Little known Senate referee to play major role on Biden relief plan

Senate parliamentarian Elizabeth MacDonough will soon play a crucial role in determining whether President Biden’s proposal to increase the minimum wage and other components of his $1.9 trillion relief package make it through Congress.

As legislative referee, MacDonough is tasked with deciding if provisions like raising the federal minimum wage to $15 an hour are allowed to pass the Senate with a simple-majority vote under a special process known as budget reconciliation.

The parliamentarian will pass judgment on what elements of Biden’s plan comply with the Byrd Rule, which lays out detailed requirements for protecting legislation from filibusters through the reconciliation process.

It is not considered an enviable job once budget reconciliation gets underway.

“I can tell you this for a fact, going back all the way to Bob Dove and Alan Frumin, they hate this process. They are put in a terrible position,” said Bill Hoagland, a former Republican staff director on the Senate Budget Committee, referring to previous Senate parliamentarians.

Some of the spending in the Democrats’ COVID-19 relief package may come under attack from Republicans if it does not comply with the Byrd Rule.

One key requirement is that any provision passed under reconciliation must produce changes in outlays and revenue that are not merely incidental to its nonbudgetary effect. Another key requirement is that spending protected by reconciliation must fall outside the annual appropriations process.

So if part of the package can be classified as discretionary spending or if it is seen as funding programs that will need future appropriations to administer, that component could be jettisoned by MacDonough, who has served as parliamentarian since 2012.

Then-Senate Majority Leader Harry Reid (D-Nev.) appointed MacDonough, making her the first woman to hold the position.

Senate parliamentarians have been in the hot seat before.

During the contentious 2001 debate over former President George W. Bush’s proposed tax cuts, then-Senate Majority Leader Trent Lott (R-Miss.) ousted parliamentarian Robert Dover after a dispute over whether the proposal qualified for reconciliation because it reduced revenues. 

Like today, the Senate at the time was split 50-50, though Republicans were in the majority because former Vice President Cheney could cast a tie-breaking vote.

One challenge facing MacDonough is the need to gather data from the Congressional Budget Office and the Joint Committee on Taxation in a short period of time. Democrats want to pass the relief bill by mid-March at the latest, making it difficult to score all of the bill’s provisions in just a few weeks.

In the meantime, lawmakers are arguing over whether a minimum wage increase can avoid a filibuster. 

Sen. Mike Crapo (Idaho), the top-ranking Republican on the Senate Finance Committee, said he doesn’t think a wage increase should be allowed to pass with fewer than the 60 votes required for regular legislation.

“To my knowledge, that has never been done,” he said. 

Senate Majority Whip Dick Durbin (D-Ill.) and other Democrats say it qualifies for reconciliation. 

When asked whether a minimum wage increase would be eligible for the reconciliation package, Senate Banking Committee Chairman Sherrod Brown (D-Ohio) said, “I hope so and I think so.”

Bill Dauster, a longtime Senate Democratic aide who will start next week as chief counsel for the Senate Budget Committee, says raising the minimum wage has a direct effect on the budget because you pay people more and they use federal benefits.

Sen. Brian Schatz (D-Hawaii) made the case Wednesday that raising wages across the country would reduce expenditures on the earned income tax credit and other federal programs. 

“It’s hard to argue that raising the minimum wage doesn’t have an impact on government revenues. It would certainly reduce the amount you have to spend on food stamps and temporary assistance to needy families,” he said.

“Anything that raises people out of poverty changes the number of people that you have to subsidize, so I think we have a very strong case to be made,” he added.

Schatz, however, acknowledged it would be up to MacDonough.

Democrats also need to convince Sen. Joe Manchin (D-W.Va.), who said this week he doesn’t support a hike to $15, though he left the door open to a smaller increase. Without all 50 Democrats on board, a wage increase is unlikely to make it through the Senate.

Republicans aren’t taking any chances, though. GOP senators say Biden’s proposal to raise the minimum wage doesn’t warrant reconciliation protections because it wouldn’t have a significant impact on the federal budget following his executive order initiating a process to ensure all federal workers and contractors make at least $15 an hour. 

A 2019 Congressional Budget Office estimate for the Raise the Wage Act, which would have increased the federal minimum wage to $15 an hour, concluded the legislation would not have any significant budget effect other than costs associated with increasing the wages of some federal employees. 

Hoagland said “on the face of it,” a minimum wage increase should not be eligible to pass with a simple-majority vote.

“The Byrd Rule says it has to have a federal budgetary impact,” he said. “Technically there would be no impact” from raising the minimum wage.

Hoagland conceded there could be a budgetary impact under a dynamic scoring model — an approach Democrats fiercely criticized when Republicans used it to pass former President Trump’s 2017 tax-cut package.

But he said the budgetary effect is still likely to be “merely incidental to the overall goal” of increasing wages.

Dauster, however, argues there would be a budgetary effect without dynamic scoring.

Some Republicans are worried that Democrats are so intent on passing Biden’s plan in its entirety that they could vote to overrule any adverse judgement from the parliamentarian.

Such a scenario would require all 50 Democrats and Vice President Harris voting to set aside the parliamentarian’s ruling. 

“Democrats are going to nuke the Byrd Rule,” one GOP senator said after Senate Majority Leader Charles Schumer (D-N.Y.) announced Tuesday he would move a large COVID-19 relief package through budget reconciliation. 

Sen. Kevin Cramer (R-N.D.) said he has heard that same concern expressed by a number of GOP colleagues. 

“I know there are people worried, there’s no question about it,” he said.

Cramer expressed hope that Manchin would vote against any effort to overrule the parliamentarian on including a minimum wage increase in the package.

Manchin and Sen. Kyrsten Sinema (D-Ariz.) have told Senate Minority Leader Mitch McConnell (R-Ky.) they would not vote to gut the Senate legislative filibuster rule, Cramer noted, suggesting a vote to overrule the parliamentarian would fall into a similar camp.

Republicans assert that raising the minimum wage to $15 an hour or a similarly high level would have a detrimental effect on small businesses across the country, dwarfing whatever federal savings may be gained from lower earned income tax payments and reduced spending on other social aid programs.

Sen. Mike Braun (R-Ind.) said restaurants “would be most devastated by it” because it “would take away flexibility” and “add huge fixed costs” by replacing tipped wages with a high hourly rate paid by employers.

Once Democrats finish crafting their COVID-19 relief package, they will have to defend against Republican challenges over whether specific provisions are eligible to sidestep a 60-vote filibuster.

Senior Democratic and Republican aides will soon present their arguments to the parliamentarian on whether provisions should be kept or eliminated from the COVID-relief package in a series of meetings nicknamed “the Byrd bath.”

New leadership atop the Senate Budget Committee, which has jurisdiction over reconciliation, is complicating the process. Sen. Bernie Sanders (I-Vt.) is the new chairman of the panel, and Sen. Lindsey Graham (R-S.C.) is the new ranking member.

Graham said Wednesday he needs to have additional meetings with staff before deciding on a strategy to challenge Democrats on their budget reconciliation plans.