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Congress okays $8-billion in tax breaks for Gulf Coast businesses

By wire services
Published December 17, 2005

WASHINGTON - Congress passed nearly $8-billion in tax breaks for Gulf Coast businesses on Friday but denied federal help for casinos, liquor stores and golf courses.

Almost four months after Hurricane Katrina slammed into the coast, destroying businesses and jobs, lawmakers responded to President Bush's appeal for revitalizing the region with a special enterprise zone.

Both the House and Senate passed the bill by voice vote on Friday. Bush called the measure an important part of his plan to help the Gulf Coast rebuild.

"The private sector is critical in the rebuilding effort, and these tax incentives will help boost investment, get people back to work, and return the region to prosperity," Bush said in a statement.

Rep. William Jefferson, D-La., said the tax breaks will make a major contribution to restoring and rebuilding New Orleans.

"It'll help to get our local government back on its feet, and it'll help to get our businesses incentivized to come back," Jefferson said.

The tax breaks for business investment are aimed at luring companies into the region and keeping those that are already there. Companies can use a tax credit to defray salaries if they kept employees on the payroll even while shut down due to storm damage.

"If there is a force even more powerful than the storms that devastated the gulf region, it is the American tradition of entrepreneurship and innovation," said Treasury Secretary John Snow.

Numerous recreational businesses would be prohibited from using the special tax breaks. The list puts limitations on country clubs, casinos, hot tub facilities, liquor stores, massage parlors, golf courses, racetracks and tanning parlors.

A narrowly drawn exception, preventing taxpayer dollars from subsidizing gambling, means companies could consider their hotels and restaurants apart from attached casinos and take advantage of some of the tax breaks.

Sen. Trent Lott, a Mississippi Republican, had pushed for casinos to share in the tax breaks like any other legal business.

"It's totally bad policy. It's totally ridiculous. It's totally hypocritical," he said. "But this is almost $8-billion. We had to get it done."

Other portions of the bill offer special tax-exempt bond authority to rebuild ruined infrastructure, tax breaks to rehabilitate buildings and expanded tax credits to build low-income housing in the region.

Some tax cuts would help defray the cost of demolition and cleanup, including a special deduction for cleaning up petroleum products and urban areas with environmental contamination known as "brownfields."

WASHINGTON - For the second time in as many months, the House rejected calls for withdrawing U.S. troops from Iraq with a vote Friday that Democrats said was politically driven.

In a 279-109 vote, the House approved a resolution saying that the chamber is committed "to achieving victory in Iraq" and that setting an "artificial timetable" would be "fundamentally inconsistent with achieving victory."

Democrats voted against the resolution by 108-59, while 32 of them voted "present," a rarely used option that signals neither support nor opposition. That split underlined divisions within the party over alternatives to President Bush's Iraq war policies.

Among Republicans, 220 supported the proposal, none were opposed and two voted "present," while the House's lone independent voted "no."

Every member of the Tampa Bay area's House delegation voted in favor of the measure.

WASHINGTON - The House struggled Friday over the best way to slow illegal immigration in legislation seen as a prelude to a tougher debate next year over what to do with the 11-million undocumented people already in the country.

The House legislation, billed as a border protection, antiterrorism and illegal immigration control act, includes such measures as enlisting military and local law enforcement help in stopping illegal entrants and requiring employers to verify the legal status of their workers. It authorizes the building of a fence along parts of the U.S.-Mexico border.

Republican leaders wouldn't allow a vote on a controversial proposal to deny citizenship to babies born in this country to illegal immigrants. And they put off consideration of a guest worker program, which President Bush has said must be part of a lasting solution to the illegal immigrant problem.

WASHINGTON - A House-Senate agreement reached Friday opened the way for Congress to approve a two-year extension of a post-Sept. 11, 1002, law providing federal insurance backup for catastrophic losses suffered in a terrorist attack.

The Senate approved the compromise by voice vote late Friday, and the House is expected to follow suit today.

The Terrorism Risk Insurance Act expires on Dec. 31, and business and insurance groups had pressed Congress to keep the program alive, arguing that without it insurers will not offer the terrorism insurance that builders and investors need to initiate construction projects.

[Last modified December 17, 2005, 01:02:06]