Rep. Miller seized an opportunity on March 15 to demand a vote on the minimum wage increase in an attempt to derail a bill to revamp federal job training programs (H.R. 803; see article elsewhere in this issue).  He offered a motion that would have added the three-year increase to $10.10 to the job training bill.  The motion was defeated 184-233, with no Republicans favoring it and 6 Democrats joining 227 Republicans to oppose.

According to an analysis by the Economic Policy Institute more than 30 million workers would receive a raise from the bill. Contrary to popular belief, 88 percent of minimum wage workers are adults over age 20, not teens, and the majority of them, 56 percent, are women.  Many of these women are caring for children or the elderly, are cleaning offices, or preparing and serving food while struggling to feed and support their own families. Since 2002 the child poverty rate has increased from 16 to 22 percent.  Parents of 17.5 million children are minimum wage workers. Nearly half are workers of color and over 43 percent have some college education.

A National Employment Law Project report documents that 66 percent of low-wage workers are employed by large corporations with over 100 workers.  The three companies that employ the most low-wage workers are Wal-Mart, Yum! Brands (Taco Bell, Pizza Hut, KFC), and McDonald’s.  The vast majority (92%) of the largest 50 employers of low-wage workers have fully recovered from the recession and were profitable in 2011.  Their top executive averaged $9.4 million in compensation in 2011, and their shareholders received $174.8 billion in dividends or share buybacks between 2007 and 2011.

The minimum wage has lost more than 30 percent of its buying power since its peak in 1968.  If the wage had kept pace with inflation its value today would be approximately $10.56.  The minimum wage today pays only $15,000 per year, $3, 000 below the poverty level for a family of three.  Numerous rigorous studies over the past 20 years have shown that increasing the minimum wage does not cost jobs.  Instead, increasing the minimum wage provides an economic benefit for local businesses and communities, generating new jobs as it puts more money into the pockets of low-wage workers who will spend it.  Nineteen states and numerous cities have minimum wages that are higher than the federal minimum wage.

Some would argue that a more effective way to assist low-wage families is through the Earned Income Tax Credit (EITC).  The EITC provides a tax refund to working families with children (and a small credit to some childless workers).  It supplements the income of low-wage earners and effectively raises some families out of poverty.  However, no alternative proposal to increase the EITC has emerged, either this year or when previous minimum wage increases were considered.  Some in Congress who are likely to oppose an increase in the federal minimum wage also pushed back against extending improvements to the EITC in the January 1, 2013 American Taxpayer Relief Act of 2012.  Advocates know that what is required in fairness to families working hard and still struggling to make ends meet is a ‘both/and’ strategy that includes an increase in the minimum wage and a robust EITC.

As in the past, Democrats acknowledge that they may need to agree to tax incentives for small businesses in order to obtain enough bipartisan support to enact an increase in the federal minimum wage.

The post CHN: Bill to Increase the Minimum Wage is Introduced; Defeated in House First Attempt appeared first on Coalition on Human Needs.

According to the Economic Policy Institute, an estimated 13 million workers (10 percent of the workforce) will be positively affected by the most recent increase in the minimum wage.  Of these workers, 5.6 million people who currently earn less than $7.25 will directly benefit from the raise, and 7.4 million workers earning wages slightly above $7.25 are expected to reap indirect benefits by the increase due to plausible “spillover effects.”

Currently 30 states and the District of Columbia have minimum wages higher than $5.15 an hour.  Seven of the states have minimum wages that exceed $7.25 an hour – California, Connecticut, Massachusetts, Oregon, Rhode Island, Vermont and Washington.  Ten of the states have minimum wages that are indexed to increase annually based on the cost of living.

The Senate version of the minimum wage increase attached $8.3 billion in business tax breaks, while the House included $1.3 billion.  The final minimum wage agreement included $4.8 billion in business tax cuts.  The wage increase and tax cut package were ultimately added to the must-pass emergency supplemental spending bill containing $120 billion in funding mostly to cover the costs of the war in Iraq.

