Minimum wage hike faces more resistance

Bill, yoked to Iraq war budget, stands to be vetoed by President Bush; Senate Republicans want to revisit some provisions.

By Chris Zappone, staff writer

NEW YORK ( -- The Senate passed the $124 billion war supplemental budget bill Thursday in a 51-46 vote that moves the legislation, which includes a minimum wage hike and small business tax cuts, toward an all but certain veto from President Bush.

Senate Republicans have voiced disappointment over the size the small business tax break package and hinted that more amendments, and delays, could follow the expected presidential veto.


Sen. Charles Grassley, R-Iowa, ranking member of the Senate Finance Committee, urged that Congress hammer out a new agreement over tax breaks.

"Let's arrive at a pre-conference agreement on the House and Senate bills and go to conference and hash it out with a real conference," he said on the Senate floor before the vote.

Senate Minority Leader Mitch McConnell, R-Ky., said Tuesday that the supplemental bill, with minimum wage and small business tax breaks, would be determined after an expected presidential veto.

"We will have to do the whole process all over again," said McConnell. "Exactly what the second bill is going to look like at this point I couldn't tell you."

The minimum wage legislation, made possible in a deal announced Friday between key Democratic leaders in the House and Senate, gives $4.8 billion in tax breaks for small business.

Senate Republicans, including Grassley, want some dropped provisions, such as a simplification of the cash method of accounting and faster depreciation for new restaurant buildings, to be added back in.

If the minimum wage increase is not in the war supplemental bill Senate Republicans can delay and possibly kill it, the AFL-CIO's Bill Samuel said.

If the minimum wage is in the war supplemental bill then the only way they can kill it is by filibuster, which they wouldn't do, Samuel said.

"These are senators who were against raising the minimum wage," said Samuel, who believes it's not a frightening thought to Senate Republicans to kill the minimum wage for more tax cuts.

Not everyone is convinced that Senate Republicans would put up too much of a fight on the bill's expected next go-round through Congress.

Ross Eisenbrey, of the labor-backed Economic Policy Institute, said that most likely the House Republicans are more upset over the size of small business tax breaks than the Senate Republicans.

Eisenbrey, who follows the minimum wage issue on Capitol Hill, predicts there will be a compromise over the Iraq language, and the minimum wage and tax deal will eventually be signed.

Republicans would be hard-pressed to hold up a compromise for tax breaks because of the urgency of the funding of the troops in Iraq, according to Brigen Winters, of Groom Law Group, which follows tax policy in Congress.

"The Iraq situation is weighing over everything right now," he said.

In any case, President Bush has vowed to veto any bill that sets a timeline for the withdrawal of U.S. troops from Iraq, which the $124 billion war supplemental budget bill does.

Tax breaks for small business are a condition for the passage of the minimum wage bill by both Senate Republicans and President Bush.

The minimum wage bill provides for a gradual increase of the minimum wage from $5.15 an hour to $7.25 an hour over two years. The last time lawmakers increased the federal minimum wage was in 1997. A minimum wage hike would directly affect 5.6 million workers currently earning less than $7.25 an hour, according to the EPI.

The hike also could increase the wages of another 7.4 million workers who earn just above the current federal minimum, the group said. Currently, 28 states and Washington, D.C., already have a higher minimum wage. And a number of those states have indexed their minimum wage to inflation. Top of page