Minimum wage hike coming - but maybe with strings

NEW YORK (CNNMoney.com) -- The Democrats are taking control of Congress and one of their key agenda items in the "first 100 hours" is boosting the minimum wage. But while a passage in the House is near-certain, passage in the Senate and ultimately the White House may require concessions in the form of tax cuts and regulation-reduction.

Incoming House Majority Leader Steny Hoyer (D - Md.) said Wednesday that the matter is slated to be taken up Jan. 10. A House bill would likely seek to raise the minimum hourly pay to $7.25 in steps over a two-year period. It has been at $5.15 since 1997.

The change would directly affect 5.6 million workers currently earning minimum wage, according to the labor-backed Economic Policy Institute. The hike could also increase the wages of another 9.2 million who earn just above the minimum.

Workers in 26 states already have a higher minimum wage. A number of those states have automatic increases for inflation.

In the House of Representatives, where the Democrats hold healthy majority, the passage of such a bill is all but certain. But in the Senate, the Democrats have a razor-thin advantage. And President Bush said in December that while he would work with Democrats on the issue, he'd also like to see more tax cuts and other breaks for small businesses.

"Bush has said this is an area where we can work together," said the Economic Policy Institute's Jared Bernstein. "By 'working together' he means, 'I'll sign if it includes tax cuts.'"

Incoming Senate Minority Leader Mitch McConnell (R - Ky.) has echoed Bush's position. "An increase in the minimum wage needs to help both the workers who earn it and the small businesses that pay it," McConnell said in a statement in December. "That's why it just makes sense to pair the increased wage with tax and regulatory relief to help the small businesses that provide most of the jobs in this country stay competitive and employ even more people."

Bernstein has urged a "clean" bill get passed in Congress, with no amendments. The last minimum wage increase was paired with tax cuts, according to Bernstein, but that hasn't been the case historically.

John Fortier, of the right-leaning American Enterprise Institute, expects the Republicans to get some amendments that will "sweeten" the legislation for them but he notes the GOP isn't in near the bargaining position it had been in the previous session of Congress.

Having to pick their fights more carefully, [the Republicans] "won't be willing to go to mat against [the minimum wage]," Fortier said.

Greg Valliere of Stanford Washington Research Group, a political intelligence firm that caters to corporate clients, agrees.

"This is about as flexible as I've ever seen Bush on domestic legislation," said Valliere. "It won't take much to please the White House on this. They want to get it done," said Valliere, who likened it to an albatross around their neck.

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