Congress may alter minimum wage levels

WASHINGTON -- The Senate is gearing up for a vote on whether to raise the minimum wage for the first time in eight years as Democrats and Republicans offer competing proposals they want to add to bankruptcy legislation.

Looking ahead to the expected votes Monday evening, the Democratic plan would increase the current $5.15 hourly minimum by more than $2. The GOP proposal couples a more modest raise with a change to the 40-hour work week.

The plan from Sen. Rick Santorum, R-Pa., also includes tax and regulatory breaks for small businesses. His amendment would lift the minimum wage by $1.10 over 18 months, in two steps of 55 cents.

The rival proposal from Sen. Edward Kennedy, D-Mass., would boost the wage to $7.25 in three increments over 26 months.

The bankruptcy bill, long a priority for Republicans, is intended to make it more difficult for people to eliminate personal debts by declaring bankruptcy.

The minimum wage amendments will need 60 votes to survive. It is not clear if either one has that support.

A minimum wage increase faces a tougher road in the more conservative House. House Majority Leader Tom DeLay, R-Texas, and the chairman of the House Judiciary Committee, Rep. James Sensenbrenner, R-Wis., have said the House was ready to quickly pass the Senate's bankruptcy bill under the condition that the Senate reject any further substantive amendments.

DeLay also had said that the House had no plans to vote this year on a minimum wage increase, which business groups claim would drive up costs and force small businesses to lay off workers.

Santorum's proposal contains an idea that Republicans have advocated, without success, for years: "flex-time," which gives employees the option of shifting their work hours over a two-week period. Supporters say this would allow workers to adjust their schedules to meet family needs.

Kennedy said this would end the 40-hour work week by denying workers overtime pay for up to 10 hours every two weeks.

Kennedy also said restaurant workers would be harmed because Santorum's proposal allows tips to be credited for purposes of complying with any future minimum wage increases in states where tips are not now credited. Santorum said his plan would not reduce cash wages in any way.

The GOP plan says small business enterprises with less than $1 million in receipts would be exempt from the federal Fair Labor Standards Act, which sets minimum wage, overtime and record keeping standards. The current ceiling is $500,000.

The proposal includes more than $4 billion in small business tax breaks, headed by a 15-year recovery period for certain restaurants, at a cost of $3.4 billion. The tax breaks are offset by such measures as tightening tax requirements on companies that move their companies overseas to avoid U.S. taxes and increasing penalties on tax fraud and underpayment.

Santorum's spokeswoman said the senator is introducing his amendment in response to Kennedy's. The Pennsylvania Republican recognizes that it has been 7 1/2 years since the last raise but also wants to ease regulatory burdens on small businesses, the aide said.

Kennedy, in a statement, said the GOP plan would help only 1.8 million people, compared with 7.3 under his legislation.

He told fellow senators that under the last minimum wage raise, voted by Congress in 1996 and reaching its current level in 1997, minimum wage workers earn $10,700 a year, $5,000 below the poverty line for a family of three.

During the same eight-year period, members of Congress have raised their own salaries seven times, by a total of $28,500, he said.