Because it didn’t have any tax breaks to offset the effect the increase would have on small businesses. What I like about this is that it sends the message to Pelosi that she just can’t push through legislation without the involvement of the Republicans. She doesn’t have as much power as she thinks she does.

The vote sent a message to House Democrats and liberals in the Senate that only a hybrid tax and minimum wage package could succeed in the Senate. But any tax breaks in the bill would put the Senate on a collision course with the House, which is required by the Constitution to initiate tax measures.
[…]

The House passed the increase two weeks ago. Since then Speaker Nancy Pelosi, D-Calif., and Rep. Charles Rangel, the chairman of the tax writing Ways and Means Committee, have prodded the Senate to keep tax proposals out of the bill.

Senate Majority Leader Harry Reid, D-Nev., scheduled Wednesday’s vote to demonstrate the Democrats’ lack of Republican support for a straight minimum wage bill without tax cuts. Every Democrat present voted to end debate and five moderate Republicans joined them.

“There seems to be agreement to raise the minimum wage,” said Republican Sen. Michael Enzi of Wyoming. “The difficulty has been how do we take care of some of the impact to small businesses that will result from this.”

Reid is backing an $8.3 billion tax package that would extend for five years a tax credit for employers who hire low-income or disadvantaged workers. It also extends until 2010 tax rules that permit businesses to combine as much as $112,000 in expenses into one annual tax deduction.

Read the rest here.
And Kennedy shows that all these years in Congress hasn’t been good for his business sense. The government is forcing employers to pay more money for workers, the least the government can do is offset the cost a little for those who can afford it least. Wealthy people like Kennedy shouldn’t be in the Senate, they don’t understand the problems of the little guy:

“Why can’t we do just one thing for minimum wage workers, no strings attached, no giveaways for the powerful?” asked Sen. Edward Kennedy, D-Mass., a leading sponsor of the bill.

He is so clueless! The powerful? The pizzeria owner is powerful? How about the bodega owner? Thankfully, the Republicans are there to protect the little guy.
And btw, Kennedy offsetting the cost to the small business owner might help ensure he won’t lay off some of his employees since he may no longer be able to afford them.