September 16, 2005

Who's going to pay for the Katrina recovery effort?

And what's it going to cost? If you want straight answers on either of these questions, don't ask anyone at the White House.

From today's White House press briefing with Scott McClellan and Al Hubbard [Dubya's assistant for economic policy and director of the National Economic Council]:

Q Al, where's the money coming from for this?

DIRECTOR HUBBARD: Where's the money coming from? It's coming from the American taxpayer.

Q Right, but you're already spending more than you take in, so how much more is there to --

DIRECTOR HUBBARD: Well, if you want to know the --

Q Are we going to have to borrow it, or are you going to raise taxes? I mean, if it's coming from the taxpayer that suggests maybe you're going to have to raise taxes.

DIRECTOR HUBBARD: The most important thing that we need to do is make sure that this economy remains very, very strong. A strong economy is what will provide the resources for the rebuilding for the disaster as a result of the Katrina storm. We're fortunate that the economy is very, very strong now; it will continue to be strong. But the last thing in the world we need to do is raise taxes and retard economic growth.

Q So where does the money come from? Obviously, you've got to borrow it or offsets in the budget, what?

DIRECTOR HUBBARD: Well, again, the money is going to come from the federal government, it's going to come from the federal taxpayer. This President is committed to, as you know, cutting the deficit in half. This in no way will adversely impact his commitment to cut the deficit in half by 2009. At the same time, unfortunately, because of the biggest national disaster I think we've ever faced, we're going to have to spend significant amounts of money on a one-time basis. And that's what's important: it's one time, it's not recurring. But the President is committed, and I know the American people are committed to doing everything that's necessary, but no more than is necessary, and doing it in a very prudent way.

Q -- significant amount? How much?

DIRECTOR HUBBARD: Pardon me?

Q How much? Do you have a ballpark figure for how much this is all going to cost the American taxpayer?

MR. McCLELLAN: Are you talking about the overall costs?

Q Yes.

MR. McCLELLAN: Well, one, I think -- and we talked about it the last couple of days, in terms of the longer-term recovery and reconstruction efforts, and the President made very clear last night that we're going to do what it takes to meet the needs of the people who have been affected by this and to meet the needs of the region. But as we do, we need to work with state and local officials to make sure it's done in a well thought out, well planned way. And that's why he emphasized we're going to make sure that the money is spent wisely and it's going to what it's supposed to go for.

But in terms of the longer-term reconstruction needs, I think that we're still assessing what those needs are. It's not clear exactly what those longer-term needs are going to be. And so it would be speculating at this point and we're not going to get into speculating about it.

Q Is the $200 billion figure --

MR. McCLELLAN: I mean, it's speculating about it, and we're not going to get into speculating about it. What we are going to do is make sure that the needs of the people are met.

Q So there were no internal initial investments for how much this will cost? None?

MR. McCLELLAN: For the longer-term? I think that's something that's still being assessed --

DIRECTOR HUBBARD: Right. I mean, you know, you've got --

MR. McCLELLAN: -- as our OMB Director has said over the last couple weeks, too.

Q Allan, can I just clear this up? So the money will be borrowed, so it will add to the deficit, right?

DIRECTOR HUBBARD: Well, there's no question that this -- the recovery will be paid for by the federal taxpayer and it will add to the deficit. That's right.

Gee, that sure clears everything up, doesn't it?

Posted by Magpie at September 16, 2005 03:53 PM | US News | Technorati links |
Comments

All the government and insurance money dumped on NOLA is going to create lots of economic stimulus, though.

Posted by: muckdog at September 17, 2005 03:27 PM