Charitable Donation Relief Act of 2005

Madam Speaker, I yield myself such time as I may consume.

First, I want to thank the gentleman from Louisiana (Mr. McCrery), my friend and colleague, for joining me in introducing this important piece of legislation. I also want to thank the gentleman from California (Mr. Thomas), the chairman of the committee, and the gentleman from New York (Mr. Rangel), our ranking member, for their swift action in bringing this bill to the floor, as well as the members of the Committee on Ways and Means.

I also would be remiss if I failed to thank both the Republican and Democratic staff of the committee for their extraordinary bipartisan effort to put this tax package together in such a timely way.

Madam Speaker, the Katrina Emergency Tax Relief Act of 2005 provides much-needed aid and comfort to the victims of Hurricane Katrina and the many thousands of good Samaritans who have opened their arms, wallets and homes to provide food, clothing, shelter and medical care and other necessities to the thousands of Americans who have been uprooted in the wake of this horrible storm.

As we have all seen, while Hurricane Katrina was indiscriminate in the destruction it wrought, the unprecedented property damage, human toll and economic loss fell disproportionately on the backs of our poorest and most vulnerable citizens.

A disproportionate share of the damage in my hometown of New Orleans was meted out on parts of our great city that were already extraordinarily economically disadvantaged. The poverty, disability and economic disenfranchisement in these areas in no small way were factors in the extraordinary loss of life and property experienced by my constituents.

For this reason, I am grateful that the bill we consider today provides important relief to these vulnerable families.

First, families who have been displaced in the wake of Hurricane Katrina are held harmless against the loss of critical economic security and benefits. Damage caused by the hurricane has displaced hundreds of thousands of individuals, who are temporarily living with family, friends or good Samaritans.

Under current law, a prolonged change in their living situation could affect their eligibility for various tax benefits. The proposal allows individuals the option of using their 2004 income tax returns to calculate their child credit and the Earned Income Tax Credit on their 2005 tax returns. This special rule applies to individuals who lived in areas eligible for individual assistance from the Federal Government as a result of the disaster as of August 28, 2005.

The proposal also grants the U.S. Treasury Department authority to ensure that taxpayers do not lose dependency exemptions or child credits for 2005 due to temporary relocations.

In many areas of the gulf coast devastated by Hurricane Katrina, including my hometown of New Orleans, the EITC is a vitally important part of many families' economic security. This bill ensures the continuing eligibility of the thousands of families displaced by Katrina.

Second, the legislation ensures that the victims of Hurricane Katrina are able to account fully for the losses they have suffered in the aftermath of the hurricane. Moreover, it exempts the value of forgiven mortgages and other debt from taxable income. These two very important provisions demonstrate compassion by prohibiting the IRS from kicking these families when, for many of them, they are at the lowest points in their lives.

Madam Speaker, this Act also provides an added measure of financial security to the many victims of this storm by providing them with added flexibility to access the savings they have set aside in 401(k) plans and individual retirement accounts without the usual penalties. In a time when so many have lost jobs and, consequently, their paychecks, denying or penalizing access to their savings is inappropriate, and this bill recognizes that.

As I have said repeatedly over the past 2 weeks, the recovery, reconstruction and revival of the gulf coast region, and particularly New Orleans, will require an unprecedented Federal commitment.

The bill we will pass today takes two important steps toward that recovery.

First, the bill expands the availability of low-interest mortgages for the building and purchasing of homes in the affected areas. We all understand that the most solid foundation for the economic security of our Nation's families is homeownership. By lifting some of the restrictions on the use of mortgage revenue bonds, this bill will help to build a solid economic foundation for the families whose lives have been turned upside down by Hurricane Katrina.

In addition, the Katrina Emergency Tax Relief Act also provides targeted incentives for returning businesses and new businesses to employ the thousands of hardworking Americans who have been displaced or lost jobs to Hurricane Katrina. By encouraging businesses to hire workers from the affected areas, this bill takes another very important step toward our uniform goal of rebuilding and resettling New Orleans and other areas tragically struck by the hurricane.

Finally, Madam Speaker, the legislation we consider today recognizes the important contributions that good-hearted and generous Americans have made to the recovery effort. By increasing the value of the charitable deductions and providing relief to the thousands of Americans who have opened their homes to my constituents who have lost theirs, this bill is an important expression of gratitude from this Congress to the American people for rising to the challenge of Hurricane Katrina in truly extraordinary ways.

