Baucus Caves to Business Interests on Minimum Wage

As the House of Representatives looks to move forward with clean legislation to increase the minimum wage for the first time in a decade (i.e. not containing any gifts to corporate interests), on the other side of the Capitol Sen. Max Baucus, who as Democratic chairman of the Finance Committee is handling the companion bill, has apparently caved to business groups interested in making such a move more palatable to their members. CQ's Midday Update email has the story (no link available).

Finance Chairman Max Baucus, D-Mont., unveiled four proposals at a morning hearing, including one to cut small business depreciation schedules from 29 years to 15 years, which would let those businesses to write off investments faster.

Baucus and ranking Republican Charles E. Grassley of Iowa have been working on the package for several days and plan to mark it up Jan. 17. Minimum wage legislation could come to the Senate floor next week.

Senate Democrats, lacking the 60 votes needed to overcome filibusters in the Senate, have known all along they would need to accept some "sweeteners" for business to get a minimum wage hike through.

In a statement of administration policy, the White House today said it "strongly supports" adding business-friendly provisions to the House minimum wage bill.

There is no reason whatsoever for the Democrats to give in to the demands of the business lobby at this point. The service and retail sectors spent big dollars in recent years to convince the Republican Congress not to increase the minimum wage, giving $28,537,380 to GOP candidates over the last two cycles and just $11,277,663 to Democrats. This effort was a complete success as Republicans obstructed Democratic moves to boost the minimum wage for years. Yet the Democrats won control of both chambers of Congress on November 7, in no small part as a result of their calls to raise the minimum wage.

Now the Democrats have a responsibility to follow through with their campaign promises, not only because it makes for good politics but also because it makes for good policy. But good policy does not include handing massive giveaways to the business lobby to buy their support for legislation they have fought with all of their might to oppose. Simply put, Americans rejected the position of these special interest lobbyists last fall, and Congress must listen to the voters rather than K Street.

It is certainly possible that the Democrats, at this point, do not have enough votes to invoke cloture on a clean minimum wage bill in the Senate. But if this is the case, then the Democratic leadership in the chamber should at least hold a vote to put Republican Senators -- particularly those up for reelection next year -- on the record either for or against raising the minimum wage. Even if such a gambit fails, the Democrats could always go back and try to pick off wayward Senators with enticements at that point. But to give away the house so early in the game is unconscionable, and Senator Baucus should know that. And, what's more, Harry Reid, Dick Durbin and the rest of the Senate Democratic leadership need to make it clear to Baucus that this type of unnecessary kowtowing to the business community will not be tolerated in the 110th Congress.

Tags: Max Baucus, minimum wage (all tags)

Comments

44 Comments

Re: Baucus Caves to Business Interests on Minimum

Would the Republicans really filibuster minimum wage  in this environment?

by Alice Marshall 2007-01-10 10:47AM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

No.  But the Democratic leadership is composed of a bunch of institutionalists.

by Matt Stoller 2007-01-10 10:49AM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

Not disagreeing, but just curious to know more: what do you mean by 'institutionalists'?

by blueflorida 2007-01-10 10:59AM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

doesn't that mean that they are more interested in 'getting along' to maintain what they think is the rarified stature of being Senators in the US Congress than actually go out on a limb by doing what is in the interest of the American people?

by bruh21 2007-01-10 11:21AM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

I think they buy into a different model of politics.  For them 'getting things done' means passing legislation, not fighting in public over what should happen and letting the chips fall where they may.  We see forcing the Republicans to filibuster the minimum wage as a way of having debate over fundamental values, and therefore a useful part of politics.  They see passing compromise legislation as necessary to help Americans who are struggling immediately while placating minority forces.

It's a different set of strategic choices.  We believe in public debate with the right-wing as a means of wielding power and passing legislation, they prefer working to pass legislation quietly through compromise with the right-wing.

by Matt Stoller 2007-01-10 12:14PM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

Exactly. And we are right, tactically and morally. Silent compromises with the far right is a path to self destruction. Our values are mainstream American values so there is no need to hide from the debate.

by Populism2008 2007-01-10 12:46PM | 0 recs
Devils' Advocate

IF by acting as institutionalists here, and by giving away some goodies to the Senate GOP, Senate Dems win some less aggressive opposition to future senate bills that will be somewhat harder to pass than the minimum wage, then the Senate Dems might have a point.  I can imagine an argument along the lines of "well, if we start the filibusters and the head-knocking fights early, we won't have any reservoirs of goodwill when the more difficult agenda items than minimum wage come up.  Let's not turn the chamber into a filibuster fest in the first week, and if we choose to bargain with the GOP on this, we'll win a little deference on other issues that will be handy later.  After all, they've seen the polls on this, they know we're strong, and they don't want to have to filibuster.  We can earn some chips here if we give them a way out."

