Congress should use the budget to raise the minimum wage

Reconciliation helped enact Obamacare and drilling in the Arctic. This one is no different

Workers rally in Upper Senate Park in Washington in 2015 to call for a $15-an-hour minimum wage. There’s no reason why Congress can’t use the budget reconciliation process to raise the minimum wage, Dauster writes.  (Tom Williams/CQ Roll Call file photo)
Workers rally in Upper Senate Park in Washington in 2015 to call for a $15-an-hour minimum wage. There’s no reason why Congress can’t use the budget reconciliation process to raise the minimum wage, Dauster writes. (Tom Williams/CQ Roll Call file photo)
Posted January 22, 2021 at 5:00am

It’s welcome news that President Joe Biden has called for raising the minimum wage as part of his economic and health care relief package. This is long overdue.

Congress has not raised the minimum wage since 2009, when it was pegged at $7.25 an hour. For a full-time job, that’s $15,080 a year, less than the poverty level for families of two or more. Working Americans deserve a raise.

Biden has said that he wants to work with Republicans “to get … things we have to get done as a country … done together.” There’s good reason for Republicans to back him. Raising the minimum wage is popular in red states as well as blue ones. When it has been on the ballot lately, measures have won in Florida, Arkansas, Missouri, Maine and Alaska.

And when Congress has raised the minimum wage in the past, it has often done so as part of a package with tax cuts for small businesses. Taken together, a minimum-wage and small-business tax cut package can be a bipartisan win-win.

[Democrats planning budget blitz to pass Biden agenda]

But if Republicans resist raising the minimum wage, threatening to filibuster it in the Senate, Democrats should not take that “no” as the final answer. They should then use the budget reconciliation process to pass it with a majority vote.

Budget reconciliation is a process created in 1974 to allow Congress to enact fiscal policy by a simple majority instead of the usual 60 votes. Congress created it to help take back the power of the purse from an increasingly assertive executive branch.

Since then, Congress has used it to enact Ronald Reagan’s budget cuts; George W. Bush’s tax cuts, twice; Barack Obama’s Affordable Care Act; and Donald Trump’s tax cuts. In the past 25 years, lawmakers have used reconciliation to enact most major economic policy.

The law limits what Congress can do in budget reconciliation. Under the “Byrd rule,” so named after its sponsor, Robert C. Byrd of West Virginia, a provision has to be budgetary to be included in this fast-track measure. And the provision’s budgetary effects cannot be “merely incidental” to its nonbudgetary effects.

Plainly, that’s a judgment call. One person’s fiscal policy is another person’s fundamental policy change.

To resolve such differences, lawyers argue their case before the Senate parliamentarian. Hill wonks call these arguments “Byrd baths.” Things that get excluded from the reconciliation process are called “Byrd droppings.”

As raising the minimum wage is budgetary, the parliamentarian should allow it to be included in reconciliation.

In an in-depth study, the Congressional Budget Office found that raising the minimum wage would “directly affect the federal budget by requiring the government to increase wages” for some federal employees. CBO also found that “workers receiving an earnings increase would pay more in taxes and receive less in benefits than they would have otherwise, reducing the federal budget deficit.” And any small-business tax cuts made contingent on raising the minimum wage would also plainly have a budget effect.

So it comes down to a judgment of whether the budget effects of raising the minimum wage are “merely incidental” to its nonbudgetary effects.

Consider, Congress has used the budget reconciliation process to enact the Affordable Care Act under Democrats and to eliminate the ACA’s mandate to buy insurance under Republicans. Congress used it to open the Arctic National Wildlife Refuge to oil and gas drilling and to impose work requirements on people receiving public benefits. If it could do those things, it should be able to raise the minimum wage.

In the end, this is a call the Constitution gives the vice president or, in her absence, the Senate’s president pro tempore to make. The Constitution provides, “The Vice President of the United States shall be President of the Senate.” And it also provides, “The Senate shall chuse … a President pro tempore, in the Absence of the Vice President.”

Vice President Kamala Harris or, in her absence, President Pro Tempore Patrick J. Leahy are empowered to make this call. If the Senate parliamentarian does not advise them that Congress can include the minimum wage in budget reconciliation, Harris or Leahy should exercise their constitutional authority to say that it can.

Bill Dauster was deputy chief of staff to former Senate Majority Leader Harry Reid.