'Plan B' for $15 minimum wage unveiled

Senate Finance Committee Chairman Ron WydenRonald (Ron) Lee WydenOn The Money — House pushes toward infrastructure vote Hillicon Valley — Presented by Xerox — EU calls out Russian hacking efforts aimed at member states Why Democrats opposing Biden's tax plan have it wrong MORE (D-Ore.) on Friday announced Democrats’ “Plan B” to raise the minimum wage after the Senate parliamentarian ruled that an earlier proposal from House Democrats to raise the federal minimum wage $15 an hour did not meet special budgetary rules.

Wyden is proposing a workaround solution that would impose a 5 percent tax penalty on large corporations if any of their workers earn less than a certain amount, with the penalty increasing over time.

The language would ensure that large companies would have a significant financial incentive to raise wages, even if they are not mandated by law to pay employees more than the current federal minimum wage of $7.25 an hour.


“As chair of the Finance Committee, I’ve been working on a ‘plan B’ that would make big companies pay for mistreating their workers. My plan would impose a 5 percent penalty on a big corporations’ total payroll if any workers earn less than a certain amount. That penalty would increase over time,” Wyden said in a statement.

A senior Democratic aide said Friday that Senate Majority Leader Charles SchumerChuck SchumerDemocrats press Schumer on removing Confederate statues from Capitol Democrats' do-or-die moment Biden touts 'progress' during 'candid' meetings on .5T plan MORE (D-N.Y.) is looking at adding such a provision to the $1.9 trillion COVID-19 relief package. He is expected to bring the legislation to the floor as soon as next week.

Wyden said his plan would include safeguards to prevent companies from evading the penalty by outsourcing jobs.

“For example, if a profitable mega corporation like Walmart fires a store’s security guard and replaces him with a contractor who makes far less, my proposal would still require that Walmart pays a penalty,” Wyden said.

Wyden wants to incentivize what he calls “the smallest of small businesses” to raise workers’ wages by providing an income tax credit equal to 25 percent of wages — up to $10,000 per year per employer — to businesses that boost wages.


Senate Parliamentarian Elizabeth MacDonough dealt a serious setback to Democrats this week by advising a proposal under the jurisdiction of the Senate Health, Education, Labor and Pensions Committee to raise the minimum wage was primarily a policy change with only incidental budgetary effect.

As a result, President BidenJoe BidenFighter jet escorts aircraft that entered restricted airspace during UN gathering Julian Castro knocks Biden administration over refugee policy FBI investigating alleged assault on Fort Bliss soldier at Afghan refugee camp MORE’s proposal to raise the minimum wage to $15 an hour cannot be passed through the Senate with a simple-majority vote.

The Senate’s Byrd Rule requires that proposals included in budget reconciliation packages — which are allowed to pass with simple-majority votes — produce changes in spending outlays or revenues that are not merely incidental to their policy impacts.

By structuring incentives on large corporations and small businesses to boost wages as tax penalties and tax benefits, Wyden feels confident the parliamentarian will agree those reforms meet the Byrd Rule and can avoid a Republican filibuster.

“While conversations are continuing, I believe this ‘plan B’ provides us a path to move forward and get this done through the reconciliation process,” Wyden said.


“Workers have not gotten a federal pay raise in more than a decade. We can’t continue to have millions of worker — workers who are disproportionately, people of color, women and essential workers like fast food workers and home health aides — earning starvation wages,” he added.

If Democrats aren’t able to find a way to fit the minimum wage increase into the $1.9 trillion COVID-19 relief package they plan to pass under special budget rules, they will need to reach a compromise with at least 10 Republicans to reach the 60-vote threshold to overcome a filibuster.

Sens. Mitt RomneyWillard (Mitt) Mitt RomneyGraham tries to help Trump and McConnell bury the hatchet GOP senator will 'probably' vote for debt limit increase Five questions and answers about the debt ceiling fight MORE (R-Utah) and Tom CottonTom Bryant CottonHillicon Valley — Presented by Xerox — Tech groups take aim at Texas Republican lawmakers raise security, privacy concerns over Huawei cloud services Debt ceiling fight pits corporate America against Republicans MORE (R-Ark.) this week introduced a proposal to raise the minimum wage to $10 an hour in 2025 and tie the wage increase to crack down on employers who hire undocumented immigrants, demonstrating the wide gulf between where Democrats and many Republicans are on the issue.