Basically, if Senate Dems assume that the Senate GOP are also institutionalists, then they might have a case.  If the Senate GOP would be offended by a hardass vote on the minimum wage, would resent being forced to filibuster or fold, and would appreciate and appropriately reward some conciliatory gestures, then the Senate Dems are right.

Unfortunately, I don't think the Senate GOP really are institutionalists anymore.  I think they're maximalists, looking to take the greatest advantage for themselves in any situation, consistency or other external values (comity, the institution of the Senate, dignity, etc) be damned, and I think they'll grab our concessions now and fail to reward them in kind at any future point.  I think the Senate Dems may be wrong about what kind of people the Senate GOP are.

On the other hand, McConnell and Lott have been in the Senate a long time, and that loser Frist is gone.  Lott apparently initiated the Gang of 14 standdown (a chamber-before-party sort of move).  

The question of whether to do this depends, I think, on an understanding of the GOP actors.  If it's possible to actually earn their goodwill and get repaid for it later, that's one thing.  On the other hand, from over here in the cheap seats the GOP hasn't looked like that kind of machine in a long time.  What did Jay Rockefeller ever get out of Pat Roberts?  What did Carl Levin ever get out of Lindsay Graham?  

Anyway, it's easy to see why we in the netroots disagree.  The television side of the GOP that we see is the ugliest, most disgraceful, unprinicipled self-serving monster in First World politics today.  You have to go to like, Putin and Chavez and Amhadinejad to find similarly poisonous  politics.  (No polonium puns intended)

by texas dem 2007-01-10 02:21PM | 0 recs
Re: Devils' Advocate

Let me know when this hypothetical easier ability to pass things happens, and then the rest of all of your devils advocacy may need to be considered.

by bruh21 2007-01-10 03:16PM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

But, doesn't the other side have to agree with them in order for that to work? That seems to be the flaw in their position. I am all for decorum, and building consensus, but it takes two to tango, right.

by bruh21 2007-01-10 03:15PM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

McConnell himself would probably filibuster. Anyway,  although I'm not certain as to what the exact federal revenue impact will be, I don't particularly think that a change to the small business depreciation timeline is 'giving away the house'. The important thing is to get the minimum wage bill passed. If anything, allowing them the opportunity to filibuster the bill, even if temporarily, gives them a 'victory' to rally around, and could feed a media narrative of Democratic ineptness.

by blueflorida 2007-01-10 10:57AM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

Is it really a victory to filibuster a bill that enjoys support from 70% of the people? I say let them filibuster and we will kill them in 2008.

by Populism2008 2007-01-10 12:48PM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

Actually, I think the GOP would rather not filibuster this one.  I think they're probably looking for a face-saving way out.

by texas dem 2007-01-10 02:22PM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

I don't know the details of the compromise... but tax relief for small businesses is something that progressives should be behind, as long as it is done responsibly. Small business owners (and I mean the owners of businesses that are, you know, actually small) often make very little money and they often work extremely hard. Their businesses keep money in the local area, they don't export jobs, and they are often intertwined with the character of a local community. In other words, small business owners are a natural ally of the progressive movement. Yes, they often exploit the crap out of their employers. But they are also often in extremely precarious economic situations themselves. And the tax burden on them seems unduly high -- at least from my perspective (my wife is a former small business owner).

by Joe Gabriel 2007-01-10 02:24PM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

They're going to filibuster the Part D negotiation bill.  I'm not sure they wouldn't filibuster minimum wage as well.  But Matt's right - the problem isn't the GOP this time, it's the Dems.

by eRobin 2007-01-10 10:58AM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

what I find fascinating is how quickly the GOP is willing to use filabusters, and how quickly we allow them to keep making threats with it. Maybe I have too long a  memory but wasn't just last year or so people were talking about a nuclear option.

by bruh21 2007-01-10 11:23AM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

That was different!!  They were talking about judicial nominees and the Dems thwarting their god-given right to  be seated without question.  This is paying workers a marginally less unfair wage and tending to the least among us.  The Bible is silent on those points.  

