On January 10, the US House of Representatives delivered on the promise of Democratic leadership to produce legislation for the increase of the federal minimum wage within the first 100 hours of the 110th Congress.

The House bill (H.R. 2 – The Fair Minimum Wage Act of 2007) would raise the minimum wage rise from $5.15 an hour to $5.85 per hour 60 days after enactment. One year later, the wage would increase to $6.55 an hour, and a year after that, it would increase to $7.25.

Earlier Attempts to Raise Wage Failed

In prior years, Congressional efforts to increase the federal minimum wage have been mired in political wrangling and blocked by parliamentary procedures. For example, in 2006, H.R. 5970, which proposed the same $2.10 increase phased in over two and a half years, was thwarted when Republicans tied the measure to a controversial reduction of the federal estate tax.

This link to a tax reduction proposal was roundly criticized and caused many Republican congressmen to cross over in support of a clean minimum wage increase. However, there were not sufficient votes in the Senate to forestall “extended debate” rules under which the bill was unable to proceed to a final vote. Thus, the measure died without final action at the close of the congressional session.

Proponents Are Confident “Clean Bill” Will Pass

However, given the sweeping tide of Democratic victories in the 2006 elections which carried the party to control of both the House and Senate, minimum wage proponents are confident that they can overcome all legislative opposition this year and pass a “clean bill.” In fact, the January 10 House vote was marked by a significant amount of bipartisan support, with 82 Republicans joining all the House Democrats to pass the bill.

Further, the political lines of opposition on the issue were blurred a bit when President George W. Bush announced during a December 20, 2006, news conference that he supported an increase of $2.10 an hour. He even proposed a slightly faster timetable, suggesting that the phase-in should be completed within two years.

President Has Suggested Increase Should Include Small Business Protections

During that press conference, the President did suggest that any minimum wage legislation should include protections for smaller businesses, stating, “I support pairing an increase with targeted tax and regulatory relief, to help small businesses stay competitive and to help keep our economy growing.” While the President did not identify any specific measures, he indicated that the administration’s proposals will be clarified in his State of the Union address on January 23.

Expect Compromises as Senate Takes Up Measure

Indications are that the Senate will take up the measure in the next few weeks, most likely after the State of the Union.

Senate Majority Leader Harry Reid (D-Nev.) has indicated his belief that compromise is possible as the minimum wage package moves through the Senate. At the same time, Senator Edward M. Kennedy (D-Mass.), chairman of the Senate Health, Education, Labor and Pensions committee, insists that there are already 57 votes in support of a clean minimum wage bill in the Senate, although he concedes that getting 60 votes to close debate could be a challenge.

Meanwhile, organized labor and business associations are marshalling their resources to lobby the Senate in support of their respective positions. You can expect the efforts to sway every vote on this high-stakes issue to be very intense.