Capitol News By Meghan Boyer

Senate Blocks Trifecta Bill

In early August, the Senate blocked legislation — known as the trifecta bill — that included an estate tax cut, a set of tax breaks and a minimum wage increase. The proposed legislation spreads the wage increase over three years, reduces the estate tax permanently and offers $38 billion in tax breaks and federal aid. It fell four votes short of the 60 needed to end debate.

Under the bill, the amount of a person’s estate that would be exempt from taxes would rise to $5 million by 2015; couples could have up to $10 million exempt. Additionally, the country’s minimum wage would be raised for the first time in nearly a decade from $5.15 per hour to $7.25 per hour.

Failure of the bill is seen as a defeat for Senate Majority Leader Bill Frist (R-TN) and his allies, who viewed the wage increase as an appropriate trade for the tax breaks and reductions. Frist said an increase in minimum wage could only be considered along with the two other components of the bill. Senate Democrats argued that a minimum wage increase, which affects the United States’ working poor the most, should not be coupled with a tax cut for wealthy Americans.

House members passed the bill before adjourning for the August recess. The Wall Street Journal reports there will be renewed pressure from Senate Democrats and labor organizations to release the “hostage” elements of the trifecta package once the Senate reconvenes.

Big Box Ordinance Approved, Retailers Put Plans on Hold

The Chicago, Ill., City Council approved a measure requiring big box retailers to pay workers a “living wage.” Since passing in late July, the measure has caused multiple big box retailers to put their development plans for Chicago on hold. They, along with opponents of the measure, are pushing for a mayoral veto, a right Chicago Mayor Richard Daley has not exercised in his 17-year tenure. At press time, Daley had not stated whether or not he intends to veto the measure; he has until Sept. 13, 2006, to decide.

The big box ordinance applies to stores with at least 90,000 sq.ft. that are operated by retailers with $1 billion or more in annual sales. Beginning July 2007, such stores will have to pay employees a minimum of $9.25 per hour in wages and $1.50 in benefits. The numbers will rise to $10 and $3, respectively, by 2010. Automatic annual cost-of-living increases will apply after that, reported the Chicago Tribune. Approximately 40 existing city stores fall under the ordinance, including Wal-Mart, Lowe’s, Menards, Target and Home Depot stores.

Those who oppose the measure worry that big box business will stay out of Chicago. At press time, Lowe’s, Wal-Mart and Target site developments in Chicago have been put on hold. Alderman Howard Brookins Jr., whose ward includes the site of a halted Lowe’s project, told the Chicago Tribune that Lowe’s concerns about the law caused it to shelve plans for stores.

Similar legislation has been introduced in Washington, D.C., and discussed in New Jersey. Other states have passed laws that require certain larger employers to provide health benefits for workers, but none of the laws contain a wage requirement.

Pension Bill Clears Congress

Congress approved a landmark pension bill intended to help the federal insurance system and better secure retirement benefits for millions of U.S. workers by requiring some companies to increase their plan contributions. The core of the complicated, 907-page bill seeks to close the $313 billion funding gap in the nation’s employer-sponsored pension plans and make it more difficult for companies to make pension promises they cannot keep, reported the Wall Street Journal.

Under the bill, companies with pension funds will be required to close any shortfalls within seven years. It also has tests that companies would have to use to determine whether their pension plans posed a risk to the federal insurance system, reported the New York Times. Companies with risky plans would need to calculate the cost of having every qualifying employee take an immediate early retirement and then put that amount in their pension funds.

The bill’s passage comes after Republican leaders removed a package of tax breaks from the pension legislation; the tax breaks were added to the wage increase and estate tax change bill.

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