This report was written by David Sirota and Andrew Perez.
Earlier this month, progressive lawmakers refused to withhold their votes on must-pass COVID-19 stimulus legislation until the bill included a $15 minimum wage. A few weeks later, conservative Democratic lawmakers are now threatening to withhold their votes on must-pass infrastructure legislation until the bill includes large tax cuts for the wealthy.
The contrast in tactics spotlights a decisive asymmetry in congressional politics right now: The right wing of the Democratic Party is willing to play hardball on behalf of the affluent, to the point of threatening to take down one of President Joe Biden’s signature legislative initiatives, an infrastructure and climate plan he will detail on Wednesday.
By contrast, the left wing of the party has not yet been willing to play the same kind of hardball on behalf of the working class — and that refusal ultimately helped kill a promised wage hike in the recent pandemic aid bill and could similarly imperil other progressive priorities.
“Does Not Have A Position”
The tax issue revolves around federal write-offs for state and local taxes — colloquially called SALT deductions. Donald Trump’s 2017 tax bill limited such deductions to $10,000. The move was perceived as a mean-spirited shot at blue states, which often have higher state and local levies to fund more robust public services. But on the merits, the policy serves to limit tax deductions primarily for higher-income households.
As The Daily Poster reported back in January, congressional Democrats in states like New York and New Jersey have been pushing for a repeal of the SALT deduction caps. Biden declined to include the SALT cap repeal in the American Rescue Plan.
If the SALT cap was fully repealed, nearly all — 96 percent — of the tax benefits would flow to the top quintile of earners, and more than half of the benefits would go to the top 1 percent of earners, according to data from the Brookings Institution. Congress’s Joint Committee on Taxation found that the majority of the benefits of a SALT cap repeal would flow to households earning more than $1 million.
On its face, the notion of passing a massive tax cut for the wealthy — one that would reportedly cost $139 billion over two years — should sound wildly offensive after Democrats spent so much time over the past few months debating whether to cut off COVID survival checks to individuals who earned more than $50,000 in 2019, because some conservative Democrats were allegedly concerned that cash might go to some people who don’t need it.
But amazingly, despite the regressivity of eliminating the SALT deductions — and even though there are progressive alternatives to fix some of the purported problems with the SALT cap — progressive lawmakers are split on the idea of a repeal.
Congressional Progressive Caucus chair Pramila Jayapal, D-Wash., said Tuesday her caucus “does not have a position” on the tax breaks, according to Aida Chavez, a reporter for The Nation.
Some progressives, such as New York Reps. Mondaire Jones and Jamaal Bowman, support the repeal, in solidarity with other lawmakers in their states. But New York Rep. Alexandria Ocasio-Cortez voted against repealing the SALT caps in late 2019, citing data showing that it would primarily enrich the wealthy — and she continues to oppose a repeal.
Now, three conservative Democrats — Reps. Bill Pascrell and Josh Gottheimer of New Jersey and New York Rep. Tom Suozzi — are saying they will vote against any tax-related legislation that does not eliminate the caps, according to Washington Post reporter Jeff Stein.
Their position could threaten Biden’s ambitious new plan to spend $2 trillion to improve the nation’s roads, bridges, rail lines and utilities. The White House intends to fund the program through new tax hikes, including raising the corporate tax rate from 21 percent to 28 percent for the 15 years. In a narrowly divided House — currently split 219-211 — those three Democratic votes could prove decisive.
“No SALT, no deal,” Suozzi said in a press release Tuesday. “I am not going to support any change in the tax code unless there is a restoration of the SALT deduction. The cap on the SALT deduction has been a body blow to New York and middle-class families in New York.”
Actually Wielding Power
Whatever side of the issue you may be on, one thing is clear: This trio of lawmakers is leveraging their position and demonstrating how Congress actually works.