In addition to defense-related spending, the supplemental contains funding for domestic programs including the State Children’s Health Insurance Program (SCHIP), agriculture disaster aid, firefighting, FEMA hurricane recovery and the Corps of Engineers.   The $650 million for SCHIP will address shortfalls in FY ’07 in 14 states including Alaska, Georgia, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Nebraska, New Jersey, North Carolina, Rhode Island and Wisconsin.  Unfortunately, additional funding for the Low Income Heating and Energy Program (LIHEAP), included in the first failed attempt at passing the supplemental spending bill, was dropped from the final bill when $4 billion was trimmed from the overall cost.

The post CHN: Finally -Federal Minimum Wage Increase Signed Into Law appeared first on Coalition on Human Needs.

As a conference committee worked to come to agreement on the $124 billion FY ’07 supplemental spending request to fund the wars in Iraq and Afghanistan, negotiators also reached a deal on the $4.8 billion package of business tax breaks attached to the minimum wage.  The tax breaks ostensibly help small businesses said to be most affected by an increase in the minimum wage.  However, more than half, or almost $2.6 billion, will pay for a three and one-half year extension of the Work Opportunity Tax Credit used to encourage companies to higher low-wage workers, which is most often claimed by larger companies.

The supplemental spending bill was vetoed in large part because the President strongly objected to its call for date-certain withdrawal of troops from Iraq.  The Administration also objected to the fact that the $124 billion exceeded its original request by $21 billion.  The additional money was directed toward VA and Defense healthcare, homeland security, Katrina recovery, disaster farm aid, pandemic flu preparedness, the Low Income Home Energy Assistance Program, and funds to address the 2007 shortfall in the State Children’s Health Insurance Program.  With a vote of 222-203, the House failed to garner the two-thirds majority needed to override the President’s veto. 

The House and Senate will now go back to the drawing board to negotiate another supplemental spending bill. All agree that within the next weeks a bill will be enacted, as neither Congress nor the Administration wants to be held responsible for not supporting the troops on the ground.  It is not clear whether all of the non-military spending will be included in the next bill.  In the meantime, even though negotiators have finally agreed on the minimum wage/tax break package, low-wage workers still wait for an increase in their pay.

The post CHN: Minimum Wage Languishes As Worker Wait appeared first on Coalition on Human Needs.

Three months ago, passage of an increase in the minimum wage seemed imminent.  One week after the Democrats took power in the House, they passed a clean minimum wage bill increasing the wage to $7.25 an hour.  Then three weeks later the Senate, convinced it could not pass a clean bill, added $8.3 billion in small business tax cuts to their bill.  The House then reconsidered the bill they passed and added $1.3 billion in small business tax cuts, requiring a conference between the House and Senate on the bill.  Since then, deep disagreements between House Ways and Means Chairman Rangel (D-NY) and Senate Finance Committee Chairman Baucus (D-MT) on the tax provisions have stalled action on the bill. Baucus believes that when the bill finally reaches conference the larger $12.3 billion tax cut will lead to a compromise that is closer to the $8.3 billion in the original Senate minimum wage bill than the $1.3 billion in the House bill.  While this jockeying for advantage continues, it is now a decade since the last minimum wage increase.  Since then, the cost of living has risen by 26 percent, and the minimum wage is at its lowest value since 1955.  Members of Congress have received 8 pay increases in 9 years.

The House supplemental bill provides $124 billion in overall spending, just slightly more than the $123 billion in the Senate bill.  In response to the President’s $103 billion request, most of the money would go to fund the wars in Iraq and Afghanistan.  The House and Senate bills also contain $750 million and $745 million respectively to pay for anticipated shortfalls in 2007 in the State Children’s Health Insurance Program (SCHIP).  The remainder of the money beyond the President’s request includes funding for health care for veterans, homeland security, disaster aid to farmers, hurricane relief for victims of Katrina and Rita.

For weeks the House and Senate have struggled over language to their bills related to the withdrawal of troops from Iraq.  The House sets a firm date of August 2008 for most troops to be out of Iraq.  The Senate bill calls for withdrawal to begin four months after enactment of the bill and sets a ‘goal’ of having them home by March 31, 2008.  The White House has threatened a veto based on the withdrawal language.  It has also expressed disapproval of the added funding.

