Earlier today, the Senate approved by unanimous consent a small tax cut package designed to help those displaced by Hurricane Katrina and also encourage others to continue contributing to the relief effort. The package was announced yesterday by Finance Committee Chairman Charles Grassley (R-IA) and Ranking Member Max Baucus (D-MT) and was scored today by the Joint Committee on Taxation as costing $8 billion. The House passed a similar tax cut bill this afternoon. The two chamber's versions differ mainly in their handling of charitable giving incentives and in their approach to the Earned Income Tax Credit. The House version ensures families do not lose tax benefits because of temporary relocations; ensures that forgiven debt, such as a mortgage cancellation, is not taxable; provides a $500 per person tax deduction up to $2,000 for taxpayers who temporarily house displaced victims of the hurricane; allows full deductibility for personal casualty losses; waives the 10 percent tax penalty for early withdrawals from retirement plans; extends the Work Opportunity Tax Credit so employers who hire victims of the hurricane can claim a tax credit; lengthens the period of time for replacing damaged property; expands availability of below-market mortgages; and encourages cash donations by individuals and corporations. Congressional leaders hope the differences can be worked out quickly in conference.

Yesterday, Sen. Robert Byrd (D-WV) and Rep. David Obey (D-WI) -- who are the ranking members on the Senate and House Appropriations Committees -- sent a letter to OMB Director Joshua B. Bolten sharing their thoughts on the type of detail they would like to see reported to them for oversite purposes of the current government relief spending. The letter requests that the OMB provide the Appropriations Committees with information regarding all spending, so the committee members "can determine whether taxpayer dollars are being spent wisely and efficiently." Specifically, the letter requests:

Detailed information on every obligation, allocation, or expenditure that totals more than $50 million, broken down in no less than $50 million increments. The detailed information should include: the purpose; whether the work will be performed by the government or a contractor; and, if the work is performed by a contractor, the name of the contractor, the type of contract let (fixed-price, cost-plus), and whether the contract was sole-source, full and open competition, or limited competition;

The amount of credit card purchases by agency/mission assignment;

Weekly obligations, allocations, and expenditures by agency and state, and by purpose/mission assignment (for example, public assistance, debris removal, etc.);

Weekly status of the disaster relief fund, including unexpended balance, unobligated balance and unallocated balance; and

Information on any waivers granted.

Treasury Secretary John Snow announced yesterday that the President's Advisory Panel on Tax Reform will delay its tax report until the end of October. This delay apparently comes at the request of the administration, who Snow said is concerned that a sooner release would doom it to the "back pages" of newspapers because of the extensive coverage we are currently seeing with Hurricane Katrina aftermath. Another Treasury spokesman said that with such a full agenda, "there is little capacity for public focus on the full debate and dialogue that this key presidential priority deserves." While finding ways to reform the tax code is important, it is hard to tell if the panel and their work is going to have any impact whatsoever. Not much information is available regarding what exact recommendations they are supposed to make to the Treasury Department. The panel has been extremely vague about their actions; in their emails announcing meetings they say they will be discussing "issues surrounding tax reform," and rarely do they delve much deeper than that. BNA has reported that Snow expects they will work to fix the laws relating to the alternative minimum tax, but few other policy priorities are known. We will see with the release of the report in October what exactly the tax panel has in mind. After that, it will be up to Congress and the President to find the time to even make tax reform a priority, or else this panel's report will do little more than collect dust.

Finance Committee Chairman Charles Grassley (R-IA) and ranking member Max Baucus (D-MT) are planning to introduce a health care package to assist victims of Hurricane Katrina. The package will expand Medicaid eligibility and provide 100 percent federal reimbursement for Medicaid coverage to states who have seen an influx of displaced persons. Baucus said new Medicaid provisions were needed to provide health care to victims who have lost homes and jobs. The devastation from Hurricane Katrina has plunged thousands of people into unemployment and poverty, resulting in a huge increase in the number of people who are now eligible for Medicaid. At the same time, hospitals and clinics -- especially in the south -- are being flooded with people in need of medical care, which is putting a growing burden on the already-fragile public health infrastructure of many major cities. Well before this natural disaster took place, hospitals and clinics across the country struggled to take care of local patients who didn't have insurance to cover all medical costs. Congress, in fact, included instructions in the budget resolution for $10 billion to be cut from mandatory programs under the jurisdiction of the Senate Finance Committee (like Medicaid). While the date for reconciliation has been pushed back, Majority Leaders Bill Frist (R-TN) and other Congressional GOP leaders are saying they want to go ahead with cuts to these entitlement programs. Those cuts would put cost strains on states not directly impacted by the disaster, ultimately leaving taxpayers to foot the bill. So, while this Finance Committee health care package will help alleviate some of the burdens for now, keep in mind that many in Congress still want to move forward with severe cuts to Medicaid, perhaps in the very near future.