Madam Speaker, the efforts of my colleagues in providing the relief we need in the gulf coast has been unparalleled to any I have witnessed during my tenure in Congress. For that, I am extraordinarily grateful. However, we still have a long row to hoe before we have achieved the full recovery that I know we all want. I look forward to working with each of you in the coming weeks and months as we rise to the challenge of ensuring that, like the Phoenix of myth and fable, New Orleans rises from the devastation of Hurricane Katrina as a bright, shining model of American ingenuity and opportunity.

Madam Speaker, I reserve the balance of my time.

Madam Speaker, I am pleased to yield 3 minutes to the gentleman from Maryland (Mr. Cardin), a distinguished member of the Committee on Ways and Means.

(Mr. CARDIN asked and was given permission to revise and extend his remarks.)

Madam Speaker, I am pleased to yield 3 minutes to my colleague and friend, the gentleman from Mississippi (Mr. Taylor).

Madam Speaker, I am pleased to yield 2\1/2\ minutes to the gentleman from Oregon (Mr. Blumenauer).

Madam Speaker, I am pleased to yield 2\1/2\ minutes to the gentleman from Illinois (Mr. Emanuel), a distinguished member of the Committee on Ways and Means and whose family has donated generously to our food relief efforts in the affected area.

Madam Speaker, I yield myself the balance of my time. I again want to thank my colleague from Louisiana (Mr. McCrery) and others who have worked so carefully on this bill. This has been an important debate, an important discussion about where this Congress is going and how it is helping out and the generosity of this Congress as we tackle these important issues and the difficult issues back home.

To those who say this is not a huge step forward, I should say to them that it is huge for the people who are involved. We take to heart the remarks made by Mr. Emanuel, the bill that he and Mr. Obama are pushing to get this relief out fast. I think it is very important.

This is a huge step, but it simply is not the last step. It is far from the last step in providing relief to our region. We want this Congress to walk along

with us as we make one step after another toward realizing the vision of restoring our area and rebuilding it to a new, better, higher place.

I look forward to this walk with this Congress over the next months and years. I hope that we will stay engaged as fully as we are in these early days throughout this lengthy process.

Madam Speaker, I yield back the balance of my time.

Madam Speaker, I move to suspend the rules and pass the bill (H.R. 3768) to provide emergency tax relief for persons affected by Hurricane Katrina, as amended.

Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, I rise today in strong support of the Katrina Emergency Tax Relief Act of 2005. I want to thank my colleagues on both sides of the aisle for their work and support in moving this critical legislation quickly to the House floor. In particular, I want to thank the members of the Committee on Ways and Means, the gentleman from Louisiana (Mr. Jefferson), the gentleman from New York (Mr. Rangel), and all the members of the Louisiana delegation for their continued assistance in crafting hurricane-related legislation.

This bill is the Committee on Ways and Means' second installment of providing targeted relief for individuals and families hurt by Hurricane Katrina. These tax provisions are aimed at easing the financial burdens of people of the region as they begin to rebuild their lives.

The bill also address the generosity of many Good Samaritans across the country who have opened up their homes to individuals and families displaced by the hurricane. H.R. 3768 would provide a special $500 income tax deduction for those who are providing temporary housing. In addition, the Katrina Emergency Tax Relief Act encourages cash donations to help victims by relaxing some restrictions regarding how much charitable contribution can be deducted on an individual's tax return.

H.R. 3768 continues the efforts of this Congress to bring immediate relief to these individuals and families devastated by Hurricane Katrina.

Madam Speaker, last week, the members of the Committee on Ways and Means on both sides of the aisle acted quickly, and the House passed the TANF Emergency Response and Recovery Act. That bill will provide aid by cutting down red tape and bringing more Federal dollars to the affected areas through the Temporary Assistance for Needy Families program, with the welfare program.

The Committee on Ways and Means continues to look at programs within

our jurisdiction and how they might be used to assist those affected by Hurricane Katrina. I expect that we will bring to the House floor additional legislation in the coming weeks. We know that the people and businesses of New Orleans and the gulf coast areas hit by Katrina will rebuild, and we are committed to helping them do that.

Today, Congress will vote on much-needed tax relief for the affected areas. I urge my colleagues to support this legislation so we can quickly work with our colleagues in the Senate and further demonstrate that this Congress stands ready to help those most affected by Hurricane Katrina.

Madam Speaker, I reserve the balance of my time.

