative minimum wage plan that called for tax penalties on large corporations that fail to pay at least $15 an hour, according to reports.
Put forth last week by Senate Finance Chair Ron Wyden, D-Oregon, and Senate Budget Chair Bernie Sanders, I-Vermont, the plan would have created an indirect path to raise the pay of some workers after parliamentary rules in the Senate necessitated the issue be scratched from the $1.9 trillion coronavirus stimulus bill that passed the House over the weekend.
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Deliberations for the corporate tax — which was viewed as potentially more palatable to the Senate parliamentarian — broke down due to numerous practical and political challenges that arose as the proposal was being drafted, according to The Washington Post.
Economic experts said the tax penalty would have been problematic to implement, and that corporations would’ve been able to easily sidestep the requirement by recategorizing employees as contractors.
“I would be extremely nervous about trying out a brand new idea like this with virtually no vetting,” Jason Furman, a former Obama administration economist, said on Twitter on Friday.
Wyden and Sanders faced a short time window to nail down the proposal, and it was uncertain whether every Democrat in the Senate would have supported the measure. The White House was also mum on the idea and has indicated that President Joe Biden was not inclined to overturn the parliamentarian’s ruling.
Democratic leaders want to have Biden sign the stimulus into law before unemployment benefits expire for millions of people in mid-March, meaning there is little time for an alternative plan to emerge, the Post reported.
It remains to be seen how the Senate will ultimately strike the minimum wage issue from the House stimulus bill. Other measures to raise the pay of minimum wage workers still have potential to be included, the Post reported.
Despite the early hurdles, Democrats have vowed to keep pursuing minimum wage legislation later in Biden’s presidency.
“We’re going to have to spend the next several days or even weeks figuring out the what best path forward is, but he’s committed to doing that,” White House press secretary Jen Psaki said Sunday on Fox News.
The federal minimum wage has remained the same since it was last increased to $7.25 an hour in 2009.
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