Faced with the aftermath of Hurricane Katrina and 2 pending Supreme Court appointments, the Senate has delayed action on the estate tax issue.[@@]

Senate Majority Leader William Frist, R-Tenn., said on Monday that the Senate would delay action on the estate tax issue, which had been slated as among the first issues lawmakers were to tackle upon their return from the August recess. Frist had maintained that plan as recently as last week, which drew heavy criticism from Democratic National Committee Chairman Howard Dean.

“It’s simply irresponsible for Senator Frist and Ken Mehlman to even think about spending our tax dollars on breaks for millionaires at a time when our top priority must be to ensure we have the resources needed to address the long- and short-term costs associated with rescue, recovery, and rebuilding in the wake of Hurricane Katrina,” Dr. Dean said on Sunday. “Not to mention the vital lesson we learned this week about the deadly cost of diverting funds at the expense of the safety of the American people. These costs also come at a time when our nation faces a massive deficit, and mounting costs in the ongoing war in Iraq.”

Frist told reporters Monday that the estate tax vote would be delayed, and that lawmakers would instead take up legislation dealing with the cleanup and recovery of New Orleans and the Gulf Coast.

For the moment, the delay seems to be indefinite, as no schedule for returning to the estate tax issue has been set. The tax is being gradually phased out until the year 2010 as part of a budget agreement in an earlier Congress, but the tax is scheduled to return in full in 2011 unless lawmakers act.

Some critics of the estate tax say providing additional relief from the estate tax could be part of the Katrina relief effort.

“Family businesses in these [affected] states will face enormous challenges in the coming weeks, months, and years,” says Dick Patten, executive director of the American Family Business Institute, Washington. “They will need to rebuild businesses that, in some cases, may virtually no longer exist.”

The AFBI has called on lawmakers to enact legislation providing for an immediate and retroactive exemption from the estate tax for residents in the areas affected by the hurricane, as was done for those families and businesses affected by the Sept. 11, 2001, terrorist attacks.