Given the uncertain outcome of the pending supplemental bills, it appears that low-wage workers will be forced to continue to wait for a long-overdue wage increase. 

The post CHN: Changes To Minimum Wage Package In Vehicle With Uncertain Outcome appeared first on Coalition on Human Needs.

In an attempt to move forward with an increase in the minimum wage, House Leadership decided to attach the House version of the bill to the emergency supplemental spending bill winding its way through Congress.  The House Appropriations Committee approved the $124 billion spending bill on March 15.  During consideration of the bill, the most contentious debate focused on whether to include language that would set a timetable for removing U.S. troops from Iraq.

The funding level in the bill that passed the committee is $21 billion higher than the President requested and includes money for a number of domestic programs.  It provides $750 million to cover an anticipated shortfall this year in the State Children’s Health Insurance Program (SCHIP), $2.4 billion for Homeland Security programs, $1.4 billion for veterans’ health accounts, $4 billion for farm disaster relief, $1 billion for pandemic flu preparations, and $1.3 billion for the Army Corps of Engineers for levees.

The full House will vote on the supplemental spending bill next week.  The Senate held a separate debate this week with votes on Iraq resolutions.  The Senate will mark up its version of the supplemental spending bill next week.  It is unclear what will happen with the minimum wage as the supplemental bill moves forward.  Advocates who have viewed the enactment of the minimum wage increase as all but certain have become increasingly impatient with its entanglement with other issues.

The post CHN: Minimum Wage Increase, Children’s Health Attached To Supplemental Spending Bill appeared first on Coalition on Human Needs.

This week the House Ways and Means Committee approved a smaller $1.3 billion package of small-business tax breaks.  It includes some, but not all, of the provisions the Senate package and in some cases provides less generous extensions of time to save costs.  The House bill, for example, extends the work-opportunity tax credit for employers who hire low-income works, but only for one year instead of for five years as in the Senate bill.  Both bills assume that the tax cuts must be paid for, each using a different set of offsets.

As we go to press, the full House has not yet voted on the $1.3 billion tax cut package but is expected to approve it with bi-partisan support.  The House and Senate will then be ready to give the bills to a Conference Committee where negotiations will focus on the size of the tax cuts in the final bill.

The post CHN: More Twists And Turns For Increase In Minimum Wage appeared first on Coalition on Human Needs.

After several days of debate, Democrats filed a cloture motion to stop debate and bring the substitute bill to a vote.  The vote passed overwhelmingly 87-10.  From that point, Senate procedures allowed 30 more hours of debate on more amendments before a final vote.  Finally, the Senate adopted the $7.25 increase in the minimum wage by a vote of 94-3.  “No” votes were cast by Senators Kyl (R-AZ), Coburn (R-OK), and DeMint (R-SC).  Three Senators were not present for the vote.

Next, a House-Senate conference committee will decide what to do about the tax cuts included in the Senate bill.  House Democrats have insisted that the final bill must not include tax cuts.  At this writing it is not clear how the different bills will be resolved.

Senator Kennedy (D-MA) has been a tireless champion of increasing the minimum wage for decades.  He often says, “Raising the minimum wage is not just an economic issue.  It’s a fairness issue, and it’s a moral issue.  It’s not just about a paycheck.  It’s about a just paycheck.”  Thanks to his efforts in the Senate, after waiting 10 years minimum wage workers may finally be headed for a raise.  See CHN statement.

The post CHN: Minimum Wage Increase Inches Its Way To Becoming Law appeared first on Coalition on Human Needs.

The amendment proposed by Senator Kennedy would have raised the minimum wage to $7.25 over the next two years, an increase of $2.10 above the current federal minimum wage of $5.15.  Kennedy’s amendment would also have extended the minimum wage requirement to the US territory of the Commonwealth of the Northern Mariana Islands, which is currently exempt from the requirement and has a minimum wage of $3.15.  Eight Republicans joined all of the Democrats in supporting the amendment.

