Katrina & Beyond


This is MORNING EDITION from NPR News. I'm Steve Inskeep.

We already know that Congress has approved more than $60 billion for the Gulf Coast region, and it's estimated that the total cost from Hurricane Katrina could reach $200 billion. What we don't know yet is where that money is going to come from. So we will start this part of the program with the politics of deficit spending. Depending upon who wins the debate, the cost of Katrina could affect your tax rate, unrelated government programs or the debts faced by your descendants. Here's NPR's Andrea Seabrook.


Congress has the power of the purse, though these days it might be called the power of the plastic since the government is putting hundreds of billions on dollars on its credit card every year. And now Katrina. So far, Congress has shelled out more than $60 billion, and the cost over time could rise another $150 billion on top of that; this when the federal government was already in the red.

So where does the money come from? Senate Majority Leader Bill Frist.

Senator BILL FRIST (Majority Leader): The money right now, as you well know, with our deficit means that in many ways our children are paying for it.

SEABROOK: In other words, more credit card charges, and that makes many in Congress antsy. See, the deeper the federal deficit runs, the less money there is for everything next year and in future years.

So several ideas are floating around Capitol Hill right now for ways to keep down that deficit spending. Democrats want to get rid of the latest round of tax cuts for upper-income Americans that were included in the budget earlier this year. The cuts have been installed temporarily, but when that budget goes through a process called reconciliation, they'll become permanent and they're worth about $70 billion. Senate Minority Leader Harry Reid made clear Democrats' proposal.

Senator HARRY REID (Minority Leader): I believe the Republican-controlled Congress should refuse to pass reconciliation until they come back with something that doesn't have the massive tax cuts for the rich. Simple as that.

SEABROOK: Keeping that $70 billion in the Treasury would just cover the money Congress has spent on Katrina so far. But Republicans are not keen on this plan. In fact, House Majority Leader Tom DeLay said yesterday it's not an option. Because the tax cuts have been in place temporarily, DeLay says, to not make them permanent would be to essentially raise taxes on wealthier people, and he and other Republicans in control of Congress refuse to do that.

Representative TOM DeLAY (House Majority Leader): The Gulf Coast region is today without an economy, without jobs or businesses or investment. Raising taxes will not help create any of those things but will instead guarantee that the region's economic troubles spread to the rest of the country.

SEABROOK: Fiscal conservatives of both parties say they would like to cut earmarks and pork-barrel spending out of the highway bill to cover the costs of Katrina. But opening a bill like that, one that required complex negotiations and bargaining for two full years to get it to pass, is something the leadership of both parties is not particularly interested in.

And so, you've got Republican leaders rejecting a tax increase and not jumping to cut earmarks, either. Instead, Senate Majority Leader Frist says they will try to find savings in many smaller ways.

Sen. FRIST: In the future, we're going to look at a lot of the issues that have been discussed: offsets; potential across-the-board spending cuts; looking at legislation we passed in recent weeks, months and even years as to where we can appropriately cut. It's going to take a sacrifice by the American people, not just the people of Mississippi and Alabama and Louisiana, but the American people.

SEABROOK: And Majority Leader DeLay says officials haven't really pinned down yet what needs to be done to reconstruct the Gulf Coast region and how much it will cost. And so, DeLay acknowledged yesterday there is no plan. Andrea Seabrook, NPR News, the Capitol.

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