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Tax Relief Extension Reconciliation Act of 2005

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Date:
Location: Washington, DC


TAX RELIEF EXTENSION RECONCILIATION ACT OF 2005 -- (Senate - February 01, 2006)

BREAK IN TRANSCRIPT

Mr. OBAMA. Mr. President, I thank the Senator from Montana.

Let me begin by congratulating Senator Harkin for his outstanding explanation of some of the flaws in the reconciliation bill that we are receiving from the House. I thank Senator Grassley and Senator Baucus for the fine work they are doing in trying to deal with what is probably the biggest ticking timebomb we have in the Tax Code, and that is the alternative minimum tax. It is absolutely a critical necessity for us to address that.

Mr. President, I rise to speak about an amendment to the tax reconciliation bill that I intend to offer at the appropriate time.

The amendment achieves two goals. First, it helps keep a promise the President made to rebuild the gulf coast in the wake of Hurricane Katrina. Second, in a $70 billion bill laden with tax cuts for the wealthy and well- connected, it sets aside less than 1 percent for the neediest in our society.

Two weeks after Katrina made landfall, President Bush stood in the ruins of New Orleans and vowed to ``do what it takes'' to help the region recover. He also acknowledged the terrifying images of abject poverty that struck Americans on their TV screens and said, ``We have a duty to confront this poverty with bold action.'' Five months later, the President's timid actions have not matched his bold rhetoric. He has not lived up to his promises.

My amendment uses a cost-effective and proven tool in our tax code--the child tax credit--to extend aid to 1ow-income working families affected by Hurricane Katrina.

Enacted in 1997, the child credit allows families with qualifying children to receive a credit of $1,000 per child against their Federal income tax. Unfortunately, the credit is skewed so that many families who need it the most can't get it.

Under current law, families that earn less than $11,000 get no benefit from the refundable child credit. That means that a child is left out of the credit even if her parent works full time at minimum wage, which has not increased since 1997. And the child doesn't get the full benefit of the $1,000 credit until her parent earns close to $18,000, or even more if the child has siblings.

What's worse, if her parents' incomes stagnate, are disrupted for any reason, or the economy stalls and work hours or wages are reduced, the value of the credit drops or even disappears. Under current law, almost 17 million children get less than the full credit.

We all know what happened to the families on the gulf coast due to Hurricane Katrina, and it will be a long time before these families can rebuild their lives. Many of the families in the affected States were evacuated to other areas, and many of them cannot even afford to go back. And the Federal response so far has been inadequate to get these families effectively back on their feet.

We need to do better. At a time when we are debating $70 billion of tax breaks, many of which will benefit those who need the least help, it is critical that we remember the worst off and the most vulnerable members of our society.

When I went to Houston after the hurricane, I met an evacuee from New Orleans who said to me: ``we had nothing before the hurricane, and now we've got less than nothing.'' Life was hard for many families even before Katrina hit. In Louisiana, Mississippi, and Alabama, for example, more than 900,000 children under 17 years of age were so poor that they got no child tax credit or only a partial credit. These States had among the highest rates of children too poor to get the full credit. In fact, more than one-third of the children in Mississippi and Louisiana didn't get the full benefit of the child tax credit. That is what our measure is designed to do.

This amendment, at a cost of less than 1 percent of the overall tax reconciliation bill, will provide necessary assistance to many of these families. The amendment eliminates the income threshold that excluded all children in families with less than $11,000 of income.

My amendment sends a simple message: If you work, your kids get a benefit. It provides a partial credit starting with the first dollar of a parent's income for families who lived in the areas affected by Hurricane Katrina.

The amendment is simple. It says that the children of low-income working parents affected by Hurricane Katrina will no longer be denied the child credit. You work, your kids get a benefit. If you don't work, no benefit. And if you want the full benefit, you have to earn at least $10,000, which is just about the income of a full time job at minimum wage.

That's a commonsense way to support families with children, especially families that have experienced the huge cost--psychological and financial--of a natural disaster.

My amendment is also narrowly tailored and fiscally responsible. It is aimed at families affected by the hurricanes, and it provides short-term support, expiring in 2008.

With this amendment, hundreds of thousands of this country's most disadvantaged children will see an increase in their credit. Katrina offered us a window into America's poverty. Let's not let that window close without doing something to provide a chance for America's children to rebuild their lives with dignity, hope, and opportunity. That is what this country is about. I hope that is what this Chamber is about.

I yield the floor.

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