The minimum wage as an unfunded mandate

NY Times:

The Senate is expected to clear the way on Tuesday for an increase in the minimum wage that Democrats and some Republicans agree is overdue.

But the Senate’s approval may not mean that workers will actually start receiving bigger paychecks in the immediate future.

The Senate bill differs from the one that cleared the House, and includes $8.3 billion in tax breaks for small businesses that Republicans and some Democrats say are necessary to offset the cost of the wage increase.

The House bill, which passed by a vote of 315 to 116, with 82 Republicans joining the Democrats, included none of those tax breaks. And Democratic leaders there have said they want to hold out for that kind of “clean” bill.

The question is how the leaders in both houses choose to reconcile the two approaches.

The first Senate vote will be on whether to limit debate on the measure, leading to a second vote — and expected approval — later this week.

Then, the Senate could hold on to the bill, leaving it to leaders from both chambers to work out the differences. Or, it could send the bill to the House, where the House could strip out the tax breaks and send it back to the Senate for a new vote.

Ted Kennedy was at his demagogic best in railing against tax cuts to offset the mandate.


"How many more billions of dollars do we have to give you, Mr. Republican?" the Massachusetts Democrat shouted. "How many more dollars do we have to give you to get an increase in the minimum wage? It is shocking. It is disgraceful."
So the Senate Finance Committee -- headed by Sen. Max Baucus, Montana Democrat -- added up the amount of tax cuts that it had included in the minimum-wage bill that the panel approved earlier this month. The $8.3 billion in tax cuts were aimed at the small businesses that hire most minimum-wage workers.
Senate Republicans were quick to note that the $8.3 billion in tax cuts for small businesses nationwide is less than the $8.5 billion federal funding cap placed on Boston's Big Dig highway project. Mr. Kennedy has been the principal sponsor of the project, which has been riddled with corruption, cost overruns, delays and safety woes.
"Senator Kennedy complains about $8.3 billion in tax relief out of one side of his mouth, while asking for $8.5 billion in pork-barrel spending out of the other," said Wesley Denton, spokesman for Sen. Jim DeMint, South Carolina Republican.
OK, so he is a hypocrite as well as a demagogue. It appears that Charley Rangel is intent on making the minimum wage requirement a fully unfunded mandate. In other words he wants to order other people to spend their money without any offset on the tax side. That he thinks that is fair tells you something about Democrats.


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