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.

Some charity officials in Southern California have started to run into fund-raising problems since Hurricane Katrina hit the Gulf Coast, and many others fear a drop in donations to non-relief causes, the href="http://www.latimes.com/news/local/la-me-lagives10sep10,1,4067878.story">Los Angeles Times reports. The Red Cross in Riverside County, for example, has had to lay off several employees because all gifts are earmarked for Katrina relief. Other groups have had to delay or cancel fund-raising events. Several charity officials say donations

Senator Frist (R-TN) and Senate Budget Chariman Judd Gregg (R-NH) announced today the deadline for the budget committee to report a bill cutting entitlement programs by $35 billion would be pushed back to October 26. The original deadline for the spending cuts to be reported was this coming Friday, September 16. While Frist and Gregg did not mention the other two parts of the reconciliation package this year (yet another tax cut bill costing approximately the same as the amount of money approved so far by Congress for hurricane relief, and legislation to raise the country's debt limit by $781 billion), many suspect the deadlines for those bills will move back by a similar period to late October, early November. Yet it isn't entirely certain the tax cut bill will move forward this year. The delay in the spending reconciliation bill and the fact Frist did not directly address the tax cut legislation may signal tax cuts primarily benefiting upper-income Americans in the aftermath of Hurricane Katrina are politically untenable. This would threaten the extension of a number of provisions of President Bush's tax cut package. Below is a chart of a few of the most likely to be included in the bill this year should Congress proceed.

The Senate Finance committee released a set of proposals for tax cuts designed to aid the victims of Hurricane Katrina, and encourage other Americans to donate to the relief effort. Among the items included that will directly benefit hurricane survivors include cancelation of early withdrawl penalties from retirement plans, extension of the Work Opportunity Tax Credit and other provisions that would encourage hiring those displaced by the hurricane around the country and aid in the retention of employees within the disaster zone, and a relaxation of restrictions of financing to first-time homebuyers in the areas impacted for three years. In addition, the package would provide incentives for all Americans to contribute to the relief effort by increasing tax right-offs for businesses for food and books, granting an additional tax credit for those who open their homes to shelter hurricane victims, and by allowing tax-free cash donations from IRA accounts. The proposals by the Finance committee would also increase taxpayer assistance efforts by the IRS to meet the needs of those seeking to receive the benefits of these proposals.