Senate version of minimum wage adds tax breaks

WASHINGTON - The Senate yesterday cleared the way for an increase in the minimum wage, but only with business tax breaks that House Democrats want removed.

Final Senate passage of the legislation is expected later this week, setting the stage for negotiations between House and Senate Democrats over how to get the legislation to President Bush for his signature.

In a key test, the Senate yesterday voted 87-10 to end debate on the bill, well clear of the 60 votes needed.

Earlier this month, the House passed the same increase in the wage floor - from $5.15 to $7.25 an hour over two years - without any tax provisions.

The vote yesterday emphasized how Senate passage of the bill depends on the tax package to attract Republican votes.

The White House has also signaled that Bush wants tax breaks in the legislation.

"Raising the minimum wage will cost some jobs," Al Hubbard, the director of the president's National Economic Council told reporters aboard Air Force One Tuesday.

"We think it's important to counter that with tax breaks that will replace those jobs." *