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How to pay for Katrina and Rita?

Update: The Red Cross has not received enough donations after Katrina, reports the Washington Post today:

The American Red Cross asked Americans to give more to help hurricane victims, saying the $853 million donated for Katrina is less than half what's needed. Rita will require even more.

Congress has not yet agreed on how to pay for the estimated $ 200 billion to rebuild the Gulf Coast after Katrina's destruction, but NASA proudly presented plans to spend $104 billion to return to the moon. While Rita's destructions will increase the federal bill and the debate about national spending priorities considerably, Katrina has, according to the Dallas Morning News, already

reopened the fiscal and social debate about how the nation can care for the poor and pay for the retirement of the baby boom generation while maintaining tax and economic policies that stimulate investment and growth. Those concerns, combined with worries about chronic budget deficits, have spurred lawmakers and lobbyists to dust off their favorite ideas on taxes, spending and pork.

Pressure to get out of Iraq intensifies as well.... Here are some of the proposals to pay for the rebuilding of the Gulf Coast:

Dalllas Morning News:
The federal government is already operating at a $331 billion annual deficit, with a debt that's reached $7.8 trillion. (...) While Mr. Bush has ruled out raising taxes, some budget experts as well as Democrats argue that rolling back some of his 2001 and 2003 tax cuts are the type of shared sacrifice required. Temporarily suspending the tax cuts would save $225 billion this year.
Military options:
Stopping production of the F/A-22 Raptor after next year would save $9 billion over five years and still leave the Air Force with 116 of the fighters. Canceling the V-22 Osprey tilt-rotor craft would save $7.8 billion. The Navy's new DD(X) destroyers will cost $2.5 billion apiece to build. The Joint Strike Fighter is a $200 billion program.
Economic subsidies:
Subsidies for the Export-Import Bank and the Overseas Private Investment Corp. cost $600 billion. Cutting Amtrak or farm subsidies could save billions. But all these ideas have hit fierce resistance in Congress.

Gulf Coast's rebuilding bills expose a GOP split, observes
The Washington Post
Treasury Secretary John W. Snow said that hurricane recovery spending would "push to the back burner" the GOP's plans to extend the tax cuts this year. But about 90 minutes later, House Majority Leader Tom DeLay (R-Tex.) held a news conference in his office and asserted that "we're not reexamining" the commitment to extend the tax cuts. "That's not an option," DeLay said, then, for emphasis, added: "Not an option.""

The Boston Globe reports about the Republican disagreements as well and describes some of the proposed cuts:

Yesterday, the Republican Study Committee, a group of more than 100 conservative House members, say they have compiled a package of proposed cuts that would save the federal government more than $139 billion next year. It calls for eliminating subsidies for public broadcasting and Amtrak, and for sharply limiting foreign aid, among a wide range of other proposals. Even some of President Bush's most cherished priorities are coming under scrutiny. The committee wants to kill Bush's idea to send manned spacecraft to the moon and Mars and cut the ''Millennium Challenge Accounts" the president wants as rewards for nations that make strides toward economic and personal freedom. And a growing number of Republicans are asking for a one-year delay in implementing the new Medicare prescription drug benefit, which would begin Jan. 1. The delay would save the federal government about $30 billion in 2006, money that some Republicans say would be better spent on rebuilding New Orleans and the Gulf Coast. (…)

But the debate over how the government should pay for it has split the Republican Party at a time that opinion polls show Bush's job approval ratings at record lows, due in part to the federal government's flat-footed response to the Katrina disaster. Bush had pledged to halve the deficit by the end of his term, but the federal government was spending at a prodigious rate long before Katrina struck. The cost of the wars in Iraq and Afghanistan have reached a combined $250 billion, and this summer, the president signed a $286 billion highway bill that earmarked $25 billion for lawmakers' pet projects. (…)

Democrats have already blasted Republicans for insensitivity to the poor, pointing to their pre-Katrina plan to proceed with $10 billion in cuts to Medicaid, the health program for low-income people. The grinding poverty the storm exposed means more federal aid should go to the poor, and Republicans should ask the wealthiest Americans to give up portions of recent tax cuts Bush gave them, said Representative Edward J. Markey, a Malden Democrat. ''They're so committed to their tax cuts for the rich, it's as if they didn't learn anything from Katrina," Markey said. ''President Bush and the Republicans have to ask the millionaires to sacrifice."

According to the Blethen Maine Newspapers service:

The federal budget deficit for 2005 is projected at $331 billion -- the third-largest ever -- and the national debt is now $7.94 trillion, about $2.2 trillion more than when Bush was elected in 2000. Each year's deficit spending adds to the federal debt, which is passed on to future generations.