Senator Enzi’s amendment would have increased the minimum wage only to $6.25, and also included “poison pills” that would undermine worker rights and reduce incomes.  The Enzi amendment eroded the Fair Labor Standards Act by ending protections for the 40-hour work week.  Employers would be allowed to avoid paying overtime if two weeks of work did not exceed 80 hours, even though employees worked more than 40 hours in one of the weeks.  In addition, Enzi’s amendment undermined the minimum wage tip credit.

According to Senate reports, Senator Kennedy will try to add his amendment to other legislation moving through the Senate sometime this year.

In the House.  An amendment to raise the minimum wage to $7.25 over the next two years was added to the House Labor-HHS-Education appropriations bill in the full committee on June 13.  Rep. Hoyer (D-MD) proposed the amendment, which passed by a vote of 32-27 with the support of 7 Republicans.  The addition of the minimum wage provision and disputes over funding levels has stalled the bill.

On June 22, in an effort to get a minimum wage vote on the House floor, Democrats attempted to add the amendment to another appropriations bill: for Science/State/Justice/Commerce.  This time the Republicans who’d supported the amendment on the earlier bill withdrew their support. The amendment failed, and the bill went to the floor without the minimum wage provision.  However, on June 28 when the bill came to the floor, Rep. Obey (D-WI) offered an amendment to raise the minimum wage to $7.25 by January 2009.  Obey withdrew the amendment under objections that it violated the House rules for legislating changes on an unrelated spending bill.  The strategy of the House Democratic leadership is to continue using appropriations bills and votes on the rules setting the parameters for their consideration as mechanisms for bringing up the minimum wage.

In other action related to the minimum wage, during House consideration of the estate tax bill on June 22, House Minority Leader Pelosi (D-CA) raised a procedural issue saying, “It is inappropriate to consider this bill until the Republican leadership schedules a vote on an increase in the minimum wage, which they are now blocking.”  A vote was then taken to block proceeding with the estate tax vote.  It failed 182-236.  All but ten of the Democrats present voted for the Pelosi motion.  No Republicans voted with her.

House Majority Leader Boehner (R-OH), in reversing an earlier statement, said that the minimum wage would come up for a vote in the House this year.  The Democratic leaders believe that if a Republican bill does come up it will be similar to the Enzi bill offered in the Senate.

For more information, see “Most Americans Now Live in States That Have Raised the Wage Floor” by Michael Dimock, Pew Research Center for the People & the Press, April 19, 2006

http://pewresearch.org/obdeck/?ObDeckID=18

The post CHN: Action On Minimum Wage In The Senate And The House appeared first on Coalition on Human Needs.

The legislation would increase the minimum wage to $5.85 an hour 60 days after enactment, then to $6.55 12 months later, and to $7.25/hour 24 months after the bill’s passage.

Some have argued that the minimum wage is simply a low entry level from which workers rapidly rise. But new research by the Center for Economic and Policy Research shows that for the majority of minimum wage workers who are between ages 25 and 64, more than one in three will be stuck at the minimum wage for at least three years. (See Center for Economic and Policy Research, Many Minimum Wage Workers Ages 25 to 54 Trapped in Low-Wage Jobs http://www.cepr.net/pressreleases/labor_markets_2005_05_18.htm )

As the minimum wage eroded, the Children’s Defense Fund found that an increasing proportion of the patrons of emergency food facilities were employed (in surveys from 1997 to 2001). In 2004, 9.7 million children lived in households where at least one worker could benefit from the proposed increase. (See Children’s Defense Fund, Increasing the Minimum Wage: An Issue of Children’s Well-Being http://www.childrensdefense.org/familyincome/jobs/minimumwagereport2005.pdf )

For more information,

S. 1062 and H.R. 2429 bill text and sponsors: http://thomas.loc.gov

Economic Policy Institute, Minimum Wage Frequently Asked Questions , last updated March 2005

http://www.epinet.org/content.cfm/issueguides_minwage_minwagefaq

The post CHN: Minimum Wage Bill Introduced appeared first on Coalition on Human Needs.

Last night Congress approved a $2.6 trillion federal budget for next year that lays the groundwork for $10 billion in cuts to Medicaid, as much as $3 billion in cuts to Food Stamps, and billions in other mandatory program cuts.

