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Saturday, Nov. 22, 2003

Sen. Arlen Specter of Pennsylvania, the chief Republican opponent of the new rules, agreed to drop a provision killing the regulations from a massive spending bill, lawmakers, congressional aides and lobbyists said.

Critics of the new rules said they could lead to 8 million Americans losing eligibility for overtime pay, largely white-collar workers earning more than $65,000 a year. Administration officials say more than 644,000 such employees would lose the time-and-a-half pay now required when they work more than 40 hours in a week.

The dispute was the biggest hurdle to completion of a huge, overdue bill financing dozens of federal agencies that Congress' leaders want to complete before lawmakers leave town for the year.

With the overtime fight resolved, it was possible that the spending bill -- exceeding $280 billion, one-eighth of the entire federal budget -- could be approved by the House this weekend and by the Senate early next week.

The end of the overtime battle spelled a legislative and political victory for President Bush, whose aides had repeatedly threatened a veto for any legislation attempting to kill the proposed regulations.

The monthslong battle pitted big business and its GOP allies against organized labor and congressional Democrats.

"Congress really believed the administration would provoke a funding crisis to retain its ability to cut overtime," said Bill Samuel, the AFL-CIO's legislative director. "We're not going to let this rest."

Specter, a moderate Republican from a state where organized labor has considerable clout, faces a difficult re-election fight next year, including a primary challenge from a conservative.

The Bush administration and business leaders say the new rules are a badly needed modernization of overtime rules that in many cases are vague and decades old.

"The business community lobbied hard on this issue, but in the end it was the simple argument, that this rulemaking should go forward because the regulations haven't been updated in 40 years, which won the day," said Randy Johnson, U.S. Chamber of Commerce vice president for labor policy.

Specter and his aides could not immediately be reached for comment. Earlier in the day, he and his supporters said they would continue their fight even if their provision was dropped from the spending bill.

Specter had also acknowledged that he was feeling boxed in by threats from congressional leaders to delete the language blocking the rules from the spending bill. That would force him to decide whether to oppose the overall spending measure -- a vote that in effect would be a vote to shut down numerous federal agencies over the issue.

"Does anybody have a choice" but to vote for the spending bill, he said.

The Senate voted in September to block the regulations. The House had backed them this past summer, but reversed its stance last month in a nonbinding vote.

Sen. Tom Harkin of Iowa, the lead Democratic sponsor of the provision blocking the overtime rules and an ally of Specter, blamed his colleague's decision to abandon the fight on Bush administration pressure.

"Just in time for the holidays, the White House has delivered another gift for big business, along with a pay cut for millions of working families," Harkin said in a written statement.

It was unclear what, if anything, Specter received in return for his decision.

The Labor Department proposed the rules in March, and is expected to issue a final version as early as next month.

The department says its proposal would require that 1.3 million low-wage workers now ineligible for overtime pay to start receiving it or a salary boost. Officials proposed boosting the salary cap in current law from $8,060 a year, set in 1975, to $22,100 a year to help the low-income workers. Opponents were not trying to block that provision.

© 2003 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

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