Senate Democrats Block Wage, Tax Bill

From: <KEBSCHULLW_at_aol.com>
Date: 4 Aug 2006 18:14:06 -0700

Procedural vote blocked passage of bill even though four Democrats voted for to procede to a final vote and two Republican senators voted against further consideration.

Cheers,

WDK August 4, 2006
Senate Democrats Block Wage, Tax Bill
By REUTERS
Filed at 0:29 a.m. ET

WASHINGTON (Reuters) - Democratic senators blocked their own goal on Thursday of raising the U.S. minimum wage for the first time since 1997 after Republicans added a huge tax break for the rich to the legislation, actions sure to reverberate in this election year.

On a 56-42 vote, the Republican-led Senate failed to get the 60 votes needed to clear the way for final congressional passage of the minimum wage increase and a big cut in inheritance taxes for wealthy Americans.

The hard-fought battle was a defeat for Senate Majority Leader Bill Frist of Tennessee, a possible 2008 Republican presidential candidate, who crafted the package last week with fellow Republicans in the House of Representatives.

The House had already approved the bill to raise the $5.15-per-hour minimum wage to $7.25 over three years.

Democrats, who have long pressed for a somewhat stronger minimum wage increase, have vowed to keep pushing for the pay raise, making it a centerpiece of their effort to take control of the Congress in the November election.

``They (Republicans) can get 6.6 million Americans an increase in their
basic minimum wage as long as we promised that the fattest of cats in America would get a great big bowl of tax cuts,'' said Sen. Richard Durbin of Illinois, the second-ranking Democrat in the Senate.

Organized labor blasted the Republican maneuvering and called on Congress to approve a stand-alone minimum wage increase to help keep some low-paid workers out of poverty.

ELECTION-YEAR POLITICS AFL-CIO President John Sweeney said the proposed estate tax reduction, estimated to cost hundreds of billions of dollars, would have led to cuts in health care, food stamps and other government benefits and
``end up hurting the very same people that a minimum wage increase is
supposed to help.''

Frist countered that the failed package was ``important to millions of hard working Americans.'' And he said the ``death tax'' on inherited wealth has meant ``90 percent of family businesses do not survive that third generation'' because they cannot afford the taxes or the cost of finding tax shelters.

Frist's high-stakes election-year gamble drew criticism even from some in his own party. ``The process was lousy and offensive,'' said Sen. Charles Grassley of Iowa.

Earlier this year, Frist also lost on two other issues important to his conservative base: constitutional amendments to ban flag-burning and same-sex marriage.

But Republicans hope just raising these issues will help energize supporters in the run-up to the November vote.

The Senate also blocked a one-year renewal of a series of popular tax breaks that expired late last year, including a state and local sales tax deduction, a research and development tax credit and a deduction for college tuition.

The one-year renewal could be resurrected in September.

The Republican plan would have eventually excluded estates valued at up to $5 million per individual, or $10 million for married couples, from any taxes.

Estates over $5 million to $25 million would have been taxed at 15 percent and anything over $25 million at 30 percent.

President George W. Bush's 2001 tax cut included a phase-out of the estate tax, with full repeal lasting only for the year 2010. If Congress does not pass a new reduction, the tax would go back to the top rate of 55 percent on estates over $1 million in 2011.