Congress Moves to Help Katrina Victims

WASHINGTON – The House and Senate each passed tax cut bills Thursday aimed at helping victims of Hurricane Katrina (search) as government money continues to flow in response to the devastation.

The tax cuts are designed to give people affected by the hurricane easier access to their retirement savings and to encourage charitable giving, among other incentives aimed at easing suffering from Katrina. Each chamber passed its bill by a voice vote.

Lawmakers still need to reconcile the minor House-Senate differences in the legislation before it can be sent to President Bush for his signature.

Lawmakers worked on the aid for New Orleans (search) and other stricken areas as Bush prepared for his fourth trip to the region to give a nationally televised address Thursday night on his recovery and reconstruction plans.

The House and Senate tax plan, among other steps, waives penalties for hurricane victims who tap into their retirement savings accounts (search), helps the working poor hold onto an earned income tax credit, and provides a tax break to anyone who houses evacuees for two months or more.

Senate Finance Committee Chairman Charles Grassley also hoped to pass a bipartisan $5 billion to $7 billion plan to speed health care to those displaced by Katrina by easing rules for the Medicaid federal health care program, though objections from unnamed senators had snagged the bill as off midday.

And the Senate is likely to pass and send to Bush a House-passed bill to temporarily ease rules requiring welfare recipients to work 30 hours a week for their benefits while extending the overall welfare program through the end of the year.

Separately, an amendment adopted Wednesday by the Senate on a voice vote would provide more than 350,000 families left homeless by Katrina with emergency housing vouchers averaging $600 a month for up to six months.

Any displaced family, regardless of income, would be eligible for the program, which is slated to cost $3.5 billion over six months.

The measure was attached to a spending bill covering the departments of Commerce and Justice. The Senate was to pass the overall bill Thursday; a final version needs to be worked out with the House, which has not voted on the housing amendment. But Democratic and GOP aides said the expensive housing plan might not survive talks with the more conservative House.

Also Thursday, Michael Brown, who resigned under fire as director of the Federal Emergency Management Agency, was quoted criticizing the state of Louisiana's response to Katrina.

"I never received specific requests for specific things that needed doing," Brown told The New York Times.

Hours after the hurricane struck, Brown said, he told the White House that the situation was "out of control." The next night, Aug. 30, Brown said he called again in desperation: "This is bigger than what FEMA can do."

"Maybe I should have screamed 12 hours earlier," said Brown, who insisted the White House was not at fault.

The spate of Katrina-related bills comes as Congress and Bush are in the initial phases of responding to the desperate needs of the Gulf Coast. Long-term rebuilding and recovery efforts are expected to cost at least $200 billion.

Lawmakers competed to demonstrate how seriously they are taking the Katrina tragedy, with Senate GOP leaders urging a "Marshall Plan for the Gulf Coast as soon as possible."

Grassley said he thought the Medicaid measure could pass this week. The bill would provide Medicaid care in some instances to able-bodied single men, a big departure from current rules. And unemployment benefits would be extended for 13 weeks for people in Mississippi, Louisiana and Alabama whose benefits have run out.

The Centers for Medicare and Medicaid Services was to announce on Thursday that it will pick up all costs of Medicaid care for low-income evacuees who fled to Texas. Sen. Kay Bailey Hutchison, R-Texas, received a phone call late Wednesday from CMS Administrator Mark McClellan about the forthcoming aid, said her spokesman, Chris Paulitz.

An estimated 250,000 refugees from the flooding, an overwhelming majority of whom are believed to be qualified for Medicaid, are now in Texas.