The In Session column on the Sept. 13 Federal Page incorrectly identified Sen. Charles E. Grassley (R-Iowa) as a Democrat. (Published 9/15/2005)

The Senate this week may rush through a Katrina tax-relief package.

"These people need help," said Sen. Max Baucus (D-Mont.), a co-author of the package. "They need to know Congress is doing something, too."

For individuals, the package would exempt taxes on debt that is forgiven and waive the penalty tax on early retirement-plan withdrawals. Other incentives include a tax credit to encourage employers to hire Katrina evacuees, and for companies in the disaster zone to temporarily retain evacuees on their payroll. For people who house evacuees, the legislation would provide an additional $500 personal exemption for every dislocated person not already included on a taxpayer's return. A slew of other provisions would encourage donations of books, food and cash.

The Senate might consider two other hurricane-related bills this week to adjust federal flood insurance and welfare laws. Both measures have cleared the House.

The tax package's total cost could run between $3 billion and $7 billion, early estimates show. The benefits would be temporary, with most expiring at the end of this year.

"I don't want to sound fiscally irresponsible, but we're trying to help people," said Senate Finance Committee Chairman Charles E. Grassley (D-Iowa), who unveiled the package yesterday with Baucus, the ranking Democrat on the panel.

The House Ways and Means Committee will consider its own slate of hurricane-related tax relief, but aides cautioned that the House's priorities could differ somewhat.

In a bipartisan statement issued Friday, Ways and Means members said that in coming weeks they would look at tax relief for individuals along with changes to unemployment, child support and foster care laws. Future legislation would address rebuilding incentives similar to the New York City revitalization efforts after the Sept. 11, 2001, terrorist attacks, the statement said.

Congress to Examine What Went Wrong

What went wrong with government's response to Katrina?

Congressional committees will pry open that can of worms starting tomorrow, with a Senate hearing titled "Recovering from Hurricane Katrina: The Next Phase." The Homeland Security and Governmental Affairs Committee will gather information and recommendations for what a broader congressional joint investigation should pursue -- if that effort ever gets off the ground.

Witnesses scheduled to appear include former California governor Pete Wilson (R), whose tenure included the L.A. riots, the Northridge earthquake, and 22 state-declared disasters; Patricia Owens, former mayor of Grand Forks, N.D., which suffered a devastating 1997 flood; former New Orleans mayor Marc Morial; and Iain Logan, operations liaison for the International Federation of Red Cross and Red Crescent Societies.

On Thursday, the House Government Reform Committee will conduct a hearing titled "Back to the Drawing Board: A First Look at Lessons Learned from Katrina." Chairman Thomas M. Davis III (R-Va.) said it would be the first in a series of reviews by his panel. The hearing will examine the emergency plans of other cities "that potentially face similar catastrophic events, natural or man-made," he said.

Davis and his Senate counterpart, Homeland Security Committee Chairman Susan Collins (R-Maine), are avoiding summoning officials who are directly involved in Katrina operations, at least for the time being. House and Senate leaders continue their attempts to arrange bipartisan, bicameral hearings, but many Democrats are adamant that an independent investigation is needed to ensure an objective assessment of what went wrong.

Senate to Consider Funding Packages

Trying to stay on track with appropriations bills, the Senate will consider two big fiscal 2006 funding packages on the floor this week -- for the Commerce, Justice and State departments and the Transportation, Treasury, Justice and Housing and Urban Development departments. The House completed all of its spending bills before July 4, but the Senate is just getting rolling.

Despite the distractions of two Supreme Court vacancies and Hurricane Katrina, GOP leaders still hope to pass separate spending bills that stick within the tight budget limits that Congress established for fiscal 2006. The last time the House and Senate stuck to its regular appropriations schedule was 2001, in the aftermath of another national crisis -- the Sept. 11 terrorist attacks.

Conservatives, who want the government to tighten its belt, hope that the ongoing deluge of disaster aid will curb the Senate's more robust appetite for unrelated domestic spending.

"Katrina strengthens the House's hand that we need to stick to this budget," said John Scofield, spokesman for the House Appropriations Committee, referring to the relatively austere 2006 budget that Congress passed in the spring.

But there are plenty of skeptics. Given Congress's full plate, Rep. Ray LaHood (R-Ill.), an Appropriations Committee member, predicted lawmakers would still be struggling to pass spending bills by Thanksgiving, raising the prospect for one big pork-laden "omnibus" bill.

"You can just see it coming," he said.