May 24,2007

Supplemental Spending Bill Keeps Minimum Wage Hike, Small Business Tax Package Agreement

Baucus applauds additional funds for Children’s Health Insurance Program as well

Washington, DC – Final supplemental spending legislation approved by the Senate today includes a long-overdue minimum wage hike for America’s workers, and a number of small business tax incentives shepherded to passage by Senate Finance Committee Chairman Max Baucus (D-Mont.). Baucus and House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) hammered out the $4.84 billion tax package for the first supplemental spending bill passed this year, and worked to retain the provisions in this second version of the legislation. The tax package offers assistance to many businesses that employ minimum-wage workers, who will soon get a $2.10 raise in their hourly pay.

“Thanks to this bill, America’s minimum wage workers are finally going to get their pay raise, and small businesses will get needed tax cuts,” Baucus said. “There’s more that the Finance Committee can do for American families and businesses this year, from education and health tax incentives to additional small business tax relief. But I’m satisfied that we’ve made a good start, and extremely pleased to finally get these provisions done.”

Provisions in the Baucus-Rangel tax incentives package include measures to encourage the hiring of low-income and disadvantaged workers, to help growing businesses save when they buy new equipment, and to assist economic growth in the Gulf Opportunity Zone – the area still struggling to recover from Hurricanes Katrina, Rita, and Wilma. A summary of the revenue-neutral tax package, including offsets, can be found on the  following pages. Additional information can be found on the Finance Committee website at

The final supplemental spending bill also provides as much as $650 million to cover shortfalls in Federal funding for the Children’s Health Insurance Program. The actual expense of covering looming shortfalls in 11 states may be as low as $396 million. Baucus, whose committee will take up legislation renewing the CHIP program shortly after Memorial Day, sought the emergency funds to help states avoid dropping children from CHIP coverage in the coming weeks. CHIP gets affordable health coverage to children whose parents make too much to qualify for Medicaid, but who cannot afford private health insurance.

“As we’ve brought a much-needed raise to hardworking Americans who make the minimum wage, we’re making sure that many of their children keep their health coverage,” Baucus said. “Senator Byrd and all the appropriators made good choices in this bill. The Finance Committee will work to build on the success of the Children’s Health Insurance Program, and to reach even more uninsured children through CHIP.”

The bill also places a one-year moratorium on a new rule from the Centers for Medicare and Medicaid Services (CMS) that would limit Medicaid payments to public hospitals and nursing homes. CMS proposed the rule in an effort to keep states from abusing Medicaid financing arrangements to draw down funds to which they’re not entitled. But the Government Accountability Office (GAO) has found that CMS has not been clear with states about how financing can be arranged appropriately, and made major policy changes with little advance notice. Baucus and other colleagues feel that the currently proposed rule is a too-hasty answer that will result in more confusion.

The legislation passed by the Senate today will now be sent to the White House for
signature into law.

# # #