Rep. Rangel Talks Link Between Tax Breaks, Minimum Wage Hike

The chairman of the House taxwriting committee said Tuesday he would be willing to link tax breaks for small business to a hike in the minimum wage but that the $8 billion tax package adopted by the Senate was unacceptable.

The comments by Rep. Charles Rangel, D-N.Y., chairman of the House Ways and Means Committee, were the first public acknowledgment by a top House Democrat that some tax cuts might be necessary to win approval of an increase in the federal wage floor.

"I'm prepared to send something over there for (the Senate) to be able to attach a tax package," Rangel said in an interview with reporters. "The problem, which I can't answer, is what would I accept."

The House last month approved an increase in the minimum wage from $5.15 to $7.25 over two years. The Senate last week passed the same wage hike but attached tax cuts for businesses that Republicans demanded to win their vote. The two bills would have to be reconciled in a House-Senate conference committee.

House Democrats, encouraged by labor organizations, have been pressing the Senate to pass a "clean bill" without any added provisions. But Senate Democrats argued that they need Republican votes to get the 60 votes required to overcome a filibuster or other procedural delays.

Rangel's view is especially important because constitutional precedents require tax legislation to originate in the House. Without Rangel's cooperation, the Senate tax plan would have a difficult time surviving.

But Rangel left no doubt that he would reject the Senate tax package -- worth $8.3 billion over 10 years. He refused to speculate on what types of tax cuts would be acceptable and placed the burden for lowering the tax package on Senate Majority Leader Harry Reid, D-Nev., and the chairman of the Senate Finance Committee, Max Baucus, D-Mont.

"When we start with $8 billion my hearing aid is off," the 76-year-old congressional veteran said. "I see no reason to waste anybody's time."

Baucus said later he would continue to work with Rangel and said he was certain that their goal of raising the minimum wage would overcome differences on other provisions in the Senate bill.