Seriously, when I see the GOP willing to filibuster everything the Dems do, I go crazy remembering how the Dems refused to even consider filibustering the MCA.

by eRobin 2007-01-10 11:43AM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

I am struck by how weak it makes us appear.

by bruh21 2007-01-10 07:10PM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

This is why we should have made them trigger the nuclear option. Filibustering is undemocratic and an inherently conservative tool.

by Populism2008 2007-01-10 12:50PM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

The filibuster is what makes the Senate a 60-votes chamber.  I actually think that's a good thing.  It slows down any radical change in government, but that means it slows down us and the reactionaries too.  Lately they're just as strong or much stronger than we are, so that's fine with me.

The House is already a 50 votes chamber (figuratively).  It also passes some supremely awful legislation.  The Movement Conservatives had full control of the House for several cycles.  At their peak in 2005, they had 50 or 51 votes in the Senate.  They never got anywhere near 60 though, and we're damn lucky too.  

by texas dem 2007-01-10 02:30PM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

Whether or not its a good thing seems besides the point. You sound like a process lover. I am not. I am interested in how we seem weak by allowing them to fall back on their old tactics without any repercussions.

by bruh21 2007-01-10 07:11PM | 0 recs
Re: Baucus Caves to Business Interests on Minimum


Whether or not its a good thing seems besides the point.

Um, hm.  Well, at least you're upfront about that.

You sound like a process lover. I am not. I am interested in how we seem weak by allowing them to fall back on their old tactics without any repercussions.

You are interested in image (and explicitly not in the substance of the matter).  Fine.  

The filibuster is not "their old tactic", it's theirs and ours and everyone else's.  It's a Senate tactic that everyone uses and has always used.  It defines the Senate (both as a 60-vote chamber, and as one with individual privileges, all of which depend on your own party backing you up with filibuster.)

Wait, you're not interested in that.  Back to image.

It's not their old tactic.  It is theirs and ours.  We both use it equally.  They briefly threatened to eliminate it, and we staged an event that resulted in a rebellion in their own damn caucus.  Our half of the Gang of 14 was talking to Harry Reid the entire time.  Bill Frist was not in the loop and wound up looking like a complete fool.

The filibuster is not their tactic, they did make the stupid mistake of trying to get rid of it, they badly botched the process and looked like fools, and now they're using filibusters themselves, which just makes their whole nuclear option stunt look even stupider.  The return of the filibuster does not make us look weak.  

You're interested in image, but your sense of the optics is wrong.  A GOP filibuster does not make us look weak, and actually makes us look better and them look worse vis-a-vis that old nuclear option thing.  Furthermore, the GOP is actually trying to avoid filibuster in this case, and they're begging us for an excuse to back down (I think) and we're giving them one.  More as a favor to them than anything else.  I think.

Anyway, that giveaway may make us look weak, but the filibuster sure as heck doesn't.  If they filibuster it actually HELPS us.  ("Senate Republicans block minimum wage increase" would be a GREAT headline for us.)  You're that wrong on the optics here.

And finally, "repercussions"?  What do you want us to do, pull the nuclear option ourselves?  It is bad policy, so bad that John freakin Warner and Lindsay goddamn Graham wouldn't let them get away with it.  Good guys like us don't institute terrible policy just to look tough.  

by texas dem 2007-01-11 02:07AM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

not image- substance. but a different way of reaching that substance than you understand.

by bruh21 2007-01-11 02:51AM | 0 recs
Re: Baucus Caves to Business Interests

What are the other sweeteners?  Changing the depreciation schedule doesn't seem like a big deal to me.  So it moves from 29 to 15 years...and?  So they get to write off investments twice as fast.  It's still the same amount (not factoring an inflation difference in years 16-29).

(Full disclosure:  I own a couple very small businesses, so this could possibly be a benefit for me...but I see little overall impact to my bottom line)

I certainly understand not caving in, but I don't really see this one part as being a huge compromise.  In fact, if something like this gets a deal done, I think it should be considered.

I don't think we owe it to anyone to be bipartisan, but I also don't think it wise to be partisan at the cost of scuttling good legislation.

by lutton 2007-01-10 11:24AM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

Compared to previous "sweeteners" that were proposed by the GOP majority, this change to the depreciation schedule is extremely mild. Besides, Democrats should support small businesses, as many here claim whenever Walmart comes up. Apparently that "support" rings pretty hollow.

This is not a giveaway to Exxon, it's a break for the local pizza shop when they buy a new oven. This and other blogs take the anti-business positions to the extreme just to stick it to the GOP, but it often gets in the way of common sense issues. This change is a very small price to pay for easy passage of a minimum wage increase. With the stance taken in your post, the first 100 hours will be more like the first 1000 hours.

by OfficeOfLife 2007-01-10 11:24AM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

Yup.

