Bush Says Spending Cuts Will Be Needed

By Michael A. Fletcher and Jonathan Weisman
Washington Post Staff Writers
Saturday, September 17, 2005

One day after pledging to undertake one of history's largest reconstruction efforts, President Bush served notice yesterday that rebuilding the hurricane-ravaged Gulf Coast will require spending cuts elsewhere in the federal budget.

Amid growing concern among congressional Republicans about the huge cost of the planned reconstruction effort, Bush said the federal government can foot the bill without resorting to a tax increase. "You bet it's going to cost money. But I'm confident we can handle it," Bush said. "It's going to mean that we're going to have to cut unnecessary spending."

Bush has refused to put a price tag on the reconstruction plan, which he outlined in a prime-time speech Thursday night, although members of Congress and others have predicted that it could cost as much as $200 billion. The plan was assembled by Department of Homeland Security Secretary Michael Chertoff, White House Deputy Chief of Staff Karl Rove and Claude Allen, Bush's top domestic policy adviser.

Speaking at a prayer service earlier in the day as part of a national day of remembrance for the hurricane's victims, Bush vowed to rebuild the Gulf Coast with the goal of wiping out the legacy of racial discrimination and social inequality that has compounded poverty there.

"As we clear away the debris of a hurricane, let us also clear away the legacy of inequality," he said.

His blueprint envisions the federal government paying much of the cost for the reconstruction of roads, bridges, schools and other infrastructure wiped out by Katrina. It also calls for an unprecedented effort to attack poverty in the region, through a combination of tax breaks for small and minority businesses, individual grants for job training and day care and other needs, and an initiative to give federal land or abandoned homes to poor people for home construction and renovation.

The deadly storm and the federal government's slow response has damaged Bush's standing as a leader among voters, polls show, and his approval rating has hit all-time lows. The president has faced particular anger from African Americans, a majority of whom believe the government's response to the storm would have been faster were most of the victims not poor and black.

Although the plan promises to be huge in scale, many details about how it will be managed and carried out are still being determined. Bush's rebuilding promise has created new political pressures amid concerns that in the absence of tax increases, the huge expenditure will lead to larger budgets, at least in the short term. Members of his own party are publicly stating strong concerns about the money being allocated.

A half-dozen House and Senate Republicans have drafted legislation to keep a close eye on Katrina expenditures, and several have called for significant spending cuts to pay for the relief.

"There's no shortage of places where the federal government can tighten its belt to pay the cost of the hurricane recovery effort," said Rep. Jeff Flake (R-Ariz.). "Let's face it, after years of uninterrupted growth, the federal government is bloated."

Other Republicans have contradicted that assertion, including House Majority Leader Tom DeLay (R-Tex.), who has said there is no appreciable fat in the federal budget.

Bush pledged to find some spending cuts. But he offered no specifics, and his chief economic aide, Allan B. Hubbard, dismissed the rebuilding effort's impact on the longer-term effort to reduce the budget deficit. "This in no way will adversely impact his commitment to cut the deficit in half by 2009," he said.

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