November 4, 1999

Minimum wage bill running out of time

By CURT ANDERSON
AP Tax Writer

WASHINGTON -- Sponsors of House measures to boost the minimum wage by $1 an hour are running out of time to reach agreement on how quickly the increase would take effect and the scope of a companion tax relief package.

Republican and Democratic sponsors of competing plans worked Tuesday to line up the necessary votes, but Majority Leader Dick Armey said the issue would not reach the House floor unless a GOP-tilted version with $30 billion in tax relief over five years appeared likely to gain sufficient bipartisan support.

"We're not going to put it on the floor if we don't have the Democrats to pass it," said Armey, R-Texas.

After a closed-door Republican meeting Wednesday, several GOP leaders said it was unlikely the necessary 40 to 50 Democratic votes would be found in time for action this week.

"If it comes up, it will be next week," said Rep. J.C. Watts, R-Okla.

The measure, sponsored by Reps. Rick Lazio, R-N.Y., and Gary Condit, D-Calif., has not only drawn a veto threat from the Clinton administration over the tax package but is also viewed by many GOP moderates as weak because the minimum wage increase is phased in over three years.

"I really feel we can do a lot better," said Rep. Jack Quinn, R-N.Y.

But Lazio and Condit both said Tuesday they were working to gain sufficient bipartisan support. "We're closing the gap," Lazio said.

Long a hallmark of Democratic politics, increasing the current $5.15-an-hour minimum wage has become a priority for Republicans in districts with large union constituencies, particularly in the Northeast. For that reason, House GOP leaders are willing to bring an increase to the floor, but they aren't actively supporting it.

"It's something you have to look at, I think, almost on a regional basis," Armey said. "It probably is, I think, a matter of some consequence in a lot of districts. It is not in my district."

A revised GOP tax package released Tuesday includes a five-year reduction in the estate tax, an expansion of the low-income housing tax credit, expanded pensions and delayed taxation of federal farm production payments. It would also increase the business meal deduction from 50 percent to 60 percent and make self-employed insurance premiums fully deductible in 2001 instead of 2003.

"This modest tax relief for those who create jobs will provide an effective antidote to the job-threatening potential of a government-imposed minimum wage increase," said House Ways and Means Committee Chairman Bill Archer, R-Texas.

Dropped from that version were the original proposal's credits for independent film production and intercity buses that need wheelchair lifts, as well as a repeal of a tax paid by retailers and wholesalers of alcoholic beverages. Some of those could be resurrected to gain votes, however.

Top Clinton administration officials said Monday they would recommend a veto of the bill because the tax relief would be paid for out of projected budget surpluses beginning in 2001 -- money they say is needed to safeguard Social Security and Medicare.

Democrats, meanwhile, are pushing for the $1 increase over two years and a more modest, $8 billion package of tax relief for small businesses that would be fully offset with several revenue-raisers, including closure of corporate tax loopholes.

Rep. David Bonior, the House minority whip, said the estimated 12 million workers earning the minimum wage deserve a more rapid increase than the GOP is offering, given the nation's economic prosperity. He also accused Republicans of trying to resurrect parts of the $792 billion tax cut vetoed in September by the president.

"They've hijacked this to do their tax bill," said Bonior, D-Mich.

In the Senate, Democrats and Republicans were near agreement to allow a vote on a two-year, $1 increase in the minimum wage coupled with a $9 billion tax relief package over five years. That measure would be permitted as one of a series of amendments to an unrelated bankruptcy bill.

"We're ready to go," said Sen. Edward M. Kennedy, D-Mass.

Senate Republicans, however, were working on an alternative likely to boost the small-business tax package to at least $30 billion over five years.