CHN: Changes To Minimum Wage Package In Vehicle With Uncertain Outcome

This week the Senate followed the House’s lead by including provisions to increase the minimum wage and provide funding for the State Children’s Health Insurance Program (SCHIP) in the war supplemental funding bill it passed.  (See 3-16-07 HNR story)  The Senate chose to up the ante in the standoff with the House over the minimum wage by expanding from $8.3 billion to $12.2 billion the size of the package of small business tax breaks accompanying an increase in the minimum wage in their version of the supplemental spending bill.
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. 

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minimum wage