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US House, Senate pass hurricane tax bills

Posted on: Thursday, 15 September 2005, 17:46 CDT

By Donna Smith

WASHINGTON (Reuters) - The U.S. Senate and House of Representatives approved separate tax relief bills for Hurricane Katrina victims on Thursday and vow to quickly resolve their differences before sending legislation to President George W. Bush.

The House also passed a measure to establish a special committee to jointly investigate with the Senate the sluggish government response to Katrina. Democrats objected to the Republican-led panel, saying a fully independent outside commission was needed to get to the truth.

"The Bush administration and the Republican Congress should not investigate themselves," House Democratic Leader Nancy Pelosi said. "And partisanship has no place in this inquiry."

Despite the partisan bickering over how to proceed with an investigation into the botched government response, lawmakers worked cooperatively to pass the tax bills, the first of a series of measures expected to help Katrina victims.

The Senate and House tax bills give a tax break to people providing housing to storm victims and allow victims to make penalty-free withdrawals from retirement savings accounts.

"This can't come fast enough," said Senate Finance Committee Chairman Charles Grassley, an Iowa Republican. "We need to get these tax incentives on the books to help people make a fresh start."

The bills also ensure families do not lose child credits and other tax benefits due to income lost because of the storm. The Senate bill, with an estimated cost of $7 billion over five years, gives more generous tax breaks to employers who hire storm victims and who keep people on the payroll despite a loss of business. The House bill costs an estimated $5 billion.

The tax bill is the first in a series of storm-related legislation Congress is rushing to pass to help the hurricane's victims and hasten reconstruction in Louisiana, Alabama and Mississippi.

EXTENDED BENEFITS

The Senate is expected to soon take up legislation that would temporarily expand the federal government's role in the Medicaid health care program for the poor by paying 100 percent of the costs for Katrina victims. Normally the cost is split between states and the federal government.

That bill will also add an extra 13 weeks of unemployment benefits for Katrina victims and waive some welfare rules to make it easier for both states and beneficiaries to access funds. The House has already taken action on welfare rules.

Meanwhile, the House Government Reform Committee held its first hearing into the government's sluggish response to Katrina, hearing from California, Florida and District of Columbia officials on how they prepare for disasters.

Democrats are pushing for an independent commission to investigate the catastrophe, arguing that a Republican-led Congress might not do a thorough job of investigating a Republican White House. They complained that none of the witnesses at Thursday's hearing had anything to do with the Katrina response.

But committee Chairman Tom Davis, a Virginia Republican, said he did not want to interfere with relief efforts and promised a comprehensive review.

Source: REUTERS

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