Skip to content

Democrats Push More Aggressive Minimum Wage Plan, Use Taxes as Lure

Senate Democrats are looking for sweeteners such as small-business tax incentives they hope will attract support from Republicans and constituent groups for a plan to raise the minimum wage to a level beyond what President Barack Obama has proposed.

Health, Education, Labor and Pensions Chairman Tom Harkin of Iowa said in coming months he wants to move a new proposal (S 460) that would increase, in stages, the current minimum wage of $7.25 an hour to $10.10 an hour.

“If the minimum wage had kept up with rising prices for food, rent, utilities, clothing and other goods, then the wage would be $10.56 today. But instead it’s $7.25,” Harkin said in a statement. “My bill will restore much of the buying power of the minimum wage.”

Supporters include Democratic Sen. Benjamin L. Cardin of Maryland, a tax writer, who says small-business tax incentives should be coupled with the proposal to help offset concerns of businesses about the impact on overall wage costs.

Democrats point to the 2007 minimum wage hike (PL 110-28), which was combined with small-business tax incentives, as a possible model.

“What gets connected to it will be related to business, and small business particularly,” Cardin said. One plan, he said, may include his own draft proposal to provide more incentives for “S corporations,” businesses that are taxed through the individual filings of shareholders.

Harkin’s bill goes well beyond Obama’s proposal to increase the federal hourly minimum wage from $7.25 to $9 in stages.

That idea has drawn protests from Republicans and business groups. But allies say Harkin has a strong base for action, with the support of 25 members of the 55-member Democratic Caucus, including Majority Whip Richard J. Durbin of Illinois and Charles E. Schumer of New York.

Cardin said he and other supporters hope to gain momentum from the push for a tax overhaul on Capitol Hill. “It could ride along with it,” Cardin said.

Finance Chairman Max Baucus of Montana helped engineer the small-business tax incentives that were attached to the 2007 minimum wage increase with his longtime ally, Charles E. Grassley of Iowa, then the panel’s ranking member. But Baucus and Grassley both have been cool to the latest minimum wage increase proposal.

Baucus said this week he did not envision a minimum wage increase being part of his panel’s discussion of a possible framework for a tax overhaul in coming weeks. “When we consider tax reform, I doubt that minimum wage is a part of anything that we can propose,” Baucus said.

Grassley said he flatly would not support another minimum wage hike.

“It’s a bad time to do it,” he said. “Somebody’s not going to get a job.”

In the House, Ways and Means Chairman Dave Camp, who supported the 2007 minimum wage increase, said he intends to move small-business incentives in a tax overhaul and not in a minimum wage measure.

“I supported that last package with small-business reform,” the Michigan Republican said. “But this is a different issue now because we want to do a comprehensive reform now.”

Still, supporters of the Harkin bill, and a draft companion in the House, sponsored by Rep. George Miller, D-Calif., say they believe the minimum wage could attract bipartisan support. And they contend the measure would spur growth by giving workers more money to spend.

“I care about wages. These wages would go right back into the economy,” Sen. Jay Rockefeller, D-W.Va., said.

Rep. Sander M. Levin of Michigan, ranking member on Ways and Means, said he and other Democrats were hunting for Republican allies who could help to push the minimum wage increase. “There are some Republicans who would vote for it on its own,” Levin said.

But for now, a number of Republicans, including Sen. Richard C. Shelby of Alabama, ranking member on Appropriations, are vowing to oppose the measure.

“That costs jobs. … It interferes with marketplace,” Shelby said.

“I am open to an increase up to the level that Maine has,” said Susan Collins of Maine, which has a $7.50 state minimum wage. “I think we have to be very careful that we don’t end up hurting the very people that the minimum wage increase is intended to help.”

Recent Stories

FDA delays menthol ban following lobbying war

House tees up censure vote for Rep. Jamaal Bowman over fire alarm pull

Framework appropriations deal elusive as session winds down

War supplemental stymied in Senate over border holdup

Congress takes holiday decorating seriously. This year it caused an outcry

House Judiciary panel advances renewal of surveillance authority