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Politics Key Senators Float Tax on Big Firms to Enable Minimum-Wage Hike

07:16  26 february  2021
07:16  26 february  2021 Source:   bloomberg.com

$15 minimum wage debate: Everything you need to know

  $15 minimum wage debate: Everything you need to know House Democrats have included a minimum wage hike in their latest Covid relief bill, although opposition among some Senate Democrats means it is not at all clear they will have the votes to pass it. © Scott Olson/Getty Images Demonstrators participate in a protest outside of McDonald's corporate headquarters on January 15, 2021 in Chicago, Illinois. Improving worker pay is unrelated in that raising the minimum wage has long been a Democratic priority.

Senate Budget Committee Chairman Bernie Sanders and Senate Finance Committee Chair Ron Wyden said Thursday evening they were considering the strategy after prospects for making a wage increase part of the relief package were dealt a severe blow. Earlier Thursday, the Senate Democrats have less than three weeks to draft the changes, convince all 50 senators who caucus with the party to support the tax increases -- and the specifics of the minimum - wage hike . The idea came after Senate Parliamentarian Elizabeth MacDonough found that the proposed phased-in hike to a an hour

Senate parliamentarian says minimum - wage hike doesn’t qualify. Fast-track legislative process has criteria for its components. Democrats would now likely have to try to pass the wage increase through the ordinary legislative process, which requires 60 votes to cut off debate. The parliamentarian’s ruling on the application of the so-called Byrd rule can be overturned by 51 votes, but West Virginia Senator Joe Manchin, a moderate Democrat, has already said he would not supply the key vote to do so.

(Bloomberg) -- Two Senate committee chiefs are looking at ways to raise taxes on companies paying workers less than $15 an hour, as part of a new strategy to include President Joe Biden’s push to boost the minimum wage to that level in his Covid-19 aid bill.

a close up of Bernie Sanders in glasses looking at the camera: Senator Bernie Sanders, an independent from Vermont and chairman of the Senate Budget Committee, speaks during a hearing in Washington, D.C., U.S., on Thursday, Feb. 25, 2021. © Bloomberg Senator Bernie Sanders, an independent from Vermont and chairman of the Senate Budget Committee, speaks during a hearing in Washington, D.C., U.S., on Thursday, Feb. 25, 2021.

Senate Budget Committee Chairman Bernie Sanders and Senate Finance Committee Chair Ron Wyden said Thursday evening they were considering the strategy after prospects for making a wage increase part of the relief package were dealt a severe blow.

The problem with a one-size-fits-all federal minimum wage hike

  The problem with a one-size-fits-all federal minimum wage hike Minimum wages are not a free good. They have tradeoffs. While politicians might not pay much mind to such economic arguments, they are well aware of the regional differences among their constituents. If they listen, they should reject a one-size-fits-all federal minimum wage hike and, instead, let cities and states make decisions that best suit the people in their communities.Ryan Young is a senior fellow at the Competitive Enterprise Institute and author of the study "Minimum Wages Have Tradeoffs.

Critics of a minimum wage say it would hurt the nation's already struggling small businesses and force companies to reduce their workforce. An analysis released by the Congressional Budget Office earlier this month shows that a higher wage would cut employment by 1.4 million and would lift roughly 900,000 Americans out of poverty. Although government spending on nutrition programs would decline, hiking the minimum wage would increase spending in other areas, including unemployment aid, Social Security benefits and other health care programs.

Meet the Senate Parliamentarian, Key Figure in Minimum - Wage Debate. Who Could Receive a Third Stimulus Check. If the parliamentarian indicates the minimum - wage provision doesn’t meet muster, Democrats face a different set of decisions. Some progressives have said they would push for the White House and lawmakers in the Senate to ignore her ruling. Several senators have said they would be uncomfortable with bending the chamber’s rules to raise the minimum wage , as did White House chief of staff Ron Klain on Wednesday night.

Earlier Thursday, the Senate parliamentarian ruled that Democrats’ minimum-wage proposal fell afoul of rules for the legislative process that congressional leaders are using for Biden’s $1.9 trillion aid bill. Requirements dictate that measures be primarily fiscal in nature; taxes are a component of fiscal policy.

“In the coming days, I will be working with my colleagues in the Senate to move forward with an amendment to take tax deductions away from large, profitable corporations that don’t pay workers at least $15 an hour and to provide small businesses with the incentives they need to raise wages,” Sanders said in a statement.

Sanders, a Vermont independent, added that his “amendment must be included in this reconciliation bill,” referring to the Covid-19 spending package.

Tom Cotton, Mitt Romney's $10 Minimum Wage Plan Criticized for Being Less than Arkansas' $11

  Tom Cotton, Mitt Romney's $10 Minimum Wage Plan Criticized for Being Less than Arkansas' $11 "Incrementally increasing a pitiful 7.25 wage to $10 over 5 yrs is a cruel joke. Poverty cannot be overcome just by $2.75/hour more," Democratic Michigan Representative Rashida Tlaib wrote.The GOP plan, entitled the Higher Wages for American Workers Act, would gradually raise the federal minimum wage from its current rate of $7.25 an hour to $10 an hour by 2025. The plan would also require employers to phase in the use of the federal E-Verify system to ensure that only documented laborers, and not undocumented immigrants, are hired. Lastly, the plan would provide stiffer penalties to employers who hire undocumented workers.

WASHINGTON (AP) — Senate Republicans blocked an election-year Democratic bill on Wednesday that would boost the federal minimum wage , handing a defeat to President Barack Obama on a vote that is sure to reverberate in this year's congressional elections. The National Restaurant Association has hundreds of members at the Capitol this week lobbying lawmakers on several issues, including opposition to a higher minimum wage . Also opposed were conservative organizations including Heritage Action and Americans for Prosperity, which is backed by Charles and David Koch.

