- The Washington Times - Thursday, August 3, 2006

Senate Democrats last night killed a Republican bill that would have reduced the “death tax,” increased the minimum wage for the first time in a decade, and extended popular tax breaks for teachers, college students and businesses.

The bill fell four votes short of the 60 votes to overcome a Democratic blockade, getting just a 56-42 majority, with three Republicans joining 38 Democrats and independent James M. Jeffords of Vermont to vote against it. Fifty-two Republicans and four Democrats voted for the bill.

“What’s going on here is block and blame,” said Senate Majority Whip Mitch McConnell, Kentucky Republican. Senate Majority Leader Bill Frist, Tennessee Republican, said the bill was “critically important to the American people” and that he may bring it back. “I hope the Democratic senators will rethink long and hard,” he said.

The Senate overwhelmingly approved a bipartisan pensions-overhaul bill later last night, sending it to the president on a 93-5 vote.

Democrats said they would not be coerced into supporting a cut in the estate tax, which most of them denounce as a frivolous gift to the rich, in order to get the wage and tax provisions they want.

“They’re holding the minimum wage and middle-class tax relief hostage, so they can repeal the estate tax,” said Senate Minority Leader Harry Reid, Nevada Democrat.

Sen. Richard J. Durbin, Illinois Democrat, said the estate tax “will bring deeper debt to our nation” and that Republicans blocked a minimum-wage increase for nine years, only to have a “deathbed conversion” months before a tough election.

House and Senate Republican leaders crafted the bill hoping it would smooth passage of their estate-tax relief, neutralize the minimum-wage issue for Republicans in tight races this year, and force Democrats to decide whether to vote against one of their pet issues. Republicans also loaded the bill with items targeted at specific members, such as a tax break for timber companies aimed at Washington and provisions to help coal miners in West Virginia.

In the end, that was not enough, but the political fighting started before the bill was defeated. Sen. Maria Cantwell, a Washington Democrat who is up for re-election, expressed her opposition to the bill yesterday afternoon, citing a provision she said would cut wages for tip workers. The National Republican Senatorial Committee quickly shot out a statement reading, “Cantwell bows to political bosses rather than standing up for Washingtonians.”

The bill, which was approved in the House, would have raised the minimum wage from $5.15 per hour to $7.25 per hour over three years. It also would have cut the estate tax, which now exempts the first $2 million of a person’s estate and $4 million of a couple’s. The Senate bill increased those exemptions to $5 million and $10 million, respectively. Estates worth up to $25 million would have been taxed at the capital gains rate, now 15 percent, and estates worth more than $25 million would have been taxed at a rate of 30 percent. The current rate is 46 percent.

It also would have extended popular tax breaks for teachers who spend their own money on classroom supplies, businesses that conduct research and development, those paying college tuition, and employers who hire welfare recipients.

“If they want to be painted as the obstructionists … then I’d welcome that fight,” said Sen. John Thune, South Dakota Republican.

The pensions bill, meanwhile, sets new funding rules for employers with defined-benefit plans and cracks down on companies that have fallen behind their obligations.

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