July 10, 1996 in Nation/World

Senate Votes To Raise Minimum Wage Republican Holdouts Still Threaten To Tie Up Bill In Conference

David Hess Knight-Ridder
 

The Senate Tuesday joined the House in voting overwhelmingly to raise the federal minimum wage by 90 cents an hour after rejecting a Republican attempt to exclude millions of workers from the increase.

Final passage came on a 74-24 vote that masked the partisan tensions that had kept the bill bottled up in the Senate since spring - and still leaves its fate somewhat in doubt.

“There’s no reason that minimum-wage workers should have to wait any longer for their raise,” said President Clinton, urging Congress to send him the bill. “This is not a time to nickel and dime our working families.”

The hangup could come if Republican opponents try to block further action. Although both the House and Senate have passed similar minimum-wage bills, the two chambers still must agree on one version for it to become law.

The Labor Department estimates that about 11 million workers would qualify for a higher minimum wage, which has been $4.25 an hour since 1991. The Senate version of the bill would raise the minimum wage by 50 cents this month and by 40 cents next July.

The Senate approval Tuesday came after five Republicans defected from party ranks to help defeat a crucial amendment that would have prompted a veto by Clinton.

Sen. Christopher Bond, R-Mo., proposed to exempt an estimated 5 million low-income workers in small businesses from getting the minimum-wage increase. That amendment, which Clinton called a “poison pill,” was rejected by a 52-46 vote in a dramatic climax to a five-month fight over the issue.

The five maverick Republicans were Sen. Arlen Specter of Pennsylvania, Mark Hatfield of Oregon, Ben Nighthorse Campbell of Colorado, Alfonse D’Amato of New York and James Jeffords of Vermont. On that tally, all 47 Democrats and the five Republicans opposed the amendment, while 46 Republicans supported it. Two Republicans were absent and did not vote.

As the Senate prepared to vote on Bond’s amendment, Sen. Edward Kennedy, D-Mass., made an impassioned plea for its defeat, saying its adoption would effectively deny a pay raise for millions of workers.

“If we care about helping the working poor. … If we want to help minorities and women and single parents. … If we want to help adults stay off the welfare rolls, we must raise the minimum wage,” Kennedy said. “No one who works for a living should have to live in poverty.”

Labor Secretary Robert Reich said the matter entailed more than a disagreement over the economic impact of a wage increase. “It’s a matter of fairness, it’s a matter of morality,” he said, noting that the average compensation of the heads of large corporations last year rose an average of 23 percent - while the wages of low-income workers shrank from inflation.

But Bond argued that the added cost to small-business employers would force many of them to lay off existing workers or defer hiring new ones, defeating the legislation’s stated purpose of helping the working poor.

Bond was joined by Majority Leader Trent Lott, who said that “a legislative mandate like this could destroy jobs rather than increase them. There is something worse than low wages, and that is no wages.”

Senate Majority Whip Don Nickles, R-Okla., an avowed opponent of raising the wage, has hinted he will object to a motion to name Senate conferees who would negotiate with the House on a final version of the legislation. That could delay any conference and put final adoption of the bill at some risk.

Nickles said his tactics would be justified in light of a similar move by Democrats to block a conference on an unrelated health reform bill, snagged in a dispute over so-called medical savings accounts, which would provide tax deductions for people who buy health-insurance policies with high deductibles.

As part of the wage bill, the Senate also adopted a grab-bag package of small-business and other tax breaks designed to cushion the effect of higher payroll costs associated with the minimum-wage hike.

“Excessive taxes are the sludge that binds the gears of small businesses,” said Senate Finance Committee Chairman William Roth, R-Del., in explaining the rationale for the tax relief.

Among other things, the tax provision would phase in over seven years the annual credit that businesses can take for new equipment to $25,000 from $17,500. It also would renew and extend the education tax credit that businesses can claim when they pay tuition for employees to upgrade their skills.

“It’s the most effective federally supported higher education program in history,” said Sen. Daniel Patrick Moynihan, D-N.Y.

The package also includes a provision permitting non-employed spouses to put up to $2,000 a year in tax-deferred IRAs, rather than the $250 permitted now.

In addition to the tax relief for small businesses, the provision also renews several expired federal tax credits for business research and development, and for alternative fuels. And it extends the $2,100 tax credit for businesses that hire disadvantaged youths.

The price tag for the tax package over 11 years is $19.9 billion. The cost would be partly offset by a temporary extension of the air passenger and cargo excise tax, by phasing out a longstanding tax break for business investments in Puerto Rico and other offshore U.S. possessions, and by collecting income tax payments from wealthy Americans who renounce their citizenship and move abroad to avoid taxation.

xxxx HOW THEY VOTED Here’s how Northwest senators voted on a Republican amendment to exempt many workers from a 90-cent-an-hour increase in the minimum wage. A “yes” vote was a vote for the amendment. Washington - Slade Gorton, yes; Patty Murray, no. Idaho - Larry Craig, yes; Dirk Kempthorne, yes.

Here’s how Northwest senators voted on the bill to increase the minimum wage from $4.25 an hour to $5.15 over the next year. A “yes” vote was a vote to raise the minimum wage. Idaho - Craig, no; Kempthorne, no. Washington - Gorton, yes; Murray, yes.

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