The budget would make room for $100 billion in tax cuts – while cutting $212 billion over the next five years to domestic discretionary programs. Education, veteran’s health care, community development, workforce training, child care, Head Start, nutrition assistance for pregnant women and children, home energy assistance and environmental programs, and many others fall under this category.

The House voted by a margin of 214 to 211 on H. Con. Res. 95 . The Senate agreed 52 to 47 . Republican Senators Lincoln Chafee (RI), George Voinovich (OH), and Mike DeWine (OH) joined all Democrats and Independent Jim Jeffords (VT) in voting against the budget resolution. Senator Joe Lieberman (D-CT) did not vote. Not a single Democrat in the House or Senate voted for the resolution. A budget resolution is not a law and thus does not go to the President for his signature.

Cutting Mandatory Programs That Help Low-Income People

The budget includes instructions to specific committees in the House and Senate to find $35 billion in “savings” (cuts) to mandatory programs over the next five years. (Mandatory programs are not appropriated annually.) The inclusion of these reconciliation instructions sets the stage for act two in the budget process – producing legislation making program changes that will result in cuts.

Under the budget resolution, Medicaid must be cut by $10 billion over the next five years. The Senate Finance Committee and the House Energy and Commerce Committee are directed to produce a bill by September that will make these cuts. The President’s own budget recommended cuts of $7.6 billion, according to calculations by the Congressional Budget Office.

Food Stamps are also at risk. The House and Senate Agriculture Committee have instructions to cut $3 billion from programs under their jurisdiction – which includes farm subsidies as well as Food Stamps and other nutrition programs. House Agriculture Committee Chairman Bob Goodlatte (R-VA) has said he would like to see those cuts come from the Food Stamps program, but Senate Chairman Saxby Chambliss (R-GA) has favored applying the cuts across farm supports, Food Stamps, and other agriculture programs.

The resolution also assumes cuts to other committees including $12.7 billion in cuts to the House Education and Workforce Committee and $13.7 billion to the Senate Health Education, Labor and Pensions (HELP) Committee. About $6.6 billion of that amount is assumed to come from changes to the Pension Benefit Guaranty Corporation, which could mean higher pension premium payments from companies with defined-benefit plans.

Student loan programs, also within the jurisdiction of Education and Workforce and HELP, could be tapped for cuts. The Center on Budget and Policy Priorities estimates that student loans could be cut as much as $7 billion over five years. On the other hand, the budget resolution increases the reserve fund for Pell Grants and increases the maximum amount of a grant by $100 to $4,150. Advocates for education point out that the increases in Pell Grants are laudable, but cuts elsewhere could make college less affordable for low-income students.

Smaller cuts must be produced by the House Resources and Senate Energy and Natural Resources Committees, the House Financial Services and Senate Banking Committees, the House and Senate Judiciary Committees, and others.

Committees with reconciliation instructions face a September deadline to come up with legislative changes that will achieve the required cuts. If a committee fails to produce legislation, the Budget Committee can write its own bill with cuts as determined by the Chair and send it to the floor for a vote. The bills will be wrapped into a single reconciliation bill, which will need only 51 votes for passage – not the typical 60 votes required for most legislation.

Discretionary Spending Slashed

Over the next five years domestic discretionary spending will be slashed by $212 billion. Those cuts could hit education, child care, workforce training, Head Start, veteran’s benefits, housing, home energy assistance, nutrition assistance for pregnant women and children and many other programs. Next year alone, spending on domestic discretionary programs would be reduced by $23 billion – a 5.9 percent cut from this year.

The conference agreement included $843 billion in total discretionary spending for 2006, the same level as the House. The Senate had earlier adopted an amendment offered by Senator Edward Kennedy (D-MA) that increased the total discretionary level to $848.8 billion, with the intention of directing that additional money towards education and training. The conferees rejected the amendment and the higher level of discretionary spending in the Senate resolution.

Appropriators have not been waiting for the completion of a budget resolution to start the work of divvying up the total amount to individual subcommittees. House Appropriations Chairman Jerry Lewis has said he is giving more of the total discretionary amount to domestic spending than the President requested.

