On July 29, the House approved, 230-180, a bill (H.R. 5970) that would increase the minimum wage from $5.15 to $7.25 over three years. The legislation would increase — to $5 million for individuals and $10 million for couples by 2015 — the amount of inheritance exempt from the estate tax, and would index the amount to inflation after 2015. The bill also would extend several tax credits through 2007, including: an above-the-line $4,000 deduction for tuition and related expenses, which would replace the Hope and Lifetime Learning tax credits; an above-the-line $250 deduction for teachers for classroom supplies; the Work Opportunity Tax Credit (WOTC) for employers that hire workers facing barriers to employment; the Welfare-to-Work (WTW) Tax Credit for employers hiring individuals who have received public assistance (after 2006, the WOTC and WTW credits would be combined); and the Archer Medical Savings Accounts, which allow individuals to make tax-deductible contributions for health care expenses. The legislation also extends through 2007 the penalty for group health plans that impose limits on mental health benefits, but not medical benefits, in violation of the Mental Health Parity Act of 1996 (P.L. 108-311).
Rep. Juanita Millender-McDonald (D-CA) said, “Mr. Speaker this is a sad day. The American people need our help. From coast to coast, the lowest paid Americans are clamoring for assistance as they struggle to live off of wages not suitable for this decade. It is obvious that an increase in the minimum wage is sadly overdue. Unfortunately, when the majority finally provides the opportunity to vote on increasing the minimum wage, it comes to us bloated, filled with provisions harmful to the American worker and which ensure that this legislation is never enacted…For the last two-years, the Democrats have fought to increase the minimum wage. The effect of the last minimum wage increase in 1996-97 has been completely eroded by inflation…At the same time fuel prices have continued to skyrocket, housing prices are soaring and health care continues to be out of reach for those whose jobs do not provide it for them. If the Democrat minimum wage initiative would come to the floor, an estimated 14.9 million workers would receive an increase in their hourly wage rate if the Democrat minimum wage were raised…But this Republican bill does not provide the minimum wage increase American workers need. It delays the increase and nullifies wage protections for tipped workers…The American people need us more than ever. I urge my colleagues to only support a clean bill focused solely on the minimum wage and to vote against this Republican legislation in its current form.”
Rep. Nancy Johnson (R-CT) said, “I am proud, yes, for raising the minimum wage by 40 percent. It is simple. Working families deserve a pay raise, and tonight we pass a 40 percent increase in the minimum wage. But this bill helps workers in many other ways…In my district, an old manufacturing part of the nation, most of our manufacturers, high quality, high skilled, are small and family owned. But to compete as a supplier in a global economy, they have to be good, and that takes expensive equipment. Dad dies, you have to sell off. You have to sell that family-owned business because you cannot afford the taxes. A permanent estate tax will let that family business survive and those jobs survive because you know what happens? Those small manufacturers get bought and the jobs leave town. They go to a bigger plant. They get merged in. So if you want to protect jobs in your town, we need a permanent estate tax because that way small family-owned manufacturers can survive…We also protect the opportunity for American workers to get the education they need to compete. That $4,000 tax deduction for education expenses that is building the future…This is about working America. This is a tax bill about working America, about opportunity, about equity, about fairness, and about protecting our jobs. And, yes, it raises the minimum wage…I am proud to vote for it. I urge members on both sides of the aisle to vote for it because this is good policy by a strong Congress, and we need to get through the Senate and to the President’s desk.”
Prior to the vote on H.R. 5970, Rep. George Miller (D-CA) offered a motion to recommit the bill that would have removed the estate tax provisions. The motion failed, 190-220.
The Senate is expected to consider the bill next week.
