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Lawmakers work to ease access to funds, housing, healthcare

WASHINGTON -- Lawmakers worked yesterday to help solve the practical problems facing those caught in Hurricane Katrina's path who need quick access to cash, housing, and medical care.

The House and Senate passed nearly identical bills to let victims tap off-limit retirement accounts without penalty and help working poor families and parents retain their tax credits. Senators also voted for rental housing vouchers and aid measures for small business.

The action came ahead of President Bush's planned television appearance last night from New Orleans. In his first prime-time speech since the damaging storm, he intended to outline a comprehensive recovery program for the battered Gulf Coast.

On Capitol Hill, Republicans and Democrats fought over plans for a special, GOP-majority committee to investigate the government's sluggish response to the emergency.

Republicans said it is their responsibility to scrutinize their GOP-run government. ''In the aftermath of Hurricane Katrina, we saw government, at all levels, fail her citizens," said the Senate majority leader, Bill Frist, Republican of Tennessee. ''It is the duty and responsibility of Congress to investigate what went wrong."

Democrats contended that Republicans cannot be trusted to run an impartial investigation. ''After the flood comes the whitewash," said Representative James P. McGovern, Democrat of Worcester. ''The job of this Congress is not to run interference for the Bush administration."

Louisiana lawmakers outlined a reconstruction plan, called Project Pelican, for their devastated state. It includes coastal restoration and economic development incentives to bring jobs and people back to New Orleans.

The Treasury Department ruled that the hurricane qualified as a hardship that allows victims to tap retirement plans, including 401(k)s. That move is intended to help people with little savings recover.

In separate bills passed by the House and the Senate, lawmakers voted to waive penalties typically imposed on early withdrawals from retirement accounts. Lawmakers have to reconcile their differences and send the measure to the president before it can become law. The measures help working poor families and parents hang onto tax credits and other benefits that can be disrupted when taxpayers lose their jobs, relocate, or separate family members.

Several House lawmakers reacted favorably to a proposal by two Illinois Democrats, Senator Barack Obama and Representative Rahm Emanuel, to immediately advance earned income tax credits and child tax credits to families in the disaster area instead of making those taxpayers wait until next year.

The tax bills would let people write off more of their unreimbursed hurricane losses. Also, taxes typically imposed when debts such as mortgages are forgiven would be waived and people who take in evacuees for two months or more would get tax breaks.

The Senate's housing voucher program would provide more than 350,000 families left homeless by Katrina with emergency housing vouchers averaging $600 a month, for up to six months.

Any displaced family, regardless of income, would be eligible.

The small business plan, approved by a 96-to-0 vote, would allow borrowers to defer repayment of Small Business Administration disaster loans for a year. The maximum size of an SBA disaster loan would rise from $1.5 million per loan to $10 million.

Both proposals were added to a spending bill for the departments of Commerce and Justice. But it may not get to Bush soon, despite the Katrina-related provisions.

Senators also worked on a bill to give displaced hurricane victims temporary access to Medicaid health services, including mental health care. The Senate could act on it this week, said the chairman of the Senate Finance Committee, Senator Charles Grassley, Republican of Iowa.

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