A week after lawmakers rushed back to Washington to approve $10 billion for hurricane-relief efforts, nearly all that money had been spent, and the White House got Congress to shell out $52 billion more. For those who are keeping tabs on the tab:
How much will Hurricane Katrina cost? At best, the $62 billion already allocated for recovery is expected to last through the beginning of October. With the Federal Government spending more than $2 billion a day in the affected areas, some members of Congress are estimating that the bill could top $200 billion. That's equal to nearly 9% of what the U.S. government spends each year.
How will we pay for it? Democrats say President George W. Bush should consider increasing taxes on the wealthy, while some Republicans, including Arizona Senator John McCain, want lawmakers to cut back on pork-barrel spending. But Congress is highly unlikely to achieve either goal. Instead, Washington is expected to continue borrowing money without finding ways to pay for it. The bulk of the rebuilding costs will probably show up in next year's budget deficit, which was estimated--pre-Katrina--to exceed $314 billion.
Where is the recovery money going? Congress earmarked $23 billion last week for medical care, household items and temporary housing for evacuees. More than 200,000 trailers have been purchased. The government, which has scrapped plans to give $2,000 debit cards to thousands of hurricane victims, is capping total aid per household at $26,000, and almost all the rest of the money will go to federal agencies to work on the relief effort. --By Perry Bacon Jr.