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Congress Ties Minimum Wage to Tax Cut Bill

By Andrew Taylor  Posted by ron smith (about the submitter)     Permalink
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WASHINGTON - Congress would pass an increase in the minimum wage
before leaving Washington for vacation, but only as part of a
package rolling back taxes on the heirs of multimillionaires, a
Senate leadership aide said Friday.

The GOP package would also contain a popular package of expiring tax
breaks, including a research and development credit for businesses,
and deductions for college tuition and state sales taxes.

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The wage would increase from $5.15 to $7.25 per hour, phased in over
the next two years, the aide said.

The maneuver is aimed at defusing the wage hike as a campaign issue
for Democrats while using its popularity to spur enactment of the
Republican Party's long-sought goal of permanently cutting taxes on
millionaires' estates.

But it seemed certain to provoke outrage from Democrats clamoring
for a measure devoted solely to raising the minimum wage.

"Its political blackmail to say the only way that minimum wage
workers can get a raise is to give a tax giveaways to the wealthiest
Americans," said Sen. Edward Kennedy (news, bio, voting record), D-
Mass. "Members of Congress raised their own pay - no strings
attached. Surely, common decency suggests that minimum wage workers
deserve the same respect."

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"It's outrageous the Republican Congress can't simply help poor
people without doing something for their wealthy contributors," said
Rep. Tim Ryan (news, bio, voting record), D-Ohio.

House lawmakers were to discuss the package at an early afternoon
session, while the Senate GOP aide professed confidence the bill
could advance through the chamber next week.

The aide asked not to be identified publicly because of the ongoing
closed strategy sessions on the bill.

"It's the one chance for Democrats who want to get a minimum wage
increase," the aide said.

The move comes after almost 50 rank-and-file Republican lawmakers
pressed House leaders - who strongly oppose the wage hike and have
thus far prevented a vote - to schedule the measure for debate.
Democrats have been hammering away on the wage hike issue and have
public opinion behind them

"We weren't going to be denied," said Rep. Steve LaTourette, R-Ohio,
a leader in the effort. "How can you defend $5.15 an hour in today's
economy?"

It was a decade ago, during the hotly contested campaign year of
1996, that Congress voted to increase the minimum wage. A person
working 40 hours per week at minimum wage makes $10,700, which is
below the poverty line for workers with families.

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In advancing the tax plan, GOP leaders excluded a measure popular
with small businesses that would make it easier for small businesses
and the self-employed to band together and buy health insurance
plans for employees at a lower cost.

That idea was blasted as a "poison pill" by Democrats and labor
unions. The small business health insurance bill exempts
new "association health plans" from state regulations requiring
insurers to cover treatments such as mental health and maternity
care. And opponents fear they would offer inferior prescription drug
benefits.

Democrats have made increasing the wage a pillar of their campaign
platform and are pushing to raise the wage to $7.25 per hour over
two years. In June, the Republican-controlled Senate refused to
raise the minimum wage, rejecting a proposal from Democrats.

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