LET'S HOPE HASTERT GETS BEST DEAL

This last week saw House Speaker Dennis Hastert announce a pre-emptive capitulation on an important issue: The minimum wage. Hastert says the GOP majority will offer legislation boosting the minimum wage by $1 over two years, without making the issue contingent on two key tax cuts President Clinton opposes.

Hastert said in a letter to the president that Republicans still wanted a $76 billion package of business tax breaks to accompany the wage measure but would remove proposals to abolish the estate tax and to change pension laws, including increased contribution limits for 401(k) plans. Both are subjects of separate bills. Hastert's proposal would increase the minimum wage over two years: 50 cents on Jan. 1 and 50 cents on Jan. 1, 2002.

Democrats have long sought to increase the minimum wage from $5.15, but Republicans have said tax breaks are needed to cushion the higher costs sure to fall on small businesses. Different versions have passed the House and Senate, while negotiations have bogged down.

House Minority Whip David Bonior, D-Mich., called Hastert's offer "a bona fide effort and an attempt to reach a positive solution." He predicted a minimum-wage increase and a tax package would pass before lawmakers leave Washington this fall.

Remaining features of the tax package Hastert wants are:

* Immediate 100 percent health insurance premium deductibility for the self-employed, sooner than under current law. Individuals could deduct from their taxes 100 percent of health expenses without itemizing, if they are not covered by an employer or government plan or by Medicare.

* Raising the business meal deduction from 50 percent to 80 percent, reducing the amount of business equipment eligible for an expensing tax write-off from $19,000 to $35,000, providing tax credits for timber companies' reforestation costs and restoring a law allowing a business seller to pay taxes in installments rather than in a lump sum.

Evidently political calculations about the fall elections will drive policy on the minimum wage. We hope that if this is the plan, Hastert gets the very best deal he can.