Taxpayers will pay about $208 billion for the fiscal year starting Oct. 1 just to cover interest on the debt. For comparison's sake, that $208 billion is more than 25 times next year's $8.2 billion budget for the U.S. Environmental Protection Agency. The interest payments on the national debt go to investors who loan us money by buying U.S. Treasury bonds. Foreigners now hold an astonishing 46 percent of the Treasury's debt, affording them way too much influence over our economy.
Even many influential Republicans see billions of dollars in possible cuts that could be made, especially in the recently passed transportation bill. It includes some 6,300 local pork projects, perhaps the most infamous being the $200 million "bridge to nowhere" in Alaska that would serve an island with only 50 residents. (...) Many other expenditures are already on a list that came out of a recent White House review of the federal budget that identified at least $90 billion being spent on programs deemed to be "ineffective, marginally adequate or operating under a flawed purpose or design."

Public pressure mounts for Bush to curtail Iraq war after Katrina disaster, opines the Canadian CBC News:
Even before Katrina stuck, there were increasing concerns about the effectiveness of the Iraq effort, which has gobbled nearly $200 billion US and claimed the lives of nearly 2,000 U.S. soldiers. Anti-war activist Cindy Sheehan's vigil last month near Bush's Texas ranch also renewed national focus on the war and its toll on the 140,000 soldiers there. But analysts say it was clearly Katrina that sparked an abrupt spike in discontent, against the backdrop last week of the deadliest day in Baghdad since the March 2003 invasion, when more than 150 people were killed in suicide bombings. And the hurricane catastrophe has supplied renewed energy for anti-war groups planning massive rallies in the U.S. capital this weekend. (...)
If the tide of public opinion doesn't budge, Bush may not be able to withstand an abrupt change in priorities, said Charles Cushman, a politics professor at George Washington University. "His supporters in Congress could abandon him if he's not going to be able to help them get re-elected," he said. "There will be tremendous pressure to declare victory no matter what's going on in Iraq and go home." A new Gallup survey Wednesday reported a record high in the percentage of Americans favouring a reduction of U.S. troops in Iraq, with 63 per cent saying some or all of them should come home. The opinion shift on troop withdrawal was similar among Republicans, Democrats and independents. And 54 per cent of Americans chose less spending on Iraq over other means of paying for Katrina, including increasing the deficit, cutting domestic programs or raising taxes, an option Bush has ruled out.

According to the Associated Press:
Two-thirds of Americans say Bush is spending too much in Iraq, according to an AP-Ipsos poll. Given a choice, 42 percent favor cutting spending on Iraq to pay for relief efforts on the Gulf Coast, and 29 percent want to delay or cancel Republican tax cuts -- both steps that Bush has ruled out.

Linked at: Political Teen, Wizbang, Basil’s Blog, Stop The ACLU, Soldiers’ Angel - Holly Aho, Oblogatory Anecdotes, Truckin’ Wifi, BIG DOG’S WEBLOG, Something… And Half of Something


Dialog International on : Anti-War Sentiment Growing in US

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Last week Gallup Poll numbers indicate that a shift has occured among Americans, and the majority now reject the stay the course policy of the Bush administration for Iraq and also believe the invasion was a mistake. Record numbers of


Display comments as Linear | Threaded

Jeb Koogler on :

Excellent post. Very informative.

cooper on :

I posted at daily kos on this and it seems that the poll I made along with it so far show half the people prefer governemtn fund nasa half do not. I think nasa need to stop funding manned space travel for now.

cooper on :

TM Lutas on :

One real, unmentioned problem is that we've arranged the system so inefficiently that we waste a great deal of money getting over systemic friction. Filing your forms via paper happens time after time in department after department and that costs extra money beyond what electronic filing would cost for zero societal benefit. There's lots of other examples. We've got a huge new expenditure on our plate. It behooves us to find cuts to fund it. I went through my congressman's site. He touted some recently passed highway projects. Some were needed, one was not and that one was about a third of all highway projects in the district ($10M). I recommended it for cutting over at porkbusters. If we would all do that and identify what we could do without, we'd help make a huge dent in the shortfall, possibly exceeding the cost of Gulf Coast reconstruction and tackling some of that persistent deficit. I'm not pointing at anybody else. I started with my own CD. You should too.

JW on :

I think the Porkbusters project is great. I hope this bloggers' initiative will be successful across the US. Please let us know about future developments. Europeans should try this as well.

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