Senator Bernie Sanders introduces the Raise the Wage Act, a proposed gradual increase in the minimum wage to $15, at the U.S. Capitol on Jan. 16, 2019.
The Congressional Budget Office (CBO) released a report this month showing that raising the minimum wage to $15 nationwide would increase the budget deficit by $54 billion, which it said would lead to higher unemployment and higher prices for goods and services.
“If enacted at the end of March 2021, The Raise the Wage Act of 2021 would raise the federal minimum wage to $15 per hour on an annual basis by June 2025, and automatically increase it at the same rate as the median hourly wage each year after 2025. “The cumulative budget deficit between 2021 and 2031,” the CBO noted in its report, “would increase by $54 billion.”
Democrats on the House Education and Labor Committee (HELC) first introduced a draft of the Raise the Wage Act in 2019, and Democrats reintroduced the bill on Jan. 26, which aims to gradually raise the national minimum wage from $7.25 today to $15 by 2025.
Senate Democrats passed a budget resolution on Friday (Feb. 5), moving President Biden‘s $1.9 trillion Communist Party virus (Wuhan pneumonia) bailout another step closer to simple majority passage.
During debate on the budget resolution, senators proposed changes to the budget resolution, and Republican Senator Joni Ernst offered an amendment that would prohibit raising the federal minimum wage during a pandemic, which was unanimously approved.
“A federal minimum wage of $15 would be devastating to our hardest-hit small businesses at a Time when they can least afford it.” Ernst said on the Senate floor.
“We shouldn’t have a one-size-fits-all policy set by politicians in Washington,” she said, “We all support higher wages, but a $15 federal minimum wage would be counterproductive.”
Sen. Joni Ernst (D-Mich.).
However, Democrats insist that they want to raise the minimum wage across the board after the pandemic, no matter how much it would increase the federal deficit.
Sen. Bernie Sanders (I-Vt.), chairman of the Senate Budget Committee, responded to the CBO report, saying the minimum wage can only be changed if the “budget reconciliation process” is used to circumvent Republican approval.
“We will never get 10 Republicans to support a ‘standing order’ to raise the minimum wage. Right now, the only way to raise the minimum wage to $15 an hour is to pass it by 51 votes through the budget reconciliation process.” Sanders said in a statement release Monday.
The CBO report projected that the minimum wage increase would “reduce poverty by 900,000 people.” But the report also found that the change would result in the loss of 1.4 million jobs, equivalent to a 0.9 percent increase in the unemployment rate.
“The good news, however, is that from a Byrd Rule perspective, CBO has demonstrated that raising the minimum wage will have a direct and substantial impact on the federal budget,” Sanders said.
Note: The reconciliation process, a special process for passing budget bills, is governed by a number of specific Senate statutes, one of which is the Byrd Rule. This provision prevents bipartisan use of the reconciliation process to pass non-budget bills that do not affect the federal budget.
“It means that under the consent process, we could indeed raise the minimum wage to $15 an hour,” Sanders added. Sanders added.
Sanders, who has been one of the strongest supporters of raising the minimum wage among members of Congress, questioned the findings in the CBO report.
“I have a hard time understanding how the CBO came to the conclusion that raising the minimum wage would add $54 billion to the deficit. Two years ago, the CBO concluded that a $15 minimum wage would add less than $1 million to the deficit over a decade.” He said.
CBO estimates oppose Sanders’ argument that the wage increase bill would reduce the number of people applying for public assistance programs, ultimately saving taxpayers money overall.
The report states, “Overall Medicaid spending would increase under the bill. Because the price of health care services would rise and the increase in the number of unemployed people resulting from the minimum wage increase would have an impact that would outweigh the reduction in the number of people applying for benefits that would result from higher incomes.”
In a statement, House Education and Labor Committee (ELC) Vice Chairwoman Virginia Foxx (D-MD) said the CBO report confirms that a mandatory minimum wage increase would destroy jobs and said the Sanders-led bill is misleading the public.
“It’s the exact opposite of what our country needs. During the COVID-19 pandemic, Congress should be focused on creating jobs and protecting small businesses, not destroying them with this misguided legislation.” Fox said.
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