WASHINGTON — Question:
Why did President Joe Biden say that the minimum wage increase may not be allowed through the budget reconciliation process in the Senate?
Democratic leadership is pursuing President Biden's COVID-19 relief plan through a process known as 'budget reconciliation.' This process allows them to pass legislation with a simple majority by essentially incorporating it into the budget.
However there are added rules meant to keep provisions related to the budget. The "Byrd Rule," named after the late-Senator from West Virginia, creates numerous limitations on provisions that are deemed extraneous to the budget.
It's unclear if the minimum wage provision will stand in the Senate, because the budget effects may be deemed 'merely incidental.' The final decision on this matter will be up to the Senate Parliamentarian.
- Center on Budget and Policy Priorities, "Introduction to Budget 'Reconciliation'"
- House Committee on the Budget, "Budget Reconciliation: The Basics"
- Dr. Casey Burgat, Legislative Affairs Program Director at The George Washington University
- Bill Dauster, Former Deputy Chief of Staff for Policy for Senate Majority Leader Harry Reid; Chief Counsel at U.S. Senate Budget Committee
While much of Washington's attention is on the impeachment trial for former President Donald Trump, there's another essential debate taking place over the prospects of a minimum wage hike.
President Joe Biden proposed an increase of the minimum wage to $15, as a part of his COVID-19 relief plan. In the end, Democratic leadership is incorporating this plan into the budget through a process known as 'budget reconciliation.'
The Verify team did a deep dive on this topic, which can be read here.
The process, which has been used 21 times since 1980, allows for Congressional leadership to incorporate bills into the budget, rather than creating a stand-alone bill. This maneuver allows for provisions to be passed with a simple majority, rather than the typical 60 votes needed to defeat the filibuster in the Senate.
While many of the COVID-19 relief provisions are likely to face little resistance in this process, this is less clear with the minimum wage. President Joe Biden admitted this during an interview with CBS News.
"Apparently that's not going to occur," he said. "Because of the rules of the United States Senate."
There are rules about what provisions can be included through 'budget reconciliation,' most notably the 'Byrd Rule,' named after the late-Senator from West Virginia.
"They have to be related to the budget," explained Bill Dauster, a longtime legislative expert.
The VERIFY Team spoke with Dauster just days before he was hired as the Chief Counsel of the U.S. Senate Budget Committee. Dauster explained that provisions added through reconciliation must be related to spending or revenues.
"If it doesn't do one of those two things," he said. "It can't be included."
What is the Byrd Rule, and how does it impact minimum wage?
There are many provisions related to the Byrd Rule, dictating what bills are allowed to be included in the reconciliation process. One of them is that the budget impact of the policy can not be 'merely incidental' to the policy goals.
"The Byrd Rule generally treats as extraneous any provision of a reconciliation measure," wrote the Center on Budget and Policy Priorities. "That doesn't change the level of spending or revenues, or where the change in spending or revenues is 'merely incidental' to the provision's non-budgetary effects."
Dauster explained how this might impact minimum wage legislation.
"Raising the minimum wage will reduce the amount of public benefits that low income people that get that higher wage are going to receive," he said. "So it has a budgetary effect. But the question then becomes one of a judgement. Is this a bigger policy change then it is a budgetary change."
If a senator believes that the minimum wage proposal is 'merely incidental,' making it extraneous to the budget, they can raise a point of order, under the Byrd Rule.
"The Senate Parliamentarian decides whether there is a Byrd rule violation," wrote the House Committee on the Budget. "And provisions struck through a Byrd rule point of order cannot be offered later as amendments."
Currently the Senate Parliamentarian is Elizabeth MacDonough, an appointed official, who may make the final decision on whether a minimum wage hike is allowed to be included through budget reconciliation.