Minimum-wage talks restart as progressive and moderate Democrats reportedly huddle with Chuck Schumer

Chuck Schumer Bernie Sanders
Sens. Chuck Schumer (D-NY) and Bernie Sanders (I-VT) during a Capitol Hill press conference in 2018.

  • Democratic Senators are meeting on Tuesday to discuss a minimum wage increase, HuffPo reports.
  • The meeting will include all 7 moderate Democrats who voted against the increase in the stimulus.
  • Bernie Sanders of Vermont has been adamant that the minimum wage can be no less than $15 an hour.
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Although a federal minimum wage increase to $15 an hour didn’t make it into the stimulus bill, Senate Democrats are meeting today to find a way to get it done somehow, a Democratic source told HuffPost.

According to the source, Senate Majority Leader Chuck Schumer will meet with the progressive senators who led the push for the $15 minimum wage increase, including Bernie Sanders of Vermont, Patty Murray of Washington, and Ron Wyden of Oregon. But the meeting will also include all seven moderate Democrats who voted against the $15 minimum wage hike: Joe Manchin of West Virginia, Kyrsten Sinema of Arizona, Chris Coons of Delaware, Tom Carper of Delaware, Jeanne Shaheen of New Hampshire, Maggie Hassan of New Hampshire, and Jon Tester of Montana.

When the Senate parliamentarian voted against including a minimum wage increase in the stimulus bill, Sanders – who co-sponsored a bill to raise the wage to $15 an hour by 2025 – promised he wouldn’t give up on efforts to get the job done.

“But let me be very clear: If we fail in this legislation, I will be back,” Sanders told reporters on March 1. “We’re going to keep going and, if it takes 10 votes, we’re going to raise that minimum wage very shortly.”

And in a call with reporters on Friday, progressive lawmakers, including Rep. Ro Khanna of California, joined labor leaders and activists to strategize how they could pass a minimum wage increase through Congress, whether by reconciliation or attaching it to a must-pass bill.

“There needs to be a clear plan, a clear strategy,” Khanna told The Washington Post in an interview. “It’s not enough to just say, well, we’re committed to this, we want to get it done.”

Manchin has previously said that a $15 minimum wage increase is too high and advocated for an $11 per hour increase instead. However, Sanders has remained adamant on achieving a $15 per hour increase to lift Americans out of poverty.

“In my mind, the great economic crisis that we face today is half of our people are living paycheck to paycheck,” Sanders said on Twitter on March 5. “And many millions of workers are, frankly, working for starvation wages. Raising the minimum wage is what the American people want, and it’s what we have got to do.”

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A single GOP senator blocked a bill that would stop private debt collectors seizing stimulus checks

pat toomey gamestop
Sen. Pat Toomey, R-Pa.

  • GOP Sen. Pat Toomey blocked a bill meant to stop debt collectors seizing stimulus checks.
  • Democrats had hoped to pass the measure to maximize the help people would get.
  • But Toomey intervened, saying debt collectors had the right to claim cash owed.
  • See more stories on Insider’s business page.

Republican Sen. Pat Toomey on Thursday blocked a bill meant to bar private debt collectors from seizing checks issued as part of the recent stimulus bill.

The law that Toomey opposes had been proposed by Democratic senators Ron Wyden and Sherrod Brown.

Such a measure was included in the December stimulus package passed under President Donald Trump, which provided $600 checks.

However, it was not included in the latest stimulus bill passed under President Joe Biden, which provided $1,400 checks to most Americans.

Democrats still supported the proposal, but had to leave it out because of the rules of the Senate mechanism known as “budget reconciliation” which was used to pass the latest stimulus.

That mechanism let Democrats pass the bill without any GOP votes, but comes with limits on what is allowed. The same rules led to proposals for a $15 federal minimum wage being dropped.

Democrats tried to introduce the rule in separate legislation, arguing that the cash is meant to help struggling Americans rather than debt collection agencies.

Wyden and Brown proposed the measure under a unanimous consent rule, which allows bills to pass quickly and bypass some lengthy Senate procedures.

However, any single senator can block such a proposal, which Toomey chose to do.

Toomey argued that Democrats were to blame for the rule not being in the recent relief bill, because they chose not to involve Republicans in putting it together.

He said that debt collectors had “valid legal claims” against people who “owe money to someone else and that someone else has gone to court, and it’s been adjudicated.”

The senator also said that, with 90 million relief checks already issued, it was too late to seek the amendment.

The process of the relief check money being seized by creditors is known as “garnishment.”

“These payments have already gone out the door,” Toomey said. “The garnishment happens automatically. It’s already happened!”

Toomey’s objection means it is likely that many other relief checks will be seized by debt collectors.

In comments to the Huffington Post, Brown said “we will keep trying” to get the measure passed. Senators can still try to pass it without unanimous consent, which would take longer and would also require some Republican support to evade filibuster rules.

