The White House is weighing whether to engage in talks with Republicans on a minimum wage hike once Congress passes its Covid relief bill, two sources with knowledge of their strategic thinking say.

White House aides said they believe there’s room to bring Republicans into the fold because raising the minimum wage is popular across ideological grounds. They pointed to the recent $15-an-hour wage increase passed in Florida, a state that voted for Donald Trump, as evidence that the issue has widespread support.

In a sign that the White House is looking to broaden the coalition behind a wage hike, administration officials reached out to trade groups last week to gauge their willingness to support legislation, according to two people familiar with the matter.

Negotiations with Republicans would be another step entirely. And it would likely frustrate progressives and raise alarms among labor and advocacy groups who are looking to Biden to make good on his promise to deliver a $15-an-hour minimum wage. Progressives argue that a phased-in $15 floor over five years is already a compromise and would likely oppose any deal that would go significantly lower.

"They don't want to blow up the world politically and pay a huge political cost, but if the politics aligned for a smaller increase, Joe Biden generally wants to get deals done,” said a source with knowledge of the administration’s thinking. The White House is “not doctrinaire on policy grounds about what it is they sign” the source added.

Cedric Richmond, a White House senior adviser, would only say that the administration is “exploring all options,” and that internal deliberations were still in the preliminary stages.

“It’s still early in the game,” Richmond said. “This is not the point where you lay your whole strategy out for the world to see.”

The search for a path to passing a wage hike took on renewed importance this week after the Senate parliamentarian ruled that Democrats and the White House could not do so in the Covid relief bill being considered under reconciliation rules. Democrats are considering trying to pass the measure through reconciliation again when Congress considers its second such bill in the months ahead. But that would face similar hurdles, not least of which is that several Senate Democrats have said they won’t support a $15-an-hour hike.

Moving a bill through regular order would not involve the parliamentarian. But it would require 60 Senate votes to pass — meaning every Democrat and at least 10 Republicans would have to sign on. And that, said former Senate Majority Leader Harry Reid, a key Biden ally, is where a deal may have to be struck.

“The minimum wage will be raised, it’s just a question of how much,” Reid said. “The House may come up with $15 an hour, but I think when it comes to the Senate one way or another it will be cut back.”

The White House has repeatedly insisted that Biden remains committed to a $15-an-hour minimum wage. And in a meeting with Senate Democrats on Tuesday, the president reiterated his position: “We need to get to $15,” he said. “I fully support $15.”

But the White House has, in the past, telegraphed that a final negotiation could mean they don’t hit that mark. And within Biden’s orbit, there is not a strong desire to use the issue as a battering ram against the opposition.

“There is zero percent chance the White House is going to shove the minimum wage down Republicans’ throats,” a source close to the White House said.

On Wednesday, White House press secretary Jen Psaki repeated Biden’s commitment to a $15-an-hour wage. But when asked if the president would negotiate with Republicans, she said, “he’s happy to hear any ideas but I’m not going to negotiate from here obviously.”

Aides insist that talks with Republicans don’t necessarily mean moving off of $15. There are other dimensions that could be negotiated, including extending the period of time over which the wage is raised, redefining which companies are impacted, and including other provisions to help out small businesses that may have to raise wages for their employees.

Republicans have shown some comfort with wage hikes, though not nearly to the same degree as Democrats. Sens. Mitt Romney (R-Utah.) and Tom Cotton (R-Ark.) proposed a phased-in minimum wage increase to $10-an-hour coupled with an e-verify mandate, requiring proof that employees are legally able to work in the country.

There so far has been no contact between Romney or Cotton and the White House on minimum wage, according to two sources familiar with the matter. A Senate GOP aide said there are Republicans who are willing to have conversations about the wage floor, but that the e-verify mandate is likely a sticking point.

Sara Nelson, president of the Association of Flight Attendants-CWA, argued that Biden could use the support he’s built around the Covid relief package to push lawmakers to support a $15 wage floor: He has “got all this support back in their home districts and states.” Nelson expected a $15 wage hike to be part of discussions around jobs and infrastructure package that the White House is expected to focus on in the coming months. And she argued that Biden should pressure Republicans by building support for a wage hike with governors and mayors.

“This is something that Biden understands,” said Nelson, “that you can't write people off because when you write people off, you are excusing them and you're not holding them accountable."

Rep. Alexandria Ocasio-Cortez condemned "conservative" Democratic senators who pushed their party to limit eligibility for a new set of $1,400 stimulus checks under President Joe Biden's relief package. 

Biden has endorsed the proposal for quicker phaseouts for the $1,400 stimulus checks to prevent people who earn higher incomes from getting a third direct payment, two Democratic aides told Insider on Wednesday. The checks form a key part of the $1.9 trillion relief legislation the Senate will take up.

