Sunday, June 24, 2018
Go to After Katrina
After Katrina
How you can help
Photo gallery (Flash)
Your stories


How do you pay for Katrina?

Larger view
New Orleans Police Sgt. Kevin Guillot, left, and Deputy Mike Thommes and Deputy Donald Rindal, both from the Ramsey County Sheriff's Department in St. Paul, prepare to enter a New Orleans home to collect guns found by a team searching for victims of Hurricane Katrina. (Photo by Ethan Miller/Getty Images)
As Hurricane Rita heads toward the Gulf Coast, the debate is already underway over how to pay for recovery costs from Hurricane Katrina. So far Congress has approved spending $62 billion, but some estimates say the price tag could eventually top $200 billion. There's no consensus among Minnesota's congressional delegation on how to pay for the recovery. Some lawmakers want to offset the cost with spending cuts, and some say taxes should go up.

St. Paul, Minn. — President Bush has said he'll work with Congress to cut wasteful spending to pay for hurricane relief, but so far he has not offered a specific plan.

So, what is wasteful spending? That depends on which member of Congress you ask. For 6th District Republican Mark Kennedy, it's $1 billion in Amtrak subsidies. For 2nd District Republican John Kline, it's a $223 million bridge in a remote part of Alaska that was included in the federal transportation bill.

"I think there's some areas that warrant close consideration. What are we spending on NASA, for example? What about manned space flight? Is that something that should be pushed back and perhaps save some money there?" Kline asked. "How much are we spending on aid packages overseas?"

Kline said Congress should examine all federal spending -- except defense spending. Kline, who is a retired Marine, said with U.S. troops in Iraq and Afghanistan, now is not the time to cut military funding. Unlike some other Republicans, Kline also doesn't want to delay a Medicare prescription drug benefit scheduled to begin in January.

Republican Sen. Norm Coleman said he would consider delaying the drug benefit.

"I'm open to that," Coleman said. "I want to see where we're at, I want to see the cost-benefit. And so I think there are some areas that we can look at that maybe call for just stepping back a little bit, without taking away from commitments that we have already made."

A one-year delay in the drug benefit would save an estimated $33 billion.

President Bush has ruled out raising taxes to pay for Katrina recovery, but 8th District Democrat James Oberstar thinks taxes should be on the table. Oberstar, whose wife is from New Orleans, said he thinks Americans would be willing to pay a temporary income tax surcharge for recovery efforts.

"There is no reason the president can't stand up to the American public and say, 'This is an extraordinary circumstance. I am asking the Congress to impose a surcharge of whatever percent is needed for one year or two years, to pay this extraordinary cost,'" Oberstar said. "We don't have to further borrow and further widen the federal government's deficit."

Oberstar and other Democrats say Republicans should abandon their push for permanent tax cuts. That appears to be the case, at least for now. But 6th District Republican Mark Kennedy, who is also a candidate for the U.S. Senate in 2006, said he'll continue to advocate for cutting taxes, because it will spur economic growth.

"You're only going to get this deficit under control long-term with a growing economy, so we need to continue with pro-growth policies in order to achieve that," Kennedy said.

Kennedy and other Minnesota congressmen worry about the size of the federal deficit, particularly if Katrina recovery isn't paid for up front. Democratic Sen. Mark Dayton said Congress should not add to the nation's debt, at a time of significant spending in Iraq.

"The easy answer, and the one that will be most politically popular, is going to be to borrow additional money."
- U.S. Sen. Mark Dayton

"And now we're going to add those additional burdens of expenditures. The easy answer, and the one that will be most politically popular out here, and really is most popular with the American people, is going to be to borrow additional money," Dayton said.

Despite their concern about the deficit, Dayton and other Democrats don't want to delay projects in the transportation bill recently signed into law, and they don't want to postpone the Medicare drug benefit.

So what does the lack of consensus mean?

Rep. Martin Sabo, who has served on the House Appropriations Committee for more than two decades, said there will be plenty of posturing about how to pay for Katrina recovery, but he said all the talk of finding money to offset the cost is just that.

"There's no way we're going to fund that, either with immediate spending cuts or immediate tax increases," Sabo said.

Sabo said in the end, the cost of paying for the disaster will be added to the federal deficit, which last year topped $400 billion.

"I think the president should be truthful and say that," said Sabo.

It's not just Democrats like Sabo who have criticized the president for deficit spending. It's also fiscal conservatives like 1st District Republican Gil Gutknecht.

Gutknecht said Bush needs to outline how to pay for Katrina recovery. He said it's not compassionate to write disaster checks from the federal government, and expect future generations to pay for them.