Budget office: $15 wage would reduce poverty, increase debt

WASHINGTON (AP) — Increasing the minimum wage to $15 an hour would reduce the number of Americans living in poverty and boost wages for millions of Americans while adding to the federal debt and joblessness, a new report from the Congressional Budget Office projects.

The federal deficit would increase by about $54 billion over 10 years under a Democratic proposal to gradually increase the federal minimum wage to $15, largely because the higher wages paid to workers, such as those caring for the elderly, would contribute to an increase in federal spending, the estimate found.

Democrats are pushing to include the higher minimum wage as part of their $1.9 trillion COVID-19 relief plan. House committees this week will begin crafting the legislation along the lines that President Joe Biden has requested, but it's unclear whether the minimum wage proposal will make it into the final product. The bill is expected to include another round of direct payments to Americans, an expansion of the child tax credit and aid to states and local governments.

The decision on the minimum wage is a key early test for Biden as he seeks to build public support for his proposal and navigate differences within his own party about how far the COVID-19 legislation should go. Voices on the left like Sen. Bernie Sanders, I-Vt., the author of the wage legislation, want Democrats to fight now for the pay increase, but some moderates are wary, fearing the impact on small businesses during the pandemic.

The report from the Congressional Budget Office cites several positive and negative effects from raising the minimum wage. On the positive, the number of people living in poverty would fall by about 900,000 once the $15 wage is fully in place in 2025. On the negative, the number of people working would decline by about 1.4 million.

Rep. Bobby...