Senate blocks federal minimum wage bill

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A bill to increase the federal minimum wage stalled Wednesday in the Senate, in the latest setback for Democrats pushing a set of election-year economic bills.

Republicans argued that the change would be too expensive for employers and would backfire by costing jobs. Fueling their argument was a Wednesday morning Commerce Department report showing the economy grew at just a 0.1 percent rate in the first quarter.

The bill failed on a 54-42 test vote. It needed 60 to advance.

The bill by Sen. Tom Harkin, D-Iowa, would gradually raise the $7.25 hourly minimum to $10.10 over 30 months and then provide automatic annual increases to account for inflation. Democrats argue that if fully phased in by 2016, it would push a family of three above the federal poverty line -- a level such earners have not surpassed since 1979.

Republicans, though, cited a February study by the nonpartisan Congressional Budget Office that estimated the increase to $10.10 could have the effect of eliminating about 500,000 jobs — but also envisioned higher income for 16.5 million low-earning people.

"Washington Democrats' true focus these days seems to be making the far left happy, not helping the middle class," said Senate Minority Leader Mitch McConnell, R-Ky.

The debate was playing out half a year from this fall's elections, in which Democrats are struggling to retain their Senate majority and the economy remains a marquee issue.

President Obama has made boosting the minimum wage a top priority. Its rejection marks a defeat for him and the latest setback for a stream of Democratic bills that stress the campaign-season theme of economic fairness.

Obama blasted Republicans for the vote Wednesday afternoon.

"Workers who benefit from a minimum wage increase often work full time, often in physically demanding jobs. They average 35 years of age. Most low paying jobs are held by women. But because Republicans in Congress said no to even allowing a vote on the floor of the Senate, these folks are going to have to wait for the raise they deserve," he said, adding: "Change is happening whether Republicans in Congress like it or not."

Obama also praised lawmakers in Hawaii, who voted Tuesday to raise the state's minimum wage to $10.10 per hour over four years. Five other states have enacted increases so far this year, and 21 have minimums above $7.25.

"It's time for Republicans in Congress to listen to the majority of Americans who say it's time to give America a raise," Obama said in a written statement.

Supporters note that the federal minimum wage's buying power has fallen. It reached its peak value in 1968, when it was $1.60 hourly but was worth $10.86 in today's dollars.

The legislation was opposed by business groups including the National Council of Chain Restaurants and the International Franchise Association. The National Restaurant Association has hundreds of members at the Capitol this week lobbying lawmakers on several issues, including opposition to a higher minimum wage.

Also opposed were conservative organizations including Heritage Action and Americans for Prosperity, which is backed by Charles and David Koch. The billionaire brothers are spending millions this year to unseat congressional Democrats, and Senate Majority Leader Harry Reid, D-Nev., and his allies are casting them as unfettered villains.

Underscoring the political value they envisioned from the minimum wage fight, Harkin and other Democrats said earlier if the measure was defeated Wednesday, the Senate would vote on it again this year.

According to the federal Bureau of Labor Statistics, about two-thirds of the 3.3 million people who earned $7.25 an hour or less last year worked in service jobs, mostly food preparation and serving. More than 6 in 10 of those making $7.25 or under were women, and about half were under age 25. Democrats hope their support for a minimum wage boost will draw voters from both groups — who usually lean Democratic — to the polls in November, when Senate control will be at stake. The GOP's hold on the House is not in doubt.

Harkin's bill would also gradually increase the minimum wage for tipped workers like waiters to 70 percent of the minimum for most other workers. It is currently $2.13 hourly, which can be paid as long as their hourly earnings with tips total at least $7.25.

The minimum wage was first enacted in 1938 and set at 25 cents.

Congress has passed nine laws slowly increasing it, including one each decade since the 1980s. The minimum has been $7.25 since 2009.

The Associated Press contributed to this report.