Minimum-Wage Hike Defeated

Republicans on Monday defeated another in a series of Democratic attempts to alter legislation aimed at toughening bankruptcy laws, voting down a proposal to attach a minimum-wage hike to the bill.

An amendment offered by Sen. Edward M. Kennedy (D-Mass.) would have raised the federal minimum wage from $5.15 to $7.25 an hour over two years. It was defeated, 49-46.

The GOP-controlled Congress has blocked all such Democratic-backed efforts to increase the minimum wage in recent years. And Senate Republicans were especially determined to keep the Kennedy amendment off the bankruptcy bill because the House GOP leadership has promised to act quickly on the measure only if it remains largely unchanged.

Banks and credit card companies strongly back the legislation, which Republicans have labored for eight years to enact. Its supporters say the bill would curb abuse of the nation’s bankruptcy laws and force more Americans to be financially responsible by requiring them to pay back more of the debts they incur.

If passed, the bankruptcy bill would force debtors to pass a “means test” that would determine whether their assets were enough to pay back at least part of what they owed. Those with annual household incomes below their state’s median level would be allowed to apply for forgiveness of their debts, as they are under existing law. But those making more than the median would have to develop a repayment plan.

In California, the median household income is about $50,000.

Kennedy, in arguing for his amendment, noted that the federal minimum wage has not been increased for eight years.

“For minimum-wage workers, prices have increased every year since 1997, but their paychecks have remained exactly the same,” Kennedy said. “With few savings, and little safety net, minimum-wage workers are one pink slip or one medical emergency away from bankruptcy.”

But Republicans said that hiking the minimum wage would only hurt low-income, low-skilled workers by forcing producers to raise prices and cut jobs.

“Wage increases without increased skills and productivity have to be paid for with higher prices,” said Sen. Michael B. Enzi (R-Wyo.), the new chairman of the Health, Education, Labor and Pensions Committee.

The answer, Enzi said, is to provide more training for minimum-wage workers, not higher wages.

Enzi also said states should be left to set minimum wages that reflect local living standards and job markets.

California and several other states already have minimum wages that exceed the federal standard. The minimum wage in California is $6.75 an hour.

California Sens. Barbara Boxer and Dianne Feinstein, both Democrats, voted for Kennedy’s amendment.

Sen. Rick Santorum (R-Pa.) offered a Republican version of a minimum-wage hike, which would have raised the minimum wage by $1.10 an hour over 18 months. The proposal also would have offered small businesses tax and regulatory breaks. In an unusual move, Santorum urged his colleagues to vote against his amendment, saying on the Senate floor that he believed both his and Kennedy’s amendments should be defeated. An aide later explained that Santorum believed no minimum-wage amendment should be added to the bankruptcy bill, but decided that if Democrats offered one, Republicans should propose an alternative.

Santorum’s amendment was rejected, 61-38, with Boxer and Feinstein among those opposing it.

Democrats are expected to suffer another defeat today, when a vote is scheduled on an amendment that would bar antiabortion activists from using the bankruptcy laws to avoid paying court-ordered fines. A final Senate vote on the bill is expected later this week.

Democrats said they believed they had scored some political points by forcing floor debate on several key issues during consideration of the bankruptcy legislation, even though their amendments were going down to defeat.

“That’s the way the Senate works,” said Sen. Charles E. Schumer (D-N.Y.). “You take your shots when you can. You certainly want to keep talking about it, to keep it in the public’s mind. That’s how you win eventually when you are in the minority.”

Schumer, the sponsor of the amendment targeting antiabortion activists, said he found it particularly galling that many Republicans who had voted for the provision when he successfully attached it to a bankruptcy bill in 2001 this time seemed prepared to vote against it.

“It’s going to be close,” he said. “But what is happening is some of the leadership of the Republican Party said: ‘You can’t vote for this amendment, because it will hold up’ ” the bankruptcy bill. “They’re twisting arms left and right.”

Although he said that he would vote against the bankruptcy bill if his amendment fails, Schumer declined to say whether he would attempt a filibuster. “We’ll cross that bridge when we come to it,” he said.

But one senior Democratic staffer who was familiar with the party’s strategy said that a filibuster was unlikely and that the bankruptcy legislation was expected to pass.

Democrats have decided to pick their fights carefully with the GOP majority, said the aide, who asked not to be named. The aide said the party was focusing its attention on battles over President Bush’s judicial nominees, his Social Security reform plan and his expected effort to reform the tax code.

Congress has considered bankruptcy legislation in every session since 1998. Bills have passed the Senate, the House and sometimes both chambers, but have never been enacted into law.

In 2000, President Clinton refused to sign a bill that had passed both chambers.