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Debate intensifies over Katrina costs

Conservatives are getting fed up and openly complaining about the return of big government under President Bush. NBC's David Gregory reports from the White House.

The true cost of Hurricane Katrina is only beginning to sink in — a $200 billion estimate, at least, for reconstruction — much of it to be paid by taxpayers. That's on top of the roughly $200 billion taxpayers have already spent in Iraq to date.

Conservatives are getting fed up and openly complaining about the return of big government under President Bush.

“We may never see a balanced budget in our lifetimes again if the president continues spending like this,” says Chris Edwards of the libertarian CATO Institute.

Again Monday, the White House warned that Katrina will swell the $333 billion deficit, but so far the administration has not asked Americans for any sizable sacrifice.

“First of all, we are going to meet the needs of the people in the region,” says White House spokesman Scott McClellan.

According to the CATO Institute in Washington, federal spending has shot up one-third since Bush took office.

Just Monday, NASA unveiled a new space capsule costing more than $100 billion for travel to the moon.

But some Republicans in Congress are looking to cut costs. One target: the president's $700 billion prescription drug benefit for seniors, which is set to hit the books next year.

“Let's go back to square one,” says Sen. John McCain, R-Ariz. “$700 billion already on a broken entitlement program isn't going to work.”

Democrats have called on the president to roll back his tax cuts, something he's said he won't do.

“Now he says he wants to cut waste,” says former senator and vice presidential candidate John Edwards, “but he won't touch two more tax cuts for millionaires that haven't even taken effect yet."

Does the deficit matter to the White House? Not nearly as much as Katrina these days. The recent NBC News/Wall Street Journal poll found that Americans rank the deficit near the bottom of the government's priorities.