House Committee on Education and Labor
U.S. House of Representatives

Dear Colleague: 

Today, we introduced the Working Families Wage & Access to Health Care Act – a comprehensive package to increase the minimum wage, expand access to affordable health care, and protect small businesses and their workers.  Because of a provision added to an unrelated House Rules package last week, tomorrow’s minimum wage debate will not follow regular order, meaning no Committee hearings on the legislation will be held and no opportunities for amendments to improve the bill on the House floor will be made available.  In fact, we won’t even be permitted to go before the Rules Committee to make our case for a fair, open, and honest debate. 

However, we’re optimistic that as Congress moves forward with minimum wage legislation, steps will be taken to improve the Democrat leadership’s legislation so a more balanced measure can be sent to the President’s desk.  Last month, President Bush detailed his desire to work with Members to forge an agreement that both raises the minimum wage and protects small businesses and their workers.  Senate Majority Leader Harry Reid (D-NV) last week signaled his willingness to do the same.  And we believe the Working Families Wage & Access to Health Care Act would add the momentum needed to improve the unbalanced proposal we’re slated to consider tomorrow. 

The Working Families Wage & Access to Health Care Act includes the same minimum wage language as H.R. 2, the so-called “Fair Minimum Wage Act.”  However, the comprehensive alternative includes important protections for small businesses and their workers, as well as reforms to expand working families’ access to affordable health care. 

Following is a summary of the Working Families Wage & Access to Health Care Act: 

I. Raising the Federal Minimum Wage  

• Identical to the House Democrat leadership’s proposal, the Working Families Wage & Access to Health Care Act amends the Fair Labor Standards Act to increase the current federal minimum wage rate of $5.15 per hour to $7.25 per hour over two years.  The increase would occur in the following increments: 

  • From $5.15 per hour to $5.85 per hour 60 days after enactment of the Working Families Wage & Access to Health Care Act;  
  • From $5.85 per hour to $6.55 per hour one year after the first increase; and 
  • From $6.55 per hour to $7.25 per hour one year after the second increase. 
• Also identical to the House Democrat leadership’s proposal, the Working Families Wage & Access to Health Care Act would extend the federal minimum wage to the Commonwealth of the Northern Mariana Islands. 

II. Expanding Access to Affordable Health Care  

• The Working Families Wage & Access to Health Care Act would significantly expand access to health coverage for uninsured families across the country by creating Small Business Health Plans.  According to the U.S. Census Bureau, the number of Americans who have no health insurance increased to about 46.5 million last year.  Estimates indicate 60 percent or more of the working uninsured work for or depend on small employers who lack the ability to provide health benefits for their workers. 
• To ease the burden on small businesses and provide meaningful benefits to those who work for them, the Working Families Wage & Access to Health Care Act would establish Small Business Health Plans that allow small businesses to band together and purchase quality health care for workers and their families at a lower cost.  36 House Democrats supported doing exactly this in the 109th Congress. 

III. Protecting Small Businesses and their Workers

• The National Federation of Independent Business reports that small businesses create two-thirds of the nation’s new jobs and that 98 percent of new businesses in the U.S. are small businesses.  The Working Families Wage & Access to Health Care Act protects them – particularly restaurants, which employ over 13 million Americans, many of them low-income – so they can employ more workers and provide better benefits. 

• Specifically, the Working Families Wage & Access to Health Care Act would: 

  • Eliminate a temporary FUTA surtax that was established in 1976 to repay loans from the federal unemployment trust fund.  Even though this money was fully repaid 20 years ago, this temporary tax has been extended five times.  Eliminating the FUTA surtax would relieve businesses of more than a billion dollars in unnecessary tax burden and would help alleviate the highest of all taxes that small businesses pay. 
  • Enhance Internal Revenue Code Section 179 small business expensing to simplify the financial planning activities for small businesses.  This would provide a meaningful capital resource incentive for small businesses to expand, employ more workers, and invest more in their communities. 
  • Reduce new restaurant construction depreciation to 15 years.  Restaurants are a high-volume business, serving more customer traffic and maintaining longer hours than the average commercial business.  This results in rapid deterioration, making new restaurant construction important but costly.  New restaurant construction – made easier by reducing the depreciation schedule – creates jobs not only in the restaurant industry, but in industries that will indirectly benefit from the construction of restaurant buildings as well. 

As Congress considers legislation to increase the federal minimum wage, leaving small businesses and their workers behind – as the unbalanced plan slated for a vote tomorrow does – is terribly irresponsible.  Small businesses are the backbone of the American economy, and it’s important for Congress to ensure a minimum wage mandate does not have a harmful effect on small employers’ ability to create jobs – and provide benefits – for working families.  If you would like to cosponsor this bill, please contact Rob Gregg with the Education and Labor Committee’s Republican office at 6-9406. 

Sincerely,