Republicans tie minimum wage to tax cut (Will LIBS vote against it?)

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.

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.

"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.

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.

It's long been clear that there is wide support for the wage increase in the House, but Republican leaders have a general policy of bringing legislation to the floor only if it has support from a majority of Republicans. Perhaps one-fourth of House Republicans support the wage increase.

Inflation has eroded the minimum wage's buying power to the lowest level in about 50 years. Yet lawmakers have won cost-of-living wage increases totaling about $35,000 for themselves over that time.

Lawmakers fear being pounded with 30-second campaign ads over the August recess that would tie Congress' upcoming $3,300 pay increase with Republicans' refusal to raise the minimum wage.

Copyright © 2006 The Associated Press. All rights reserved. The information contained in the AP News report may not be published, broadcast, rewritten or redistributed without the prior written authority of The Associated Press.

I'm sure it's just a coincidence, but the Oprah show today (which I watch on the treadmill) was about raising the federal minimum wage. Two things stuck out for me.

First, they had Morgan Spurlock on (of SuperSize me fame), who did a show on living for 30 days on minimum wage. He did a lousy job of it, buying bottled water, sodas, snacks and whatever else a guy who is used to buying whatever he wants walking down the street in NYC would buy. Shockingly, that doesn't work when you're working for low wages. He was NOT, however, working for federal minimum wage.

Indeed, (and this is the second thing that struck me) in the whole show, which featured people from all over the country, they didn't have anyone who was actualy making $5.15 an hour. I guess that's an easy point to rally people around, raise the minimum from $5.15, but for some one who makes $8.50 an hour and lives in poverty, raising the minimum wage to $7.00 isn't going to change a thing.

Oh yeah, Morgan Spurlock also admitted that until he did the 30-days-at-minimum-wage experiment, he didn't provide health insurance for any of his employees. (to his credit, he decided to, afterwards). But then he had the nerve at some point to say "it's the corporations who don't want to raise the minimum wage." But you know what, Spurlock? Most big companies at least provide health insurance for their employees. Unlike (until recently) you.

It is definitely a coincidence since this show is a repeat from earlier this year. I had my DVR set to record it, but, since I've already seen it once, I am not going to suffer through it again. I usually love Oprah, but I hate these shows when she is trying to make a political point. Thankfully, she doesn't do it that often.

I guess it is just your point of view of what is rich or not but considering that - 1.3% of all estates are $1 million dollars or more. That says to me were talking rich people.

I am not sure what you define as rich but when your wealth exceeds 98.7% or more of the entire US population you look wealthy to most people.

It certainly appears rich, but remember that as we move to 401(k)s, which can be passed on, from defined benefit pension plans, many people--at least those with the foresight to plan well--will have larger estates ($1 million is a decent-sized, but not huge, 401(k)). Also consider that with property inflation in many parts of the country, ordinary houses can fetch $500,000+.

Together, these mean we will probably see far more estates in the $1 million+ range, even from people with middle-class incomes.

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