Wall Street Journal: Wage increase clears Senate hurdle

By John Godfrey
Wall Street Journal, 1/30/07

... Some business leaders say, however, that the additional wages will increase workers' purchasing power, in turn boosting their companies' bottom line. For example, Jim Sinegal, chief executive of Costco Wholesale Corp., backs the wage increase. And while the U.S. Chamber of Commerce opposes the minimum wage rise, the U.S. Women's Chamber of Commerce supports it.

"We all lose when American workers are underpaid," said Margot Dorfman, CEO of the U.S. Women's Chamber.

By John Godfrey
Wall Street Journal, 1/30/07

WASHINGTON -- A Democratic proposal to increase the federal minimum wage cleared one hurdle in the U.S. Senate Tuesday on an 87-10 vote.

But it faces several other Republican roadblocks this week.

Democrats say Republicans are dragging out the minimum wage debate to postpone the next item on the Senate's schedule: a debate on President Bush's policies for Iraq.

"How many days? What's the price?" Senate Labor Committee Chairman Edward Kennedy (D., Mass.) asked during debate Tuesday morning.

Senate Republican Leader Mitch McConnell (R., Ky.) has predicted a final vote could come this week. "We're going to pass a good minimum wage increase bill because of Republican support and because Republicans insisted on a bipartisan package, not a partisan fight," Sen. McConnell said after the vote.

Democrats had wanted to pass a $2.10-per-hour minimum wage increase without any extraneous measures attached. Sen. McConnell and other Republicans largely held ranks last week to block Democrats from forcing a vote on such a "clean" bill.

The Senate vote Tuesday afternoon was on a procedural motion to limit debate on a substitute amendment to the bill, which, at Republican insistence, added to the minimum wage hike about $8 billion in tax breaks for businesses over the next five years. The Senate has been debating the bill since last Monday.

Adoption of the motion on Tuesday limits further debate on the amendment to 30 hours. Republicans are expected to demand that all of that time be used, meaning the next procedural vote, limiting debate on the underlying bill, could come late Wednesday. There are several other procedural hurdles Republicans could throw up along the way. For example, Republicans could split their leading counter-amendment into five separate pieces on Friday, and that could require a separate vote on each.

That amendment, offered by Sen. Jon Kyl (R., Ariz.) would make permanent a number of the temporary tax breaks included in the underlying bill. They include an extension of the current increase in expensing for small businesses and a reduction to 15 years for the depreciation schedule for leasehold and restaurant improvements. Sen. Kyl's amendment, which would cost another $46 billion over 10 years by one estimate, would also make permanent the Work Opportunity Tax Credit.

Republicans and the White House argue tax breaks are needed to offset the cost of a minimum wage increase to businesses. The Congressional Budget Office estimates that the wage increase, which would take full effect by May 1, 2009, would cost businesses an additional $17 billion through 2012.

"Raising the minimum wage will cost some jobs, and we think it's important to counter that with tax breaks that will replace those jobs," said Al Hubbard, director of the White House's National Economic Council.

Some business leaders say, however, that the additional wages will increase workers' purchasing power, in turn boosting their companies' bottom line. For example, Jim Sinegal, chief executive of Costco Wholesale Corp., backs the wage increase. And while the U.S. Chamber of Commerce opposes the minimum wage rise, the U.S. Women's Chamber of Commerce supports it.

"We all lose when American workers are underpaid," said Margot Dorfman, CEO of the U.S. Women's Chamber.

Copyright 2007 Wall Street Journal

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