Estate Tax, Wage Hike Teetering In Senate

By Jonathan Weisman and Charles Babington
Washington Post Staff Writers
Sunday, July 30, 2006

The House completed its summer work in a flurry of post-midnight debates and votes yesterday, approving changes to the federal minimum wage, estate taxes and pension laws. But with deep divisions lurking in the Senate, it all may go for naught, as have so many other recent efforts, leaving the two chambers open to perhaps the loudest taunts of "do-nothing Congress" in decades.

Despite their control of the House, Senate and White House, Republicans have been unable to reach accord on immigration, lobbying reform, military tribunals, Social Security and even nuts-and-bolts measures such as a 2007 budget plan. Lawmakers still have time to pass some of that legislation, but not much.

House members left town yesterday for the August recess, and senators are expected to follow suit in a few days. When both chambers reconvene after Labor Day, they will have 15 scheduled work days before their planned final adjournment for the fall elections.

Democrats have poked fun at the GOP-run Congress's long weekends and frequent recesses before, but the "do-nothing" jibes may carry more sting as November balloting nears. Republicans face their lowest approval ratings in a decade, and Democrats feel they are close to retaking the House -- and conceivably the Senate -- in the midterm elections.

"I think people care, and they should care," said Rep. Christopher Shays (Conn.), an embattled Republican who so far has failed to secure his top legislative priority -- strong controls on lobbying. "I just hope people understand that things have become so partisan around here that the best thing we can do is get this election out of the way and come back to work."

Republican leaders shrug off the "do-nothing" charge. "You get used to hearing that nonsense," said House Majority Leader John A. Boehner (R-Ohio). As for beating the 1948 Congress's record for lethargy, he joked, "Most Americans will be pretty happy with that."

The weekend's flurry of House action may give Republicans some midsummer bragging rights, but it's far from clear that the Senate will go along. The House voted to boost the nation's minimum wage for the first time in nine years, slash the estate tax permanently and extend several business tax breaks. It also voted 279 to 131 to approve the most sweeping overhaul of the nation's pension laws in 30 years.

Those measures face deep uncertainty in the Senate this week, where maneuvering by Majority Leader Bill Frist (R-Tenn.) has alienated several committee chairmen and triggered Democratic accusations of cynicism. Given senators' ability to thwart legislation more easily than House members, the discontent could prove fatal.

The House, at about 1:30 a.m. yesterday, voted 230 to 180 to raise the minimum wage to $7.25 an hour, from the $5.15 rate on the books since 1997. The bill also would exempt from taxation all estates worth as much as $5 million -- or $10 million for a married couple -- and apply a 15 percent tax rate to inheritances above that threshold and as much as $25 million. For estates exceeding $25 million in value, the tax rate would be 30 percent.

Most congressional Republicans support the estate-tax cuts and oppose the minimum wage increase. Most Democrats take the opposite positions. Democrats said they saw a two-edged strategy in the GOP decision to couple the issues.

Democrats' eagerness to raise the minimum wage might attract enough support in the Senate as well as the House to pass the estate-tax cut, a major GOP goal. But if Senate Democrats block the bill because of their aversion to the estate-tax cut -- as their leaders have vowed to do -- House Republicans may at least be able to blunt Democratic accusations that they made no effort to help the working poor.

Frist, who will retire this year and possibly run for president, faces a huge challenge this week in trying to soothe hurt feelings, minimize Democratic opposition and steer the tax, wage and pension legislation to passage with no changes that would force a return to the House. A heart surgeon who had comparatively light legislative experience when President Bush helped elevate him to the majority leader's post, Frist gambled by agreeing with House leaders to strip some popular business tax extensions from the pension bill and add them to the proposed estate-tax cut, a Frist priority.

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