Minimum Wage Measure Moves to Senate

Rep. Michael McCrery, R-La., ranking Republican on the House Ways and Means Committee, left, accompanied by Rep. Howard McKeon, R-Calif., gestures during a news conference on Capitol Hill in Washington, Tuesday, Jan. 9, 2007 to discuss the raising of the minimum wage. (AP Photo/Susan Walsh) (Susan Walsh - AP)

WASHINGTON -- House-passed legislation boosting the federal minimum wage moves to the Senate, where Democrats intend to add billions of dollars in tax breaks to make it easier for business to swallow.

"Let us raise the minimum wage. Let us help small businesses cope," said Sen. Max Baucus, D-Mont, helping craft a multi-billion-dollar package of tax breaks aimed at businesses who hire low income workers, the restaurant industry and others.

Moving on a top priority, House Democrats, with help from 82 Republicans, overwhelmingly passed legislation Wednesday that would eventually lift the minimum wage by $2.10 an hour, the first increase in a decade. It didn't include any tax breaks to help temper the sting of higher labor costs to businesses.

"With the passage of this crucial legislation, we will reward work, paying America's workers a decent wage so they may join in our nation's prosperity," said House Speaker Nancy Pelosi of California.

In the Senate, however, Democrats have only a fragile majority and many of them favor the tax breaks.

The White House indicated that it would support a lift in the minimum wage as long as it as paired with "tax and regulatory relief to help small businesses stay competitive and to help keep the economy growing."

Sen. Majority Leader Harry Reid, D-Nev., has already signaled that Democrats will accept business-friendly amendments.

Baucus is working on a package with between $8 billion and $10 billion in relief over 10 years. Provisions being eyed for the package include a tax credit for employers who hire disadvantaged workers and faster depreciation for restaurant improvements, among other things.

The final minimum wage package will be ironed out in negotiations between the two chambers. It is likely that Pelosi and her Democratic colleagues will ultimately have to accept tax breaks for businesses if they are to get Bush's signature on one of their top priorities.

Under budget rules enacted law week, however, no tax legislation that clears the House can increase the deficit. That means a minimum wage that contains costly tax breaks would have to include either spending cuts or tax increases elsewhere to make up for the lost revenue.

The Senate _ like the House _ is not expected to waste time in advancing a minimum wage boost _ a top goal for Democrats now in control of both chambers.

Both bills would raise the federal wage floor by $2.10 from its current $5.15 an hour over 26 months.