Minimum wage hikes die in Senate

WASHINGTON -- Republicans and Democrats in the Senate defeated each other's proposals yesterday to raise the minimum wage, with political wrangling resulting in largely party-line fissures that will keep the nation's minimum wage where it's been since 1997.

The national minimum wage will remain at $5.15 an hour despite the fact that large numbers of Democrats and Republicans registered their support for an increase yesterday. The failure to pass an increase reflects the complex politics of the minimum wage and its impact on economic growth and small businesses.

The partisan deadlock over minimum wage cleared the way for the Senate to approve a bill that would significantly tighten the nation's bankruptcy laws.

House leaders had warned that they would only consider the bankruptcy overhaul bill if it passes the Senate free of unrelated amendments, including those affecting the minimum wage. It is expected to pass the Senate today.

In the past, Republican Senate leaders have thwarted Democrats' attempts to bring the minimum wage to the Senate floor. Yesterday they allowed the vote on a Democratic plan to raise the wage by $2.10 over the next 26 months, and on a separate proposal by Senator Rick Santorum, Republican of Pennsylvania, for hiking the minimum by $1.10 over the next 18 months, but also exempting more businesses.

Republican leaders didn't really want either proposal to succeed.

Even Santorum said the need to pass a bankruptcy overhaul is so urgent that it shouldn't be complicated with the minimum wage issue.

But some GOP senators wanted a chance to vote for Santorum's plan to demonstrate their support for a modest wage increase.

"I would hope candidly that we didn't pass either of these at this time," said Santorum, chairman of the Senate Republican Conference, who nonetheless voted for his amendment.

House majority leader Tom De- Lay said last week that an increase in the minimum wage could derail the bankruptcy bill, because House leaders don't believe the minimum should be raised. The bankruptcy bill, which Democrats say would harm people who run up large medical debts, is expected to gain Senate approval today, and the defeat of minimum wage amendments should ease its passage in the House.

Democrats accused Republicans of offering a misleading alternative and conducting a debate with a foregone conclusion, to protect themselves politically. Santorum, for one, is seeking reelection next year in a labor-friendly state and sought to demonstrate some support for increasing wages, Democrats charged.

Senate Democratic leader Harry Reid of Nevada said the "marching orders have been given" by Republican leaders to stop low-paid workers from seeing wages rise.

The Democrats' proposal would raise the minimum hourly wage from $5.15 to $7.25, phased in over 26 months. That amendment was defeated 49 to 46, with Republicans arguing that such a pay spike would stifle the economic recovery and limit the number of entry-level jobs that are available.

"When you raise the minimum wage, you price workers out of the market," said Senator John E. Sununu, a New Hampshire Republican.

"That's the economic reality."

Santorum's alternative would have boosted the minimum wage by $1.10 an hour, to $6.25, over the next 18 months. But it also included business-friendly provisions that would have excluded more employees from the minimum wage requirement and limited overtime available to hourly workers, drawing strong opposition from Democrats.

The Republican proposal was defeated 61 to 38. Senator Edward M. Kennedy, the lead sponsor on the Democratic proposal, mocked the Republicans for needing an 85-page amendment to achieve an increase in the minimum wage.

"It takes one page to raise the minimum wage, and 84 pages are special-interest giveaways to take rights away from workers," said Kennedy. "This affects millions of workers that are going to get a real pay cut."

Santorum said an increase in the minimum wage is overdue, because it has not kept up with inflation.

But he said it is important to also acknowledge the burden that such an increase brings to small businesses. Under current law, only businesses with revenues of less than $500,000 a year are exempt from minimum wage and overtime requirements, and Santorum's amendment sought to raise that threshold to $1 million.

In addition, his measure would limit the oversight of federal agencies on small business practices, and free up businesses to grant workers flex time in lieu of paying overtime.

"What I think we're trying to do here is find an acceptable compromise," Santorum said. "It focuses on those who are most in need, and at the same time doesn't hurt the small business community."

Democrats argued for a more substantial increase, saying that inflation has eroded the purchasing power of the minimum wage by 15 percent since 1997. A fulltime minimum wage worker earns about $10,700 a year, about $5,000 below the federal poverty line for a family of three.

Kennedy's proposal would mean an additional $4,370 a year for full-time minimum wage workers, and would help some 7.8 million Americans, said Senator Tom Harkin, Democrat of Iowa.

"That could be of real value to a family living in poverty," Harkin said. "Let's face it, the present one, at $5.15, is a poverty wage and does not respect the value of work."

Fourteen states and the District of Columbia have higher wage floors than the federal minimum, and another 17 states have proposals pending to raise the minimum this year. The Massachusetts minimum is $6.75 an hour.

The bankruptcy bill would make it harder for consumers to file for a type of bankruptcy that allows them to avoid repayment of debts. Democrats have tried to add a series of amendments that would protect consumers, but have been thwarted in their efforts on the Senate floor.

Both Democrats and Republicans in the Senate vowed to try again this year to raise the minimum wage in line with their proposals, and further votes are possible as soon as this month. But that may do little to change the posture of House Republican leaders, who can quash any plan by themselves.

"It's not an issue we're going to bring to the floor," DeLay said last week.

Rick Klein can be reached at rklein@globe.com.