Worker-Friendly Reforms Anticipated As Democrats Take Control Of Congress

As the Democrats take control of both houses of Congress, the minimum wage, health care policy, and tax issues are among their top legislative priorities. Commenting on the Democratic agenda, incoming Senate Majority Leader Harry Reid (D-NV) said, "One result Democrats will fight for next Congress is an economy that lifts working Americans and the squeezed middle class. Today in America, the rich are getting richer. The poor are getting poorer. And the middle class is being squeezed, between higher everyday expenses and jobs that pay less and less."

Reid vowed that "Democrats will reach out to Republicans to raise the minimum wage, provide tax relief for working families, cut the cost of health care, and make college more affordable."

House Speaker-Elect Nancy Pelosi (D-CA) has called raising the federal minimum wage a top priority for the House when the 110th Congress convenes in January. Sen. Edward Kennedy (D-MA) announced in mid-November that the minimum wage will also lead the agenda of the Senate Health, Education, Labor, and Pension Committee when he takes over as chairman.

As sponsor of the Fair Minimum Wage bill, Kennedy has long advocated raising the federal minimum wage, which has been at its current level of $5.15 an hour since 1997. Under Kennedy's proposal, the minimum wage would rise to $6.55 one year after enactment and to $7.25 the following year. Recent attempts by Congress to pass a minimum wage increase have failed because legislative add-ons have generated opposition. In August, Democrats voted down a bill that would have cut the estate tax in addition to raising the minimum wage.

After the November 7 midterm election, Kennedy pointed out that voters in Arizona, Colorado, Montana, Missouri, Nevada, and Ohio had approved ballot measures in support of raising the state minimum wage. A total of 28 states have approved a minimum wage higher than the federal level.

"America has spoken, and the new Congress will listen. If there's one message from this election that emerged loud and clear on a domestic issue, it's raise the minimum wage. No one who works for a living should have to live in poverty," Kennedy said.

Democratic leaders have also expressed their support for a number of other issues high on the agenda of organized labor, including overturning the ban that currently prevents Medicare from negotiating with drug companies for lower prescription drug prices. Rep. John Dingell (R-MI), who is expected to chair the House Energy and Commerce Committee, has said Democrats would aim to close the gap in Medicare Part D coverage known as the "doughnut hole" and give the program the power to negotiate discounts on drugs—a practice specifically prohibited under the 2003 legislation that created Medicare Part D. Democrats have also stressed their commitments to expanding health care coverage to all children and providing federal funding for embryonic stem cell research.

To assist college students faced with rising tuition bills, Democrats have announced plans to slash interest rates on student loans in half and to offer families a 100% annual tax credit for tuition worth up to $3,000. A number of Democratic leaders have also vowed to repeal the alternative minimum tax (AMT), which has a disproportionate impact on upper-middle class families in high-tax states, such as New York and California.

While outspoken in their opposition to Republican efforts to create private accounts for Social Security, Democrats are promoting AmeriSave, an alternative retirement savings plan intended to supplement guaranteed Social Security benefits. Under AmeriSave, low- to middle-income families would be eligible for a dollar-for-dollar match on the first $1,000 contributed to an IRA or 401(k) plan. The proposed legislation would also encourage automatic enrollment in 401(k)s and create a tax credit for employers offering workers the option of converting their retirement savings into an annuity upon retirement.

At the unveiling of the AmeriSave plan, Pelosi said, "At a time when middle-class families are facing mounting health care costs, higher costs of tuition, and higher gas prices at the pump, saving for retirement is an even greater challenge."

Pelosi added, "AmeriSave will help middle-class families build retirement security by expanding opportunities to save, and ensuring pension fairness, guaranteeing workers receive the benefits that they have been promised after a lifetime of hard work."