They still get to write off the same amount; just faster...turn it back on them.  Make it about small business:  put a cap on it, say only the first $100k or $500k or $1 millon (I'm not really sure what number fits in the small business arena) a 15 year schedule, above that remains at 29.

If the GOP balks, we can tell the public that the GOP won't support tax benefits for small business.

by lutton 2007-01-10 11:31AM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

Smart.

by eRobin 2007-01-10 11:45AM | 0 recs
Re: Baucus Caves to Business Interests

Yup.

They still get to write off the same amount; just faster...turn it back on them.  Make it about small business:  put a cap on it, say only the first $100k or $500k or $1 millon (I'm not really sure what number fits in the small business arena) a 15 year schedule, above that remains at 29.

If the GOP balks, we can tell the public that the GOP won't support tax benefits for small business.

by lutton 2007-01-10 11:31AM | 0 recs
Re: Baucus Caves to Business Interests

That's a good idea.

I'm not in favor of adding a corporate giveaway to a bill we can pass as-is, but I'm not going to object to throwing them some kind of minor bone.

One thing people don't consider is that, because of the slower pace in the Senate, the number of available days to pass legislation really has a way of passing by before you know it.  If you can make a minor concession and have a bill sail through by unanimous consent, as opposed to taking 3 days for full debate, that's a win in itself and it means you can use those 3 days to pass other progressive legislation.  So let's not hate the Dems too much if they allow some MINOR pro-business concessions in the bill.

by Steve M 2007-01-10 01:56PM | 0 recs
Re: Baucus Caves to Business Interests

I agree that if, in the end, the Senate passes a minimum wage bill with modest sweeteners with some inherent policy justification, that's fine and dandy.

The House Dems shouldn't balk in conference at such a compromise.

On the other hand, offering sweeteners so early in the piece might suggest to the GOP that there's more to be had with a bit of pressure. And, having adopted at the outset a flexible negotiating stance, it might be hard for the Senate Dems to draw the line at a place acceptable to House Dems and large elements of the wider party.

by skeptic06 2007-01-10 02:13PM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

Noone is anti-business. A lot of people are anti-corporate dictatorship which is a big difference.

by Populism2008 2007-01-10 12:52PM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

This is a small concession to small businesses. Far from a "corporate dictatorship". Small businesses are the foundation of our economy and should be happily supported by Democrats and Republicans alike. When people on this site get their panties in a twist over something as minor as an adjustment to the depreciation schedule for small businesses, it comes off as anti-business to any rational observer.

by OfficeOfLife 2007-01-10 08:13PM | 0 recs
Couple of points

I agree that Uncle Harry is giving way too quickly and too easily.

But I suspect that the 100 Hours timetable may have something to do with it.

Now, the timetable was always, in its terms, ambiguous: it promised that various bills would be passed within the time limit, but not whether passed meant passed Congress or merely passed the House.

But the fact that the House is under the gun, and turning round a good handful of bills in short order would naturally (100 Hours or no 100 Hours) puts any Senate Dem leadership under some pressure to follow suit.

Which, given the rules the Senate works under, is close to Mission Impossible, without cutting deals that are worse for the Dems than if nature had taken its course in the Senate.

Absent the 100 Hours, the best way to handle the possibility of a GOP filibuster would, I suspect, have been kick things around for a while, feel senators out, let the interest groups have a go them; then move to a vote on cloture, and see the color of senators' money.

A failed cloture vote would be a welcome douche of realism for supporters with unrealistic expectations, and, as others have said upthread, would hopefully allow the Dem leadership to buy off enough no votes to turn the vote around the second time.

But - are we sure this is all Baucus? If Reid wants to play it long, how does Baucus get his shake-n-bake compromise bill to the floor?

My strong suspicion is that this is a leadership bill, and will go forward to a passage vote.

A jolly little conference that'll make!

by skeptic06 2007-01-10 11:26AM | 0 recs
Reid on board with tax sweeteners!

According to Bloomberg, at least:

Senate Majority Leader Harry Reid of Nevada has said he's willing to consider adding tax breaks to a Senate version of the minimum wage bill. Senate Minority Leader Mitch McConnell, a Republican from Kentucky, says he's working with Reid on a measure that would include tax relief.

"The package, we think, has bipartisan support,'' McConnell said last week.


