Senate poised to pass minimum wage bill

[Ron Burgundy]

AP - As the Senate moved toward passage of the first increase in the minimum wage in 10 years, Democrats in the House and Senate were trying to reconcile differences between their two bills.

After more than a week of debate, senators planned to vote Thursday on raising the federal wage floor from $5.15 to $7.25 an hour over two years. The legislation also contains $8.3 billion in short-term tax benefits for small businesses.

The House bill, which passed swiftly last month, contained no tax breaks, complicating its chances for getting President Bush's signature.

House Democrats have argued that the minimum wage should pass with no strings attached and point out that constitutional precedents require tax legislation to originate in the House.

But Senate Democrats insist that without tax breaks and other incentives for small business, they would not win enough Republican support to get the bill to a final vote and on to the White House.

Rep. George Miller (news, bio, voting record), D-Calif., a close ally of House Speaker Nancy Pelosi (news, bio, voting record), said he has talked to key Democrats in the House and Senate to make sure the differences in the bills don't derail the effort to raise the minimum wage.

"We just have to sort it out," Miller said. "I think it can be done. Just don't ask me how."

The legislation poses one of the first governing tests for Democrats, particularly for Pelosi. The speaker must find common ground between the political realities in the Senate and the insistence by Rep. Charles Rangel (news, bio, voting record), D-N.Y., the chairman of the tax-writing House Ways and Means Committee, that the Senate cannot take the lead on taxes.

Senate Democrats have said that once the Senate version passes, the bill will be set aside while both sides negotiate a solution. If the Senate moves to go to a House-Senate conference to resolve the two bills, Rangel reserves the right to send the Senate bill back to the Senate.

Ultimately, Rangel could draft his own tax bill that could act as a vehicle for the Senate measure, but that could take time, denying the new Democratic majority in Congress a quick legislative victory.

Democrats have tried to blame Republicans for the potential impasse, arguing that without their demand for small business tax breaks the legislation would become law easily. But combining minimum wage hikes with tax breaks is not unusual. The last increase, passed in 1997, also contained tax breaks.

The tax breaks contained in this bill are significantly smaller than what Republicans demanded last year, when they combined a minimum wage increase with a reduction in estate taxes that could have reduced tax revenue by $268 billion over 10 years.

The current Senate bill would cost $8.3 billion in lost revenue over 10 years, but that amount is paid for in part by closing some tax loopholes and by capping deferred-compensation for top executives.

source: http://news.yahoo.com/s/ap/20070201/ap_on_go_co/minimum_wage [link]