Madam Speaker, I yield 2 minutes to the gentleman from Florida (Mr. Foley), a distinguished member of the Committee on Ways and Means.

Madam Speaker, I yield 2 minutes to the gentlewoman from Pennsylvania (Ms. Hart), another distinguished member of the Committee on Ways and Means.

Madam Speaker, I yield such time as he may consume to the gentleman from California (Mr. Thomas), the distinguished chairman of the Committee on Ways and Means.

Madam Speaker, I can assure the gentleman from Mississippi that I agree with his remarks, and there will be more coming from this Congress.

Madam Speaker, I yield 2\1/2\ minutes to the gentleman from Arizona (Mr. Hayworth), another member of the Committee on Ways and Means.

(Mr. HAYWORTH asked and was given permission to revise and extend his remarks.)

Madam Speaker, I yield 2 minutes to the gentleman from Mississippi (Mr. Wicker), a distinguished member of the Committee on Appropriations.

Madam Speaker, I would compliment the gentleman from Illinois for his thoughts on speeding relief to the people most in need; and, of course, the bill before us today does take some steps toward protecting those who are on the EITC already, to make sure that changed circumstances that they might encounter as a result of the disaster do not affect their eligibility for those checks. We are doing that in this legislation, but the gentleman makes an excellent point about the need for those checks to arrive in a speedy manner. I look forward to discussing that with the gentleman.

Madam Speaker, I yield 2 minutes to the gentleman from Indiana (Mr. Souder).

Madam Speaker, I yield myself the balance of my time.

I would be remiss if I did not thank the Bush administration, the Department of Treasury and the IRS for administratively doing a great many things that they could do without legislation to make sure that the needs of the victims of Hurricane Katrina are met vis-a-vis the Tax Code. I want to thank the administration for their important work on this subject as well.

I also want to reiterate my thanks to the gentleman from Louisiana (Mr. Jefferson) for working so closely with me and my staff to craft these very important individual tax provisions that, thanks to the leadership on both sides of the aisle, we have been able to bring to the floor in such a speedy manner.

Lastly, I would thank the chairman of the Committee on Ways and Means for lending the full support of his staff to this effort over the past couple of weeks. That will continue for some time to come.

I urge all Members to support this important legislation and get this needed relief to individuals who were affected by Hurricane Katrina.

Madam Speaker, I yield back the balance of my time.

Madam Speaker, I want to thank the members of the Committee on Ways and Means for bringing this to the floor. As you know, south Mississippi, south Louisiana suffered a catastrophe of biblical proportions; and there is really no other way to describe it. A 30-foot wall of water hit south Mississippi, resulting in the breaking of the floodgates in New Orleans.

Whole communities, the city of Waveland, it is pretty fair to say no longer exists. The city of Bay Saint Louis, probably 80 percent of the people in that town lost their homes. In portions of Harrison County, in Pass Christian and Biloxi, there are entire blocks leveled, with one person not able to distinguish the parts of furniture from his house with the parts of furniture from another.

I consider myself a deficit hawk. I have voted against almost every tax bill that came to this floor because I did not want to see the deficit go up by the $2 trillion it has. This is different. I felt that those bills took care of the wealthiest Americans. I think this bill takes care of the neediest Americans. It is truly a step in the right direction when we have so much to do.

One of the fights that the gentleman from Louisiana (Mr. McCrery) and all of us from the affected area will have is to help those people who could never have conceived they would flood with their insurance needs. They had wind insurance. They are now being told it did not cover a flood, and places that had never flooded in recorded history of the Europeans coming to America flooded. They are being left out in the cold. We have to find a way to help them.

There is going to be, based on the Florida experience, a number, probably in the tens of thousands of people, who will be told by FEMA that their house has been 51 percent destroyed and, by regulation, it has to be bulldozed. And then it is complicated by, I am told, based on the Florida experience, the insurance companies who will go to them and say FEMA says there is only 51 percent destruction, so we are only going to give you 51 percent of what you thought your premium was. So if you had a $100,000 house, it is bulldozed; but you only get $51,000 in payment. We have to fix that. We cannot let that happen again. There are too many hard-working people who are looking to Congress for leadership.

I do not say this often, because I did vote for the war in Iraq and I share in the responsibility for every one of those Americans who were wounded there and everyone who died there, but on a daily basis we hire Iraqis to clean the streets, just to give them something to do and give them a chance at life. On a daily basis we are fixing sewer lines in Iraq. On a daily basis we are building schools in Iraq. We need to do for our fellow Americans what we so willingly do for the Iraqi people.