All the press releases, tweets, cable TV appearances and fancy Washington titles can trick the casual observer into thinking rank-and-file lawmakers have all sorts of levers of power — but in reality, most members of Congress have very little real-world legislative power other than their vote. The more narrowly divided the House, the more power each individual lawmaker has, because congressional leaders need their votes to pass legislation.
In this situation, three relatively obscure, low-profile legislators who are not major social media brands are utilizing that power to defend the interests of the wealthy. Sure, it’s grotesque — but in terms of pure power politics, they are taking a stand and seizing a spot at the negotiating table not by merely tweeting about it or making vague promises to “push” for something, but by wielding their voting power to try to force the Biden White House and the congressional leadership to deal with the issue in a bill the party sees as a necessity.
This is the opposite of what congressional progressives did on the minimum wage during the debate over the American rescue plan.
Progressive lawmakers sent a letter asking Vice President Kamala Harris to ignore the Senate parliamentarian’s advice and allow a $15 minimum wage to stay in the bill. But they never drew a line in the sand and said they would be — or would even consider — withholding their votes on the bill if a $15 minimum wage was excluded.
And because they didn’t wield power in the way conservative Democrats are wielding power on SALT deductions, the Biden White House knew these progressives could be ignored and the $15 minimum wage was eliminated from the legislation.
If that wasn’t bad enough, after the $15 minimum wage was killed, Jayapal gave cover to Biden by insisting after the fact that he is still “committed” to the wage hike, even though he didn’t lift a finger to make it happen when it had its best chance under Senate reconciliation rules.
How To Be At The Table, Rather Than On The Menu
Last week, progressive lawmakers got a special, feel-good meeting with White House chief of staff Ron Klain to talk about the $15 minimum wage. While he reportedly reiterated Biden’s commitment to a wage hike, there has been no indication out of Washington yet that Democrats have a real plan to pass such a measure.
The only hint of a plan to raise the wage so far is not encouraging. The Intercept reported Monday that Senate Majority Chuck Schumer is considering attaching the $15 minimum wage measure to Biden’s new infrastructure package — legislation that will likely be passed under the budget reconciliation process by a simple majority vote, as the American Rescue Plan was.
However, just last month, Senate parliamentarian Elizabeth MacDonough said that in her opinion, a $15 minimum wage increase did not comply with reconciliation rules. Instead of ignoring that opinion or simply replacing her, Senate Democrats took the measure out of their bill. Then, eight Democrats joined Republicans to reject an amendment to add the minimum wage measure back to the bill, helping create a new precedent excluding minimum wage hikes from reconciliation legislation.
Schumer now insists he sees some “glimmer of hope that the parliamentarian would rule differently this time: The new legislation is focused on infrastructure, and setting wages is directly related to the budget impact of any infrastructure spending,” according to The Intercept.
But unless the whole Democratic caucus in the Senate is now committed to supporting the overall infrastructure package with a wage hike — no matter what the parliamentarian says — Schumer’s idea should be considered a way to make it look like Democrats are fighting to pass a $15 minimum wage without ever actually using their power to make it happen.
As we wrote last week, the best chance Democrats have to pass a $15 minimum wage starts with eliminating the filibuster. Short of that, progressive lawmakers can talk all they want about how important it is to finally raise the minimum wage, but until they start threatening to vote down must-pass legislation — or actively doing so — no one will take their demands seriously.
This isn’t rocket science. This is negotiation 101. Whether a labor-management tussle, a business pact or a legislative debate, if you aren’t willing to condition support for a final deal on a set of clear demands, then your demands will likely be ignored.
Conservative Democrats fighting for tax cuts for their wealthy donors seem to understand this. Progressive Democrats who say they are for a $15 minimum wage but never made firm demands either did not understand this, or were willing to sacrifice their stated priority for the good stuff in the final bill.
Maybe that latter decision is justifiable, maybe not. But until progressives are willing to play the same kind of hardball as their conservative Democratic opponents, they should expect to continue being on the menu, not at the table — and the $15 minimum wage will probably remain in limbo.
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