House heads toward passing minimum wage hike

Published July 29, 2006

WASHINGTON - The House of Representatives headed Friday toward a late-night vote to raise the federal minimum wage from $5.15 to $7.25 an hour by 2009, phased in over three years. Experts said the bill seemed likely to pass the House but faced an uncertain fate in the Senate.

Republican leaders said they were willing to allow the first minimum wage increase in a decade, but only if it were coupled with a cut in inheritance taxes.

As the House pointed toward a session stretching past midnight, it was anything but certain that the plan would work.

Democrats were left in the uncomfortable position of going on record voting against the minimum wage increase and the estate tax cut.

The GOP plan would increase the wage from $5.15 to $7.25 per hour, phased in over the next three years, said Kevin Madden, spokesman for House Majority Leader John Boehner, R-Ohio.

It would also exempt $5-million of an individual's estate, and $10-million of a couple's, from estate taxes by 2015. Estates worth up to $25 million would be taxed at capital gains rates, currently 15 percent and scheduled to rise to 20 percent. Tax rates on the remainder of larger estates would fall to 30 percent by 2015.

As part of the plan, the House and Senate would also pass a bill shoring up the U.S. pension system.

Senate Finance Committee Chairman Charles Grassley, R-Iowa, said he does not like the idea and wants to couple the business tax breaks with a bill to overhaul U.S. pension laws.

Democrats, who have said increasing the minimum wage is a pillar of their campaign platform, tried to paint the move as political maneuvering.

The No. 2 Democrat in the House, Steny Hoyer of Maryland, said the move by GOP leaders was aimed to give political cover to Republicans

"They want on the one hand to appear to be doing something and on the other make sure that it doesn't happen," Hoyer said.

However, 50 Republican lawmakers had pressed House leaders to schedule the measure for debate.

"We weren't going to be denied," said Rep. Steve LaTourette, R-Ohio. "How can you defend $5.15 an hour in today's economy?"

Information from the Associated Press and McClatchy Newspapers was used in this report.