It has been two months since Hurricane Katrina hit and one month since Rita made landfall on the already-ravaged Gulf Coast, yet reverberations continue to be felt not only in Washington, but throughout the country. Congress was forced to reshuffle the legislative calendar to address the immediate needs of the relief effort, postponing consideration of the reconciliation bills and a vote on repealing the estate tax, dropping Social Security reform legislation, and passing a stark continuing resolution to fund government services past the end of the fiscal year and allow for more time to pass the annual appropriations bills. Outside of Washington though, a larger reshuffling is occurring as the vast majority of Americans no longer believe the country is on the right track and are turning to government to help redress some of the startling inequalities witnessed in the wake of the hurricanes. Polls conducted post-Katrina have overwhelmingly shown a public that places higher importance on combating poverty and inequity in American society than ever before. The results of a recent national poll released Oct. 27 by New California Media, a San Francisco-based coalition of ethnic media, showed Americans more concerned with eliminating poverty than fighting terrorism, establishing democracies in Iraq and Afghanistan, or rebuilding cities devastated by natural disasters. In the poll - which surveyed whites, blacks, Asians and Hispanics about how Hurricane Katrina influenced the way people view poverty, race relations, climate change and government - a majority of the 1,035 respondents felt the United States should be using revenues to build strong cities and communities here at home rather than oversees. Waning public support for U.S. involvement and spending in Iraq has been seen in other recent polling, notably in the results from an AP-Ipsos poll conducted last month. The AP poll found that 42 percent of people favored cutting spending on Iraq to pay for relief efforts in the Gulf Coast. In that same poll, respondents identified poverty as the number one issue the government needs to dedicate time and resources to overcoming. Sergio Bendixen, whose firm conducted the poll, stated, "I don't remember poverty ever finishing as the number one priority on any kind of list. The aftermath of Hurricane Katrina [and Rita] and the images of poverty have clearly made a large impact on many Americans." According to a study released in October by the Marguerite Casey Foundation, approximately 90 percent of those surveyed realized that poverty is a problem in America today and a majority supported a broad range of long-term investments to help reduce poverty, such as increased wages, health insurance, education, job training and tax credits. Unfortunately, Congress does not seem to be listening. While the hurricanes have had a significant impact on Congress' schedule this fall, they have not changed the priorities of Republican leaders in either the House or Senate. Following Katrina Congress immediately passed a $10.5 billion emergency supplemental bill to keep the Federal Emergency Management Agency operating, and followed it with a much larger $51.8 billion bill to fund short-term relief and recovery efforts throughout the region. On Oct. 28, President Bush sent a third supplemental request for aid to Congress, which will consider it over the coming weeks. This third supplemental does not require any new funds to be approved by Congress; it simply reallocates $17 billion of the $62 billion that was previously provided for FEMA's disaster relief fund. According to the Office of Management and Budget (OMB), sufficient funds will remain in the disaster relief fund to continue meeting ongoing and current recovery demands. In addition, the White House requested $2.3 billion in rescissions to programs it deemed to be a "lower priority." The $17 billion transferred would include funds to reconstruct military bases ($3.31 billion); repair and rebuild highways and bridges ($2.33 billion); rebuild levees and improve waterways and wetlands ($1.6 billion); support Community Development Block Grants ($1.5 billion); reconstruct veterans health care facilities in New Orleans and Biloxi ($1.16 billion); and help meet child care, mental health, and other human services needs ($500 million), among other smaller projects. The $2.3 billion in rescissions, which will come from twelve cabinet departments and the Environmental Protection Agency, would, according to the OMB, "offset the unprecedented cost of this disaster and control growth in discretionary spending." In reality these extraordinarily small spending cuts will have little long-term effect on the growth of unsustainable deficits. In addition to supplementals, Congress has worked to pass tax packages to bring relief to some victims and spur new growth. On Sept. 21, Congress agreed to a $6.2 billion tax package to expand tax deductions for dislocated victims and provide charitable incentives to encourage other Americans to help. The bill, sponsored by Rep. Jim McCrery (R-LA), will provide some financial support in the future, but will do less to get victims back on their feet than direct spending would. This very point was made by Daniel Doctoroff, the deputy mayor for economic development and rebuilding for New York City, in his Sept. 28 testimony before the Senate Finance Committee. Doctoroff testified that tax breaks were not the most effective approach to assist those most in need in the wake of a disaster and that direct spending by the government was more immediately beneficial. Doctoroff described the tax code as "a crude vehicle for delivering assistance - particularly in comparison to appropriations." Despite reservations raised by independent analysts, McCrery has introduced a second tax package that focuses on tax cuts for businesses in the Gulf region. On Oct. 27, McCrery, a senior member of the Ways and Means Committee, introduced the bill, which is expected to carry a 10-year cost of slightly less than $8 billion. The bill would:

• Provide new cash for tax-exempt bonds, in order to help states and localities rebuild infrastructure and private industry rebuild commercial and residential property;
• Authorize $14 billion in new private activity bonds and allow the interest on those bonds to be excluded from income for purposes of calculating the alternative minimum tax (AMT), ensuring that any tax benefit investors gain from the bond will not be recaptured by the AMT;
• Allow for a second advance refunding of outstanding bonds to allow state and local governments to restructure their debt, a key provision sought by hurricane-effected states;
• Double the limit on expensing of new property and equipment for small businesses to $200,000, but only for businesses operating in the disaster zone;
• Establish Gulf Opportunity Zones, or GO Zones, for areas effected by Hurricane Katrina, similar to the Liberty Zones set up after the Sept. 11 terrorist attacks;
• Create a new tax credit bond, which would allow states to offer investors a federal tax credit instead of paying interest on the bond. Authority would be limited to $200 million for Louisiana, $100 million for Mississippi and $50 million for Alabama.

It is unclear when Congress will take up work on this second tax relief package. GOP leaders continue to claim they will finish all legislative duties before the Thanksgiving holiday, but with many appropriations bills still left unfinished, starkly different reconciliation bills to rectify, and an open seat on the Supreme Court to fill, more than likely Congress will be working in Washington well into December this year.