Senate blocks minimum wage rise

The bill, already passed by the US House of Representatives, would have raised wage levels to $7.25 by 2010.

But Democrats were unhappy that it was tied to a Republican plan to cut inheritance taxes paid by the rich.

The Republican-led Senate did not gain the 60 votes needed to enable final congressional passage of the package.

Opponents of the joint bill had previously said they were not expecting the bill to gain approval in the Senate.

'Fattest cats'

On 30 July, the House of Representatives voted in favour of increasing the minimum wage from the existing hourly rate of $5.15 to $7.25 by the middle of 2009.

But the bill also included plans to cut estate taxes, which are a form of inheritance tax levied when a property transfers from one person to another following a death.

Republicans say small businesses and farmers would benefit.

But many economists argue that expanding the estate tax benefit would only serve a small slice of the US population, who are already rich.

"The Republicans can get 6.6 million Americans an increase in their basic minimum wage, as long as we promised that the fattest cats in America would get a great big bowl of tax cuts," said Senator Richard Durbin of Illinois, the second-ranking Democrat in the Senate.

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