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Bush Calls for Cuts to Offset Relief Plan

September 17, 2005|Warren Vieth and Richard Simon | Times Staff Writers

WASHINGTON — President Bush, confronting a brewing rebellion within conservative ranks, promised Friday to help Congress cut spending in other areas to try to offset the cost of Hurricane Katrina reconstruction.

Bush said he still intended to spend whatever it took to finance the massive Gulf Coast rebuilding effort he outlined in Thursday night's address to the nation. White House officials acknowledged that the government would cover most costs in the short term by running up the federal debt.

The president ruled out tax increases to reduce red ink. He said the Office of Management and Budget would help lawmakers trim federal programs to help offset reconstruction costs that independent analysts predicted would exceed $200 billion.

"You bet it's going to cost money," Bush said at a White House news conference.

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

GOP lawmakers and conservative activists had been expressing misgivings about what they perceived as an open-ended federal commitment to borrow and spend to rebuild New Orleans and nearby coastal communities in Louisiana, Mississippi and Alabama.

"This isn't the first time an American city has been devastated," said former Rep. Pat Toomey (R-Pa.), who heads the economically conservative Club for Growth. "We've had great disasters, and the federal government didn't always come in and rebuild these cities. We shouldn't assume the only way to do this is through Uncle Sam."

Rep. Shelley Moore Capito (R-W.Va.) expressed concern about the potential for waste in Bush's reconstruction plan. "We don't want to turn rebuilding the Big Easy into the Big Dig," she said, referring to Boston's costly underground-highway project.

Rebuilding after Katrina, Capito said, "is going to require efficiency, which is not something synonymous with the federal government."

The debate reflected a schism among conservatives pitting advocates of a limited federal government against supporters of a more expansive GOP agenda.

The president's reconstruction proposal -- expected to cost roughly twice as much as the post-World War II Marshall Plan to rebuild Europe -- intensified the anxiety of fiscal conservatives who already deplored the rapid increase in deficit spending under Bush.

"Among advocates of limited government, there is despair," said David Boaz, executive vice president of the Cato Institute, a libertarian think tank. "This is the biggest-spending president since Lyndon Johnson. And if he spends the kind of money that's being talked about here, I don't know if there will ever have been a president who increased spending as fast as this one did."

The government recorded a $128 billion surplus in 2001, the year Bush took office. But a variety of factors plunged the government back into debt -- the big tax cuts Bush pushed through Congress, the 2001 recession, and the costs of the Sept. 11 terrorist attacks and the wars in Afghanistan and Iraq. The Treasury posted a record $412 billion deficit last year. The Congressional Budget Office projected this year's shortfall at $331 billion, but that projection was released Aug. 15, two weeks before Katrina.

Bush did not specify the kind or extent of budget cuts he wanted Congress to consider, saying the White House budget office would "work with Congress to figure out where we need to offset, when we need to offset," he said.

But administration officials said a good place to start would be reducing discretionary and entitlement spending proposed in the president's budget for the 2006 fiscal year, which begins Oct. 1.

Legislation approved by the House contains about $20 billion in discretionary spending cuts, but the House and Senate have not agreed on the proposed reductions.

Several Republicans expressed disappointment that Bush had not pressed harder for spending cuts to keep the government's hurricane response from ballooning the budget deficit.

Rep. Jeff Flake (R-Ariz.) said he thought Bush should have called on Congress to sacrifice some spending priorities to help pay for Katrina cleanup.

"It's unconscionable to pass this burden on to our kids," Flake said, noting that Congress had cut spending in other areas to pay for other emergencies, including the 1994 Northridge earthquake.

Budget watchdogs urged Congress to cut back on the billions of dollars for lawmakers' pet projects packed into a recently approved highway bill. But that appeared unlikely, given the political popularity of highway projects.

J. William Lauderback, executive vice president of the American Conservative Union, said Bush's pledge to find offsetting spending cuts was encouraging but should be followed by aggressive efforts to enact them.

He said he was disappointed that Bush had not mentioned spending cuts in his speech Thursday night.

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