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Bush requests $51.8 billion for hurricane relief

President Bush sent to Congress Wednesday a request for $51.8 billion in additional hurricane relief, raising Katrina's cost to the federal government to $62.3 billion so far, easily a record for domestic disaster relief.
BUSH
President Bush greets victims of Hurricane Katrina on Monday in Poplarville, Miss.Lawrence Jackson / AP
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President Bush sent to Congress Wednesday a request for $51.8 billion in additional hurricane relief, raising Katrina's cost to the federal government to $62.3 billion so far, easily a record for domestic disaster relief.

Separately, Republican leaders moved to try to contain the political fallout from Katrina, forming a joint House-Senate review committee of senior lawmakers who will investigate the government's preparation and early response to the catastrophe. Democrats called again for an independent probe similar to the investigation of the Sept. 11, 2001, attacks.

The mounting cost of the hurricane and its aftermath comes at a time when federal budget deficits were finally in retreat after three successive years of rising red ink. Katrina's impact, coupled with the stubbornly high cost of the war in Iraq, will probably keep the deficit well above $300 billion and near record territory in 2006, budget analysts said.

And White House budget director Joshua Bolten made it clear: "This will not be the last request." Last week, the Federal Emergency Management Agency was spending just over $500 million a day, an unprecedented rate, House Appropriations Committee aides said. But over the weekend, Bolten said, that "burn rate" soared to more than $2 billion a day as FEMA began signing contracts for the construction of temporary housing.

The rescue effort continued to focus Wednesday on trying to persuade a few remaining residents to leave New Orleans. Despite an order to abandon their homes because of the increasingly toxic floodwaters engulfing the city, the holdouts remained in their flooded homes and ignored the pleas of hundreds of rescue workers who went house to house on flat-bottom boats. Officials said an estimated 5,000 to 10,000 residents remained in the city.

Underscoring the concern of rescue crews, the Centers for Disease Control and Prevention said three people have died from suspected bacterial infections caused by the dirty water resulting from the storm. In addition, the Environmental Protection Agency released its findings from floodwater tests in the city, noting that it found levels of lead, E. coli bacteria, polychlorinated biphenyls and other substances that "greatly exceeded" the agency's recommended levels for safe contact.

Officials said FEMA will issue $2,000 debit cards to hurricane victims so that they can pay for essentials such as food, gas and transportation.

Dwarfing past disasters
Already, Katrina has dwarfed past disasters. Congress spent $14.5 billion after multiple hurricanes slammed into Florida last year. The emergency package that followed Hurricane Andrew in 1992 totaled $12.5 billion. The 1994 Northridge earthquake in Southern California yielded an $8.3 billion emergency bill.

The White House request, which Congress is likely to approve Thursday, includes $50 billion for FEMA's disaster response fund, $1.4 billion for the Defense Department, largely for personnel costs and damage to facilities in the Gulf region, and $400 million for the Army Corps of Engineers to repair locks, reconstruct channels in the Louisiana bayou and dredge waterways rendered impassable.

That request came on top of a $10.5 billion relief package approved by Congress last week.

The escalating cost prompted Republican leaders to delay consideration of two complex packages of spending and tax cuts, which under statute were supposed to be completed by month's end. The packages would have led to cuts in the growth of entitlement programs, largely for the poor, such as Medicaid and food stamps, coupled with an extension of cuts to the tax rate on capital gains and stock dividends that directly benefit affluent investors.

The disaster has forced the Republicans to temporarily set aside a planned fall agenda of tax relief, spending cuts and retirement savings initiatives, as well as to react to public outrage over the government's slow response to the crisis.

The joint inquiry, launched by Senate Majority Leader Bill Frist, R-Tenn., and House Speaker Dennis Hastert, R-Ill., a day after the White House announced its own investigation, will wield subpoena power and is billed as a bipartisan enterprise, although Republicans will dominate the committee. It will be the first joint investigation since the Iran-Contra probe of the 1980s.

‘Americans deserve answers’
With a deadline of Feb. 15, Frist and Hastert said the inquiry will explore the adequacy of planning that took place before the hurricane struck the Gulf coast and the way federal, state and local governments reacted to the disaster.

"Americans deserve answers," Frist said.

Also Wednesday, FEMA launched its own $1.4 million investigation of its hurricane response. Democratic leaders responded to the joint-congressional investigation by calling again for an independent probe similar to the investigation of the Sept. 11, 2001, attacks. "An investigation of the Republican Administration by a Republican-controlled Congress is like having a pitcher call his own balls and strikes," said Senate Minority Leader Harry Reid, D-Nev.

Reid demanded to know how President Bush's vacation had impacted hurricane relief, while House Minority Leader Nancy Pelosi, D-Calif., pressed for the sacking of FEMA Director Michael Brown.

"There were two disasters last week: first, the natural disaster, and second, the man-made disaster, the disaster made by mistakes made by FEMA," Pelosi said.

"While countless Americans are pulling together to lend a helping hand, Nancy Pelosi and Harry Reid are pointing fingers in a shameless effort to tear us apart," Republican National Committee Chairman Ken Mehlman responded.

GOP leaders would not say how long they would delay considering the tax-and-spending cut packages, the cornerstones of their fall agenda, insisting the cuts would be passed eventually.

But pressure is mounting from lawmakers of both parties to make the delay indefinite. Of the $35 billion in cuts planned over five years, up to $10 billion would come from Medicaid, just as Republicans are suggesting that all Katrina survivors be granted access to the key federal health program for the poor.

A changed agenda
And the hardest-hit states are the most Medicaid-dependent. Medicaid enrollment in Louisiana has shot up since 1998, from 532,032 to 945,087 last year, according to a report due out Friday by the Kaiser Family Foundation. Some 23 percent of non-elderly Mississippians are now on Medicaid, the highest percentage in the nation.

"There's a growing awareness that Katrina has changed not only the agenda but all the circumstances we find ourselves in," said Rep. Heather Wilson, R-N.M.

Sens. Gordon Smith, R-Ore., and Olympia Snowe, R-Maine, teamed with Sens. Jeff Bingaman, D-N.M., and Blanche Lincoln, D-Ark., to circulate a letter imploring GOP leaders to set aside the measures. Wilson said similar discussions are underway in the House.

Staff writers Tim Dwyer in New Orleans and Spencer S. Hsu in Washington contributed to this report.