Let Justice Roll

Minimum wage making minimum progress through Congress
By Marilyn Geewax
Cox News Service, 3/15/07

WASHINGTON - In January, the House voted overwhelmingly to raise the federal minimum wage to $7.25 over two years, and the Senate followed suit in February. President Bush said he would sign wage-hike legislation.
So where are the fatter paychecks for low-wage workers?

Nowhere. That's because the legislation has gotten bogged down by disputes over amendments involving business taxes.

Lawmakers "don't have any idea what it's like out here," said Roscoe Dees, who earns $6.85 an hour working for Mature Services Inc. in Cincinnati. "They don't really care about the common worker."

If Dees' pay were to rise to $7.25, he'd make $64 more each month. "That would help me a great deal," he said in a phone interview Thursday. "When I pay all of my bills, I don't have anything left."

While most lawmakers agree the $5.15 minimum wage is due for an increase after a decade of stagnation, the legislation has become a classic example of congressional dysfunction.

Democrats who sponsored the wage hike have not been able to close the deal precisely because the legislation is so popular. Rather than let it sail through Congress, Republicans have used the bill as a vehicle for a package of tax cuts to help small businesses.

Key members of the House and Senate have very different ideas about which tax cuts and how many of them to include, and no one wants to back down.

The situation has become so odd that this week, the House Ways and Means Committee held a hearing to examine the Senate's legislation - a move seemingly intended to embarrass the Senate Finance Committee for not holding such a hearing itself. Both committees are run by Democrats.

Ways and Means Chairman Charles Rangel, D-N.Y., said he wanted his committee to better understand the Senate's provisions, but all of the invited witnesses were critical of the Senate bill.

The top Republican on the Senate Finance Committee, Charles Grassley of Iowa, responded to Rangel's hearing by criticizing Democrats for not cooperating with each other. "The House and Senate Democratic leaders not only aren't singing off the same sheet, but aren't even in the same choir," he said in a statement.

The minimum wage legislation's bumpy ride began early this year when Democrats took control of the House after promising to pass several key bills in the first 100 legislative hours. The wage bill shot through on a 315-116 vote on Jan. 10.

But when the Senate took up the legislation, the situation became far more complicated. Because Democrats lack the 60 votes needed there to overcome a filibuster, they had to compromise with Republicans who insisted on attaching an $8.3 billion package of tax cuts aimed at small businesses.

House Democrats balked at the idea of adding tax cuts but finally relented on Feb. 16, voting 360-45 in favor of a package that would cut taxes only by $1.3 billion over 10 years.

In theory, House and Senate negotiators should have met to hammer out a final compromise. Senate Finance Committee Chairman Max Baucus, D-Mont., said in a statement that while there were big differences between the bills, he was "confident they'll be worked out."

But a compromise has not emerged.

There are areas of agreement: Both House and Senate bills include new tax rules for business expenses, as well as extensions of tax credits for companies hiring workers coming off welfare.

But they differ in several major ways. For example, only the House version would give restaurant owners a break on how they calculate deductions for Social Security taxes paid on tips.

And while the Senate bill gives businesses faster tax breaks for the depreciation of equipment, it also contains several revenue-raisers that many big businesses dislike, such as restrictions on deferred compensation for corporate executives and the elimination of deductions for payments in lawsuits.

Meanwhile, House Speaker Nancy Pelosi, D-Calif., is trying yet another maneuver: she incorporated the wage hike and $1.3 billion in tax breaks in a supplemental spending bill for the Iraq war, considered "must pass" legislation. On Thursday, the House Appropriations Committee approved the $124.1 billion legislation, which will get a floor vote next week.

"We're pretty frustrated," said Katy Heins, associate coordinator of Let Justice Roll, a coalition of faith and community groups favoring a wage hike. "It's not what we learned in our civics class about how Congress is supposed to work."

On the Web:
Let Justice Roll: www.letjusticeroll.org
Marilyn Geewax's e-mail address is marilyng@coxnews.com

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