Senate Finance Committee Chairman Ron Wyden (D-Ore.) and Senate Budget Committee Chairman Bernie Sanders (I-Vt.) floated their "Plan B" following the parliamentarian’s ruling that a straight increase of the federal minimum wage to $15 per hour didn't comply with arcane budget rules that govern what can be included in the coronavirus relief bill.
Under the backup plan, outlined on Friday by Wyden, large corporations would receive a 5 percent tax penalty if they paid workers less than a certain amount, with the amount of the penalty increasing over time. Democrats were considering giving tax incentives to small businesses to raise their wages.
However, Democrats have dropped the effort, with one source familiar revealing that there were concerns that working out the details could slow down the overall coronavirus bill. Democrats want to get the bill to President Biden's desk before unemployment benefits expire in a matter of weeks.
"We worked through the weekend and it became clear that finalizing Plan B with the caucus would delay passage and risk going over the jobless benefits cliff on March 14," the source stated.
A source close to Sanders confirmed that he was also not moving forward with offering the idea as an amendment to the coronavirus bill, which he initially pledged to do on Thursday night.
"He is dedicated to raising the minimum age to $15 an hour and is working on strategies to get it done," the source added.
The decision, which was first reported by The Washington Post, is the latest setback for progressives, who were seeking to use the coronavirus relief bill to raise the minimum wage to $15 per hour.
The House passed the sweeping $1.9 trillion legislation over the weekend with the minimum wage hike included. But because of the parliamentarian's ruling — and neither the White House nor key Democrats willing to ignore that advice — the language is expected to be stripped out this week when the Senate takes up the COVID-19 bill.
Even if the parliamentarian had ruled for the $15 per hour minimum wage, it would likely have faced changes in the Senate as the proposal does not have the support of 50 Democratic senators. Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) have voiced opposition, and there were ongoing conversations among a broader group about things like tipped workers and how to structure the increase.
Neither Manchin nor Sinema had publicly weighed in on the backup plan, but the White House gave Plan B a publicly cool reception.
"Our focus will be on the urgent priority of getting this package passed and delivering the relief that is so desperately needed — $1,400 rescue checks for most Americans, funding to get this virus under control, aid to get our schools reopened and desperately needed help for the people who have been hardest hit by this crisis," a spokesperson said on Friday.