Senate rejects minimum wage/estate tax bill

On August 3, Senate Democrats declined to swallow the poison pill that Republican legislators were offering them — the bill linking an increase in the minimum wage to cuts to the estate tax that passed the House on July 30.

OMB Watch has a good analysis that breaks down the costs that the estate tax cuts would have imposed.

Frist opened floor debate … insisting, if not threatening, that this would be the Senate’s last opportunity, perhaps assuming that a majority supporting each of the parts translated into a majority supporting the whole.

But in the end, the estate tax provision, which would have eliminated about 75 percent of estate tax revenues, amounting to $750 billion including interest costs in the first decade of full implementation, proved too costly to bear for Democrats and moderate Republicans.

Minority Leader Harry M. Reid (D-NV), citing the fact that, under the bill, “8,100 of the wealthy and well-off hit the jackpot, while millions of working families get $800 billion in [national] debt,” managed to hold on to the votes of 38 Democrats, despite at times intense lobbying by Frist. Reid was also quick to point out that estate tax repeal will not benefit the middle-class, but rather the richest of the rich in this county.

It remains to be seen whether the Democrats will continue to make the right kind of hay out of this cynical manipulation as the mid-term elections approach. Let’s hope we hear them insisting at every opportunity that this was an open attempt by Republicans to undermine the increase in the minimum wage that Democrats have been working for.

2 Responses to “Senate rejects minimum wage/estate tax bill”

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  Albany Lawyer says:

  August 12, 2006 at 7:19 am

  Your readers might be interested (okay, enraged might be a better word) by my post on <>< HREF="http://www.wredlich.com/stop-wasting-money/2006/08/minimum-wage-different-kind-of-waste.html" REL="nofollow">minimum wage<><>.I hope you and your readers will answer my question as to what the “correct” level should be for minimum wage. Ideally, you would also discuss the consequences of a high minimum wage or the ineffectiveness of a low minimum wage.I know I’m going into the mouth of the lion on this, so please keep comments polite or they will not be published.Thanks,Warren

   
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  Thad Williamson says:

  August 16, 2006 at 3:23 pm

  The minimum wage ideally should be sufficient to lift a full-time worker out of poverty. This means being able to pay the bills, having a little cushion in the case of emergencies, and having time to care for children and family members and to participate in the community. We are a long way off from that goal. A good near-medium term target point, I’d submit, would be about $8/hr as the minimum wage–roughly its real value during the 1960s (a decade of healthy economic growth, by the way). If combined with health macroeconomic policies, such an increase would be very unlikely to have much impact on job creation (in part b/c the higher wages will lead to reduced turnover, greater productivity, and attract better workers). Likewise, a higher minimum wage might actually help smaller retailers in competing against the likes of Wal-Mart, to the extent that Wal-Mart’s competitive advantage is based on use of very cheap labor. A recent study shows that small business employment has actually grown faster in states with higher minimum wages.What this basically comes down to is what kind of society you want to live in. No one should celebrate an economy that produces a lot of jobs if the substance of those jobs is stressful, insecure drudgery with meager rewards, and that require workers to spend all their time and energy simply trying to survive. Rather we should set ground rules that ensure that if you work, you will have the resources to take care of yourself and your family and have the time and energy to participate in the broader community. Once that baseline is in place, tweak the macroeconomic policies to bolster employment as necessary.This is not a revolutionary proposal. It’s what we already do. We don’t tolerate slavery, use of child labor, gender and racial discrimination, unsafe workplaces, or a number of other practices–even though conceivably employer costs would go down and more workers would be hired if we did permit these things. Why? Because we have a shared understanding that these things are morally wrong and beneath our dignity as a society. We need to extend that understanding to recognize that it’s also morally wrong to organize society such that millions of our fellow citizens can work full time and are still swamped by poverty.