Wage hike stalls in the Senate

WASHINGTON A Democratic proposal to increase the federal minimum wage for the first time since 1997 stalled in the Senate Wednesday as Republican senators refused to push the measure forward without the insertion of tax breaks to offset the impact on restaurants and other small businesses.

The House easily passed a bill in early January that would increase the federal wage from its current $5.15 per hour to $7.25 per hour in three staged wage hikes. The measure was in effect rejected by the Senate when it refused by a six-vote margin to consider the proposal without debate. The failure of the Democrats’ attempt at cloture signals that the Senate will eventually vote on a wage-hike bill far different from the House’s version. The distinct measures would then have to be reconciled in a conference committee between the two legislative chambers.

According to some reports, Democrats in the House have agreed to accept $8 billion in tax breaks within the compromise bill. The sweeteners are expected to include an acceleration of the depreciation write-off for newly constructed restaurants and an extension of the accelerated schedule for renovations.

The Senate could pass a version of the bill with those tax offsets as early as next week, reports indicated. President Bush has indicated he would sign a bill that included tax relief to help small business pay for a minimum wage hike.