Bush to Request More Aid Funding
Analysts Warn of Spending's Impact

By Jonathan Weisman and Jim VandeHei
Washington Post Staff Writers
Thursday, September 15, 2005

President Bush will call tonight for an unprecedented federal commitment to rebuild New Orleans and other areas obliterated by Hurricane Katrina, putting the United States on pace to spend more in the next year on the storm's aftermath than it has over three years on the Iraq war, according to White House and congressional officials.

With the federal tab for Katrina already nearly quadruple the cost of the country's previous most expensive natural disaster cleanup, Bush plans to offer federal assistance to help flood victims find jobs, get housing and health care, and attend school, according to White House aides.

In a speech from the flood zone, Bush will commit the federal government to what many predict will become the largest reconstruction effort ever on U.S. soil.

The president will call on Washington to resist spending money unwisely, but some in his own party are already starting to recoil at a price tag expected to exceed $200 billion -- about the cost of the Iraq war and reconstruction efforts. As emergency expenditures soar -- with new commitments as high as $2 billion a day -- some budget analysts and conservative groups are warning that the Katrina spending has combined with earlier fiscal decisions in ways that will wreak havoc on the government's finances for years to come.

Bush and Republican congressional leaders, by contrast, are calculating that the U.S. economy can safely absorb a sharp spike in spending and budget deficits, and that the only way to regain public confidence after the stumbling early response to the disaster is to spend whatever it takes to rebuild the region and help Katrina's victims get back on their feet.

"I think absolutely it's going to convert the political landscape in Washington," Sen. Olympia J. Snowe (R-Maine) said of Katrina's impact. "We do have a social safety net in this country. Those aren't just words. Government has a role to play in people's lives."

Hours before Bush speaks, the Louisiana congressional delegation will present its tab for reconstruction and rebuilding efforts, which could put pressure on Bush to spend money in areas not currently on his agenda. In addition, aides said yesterday that nearly 2.5 million have registered with the Federal Emergency Management Agency for help and that Education Department officials estimate the number of displaced students to be approaching 400,000. Officials from several departments raced yesterday to complete proposals that Bush can talk about in his speech and in the days to follow.

The Education Department, for instance, is readying plans to waive No Child Left Behind requirements for some states; to provide cash assistance to school districts absorbing students; and to finance new schoolbooks, demolition and reconstruction of school buildings, and temporary trailers and new teachers for schools bursting with Katrina evacuees, Republican aides said.

The way in which the administration plans to spend money -- and not just the amount -- is raising caution flags. In a letter he plans to send to Bush today, Rep. Mike Turner (R-Ohio) said the president should scrap the administration's plan to deploy as many as 300,000 mobile homes to temporarily house people. Turner said the victims would be better served by market-rate and subsidized housing already in place in other regions of the country. A dozen Republicans also lobbied Bush to appoint a disaster czar to oversee the reconstruction and relief efforts in the South, an idea the president has, thus far, resisted.

Administration officials concede that the hurricane and its aftermath could push the budget deficit back above $400 billion next year, or about 3 percent of the country's gross domestic product, just as the tide of federal red ink that rolled over Washington during Bush's first term had begun to recede.

Since Katrina struck, Congress has already spent $62.3 billion, dwarfing the inflation-adjusted $17.8 billion that Congress spent on hurricanes Andrew, Iniki and Omar, which struck in 1992, and the $15.2 billion emergency appropriation for the Northridge, Calif., earthquake of 1994. The entire Persian Gulf War of 1991 cost less than $83 billion in today's dollars.

The libertarian Cato Institute warned yesterday of a looming "budget disaster." In meetings with GOP congressional leaders and White House aides, some Republican lawmakers have expressed alarm about the growing price tag and concern that vast sums could be wasted without proper oversight.

White House officials have told Congress that the $51.8 billion approved late last week will fund the disaster relief effort only through the first week of October, and senior congressional appropriations aides have told the White House that they need to see the next request by next week. Republicans say the next bill could exceed $50 billion.

The scale of the disaster has not even come into focus, largely because many agencies have not been allowed into the disaster zone to assess the damage, according to congressional appropriations aides, who are trying to examine the costs to the government, agency by agency.

Nearly 1,000 drinking-water and sewer systems -- 391 in Mississippi, 606 in Louisiana and one in Alabama -- remain shut down. Repairing and rebuilding such systems could cost between $3 billion and $10 billion, much of it on the tab of the Environmental Protection Agency.

Before Katrina struck, the federal highway emergency relief fund already faced a $120 million backlog of road repairs. With so many crumbled bridges and washed-out highways after the storm, the fund's deficit will now be in the billions, appropriations aides said.

The Air Force will seek as much as $4 billion to repair damaged Gulf-state facilities, a House Appropriations Committee aide said. An additional $2 billion to $4 billion will be needed to finance the mobilization of the National Guard, the evacuation of military personnel and military-family support programs. Damage to national parks, forests and wildlife refuges is estimated to approach $300 million.

Once the administration makes its request, congressional officials expect a cascade of demands from lawmakers. Farm-state members have signaled that they will seek substantial relief for midwestern grain farmers, whose shipments of grain down the Mississippi River were disrupted by Katrina. Even before the storm, parched farms in Illinois, Missouri and parts of Iowa had prompted farm-state lawmakers to seek relief.

Lawmakers from the Northeast have said they will push for $800 million or more in assistance to offset the soaring price of home heating oil. And state governments from Washington and South Dakota to West Virginia and South Carolina are expected to seek federal dollars to offset the cost of housing Katrina survivors.

The White House has declared 41 states and the District of Columbia either major disaster areas or in states of emergency, allowing federal aid to flow to any state that takes in an evacuee.

Against calls to trim spending elsewhere to accommodate the emergency, House Majority Leader Tom DeLay (R-Tex.) did little to close those floodgates when he suggested this week that the Republican-controlled Congress had already trimmed all the fat from federal spending. "My answer to those that want to offset the spending is 'Sure, bring me the offsets,' " he said. "I will be glad to do it, but no one is able to come up with any yet."

Against this tide, conservative think tanks are taking up DeLay's challenge. But their suggested spending cuts may only underscore Congress's flagging resolve.

To reach $62 billion in savings, Cato Institute analysts Chris Edwards and Stephen Slivinski have proposed cutting NASA in half, slashing energy research and subsidies just as Congress is gearing up to increase them in the face of soaring gasoline prices, cutting the U.S. Army Corps of Engineers' budget by $4.6 billion after its levees failed to protect New Orleans, and eliminating $4.2 billion in homeland security grants while lawmakers are debating the nation's lack of preparedness.

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