Bush: Spending Cuts Will Pay for Katrina

President and Laura Bush, joined Bishop T.D. Jakes of Dallas in a song Friday at a National Cathedral prayer and remembrance service for the victims of Hurricane Katrina. Jakes delivered the sermon at the service. Reuters hide caption

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Reuters

The cost of rebuilding the Gulf Coast after the hurricane could top $200 billion -- roughly the same cost of the Iraq war. But President Bush says the money to pay for it should come from spending cuts, not new taxes.

A day after proposing a landmark rebuilding effort in a televised address to the nation, the president said his administration would look for budget cuts to offset the costs. He did not offer any specifics.

The Bush administration says raising taxes would hurt a growing U.S. economy and hurt workers. Critics of the already large budget deficits, fueled by the cost of war in Iraq and tax cuts enacted during the president's first term, say that borrowing to pay for hurricane relief only passes the cost onto future generations.