Bankruptcy Abuse Prevention and Consumer Protection Act of 2005

BANKRUPTCY ABUSE PREVENTION AND CONSUMER PROTECTION ACT OF 2005

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Mr. SANTORUM. Mr. President, I rise to offer an alternative to the Kennedy amendment on minimum wage. I listened in part to my colleague from Massachusetts describe that. Obviously I have a slightly different take on what my amendment does than the Senator from Massachusetts suggests, and I will go through that point by point and point out where the Senator from Massachusetts may have exaggerated some of the claims about what destruction this amendment would do to workers in my State or any State.

I start out by suggesting why I am offering an increase in the minimum wage. On this first chart it is important to see this green line which is the percentage of hourly workers who are paid the minimum wage. Since the minimum wage was instituted--actually not since it was instituted but in the last 25 years we can see that the percentage of workers now covered by the minimum wage is actually the lowest it has been in quite some time. It is 2.7 percent of hourly paid workers who now get paid the minimum wage. When one looks at that number, it sort of cries out a bit and says it is time to bring it back up to be not the absolute bottom where no one is paying that and there is effectively no minimum wage--very few people are paid it--to a point which sort of comports with at least recent history. That is what we are trying to accomplish with our amendment, which is to bring it back up to about here.

Our $1.10 increase over a period of 2 years would cover about 7.4 percent of all workers, which is actually slightly higher than it has been over the last 15 years and is a little above historic trends. Senator Kennedy's increase would actually put it to about almost 17 percent of workers in the economy who would be making minimum wage, which at least going back to the 1970s would be much higher than it has ever been as a percentage of wages.

So I think what we are suggesting is something that comports with the current economy, certainly the way the economy has worked over the last 20-plus years, as opposed to something that harkens back to long ago days where this was not just a minimum, it actually had, as Senator Sununu suggested, a dramatic impact on the economy and a potentially very inflationary impact if one looks at where the wages were of this percentage of payroll and we have hyperinflation.

You remember the 20-percent mortgages and all the other things that were going on during the time. That set the wages at a very high level. So look at how we are providing a responsible floor for workers without having, as Senator Sununu suggested, an impact on the economy, which could be inflationary and damaging to all workers, as well as, particularly, lower wage workers, looking at high rates of inflation, as well as making sure we do not disadvantage businesses by pricing them out of the ability to have workers, and also pricing laborers out of the marketplace.

When you have extraordinarily high rates, as Senator Sununu suggested, $20-an-hour, $30-an-hour minimum wage, you are going to be pricing a lot of people out of the workforce.

I think what we are suggesting is a responsible approach. It keeps up with the tradition over the past few years of a responsible floor for a minimum wage. I am very comfortable that our proposal keeps the balance between the ability of lower skill employees to enter the workforce at a wage in which they are compensated for the skills they bring to the job, and at the same time not forcing employers--because, again, see, we are pretty far down on the number of people working at this level--not forcing employers to forego employment with people in that slightly increased amount we are suggesting. So it is not going to hurt employment, it is not going to hurt their businesses dramatically, and to the extent it does, as Senator Kennedy, at least, described the provisions--I don't know that he accurately described the provisions--we do have provisions in the legislation that deal with the smaller businesses.

It is a general rule in the Federal Government that we have lots of requirements--family and medical leave is one example, but there are others, labor laws--that exempt small businesses. We either do it by the number of employees or, in the case of the Fair Labor Standards Act, by the amount of revenue that employer happens to take in.

In this case, we do raise the cap from $500,000 of revenue for your business as being exempt from this provision to $1.2 million. That provision was set, by the way, back in 1990. If you would have indexed that for inflation, it would be $1.5 million today. So we are not even keeping up with inflation. We are actually well below inflation in the proposal that is being put forward, but we are capturing more small businesses that are not affected.

This just affects the States that sort of tie their minimum wage laws to the Federal laws. If you have a State that has no minimum wage--I think there are six or seven of those--they would stay at the $500,000 level. We left that provision in place, in a sense to protect workers because the States have not spoken on this. But for States that are tied to the Federal level, we raised it. Obviously, if the States want to go back, they are certainly welcome to do so. But it does provide an exemption for smaller businesses--those that are mom-and-pop stores, those who are just starting to build their business--from the Fair Labor Standards Act.

