Top Senate Democrats are pulling a plan to penalize large corporations that don’t have a $15 per hour minimum wage, two sources confirmed to The Hill.  

Senate Finance Committee Chairman Ron WydenRonald (Ron) Lee WydenHouse Democrats pass sweeping .9T COVID-19 relief bill with minimum wage hike House set for tight vote on COVID-19 relief package On The Money: Democrats scramble to save minimum wage hike | Personal incomes rise, inflation stays low after stimulus burst MORE (D-Ore.) and Budget Chairman Bernie SandersBernie SandersHouse Democrats pass sweeping .9T COVID-19 relief bill with minimum wage hike House set for tight vote on COVID-19 relief package On The Money: Democrats scramble to save minimum wage hike | Personal incomes rise, inflation stays low after stimulus burst MORE (I-Vt.) floated their “Plan B” after the parliamentarian ruled that a straight increase of the minimum wage to $15 per hour didn’t comply with arcane budget rules that govern what can be included in the coronavirus relief bill bill.  

Under the back-up plan, outlined on Friday by Wyden, large corporations would get a 5 percent tax penalty if they paid workers less than a certain amount, with the amount of the penalty increasing over time. Democrats were also looking at giving tax incentives to small businesses to raise their wages. 

But Democrats have dropped the effort, with one source familiar telling The Hill that there were concerns that working out the details could slow down the overall coronavirus bill. Democrats want to get the bill to President BidenJoe BidenNoem touts South Dakota coronavirus response, knocks lockdowns in CPAC speech On The Trail: Cuomo and Newsom — a story of two embattled governors Biden celebrates vaccine approval but warns ‘current improvement could reverse’ MORE‘s desk before unemployment benefits expire in a matter of weeks. 

“We worked through the weekend and it became clear that finalizing ‘plan B’ with the caucus would delay passage and risk going over the jobless benefits cliff on March 14,” the source said.  

A source close to Sanders confirmed that he was also not moving forward with offering the idea as an amendment to the coronavirus bill, which he initially pledged to do on Thursday night. 

“He is dedicated to raising the minimum age to $15 an hour, and is working on strategies to get it done,” the source added. 

The decision, which was first reported by The Washington Post, is the latest setback for progressives, who were hoping to use the coronavirus relief bill to raise the minimum wage to $15 per hour.

The House passed the sweeping $1.9 trillion legislation over the weekend with the minimum wage hike included. But because of the parliamentarian’s ruling — and neither the White House nor key Democrats willing to ignore that advice — the language is expected to be stripped out this week when the Senate takes up the COVID-19 bill.  

Even if the parliamentarian had ruled for the $15 per hour minimum wage, it would likely have faced changes in the Senate because the proposal does not have the support of 50 Democratic senators. Sen. Joe ManchinJoseph (Joe) ManchinProgressives fume over Senate setbacks Politics, not racism or sexism, explain opposition to Biden Cabinet nominees House Democrats pass sweeping .9T COVID-19 relief bill with minimum wage hike MORE (D-W.Va.) and Kyrsten Sinema (D-Ariz.) have voiced opposition and there were ongoing conversations among a broader group about things like tipped workers and how to structure in the increase. 

Neither Manchin nor Sinema had publicly weighed in on the back-up plan, but the White House gave the “Plan B” a publicly cool reception. 

“Our focus will be on the urgent priority of getting this package passed and delivering the relief that is so desperately needed — $1,400 rescue checks for most Americans, funding to get this virus under control, aid to get our schools reopened and desperately needed help for the people who have been hardest hit by this crisis,” a spokesperson said on Friday.