So I thank the committee for this great step in the right direction. It is such a, quite frankly, small step on such a monumental journey that we have to take; but it is at least a step in the right direction, and thank you for doing it.

Madam Speaker, I would like to thank both my colleagues who serve on the Ways and Means Committee who are from Louisiana and the affected area.

As you look at the overall part of this bill, both from the charitable piece to also helping the families, whether that is on debt forgiveness, dislocation as relates to building a home, and also their own family income or casualty loss, finally the Tax Code is beginning to reflect America's values: When something happens to an American, all Americans pull together to help those individuals affected restore their lives, rebuild their communities, and get back on with their own lives.

I want to isolate a particular part of this bill which deals with the Earned Income Tax Credit. I have introduced a bill with Senator Obama in the Senate that would fast-track the Earned Income Tax Credit and child credit and other educational credits to affected individuals. There is a precedent for this. During 9/11, the United States Congress fast-tracked the authority and allowed the Secretary of Treasury to get to affected families during 9/11 the child credit. In the same way, we should get to the Earned Income Tax Credit, the child credit, as well as educational credits like the Hope Scholarship to affected individuals on a fast-track basis so they, as a family, can get their lives restored, families who have children, families who work.

These are all for individuals who have worked and who have paid their taxes, ensuring that they get the benefits and credits that are due to them. It would lock in and ensure that the Secretary of Treasury would fast-track and get those resources to these families and allow them to establish themselves again and get their income moving again.

One of the most important things we are going to talk about in another tax bill is helping businesses get their feet on the ground. The Earned Income Tax Credit, the child credit, other educational credits help families get their feet on the ground, going again, and operating as a family.

Today's provisions, whether it is Earned Income Tax Credit, whether it deals with the forgiven debt, whether it deals with the charity, whether it deals with deductibility for personal casualty, it reflects all of our values that we as Americans act as one in a time of need.

I compliment both of my colleagues from Louisiana, my colleagues from Mississippi, and others in Alabama from affected areas working on this legislation, the bipartisanship here, and hope that would spread to other parts of this Congress as we work on other pieces of legislation. I hope to work with them in the future on the legislation that Senator Obama and I introduced so we can not only help families use the 2004 tax that they submitted, their tax forms, but also that we now direct the Secretary of Treasury to fast-track those checks so those families can actually get moving.

Madam Speaker, I want to particularly thank the gentleman from Louisiana (Chairman McCrery) and the gentleman from California (Chairman Thomas) and others for their collaborative efforts in helping the victims of Katrina. It has been a horrific time for America to witness on TV what those fine folk in Mississippi, Alabama, Florida and Louisiana have endured.

It really brings out the best in America, the character, the courage, the ability to help their neighbor, and here on the floor, we are providing relief by virtue of the Tax Code.

I want to specifically thank the gentleman from Florida (Mr. Shaw) and the gentleman from Florida (Mr. Mario Diaz-Balart), our colleagues who brought to the committee a very urgent need of helping Floridians as well.

The three States that were dramatically impacted have been visualized on TV, but Katrina did start off the coast of Florida, off the Bahamas and made its way through southern Florida, Dayton, Broward Counties. They suffered significant damage. The gentlewoman from Florida (Ms. Wasserman Schultz), our colleague, as well lent a

hand in trying to see that our constituents were brought whole in this effort as well.

The chairman was specific in providing targeted relief for those that were directly impacted by the storm, and we applaud that. No tax relief measure should be a grab bag for others to dip into simply because they thought they were close to a proximity of damage.

In this bill, we establish criteria that there is significant and real damage, not perceived, not illusory, but real damage. Forgiveness of debt if, in fact, your home has been decimated and you have to discharge the mortgage obligation, relieving that would be a gain under the Tax Code for a person that has not only lost their home, had their mortgage foreclosed but is being considered by the IRS for gain on that asset simply because they got a forgiveness of debt.

Ability to reach into your IRA for the specific use in this emergency. The IRA is an important asset for future financial strengthening of all persons' assets. So we do not let people just go into the account, but it is strictly provided for on the case of emergency.

So I applaud this bill. The gentleman from Louisiana (Mr. Jefferson), my colleague, I know has suffered himself personally. We are delighted that we worked in a bipartisan spirit to bring about relief for the very people that have suffered so much.