Sunday, July 30, 2006

House vote raises minimum wage; give big tax break to richest Americans

House vote raises minimum wage
By Richard Cowan and Donna Smith

WASHINGTON (Reuters) - The House of Representatives voted on Saturday to give some of the lowest-paid American workers their first raise in nearly a decade, while also handing a big tax cut to some of the wealthiest.

The House in the early hours voted 230-180 to raise the $5.15-per-hour minimum wage in three 70-cent steps until it reaches $7.25 in mid-2009.

During a bitter floor debate, Rep. Phil English, a Pennsylvania Republican, said most Democrats' opposition to the bill showed "they've always liked the politics of the minimum wage and cared little for the policy of the minimum wage."

But Democrats shot back that Republicans had staged an election-year stunt to get a minimum wage vote knowing the Senate won't go along because of opposition there to the estate tax cut. And some senators are opposed to any minimum wage hike.

Before this election year, Rep. George Miller, a California Democrat said, "You never raised a finger to help these individuals" getting paid the minimum wage.

Coming shortly before the House was to start a five-week summer break that will give members time to campaign for re-election, the legislation also would cut estate taxes, derided by Republicans as a "death tax," and extend several other popular tax cuts. Its estimated cost was about $310 billion over 10 years.

The package is likely to be debated next week in the Senate, where its fate was unclear. Efforts to roll back estate taxes failed in the Senate in June. Such a cut is a high priority for Republican leaders ahead of the November congressional elections when Democrats hope to make big gains.


Senate Democratic leader Harry Reid of Nevada noted the Senate has "rejected fiscally irresponsible estate tax giveaways before and will reject them again."

The estate tax cut is estimated to help less than 1 percent of American families at a time of skyrocketing federal debt.

"Workers at the lowest end of the scale are being held hostage to 7,500 families," said Rep. Steny Hoyer of Maryland, the second-ranking Democrat in the House, who wanted a minimum wage increase bill without the estate tax cut.

Those 7,500 families are the number of wealthy families that would benefit from the estate tax cut. By contrast, some seven million workers would benefit from the increase in the minimum wage.

Republicans argue cutting estate taxes helps small businesses and farmers.

The bill also would renew for two years expired tax breaks for education, research, college tuition and other popular items.

For several years, Republicans controlling Congress have blocked an increase in the minimum wage, claiming it would backfire by causing employers to hire fewer entry-level workers.

But Democrats stepped up pressure this year for the increase, arguing high gasoline and heating prices were making it harder for the working poor to survive while working at wages frozen since 1997.

They were joined by dozens of moderate Republicans in the House who, facing tough re-elections in November, challenged their leaders and demanded a minimum wage vote before breaking for the summer.

Recent polls have shown broad discontent with the Republican-led House and Senate. Democrats, hoping to win control of Congress, have tried to portray an out-of-touch Republican Party that has agreed to nearly $35,000 in pay raises for members of Congress over the past decade while refusing to increase the pay for low-wage jobs.

White House spokesman Tony Snow, asked about President George W. Bush's position on the minimum wage, told reporters on Friday, "We are for minimum wage increases if they do not jeopardize the ability of small businesses to create jobs."