Section A·Page 5
The University Daily Kansan
Nation
Thursday, February 3, 2000
Senate passes bill to raise minimum wage by a dollar
The Associated Press
WASHINGTON — Teeing up for an election-year fight, the Senate approved a Republican bill yesterday that would boost the minimum wage by $1 an hour during a three-year period, a amount of time President Clinton and Democrats sav is too long to wait.
With many Republicans — especially in the House — eager to avoid repeated campaign-season attacks on the widely popular issue, some increase in the current $5.15 hourly minimum seems likely to become law before Election Day. But with the White House and Democrats also objecting to the measure's $18 billion in tax cuts through five years — mostly for small business owners — it is unclear what the final version will look like. The GOP's desire to avoid making the proposal a campaign issue gives Democrats little incentive to quickly fix for anything less than what they want: a two-year phase-in, with a much smaller tax package.
"That's not the kind of legislation the president can sign," said White House press secretary Joe Lockhart, citing its three-year phase-in and a bevy of tax cuts for special interest groups.
The minimum-wage boost was included in a bill that would overhaul the nation's bankruptcy laws approved by the Senate 83-14.
Last November, the House Ways and Means Committee approved a separate GOP bill that would increase the minimum wage by $1 during three years and includes a $30 billion, five-year package of tax cuts. Some $16 billion of that price tag is a reduction in the estate tax paid by upper-income people who inherit substantial assets.
But the fate of the House legislation is unclear. With defections likely by moderate Republicans from urban, northeastern districts, GOP leaders so far lack the
votes to move their version of the bill through the House.
"I hate it." House Majority Whip Tom DeLay, R-Texas, said Tuesday when asked about the minimum wage increase. "Obviously, we don't have the votes to stop minimum wage, so we ought to do something that lessens the burden on people that pay the wages."
About 11 million Americans are paid the minimum wage. About half of them are less than 24 years old, and many hold part-time jobs.
This year's Senate bill would increase the wage by 35 cents an hour in March 2000, by 35 cents more in March 2001 and 30 cents in March 2002.
The Democratic alternative would have raised the minimum wage by $1 with two 50-cent increases during 13 months, while also providing $9.6 billion in tax relief and raising other taxes.
Democrats note that as is, it pays $10,700 a year for 52 40-hour weeks — $3,200 below the poverty line for a family of three. They also say the difference between their version and the GOP language would cost each minimum-wage earner $1,200.
"The watered-down wage proposal in this bill is an insult to hard-working men and women," said Sen. Edward Kennedy, D-Mass., sponsor of the Democratic proposal.
GOP lawmakers argue that raising the minimum wage would help low-income families by less than meets the eye because many recipients are teen-agers, not parents of low-income families. They also say businesses could eliminate up to 500,000 jobs rather than increase minimum salaries.
The Senate GOP bill includes health insurance deduction for workers who lack employer-provided coverage and an immediate 100 percent deduction for the self-employed.
Interest rate hiked
WASHINGTON — The Federal Reserve raised a key interest rate yesterday by a quarter point the fourth increase since June in an effort to slow the red-hot economy and keep inflation from becoming a problem.
The Associated Press
The announcement came after a closed-door meeting of the Federal Reserve Open Market Committee led by chairman Alan Greenspan, the committee that sets interest rate policies.
The Fed said it was increasing its target for the federal funds rate — the interest that banks charge each other on overnight loan — to 5.75 percent from 5.50 percent.
It also raised its mostly symbolic discount rate, the interest that the Fed charges to make direct loans to banks, by a quarter point to 5.25 percent from 5 percent.
In a statement explaining its decision, the Fed said it continued to be worried that the rapidly growing economy could foster inflationary imbalances that would undermine the economy's record economic expansion.
The stock market offered a mixed reaction to the Fed's announcement. The Dow Jones industrial average fell 37.85 points to close at 11,003.20.
Dow rose as much as 60 points moments before the Fed released its decision, then bobbed between positive and negative territory for much of the rest of the session. The Nasdaq finished modestly higher.
The Fed's decision marked the fourth time since June that the central bank has raised the funds rate.
Many economists think today's rate increase will be followed by
two or more increases before the end of June. "The Fed is now on record saying inflation is its primary concern," said Sung Won Sohn, Wells Fargo's chief economist. "This sets
Greenspan: voted to raise interest rate to slow economy
the stage, I think, for more hikes later this year."
Critics said the Fed's action was not warranted. Jerry Jasinowski, president of National Association of Manufacturers, said he is concerned that today's rate increases are premised on an exaggerated fear of inflation.
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