The Day The System Worked
August 04, 2006
Jared Bernstein is senior economist at the Economic Policy Institute, a nonprofit and nonpartisan research group in Washington, D.C. and author of the book, All Together Now: Common Sense for a Fair Economy.
As the heat wave over Washington, D.C., finally lifts, it appears cooler heads have prevailed. I’d even go as far as to say our political system worked yesterday.
Last night, on August 3, the Senate defeated that devious bit of legislation that linked passage of a minimum-wage increase to a major reduction in the estate tax. The House passed the bill last week and Senate conservatives pushed hard for the same result in their chamber, larding the bill up further with special breaks for key votes, like tax exclusions to pick off a few Democratic senators from timber states.
But the center held, thanks to the 42 senators who voted "no" on cloture, denying the majority the 60 votes they needed to make the bill a law.
Even for veterans of minimum wage horse trading, the coupling of the bill to repeal most of the estate tax with a minimum wage increase set a cynical new low. The increase in the minimum, to $7.25 by 2009, simply replaces the value by which inflation has eroded the wage over the past few decades, giving a direct lift worth around $1,200 per year to about 6 million low-wage workers. And it does so without adding to the $300 billion budget deficit.
The estate tax reduction—which clocks in with a 10-year cost of $268 billion—returns about $1.3 million to 8,200 wealthy estates, according to the Center on Budget and Policy Priorities. CBPP also points out that the size of the tax cut would grow with the size of the estate; as many as 900 estates worth more than $20 million would receive an average tax cut of $5.4 million in 2011.
It gets worse. The lobbyists for the National Restaurant Association managed to inject a paragraph into the minimum wage part of the bill that would have significantly lowered the pay of minimum wage workers who work get tips (like waitpersons) in seven states.
I take great solace in the fact that enough senators—Democrats and a couple of moderate Republicans, many of whom truly want to see an end to Congress’ 9-year stretch of ignoring the minimum wage—stood up to this hostage situation and faced down the leadership. Apparently, Capitol Hill is not all lobbyists’ checks and budget imbalances. We still have some old-fashioned checks and balances in play, too.
That said, you’re well within your rights to view this very differently. When an arsonist starts a fire and the fire department responds bravely to douse the blaze, do we praise the system for having the right protections in place, or condemn it for producing arsonists? Or worse…electing them!
Perhaps I’m stuck in such a narrow box that I’m confusing a few senators holding their ground against a huge overreach by conservatives with an actual outbreak of good government.
But I hope this victory for sanity is viewed as the great success it is. Granted, defeating the bill is a small victory—the buying power of the minimum wage is still at a 50-year low and counting—but it reminds us that resistance is not futile.
Who knows? Years from now, we might look back on this vote as the first sign of the turning of the tide. Or maybe that heat wave just got to me.