Katrina Cleanup Costs Climb

Published October 1, 2005

As the costs of recovery from damages caused by Hurricane Katrina mount, so do calls for cuts in other discretionary spending by the federal government. But there is little indication most members of Congress are heeding the call.

“We get strange looks [from fellow Congressmen] for even suggesting that we offset this disaster relief spending with funding from low-priority programs,” said Matthew Specht, spokesman for Rep. Jeff Flake (R-AZ). “We’re a voice crying in the wilderness.”

$62 Billion and Climbing

Since Hurricane Katrina flooded New Orleans while raking across Louisiana, Mississippi, and Alabama on August 29, the federal government has approved more than $62 billion in relief funding. Some estimates have put total relief costs at upwards of $300 billion, nearly double the cost of the Iraq war.

Soon after levees protecting New Orleans broke, causing the below-sea-level city to flood, Congress approved $10.5 billion in relief. On September 8, by a 410-11 vote in the House and 97-0 vote in the Senate, Congress approved President George W. Bush’s request for another $51.8 billion in aid.

Flake was one of a handful of congressmen to oppose that measure.

“Congress has the responsibility to cut spending elsewhere if we are going to commit this amount of money,” Flake said in a statement after the vote.

Offset Bill Not Allowed

An amendment to the Katrina relief bill to do that was offered by Rep. Jeb Hensarling (R-TX), a member of the House Committee on Budget and the House Financial Services Committee and chairman of the Budget and Spending Task Force of the Republican Study Committee. The House leadership did not allow the amendment to be considered.

“We’re doing our best, but our battles are many and our victories are few,” said Mike Walz, Hensarling’s press secretary. The Hensarling amendment would have offset the $51.8 billion in hurricane relief with spending cuts across the board over the next five years, with exemptions for entitlement spending, defense, homeland security, and veterans funding.

In announcing his amendment September 8, Hensarling pointed to billions of dollars of dubious spending approved earlier this year by Congress. “When so many lives have been shattered and relief is so critical, Congress cannot continue to fund projects like the $800,000 outhouse, $1.2 million for panda research, or the $1 million indoor rainforest in Iowa,” Hensarling said. “The fundamental question is who should tighten their belt to pay for this damage, American families or the federal government?”

Deficit Fears Grow

Hensarling said the hurricane relief spending, absent offsetting budget cuts, would increase the federal deficit, currently estimated at $331 billion for the fiscal year that ended September 30, saddling future taxpayers with the costs.

It is a theme being taken up by Democratic leaders.

“When this administration took over, we had a surplus of–it’s debatable how much it was–but some say over $6 trillion over 10 years,” said Senate Minority Leader Harry Reid (D-NV) as quoted in a September 12 article in the Chicago Tribune. “Now, we are in the red so far you can’t see the end of the red ink.”

Veronique de Rugy, research fellow at the American Enterprise Institute, said, “The government doesn’t care” about fiscal responsibility. “One of the things that struck me when I listened to the debate and then looked at the bill allocating $51.8 billion was that no one was talking about how to pay for this. There is no talk about cutting spending in other parts of the budget. It’s horrible. They’ve been behaving this way more than four years.”

Experts Say Cut Pork

De Rugy and Bruce Bartlett, senior fellow at the National Center for Policy Analysis, both suggested an easy cut would be to remove pork in the recently approved transportation bill.

“That bill has more than $20 billion of pork,” Bartlett said. “I’ve been sending emails saying our response should be to reopen the highway bill and cut spending out of that.”

Bartlett noted Bush started out saying he would veto the transportation bill if it came in at more than $256 billion. It came in at $295 billion and he signed it anyway.

“If we go back to the president’s own veto number, we have most of the $62 billion [in approved disaster relief] right there,” Bartlett said.

The pork-laden energy bill also has billions of dollars that could be cut, said Tom Schatz, president of Citizens Against Government Waste.

“Unfortunately, members of Congress use disasters as an excuse to spend money, not save money,” Schatz said. “Their idea is when we have a disaster, let’s spend more money. We support what Congressmen Flake and Hensarling and a few others are trying to do to offset this spending.”

News Media Paying Attention

Although he is discouraged about Congress’s spendthrift ways, Schatz is encouraged by the attention the issue is beginning to receive from establishment news organizations.

“We’re getting a good number of calls from the media about this,” Schatz said. “There has been a lot of waste and abuse of disaster relief in the past. A decent group of mainstream media is interested, because they know what’s gone on in the past. They’re looking for waste and abuse.”

Congress, President Ignore Complaints

Stephen Slivinski, director of budget studies at the Cato Institute, said, “Congress and the White House have not shown themselves interested in spending restraint under any circumstances. The fact that George Bush is the biggest spending president since Lyndon Johnson is not something that is to their credit.

“If I were speaking to a roomful of Congressmen, I’d say the first thing they should be talking about is how to afford all of this,” Slivinski said. “That discussion seems to be missing from the entire conversation. I would also say they should discuss how the money is being spent. One of the things the federal government has shown itself good at is throwing around a bunch of money, much of which is not well-targeted.”

On September 9 the Associated Press reported most of the $5 billion the federal government made available to small businesses that were hurt by the terrorist attacks of September 11, 2001 was wasted. Among the recipients of that disaster relief, according to the AP: “A South Dakota country radio station, a Virgin Islands perfume shop, a Utah dog boutique and more than 100 Dunkin’ Donuts and Subway sandwich shops.”

Steve Stanek ([email protected]) is managing editor of Budget & Tax News.