by user Layla
Crossposted from The HILL Chronicles
The Senate voted overwhelmingly today to increase the federal minimum wage by $2.10 to $7.25 an hour over two years, but packaged the increase with controversial tax cuts for small businesses and higher taxes for many $1 million-plus executives. The increase in the minimum, the first in a decade, was approved by a 94-3 vote, capping a nine-day debate over how to balance the wage hike with the needs of businesses that employ low-wage workers.
The wage hike has both real and symbolic consequences. It would be one of the first major legislative successes of the new Democratic-controlled Congress. "Passing this wage hike represents a small but necessary step to help lift America’s working poor out of the ditches of poverty and onto the road toward economic prosperity," said Sen. Edward Kennedy, D-Mass.
President Bush urged the House to support the measure, including the tax help for small business. He said, "The Senate has taken a step toward helping maintain a strong and dynamic labor market and promoting continued economic growth."
The bill must now be reconciled with the House version passed Jan. 10 that contained no tax provisions. House Democrats have insisted they want a minimum wage bill with no strings attached, though some have conceded the difficulty of passing the legislation in the Senate without tax breaks.
Republicans stressed the importance of the business tax breaks in the bill, though it was a significantly smaller tax package than Republicans had sought during previous attempts to raise the minimum wage.
"The Senate’s reasonable approach recognizes that small businesses have been the steady engine of our growing economy and that they have been a source of new job creation, a source of job training," said Sen. Michael Enzi, R-Wyo., who helped manage the debate for the GOP.
The bill presents a challenge to Democrats who must navigate between the demands of labor and other interest groups and the realities of the Senate, where Republicans hold 49 of 100 votes. House and Senate Democrats will try to negotiate a way out of the potential standoff.