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Senate Begins Debate on Minimum Wage Bill; Amendments on Child Care, Women’s Business Centers, School Supplies Approved

This week, the Senate began its consideration of a bill (H.R. 2) to incrementally raise the minimum wage to $7.25 over the next two years. The House approved the bill on January 10 (see The Source, 1/12/07). The Senate is expected to continue consideration of the bill next week.

On January 24, the Senate defeated, 54-34, an effort to invoke cloture on the motion to proceed to consideration of the bill; the vote fell six votes short of the 60 votes necessary to limit debate. The cloture motion was defeated because many believed that the bill would not pass, and the president would not sign it into law, without the adoption of a substitute amendment sponsored by Sen. Max Baucus (D-MT). The provisions of the substitute amendment a package of tax credits for small businesses were already approved by the Senate Finance Committee (see The Source, 1/19/07). However, because the Constitution requires tax legislation to originate in the House, some Senators will likely raise objections if the Senate adopts the substitute amendment.

An amendment offered by Sens. John Kerry (D-MA), Olympia Snowe (R-ME), and John Sununu (R-NH) to allow established Women’s Business Centers to apply for a three-year grant of $90,000 to $150,000 per year was approved by unanimous consent.

“There are about 100 Women’s Business Centers [WBC] across the country,” said Sen. Sununu. “There is one in Portsmouth [New Hampshire] that was among the very first created in the United States, and it deals with a range of issues from providing an incubator for women entrepreneurs just starting a firm, to providing training and counseling, support for marketing services, and information about government procurement, so many of the issues that have already been addressed on the floor. What this amendment does is to simply ensure that those high-performing WBCs that have continued to serve a strong, important clientele and have supported entrepreneurship and investment in their community continue to be eligible for funding. Under the current restrictions, some of those centers, after five years of sustainability grants, lose the opportunity for additional funding. My amendment would create a new program within the WBC program that allows those centers to apply for a three-year continuation of federal funding, provided they continue to meet high standards, serve their clients effectively, and attract sources of funding from the community.”

In a press release, Sen. Snowe said, “We cannot afford to ignore, or minimize, the extraordinary contributions America’s business women are making to our economy, our culture, and our future. The achievements of women entrepreneurs are undeniable. Women-owned firms generate almost $2.5 trillion in revenues. They employ more than 19 million workers and are the fastest growing segment of today’s economy. In my home state of Maine alone, more than 63,000 women-owned firms generate an astounding $9 billion in sales. Today, I am pleased to join Small Business Committee Chairman John Kerry and Senator Sununu with this amendment so women small business owners have the resources, the support, and the opportunities they need and deserve.”

“I’ve been working for 21 years on the [Small Business] Committee to promote expanded entrepreneurial opportunities for women and secure funding for these centers, which help turn ideas into jobs, start-ups into success,” said Sen. Kerry, also in a press release. “I cannot stress enough the vital role Women’s Business Centers play in cities all around the country, like Boston and Worcester. This amendment ensures we will be providing women-owned small businesses the tools they need to grow and flourish.”

An amendment by Sen. Jeff Sessions (R-AL) to authorize the secretary of the Treasury to study the costs and barriers to businesses if the advance earned income tax credit (EITC) program included all EITC recipients, and to require employers to provide all EITC-eligible employees with an application for advance payment within 30 days of hire, was approved by voice vote. Workers may elect to have some of their expected EITC paid in advance; that is, have the EITC included in their paycheck rather than wait until they receive their federal income tax return at the end of the year. According to Sen. Sessions, less than five percent of workers eligible for the EITC elect to receive it in advance and the majority of eligible workers are unaware they can receive the credit in advance.

Speaking on behalf of his amendment, Sen. Sessions said, “We could give the average low-to-middle income worker, a family man or woman, almost a $1-an-hour raise without any increase in taxes. How would we do that? In the way we administer the earned-income tax credit…The way it is administered now, a worker who falls in the category of earned-income tax credit, files his income tax return next April, May or March, whenever he gets his papers together, and gets an average of a $1,700 tax credit from the U.S. Treasury. I submit that worker does not understand or have any real comprehension of the fact that the tax credit incentivizes work. It is not connected to his work. We ought to reconnect the earned-income tax credit to the workplace. The way we do that is the way it is now authorized under law–it can be done this way, but it is not being done this way–and that is to put it on the paycheck. And $1,700 per year is a $1-an-hour increase in the take-home pay of low-wage workers in America. They could take that money home every week with their paycheck, they could appreciate their jobs much better and they could be more prideful of that paycheck they take home and have more incentive to continue to work.”

