Rep. Mac Collins, speaking to a meeting of the Fayette County Chamber of Commerce, discussed legislation before Congress, predicting that trade policy will force a change in taxation, and that the minimum wage will be increased.

Collins spoke recently to a meeting of the chamber Small Business Council. Janet McGregor, chairman of the Small Business Council, presented Collins with a special award at the end of the meeting. McGregor, owner of JMac Marketing, told the council the award “honored Mac Collins for his continued contribution to small business.”

Collins gave the group an update on legislation going through Congress during 1999. He said the most significant achievement of Congress was the passage of the balanced budget resolution, which “established the blueprint for government spending.”

Collins said that despite the efforts of fiscal conservatives like himself, spending was increased over the originally agreed-upon spending caps. He also said that while some creative accounting was used to protect Social Security funds from being spent, he believes Social Security will be set aside and protected.

“Everyone likes to say that Social Security is the `third rail' in politics,” Collins said, referring to the fact that touching the third rail on an electric train leads to instant electrocution. “I credit the president with helping us do this. In 1998, when the president gave his State of the Union speech in the well of the House, he hammered again and again that we should save Social Security first. Well, this year, he decided he only wanted to save 62 percent of it, but we said, `No, we liked your position last year better.'”

Collins said this was a great achievement for Congress, because it reverses decades of dipping into Social Security to pay for deficit spending. The key to this was to change budgeting. Under a “unified budget,” Social Security payments were mixed with other revenue. Now Congress is setting aside the payroll tax which is supposed to fund Social Security and part of Medicare.

Collins also discussed future legislative developments. He said entry into the World Trade Organization will force the pace of tax reform. With the WTO ruling against the United States Foreign Sales Corporation, U.S. tax policies will have to be changed to allow American products to compete overseas.

The present U.S. system taxes exported goods, while Europeans do not tax exported goods. This puts American workers and businesses at a disadvantage, Collins said, predicting that change will involve either a flat consumption tax, or a flat income tax.

Collins also predicted that a minimum wage increase will pass, if not this year, then next year. The debate, he said, turns on raising the wage by $1 over three years or two. Further, the measure involves tax reform that strengthens small businesses.

Congress will debate the timing and the extent and content of tax reform, but it will pass a minimum wage increase before final adjournment in 2000, he said.