politico: New war casualty: Wage hike

[Omaha Steve]

http://www.politico.com/news/stories/0507/3978.html

New war casualty: Wage hike

By: Jeanne Cummings
May 14, 2007 04:06 PM EST

When Democrats took over Congress, one of the few issues that seemed greased for passage and signage into law was an increase in the minimum wage.

So, here we are, four months later, and the seemingly noncontroversial pay hike is now attached to the Iraq supplemental spending bill and caught up in the extraordinarily controversial showdown over the war between the White House and Congress.

President Bush's veto of the Iraq supplemental bill has created a new opportunity for the business community to try to get more tax breaks added to the pay hike bill, a move that could draw sharp protests from the labor community and reopen the difficult negotiations over the $2 pay hike.


Sen. Charles Grassley dubbed the House tax cuts not just peanuts but mere peanut shells.
Photo by AP

The circuitous route traveled by the pay hike bill offers a vivid illustration of how mucked up things can get in a Congress with razor-thin partisan margins and savvy special interests with strong allies still operating on the inside. Democratic leaders are resisting any changes in the package that was hammered out after hints of a White House veto, the threat of a Republican filibuster and lengthy negotiations between the House and Senate. Still, the National Restaurant Association is urging its 400,000 member shops today to call Congress and demand a better deal and "soften the blow on small employers," says Brendan Flanagan, the group's vice president of federal relations.

It was with great fanfare that the bill boosting the minimum wage to $7.25 from $5.15 over two years -- the first increase in 10 years -- passed the House in January as 82 Republicans voted with a united Democratic caucus.

Its fate began to turn soon thereafter as Senate Republicans took a more confrontational stance, demanding an offsetting package of tax breaks for businesses. When a Senate vote in January on the House bill fell six votes shy of a filibuster-proof 60, Democrats began to compromise. In February, the Senate voted 94-3 to approve a pay hike package that included $12 billion in tax breaks for big and small businesses. Senate Republicans then used their clout to block any conference committee meetings until the House also passed its own companion tax cut package. It acquiesced, grudgingly agreeing to $1.3 billion in tax breaks to offset the impact of the wage increase.

FULL story at link.