Senate Majority Leader Bill Frist (R-TN) dubbed the measure the "trifecta," a legislative combination passed last week by the House of Representatives that bring death tax relief to estates valued at less than $10 million and permanently reduce the tax rate for those worth more than that; raise the federal minimum wage from $5.15 to $7.25 over three years; and extend several tax provisions.
In his bid to secure votes, especially from Democrats, Sen. Frist warned that this was the last opportunity the Senate would have to vote on a minimum wage increase. To ensure the legislation would go directly to the president, Sen. Frist also sought to prohibit any amendments that would require concurrence by the House, which had already gone out of town until after Labor Day.
Senator Charles Grassley (R-IA), who supported the contents of the legislation, was quoted as saying, "The process was lousy and offensive, but the substance was good." He further compared the effort to the long shot "trifecta" bid referenced in horse racing.
Late Thursday night, the Senate defeated a motion to end debate and proceed to consideration of the legislation by a vote of 56-42, four short of the 60 votes necessary. Sen. Frist changed his vote to preserve his ability to bring it for reconsideration at a later date, so in actuality the bill fell only three votes short.
There were a variety of reasons certain senators voted against the measure, but perhaps the underlying fact is that the midterm elections are only three months away and, with control of the Congress to be decided at the polls, neither political party wanted to give the other a victory to tout over the August recess.
NACS watched the debate with keen interest. The proposed increase in the minimum wage has always been something NACS has opposed, arguing that increasing this base level of compensation will put upward pressure on all other wages and put a financial burden on many small businesses. However, political momentum this year was intense, so NACS and most others in the small business community advocated to friends in Congress that any increase in the minimum wage include provisions to help offset the costs for small businesses. The House had originally considered attaching to the legislation authorization for associations to aggregate health insurance policies for their members. This policy, known as Association Health Plans or Small Business Health Plans, is one that NACS has supported for a long time.
However, Senate leaders asked the House to combine the minimum wage with the death tax reform plan rather than the healthcare provisions, claiming that this would make passage much more likely in the Senate. The House agreed and approved the legislation 230-180 on July 28. As was proven last night, however, the Senate was still unable to approve the bill.
The future of legislation to increase the minimum wage or permanently reform the death tax this year remains uncertain. There are only a handful of legislative days remaining until Congress adjourns for the elections, and there is a lot left on the table to accomplish, such as the required appropriations bills. Most anticipate the Congress will return for a lame duck session following the elections, which could lead to any variety of action items depending upon the outcome of the elections.
For NACS, August is an opportunity to regroup, assess our position relative to pending legislation, maximize the association's participation in the election process via NACSPAC, and prepare for a sprint to the finish. Congress may be gone for a few weeks, but they will be back and we must be ready.
Have a great weekend.
John Eichberger
Vice President, Government Relations