If Congress presents the President with legislation that either
unacceptably delays a minimum wage increase or contains fiscally
irresponsible tax cuts, the President will veto the legislation.
H.R. 3846 - a Bill to Increase the Minimum Wage
Congress should pass a straightforward bill to raise the minimum wage by $1
in two equal steps, as proposed by the President. H.R. 3846, which would
extend a minimum wage increase over an additional year, would unacceptably
delay the American worker's much-needed pay raise, costing a full-time,
year-round worker more than $900 over two years. The Administration
strongly supports the Traficant/Martinez amendment which would provide for
the two-step increase proposed by the President. The Administration also
strongly supports the Castle Amendment which would strike the language
allowing states to opt out of the minimum wage increase. The
Administration strongly urges Congress to enact a minimum wage bill as
proposed by the President, unencumbered by measures that repeal important
overtime protections for workers or regressive, fiscally irresponsible tax
cuts that threaten Social Security, Medicare, and debt reduction.
A modest increase in the minimum wage of $1 would merely restore the real
value of the minimum wage to the 1982 level. Recent history has shown that
those who argue that even a reasonable increase in the minimum wage would
harm the economy are wrong. Since the last minimum wage increase of 90
cents over two years, enacted in 1996, the unemployment rate has fallen
from 5.2 percent to 4.1 percent -- around the lowest in 30 years -- and
more than 10 million new jobs have been created. That last minimum wage
increase provided a significant incentive to work, contributing to the 44
percent decline in the welfare caseload, and bringing the welfare rolls
down to their lowest level in three decades. It also has been a crucial
factor in contributing to rising incomes for even the poorest groups,
reversing their income declines of the previous decade.
Minimum wage legislation should not be used as a vehicle to repeal
important overtime protections for American workers, and the Administration
would oppose adding provisions that weaken labor protections. The
Administration is concerned about provisions in the bill that would repeal
overtime protections for 1.5 million American sales employees, funeral
workers, and computer professionals.
H.R. 3081 - the Wage and Employment Growth Act of 1999
By spending a substantial fraction of the non-Social Security surplus
without a balanced framework, the House tax package would threaten the
Federal Government's ability to extend the life of Medicare and Social
Security and pay down the debt by 2013. Absent an agreement on a balanced
framework, a bill composed of these provisions would not meet the
pay-as-you-go requirements of the Budget Act, which have helped provide the
discipline necessary to bring us from an era of large and growing budget
deficits to the potential for substantial surpluses. The bill in its
present form contains tax cuts of such magnitude that they would require an
unacceptably large automatic sequester of mandatory programs, including
Medicare.
The bulk of the tax provisions in H.R. 3081 are directed away from working
families, and, whatever their stated intent, would do little to help most
small businesses or family farms. For example, the estate tax relief is
expensive, provides no benefit to average working Americans, and is poorly
targeted to its purported purpose of providing relief for small business
owners and family farms, because its three major provisions -- conversion
of the unified credit to an exemption, repeal of the surtax, and reduction
in top marginal rates -- would provide a disproportionate benefit to the
very wealthiest estates.
H.R. 3081 also contains pension provisions that would raise the maximum
retirement plan contribution and considered compensation limits for
business owners and executives. This provision would weaken the pension
anti-discrimination and top-heavy protections for moderate- and
lower-income workers. These provisions are regressive, would not
significantly increase plan coverage or national savings, and could lead to
cuts in retirement benefits for moderate- and lower-income workers while
benefits for highly paid executives are maintained or even increased.
Conclusion
The Administration urges the Congress to refrain from passing either a
minimum wage increase that would be delayed unacceptably or fiscally
irresponsible tax cuts that would threaten Social Security, Medicare, and
debt reduction, and are not targeted at the needs of working families. The
Congress should pass clean legislation that would raise the minimum wage in
two equal steps and increase the rewards for work in a manner that would be
good for the country and good for working families who are struggling to
make ends meet. The legislation should not be encumbered by provisions
that would undermine the minimum wage increase or existing labor
protections. And any tax bill passed by the Congress should be fiscally
responsible and adhere to a framework that protects the Federal
Government's ability to extend the life of Medicare and Social Security and
pay down the debt by 2013, such as the Democratic alternative does.
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