It is important to understand. There are other things I will go through, but before I move off into the other areas of the bill I want to talk about how important it is not to dramatically increase the minimum wage the way Senator Kennedy has suggested.

What we have seen about overtime is that this is where we are today with the real value, if you add in a combination of the minimum wage and the earned-income tax credit. Why do we say the earned-income tax credit? You heard the Senator from Massachusetts talk about trying to support a family, trying to make a living. I am sure he is not going to go out and try to argue for the teenage son of a wealthy businessman, that we have to make sure they earn a minimum wage because that wealthy businessman's son needs the money. He may need it in his own right, but that is not the purpose of the minimum wage. That is not what it is for.

The argument for the minimum wage is we have to make sure those out there in society whom the Senator from Massachusetts talked about--the young lady in Johnstown, PA, making sure she had coverage. By the way, the provision we authored that Senator Kennedy said applied to her with the tip credit doesn't apply to the State of Pennsylvania. It is written specifically to exclude States that have spoken on the tip credit. It is only those that have not that this covered. So the young woman in Johnstown, PA, is not covered by the provision. So the example given by the Senator is inaccurate.

But, again, going back to the central point, which is what are we trying to accomplish with the minimum wage, what we are trying to accomplish is helping those people trying to support a family or themselves out there working at low-wage jobs, welfare-to-work--that is the example that is used. I am someone, in my office, who takes that responsibility of making sure those who are on welfare have opportunities for employment and, in fact, in my office we have hired, over the course of my time in the Senate, eight people off of welfare-to-work. I take that responsibility as an employer, and also going out and talking to employers about the importance of giving people who are transitioned off of welfare, trying to make a living for themselves and their families, the opportunity to do so.

One of the ways we have done that is through the earned-income tax credit. What the earned-income tax credit does is target those who are trying to sustain a family. It helps them by building, on top of the minimum wage, some Federal support. But it is targeted support. That earned-income tax credit doesn't go to the teenager who is claimed on his father's income taxes who is a wealthy businessman. It goes to the mom who has two kids, who needs some help from the Federal Government to be able to support those children.

This is much more targeted relief, if you will, than the blunt instrument of a minimum wage increase.

Having said that, in this chart you see a decline--go all the way back to 1939. You see the earned-income tax credit comes in and you see the difference it makes up here recently. We are suggesting to bring it back up by $1.10. If you add $1.10 to $7.22, you are at $8.32, which would be higher than it has ever been with the combination of earned-income tax credit and minimum wage.

So, again, to suggest somehow or another, as the Senator from Massachusetts suggested, that his increase that would bring it off the chart, if you will, is a responsible increase--it is a blunt instrument that would benefit teenage kids of millionaires much more than it would benefit these moms here. Why? Because as you get into the higher income area, the earned-income tax credit goes away, it starts to phase out. So this blunt instrument of the minimum wage helps folks who are not the point of what a minimum wage is all about. When people come out here and say they need the minimum wage, they don't talk about the son of the wealthy businessman as the point. They talk about this mom. Increasing the minimum wage, yes, helps everyone--if you want to say ``helps.'' Obviously, it will hurt many because they will not be able to keep their job at this high rate of pay, for the maybe low skills that the employee may bring to the business.

But here is what we do. What we do is balance it. We raise it slightly to bring the level up to at least this level, which is where it was several years ago when we last raised the minimum wage, without affecting employers and the ability for low-skill workers to get the jobs they need and to hold on to them and not to disproportionately benefit a lot of workers out there making minimum wage who are not the point of the minimum wage, and that is folks who are doing so sort of as a side line and are not in need of Government interference in the market to make sure that they have plenty to eat and a place to sleep.

It is a much more surgical attempt. I think what we are attempting makes a lot more sense, to help those in need more directly, more surgically, than the blunt instrument the Senator from Massachusetts has suggested. I encourage our colleagues, when they look at our amendment, I encourage Republican and Democrat colleagues to look at what we want to accomplish.

Let me talk about another provision the Senator from Massachusetts seemed to focus on quite a bit, which is the issue of flextime. The Senator from Massachusetts talked about how flextime in this legislation is going to force workers into working more than 40 hours a week and deny them all of these--I will not repeat it. Read the transcript. Read the Senator's arguments about how devastating this would be to people, to have flextime imposed upon them.

