Puerto Rico disaster bill would revive older tax breaks

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fairly difficult
House Democrats have tucked tax relief for rum distilleries and lower-income island residents into a Puerto Rico disaster aid package.
California Rep. Mike Thompson pushed back on GOP criticism, saying it was common practice to combine relief provisions for disaster-stricken areas into one bill. (Tom Williams/CQ Roll Call file photo)

House Democrats have tucked tax relief for rum distilleries and more generous refunds for lower-income island residents into a disaster aid package intended to help Puerto Rico recover from an unusually destructive spate of recent earthquakes.

Backers say the add-ons are part of an ongoing effort to help Puerto Rico and other territories such as the U.S. Virgin Islands, also hit hard by hurricanes in recent years. But Republicans call the effort a typical congressional maneuver of piling on to a must-pass bill.

House Appropriations Chairwoman Nita M. Lowey unveiled an updated version of the disaster aid package Tuesday, which the chamber is expected to take up next week. The expanded bill follows a series of earthquakes that hit the island in late December and earlier this month, and ongoing fights between Congress and the White House over held-up hurricane relief money. Puerto Rico was devastated by Hurricane Maria in 2017 and, in the midst of recovery, was hit by Hurricane Dorian last year.

The House Ways and Means Committee-drafted tax title contains a section that is nearly identical to a $6.8 billion provision in a bill the panel approved last June. It would encourage Puerto Rico and other U.S. territories and possessions to expand their earned income tax credit programs. Over the next five years, the federal Treasury would make matching payments to Puerto Rico for such EITC expansions, while the U.S. Virgin Islands, American Samoa, Guam and the Commonwealth of the Northern Mariana Islands would receive 75 cents on the dollar.

That same earlier Ways and Means bill would also make payments to the territories…
Doug Sword
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