Making Room for More Tax Cuts

Even while making deep cuts to services for low-income families, the resolution makes room for $100 billion in additional tax cuts, most of which will benefit upper-income individuals. The resolution does not specify how taxes will be cut; that work will be left to the House Ways and Means Committee and the Senate Finance Committee.

Reconciliation comes into play with tax cuts, too. $70 billion of those tax cuts will be part of a reconciliation bill passed by the tax-writing committees. Like the reconciliation bill that cuts low-income programs, the tax reconciliation bill is also due in September and needs just 51 votes for passage.

Various proposals have been floated that may be part of the tax package, including fixing for one year the alternative minimum tax (AMT),now hitting more middle-class families, and extending research and development and other tax credits for companies. But many speculate the bill will extend the capital gains and dividend tax breaks. Nearly half of the benefits of this tax break will flow to people earning more than one million dollars. This particular tax break will give an average of $38,000 a year to those millionaires.

Makes the Deficit Worse

Since the beginning of the year, conservatives on the Hill have insisted a budget resolution include deep cuts to low-income services in order to begin to control the large and growing deficit.

But the final budget makes the deficit worse. The new tax cuts coupled with an increase in defense spending actually deepen the deficit more than if there had been no budget at all. In fact, the budget pays for rich people’s tax cuts in two ways: by restricting services for the poor and sick and by borrowing – a crushing debt left to the rest of us to repay.

Seen in that light, the budget truly is both “mean and profligate” as described in a New York Times editorial this week.

Limiting Long-Term Spending

The conference agreement contains a new rule aimed at holding down future spending for mandatory programs. The new rule would not allow the Senate to pass policy changes that could increase the deficit by $5 billion or more in any of the four ten-year periods from 2016 through 2055. The Congressional Budget Office would have to estimate the very long-term cost of any proposed change to a mandatory program, and if the costs exceeded $5 billion or more in one or more ten-year periods, the bill would be subject to a point of order. 60 votes would be required to defeat the point of order. Even modest policy improvements could be affected by this rule, because long-term costs are likely to exceed $5 billion, which is not adjusted for inflation

Tax cuts of any size are exempt from the rule, no matter how much they increase the deficit.

Bad – Just Not as Bad as it Could Have Been

The budget resolution is a profound disappointment to those who believe Congress should not cut health care for the uninsured while handing more tax cuts to millionaires. However, it must be noted the final agreement is a vast improvement over the budget agreed to by the House just last month.

Thanks to the work of thousands of advocates for children, the elderly, and people with disabilities, Congress heard and responded. The House resolution included as much as $18 billion in cuts to mandatory programs in the Ways and Means Committee – cuts that could have hit the Earned Income Tax Credit, Supplemental Security Income for poor elderly and people with disabilities, TANF, services for abused and neglected children, child care, child support enforcement and others. The Senate resolution had none of these cuts and the final agreement does not contain them.

The House resolution included a total of $69 billion in mandatory program cuts, of which at least $15 billion would have come from Medicaid. The Senate cut a total of $17 billion from mandatory programs – but refused to cut Medicaid. So the final resolution – cutting $35 billion from mandatory programs – is closer to the Senate number than the House.

Republican Senators Chafee, DeWine, and Voinovich deserve much credit for standing up to their leadership and voting no on the final resolution as well. In the House, 15 Republican representatives also refused to support the resolution.

Fight is Not Over

As mentioned above, by September Congress must pass o ne reconciliation bill that cuts mandatory spending by $35 billion over five years and a second reconciliation bill that cuts taxes by $70 billion. (The resolution also requires a third reconciliation bill to increase the debt ceiling.) Advocates within the human needs community will continue to fight to ensure cuts will not hurt low-income people.

For More Information
CBPP: Assessing the Conference Agreement on the Budget Resolution  *** Page Not Found
CHN: Opposition to the Budget Deal is Widespread – Independent Organizations Speak Out   *** Page Not Found
House Roll Call Vote on Final Resolution
Senate Roll Call Vote on Final Resolution

The post CHN: Congress Approves A Final Budget Resolution appeared first on Coalition on Human Needs.