No. 1, this provision as written does not impose anything. What it says is that the employer and the employee have to enter into a written agreement, where both have to sign, to agree that the employee will work more hours in 1 week--no more than 10 in addition to the 40 hours, in exchange for commensurate hours off the following week. Again, it is mutual agreement. It has to be in writing. Of course, the employee can decide to withdraw himself or herself from that agreement.

I happen to believe that flextime is a good thing. We have several employees in my office who job share, who use flextime. Federal employees have been able to use flextime for a long time. It is something that is very popular in the Federal workforce. What we are trying to do is make it available to others outside. Why? I can tell you an example in my own office. The people who job share and have flexible hours are moms who are in the workplace. Obviously, we have seen a dramatic change in the workplace in the United States since the minimum wage laws and the 40-hour workweek was put in place. This entry into the workforce of nontraditional workers, if you will, has given rise to a lot of workers seeking to have their hours reflected with their obligations at home. What we are trying to do is have the laws of the Federal Government reflect the changing dynamics in the workplace without forcing anybody into a situation where they are not getting fairly compensated.

But as I talked to I don't know how many parents who are friends and neighbors and constituents, they suggested to me the most important thing they would like to get out of the workplace is more flexibility and more time to be able to do the things that their other job--most people think their more important job, and that is being a husband or a wife or a father or a mother--requires them to do at home.

The most amazing thing is the Senator from Massachusetts opposes this. I know many who are supporters of the Kennedy amendment and oppose this, also. We just went on to the AFL-CIO Web site and just pulled off some things. This is their Web site. You can read the small print, the exact Web page:

Alternative work schedules encompass work hours that do not often necessarily fall inside the perimeters of the traditional and often rigid 8-hour workday or 40 hour work week. Such schedules allow working people to earn a paycheck while having the flexibility to take care of children, older relatives and other needs.

The AFL-CIO says they want that, and we are providing that. And all of a sudden, maybe because we are providing it, maybe because it is in a Republican alternative, maybe this is not a good idea. Again, this is right off the AFL-CIO Web site:

Changes in the workforce and in the kinds of hours people work are making alternative work schedules increasingly important for working families trying to balance job and family responsibilities.

Suggested family friendly provisions: Compressed work week.

Common examples of things asked are schedules that allow workers to work eight 9-hour days and one 8-hour day for an extra day off every 2 weeks.

Under the provisions we have in this law, that is exactly what we have, allowing a mother or father who wants to stay at home instead of working 10 8-hour days a week, work 9 10-hour days. Work extra hours the days that you work for the day off. Again, that is not allowed under the current law. We would have provided that flexibility. Again, it would be upon a mutual agreement of both the employee and the employer.

Look, there are some suggestions as to how we can make this more explicit, although from everything I read it is very explicit in the legislation as to how that would work. I am certainly happy to sit down and talk with the Senator from Massachusetts and see what we can work out in the future.

What we do in these provisions--yes, we do provide some tax benefits for smaller businesses. We allow for small business expensing. We allow for restaurants to be depreciated. Again, who is going to be affected by this predominantly? It is going to be the restaurant industry that pays employees at this level, and the travel and tourism industry. Those are the folks who will be most affected. Those are the ones paid at the lower end of the wage scale. So, yes, we do provide some support for them because it is going to cost some of these businesses a substantial amount of money.

We want to provide some relief from a Government mandate, mandating additional cost. So we want to provide additional relief in doing so.

What I think we are trying to do is find an acceptable compromise to be able to pass in the Senate.

I candidly don't believe--and I told the Senator from Massachusetts when I spoke to him last week--this is the appropriate place for his amendment. I understand there are a lot of dynamics at play here. But the Senator from Massachusetts feels compelled to offer it on the bankruptcy bill. I don't think there is any secret, after listening to the debate over the past week, that we very much would like to keep this bill on the Senate floor the way it came out of committee and the way it has been forged over a period of three Congresses. This compromise has almost passed this year, and time and time again for the last three Congresses. Now we have an opportunity to actually get this thing signed--passed by the House in the form it is right now on the floor of the Senate, and then to the President.

