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Democrats Face Next Move on Wage Hike

After refusing to even consider the notion earlier this week, some House Democratic leaders are beginning to acknowledge they might have to accept a package of small-business tax cuts to secure enactment of a minimum-wage increase this year.

A test vote Wednesday on a “clean” minimum-wage bill fell six votes shy of a filibuster-proof majority, 54-43, but Senate Democrats and Republicans said this was the only way of getting House Democrats to come to the table on the tax cut issue.

“We had to make this point, and I think we did it,” Senate Majority Whip Dick Durbin (D-Ill.) said of the unsuccessful vote to close debate on a minimum-wage bill that did not include small-business tax breaks. “We know their position. They want a clean minimum-wage bill. We can’t produce that.

Speaker Nancy Pelosi (D-Calif.) and House Majority Leader Steny Hoyer (D-Md.) held firm to their contention that Congress should send President Bush a clean minimum-wage bill, but Senior Chief Deputy Majority Whip John Lewis (Ga.) said his leadership certainly would have to rethink its strategy on pushing for a minimum-wage increase without tax breaks.

“I think we have to,” said Lewis, who also sits on the House Ways and Means Committee. “We didn’t want to show our hand or throw in the towel because we were hoping it was possible to get a clean minimum-wage bill.”

Lewis held out the possibility the House would look to pass another minimum-wage bill with their own package of small-business tax cuts to preserve the procedural tradition of revenue bills originating in the House.

Other House leaders also left room for future negotiations with the Senate.

“Everyone knows the Senate operates differently. … You’ve got to let the process run its course,” said Assistant to the Speaker, Rep. Xavier Becerra (D-Calif.). He added: “The bottom line is I think both houses are indicating that a minimum-wage increase is not only important but needs to get done. From there, it’s how you get from A to B.”

Still, House Ways and Means Chairman Charlie Rangel (D-N.Y.) flatly refused to entertain the notion that his panel might have to negotiate a small-business tax package with the Senate.

“It sounds like you’re describing a problem that the Senate has,” said Rangel when asked about what he would do once the Senate was unable to garner 60 votes to overcome a filibuster of the clean minimum-wage measure.

Rangel added that the Senate’s insistence on coupling the $2.10 minimum-wage increase with small-business tax breaks did not make sense.

“We don’t see the connection on this side,” he said.

However, Senate Finance ranking member Chuck Grassley (R-Iowa) said he told Finance Chairman Max Baucus (D-Mont.) in December that any minimum-wage bill would have to move in tandem with tax breaks to mitigate the potential impact on small businesses, and even Rangel acknowledged that Baucus told him weeks ago that the Senate needed to produce a tax package as a way to smooth passage of the minimum wage.

Still, Baucus expressed confidence that the House eventually would play ball on the tax issue.

“There’s no doubt in my mind that we’ll get together rather quickly,” Baucus said.

Because they had insisted on including tax breaks, Senate Republicans said the failure of a straight minimum-wage measure to garner the necessary 60 votes was a victory for them, and they said the vote on the bill would force the House Democrats to take Republicans’ views into consideration.

“This vote ought to send a strong message to the other body that there’s got to be some accommodation for small business in this package,” Grassley said.

While Senate GOP leaders said they understood that the cloture vote was intended to send a message to House Democrats rather than to force an end to the debate, they nevertheless criticized both Baucus and Senate Majority Leader Harry Reid (D-Nev.) for championing the bipartisan $8.3 billion small-business tax package and then voting against including it in the bill on Wednesday.

“It was still somewhat hypocritical for Sen. Reid and Sen. Baucus to argue on the one hand that we have a bipartisan package and then vote against it,” said Senate Minority Leader Mitch McConnell (R-Ky.).

Meanwhile, Senate Democratic leaders predicted that a final vote on the minimum-wage bill would come early next week, after slogging through a number of Republican amendments.

McConnell, however, warned that Democrats needed to continue the bipartisan spirit in which the bill was crafted by giving Republicans ample time to debate their amendments.

“When we get the votes we feel we’re entitled to, we’ll move on,” he said.

Jennifer Yachnin contributed to this report

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