In one of the most anticipated, and for some legislators most unwanted, votes in the 106th Congress, the House of Representatives voted 246 to 179 to increase the minimum wage by $1 over two years. Forty-two Republicans crossed party lines to support the increase.

The original Republican proposal spreading the increase over three years was rejected when an amendment offered by Representatives James Traficant (D-OH) and Matthew Martinez (D-CA) for a two-year increase won over enough Republicans to pass.

House Leadership divided the original bill into separate tax and wage measures. The tax provisions were approved first by a 257 to 169 vote. The majority of the tax breaks come from a reduction in estate taxes, but it also includes provisions making health care payments fully deductible for the self-employed and increases the business meal deduction. The two provisions were combined automatically after passage.

House Speaker Dennis Hastert (R-IL) attempted to put a positive spin on the resulting measure. "This is a balanced bill which helps the working poor while helping the employers who hire them," Hastert said.

The first hourly minimum wage was set in 1938 at 25 cents as part of the Fair Labor Standards Act. In the years since, the wage has been increased 19 times, most recently in 1996. Should the Senate also pass this wage increase, it would amount to a 45% increase in the minimum wage in just 5 years.

The future of the wage increase is now linked with bankruptcy reform legislation awaiting action in a House-Senate conference. The Senate attached a wage increase, spread over three years, during floor consideration of the bankruptcy bill. The Senate also added a smaller tax relief package to the wage increase. However, since any tax legislation must originate in the House, there is still an ongoing debate over how to proceed with both the wage hike and the bankruptcy overhaul. In addition, President Clinton has said he would not sign the wage bill in its current form.

If you have any questions, please contact Katherine Graham at (202) 626-8195.

This week the National Retail Federation testified in support of legislation to shed light on hidden telephone surcharges imposed on businesses. "The Truth in Telephone Billing Act" (H.R. 3011) would require phone bills to clearly identify the type and amount of all charges on the bill.

Speaking before the House Subcommittee on Telecommunications, Trade and Consumer Protection, NRF Vice President, Information Technology Cathy Hotka argued that not only were these charges concealed, but imposed additional costs on small businesses as they spend time and resources analyzing phone bills each month.

"While most analysts acknowledge that rates for long distance and data services are falling, bills are generally not. These charges, whether explicit or implicit, raise the bottom line of the bill. And the manner in which they are presented on that bill can make it very difficult for consumers to shop for carriers in a cost-effective way."

NRF will continue to monitor the legislation, and will work actively to ensure swift passage out of Committee. If you have any questions, please contact Cathy Hotka at (202) 626-8118.

The next phase of the biggest trade fight this year began this week as President Clinton sent a bill to the Senate Finance Committee to grant China Permanent Normal Trade Relations status.

White House officials acknowledge they do not have enough support in the House of Representatives to win passage of the measure. "We probably don't have the votes right now," said Commerce Secretary William Daley. "Members are still trying to grapple with this."

By sending the bill to the Senate where support is stronger, the Administration hopes to build momentum for the measure leading into the House debate. "I think the Senate is more inclined to move expeditiously on it," Senate Majority Leader Trent Lott (R-MS) said. However, Congressional procedures require that the House act on the measure first.

A number of Representatives who supported renewal of NTR in the past have recently announced they would not vote in favor of PNTR. Even Vice President Gore stepped on the Administration's toes when he claimed he would fight for stronger conditions on PNTR if he were President during a speech before the AFL-CIO, which has made stopping PNTR its top priority this year. In addition, China's behavior, as in years past, has cast a pall over the proceedings, with continued human rights abuses and, more recently, additional threats to use force against Taiwan.

The President took the offensive on Wednesday, arguing forcefully in support of PNTR in a speech at Johns Hopkins University. "A vote against PNTR will cost America jobs as our competitors in Europe, Asia and elsewhere capture Chinese markets that we otherwise would have served," President Clinton said.

The President spoke at length, explaining while granting PNTR is not required for China to join the World Trade Organization (WTO), it is required if the U.S. is to fully realize the benefits from China's membership in the WTO. He also emphasized the importance of the recent U.S.-China trade accord. "Economically, this agreement is the equivalent of a one-way street. It requires China to open its markets -- with a fifth of the world's population, potentially the biggest markets in the world -- to both our products and services in unprecedented new ways. All we do is agree to maintain the present access which China enjoys."

If you have any questions, please contact Erik Autor at (202) 626-8104.

The National Retail Federation is pleased to announce the dates for the 65th Annual Washington Leadership Conference (WLC) in Washington DC. The annual retail lobbying event will be held at the Hyatt Regency on June 13-14, 2000. The Conference is a vital opportunity for retailers to voice their concerns on Capitol Hill and ensure that Congress keeps retail interests in mind when making public policy decisions. The WLC will be held in conjunction with meetings of NRF’s Independent Stores Board, Policy Council, and the National Association of State Retail Association Executives.

Last year, WLC attendees met with more than 70 Congressional offices, and helped educate Members of Congress about issues affecting the retail industry. This year, NRF will kick-off the Conference with a Congressional reception on June 13, followed by a day of key Congressional and political speakers and an afternoon of Congressional lobbying appointments on several retail priorities on June 14.

Registration materials will be sent to NRF members within the next few weeks. If you have any questions, please contact Emily Wild at (202) 626-8131 or via email at wilde@nrf.com.

March 14-15, 2000 - International Trade Advisory Council, Washington, DC
March 21, 2000 - Credit Management Advisory Council, Washington, DC
March 22-23, 2000 - Taxation Committee, Washington, DC

Washington Retail Insight is published by the National Retail Federation, 325 7th Street, NW, Suite 1000, Washington, DC 20004. Please contact Mike Epstein at (202) 783-7971 or e-mail with comments, suggestions, or for subscription information.