By Larry Jones
January 22, 2007

House Speaker Nancy Pelosi (CA) and other Democratic leaders successfully delivered on a promise to pass a minimum wage increase, H.R. 2, in the first 100 hours of the new 110th Congress. By a vote of 315 to 116, the House approved a $2.10 increase in the federal minimum wage over the next two years, the first increase in ten years.

In a January 9 letter to the House leadership, Conference President Trenton Mayor Doug Palmer thanked the House leadership for making the minimum wage increase a priority and urged all members of Congress to support it. He pointed out that, “The time for this badly needed legislation is long over due.” Palmer also explained that the cost of living has skyrocketed over the last ten years and imposed an enormous hardship on low-income earners. And he said, “A $2.10 increase over the next two years should provide significant relief.”

Conservative members in the House were unsuccessful in their efforts to add a package of small business tax breaks to the minimum wage bill to help small businesses. Pelosi and House Ways and Means Chairman Charles Rangel (NY) were successful in obtaining a rule for floor debate that did not allow an amendment to add the tax breaks to the bill. Recently adopted “Pay-Go” rules, which require all future tax cuts and increases in mandatory spending programs (such as Medicare and Medicaid) to be offset by new taxes or cuts in other programs, would have made passing the measure more difficult in the House.

However, Senate Majority Leader Harry Reid (NV), along with Senate Finance Committee Chairman Max Baucus (MT), voiced support for adding the small business tax breaks; and on January 17, the Senate Finance Committee approved, by voice-vote, an $8.3 billion package of tax incentives to help small businesses. The Senate bill is expected to be combined with H.R. 2 and be voted on the week of January 22 on the Senate floor. The bill is expected to receive strong bipartisan support in the Senate.