Which is not to say that Reid will necessarily agree a sweetened minimum wage bill. But even so...

by skeptic06 2007-01-10 11:56AM | 0 recs
Reid quote on sweeteners

I quoted and linked it in my own piece yesterday!

by skeptic06 2007-01-10 12:05PM | 0 recs
Re: Baucus Caves to Business Interests

Also, can't we always fiddle around during the period when the House & Senate bills are reconciled?

by lutton 2007-01-10 11:26AM | 0 recs
Re: Baucus Caves

It does not appear that too many of you folks know anything about running a business.  A fifteen year depreciation schedule is probably the kind of support for small business that we Democrats should be advocating.

Of course, that attitude would interfer with an opportunity to attack a moderate Democrat from a red state.  You don't want to miss out on that fun.

by Francis Vecellio 2007-01-10 11:37AM | 0 recs
Re: Baucus Caves

As long as it's actually restricted to small business, sure.

We're probably overconditioned here by things like the "family farm saving" agriculture subsidies, almost all of which go to ArcherDanielsMidland.

Dems love small business.  Small is beautiful.  It's big big BIG business we hate.  Or rather reasonably distrust, based on a century's worth of evidence.

by texas dem 2007-01-10 02:34PM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

I don't want to piss on the outrage parade, but is he submitting four proposals, or four OPTIONS on the same proposal (raising the minwage)?

If we're already taking down BlueDogs because they have the temerity to include alternate proposals that may in some way evince a measure of compromise, it's going to be a looooong two years...

by torridjoe 2007-01-10 11:58AM | 0 recs
Re: Baucus Caves

Just sent email to Reid, Baucus, and Durbin with quotation from above. Thanks for writing this, making it easy to pounce with a sensible argument.

This isn't about small business. It's about sticking your face in his face when he threatens to filibuster. "I can talk longer than you!" Think Saturday morning cartoons, not Mr. Smith Goes to Washington. Hey, you guys won. Act like winners and wait for the other guy to make good on his threats, before you start talking compromise. Negotiate from strength. Geeze, didn't you guys learn anything from Clint Eastwood? On the Waterfront, anyone?

by mrobinsong 2007-01-10 12:10PM | 0 recs
Re: Baucus Caves to Business Interests

Since we're all always annoyed when the MSM omits important context:  what is the cost of this change, measured in US dollars?

I'm not sure I'd call this a tax break as much as a tax rule.   This is really a technical fine point of accounting.  The same total amount is going to be on the returns, summed over the years.  

So the only difference is the marginal tax rate on the difference in net present value of the out-years.  Use anything like a reasonable discount rate of 4% and you're looking at less than a 20% difference in NPV of depreciation deductions claimed.  Actual receipts will be reduced only by that amount multiplied by the marginal tax rate.  As small businesses typically devote only a small fraction of their expenses to capital investments, it's hard to imagine this being a big-ticket item.

I find it impossible to gather outrage over a change from 29 years to 15.  In fact, if anything, 15 probably more reasonably corresponds to reality for most investments; especially small-business investments.

I suppose to the extent it shows weakness in the face of a Republican filibuster threat, one might be annoyed.  But this is a case where the actual cost of "showing weakness" is awfully close to zero.  I don't think winning a fight over a technical accounting rule will encourage Mitch McConnell to be more aggressive on Iraq.  On issues like that, he's just gonna do what he's gonna do.

by Professor Foland 2007-01-10 12:31PM | 0 recs
Re: Baucus Caves to Business Interests on Minimum

History has passed Baucus by and he has yet to realize it.

by Bob Brigham 2007-01-10 01:20PM | 0 recs
Re: Baucus Caves to Business Interests

Breaks to truly SMALL busineses would be fine, in my opinion -- BUT, there should be clear lines drawn regarding who is and who is not a small business. Mom & Pop operations should get a few breaks, I think.

by Marq 2007-01-10 01:20PM | 0 recs
The term "cave" seems melodramatic...

Not everything has to be a political fight from the get go. Accelerating the depreciation for small business seems like a small price to pay to get this passed quickly.

And the depreciation itself seems like a good idea to me as well. Will help small businesses with early cash flow issues!

by SaveElmer 2007-01-10 02:16PM | 0 recs
Is this really such a big deal?

A) If the "sweeteners" are really so rotten, House Democrats can strip them out in conference.  Republicans used to do this all the time.

B) This concession seems like a minor, tiny little thing.  It might even, as many here suggest, be a good thing.  Unless you can substantiate that it is in fact a "massive giveaway," as you call it, I'd recommend chilling out.

by antidoto 2007-01-10 02:30PM | 0 recs

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