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Washington – President Bush endorsed one of the Democrats’ top priorities for the new Congress, a $2.10-an-hour minimum-wage increase – and on a faster timetable than they have proposed.

But his support comes with a catch.

Bush said at a Wednesday news conference that any pay hike should be accompanied by tax and regulatory relief for small businesses, potentially a tough sell for Democrats, who are about to reassume control of the House and Senate.

“Minimum-wage workers have waited almost 10 long years for an increase,” responded Democratic Sen. Edward Kennedy of Massachusetts, who has said that boosting the federal minimum wage will be his chief goal when he takes over as chairman of the Senate Committee on Health, Education, Labor and Pensions. “We need to pass a clean bill giving them the raise they deserve as quickly as possible.”

The president brought up the issue unprompted during the White House news conference that was dominated by Iraq but veered into domestic issues as well.

Eager to show he heard the message of voters who stripped his party of majorities in both the House and Senate in the November elections, Bush said he’ll work hard on what he called “an interesting new challenge” – trying to find common ground with Democrats who will lead Congress for the first time in his presidency.

“I don’t expect Democratic leaders to compromise on their principles, and they don’t expect me to compromise on mine,” he said. “But the American people do expect us to compromise on legislation that will benefit the country.”

He said initial consultations with incoming Democratic leaders revealed openings for cooperation in several areas. One was an immigration policy overhaul, including a way for some illegal workers to move toward citizenship. That was stymied this year primarily by conservative Republicans.

Other openings Bush saw for cooperation were increased federal spending on alternate energy sources; reform of Congress’ appropriations process that has made it common for lawmakers to slip pet projects into spending bills; and giving American workers new skills and businesses help investing in new innovations.

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