I was hoping the Senator from Massachusetts would not offer his amendment and would allow this amendment to the minimum wage laws to be offered at a different time. I think we are marking up the welfare reform bill this week. It is an extension of the 1997 act. It is an appropriate place, in my opinion. We are talking about welfare-to-work, and we are talking about helping low-income individuals transition into the workplace and providing them with a quality of life that is family sustaining. I was hoping the Senator from Massachusetts would wait until that time, and maybe we could sit down and work out some sort of compromise that the President would sign. During the campaign, he talked about his willingness to sign a minimum wage proposal similar to what I put forward. I don't think he would support what the Senator from Massachusetts proposed.

If you want to actually do something to bring this level up, and do it in a sort of targeted way that actually helps the people you are really wanting to help focus on--that is, those who are trying to provide for themselves and their families, not working summer jobs or part-time jobs or going to school; that is really what we are focusing on--we can do that in a way that I would argue does not have a poison pill attached to it.

I take great exception to what the Senator from Massachusetts said. These are not poison pills. These are responsible, proworker, pro-small-business provisions that greatly help the people in this new and dynamic workplace of America. It is a very different one than when the 40-hour week was established.

The Senator wants to offer his amendment and lock in a vote. But I hope, candidly, that we don't agree to either amendment at this time, although I would certainly vote for my amendment and vote against the amendment offered by the Senator from Massachusetts.

But I am hopeful that we can get the requisite number of votes down the road on a welfare bill, actually pass this legislation, and get it over to the House. House leadership has not expressed a willingness to bring this up.

Again, as we work on this, we have an opportunity to get it to conference and hopefully be able to do something which provides much more targeted relief to workers who are in need, as opposed to Senator Kennedy's approach which is very blunt, forceful, and destructive, I would argue, and brings a measure of damage to a lot of lower skilled, lower income workers. And it would be very damaging to business at the same time in that the economy is recovering very nicely right now.

This is a modest approach. It has half the increase the Senator from Massachusetts is suggesting. It focuses on those who are most in need. At the same time, it doesn't hurt the small business community. In fact, it provides a much needed incentive for them to be able to continue to hire employees and grow, which is obviously the ticket to middle-class America.

There are other provisions in the bill that I certainly want to talk about a little later. But we have other speakers. I don't want to use up all the time.

With that, let me yield the floor.

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Mr. SANTORUM. Will the Senator yield?

Mr. KENNEDY. Briefly.

Mr. SANTORUM. Mr. President, I point out to the Senator page 20 of my amendment discusses the tip credit. It specifically refers to only States that are covered by this provision as States that do not have a tip credit. I believe it is seven States that are the only States covered by this provision.

So I don't know where you get ``millions'' of workers.

Mr. KENNEDY. If you read from page 21, the top line from 2 down to line 16, it effectively states: ``may not establish or enforce any laws that require employers to tip credit employee.''

Mr. SANTORUM. I refer the Senator to line 20 through line 25. If the Senator would read that, he will find that any State which prohibits any portion of employee tips from being considered as wages, so that is the operative language that limits this provision--just in the States that do not allow a tip credit.

Mr. KENNEDY. The Senator understands that every State has to have the tip credit at the present time. They have to have the $2.12.

Mr. SANTORUM. My understanding is that is not the case and there are seven States that do not.

Mr. KENNEDY. Under Federal law at the present time, every State has to have a minimum of $2.13 and then the States can add on top of that. Many of the States do. The State of Pennsylvania has added, I believe, 60 or 70 cents on top of that.

So when you talk about not permitting any States to enforce the tip credit, you are talking all the States. That is the way we read it.

Mr. SANTORUM. I say to the Senator from Massachusetts--

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Mr. SANTORUM. Mr. President, I will be brief. I know the Senator from Iowa is here. I do not want to stop him from making his remarks. I just want to respond to several of the things the Senator from Massachusetts said.

First, I would be happy to look at the letter from the Ohio State professor and see how he, in my opinion, misread the provision we had. I think I am very clear on the intent. If there is some language clarification, I would be happy to sit down and work on that. I know Senator Enzi, of course, from the HELP Committee worked on this language and would be willing to do so also.

A couple of comments. The Senator from Massachusetts talked at length about economists and others who are suggesting that we need--I think I am using the Senator's words--a modest increase in the minimum wage. I did not see any of the charts that he brought out that supported his particular minimum wage increase. And he used the term ``modest'' repeatedly. I am not sure there would be too many economists in the economy of today who would say a 40-percent increase in the minimum wage would be modest. I think a 40-percent increase, by definition, probably is outside the bounds of what most people would consider modest.

