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US Senate Rejects Effort To Gut Minimum Wage Bill January 24, 2007

Posted by notapundit in Congress, Politics, US News.

WASHINGTON (Dow Jones)–The U.S. Senate rejected 69 to 28 Wednesday night an effort by conservative Republicans to gut a federal minimum wage increase being debated this week.

The vote came on an amendment by Sen. Wayne Allard, R-Colo., that would have allowed states to ignore the increase. The bill proposes raising the minimum wage to $7.25 per hour from $5.15 per hour.

“Every state has its own microeconomy and voters and legislators in those areas should decide what works best,” Allard said in arguing for his proposal.

The failure of Allard’s amendment comes after another bellwether vote in which liberal Democrats failed to block efforts to amend the bill with an $8 billion package of tax breaks for businesses.

A majority joined Democrats in the 54-43 vote, but Democrats needed 60 of 100 votes to prevail. The tax amendment hasn’t yet been approved, but if Democrats had succeeded in the procedural move, the amendment couldn’t have been brought up.

In the wake of the votes, Senate Finance Committee Chairman Max Baucus, D-Mont., predicted the Senate would complete work on the bill, including the $8 billion package of tax breaks, some time next week.

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 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 John Godfrey and Rob Wells, Dow Jones Newswires


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