September 16, 2005

Dubya takes a crack at the questions.

In the previous post, we saw how Dubya's press secretary and one of his top economic advisors couldn't answer press questions on how much the Katrina recovery effort will cost and how that effort will be paid for.

Dubya got the same questions today, when he and Russian president Vladimir Putin met the press. Here's how the prez answered:

Q Mr. President, with billions of dollars flowing out of Washington for hurricane relief, some Republicans are worried that you're writing a blank check that will have to be paid by future generations. Who is going to have to pay for this recovery, and what's it going to do to the national debt?

PRESIDENT BUSH: [...] And so, you bet, it's going to cost money. But I'm confident we can handle it and I'm confident we can handle our other priorities. It's going to mean that we're going to have to make sure we cut unnecessary spending. It's going to mean we don't do -- we've got to maintain economic growth, and therefore we should not raise taxes. Working people have had to pay a tax, in essence, by higher gasoline prices. And we don't need to be taking more money out of their pocket. And as we spend the money, we got to make sure we spend it wisely. And so we're going to have inspectors general overseeing the expenditure of the money.

Our OMB will work with Congress to figure out where we need to offset when we need to offset, so that we can manage not only to maintain economic growth and vitality, but to be able to spend that which is necessary to help this region get back on its feet. So it's a big role for the federal government.

There's a big role for private sector. And that's why I call for economic growth zones, an economic enterprise zone. Look, there's not going to be any revenues coming out of that area for a while anyway, so we might as well give them good tax relief in order to get jobs there and investment there. It makes sense. The entrepreneurial spirit is what's going to help lift this part of the world up. So we've got a -- I started laying out the outlines of a plan, and it's one that we want to work with Congress on.

Q What will it cost?

PRESIDENT BUSH: Well, it's going to cost whatever it costs. We're going to be wise about the money we spend. I mean, you're -- we haven't totaled up all the bridges and highways, but I said we'll make a commitment to rebuild the infrastructure, and to help rebuild the infrastructure. We're also spending money on -- $2,000 a family to help these people get back on their feet. There's a variety of programs. 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. [Emphasis added]

So, combining what Dubya said with what we learned from today's White House press briefing, here's what we know:

  • The White House doesn't know how much the Katrina recover will cost, but
  • The feds will spend whatever it takes.
  • The money will come from taxpayers, but
  • Dubya won't raise taxes. In fact, he's going to cut taxes on businsses involved in the recovery.
  • The costs of the recovery will raise the federal deficit by an undisclosed amount, but
  • Nobody in the White House will own even the US $200 billion figure that's been floated for the past few days.
  • The feds are going to cut federal programs to help pay for the recovery, but
  • They either don't know which programs will be on the chopping block or [more likely] they won't say until they've carefully weighed the political consequences of the cuts they want.

We ask you: Is this all nonsense or what?

The full transcript of Dubya's remarks today is here.

Posted by Magpie at September 16, 2005 03:55 PM | US News | Technorati links |
Comments

Dub is blythely unaware that all income over a million dollars was taxed at 90 per cent during the time of the Marshall Plan. That is how we paid for the rebuilding of Europe.

I suspect that he is not willing to bite the bullett and do what he has to.

Posted by: Scorpio at September 16, 2005 05:37 PM

One item you missed in your summary was this:

-- By cutting tax rates for people who will not have any income, they will be encouraged to have an income.

Based on:

Look, there's not going to be any revenues coming out of that area for a while anyway, so we might as well give them good tax relief in order to get jobs there and investment there.

Posted by: dbostrom at September 16, 2005 09:53 PM

But when taxes were at 90%, there were tons of more tax write-offs....

When taxes are cut, businesses expand, hire people, etc. It increases economic activity and growth. Which is a good thing.

If taxes were raised now, it'd slow down the economy. Consumers are already spending more on energy, which acts like a tax hike.

Posted by: muckdog at September 17, 2005 03:25 PM

It's all nonsense if you don't understand:

a - How the economy works.
b - That a natural disaster such as this will cost the nation money nomatter what.

Posted by: J at September 30, 2005 07:04 AM