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Tax Changes Ease Passage of 9/11 Responder Bill

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Washington, D.C. (December 23, 2010)

By Michael Cohn

Changes to tax provisions in a bill providing health coverage for 9/11 emergency responders helped enable the legislation to pass Congress despite the opposition of some leading Republican lawmakers.

Kirsten Gillibrand

The James Zadroga 9/11 Health and Compensation Act, sponsored by Senators Kirsten Gillibrand, D-N,Y., and Charles Schumer, D-N.Y., has been a priority of New York’s congressional delegation for years. Named after a New York City police officer who died in 2006 of respiratory disease attributed to his rescue and recovery work at Ground Zero, the bill would provide health care for 9/11 first responders who rushed to Ground Zero in the days after the World Trade Center attack, as well as volunteers and construction workers who cleared the debris and recovered the remains of the victims.

The bill failed on a party-line vote in the Senate earlier this month due to a Republican filibuster, but Gillibrand and Schumer vowed to continue fighting, and it passed in the Senate Wednesday afternoon. The bill went back to the House later that day, where Democratic Whip Steny Hoyer, D-Md., steered it to passage Wednesday evening.

Gillibrand and Schumer made changes to the bill to attract Republican support, trimming the price tag by nearly $2 billion. The bill would offer $4.3 billion in aid over five years to the rescue workers, including $1.5 billion in health benefits and $2.7 billion in compensation. The bill had initially been slated for $6.2 billion. The House version was over $7 billion, but a settlement was reached last month with many of the ailing Ground Zero workers that helped reduce the final price tag.

Other changes involved tax provisions. Instead of relying on the House-passed offset that closed foreign tax loopholes, the final bill would impose a 2 percent excise fee on certain foreign companies that receive U.S. government contracts. To offset the remaining cost of the 9/11 measure, the bill includes two other revenue-raising measures that have previously passed the Senate either unanimously or on a broad, bipartisan vote. One involves a continuation of the H-1B and L-1 visa fee for outsourcing companies that have more than 50 percent of their employees on these visas. The provision would affect outsourcing companies such as Wipro, Tata, Infosys and Satyam, but not affect American companies such as: Microsoft, Oracle, Intel and Apple. The fee was set to expire on Sept. 30, 2014. The Zadroga bill would extend the fee until Sept. 30, 2021.

The other change would continue a travel promotion fee on certain travelers to the United States that was set to expire in 2015. The fee would now be extended until 2021 and sunsets at that point.

The bill passed by a voice vote in the Senate, while the roll call in the House was 206-60.

“Remember days like today, where America — not Democrats, not Republicans, not New Yorkers, not Wyomingites — rose to the occasion,” said Schumer at a press conference, according to Bloomberg.com. “That Statue of Liberty must have a grin from ear to ear, not just for New York, but for America.”

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