Congress works through aid measures for Katrina victims

WASHINGTON — Lawmakers on Thursday worked to help solve the practical problems facing those caught in Hurricane Katrina’s path who need quick access to cash, housing and medical care.

The House and Senate passed nearly identical bills to let victims tap retirement accounts without penalty and help working poor families and parents retain their tax credits. Senators also voted for rental housing vouchers and aid measures for small business.

The action came ahead of President Bush’s prime-time speech from New Orleans about the comprehensive recovery effort he envisions for the battered Gulf Coast.

On Capitol Hill, Republicans and Democrats fought over plans for a special, GOP-majority committee to investigate the government’s sluggish response to the emergency. The House endorsed the idea by a mostly partisan 224-188 vote. Democrats warned they would boycott.

Republicans said it is their responsibility to scrutinize the GOP-run government. “In challenging times, our country expects its leaders to work together and not to engage in petty bickering,” said Senate Majority Leader Bill Frist, R-Tenn.

Democrats contended that Republicans cannot be trusted to run an impartial investigation. “After the flood comes the whitewash,” said Rep. James McGovern, D-Mass. “The job of this Congress is not to run interference for the Bush administration.”

Louisiana lawmakers outlined a reconstruction plan, called “Project Pelican,” for their devastated state. It includes coastal restoration and economic development incentives to brings jobs and people back to New Orleans.

Help was coming from the Treasury Department, which ruled that the hurricane qualified as a hardship. That allows victims and their families tap into retirement plans, including 401(k)s, an effort aimed at people with little savings to recover from the storm.

In separate bills passed by the House and the Senate, lawmakers voted to waive penalties typically imposed on early withdrawals from retirement accounts. Lawmakers have to reconcile their differences and send the measure to the president before it can become law.

The measures help working poor families and parents retain tax credits and other benefits that can be disrupted when taxpayers, for example, lose their jobs or relocate.

Several House lawmakers reacted favorably by a proposal to two Illinois Democrats, Sen. Barack Obama and Rep. Rahm Emanuel, to immediately advance earned income tax credits and child tax credits to families in the disaster area.

The tax bills would let people write off more of their unreimbursed hurricane losses. Also, taxes typically imposed when debts such as mortgages are forgiven would be waived. People who take in evacuees for two months or more would get tax breaks.

The Senate’s housing voucher program 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. The program was expected to cost $3.5 billion over six months.

The small business plan, approved by a 96-0 vote, would allow borrowers to defer repayment of Small Business Administration disaster loans for a year. The maximum size of an SBA disaster loan would rise from $1.5 million per loan to $10 million.