Senate Rejects Minimum Wage Hike

(CBS/AP)  A Republican election year effort to fuse a cut in inheritance taxes on multimillion-dollar estates to an increase in the minimum wage was rejected by the Senate late Thursday.

Republicans needed 60 votes to cut off debate and advance the bill - officially entitled the "Family Prosperity Act" - which links a $2.10 increase in the $5.15 federal minimum wage over three years to reductions on estate taxes next decade. The legislation, which was approved by the House last Saturday, got a 56-42 vote in the Senate: four votes short of succeess.

The vote would have been 57-41, but Senate Majority Leader Bill Frist switched his vote in a maneuver which preserves his right to debate the bill again this fall. The Tennessee Republican urged senators who voted against it to "rethink long and hard" before lawmakers reconvene in September.

The federal minimum wage of $5.15 an hour hasn't been raised since 1997.

In addition to a cut in the estate tax, the measure also contained one other poison pill element that was distasteful to advocates of a minimum wage hike: a provision that, in seven states, would have cut into the earnings of employees who earn tips.

Sen. Maria Cantwell, a Democrat from Washington state, said that would have meant a $5 an hour pay cut for waiters, waitresses and other tip earners in Washington state. She voted "no," as did her fellow Democrat from Washington, Sen. Patty Murray.

"This is a cynical ploy on the part of the Republican leadership in an election year," said Cantwell.

Texas Republican Sen. Kay Bailey Hutchison also decried the politics in the issue - although from an opposite point of view.

"It is an excuse to make it a do-nothing Congress," Hutchison told the New York Times. "We are turning our back on the middle-class and poor people in this country who depend on the minimum wage and death-tax relief."

For Republicans, approval of the legislation could have neutralized a Democratic campaign issue while also advancing an estate tax cut, a priority that may have an uncertain future if the GOP loses seats in Congress in November's election.

The GOP strategy put Democrats in an uncomfortable position. Either they could vote against the bill — thus rejecting a minimum wage increase — or they could vote for it, thus agreeing to cut taxes on multimillion-dollar estates. Most rejected the bill, blocking a GOP victory months before the election.

Four Democrats joined Republicans and voted for the bill: Sens. Robert Byrd of West Virginia, Ben Nelson of Nebraska, Bill Nelson of Florida and Blanche Lincoln of Arkansas. Two Republicans voted against the bill: Sens. Lincoln Chafee of Rhode Island and George Voinovich of Ohio.

Senate Majority Leader Bill Frist, R-Tenn., has tried repeatedly this year to repeal or reduce the estate tax, derided as the "death tax" by its opponents.

"This death tax punishes everyday Americans by forcing them to give up their business, to give up their farms," he said.

• 1
• 2
• Next Page »