I would make the argument that a 20-percent increase--this is what we are suggesting--a 21-percent increase would probably be extending the bounds of modesty, but it would certainly be much more within what most people consider to be the traditional definition.

I would just like to thank the Senator from Massachusetts for bringing up support for my amendment because I think, in comparing the two, the increase we are putting forth of $1.10 comports very well with what the economists are saying would not be damaging to the economy and fit in very well with what would not be damaging to employees and employers. So the $1.10, fits the modest framework.

Secondly, the issue of flextime. Again, I would just point the Senator to the actual language in the amendment. On page 3 of the amendment, it says:

Except as provided in paragraph (2), no employee may be required to participate in a program described in this section.

So it is purely voluntary. It says employers may do this. Employees may participate. It provides for a written agreement arrived at with collective bargaining. Obviously, the collective bargaining unit, the labor union, would be responsible for any kind of flextime, which is the way it would be under the law.

Here, with respect to an employee who is not represented by a labor organization: No. 1, ``a written agreement arrived at between the employer and employee before the performance of the work involved if the agreement was entered into knowingly and voluntarily by such employee and was not a condition of employment.''

Now, again, I would ask the Senator from Massachusetts, if there is stronger language he would like us to use to make sure this is a voluntary agreement and that the employee and employer enter into it willingly--there are quadruple damages if the employer violates this.

Also, the Senator from Massachusetts talks about how onerous this is on employees. The Senator from Massachusetts voted for this with respect to Federal employees. He voted for this provision, as we see here, flextime, for Federal employees on more than one occasion. As you know, we now have this provision, this ``onerous'' provision, which, I can tell you, my employees do not see as onerous. They see it as something that is of a great benefit to them and their families.

So again, if the Senator from Massachusetts has some tougher language he would like--but I think the language I have read from my amendment--and I am not reading the summary. This is my amendment.

AMENDMENT NO. 128
(Purpose: To promote job creation, family time, and small business preservation in the adjustment of the Federal minimum wage)

In fact, Mr. President, I send the amendment to the desk and ask for its consideration.

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Mr. SANTORUM. So I am reading from the text of the amendment. And again, the Senator from Massachusetts may quibble, and certainly has, with the voluntariness of this program. I think the language certainly expresses my intent and the intent of all those who are supporting this amendment, that it is a voluntary program and an employee goes into it knowingly and voluntarily with a written agreement. If there is other language that the Senator from Massachusetts would like, obviously we are not going to do that today, but I would be happy to sit down and see if there is a word that is more voluntary than ``voluntary.''

I think usually when you use the word ``voluntary'' that sums up voluntary very well. But if there is a better word for voluntary than the word ``voluntary,'' then I am pretty happy to do so. If there is a better word--whether it is ``discretionary''--than the word ``may,'' I am happy to look at a better word than ``may.'' ``May'' is usually a pretty good word when it describes ``you do not have to.'' ``May,'' that is what we usually use. But if ``voluntary'' and ``may'' are not strong enough words, I will be happy enough to sit down with the Senator from Massachusetts and come up with a better one.

I repeat, the Senator from Massachusetts has voted for this for Federal employees, and there are quadruple damages--quadruple damages--for employers who violate this provision and impose this on their workers unknowingly and involuntarily or as a condition of employment. So I would just suggest there are pretty high and threatening damages to employers who abuse this provision.

One final point I want to make. The Senator talks about its importance, that this is the only way we are going to help people out of poverty. I would suggest that is simply not the case. There are lots of ways, in fact, I would say very much more complicated ways that people get out of poverty than just by the blunt instrument of the Government setting minimum wages.

In fact, looking at this chart, the welfare reform bill we passed in 1996 shows just how effective other ways are. Requiring work is the best way. The Senator put up poverty statistics. What he did not tell you is what those numbers looked like before 1996 and the welfare reform law, which I stood on the floor and argued passionately for. And I was called a whole number of things as to what I was going to do to all these poor children.

What happened as a result of the welfare reform bill was that poverty among African-American children, the thing Senator Kennedy referred to, was at its lowest rate ever by the year 2000. It has crept up slightly during the economic decline of the early part of this decade, but it is going back down.

