[US] Republicans Tie Minimum Wage to Tax Cut

from Forbes

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, 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.