Sen. Pat Roberts (R-KS) offered an amendment to authorize the secretary of Health and Human Services to award grants to states to provide assistance for small businesses to establish and operate child care services; the amendment was approved by unanimous consent. Speaking in support of his amendment, Sen. Roberts relayed the story of a single mother he met while campaigning; she told him that her greatest need was reliable child care. Sen. Roberts said he hoped that “this amendment would alleviate the strain on working families who often have to close the door on the opportunity to be a double-income family because of the lack of childcare options in their communities.”

Sen. Christopher Dodd (D-CT) said the amendment was “good for everyone involved.” He continued, saying, “The hardest thing in the world is for smaller business to provide child care. It is not that they do not recognize the need for it. They understand the value of it. This amendment, from a child’s perspective, from a parent’s perspective, and from a business perspective is a win for all. I commend my colleague. We have talked of this in the past and agreed on its importance.”

An amendment by Sens. Susan Collins (R-ME) and John Warner (R-VA) to permanently extend and increase the above-the-line income tax deduction of up to $400 for teacher classroom supplies and to expand such deduction to include qualified professional development expenses was approved by voice vote. Sen. Collins said that she has spoken with “dozens of teachers in Maine who tell me they routinely spend far in excess of the $250 deduction limit that is in current law.” She lauded the work of educators, saying, “In most states, including mine, teachers are very modestly paid for their jobs, and I think it is so impressive that despite challenging jobs and modest salaries, teachers are willing to dig deep into their own pockets to enrich the classroom experience because they care so deeply for their students…In my view, it is the students who are the ultimate beneficiaries when teachers receive professional development to sharpen their skills or to teach them a new approach to presenting material to their students. Studies consistently have shown that other than involved parents, the single greatest determinant of classroom success is the presence of a well-qualified teacher, and educators themselves understand just how important professional development is to their ability to make a positive impact in the classroom. The teacher tax relief we have made available since 2001 is certainly a positive step, and I was very proud, along with Senator Warner, to have authored that law.”

An amendment by Sen. Wayne Allard (R-CO) to prevent employers in a state from having to pay a higher wage than the state’s minimum wage failed, 28-69.

“According to the Economic Policy Institute, 28 states plus the District of Columbia have minimum wages above the federal level in 2007. Washington state has the highest minimum wage at $7.93 an hour. Several states, including Connecticut, Massachusetts, and Oregon, have raised their minimum wage beyond $7.50 an hour,” said Sen. Allard. He continued, “If we are going to do this and do this right, we should be cautious in federally mandating a one-size-fits-all minimum wage. We should allow states to take into consideration the needs of their economy. We should give states the rights and flexibility to set their own minimum wage. Costs of living and wages vary dramatically state to state. What is right for Wyoming is not necessarily what is right for Massachusetts. Imposing dramatic increases to the minimum wage on states poses a threat to local economies….Whether the need is above or below the proposed $2.10 increase, state officials should have the right to decide…Let’s allow the states to have a say and decide what is right for them. They are the closest to the people.”

Speaking in opposition to the amendment, Sen. Edward Kennedy (D-MA) said, “I respect the Senator from Colorado, his view on this issue, but if we accepted the amendment of the Senator, it would effectively eliminate the minimum wage as we know it. I think the reason for the minimum wage, as we have tried to point out during the course of this debate in discussion, was to establish a basic floor as a standard for payment for individuals who worked long and hard in some of the most difficult jobs in this country. We have eliminated child labor. We have established laws with regard to overtime. We have tried to be not only the strongest economy in the world but one that is going to respect workers and workers’ rights and workers’ interests and workers’ families. The minimum wage does not do so at the present time, but many of us will continue to battle to try to make sure it does. The Allard amendment brings us all in the opposite direction.”

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