So the idea that the minimum wage solves these problems is just a fallacy. There are lots of things that work. One of them is work. Another is marriage. We are going to have an opportunity on the floor of the Senate, when the welfare bill comes up, to talk about how we shift Government policy away from, at best--I think it is ``at best''--neutrality toward marriage, how we shift Government policy when it comes to interacting with families and being neutral with respect to marriage. See what the huge impact is on the poor, the huge impact on poor communities and poor children, when moms and dads are helped to stay together in marriage and, more importantly, when they are introduced to the concept because many women and, unfortunately, men choose not to marry when children are born out of wedlock.

So there will be plenty of time for debate on this issue of other things we can do. But I can tell you, if you look at all these other things we are studying, the thing that is most powerful is, No. 1, jobs. The concern many have--and there are studies we can put into the RECORD about what the impact of a dramatic increase--not a small increase, as we are proposing, but a dramatic increase--in the minimum wage would have to the employment picture of these very people who came off welfare and their ability to find work and get out of poverty. It will have a dramatically negative impact on them, a 40-percent increase in the minimum wage.

But again, there are positive things we can do as we look to the future. This bill, in my opinion, belongs on welfare legislation, requiring work, more work, which is what is going to be required in this bill, as well as some things to bring fathers back into the home with the Father Initiative that Senator Bayh and Senator Domenici and I have been pushing for several years, as well as the marriage initiative that the President has talked about.

This is a complex picture and blunt instruments like minimum wages are not the answer. Yes, I am proposing an increase. I am doing one that I think comports with balancing the interest of low-income workers having a better wage with making sure they have a job in the first place because that is the most important thing. I think we have done so with this $1.10 increase and the provisions I have.

Yes, it is a long amendment. But there are a lot of things in here that I think will add to the quality of life of many workers and certainly help small businesses absorb some of the costs of the increase in the minimum wage.

So with that, Mr. President, I yield the floor.

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Mr. SANTORUM. I would say in response to the Senator from Massachusetts, my understanding of this legislation, the way it is written, there was an error made in the drafting of the statute such that the threshold had been basically ignored because of the provision to which the Senator from Massachusetts refers. It was a difference between an ``and'' and an ``or'' as to how it was written. My understanding is that the intent of the Congress was to exempt small businesses as we do from a variety of different labor laws. I mentioned before the one I am most familiar with, the Family and Medical Leave Act, which has an employee threshold. There are others that have thresholds in the Federal law, where we chose not to include very small businesses in some of the mandates the Federal Government imposes, a variety of different labor mandates. We do so because of the nature of the small business. A lot of these are mom-and-pop businesses, a garage, very small employers, where the burden of complying with a variety of Federal statutes having to do with labor laws when it comes to a small operation can be an onerous one and costly one. It can be a barrier to starting a business.

So many, including Senator Harkin and Senator Reid, your leader, have supported this small business exemption as a clean exemption with no ``or'' provision, ``as engaged in interstate commerce.''

Why? Because we understand that Federal law and these kinds of provisions can be very costly to very small businesses and can be a barrier of entry to businesses and can involve them in a cost which they may not be willing to assume.

So there has always been, to my knowledge, in almost every, if not every, Federal labor law a small business exemption, what the Senator from Massachusetts has said there should not be in this case. That is a very legitimate position. I do not think the Members of this body would agree--on either side of the aisle, I might add--that there should be no exemption for any business from this provision of the Fair Labor Standards Act. That is what we attempt to correct, to make that comport with what was broadly agreed was the intent. Unfortunately, it has never been remedied.

If the Senator from Massachusetts wants to make the argument that there should be no businesses exempt from the Federal Fair Labor Standards Act, fine. Make that argument and we will have that debate and we will find out how many votes we have, whether there should be a small business exemption or not. But don't suggest what I am doing here is some sort of subterfuge other than to clarify that there are exemptions for legitimate reasons for very small businesses. The threshold was set at half a million dollars back in 1990. If you index that to inflation, it would be $1.5 million today. We set it at a million, which is lower than the rate of inflation. That is hardly overreaching on the part of this amendment.

