Democratic drive for Biden's $1.9 trillion stimulus plan could leave progressive priorities behind

[February 18, 2021]  By Richard Cowan and Makini Brice

WASHINGTON (Reuters) - President Joe Biden's fellow Democrats' drive to hustle his $1.9 trillion coronavirus relief package through the U.S. Congress could leave some priorities of the party's progressive wing, including a $15-per-hour minimum wage, in the dust.

As Democrats battled over the wage increase, a dispute also broke out over liberals' call for canceling $50,000 in federal student loan debt for borrowers.

The sprawling COVID-19 relief package - which would be one of the largest stimulus measures ever passed by Congress - is Biden's top priority as he grapples with a pandemic that has killed nearly 500,000 Americans, thrown millions out of work and bruised the economy.

The proposal includes Senator Bernie Sanders' goal of gradually raising the national minimum wage to $15 an hour by 2025, from the current $7.25.

Representative Pramila Jayapal, a leading progressive voice in Congress, noted that even Republican-controlled Florida, which voted for former President Donald Trump in 2020, is raising its minimum wage to $10 beginning in September from the current $8.65, en route to $15 in 2026.

"I don't think we can negotiate down from that," Jayapal said of Sanders' proposal in a telephone interview. "We need to do what we said we would do as Democrats," she said.

The leadership of the narrowly Democratic-controlled House of Representatives and Senate aims to pass the COVID-19 package before previously approved benefits, including enhanced unemployment insurance, expire in mid-March, using a process called reconciliation that allows Democrats to act without Republican votes.

Also to be worked out in the Senate are income thresholds for those who would receive a $1,400 direct-payment check for individuals.

"Now is the time to go big," Biden told a CNN-sponsored "town hall" in Wisconsin on Tuesday, saying his measure would create 7 million jobs this year, helping raise the economy out of the doldrums caused by the COVID-19 pandemic.

Even a big package may fall short of some progressives' hopes.

Senate leadership is researching whether parliamentary rules will allow enacting Sanders' minimum-wage proposal through reconciliation. But even if they do, it is not clear Democrats will have the votes.

A senior Senate Democratic aide said Sanders' $15 plan would move many Americans off of costly federal food aid and healthcare programs, as well as raise wages for low-paying jobs that now leave workers at or below the poverty level.

President Joe Biden participates in a CNN town hall with host Anderson Cooper in Milwaukee, Wisconsin, U.S., February 16, 2021. REUTERS/Leah Millis

At least two of the Senate Democrats - Senators Joe Manchin of West Virginia and Kyrsten Sinema of Arizona - have publicly announced their opposition, while others have privately registered concerns.

'SAUSAGE-MAKING MACHINE'

One Senate Democratic aide predicted that Sanders' proposal would wither in the 50-50 Senate and that backers would be better off negotiating a lower rate, possibly around $12 an hour, that would win 50 votes, plus Vice President Kamala Harris' tie-breaking vote for passage.

White House spokeswoman Jen Psaki acknowledged that a lower figure may be necessary, telling reporters on Wednesday that the proposal "may not look exactly the same on the other end when it comes out of the sausage-making machine.”

The U.S. Chamber of Commerce was more blunt. "If the advocates stick with that position of $15 or bust, they may wind up with a minimum wage increase of zero," said the group's vice president, Glenn Spencer, who said his organization was open to a "reasonable increase" somewhere below $15.

As the battle was being waged over the minimum wage, Senate Majority Leader Chuck Schumer and liberal Democratic Senator Elizabeth Warren were prodding Biden to cancel $50,000 in federal student loan debt for borrowers, arguing it would help close the racial wealth gap and stimulate the economy.

The White House said Biden was opposed to such a high number and that limitations should be imposed on any debt relief above $10,000 per borrower.

But the minimum wage remains the most burning issue.

Democratic Representative Mark Pocan, a leading member of the Congressional Progressive Caucus, insisted Democrats had to seize the moment in increasing the wage to $15 an hour over time.

"I would hope first of all that senators who make $174,000 a year don't tell people making minimum wage that they don't need a raise ... that would be hard to explain back home," Pocan said in a telephone interview.

(Reporting by Richard Cowan, Makini Brice and David Lawder; Additional reporting by Nandita Bose; Editing by Scott Malone and Peter Cooney)

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