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Senate Democrats Kill Wage, Estate-Tax Bill


This is MORNING EDITION from NPR News. I'm Renee Montagne.

In the Senate last night, Democrats frustrated a Republican bid to pass two controversial measures at once: a minimum wage increase and a permanent cut in the estate tax. Democrats have long advocated a higher minimum wage, but said the estate tax reduction was too much to swallow along with it.

NPR's Brian Naylor reports.

BRIAN NAYLOR reporting:

The minimum wage/estate tax union was a marriage made not in heaven but in the offices of Republican leaders. They believed they had out-foxed Democrats, as one Republican congressman put it, by combining two economically disparate measures into one irresistible package. Democrats would get what they wanted - the first minimum wage increase in 10 years - and Republicans something they wanted - slashing the estate tax, or death tax, as they call it.

Senate Majority Leader Bill Frist also wanted to rebut the charge that this has been a do-nothing congress.

Senator BILL FRIST (Republican, Tennessee): That's why we're taking up the death tax once again, and that's why we're extending key tax relief provisions for another two years, and that's why we're raising the minimum wage. We're not doing nothing. We're doing something about issues that concern everyday, hardworking Americans all across this nation.

NAYLOR: Frist's mention of extending tax provisions was a reference to popular tax credits that might expire without this bill. Because the bill would have lumped these with the estate tax and minimum wage, the total package has become known around the Capitol as the trifecta. Senate Democratic leader Harry Reid had a more pejorative term.

Senator HARRY REID (Democrat, Nevada): Is this the legacy of the Republican majority? To spend all of our time on repealing the estate tax and threatening - threatening - Democratic senators, Republican senators and the American people - either do it with the defecta bill, or we're not gonna do anything.

NAYLOR: Though the measure was approved in the House early last Saturday morning with help from some Democrats, the opposition leaders in the Senate worked hard to keep their members in line. As much as they wanted to raise the minimum wage, they said the estate tax cut was a poison pill that would cost the Treasury $268 billion over the next 10 years.

Democrat Hillary Clinton of New York called it a case of bait-and-switch.

Senator HILLARY CLINTON (Democrat, New York): There are things in that package of bills that every one of us would sign on to. But we're not gonna sign on to a deceptive minimum wage that would actually lower the incomes of thousands and thousands of workers in states across our country.

NAYLOR: Clinton was referring to a provision of the bill affecting the tip income of restaurant workers and others in seven states. The non-partisan Congressional Budget Office and the Congressional Research Service both said the bill would mean a pay cut for workers in those states.

Republicans countered with a statement from the Labor Department that it meant no such thing. Here's Minnesota Republican Norm Coleman.

Senator NORM COLEMAN (Republican, Minnesota): Some of my Democratic colleagues are now arguing that the tip credit provision would actually lead to a reduction in the minimum wage for those workers in non-tip credit states. It is interesting that these colleagues of mine are making this argument at a time when we are close to providing an increase in the minimum wage.

NAYLOR: The bill had other, more specific sweeteners - timber tax credits targeting Washington State's two Democratic senators, money for coal mine safety and clean-up aimed at West Virginia's two Democrats. The list of goodies actually gave one Democrat who wanted to vote for the bill a reason to hold back. Ben Nelson of Nebraska said he wanted to know what else the measure contained.

Senator BEN NELSON (Democrat, Nebraska): But it's what's outside the bill that I don't know about that I want to know about. I might not have a problem with that either. The problem is when you don't know what you don't know, it makes it a real challenge to make a decision.

NAYLOR: In the end, the minimum wage estate tax bill won support from just four Democrats while two Republicans voted no, leaving majority leader Frist several votes shy of the 60 votes he needed to advance the measure. Now Republicans are wondering who got out-foxed.

Brian Naylor, NPR News, the Capitol. Transcript provided by NPR, Copyright NPR.

NPR News' Brian Naylor is a correspondent on the Washington Desk. In this role, he covers politics and federal agencies.