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Sen. Grassley, Rep. Rangel Debate Competing Minimum Wage Bills

February 15, 2007 at 6:25 PM EST
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REP. CHARLES RANGEL (D), New York: This committee can and intends to work in a bipartisan way.

RAY SUAREZ: Monday evening, the House Ways and Means Committee, under the leadership of Chairman Charlie Rangel, unanimously approved a modest package of small business tax breaks. The full House is expected to add those provisions to a bill calling for a $2.10 increase in the minimum wage over the next two years.

On hand to congratulate Chairman Rangel was an unusual visitor from the other side of the Capitol: Sen. Chuck Grassley of Iowa, the top Republican on the Senate Finance Committee.

The Senate has also approved the minimum wage increase, but with tax breaks more than six times as large as those in the House bill. I sat down with Chairman Rangel and Sen. Grassley yesterday to find out if the differences between the rival bills can be worked out.

Senator, Mr. Chairman, welcome to the program.

SEN. CHARLES GRASSLEY (R), Iowa: Glad to be with you.

REP. CHARLES RANGEL: Good to be with you.

RAY SUAREZ: Well, the House has passed the minimum wage increase. The Senate has passed an increase with a tax-break package. Mr. Chairman, where do things stand in marrying those two? How are you going to bridge that divide?

REP. CHARLES RANGEL: Well, I’m so glad, Ray, that you called this meeting, because I haven’t the slightest idea what they’re thinking about on the other side of the Capitol.

As you pointed out, the House overwhelmingly passed the bill to approve the minimum wage for over 13 million people, and we sent it to the Senate with the understanding that it would have broad support over there.

We sent it over. Republicans and Democrats support it. And maybe the distinguished senator from Iowa can share with us, what do they have against increasing the minimum wage for 13 million Americans?

Wage raises plus tax breaks

Sen. Charles Grassley
R-Iowa
Early on, we had a bipartisan agreement in the Senate that we would combine some changes for small-business people in the tax code with the minimum wage, just like we did in 1997...

RAY SUAREZ: Well, something tells me that he's more than ready to do that. Senator, where is the divide?

SEN. CHARLES GRASSLEY: Nothing against the increase in the minimum wage. That's why there were only three votes against it.

Early on, we had a bipartisan agreement in the Senate that we would combine some changes for small-business people in the tax code with the minimum wage, just like we did in 1997 when President Clinton praised Sen. Kennedy and others for helping small business, at the same time he helped minimum wage people.

Now, what Charlie didn't say to you, or the esteemed chairman didn't say to you, is that they are now working on a small-business tax package. And I assume the reason they're working on that is that somewhere along the line they're willing to sit down and talk to us about a compromise between a very good, but small package that the House put together with a larger package that we put together for small business.

Not only for small business, but we're also trying to do what both Republicans and Democrats said in the last election they wanted to do, is close down tax loopholes, and tax schemes, and things of that nature, where people are doing everything they can to avoid taxation to bring in revenue, which offsets. So there's no increase in the deficit, either in our bill or in Chairman Rangel's bill.

Working out the differences

Rep. Charles Rangel
D-N.Y.
First of all, there's overwhelming support in the Senate for it without a tax cut. But because the Republicans threatened a filibuster, they need 60 votes in order to stop the filibuster.

RAY SUAREZ: Well, is the package that the senator was referring to -- it came out of the other body -- too large for the appetite in your committee?

REP. CHARLES RANGEL: I think what the eloquent senator said was that they were going to hold the minimum wage bill hostage unless we passed $8 billion tax cuts for business. Is that fair to say?

SEN. CHARLES GRASSLEY: It's not fair to say. See what Chuck -- Chairman Rangel, being in the House of Representatives, where a bipartisan majority or a Republican majority or Democrat majority can get anything done they want to get done. We can't get anything done in the Senate unless it's bipartisan.

So this is what we're trying to do, is to help small business close tax loopholes, and raise the same amount of money so the deficit doesn't go up, and help minimum wage people. It's a win-win-win for everybody.

REP. CHARLES RANGEL: I'll get to your question.

RAY SUAREZ: First, respond to his point that, at a time when your chamber is talking about pay-as-you-go -- that is, if anything gets cut, it means finding the money somewhere else -- he says it's revenue-neutral. Why not take a look at the package from the Senate?

REP. CHARLES RANGEL: First of all, there's overwhelming support in the Senate for it without a tax cut. But because the Republicans threatened a filibuster, they need 60 votes in order to stop the filibuster. If they would remove the threat of a filibuster, it would pass both houses without the $8 billion dollar tax cut. Right? Right.