"Conservative Dems have fought so the Biden admin sends fewer & less generous relief checks than the Trump admin did," Ocasio-Cortez tweeted on Wednesday afternoon. "It's a move that makes little-to-no political or economic sense and targets an element of relief that is most tangibly felt by everyday people. An own-goal." 

A few other progressive House Democrats also voiced frustration over the stimulus check negotiation. The Senate may cast an initial vote on the $1.9 trillion relief package on Wednesday. 

Rep. Pramila Jayapal, chair of the House Progressive Caucus, said she wasn't pleased with the smaller individual checks. And Rep. Mark Pocan called the compromise deal "Senate silliness." 

"I don't like that this is being narrowed," Jayapal said Wednesday. "I feel like the survival checks are the easiest, simplest, most popular, populist, proposal."

But many Senate Democrats see the move as a necessary compromise. 

"I think it's an appropriate way of bringing this to a successful conclusion," Sen. Michael Bennet of Colorado told reporters on Wednesday.

The House approved the relief bill on Saturday with higher eligibility caps for individuals and couples, maintaining the same income thresholds from earlier pandemic aid packages. 

But moderate Senate Democrats pushed Biden to narrow eligibility in recent days.

Individuals making $75,000 and under are set to receive the full check, but those earning $80,000 and above would no longer qualify. Couples earning $150,000 and below would get the full payment, yet those earning $160,000 and above would no longer qualify.

A preliminary analysis from the left-leaning Institute of Taxation and Economic Policy indicates roughly 16 million fewer Americans do not qualify for a third check under the new design of the plan, compared to the House version of the bill.

The Nasdaq ended sharply lower on Wednesday after investors sold high-flying technology shares and pivoted to sectors viewed as more likely to benefit from an economic recovery on the back of fiscal stimulus and vaccination programs.

 

Microsoft Corp, Apple Inc, and Amazon.com Inc dropped more than 2%, weighing more than any other stocks on the S&P 500.

The S&P 500 financial and industrial sector indexes reached intra-day record highs. Most other S&P 500 sectors declined.

“Today is the perfect encapsulation of the big theme we’ve been seeing in the past couple of months: The vaccine rollout is going well and the economy improving, and that is sending yields and rate expectations higher, which is hurting growth stocks,” said Baird investment strategist Ross Mayfield, in Louisville, Kentucky.

The Dow Jones Industrial Average fell 0.39% to end at 31,270.09 points, while the S&P 500 lost 1.31% to 3,819.72.

The Nasdaq Composite dropped 2.7% to 12,997.75. That left it at its lowest since early January and reduced its gain in 2021 to less than 1%.

The U.S. economic recovery continued at a modest pace over the first weeks of this year, with businesses optimistic about the months to come and demand housing “robust,” but only slow improvement in the job market, the Federal Reserve reported.

While the vaccine distribution is expected to help the economy, data showed U.S. private employers hired fewer workers than expected in February, suggesting the labor market was struggling to regain speed.

Another report showed U.S. services industry activity unexpectedly slowed in February amid winter storms, while a measure of prices paid by companies for inputs surged to the highest level in nearly 12-1/2 years.

The U.S. 10-year Treasury yield ticked up to 1.47%, pressuring areas of the market with high valuations. It was still off last week’s peak of above 1.61% that roiled stock markets as investors bet on rising inflation.

Rising interest rates disproportionately hurt high-growth tech companies because investors value them based on earnings expected years into the future, and high-interest rates hurt the value of future earnings more than the value of earnings made in the short term.

“There is a definite headwind for equity markets if yields go above the 1.5% level with most investors keeping an eye on the pace of yield growth,” said Michael Stritch, chief investment officer at BMO Wealth Management.

President Joe Biden’s proposed $1.9 trillion coronavirus relief bill would phase out $1,400 payments to high-income Americans in a compromise with moderate Democratic senators, according to lawmakers and media reports.

FILE PHOTO: FILE PHOTO: A view of the exterior of the Nasdaq market site in the Manhattan borough of New York City, U.S., October 24, 2016. REUTERS/Shannon Stapleton/File Photo

Exxon Mobil Corp rose 0.8% after the oil major unveiled plans to grow dividends and curb spending with projections that were less bold than previous years.

Declining issues outnumbered advancing ones on the NYSE by a 1.31-to-1 ratio; on Nasdaq, a 1.95-to-1 ratio favored decliners.

The S&P 500 posted 62 new 52-week highs and no new lows; the Nasdaq Composite recorded 284 new highs and 68 new lows.

Volume on U.S. exchanges was 14 billion shares, compared with the 14.9 billion average for the full session over the last 20 trading days.