WASHINGTON – The interpretation of a few words could make a huge difference in the wages of thousands of workers in Oregon.

A small provision in a recently blocked U.S. Senate bill could slash the minimum wage for Oregon bartenders, waiters and bellhops if it is taken up again during the remaining few weeks of Congress’ latest legislative session.

The loose wording of the bill has left it open to intense debate among restaurant owners, lawmakers and economists over how extensive that reduction would be in seven states – including Oregon, Washington and California – where workers earn tips on top of the state’s minimum wage. In most states, tipped workers earn a subminimum wage.

The bill would increase the federal minimum hourly wage for most workers from $5.15 to $7.25 in three stages by 2009.

It also includes language that some analysts and senators say would cut the wages of tip-earning workers in Oregon from the state’s current minimum wage of $7.50 an hour to $2.13 an hour, with tips expected to make up the difference.

Yet this interpretation is not accepted across the board. Others, like U.S. Sen. Gordon Smith, R-Ore., say the language would not lower the minimum wage in states like Oregon for anyone.

Oregon Deputy Labor Commissioner Annette Talbot said the confusion about the bill’s language lies in whether tips would be included in minimum wages, knocking the base wage down to $2.13, or if the legislation would only relate to any future increases in a state’s minimum wage.

”You could make an argument that the language could be read either way,” she said. ”I would assume they would hopefully try to resolve that. No matter what your position is, it doesn’t do much good to create a federal law that raises so many questions that you end up litigating it for years.”

The bill passed in the U.S. House in July, with Rep. Greg Walden, R-Hood River, voting in favor. Senate Democrats stopped the bill. It was blocked largely because of another issue – the pairing of the minimum wage with a cut in inheritance taxes for the owners of multimillion-dollar estates.

But several senators, including Maria Cantwell, D-Wash., and Ron Wyden, D-Ore., said the more than $5-an-hour wage cut for tip-earners in their states was also hard to stomach.

”It raises the national debt to record highs while lowering the minimum wage for tens of thousands of Americans, including many hard-working Oregonians,” said Melissa Metz, Wyden’s press secretary.

Ross Eisenbrey, vice president and policy director at the Economic Policy Institute, a liberal-leaning think tank, said more than 5 million people nationally work in businesses where tips are common. In Oregon, there are about 65,000 individuals earning tips, he said, citing data compiled in 2005 from the U.S. Bureau of Labor statistics. Of that, about 26,830 are waiters, 11,420 are maids and housekeepers, and 7,180 are bartenders.

There is a 50 percent chance the legislation could be considered again after Congress reconvenes in September, Eisenbrey said.

”It’s a terrible legislative package, and it’s remarkable that it got as close to being passed as it did,” he said.

But Sen. Gordon Smith, R-Ore., didn’t see it that way.

”As a minimum wage increase goes into effect, the current (state) wage level will be the floor,” Smith said in remarks on the Senate floor during debate on the bill Aug. 3. ”If a state, such as my state of Oregon, currently has a minimum wage of $7.50 an hour, this amount will be the wage the employee receives.”

No one will make less under the federal legislation, he said.

Bill Perry is the director of government affairs at the Oregon Restaurant Association, which lobbied heavily in favor of the bill in Washington. Like Smith, he says the legislation would only apply to future increases in Oregon’s minimum wage. So, he said, if the state’s minimum wage goes up again, the wages for tipped employees would remain at the current $7.50, if they worked in jobs where their gratuities would put them over the new, higher minimum.

In Oregon, the state minimum wage has been pegged to the increases in the consumer price index since 2002, when voters passed an initiative. It rose by 25 cents this year.

Jody Denton, owner of Merenda Restaurant and Wine Bar in Bend, said he would strongly support an adjustment in the minimum wage for tip earners down to $2.13 an hour. The lack of a tip credit – a deduction from the minimum wage recognizing money earned from tips – puts Oregon restaurants at a financial disadvantage, he said. The tip credit is standard in Idaho and other states.

”It has been very financially challenging year after year,” said Denton, who opened the restaurant four years ago and plans to launch another restaurant this year downtown. Passage of the federal legislation limiting the minimum wage for those enjoying income from tips would help, he said.

Denton, who has about 90 full- and part-time employees, said tightening the wage law for tipped workers could have a negative affect on the labor market in the area, but he doesn’t think he would have trouble finding servers and bartenders. At his restaurant, he said a dishwasher or line cook makes about $22,000 a year, while a waiter makes $35,000 to $50,000, when including tips.

”Service is not the difficult part in our staffing,” said Denton, a member of the Oregon Restaurant Association. ”It’s just a matter of fairness to the business and fairness to the other employees. Not having a tip credit wage creates an imbalance.”

But Lilian Chu, who has owned the Hong Kong Restaurant in Bend for 26 years, said a wage decrease would be unfair to her employees. Chu said she already pays a dollar or more on top of the minimum wage to offset the rising cost of living in Bend.

”It’s just unreasonable,” said Chu, who has about two dozen full- and part-time workers. ”Tips are so variable. When the weather is bad, or there’s a lot of snow, people are afraid to drive out – they hardly make any tips. They should not calculate the tips into the wages.”

Chu said it would be difficult for her to find waiters if wages were cut. She said she tries to pay a fair wage, as well as provide health benefits for long-time employees, because, ”We like to make profits together.”

”For a hard-working employee to make profits for us,” she said, ”in return they should be rewarded.”