Having said that, the reason that we have this difference of opinion is, under the Constitution, revenue-raising bills have to originate in the House. In order to attempt to accommodate the senators, we are prepared -- and I think we'll get the bill out by Friday -- to send a small bill over to the Senate so that you can attach your $8 billion tax cut for the business to it, which would at least afford us the opportunity to go into conference to try to work out our differences.

But I must say this, that if you want agreement as to what's going to happen in conference, when you obviously can't even say whether we can get into conference, then the House has to just be able to say, "We have a bill. We can live without tax cuts. It's going to improve the work opportunity bill for poor folks, disabled folks, veterans, older people to get jobs."

And we're prepared to do that to accommodate the Senate, but what we can't say is evaluate the $8 billion tax cut that they've got sitting over there.

Tax relief is 'peanuts'?

Sen. Charles Grassley
R-Iowa
It's a small-business-tax package. It's one that's only $8 billion, compared to $20 billion 10 years ago.

SEN. CHARLES GRASSLEY: Now he makes this sound like a business-tax package. It's a small-business-tax package. It's one that's only $8 billion, compared to $20 billion 10 years ago. It seems to me to be peanuts. He passes a smaller one that might be just a peanut shell, but it gives us the opportunity to get together.

RAY SUAREZ: Well, Mr. Chairman, do you accept...

REP. CHARLES RANGEL: When $8 billion dollars becomes peanuts, I've been down here too long.

SEN. CHARLES GRASSLEY: Peanuts compared to $20 billion dollars10 years ago.

RAY SUAREZ: Do you accept the senator's principle...

REP. CHARLES RANGEL: No, no...

RAY SUAREZ: ... that a...

REP. CHARLES RANGEL: We've got 51...

RAY SUAREZ: I haven't even said what it is yet.

REP. CHARLES RANGEL: No, no, no. His principle that they're not holding the bill hostage is that they're saying that they're going to filibuster unless the Democrats cave in, period.

RAY SUAREZ: But the senator has said on the floor that a wage increase for low-wage workers is not a cost-free proposition for American employers. Do you accept that?

REP. CHARLES RANGEL: Well, I'll tell you this: The overwhelming majority of the House and Senate thought that we could get this passed without putting an $8 billion tax cut on business for it.

So, no, I don't agree with him, and neither do most of the Republicans and Democrats. That's why they're resorting to what we call a filibuster. We don't do it in the House, constitutionally, do it. If they remove the threat of a filibuster, that bill would pass the House in a minute without any tax cut.

The 'spirit of compromise'

Rep. Charles Rangel
D-N.Y.
We can get a lot of tax loopholes filled. We can bring in more revenue, and we can help small businesses that sometimes are hurt by an increase in the minimum wage. So everybody win, win, wins.

RAY SUAREZ: Senator, what about the chairman's principle that $8 billion dollars is just too big in the current fiscal state?

SEN. CHARLES GRASSLEY: If Charlie is thinking that the Senate is saying to Chairman Rangel and Speaker Pelosi, "It's the Senate's way or the highway," we're not saying that. We're saying, in the spirit of compromise, that we've got to do something for small business, because there is a negative impact upon the small business.

We can do it in a revenue-neutral way. We can do it in the way Democrats want to do it, because you're always hearing Democrats say these tax scams and these tax loopholes have to be plugged. Republicans are even willing to plug them. We're going to be revenue-neutral.

And it seems to me that everybody has a win-win-win situation. And so the art of compromise is to go to conference and see what we can work out.

Now, Charlie is right. There are some senators -- and they may be Republican, and they may be Democrat, I don't know -- but there is always a senator threatening a filibuster on something. But a lot of times, you know, they melt away. Those are threats.

REP. CHARLES RANGEL: Well, I hope they melt away, because I'd hate to get started off as chairman and have any differences of opinion with my dear friend, Chuck Grassley. He's a longtime friend, distinguished leader in the Senate and in the country, and you're not going to stick us up.

SEN. CHARLES GRASSLEY: And you are a friend.

RAY SUAREZ: It sounds to me, if you're one of those people working at $5.15, you're going to be working for $5.15 for at least a little while longer, because there seems to be a difference that can't be quickly bridged.

REP. CHARLES RANGEL: I would hope not. I would hope not.

SEN. CHARLES GRASSLEY: I think, if he and I sit down, we can reach some compromises, and we can get a minimum wage increase of $2.10. We can get a lot of tax loopholes filled. We can bring in more revenue, and we can help small businesses that sometimes are hurt by an increase in the minimum wage. So everybody win, win, wins.

RAY SUAREZ: Gentlemen, we're going to have to leave it there, but thank you both for being with me.

SEN. CHARLES GRASSLEY: Thank you.