Federal minimum wage hike to face tough tests in split US Senate

WASHINGTON - The House-approved 1.9-trillion-US-dollar COVID-19 relief package includes a controversial provision to raise the federal minimum wage to 15 dollars, which is expected to face tough tests in the 50-50 split Senate.

"As we send this legislation to the Senate, the House will continue our fight for 15, which would give 27 million American workers a raise," House Speaker Nancy Pelosi, the top Democrat in the lower chamber, said in a statement Saturday.

Pelosi noted that the minimum wage increase is a "financial necessity" for American families, an effective stimulus for the economy and a moral imperative for the country.

The federal minimum wage went up to 7.25 dollars in 2009, and hasn't been raised in over a decade.

Raising the federal minimum wage is one of President Joe Biden's 2020 campaign promises, and has been an important Democratic agenda.

"We know that a 7.25-dollar federal minimum wage is insane. It is a starvation wage, and we've got to raise it to at least 15 dollars an hour over the next several years," Bernie Sanders, who serves as Senate Budget Committee chairman, said in a recent video.

"Walmart, the largest employer in America, is owned by the richest family in America ... But the company they own starts workers off at 11 dollars an hour. That is outrageous," Sanders said.

Despite strong support from Democrats, Republican lawmakers have opposed the idea, arguing that it would lead to a loss of jobs, and could hurt vulnerable businesses, especially under a pandemic.

"Democrats' so-called relief bill includes Senator Sanders's minimum wage proposal that would kill 1.4 million American jobs," Senate Republican leader Mitch McConnell said in an earlier tweet. "Killing jobs and destroying opportunity -- that's their idea of pandemic relief?"

On Thursday, the nonpartisan Senate parliamentarian ruled that an increase to the federal minimum wage violates the budget reconciliation process, which only needs a simple majority in the Senate, and cannot be included in the COVID-19 relief bill.

The parliamentarian's ruling was welcomed by Republicans, who have criticized the Democrats' use of budget reconciliation to push through the 1.9-trillion-dollar relief bill in Congress.

"Very pleased the Senate Parliamentarian has ruled that a minimum wage increase is an inappropriate policy change in reconciliation," Senate Budget Committee ranking member Lindsey Graham said on Twitter.

"This decision reinforces reconciliation cannot be used as a vehicle to pass major legislative change -- by either party -- on a simple majority vote," said the Republican senator.

The ruling, meanwhile, prompted backlash.

"It turns out that an unelected person who is called the parliamentarian of the Senate can determine whether the minimum wage provision was germane to the overall bill," Sanders said, adding that he "strongly" disagrees with the parliamentarian's ruling.

"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 dollars an hour and to provide small businesses with the incentives they need to raise wages," Sanders said.

"That amendment must be included in this reconciliation bill," he added.

Ron Wyden, who chairs the Senate Finance Committee, also said Friday that he is exploring a tax penalty for mega-corporations that refuse to pay a living wage. "This isn't over," he said.

Vice President Kamala Harris, as the president of the Senate, could overrule the parliamentarian's decision, but Brian Deese, director of the White House National Economic Council, told CNBC Friday that the vice president isn't going to weigh in on the decision.