“Families are hanging on by a thread, but Senate Republicans blocked protections against their relief payments from being seized to pay credit card and medical debt. It’s shameful,” said Wyden in a statement Thursday.

It is unclear if there is wide backing in the Senate GOP for Toomey’s objection to the measure. Republicans have supported the measure before but may not in future.

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Senate Democrats cut stimulus unemployment benefits to $300 a week in last-minute deal

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Sen. Ron Wyden (D-OR).

  • Senate Democrats agreed to lower unemployment benefits to $300 per week and extend them through September.
  • This is a shift from the House’s bill, which included $400 weekly benefits through August 29.
  • With the unemployed facing a tax penalty from 2020, they also moved to forgive taxes on the first $10,200 of benefits.
  • Visit the Business section of Insider for more stories.

Senate Democrats struck a last-minute deal on Friday to lower unemployment benefits in the stimulus package to $300 per week and extend the benefits through the end of September, according to a Democratic aide familiar with the decision.

This is a significant change from the rescue package recently approved by the House, which included $400 weekly unemployment benefits that would last through August 29. However, Insider previously reported that Democrats were eyeing some last-minute changes to parts of the bill.

Early on Friday, Senate Democrats reached a decision to lower the benefits to $300 a week – a $100 decrease – while extending them by an extra month. Tax forgiveness on the first $10,200 of unemployment benefits would also be included – another major change given that 2020’s unprecedented jobless payouts leave many potentially facing unexpected tax payments.

White House Press Secretary Jen Psaki said on Twitter on Friday that President Joe Biden supports the extension of benefits through September to help struggling Americans.

 

“The compromise amendment achieves that while helping to address the surprise tax bills that many are facing by eliminating the first $10,200 of UI benefits from taxation for 2020,” Psaki said. “Combined, this amendment would provide more relief to the unemployed than the current legislation.”

Many Democratic lawmakers would likely welcome the change.

When the House Ways and Means Committee announced it would be cutting unemployment benefits off in August – a month earlier than Biden had requested – Oregon Sen. Ron Wyden said in a February 8 statement that he would work to preserve six months of unemployment benefits, along with $1,400 stimulus checks.

“We can do both,” Wyden said.

The $300 weekly benefit appealed to more moderate Democrats. Sen. Joe Manchin of West Virginia told reporters on Tuesday that he backed a lower benefit that would expire in the summer.

“I’m thinking by end of June, first of July we’re gonna have most people inoculated,” Manchin said.

In the $900 billion stimulus package Congress passed in December, $300 weekly unemployment benefits were included, but those are set to end on March 14 if a new stimulus package isn’t passed before then. 

“I have personally felt the benefit should be $400, but I know some of my colleagues feel otherwise,” Wyden said on the Senate floor on Friday. “So what we’re looking at is making sure that we can get a benefit so that people can make rent and pay groceries, that we prevent that cliff, and by god, we sure as hell shouldn’t let folks who are unemployed pay taxes on those unemployment benefits that they secured in 2020.”

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Some Senate Democrats eye changes to unemployment benefits and direct payments in the $1.9 trillion stimulus plan

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Sen. Joe Manchin (D-WV) talks with reporters before a series of Senate votes known as vote-a-rama in the Capitol on February 4, 2021.

  • Some Democrats are pushing to change unemployment benefits and stimulus checks in the $1.9 trillion stimulus.
  • Manchin suggested a $300 federal jobless benefit ending in the summer; others want money for broadband.
  • Another Democratic senator said she favored lowering the income threshold for the new stimulus checks.
  • Visit the Business section of Insider for more stories.

Senate Democrats are up against a narrow timeline to approve a $1.9 trillion stimulus package and get it to President Joe Biden’s desk. But some Democratic senators are eyeing changes to key components of the legislation, particularly unemployment insurance and stimulus checks.

The jockeying among Democrats to amend provisions for direct aid comes as they attempt to enact the legislation by March 14, the deadline for when numerous unemployment measures expire, including a $300 federal benefit. They have only days to settle policy differences, and it may shape the course of the economic recovery.

Senate Majority Leader Chuck Schumer told reporters the measure could be advanced as early as Wednesday. Asked if he would support targeting some aspects of the bill, he responded: “We want to get the biggest, strongest, boldest bill that can pass. And that’s what we’re working to do.”

He said discussions were ongoing between the Biden administration and a group of nine Democratic senators that includes Sen. Joe Manchin of West Virginia; Sen. Jeanne Shaheen of New Hampshire; Sen. Mark Warner of Virginia; and Sen. Dick Durbin of Illinois, the second-ranking Senate Democrat.

The relief package would provide $1,400 stimulus checks for taxpayers; $400 in federal unemployment benefits through the end of August; $350 billion in aid to state and local governments; $200 billion in school funding; $50 billion for virus testing and tracing; and a major revamp of the child tax credit.

