Happy Friday and welcome back to On The Money, where none of us have been immortalized in statue (yet). I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.
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THE BIG DEAL—Democrats scramble to rescue minimum wage hike: Democrats are scrambling to chart a path forward on a top progressive priority after the Senate parliamentarian blocked them from including a $15 minimum wage in a sprawling $1.9 trillion pandemic relief package.
What happened last night: The Senate parliamentarian on Thursday ruled against including a boost to the minimum wage in a $1.9 trillion coronavirus relief bill, arguing that it runs afoul of budget rules. That means the Democrats would have to scrap it from their relief bill to pass it with only a simple majority.
How lawmakers responded today:
- Senate Finance Committee Chairman Ron Wyden (D-Ore.) and Budget Chairman Bernie Sanders (I-Vt.) have already pitched an alternative approach — taxing big, profitable companies that pay below $15 an hour — that could find broader backing from moderates, but have a more limited impact on poverty.
- The “Plan B” approach has also been endorsed by Sen. Josh Hawley (R-Mo.), who teamed up with Sanders last year to push for $2,000 stimulus checks, but the White House isn’t crazy about it.
- House Democrats are leaving the wage hike in their version of the COVID-19 relief package set for a vote on Friday despite the ruling, forcing the Senate to remove the provision when it reaches the upper chamber.
- Progressives appear open to the alternative plan but indicated they’ll keep pushing for enacting a statutory minimum wage increase, even if it’s separate from the relief bill.
The Hill’s Niv Elis and Cristina Marcos bring us up to speed here.
In a nutshell: This is an unequivocal setback for Biden and Democrats who supported the $15 minimum wage, though it may make the relief package easier to pass in the Senate. There is a range of ideas circulating among both parties, but it’s unlikely any will make it into the relief bill given how quickly Biden and Democrats want it to be signed.
LEADING THE DAY
Personal incomes rise 10 percent in January, inflation remains low: Personal incomes rose 10 percent and inflation remained low in January as another round of coronavirus aid hit U.S. households, according to data released Friday by the Commerce Department.
- Consumer spending rose by 2.4 percent and disposable income rose by 11.4 percent in January shortly after former President Trump and Congress approved a second round of stimulus checks and the renewal of expanded unemployment benefits.
- Personal incomes had increased just 0.6 percent in December after two straight months of declines.
- Americans also saved a whopping 20.5 percent of their disposable income in January, more than twice the pre-pandemic savings rate.
- Despite the injection of stimulus, inflation as measured by the personal consumption expenditures price index minus food and energy — the Federal Reserve’s preferred metric — was just 1.5 percent in the year since December 2019 and 0.3 percent in January.
What it means: The latest income and inflation data comes as the White House and Fed try to temper fears that further fiscal and monetary economic support could spur rampant price and wage increases as the U.S. nears the end of the pandemic. I break it down here.
ON TAP NEXT WEEK
Tuesday:
- The Senate Banking Committee holds a confirmation hearing on the nominations of Gary Gensler to be chairman of the Securities and Exchange Commission (SEC) and Rohit Chopra to be director of the Consumer Financial Protection Bureau (CFPB) at 10 a.m.
- The Senate Budget Committee holds a confirmation hearing on the nomination of Shalanda Young to be deputy director of the White House Office of Management and Budget (OMB) at 11 a.m.
Wednesday:
- The Center for Global Development hosts an event entitled “Political Economy of Tax Reforms in Developing Countries” at 10 a.m.
Thursday:
- The Senate Banking Committee holds a hearing entitled “Wall Street vs. Workers: How the Financial System Hurts Workers and Widens the Racial Wealth Gap” at 10:15 a.m.
- The Senate Homeland Security and Governmental Affairs Committee holds a confirmation hearing on the nominations of Shalanda Young to be deputy OMB director and Jason Miller to be OMB deputy director for management at 10:15 a.m.
NEXT WEEK’S NEWS, NOW: President Biden’s relief bill heads to the Senate, where we’ll be keeping a close eye on Democratic attempts to pass a minimum wage hike and expand the child tax credit.
We’ll also be on the lookout for news about Neera Tanden’s Office of Management and Budget nomination, which is all but officially toast. In other confirmation news, we’ll get our first sense of how much bipartisan support Biden’s picks for Consumer Financial Protection Bureau and Securities and Exchange Commission chiefs will get during their confirmation hearing Tuesday.
GOOD TO KNOW
- House Democrats are slightly modifying language in a provision on the child tax credit in their coronavirus relief package, in an effort to prevent the Senate parliamentarian from ruling against the provision.
- The Treasury Department on Friday rolled out new sanctions against Saudi officials after a government report was released detailing their involvement in the killing of U.S.-based journalist Jamal Khashoggi.
- The Federal Communications Commission approved guidelines Thursday for a new internet subsidy program that would provide low-income families with funds for their internet bills during the pandemic.
ODDS AND ENDS
- Plant-based meat alternative company Beyond Meat on Thursday announced two new multiyear partnerships with McDonald’s and Yum Brands fast-food chains KFC, Pizza Hut and Taco Bell.
- TikTok has agreed to pay $92 million in a proposed settlement for a lawsuit over allegations that the platform wrongfully collected users’ biometric information and private data.