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 Associated Press is reporting President Bush will request $51.8 billion in additional emergency relief funding for Hurricane Katrina from Congress. As the cost of the Federal Emergency Management Agency's daily operations in the Gulf Coast climbed to over $700 million, it became clear the previous emergency supplemental approved last week for $10.5 billion would not last long. The request could be approved by Congress as early as tomorrow. The second supplemental request will include $1.4 billion for the military and $400 million for the Army Corps of Engineers, which is working to repair breaks in the levee system around New Orleans. The remaining $50 billion will go to FEMA. This is unlikely to be the last emergency funding for this disaster, as Congressional leaders and recovery experts are expecting the total damages to cost upwards of $150 billion. In addition, yesterday, the Congressional Budget Office (CBO) released a report examining the economic repercussions of Hurricane Katrina to Congressional leaders. The CBO found the economic effects of the disaster could be as severe as a one-percentage point drop in econonmic growth and the possible loss of up to 400,000 jobs by the end of 2005.

Federal Budget

• Despite Recovering Economy, Poverty On the Rise for Fourth Straight Year
• Circumstances Force Frist to Postpone Estate Tax Vote
• Finishing Appropriations Bills Will Be Juggling Act for Congress

CongressDaily reported today that the recent Hurricane Katrina devastation is "making GOP leaders think twice about moving ahead with a $34.7 billion package of entitlement spending cuts outlined by the FY06 budget resolution." Congressional Republicans are coming under a good deal of fire from Democrats, who are arguing that now is not the time to be cutting social programs, with so many people in need. Majority Leader Bill Frist (R-TN) said ""We will keep reconciliation on track for now," and added that scheduling decisions would be subject to a "day-to-day evaluation." There is a possibility that a reconciliation package could be amended and scaled back either in committee or on the floor.