Many Republican leaders in the House and Senate are worried about the costs of rebuilding after Katrina, even though President Bush has promised, and rightly so, to devote all the funds needed to help the devastated region. Republicans who are worried about excessive deficit-financed spending are pushing for the costs will be offset (most are suggesting by cutting the budget elsewhere). To appease them, OMB Director Josh Bolten said Tuesday that the administration would consider offsets, but did not offer any details about what would be cut and by how much. As Stan Collender correctly points out (subscription required), any offsets proposed by the administration would to little, if anything, to reduce the amount Katrina relief spending will add to the deficit, and the national debt. Because President Bush refuses to even consider not extending or rolling back some of his first term tax cuts, it will be future generations who will be paying for reconstructing the Gulf Coast. The federal government is required by law to pay at least 75 percent of the cost of rebuilding public infrastructure after a disaster (1988 Stafford Act). To comply, Congress -- besides approving about $64 billion in emergency spending -- has agreed on a tax-relief bill to expand deductions this year for victims. The final bill was scored by the Joint Committee on Taxation as costing $6.1 billion over 10 years. Congress hopes these targeted tax cuts will spur employment of low-income workers on the Gulf Coast. In addition, President Bush signed three bills today to help in the aftermath of the disaster. The bills waive Pell Grant and other federal student loan requirements for displaced college students and expand Temporary Assistance to Needy Families eligibility for victims. CNN.com: House Passes Tax Breaks for Hurricane Katrina Victims

Congressional tax committees have set to work and are looking into how tax policy can be used to help victims of the recent disaster, both immediately and in the long run. Chairman of the Senate Finance Committee Charles Grassley (R-IA) told reporters in a morning news conference that his committee would be looking into relief efforts associated with past natural disasters in order to determine which policies have been effective. Then, they will look into applying similar policies to help those affected by Katrina. Meanwhile, in the House the Chairman of the Ways and Means Committee, Bill Thomas (R-CA), is apparently exploring a three-phase approach addressing the initial humanitarian concerns, followed by infrastructure concerns, and finally long-term reconstruction. The first measure, which could move as early as September 8, deals with getting money to individuals through TANF (Temporary Assistance for Needy Families). The measure would remove a lot of red tape and provide immediate assistance for a number of families. Also, it is pretty clear that any sort of work on Social Security legislation is off the table now that Congressional leaders have their hands full dealing with the disaster. Sen. Olympia Snowe (R-ME) told BNA News Services that "Major issues are overtaking a number of issues like Social Security. It's hard to foresee a legislative agenda addressing the long-term issues associated with Social Security this fall." Grassley made similar comments, telling reporters that his top priority this fall will be disaster-related measures, the Roberts nomination, budget reconciliation legislation and appropriation bills, and then Social Security.

The Census Bureau released its annual report on poverty, income, and health insurance in the United States and the news is not good. The number of Americans living in poverty rose for the forth year in a row as 1.1 million more Americans were officially poor in 2004 than the year before. The data shows almost 1 in 5 American children live in poverty. In additon, almost 1 million more Americans lacked health insurance, primarily due to a decrease in employer-provided health care. Unfortunately for working families, total household income remained stagnant and income for men and women employed in full-time jobs decreased significantly. This is the first time ever that household income has failed to increase for five straight years. The Census data give just a glimpse of the reality being faced by more and more working Americans who are being forced to live without health insurance and have less money with which to purchase their own as employers increasingly focus on their profit margins at the expense of their workers. The current economic policies are not working for most Americans - only those already well-off. The decline in indicators of poverty and income for the fourth straight year should be a wake-up call for members of Congress and the administration who are seeking to make those policies permanent. It is time for a change. Read More: > Census Data Full Report> Income Stagnated and Poverty Rose in 2004, Census Shows > Coalition on Human Needs Release on Census Poverty Data > Economic Recovery Failed to Benefit Much of Population in 2004