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Bush: Spending cuts, no tax hikes, for Katrina

President Bush said Friday the federal government must slash unnecessary spending to pay for Gulf Coast reconstruction, but he ruled out raising taxes. “You bet it will cost money, but I’m confident we can handle it,” Bush said.
/ Source: news services

President Bush said Friday the federal government must slash unnecessary spending to pay for Gulf Coast reconstruction, but he ruled out raising taxes. “You bet it will cost money, but I’m confident we can handle it,” Bush said.

“It’s going to cost whatever it’s going to cost, and we’re going to be wise about the money we spend,” Bush said a day after laying out an expensive plan for rebuilding New Orleans and the Gulf Coast without spelling out how he would pay for it.

“The key question is to make sure the costs are wisely spent and that we work with Congress to make sure that we are able to manage our budget in a wise way, and that is going to mean cutting other programs,” he added.

Some conservative Republicans on Capitol Hill are increasingly worried about the growing costs of rebuilding the coastal area devasted by Hurricane Katrina.

Some estimates have put the cost at more than $200 billion. The White House and Congress already have rushed $62.3 billion in emergency funds to the region.

The president made clear raising taxes was not an option to help cover the costs.

‘We should not raise taxes’
“We got to maintain economic growth, and therefore we should not raise taxes,” Bush said, noting Americans were already paying “a tax in essence” because of higher gasoline prices. “And we don’t need to be taking more money out of their pocket.”

Bush spoke at a news conference with Russian President Vladimir Putin hours after attending a prayer service in memory of the victims of Hurricane Katrina. Addressing religious and political leaders at the National Cathedral, the president vowed to help rebuild the region with an eye toward wiping out the persistent poverty and racial injustice that exist there.

“As we clear away the debris of a hurricane, let us also clear away the legacy of inequality,” he said during a national prayer service with other political leaders and religious figures from the affected region at the National Cathedral.”

Confronting ‘unmentionable issues’
Before Bush’s remarks, Bishop T.D. Jakes, head of 30,000-member Potter’s House church in Dallas, delivered a powerful sermon in which he called upon Americans to “dare to discuss the unmentionable issues that confront us” and to not rest until the poor are raised to an acceptable living standard.

“Katrina, perhaps, she has done something to this nation that needed to be done,” Jakes said. “We can no longer be a nation that overlooks the poor and the suffering, that continues past the ghetto on our way to the Mardi Gras.”

Bush, faced with continuing questions about whether help would have been sent more quickly to the storm zone if most victims had not been poor and black, echoed those themes in his brief remarks.

Bush vows to seize opportunity
"Some of the greatest hardships fell upon citizens already facing lives of struggle, the elderly, the vulnerable and the poor,” he said. “As we rebuild homes and businesses, we will renew our promise as a land of equality and decency and one day Americans will look back at the response to Hurricane Katrina and say that our country grew not only in prosperity but in character and justice.”

Bush spoke as administration officials in Washington elaborated on his pledge Thursday in a nationally televised speech to undertake a massive reconstruction effort in the hurricane-damaged areas.

White House officials said taxpayers will pay the bill for the program and acknowledged that the huge expense will worsen the nation’s budget deficit.

With disaster costs estimated at $200 billion and beyond, Al Hubbard, director of Bush’s National Economic Council, said, “It’s coming from the American taxpayer.” He acknowledged the costs would swell the deficit — projected at $333 billion for the current year before Hurricane Katrina slammed into the Gulf Coast.

Claude Allen, the president’s domestic policy adviser, said the administration had not identified any budget cuts to offset the disaster expense.

Greater role for armed forces
In his speech Thursday, Bush ordered all Cabinet secretaries to join in a comprehensive review of the government’s faulty response. In addition, he ordered the Department of Homeland Security to undertake an immediate review of emergency plans in every major city in America.

He also said a disaster on the scale of Katrina requires greater federal authority and a broader role for the armed forces.

Bush proposed establishment of worker recovery accounts providing up to $5,000 for job training, education and child care during victims’ search for employment.

In his speech, which lasted a bit over 20 minutes, he also said he would ask Congress to approve an Urban Homesteading Act in which surplus federal property would be turned over to low-income citizens by means of a lottery to build homes, with mortgages or assistance from charitable organizations.

Other proposals, according to congressional officials briefed by the White House, include:

  • A 100 percent reimbursement to states to cover their costs of health care for treating many evacuees through the end of next year.
  • $1.9 billion to reimburse states for educating displaced students, including some money that could go to religious schools.
  • Six-month forgiveness on student loan interest for affected areas, at an estimated cost of $100 million.

Bush described the hurricane’s aftermath as “days of sorrow and outrage,” and he said the nation had “witnessed the kind of desperation no citizen of this great and generous nation should ever have to know.” He deplored scenes of victims calling out for food and water, criminals who had no mercy, and bodies of the dead lying uncovered in the street.

Promise of better days
He said the suffering of victims was tempered by acts of courage and kindness by the Coast Guard and other rescue workers. To the hundreds of thousands of people forced from their homes, Bush said, “You need to know that our whole nation cares about you — and in the journey ahead you are not alone.”

Promising better days ahead, Bush said, “The streets of Biloxi and Gulfport will again be filled with lovely homes and the sound of children playing. The churches of Alabama will have their broken steeples mended and their congregations whole.

“And here in New Orleans, the street cars will once again rumble down St. Charles, and the passionate soul of a great city will return.”

Bush faced the nation at a vulnerable point in his presidency. Most Americans disapprove of his handling of Katrina, and his job-approval rating has been dragged down to the lowest point of his presidency also because of dissatisfaction with the Iraq war and rising gas prices. He has struggled to demonstrate the same take-charge leadership he displayed after the Sept. 11 terror attacks four years ago.

Death toll over 800
The death toll from Hurricane Katrina climbed to 816 Friday after Louisiana officials raised the number of confirmed fatalities in that state to 579.

There were 218 dead in Mississippi and 19 deaths confirmed in Florida, Alabama, Georgia and Tennessee from the Aug. 29 storm.

Faulting the government’s response, Bush said that Katrina “was not a normal hurricane — and the normal disaster relief system was not equal to it.” State officials have blamed the federal government for failing to respond more quickly, and federal officials have pointed fingers at state and local officials.