Senate passes minimum wage, tax break bill
Conflicting bills to put House, Senate Democrats at odds over amendments.
By
Christian Zappone, CNNMoney.com staff writer
February 1 2007: 5:32 PM EST
NEW YORK (CNNMoney.com) -- The Senate voted 94-3 Thursday to increase the federal minimum wage in three steps from $5.15 to $7.25 in a bill that also gives $8 billion worth of tax cuts to small business.
The bill, following an exhaustive debate that brought dozens of proposed amendments mostly by Republicans, now goes back to the House of Representatives where the original bill passed on Jan. 10 with no amendments.
The difference between the Senate bill and the "clean" House bill will become a test of the Senate and the House's will to compromise.
"The Senate should have passed a clean minimum wage bill in order to ensure that millions of hardworking Americans receive a long overdue raise," said Drew Hammill, spokesperson of House Speaker Nancy Pelosi (D-Calif.)
The added tax breaks are an attempt to compensate small businesses who many argue will bear the brunt of a minimum wage increase. To pay for those tax breaks, the Senate bill includes provisions closing corporate tax loopholes and provisions that would also cap the amount of tax-deferred compensation executives are entitled to.
The House technically has the right to set aside any tax or budget bill that come from the Senate.
Rep. Charles Rangel (D-N.Y.), chair of the House Ways and Means Committee, had earlier reiterated his prerogative to "blue-slip" or set aside indefinitely such a bill coming from the Senate.
Senate Republicans and President Bush, however, have said they wouldn't support a minimum wage bill without tax breaks for small business.
House Democratic staffers say the mood in the House is to let the Senate do what it needs to do in order to get a bill passed there.
Is it Time for a New New Deal
A minimum wage increase is part of the "First 100 hours" legislation proposed by the House Democratic majority, elected in November of 2006.
A minimum wage hike, which hasn't occurred since 1997, has been a key piece of the first 100 hours of legislation promised and passed by the newly elected Democratic majority in the House.
A minimum wage hike would directly affect 6.6 million workers currently earning the $5.15 wage, according to the labor-backed Economic Policy Institute.
The hike could also increase the wages of another 8.3 million who earn just above the minimum. Workers in 28 states plus Washington, D.C. already have a higher minimum wage. A number of those states have automatic increases for inflation.
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It's good news, though. 
