Congressional Update: EMA Opposes $15 Minimum Wage; Power Sharing; New Transportation Secretary

The Energy Marketers of America joined 30 other associations in a letter opposing the Raise the Wage Act of 2021 which would increase the federal minimum wage to $15 per hour over five years and allow for annual automatic increases without the consent of Congress.

U.S. Senate Majority Leader Chuck Schumer (D-NY) is pushing to include a $15 minimum wage hike in what is known as “budget reconciliation,” which allows a bill to pass with 51 Senate votes instead of the normal 60 votes.

However, all 50 democratic Senators will need to support the effort leaving them no room for error. Senator Joe Manchin (D-WV) has already indicated he opposes the $15 minimum wage hike.

During last night’s budget reconciliation “vote a rama,” the Senate unanimously adopted an amendment from Sen. Joni Ernst (R-IA) that would ban the $15 minimum wage hike during the pandemic.

Even Senator Bernie Sanders supported, however, he argued his plan would increase the minimum wage over five years, rather than an immediate $15 increase during the pandemic.

Senate Republicans said the $15 minimum wage is a non-starter arguing that it will hurt small businesses and lead to job losses. They also argue that the states are in a better position to increase the minimum wage.

According to the Congressional Budget Office (CBO), this legislation would result in 3.7 million job losses by 2025, with a median estimate of 1.3 million job losses.

A $15 per hour federal minimum wage would reduce business income and raise prices as higher labor costs were absorbed by business owners and then passed on to consumers. CBO estimates the legislation would represent a $64 billion reduction in business income and a reduction in total real family income of $9 billion by 2025.

Power Sharing

Meanwhile, Senate Majority Leader Chuck Schumer (D-NY) and Minority Leader Mitch McConnell (R-KY) reached a power-sharing agreement to govern the 50-50 Senate.

The agreement recognizes a Democratic Senate majority and resembles a previous agreement adopted by former Senate leaders Trent Lott (R-MS) and Tom Daschle (D-SD) the last time the Senate had a 50-50 split.

Under the agreement, Majority Leader Schumer (D-NY) pledged not to limit amendments, except for those intended to delay action, and Minority Leader McConnell pledged to avoid lengthy debates on procedural votes, which will accelerate the process by which bipartisan legislation can receive a floor vote.

Senate Democrats have retaken control of committees, though each party has equal committee representation. The resolution also includes a process for discharging legislation and nominations that see a 50-50 tie, thus preserving the Democrats’ narrow majority.

While the power-sharing agreement allows the Senate to begin fully functioning, it underscores the precarious nature of a 50-50 split, as one Democratic defection could halt attempts at passing progressive legislation.

Transportation Secretary

Thus far, President Biden’s cabinet nominees have received favorable, bipartisan support in the Senate. On February 2, the Senate overwhelmingly confirmed (86-13) Pete Buttigieg as Secretary of Transportation.

A former mayor, Secretary Buttigieg will lead President Biden’s key transportation priorities such as expiration of surface transportation authorization and increasing revenue for the Highway Trust Fund (HTF).

The main federal HTF funding source, the gas tax, has not increased since 1993. Failure to identify additional revenue sources could exhaust all HTF funding.

Secretary Buttigieg has repeatedly floated a vehicle miles traveled (VMT) tax as the solution. While previous VMT proposals were rejected, increased EV investment, bipartisan VMT interest, and gas tax increase opposition may jump start VMT efforts.

However, during his confirmation hearing, Buttigieg acknowledged that concerns, such as privacy and technology, must be addressed before a VMT approach is “ready for prime time.”

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