Biden called into a Senate Democratic lunch on Tuesday and urged lawmakers to approve the bill quickly. Sen. Tim Kaine of Virginia told reporters that “he got on and kind of gave us a rally call.”

Inside the group of nine

Manchin said Tuesday he supported a $300 benefit that would expire sometime in the summer.  He appeared to suggest the end of June as a possible end-date.

“I’m thinking by end of June, first of July we’re gonna have most people inoculated,” the West Virginia Democrat told reporters on Capitol Hill. “So by that time there should be doors opening up, ready to go.”

Shaheen indicated she supported designing a new pot of money for broadband and healthcare providers. “Those are two areas we’re really hoping to see additional funding,” she told reporters. 

She suggested those initiatives could be financed with a lower check income threshold for married couples and an extension of the federal jobless benefit at $300 instead of $400. 

The push to cut unemployment benefits encountered early Democratic resistance. “I oppose that. I don’t know if it will prevail, but I’m for $400,” Durbin told reporters. Still, he said he was open to restructuring a third wave of direct payments.

That part of the legislation is far from settled. Sen. Ron Wyden of Oregon, chair of the Senate Finance Committee, said he believed there was “growing support” for unemployment benefits to end in September. “I think we’re making a lot of headway,” he told reporters, without specifying further.

Other Democrats pushed back against the idea of restricting stimulus check eligibility. “I think the president has made it clear what his views are and I believe those will prevail,” Sen. Bernie Sanders, chair of the Senate Budget Committee, told Insider.

The House approved the package on Saturday, giving Democrats only two weeks to approve the legislation in the Senate, where it will likely be amended. A second vote-a-rama will occur on Thursday afternoon, kicking off a long amendment process which is expected to end with approval of the bill by the end of the week.

Then the amended bill must go back to the House for final passage before Biden can sign it into law.

Democrats are employing a process known as reconciliation to push the rescue package through without Republican votes. The legislation must adhere to strict budgetary guidelines so it can pass with a simple majority of 51 votes in the Senate, but the Democrats’ slim majority means they cannot afford to lose a single vote.

Republicans are slamming the legislation as a Democratic wishlist of unrelated priorities. “This is a wildly expensive proposal largely unrelated to the problem,” Senate Minority Leader Mitch McConnell told reporters on Tuesday. “We’ll be fighting this in every way that we can.”

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Senior Democrats ditch their backdoor proposal for a $15 minimum wage, throwing pay hike in doubt in $1.9 trillion stimulus package

Bernie Sanders Chuck Schumer Ron Wyden
Sen Bernie Sanders speaks at a news conference alongside other top Democrats.

  • Senior Democrats tossed out a backdoor plan to raise the minimum wage to $15 an hour, per a person familiar with the decision.
  • The proposal was ditched as Democrats appeared reluctant to finalize a complex plan that could delay stimulus passage.
  • Experts said the backup plan risked being inefficient at raising hourly wages.
  • Visit the Business section of Insider for more stories.

Senior Democrats are abandoning their backdoor $15 minimum wage proposal, leaving a wage hike in doubt as they scramble to enact a $1.9 trillion stimulus plan within two weeks.

Sens. Bernie Sanders (I-Vermont) and Ron Wyden (D-Oregon) were in the midst of drafting a plan to levy a 5% tax on the payrolls of large corporations that don’t compensate workers below an unspecified wage. It would be paired with tax credits to incentivize small businesses to raise their employees’ wages.

The senators ditched their proposal. According to a person familiar with the decision, finalizing the plan and getting every Democrat onboard imperiled the passage of the legislation before the expiration of enhanced unemployment insurance on March 14 for millions of Americans.

The Washington Post first reported the development.

Sanders and Wyden came up with the alternative after the Senate parliamentarian ruled on Thursday evening that a $15 minimum wage provision in the rescue package did not clear the strict guidelines of the reconciliation process. The move blocks the measure from moving ahead under the process Democrats are using, which needs 51 votes in the Senate to bypass Republicans.

Experts said the backup plan risked being inefficient at raising hourly wages. Arindrajit Dube, a professor of economics at the University of Massachusetts, Amherst, wrote in an email to Insider that “the devil is in the details.”

Dube noted that most minimum wage workers don’t work for large corporations, so the plan may encourage those businesses to accelerate outsourcing to third-party contractors to avoid the tax.

“For these reasons, any tax-based minimum wage scheme should be broad-based in my opinion, in contrast to proposals from Senators Sanders and Wyden as I understand them,” Dube said. “Senator Wyden’s tax incentive to small businesses are also unlikely to be very effective and will largely go to employers who are already paying higher wages.”

The move slashes the odds of a wage increase becoming part of the stimulus plan, with little time left to draft legislation that would comply with the budget reconciliation process.

