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Bush Wants Minimum Wage Boost Linked To Business Tax Cuts

by Leroy Baker,, New York

27 December 2006

While President George W. Bush has expressed support for a Democrat proposal to increase the minimum wage, he said last week that new legislation in this area should also contain tax breaks to help businesses offset the higher cost of hiring workers.

"I don't expect Democratic leaders to compromise on their principles, and they don't expect me to compromise on mine, but the American people do expect us to compromise on legislation that will benefit the country," Bush told a news conference last week.

"I believe we should do it in a way that does not punish the millions of small businesses that are creating most of the new jobs in our country," he said. "I support pairing it with targeted tax and regulatory relief to help these small businesses stay competitive and to help keep our economy growing."

The $5.15 per hour federal minimum wage has not been increased since 1997, and the Democrats have made a phased increase to $7.25 per hour one of their top legislative priorities for the new Congress, when they will hold a majority in both chambers.

However, an attempt to pair new minimum wage legislation with a cut in estate tax and extension of other tax breaks failed to pass in the most recent Republican-controlled Congress.

Responding to Bush's comments, Sen. Edward Kennedy (D - Mass), who is the lead voice behind the proposed Fair Minimum Wage Act, said the mid-term elections showed that "the American people spoke loud and clear in favor of raising the minimum wage."

"I'm glad that President Bush has endorsed my plan to raise the minimum wage to $7.25 to help millions of hardworking Americans lift themselves out of poverty. But we can't slow down this important legislation with other proposals that should stand or fall on their own merit," he stated.

"Minimum wage workers have waited almost 10 long years for an increase- we need to pass a clean bill giving them the raise they deserve as quickly as possible," he added.

According to Kennedy, a recent Gallup poll found that 86% of small business owners do not think that the minimum wage affects their business, and three out of four small businesses said that a 10% increase in the minimum wage would have no effect on their company. The poll also showed that nearly half of small business owners think that the minimum wage should be increased, and only 16% of owners think the minimum wage should be reduced or eliminated entirely.

Under Kennedy's proposals, the minimum wage would increase to: $5.85 sixty days after enactment; $6.55 one year later; and $7.25 after a further year.

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