Canton Repository

August 2, 2006

Voinovich vote jeopardizes hike in minimum wage

By Paul M. Krawzak
Copley News Service

WASHINGTON Sen. George Voinovich, a persistent critic of tax cuts that increase the federal deficit, is emerging as a pivotal vote against a Republican plan to raise the minimum wage for the first time in nine years while cutting the estate tax.

Though Voinovich, R-Cleveland, voted for the last increase in the minimum wage in 1996, he plans to oppose a bill that combines the wage increase with a cut in the estate tax and an extension of several expiring tax reductions.

Voinovich “will vote against the bill because of the estate-tax provision,” his spokeswoman, Garrette Silverman, said. The junior senator from Ohio also opposes extending expiring tax cuts at a time when the $8 trillion national debt is growing.

The administration last month forecast that the federal deficit, or shortfall in government revenues, will fall to $296 billion this year.

Sen. Mike DeWine, R-Cedarville, supports the bill, which the Senate is expected to vote on as early as Friday.

DeWine supported the last increase in the minimum wage and voted for GOP plans to increase the minimum wage last year, a spokesman said. He also has voted to repeal the estate tax in the past.

When the House passed the measure last week, area Reps. Ralph Regula, R-Bethlehem Township, Bob Ney, R-Heath, Sherrod Brown, D-Avon, and Ted Strickland, D-Lisbon, all voted for it.

Rep. Tim Ryan, D-Niles, opposed the bill in the House.

In the past, House Republican leaders have opposed raising the minimum wage, which they argued would harm economic growth by imposing higher labor costs on businesses. Moderate Republicans who fear for their re-election persuaded the leadership to allow a vote on the issue.

An extremely close vote is expected in the Senate this week, making Voinovich’s vote critical.

The legislation would gradually raise the $5.15 an hour minimum wage to $7.25 an hour by June 2009.

It also would reduce the estate tax, which is set to expire temporarily in 2010 but would reappear in 2011.

Under the bill, the amount of assets in an estate that are exempt from the tax would rise to $5 million per individual by 2015. Under current law, the amount exempt would be $1 million in 2011.

The bill would cut the top tax rate on estates from 55 percent in 2011 to 20 percent for estates valued up to $25 million. The tax rate for estates worth more than $25 million would be 40 percent, dropping to 30 percent in 2015, under the bill.

The legislation also extends through 2007 several expiring tax cuts, including a research and development credit for businesses, a provision allowing individuals to deduct state and local sales taxes from their income tax returns and a $4,000 deduction for higher education expenses.

Voinovich helped defeat an earlier proposal to repeal the estate tax in June when Senate Republicans fell three votes short of the 60 needed to shut off debate and proceed to a vote on the measure.

Only one other Republican, Sen. Lincoln Chafee of Rhode Island, joined Voinovich in voting against the estate tax cut.

Senate Democratic leaders are leading the charge against the latest measure. Although most, if not all, Democratic lawmakers favor raising the minimum wage, their leaders oppose cutting the estate tax, which they say favors the wealthy and would increase the federal deficit.

Cutting the tax would cost $267.6 billion in lost revenue between 2006 and 2016, according to the Joint Committee on Taxation.

Regula and Ney have voted to increase the minimum wage and repeal the estate tax in the past.

In a statement, Ney called a minimum wage hike necessary “at a time when Americans are facing high gas prices and are losing their jobs to illegal aliens.” Brown, who is running for the Senate against DeWine, and Strickland both oppose the estate-tax reduction, but they voted for the bill because it increases the minimum wage.

Strickland, who is running for governor, said the estate tax cut will “literally cost the treasury of this country more than the entire cost of the Iraqi war thus far.”

Ryan favors increasing the minimum wage, and in June he voted to cut the estate tax. But alone among area Democrats, he opposed the bill to accomplish both of those aims last week.

Ryan’s spokesman, Ryan Keating, said the congressman voted against the bill because GOP leaders connected the estate tax cut to it, which Keating said was an attempt to ensure its defeat in the Senate.

Keating called the estate-tax provision a “poison pill.”