Senator Baucus: US Minimum Wage, Tax Break Vote Next Week January 24, 2007Posted by notapundit in Congress, Politics, US News.
WASHINGTON (Dow Jones)–The U.S. Senate is expected to complete work on minimum wage legislation with an $8 billion package of tax breaks some time next week, Sen. Max Baucus, D-Mont., said Wednesday.
Baucus spoke after the Senate rejected an effort by liberals to pass a minimum wage hike without any tax breaks. The vote on a procedural measure was 54-43, short of the 60 votes necessary to limit debate and consider a stripped down minimum wage hike.
Sen. Charles Grassley, R-Iowa, told reporters the vote was a clear message to House Democrats that a minimum wage boost must be accompanied by small-business tax breaks. House Democrats, such as Majority Leader Steny Hoyer, D-Md., have criticized tax benefits for restaurants and stores as unnecessary.
Baucus said he expects a “reasonable number of amendments” to the minimum wage and tax measure. He minimized differences between the House and Senate on the issue. “Both bodies, I think, want to keep the eye on the ball and get a minimum wage passed,” Baucus said.
The bill would increase the federal minimum wage to $7.25 an hour from $5.15. The House earlier this month approved the minimum-wage increase by a 315-116 margin, but that bill didn’t include small-business tax breaks.
Baucus’s tax package would extend for five years the “Work Opportunity Tax Credit” designed to offset the cost of hiring disadvantaged workers, such as disabled veterans. This tax break, first enacted during the Clinton administration, would reduce federal tax revenues by $3.6 billion over 10 years.
The bill also would allow retailers and restaurant owners to more quickly write off the costs of remodeling leased buildings.
To offset the cost of these provisions, Baucus’s plan contains several significant corporate tax provisions aimed at halting tax abuses. One measure would limit certain deferred compensation practices, which companies use to spread out the timing of bonuses and other payments to executives.
By Rob Wells, Dow Jones Newswires