Senate passes wage bill; House to fight tax relief

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The Senate overwhelmingly passed a bill yesterday that would raise the federal minimum wage to $7.25 an hour, but the fight for its survival has just begun.

House Democrats have threatened to invoke a parliamentary rule that would disqualify the legislation because of a Republican-sponsored provision that would provide some tax relief to small businesses. The measure aims to help employers absorb the higher payroll cost.

Senate Majority Leader Harry Reid, Nevada Democrat, is expected to delay sending the bill to the House, which passed its version last month, while the two chambers negotiate.

The talks could last weeks, said Democratic aides in both chambers.

"We've had a period of tax cuts after tax cuts after tax cuts," said Drew Hammill, spokesman for House Speaker Nancy Pelosi, California Democrat. "American workers are earning less, and it's long overdue that this raise happens."

Rep. Charles B. Rangel, New York Democrat and chairman of the Ways and Means Committee, has demanded a "clean" minimum-wage bill identical to the House version.

Senate Democrats had balked at the tax-relief measure, but their slim majority forced them to accept it to gain Republican votes needed to pass the bill 94-3. Mrs. Pelosi and Mr. Rangel now face a similar bargain.

Ways and Means Committee spokesman Matthew Beck said Republicans were "holding hostage" the wage increase.

Congress has not increased the minimum wage since 1997, the longest stretch without a raise since a minimum wage was established in 1938 at 25 cents per hour.

"The message is the Senate of the United States listened to the people," said Sen. Edward M. Kennedy, Massachusetts Democrat, who managed the bill. "That's the powerful message that is out there tonight."

He said the tax measures would help small businesses create jobs and were the "least offensive" additions to the bill.

The tax package would save small businesses $8.3 billion, a fraction of the $268 billion in tax cuts Republicans proposed for a minimum-wage bill last year.

Sen. Michael B. Enzi, Wyoming Republican and ranking member of the Health, Education, Labor and Pensions Committee, called on the House not to "derail this bipartisan approach."

"Passing the Senate's bipartisan minimum wage and small business relief is good for low-skilled workers, and it is good for the middle-class working families of America," Mr. Enzi said.

Both chambers passed bills that would raise the minimum wage by $2.10 over two years, from $5.15 to $7.25 an hour.

Sen. Benjamin L. Cardin, Maryland Democrat, who spent years on the House Ways and Means Committee before elected senator in November, said the bill would pass once the House "put its stamp on it."

"I don't think they will take the tax provisions out. They might try that, but at the end of the day, I think the tax provisions are going to be in the bill," he said.

The increase would be phased in starting with a raise to $5.85 at 60 days after enactment, to $6.55 a year later and to $7.25 the next year.