Senate is set for showdown on minimum wage increase GOP amendment brings threat of Clinton veto

July 09, 1996|By KNIGHT-RIDDER NEWS SERVICE

WASHINGTON -- After months of partisan debate, the Senate will vote today on a hotly disputed bill to boost the minimum wage by 90 cents an hour.

But before the showdown vote, senators will pass judgment on a Republican-backed amendment, sponsored by Missouri Sen. Christopher S. Bond, that President Clinton has denounced as a "poison pill."

Clinton said its adoption would trigger his veto, a threat reiterated yesterday by Labor Secretary Robert B. Reich, who called the amendment "mean spirited" and said it was meant to deny the wage increase to millions of low-income workers.

Under the bill, the minimum wage would rise from the current $4.25 an hour to $4.75, then to $5.15 next year.

Until earlier this summer, it appeared the proposed wage increase would die in the Senate, despite an earlier vote approving it in the more conservative House. But vows by Senate Democrats to keep bringing it up as an amendment to other must-pass legislation -- a move calculated to bottle up major bills sponsored by Republicans -- eventually induced Senate Majority Leader Trent Lott of Mississippi to agree to bring up the proposal for a vote. But not without conditions.

The major condition is Bond's amendment. It would:

Exempt from the minimum-wage increase all companies with gross receipts of $500,000 or less a year. The Clinton administration says this could deny the increase to about 65 percent of the 12 million Americans now earning from $4.25 to $5.14 an hour. But Lott, in a letter to Clinton, said that "only 8 percent of the work force is employed by businesses grossing less than $500,000."

Delay the effective date of the increase to Jan. 1.

Create a sub-minimum wage of $4.25 an hour for newly hired employees during their first six months on the job. This would apply to about 4 million workers.

Exempt about 2 million workers, mostly restaurant employees, who earn tips as part of their income. Their minimum wage would be set at $2.13 an hour.

Reich said that "any one of those items would warrant a veto."

As the rhetoric escalated, Senate Minority Leader Thomas Daschle of South Dakota charged yesterday that the GOP amendment is intended "to create a Swiss cheese minimum wage, create as much of a minimum wage as they can with as many holes as they can get by with."

Meanwhile, Lott's letter to the president accused the White House of "twisting your administration's policies (and the facts) around on a dime." He accused the bill's supporters of exaggerating the number of people who might be adversely affected by the GOP's amendment.

Some business economists contend that minimum-wage increases have prompted smaller businesses, in particular, to either lay off low-income workers or defer new hiring.

But other economists say experience has shown that the small increases, over the years, have had very little impact on growth in the work force -- and that the cumulative effect of the increases has boosted spending by low-income workers on food, fuel, rents and other necessities, and actually stimulated the economy.

Pub Date: 7/09/96

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