WASHINGTON (AP) – Republican leaders are willing to allow the first minimum wage increase in a decade but only if it’s coupled with a cut in inheritance taxes on multimillion-dollar estates, lawmakers said Friday.

As the House pointed toward a session stretching past midnight, it was anything but certain that the plan would work. In fact, the move seemed unlikely to result in a hike in the minimum wage, which has been frozen at $5.15 per hour for a decade.

Republicans hoped to put Democrats in the uncomfortable position of voting against the minimum wage increase and the estate tax cut ­­­- and an accompanying bipartisan package of popular tax breaks, including a research and development credit for businesses and deductions for college tuition and state sales taxes.

But there was GOP discontent, too. Some conservative in the House were unhappy about the minimum wage vote while moderates in the party were restive about it being tied to cuts in the estate tax.

Senate Minority Leader Harry Reid, D-Nev., pledged to kill the hybrid minimum wage/tax cut bill if it got to the Senate.

“The Senate has rejected fiscally irresponsible estate tax giveaways before and will reject them again,” Reid said. “Blackmailing working families will not change that outcome.”

The GOP package would increase the wage from $5.15 to $7.25 per hour, phased in over the next three years, said Kevin Madden, spokesman for House Majority Leader John Boehner, R-Ohio.

It would also exempt $5 million of an individual’s estate, and $10 million of a couple’s, from estate taxes by 2015. Estates worth up to $25 million would be taxed at capital gains rates, currently 15 percent and scheduled to rise to 20 percent. Tax rates on the remainder of larger estates would fall to 30 percent by 2015.

The maneuver was aimed at defusing the wage hike as a campaign issue for Democrats while using the popularity of the increase to achieve the Republican Party’s longtime goal of permanently cutting taxes on the estates of millionaires and small businessmen.

Lawmakers did not rush to embrace the idea, which has backing from Senate Majority Leader Bill Frist, R-Tenn.

As part of the plan, the House and Senate would also pass a bill shoring up the U.S. pension system. That bill seemed more likely to succeed than the minimum wage/estate tax plan.

“(Frist) is looking forward to bringing to the floor two bills that will strengthen pension funding rules, help to bring sanity to the tax code and offer a first step toward full repeal of the unfair death tax,” said Frist spokeswoman Carolyn Weyforth.

Senate Finance Committee Chairman Charles Grassley, R-Iowa, does not like the idea and wants to couple the business tax breaks with a bill to overhaul U.S. pension laws.

Democrats expressed outrage at the GOP strategy, saying low-income workers deserved a straight vote on increasing the minimum wage uncoupled to other measures.

“It’s political blackmail to say the only way that minimum wage workers can get a raise is to give a tax giveaway to the wealthiest Americans,” said Sen. Edward Kennedy, D-Mass. “Members of Congress raised their own pay – no strings attached. Surely, common decency suggests that minimum wage workers deserve the same respect.”

The No. 2 Democrat in the House, Steny Hoyer of Maryland, said the move by GOP leaders – who actually oppose the minimum wage hike – was a cynical exercise to give political cover to GOP moderates while ensuring the wage hike does not become law.

“They want on the one hand to appear to be doing something and on the other make sure that it doesn’t happen,” Hoyer said.

The move comes after almost 50 rank-and-file Republican lawmakers pressed House leaders to schedule the measure for debate. Democrats have been hammering away on the wage hike issue and have public opinion behind them

“We weren’t going to be denied,” said Rep. Steve LaTourette, R-Ohio. “How can you defend $5.15 an hour in today’s economy?”

It was a decade ago, during the campaign year of 1996, that Congress last voted to increase the minimum wage. A person working 40 hours per week at minimum wage makes $10,700, which is below the poverty line for workers with families.

In advancing the tax plan, GOP leaders excluded a measure popular with small businesses that would make it easier for their businesses and the self-employed to band together and buy health insurance plans for employees at a lower cost.

Democrats have made increasing the wage a pillar of their campaign platform and are pushing to raise it to $7.25 per hour over two years. In June, the Republican-controlled Senate refused to raise the minimum wage, rejecting a proposal from Democrats.

Inflation has eroded the minimum wage’s buying power to the lowest level in about 50 years. Lawmakers have won cost-of-living wage increases totaling about $35,000 for themselves over that time.

Lawmakers fear being pounded with 30-second campaign ads over the August recess that would tie Congress’ upcoming $3,300 pay increase with Republicans’ refusal to raise the minimum wage.


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