How to Spend (Almost) $1 Billion A Day

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Beyond saying that "unnecessary spending" must be targeted, the President has suggested few specific cuts of his own so far. During a news conference with Russian President Vladimir Putin the day after his televised speech, however, Bush stressed that more tax cuts remained a top priority. Neither side of the aisle has seemed capable of demonstrating fiscal prudence and compassion simultaneously, while the President, hobbled by a $331 billion budget deficit, an unpopular and expensive war in Iraq, and an official admission that he mishandled the initial crisis, could neither afford his Gulf Coast largesse--nor afford not to extend it.

With money flowing so freely, nearly every group--from hard-hit farmers to federal contractors--is angling for its piece of the action. The Federal Government is forking over as much as $800 million a day to cover everything from temporary housing and debris removal to generators and bottled water. The next stage of the gold rush should take place near the end of October, when the White House expects to return to Congress for another cash infusion, an Administration official tells TIME.

On Capitol Hill, both parties are trying their best to harness the massive Katrina rebuilding effort to propel their own ideological agendas. Democrats view this as a once-in-a-generation opportunity to try to reduce poverty and racial inequality, touting more investment in public school construction and housing vouchers. At the same time, they are showing a renewed spirit in fighting the President's proposed Medicaid cuts and a slew of G.O.P. tax reductions that were on the verge of passage. But conservatives could see at least some of their handiwork in the Administration's initial proposals for job-training accounts and private- and parochial-school vouchers--as well as in the President's earlier controversial decision to suspend rules requiring federal contractors to pay "prevailing wages" in the region. Alabama Senator Jeff Sessions has even tried to use the tragedy to fuel support for his faltering legislation to repeal the estate tax, which brought in $24.8 billion to the Treasury last year. After his prodding, activists were busy trying to identify a victim whose estate would get hit by the current tax.

Back on the ground, the Administration and Congress have had to prove they are at least attempting to mind the store. To help win passage of the $51.8 billion relief bill, Congress allocated $15 million to the Department of Homeland Security to closely monitor the spending, a sum DHS inspector general Richard Skinner termed "a good start." His office, along with the White House Office of Management and Budget, is required to give Congress weekly briefings on how the money is being spent. The first such report spanned 10 spreadsheet-packed, rather puzzling pages--including a two-page glossary--breaking out spending into numerous categories, including human services and infrastructure. "You can't prevent [abuse]," says Clark Kent Ervin, the former inspector general at the DHS. "The issue is what you can do to minimize it."