Last Thursday, the House and Senate quickly passed separate but similar versions of legislation designed to provide targeted and temporary tax cuts to all those directly impacted by Hurricane Katrina. The two bills, which also provide tax incentives to individuals housing evacuees and for businesses who continue to pay employees or hire displaced workers, each passed unanimously. All signs indicate this bill is not the last tax cut Congress will attempt to pass in order to help Katrina victims as GOP leaders have already eluded to additional "economic stimulus" proposals in the pipeline. Many fear these proposals will amount to little more than a continuation of the traditional conservative tax cut agenda and will not target tax cuts to those affected by the hurricane genuinely in need. Most provisions of the two bills passed by Congress last week were targeted at specific populations or groups of people affected by the hurricane and were designed to act as a temporary boost to those left dislocated by the storm. Among the items included in both bills include cancelation of early withdrawal penalties from retirement plans, extension of the Work Opportunity Tax Credit and other provisions that would encourage hiring those displaced by the hurricane around the country and aid in the retention of employees within the disaster zone, a relaxation of restrictions on financing for first-time homebuyers in the areas impacted for three years, and a tax deduction for individuals who provide housing assistance to dislocated people. The Senate and House versions also seek to encourage charitable giving through the private sector, but the Senate included more wide-ranging incentives. The Senate version encourages both cash and non-cash donations such as food and books, while the House version focuses on increasing individual and business cash contributions only. Both versions increase reimbursements for the charitable use of a personal vehicle and loosen restrictions on direct contributions to charities from IRA and other tax-advantaged retirement accounts. Before adopting a final version, the Senate bill was modified to more closely match the House version by including additional provisions and modifications related to the Earned Income Tax Credit (EITC), other low-income credits, and sunsets for different provisions. The EITC provision would grant displaced individuals the option of using their 2004 income to calculate the child credit and the earned income credit on their 2005 tax returns and grant the Treasury Department authority to ensure that taxpayers do not lose dependency exemptions or child credits for 2005 due to being temporarily dislocated. These changes were made in an attempt to have the two versions more closely aligned and avoid the need for a conference committee to resolve differences. Unfortunately, this attempt did not expedite the process enough to send a final version to the President before congress recessed for the weekend. The Joint Committee on Taxation estimated the House version would cost $5.28 billion over the next ten years while the Senate version will cost slightly over $8 billion over the same time period. Because these tax cut bills contains mostly small, non-controversial items that are targeted and temporary, its two versions will likely quickly be reconciled and a final bill sent to the president this week. It is, however, nearly certain to be only the first of several tax cut packages that will be compiled to respond to the aftermath of the hurricane. It seems likely an intermediate "economic stimulus" package will be proposed that will be more a vehicle for conservative ideological tax policies than a measure to help those in need on the Gulf Coast. Corporate tax cuts, particularly to specific industries like the insurance, logging, airline, and agricultural industries, reconstruction giveaways for huge multi-national corporations like Halliburton, and unrelated items like extension or elimination of capital gains and dividend taxes could sneak their way into legislation that is seen in Congress as must-pass. What is worse, the devastation and ruin along the Gulf Coast seem to have done little to change the priorities and perspectives of the Republican leadership in Congress. Despite pushing back reconciliation deadlines until the end of October, GOP leaders continue to insist passing the tax cut reconciliation bill outlined earlier this year is of vital importance. Yet it is this very philosophy of tax cuts as a panacea applicable to any situation that has lead to the current state of egregious underinvestment in American infrastructure and communities, problems Congress now scrambles to fix in the wake of Katrina. Specific provisions long-rumored to be included in the reconciliation bill would primarily benefit the wealthiest Americans, while doing little to offer quick or targeted relief to those who face the formidable work of putting their lives back together in the months to come.