September 07,2005

Baucus Outlines Hurricane Katrina Relief Package

Senator Announces Proposals to Aid Victims in Gulf Coast Region


(WASHINGTON, D.C.) In efforts to assist the victims of Hurricane Katrina, U.S. Senator MaxBaucus released the following proposals to assist the victims of the nation’s most devastatingnatural disaster. Baucus noted the package is designed to provide tax incentives and addresshealthcare needs in order for those affected in the Gulf Coast region to get back on their feet.

“A little over a week ago, the Gulf Coast region endured a tragedy never seen before in ournation’s history. In response to this devastating event, the United States Senate must focus onrelief to the victims of Hurricane Katrina. Disease, homelessness, and unemployment threatenthis beautiful, economically vibrant area of our country. I look forward to working with mycolleagues to deliver swift health and economic relief to the millions affected by this catastropheto help the rebuilding and healing process to begin.

“I believe that we can do this in several stages. First, we should enact legislation in thenext week providing immediate relief to victims through unemployment insurance, health carecoverage, temporary cash assistance, and tax relief. Devastated and displaced families shouldnot worry about medical coverage or their next meal.

“Taxpayers and business owners should not be scrambling to comply with IRS deadlineswhen they are temporarily shut down. It will take some time for many of the affected areas,especially New Orleans, to begin to plan for rebuilding. We should enact legislation that willprovide incentives for new homes, roads, businesses, and schools.

“And we should enact incentives to bring more business and workers back to thesedevastated areas. So, I envision a rebuilding plan for the Gulf Coast region that has bothimmediate and longer-term legislative solutions.

“Many of these ideas were generated after consulting with Senator Landrieu ofLouisiana. I plan to begin work on those today. I have already spoken with Senator Grassley,chairman of the Finance Committee, and I believe we can work together to produce a package ofproposals that will help at this critical time.”

The Baucus Relief Package Outline follows:

Provide Healthcare for Katrina Victims

• Immediate Access to Medicaid for Displaced Individuals

• Temporarily Extend Federal Funding of Medicaid Drug Benefits for Those duallyeligiblefor Medicare and Medicaid: Delay transition of dual-eligibles to Part D.

• Temporarily Waive Part B and Part D Late-enrollment Penalties Under Medicare

• Relax the Income and Assets Test Included in the Medicare Part D Low-incomeSubsidy Application for Evacuees.Encourage Health Care Providers to Treat Katrina Victims

• Federal Support for Affected States’ Medicaid Programs: States caring for hurricaneevacuees should receive full federal support for their Medicaid and SCHIP programs.

• Compensation to Affected Health Providers: Providers caring for evacuees shouldreceive federal add-on payments to alleviate the burden of uncompensated care.Help Evacuees Find Temporary Homes, Schools, and Jobs

• Assist Homeowners Who Take in Katrina Victims: Under this proposal, taxpayerswould receive half a dependency deduction for each Katrina victim they house for at least90 days during the tax year. Being claimed as dependent would not affect the victim’sability, however, to claim their own personal exemptions or dependent exemptions fortheir children.

• Education Tax Relief: Room and board, tuition, books and fees provided to studentsdisplace by Katrina will not be included in taxable income.

• Extend WOTC Eligibility to Katrina Victims: Under the Work Opportunity TaxCredit (WOTC), employers can claim a tax credit against wages paid to new workers thatface barriers to employment such as ex-felons, welfare recipients, high-risk youth, andveterans. This proposal would add potential workers displaced due to the hurricane to theWOTC eligible list, easing the search for employment. The credit max is $2,400 (40% offirst year wages up to $6,000, or 25 percent of wages if less than 400 hours worked.)Help Ease the Cash Crunch for Displaced Workers

• Unemployment Insurance and Disaster Unemployment Assistance (DUA): ExpiringUnemployment Insurance should automatically be extended for victims of Katrina thatwere out of work prior to the disaster. Disaster Unemployment Assistance, a program inplace to provide assistance for victims of disaster, should be expanded to cover moreworkers. The weekly DUA benefits should be expanded to at least the Federal limit of$270 a week and coverage should be expanded from 26 weeks to 52 weeks to givevictims more time to get back on their feet.

• Payroll Maintenance Tax Credit: Under this proposal, businesses with fewer than 50employees would be eligible for a 50 percent tax credit to continue paying employeeseven though the business cannot operate during the hurricane rebuilding period. Thecredit would max out at $12,000.

• Make TANF Contingency Fund Accessible for Affected States – Provide Alabama,Louisiana and Mississippi access to portion of the TANF Contingency Fund, whichcurrently has $2 billion for financial crises.

• Waive Penalties Related to Work Requirements and Time Limits for Beneficiariesin Disaster Affected States. In order to receive TANF assistance, recipients have toperform 30 hours of work a week and have a limited amount of time they are eligible toreceive assistance. States could relax these rules for victims of this disaster to ensurepeople receive TANF assistance.