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Bush Supports Democrats' Minimum Wage Hike Plan

By Michael A. Fletcher and Jonathan Weisman
Washington Post Staff Writers
Thursday, December 21, 2006

President Bush for the first time endorsed a specific plan for raising the federal minimum wage yesterday, as he embraced Democratic calls to boost it by $2.10, to $7.25 an hour, over two years.

The president's backing greatly enhances the prospects for congressional approval next year of the first hike in the federal minimum wage since 1997. He stressed, however, that it should be accompanied by tax breaks and regulatory relief that would cushion the blow for small businesses.

"I believe we should do it in a way that does not punish the millions of small businesses that are creating most of the new jobs in our country," Bush said during a news conference. "So I support pairing it with targeted tax and regulatory relief to help these small businesses stay competitive and to help keep our economy growing."

The president's endorsement of a minimum wage increase breaks with the position long held by conservative Republicans that the increase would hurt business and ultimately the economy. But with the Democrats poised to take control of both chambers of Congress for the first time in more than a decade, Bush cited his support of the proposed increase as proof of his intent to operate in a more bipartisan manner during the remaining two years of his presidency.

Beyond increasing the minimum wage, the president said that he hopes to reach agreements with the new Congress on a guest-worker program for low-skill immigrants, renewal of the No Child Left Behind education law and measures aimed at encouraging the development of alternative fuels.

"To achieve these and other key goals, we need to put aside our partisan differences and work constructively to address the vital issues confronting our nation," Bush said.

Democrats and their supporters in organized labor responded warily to Bush's proposal to link a minimum wage hike to tax breaks for business, saying the increase should be passed on its own merits. Democratic leaders have promised to make increasing the $5.15-per-hour minimum wage one of the first orders of business when the new Congress convenes Jan. 4.

"Minimum wage workers have waited almost 10 long years for an increase -- we need to pass a clean bill giving them the raise they deserve as quickly as possible," said Sen. Edward M. Kennedy (D-Mass.), who sponsored legislation to increase the wage that failed in Congress earlier this year.

Democrats have pledged to reinstate budget rules that would require that any tax cut be offset by equivalent tax increases or spending cuts. Some Democrats say they do not want to complicate their effort to raise the minimum wage by linking that issue to business tax breaks, as Bush and many Republicans are insisting. House Democrats will vote early next month on a stand-alone wage increase, leadership aides said.

"Let's be clear, given that nearly a decade has passed since the last minimum wage increase, no one can seriously believe that the proposed increase will harm the small-business sector," said Rep. George Miller (D-Calif.), the incoming chairman of the House Education and the Workforce Committee. "A minimum wage increase should not and need not be conditional on other legislation or policy changes."

But House Democrats concede that the situation may be different in the Senate. Earlier this year, Senate Republicans voted down a stand-alone wage hike, and Democrats may need 60 votes to break a filibuster if they try to pass a minimum wage increase without tax cuts. Senate Finance Committee aides are already looking for small-business tax breaks that the incoming committee chairman, Max Baucus (D-Mont.) wants passed regardless of minimum wage legislation.

"Senator Baucus is looking at small-business tax breaks for sure," a Baucus aide said. "Whether they're paired with minimum wage or move at another time, he intends to help small business."

White House officials, meanwhile, say they are still working to identify tax cuts they would like to see accompany a minimum wage increase.

Across the country, about 1.9 million workers earn the minimum wage or less, and economists estimate that 14.9 million other workers would benefit from an increase in the standard. When adjusted for inflation, the buying power of the minimum wage has dwindled to its lowest level since 1955, and raising the rate has become a popular issue among voters.

Twenty-eight states and the District of Columbia have established minimum wages that surpass the federal standard. In November, voters ratified ballot initiatives, often backed by coalitions including both organized labor and religious groups, to increase the minimum wage in six states.

"America's workers deserve a clean vote on a $7.25 increase, with no strings attached," AFL-CIO President John J. Sweeney said. "Such an increase helps everyone and hurts no one."

At his news conference, Bush said that, despite the power shift in Congress, he will continue to have a strong voice in domestic policy even if it means reaching across the aisle to get things done. "There's a lot of attitude here that says, 'Well, you lost the Congress. Therefore, you're not going to get anything done.' Quite the contrary," he said. "I have an interest to get things done. And the Democrat leaders have an interest to get something done to show that they're worthy of their leadership roles."

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