Congress Passes Tax

Cuts for Katrina Victims

Congress approved about $5 billion in tax cuts yesterday to help survivors of Hurricane Katrina and the people who shelter them.

The House and Senate approved the measure by voice vote. The legislation includes provisions to allow people who take in hurricane evacuees to claim as much as $2,000 in tax deductions and allows hurricane survivors to exempt from taxes any debts that are canceled because of the hurricane. Canceled debt is usually considered taxable income.

The bill "continues Congress's effort to bring immediate relief to those individuals and families devastated by Hurricane Katrina," said Rep. Jim McCrery, a Louisiana Republican. "This Congress stands ready to help those most affected by Hurricane Katrina."

Congress has already approved $62.3 billion in direct aid to help the recovery from Hurricane Katrina.

The tax measure would extend a tax credit for employers who keep workers in the disaster zone on their payroll, waives a 10 percent penalty for early withdrawals from retirement plans, and eliminates a limitation on casualty losses that will make it easier for those afflicted to get a refund of taxes they paid in 2004.

U.S. Will Fight Ban on

Pledge of Allegiance

Attorney General Alberto R. Gonzales said yesterday that the Justice Department will fight to overturn a federal court ruling that the Pledge of Allegiance cannot be recited in public schools because it contains a reference to God.

Gonzales said the pledge is one of several expressions of national identity and patriotism that mention God but do not violate the Constitution's ban on state-sponsored religion.

The Supreme Court "has affirmed time and again that such official acknowledgments of our nation's religious heritage, foundation and character are constitutional," Gonzales said in a statement a day after the ruling by U.S. District Judge Lawrence Karlton in Sacramento.

For the Record

* Legislation that would allow the Environmental Protection Agency to temporarily suspend or relax its rules because of Hurricane Katrina is being prepared by the Republican chairman of the Senate Environment and Public Works Committee.

The proposal is being readied despite EPA Administrator Stephen L. Johnson's assurance he has no immediate need for any regulatory waivers. Johnson gave a closed-door briefing Wednesday to the committee's chairman, Sen. James M. Inhofe of Oklahoma, and other committee members.

Johnson told them he is not aware of anything he needs at this point, the committee's spokesman said.

* Mass production of a new vaccine that promises to protect against bird flu is poised to begin, as the government agreed yesterday to stockpile $100 million worth of inoculations.

The new contract with French vaccine maker Sanofi Pasteur marks a major scale-up in U.S. preparation for the possibility that the worrisome virus could spark an influenza pandemic.

While the vaccine is still experimental, preliminary results from the National Institutes of Health's first human trials suggest the inoculations spur an immune response that would be strong enough to protect against known strains of the avian influenza, sparking the new investment. How many doses the $100 million will buy is not yet clear.

-- From News Services