Neera Tanden, Democratic President Joe Biden's nominee to head the U.S. Office of Management and Budget, told U.S. senators on Wednesday she would support raising the federal minimum wage , without giving a target for a higher rate. Tanden said recent studies had challenged the conventional view about the impact of minimum wage increases on jobs and determined that job loss rates due to such raises were "relatively low."

Tax ‘Penalty’

Wyden, an Oregon Democrat, said in a statement that he is considering a “tax penalty for mega-corporations that refuse to pay a living wage.”

Read More: Biden’s Minimum-Wage Increase Ruled Out of Order for Senate

The White House did not immediately respond to a request to comment on the ideas. Press Secretary Jen Psaki said in a statement that Biden “respects the parliamentarian’s decision and the Senate’s process. He will work with leaders in Congress to determine the best path forward because no one in this country should work full time and live in poverty.”

Thursday night’s developments -- on the eve of the House’s expected passage of the aid bill -- throw an air of uncertainty around the economic rescue package. Congressional leaders are planning to pass it by March 14, when enhanced unemployment benefits under a December aid bill expire.

Besides the wage increase, the bill includes $1,400 stimulus checks, an extension of the enhanced jobless benefits and funding for the vaccine rollout, along with money for state and local governments.

Democrats short of a backup plan after minimum wage ruling

  Democrats short of a backup plan after minimum wage ruling The Senate parliamentarian’s decision saves them from an internal fight — but they have no clear path forward.The Senate parliamentarian’s decision to rule the wage hike out of order ahead of debate on President Joe Biden’s coronavirus relief plan saves Democrats from an internal fight over whether to increase it to $15 an hour. But it also leaves Democrats without a clear path forward on fulfilling a key campaign promise.

Key Points. Fifth Third and AT&T are paying employees special bonuses after getting tax cuts under the Republican tax plan. Wells Fargo said Wednesday that it would boost minimum wages for employees to an hour, following Fifth Third's similar announcement. Wells Fargo, meanwhile, also said it would be boosting its minimum wage for employees to an hour, which was prompted by the tax plan. The San Francisco-based bank also said it would target 0 million in donations to community and nonprofit organizations next year.

Effects of a minimum wage hike . According to a paper by American Enterprise Institute, which examined data from the American Community Survey (ACS) and Current Population Survey (CPS) in 2016, large increases in statutory minimum wages reduced employment among individuals — particularly for those with low levels of experience and education — by just over 2 percentage points. On the other hand, an increase in the minimum wage — particularly during this pandemic — could help consumer demand recover, the Economic Policy Institute (EPI) argued.

Clock Ticking

Democrats have less than three weeks to draft the changes, convince all 50 senators who caucus with the party to support the tax increases -- and the specifics of the minimum-wage hike.

The idea came after Senate Parliamentarian Elizabeth MacDonough found that the proposed phased-in hike to a $15 an hour minimum wage didn’t comport with the rules for the budget reconciliation process. That process allows bypassing the usual 60-vote threshold in the Senate.

Targeting only large, profitable companies could help assuage concerns from some moderate Democrats who are hesitant to support large-scale tax increases. The tax-hike play is likely to qualify under the reconciliation rules, which require all elements of the bill have a direct fiscal impact.

Still, Democrats don’t universally support a $15 an hour wage requirement. Senators Joe Manchin of West Virginia and Kyrsten Sinema of Arizona said they wouldn’t vote for a bill with the provision as written included.

Business Criticism

That could mean negotiations as Wyden and Sanders develop a workaround strategy to compel companies to increase employee pay.

AOC says Democrats should overrule or FIRE the Senate parliamentarian

  AOC says Democrats should overrule or FIRE the Senate parliamentarian Alexandria Ocasio-Cortez said Democrats should overrule or fire the Senate parliamentarian after Elizabeth MacDonough ruled the $15 minimum wage cannot be included in COVID relief package.'I think all options should be on the table,' she told reporters on Capitol Hill when asked about the matter.

Read More: Former Burger Flipper Becomes a World Expert on the Minimum Wage

The push is also likely to prompt criticism from Republicans and backlash from restaurants and retailers that oppose a $15 an hour wage requirement -- arguing that it will force businesses to close.

The International Franchise Association “supports a conversation around the minimum wage, but the only thing worse than doubling the labor costs of small businesses is disguising it through a backdoor tax increase in the middle of a pandemic while they are still struggling to recover from the worst economic downturn in nearly a century,” Matt Haller, a spokesman for the group, said in a statement.

Democrats had largely avoided major tax increases in the $1.9 trillion stimulus package, saying they would consider increases on corporations and the wealthy once the economy had recovered from the pandemic. Treasury Secretary Janet Yellen said on Monday the administration is considering corporate tax hikes to help fund an infrastructure bill that could move later this year. She also signaled openness to a higher capital gains levy.

After the House votes on its version of the stimulus bill, with the $15 minimum wage mandate included, the bill will then go to the Senate, where it can be amended.

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Joe Manchin's $11 Minimum Wage More Popular Than Biden's $15—Among Democrats and Republicans .
While a majority (60 percent) of voters approve of the increase to $15 per hour, 71 percent support a more modest hike to $11.President Joe Biden and Democrats campaigned on raising the federal minimum wage to $15, and House Democrats included the wage hike in their version of the $1.9 trillion American Rescue Plan. However, the wage hike looks unlikely to survive in the Senate's version of the bill, as that chamber's parliamentarian ruled it could not be passed through the budget reconciliation process. Meanwhile, GOP Senators Mitt Romney of Utah and Tom Cotton of Arkansas have put forward a proposal to raise the minimum wage to $10 per hour—close to what Manchin has suggested.

usr: 4
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