If the Senator wants to say there should be no exemption, that all businesses should be covered and there should be no small business exemption to any labor law, fine, if that is what the Senator from Massachusetts wants. Understand the consequences, that Democrats and Republicans for years have understood here, which is these mandates on very small startup businesses in particular, but any small business, can be damaging to the economy in our poorest neighborhoods, in the cleaning services, in the landscape businesses, and a whole host of other small businesses where people are trying to make ends meet by pursuing their entrepreneurial spirit. By putting these kinds of requirements and labor laws and regulations on these small businesses, we damage and destroy the very small businesses in this country.

I do not think that is where most on his side of the aisle are. That may be where the Senator from Massachusetts is. If that is where he is, fine, but I would be very proud to defend that provision that says the smallest businesses in America should not have these kinds of mandates imposed on them by Federal law.

Mr. DURBIN. Will the Senator yield for a question?

Mr. SANTORUM. I am happy to yield for a question.

Mr. DURBIN. I am sorry that I just arrived. I am trying to catch up with this debate. Would the amendment reduce the number of workers in America eligible for overtime pay and reduce the number of businesses in America required to pay the minimum wage?

Mr. SANTORUM. I think I was pretty clear about that. The answer is yes. Because we raise the threshold from a half million, small business, to a million. As I said before, the half million threshold was set in 1990. It has not been indexed. I hear a lot of comments about why we should index things here. We should index the minimum wage, we should index a whole host of other things that have the benefit of, in this case, increasing workers' pay. If that is the case, if we thought $500,000 was a legitimate threshold in 1990, I don't know why it should not be indexed to include in real terms that same class of small businesses at this time.

Mr. DURBIN. Will the Senator yield for a further question?

Mr. SANTORUM. I am happy to.

Mr. DURBIN. If the Senator is prepared to double the size of the business from $500,000 to $1 million because it should keep up with inflation, would the Senator be prepared to double the minimum wage of 1990 to what it should be today?

Mr. SANTORUM. I say to the Senator from Illinois, we are increasing--in fact, my amendment does increase the minimum wage by 20 percent.

Mr. DURBIN. By 100 percent?

Mr. SANTORUM. I don't recall exactly what the increase was. I will check and see what the wage was in 1990 as compared to what it is today. We are proposing a modest increase. If the Senator is suggesting it should be a smaller increase, I will be happy to negotiate a smaller increase if it makes the Senator comfortable.

The Senator from Massachusetts is not suggesting it should be a smaller increase. He is suggesting there should be no exemption at all and that there was a provision--and that is what the debate is about--that if they included anyone in interstate commerce, even one employee, that they should be covered. In fact, that is my understanding of how the Labor Department has interpreted this provision. In a sense, there has not been any threshold.

Again, if the Senator from Illinois would like to have a threshold that indexes with the minimum wage, I would be happy to accept that as a reasonable index. But I think to suggest it should not change at all over a period of time does, of course, begin to gather and cover more and more businesses that are small by nature and then again it would be a barrier to entry and a difficulty in sustaining those businesses over time.

I am willing, if there is a legitimate concern about this as to how much we are raising the cap, again, we are willing to negotiate that. That is not what the Senator from Massachusetts is saying. What the Senator from Massachusetts is saying is there should not be any threshold at all; we should keep the zero threshold which exists today in law.

I yield the floor.

BREAK IN TRANSCRIPT

Mr. SANTORUM. Mr. President, I would like to correct the record. I have supported the minimum wage on more than one occasion during my time in Congress. When I started in the House, the last minimum wage that passed I supported. Under the Clinton administration, I voted for an increase. I have voted for an increase in the minimum wage in the past. I voted for a similar minimum wage increase in the last session of Congress, or the time before. I have not had any ideological problems supporting minimum wage. I want to correct the record about what the Senator from Massachusetts said.

I would also say with respect to workers not being covered as a result of this provision of raising the threshold, as you know and as the Senator from Massachusetts knows, there are operative State laws which provide worker protections in addition to Federal law. In fact, for the States that do not have operative State laws which provide these worker protections, we leave the threshold at 500-fold. We don't change the threshold for the States that do not have operative worker protections for the things that the Fair Labor Standards Act applies to.

I want to make the record clear. No one is falling through the cracks here. The States that only have Federal law covering this area do not change. The ones that do have State laws change accordingly. Again, many of those State laws will remain in place and cover workers who are not covered under the Fair Labor Standards Act under their own State labor protection laws.

I yield the floor.

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