Transcripts

Pension Reform & Minimum Wage Are Giving Congress Maximum Headaches

PAUL KANGAS: A last minute flurry of activity today on Capitol Hill, as lawmakers try to clear the decks, before Congress clears out of town for the summer recess. But as Washington bureau chief Darren Gersh reports, there are many critical issues still to be decided and it`s getting tough to reach agreement on them.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: Tempers on Capitol Hill were running as hot as the weather today as Republicans battled mostly among themselves over pension reform and tax cuts. Late this afternoon, it appeared House leaders had agreed to wrap together a vote to increase the minimum wage with a plan to cut estate and gift taxes. Analysts say that could put in jeopardy legislation to extend the research and development tax credit which has been folded into the package.

CLINT STRETCH, TAX PRINCIPLE, DELOITTE TAX: I think a lot in the business community at least are looking at this and saying, why are you slowing down the things we need done to have this political discussion about estate taxes which is going nowhere.

GERSH: The R&D tax credit and other tax cuts were supposed to clear the way for a pension reform bill to help airlines and other companies fund their retirement promises to employees. But now pension reform will have to stand on its own. Analysts say that could be a mistake.

JOE LIEBER, POLITICAL ANALYST, WASHINGTON ANALYSIS: I think taking out the tax provisions has wounded desperately the pension bill. And I think had they kept the tax provisions in this thing, would have been passed the House today and would have been past the Senate probably early next week and be on the president`s desk by mid August.

GERSH: Analysts agree a minimum wage bill tied to a cut in the estate tax has virtually no chance of passing in a closely divided Senate. House Democrats called all the political maneuvering proof that Republicans did not really want to raise the minimum wage to $7.25 an hour.

REP. NANCY PELOSI, HOUSE MINORITY LEADER: It`s obscene that we have $5.15 an hour nine years straight, no increase in the minimum wage. Obscene, it`s immoral; it unfair. But what do they do? Instead, they resist, they resist, they resist for nine years and they brag about it. GERSH: Moderate Republicans were in an almost impossible situation today. They had pushed for a vote on the minimum wage, but many oppose a further cut in the estate tax. Now they may have to choose whether to vote against their own party leadership. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.