Still, Democrats such as Sen. Sherrod Brown of Ohio, chair of the Senate Banking Committee, say they will find a way to bump the federal minimum wage, which hasn’t increased from $7.25 an hour since 2009.

“Democrats are united in giving a raise. We’re going to raise wages,” he told NBC’s “Meet the Press” on Sunday. “We’re going to find a way to. It’s just too important not to.”

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A weekend stimulus deal could be derailed by a GOP measure to rein in the Federal Reserve

McConnell Portrait
Senate Majority Leader Mitch McConnell.

  • A GOP measure to limit the Federal Reserve’s lending powers imperiled the odds of a weekend stimulus deal on Saturday.
  • Republican and Democrats fought bitterly over the Fed’s emergency aid programs, which have assisted state and local governments as well as mid-sized businesses.
  • Democrats argued the Republican proposal could cripple the incoming Biden administration’s ability to respond to the current economic crisis.
  • Visit Business Insider’s homepage for more stories.

A late Republican push to curtail the Federal Reserve’s lending authority formed a major roadblock in stimulus negotiations on Saturday – and it threatens to stretch the talks on a $900 billion emergency spending package into next week.

The clash over the Fed between Republicans and Democrats intensified on Capitol Hill. Politico reported that Senate Majority Leader Mitch McConnell told senators in a caucus call that Republicans should stand firm with Sen. Patrick Toomey. He’s demanding to cut off the central bank’s emergency lending powers after they sunset on Dec. 31, the current expiration date under the CARES Act which Congress approved in March.

As the pandemic swept the US and devastated the economy earlier this year, the central bank set up an array of programs to aid the flow of credit and provide loans to mid-sized businesses, along with state and local governments. The proposal would restrain the Fed’s ability to restart those programs without congressional approval. Toomey, the incoming chair of the Senate Banking Committee, called it “a bright red line” this week.

The ensuing fight could imperil the odds of a relief package passing both chambers of Congress this weekend, and raises the prospect of a shutdown given the deadline for government funding to dry up on Sunday evening.

Lawmakers authorized a two-day funding extension late on Friday to settle longstanding policy differences. The $900 billion federal assistance package is expected to include $600 stimulus checks for many Americans, $300 federal unemployment benefits, vaccine distribution funds, as well as another round of small business aid.

Republicans say that keeping the Fed’s emergency lending programs in place could cause the institution to overstep its historic boundaries as a lender of last resort. They also contend the Fed initiatives could create an avenue to aid states and municipalities, long a Democratic priority.

Sen. John Kennedy of Louisiana, a GOP member of the Senate Banking Committee, told reporters that maintaining those programs could turn the Fed into “a commercial bank” and said “we’re gonna stand firm.”

Kennedy also suggested relief talks to resolve the issue could stretch on to “New Year’s or Christmas Eve.”

Democrats are fiercely resisting the measure. They argued its a political move aimed at crippling President-elect Joe Biden’s ability to manage the recovery while simultaneously jeopardizing the Fed’s capacity to respond to future recessions as well.

“The last thing America needs right now is to make it tougher to help people in communities and that’s what this proposal does,” Sen. Ron Wyden, ranking Democrat on the Senate Finance Committee, said in a brief interview on Capitol Hill. He added it was “a significant sticking point” in the volatile negotiations.

“There’s no reason the Treasury and the Fed in the Biden Administration should have fewer tools to address an economic crisis than the Trump Administration had,” Bharat Ramamurti, a Democratic panelist on the Congressional Oversight Commission policing the Treasury and Fed’s economic response, tweeted on Saturday.

Not every Republican appeared to be onboard with Toomey’s proposal. Sen. Mitt Romney of Utah told Business Insider in a brief interview that pursuing major Fed reforms could wait until next year.

“I think the Fed should be returned to the powers it had prior to the CARES Act, but I think other reforms should wait for another time,” Romney said.

Senators discussed the divide during a confirmation vote on the Senate floor on Saturday afternoon, and a group that included Toomey and Romney broke off and met in Senate Minority Leader Chuck Schumer’s office. After leaving, Toomey said, “I think that we should be able to get a deal done.”

The fight on Capitol Hill elicited a rare public statement from Ben Bernanke, who served as chair of the Federal Reserve during the 2008 financial crisis. He said the central bank’s emergency lending powers from before the pandemic should remain “fully intact,” adding it was “vital” for its ability to respond to future financial or economic crises.

A failure from Congress to pass a new relief package carries potentially calamitous consequences for many Americans. Unemployment claims have risen for the past three weeks, and nearly 13 million people are threatened with the loss of all their unemployment assistance if some federal measures are not renewed by year’s end.

An eviction on moratoriums also expires on December 31, which would put millions of Americans at risk of losing their homes.

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