Fiscal Relief from Hurricane Relief

As Hurricane Rita pounds the Florida Keys and heads toward the Gulf Coast just beginning the recovery from the damage inflicted by Hurricane Katrina, it is a good time to consider the fiscal implications of Congress's and the Bush administration's handling of disaster relief so far.

It is not a pretty picture.

As noted in a forthcoming article in the October issue of Budget and Tax News (of which this author is senior editor), published by The Heartland Institute, BTN managing editor Steve Stanek notes that Congress and the Bush administration have consistently ignored calls for hurricane relief expenditures to be offset by cuts in spending on other programs, particularly the numerous pork projects passed this year:

"We get strange looks [from fellow Congressmen] for even suggesting that we offset this disaster relief spending with funding from low-priority programs," said Matthew Specht, spokesman for Rep. Jeff Flake (R-AZ), who has called for this to be done. "We're a voice crying in the wilderness."

Since Hurricane Katrina flooded New Orleans while raking across Louisiana, Mississippi, and Alabama on August 29, the federal government has approved more than $62 billion of relief. Some estimates have put total relief costs at upwards of $300 billion, nearly double the cost of the Iraq war.

Floyd was one of the few members of Congress to vote against the Sept. 8 bill approving President Bush's request for another $51.8 billion. "Congress has the responsibility to cut spending elsewhere if we are going to commit this amount of money," Flake said in a statement after the vote.

Stanek notes that the House leadership killed an amendment calling for spending offsets:

An amendment to the bill to do that was offered by Rep. Jeb Hensarling (R-TX), a member of the House Committee on Budget and the House Financial Services Committee and chairman of the Budget and Spending Task Force of the Republican Study Committee. The House leadership did not allow the amendment to be considered.

"We're doing our best, but our battles are many and our victories are few," said Mike Walz, Hensarling's press secretary. The Hensarling amendment would have offset the $51.8 billion of hurricane relief with spending cuts across the board over the next five years, with exemptions for entitlement spending, defense, homeland security, and veterans funding.

In announcing his amendment September 8, Hensarling pointed to billions of dollars of dubious spending approved earlier this year by Congress. He argued, "When so many lives have been shattered and relief is so critical, Congress cannot continue to fund projects like the $800,000 outhouse, $1.2 million for panda research, or the $1 million indoor rainforest in Iowa. The fundamental question is who should tighten their belt to pay for this damage, American families or the federal government?"

Democrat leaders have stepped up their criticism of the increasing red ink, though their proposed solution is to raise tax rates, which would do nothing to hold back the expansion of federal power. Critics on the right suggest that cutting pork spending would more than suffice to offset the new expenditures:

[Veronique] de Rugy [a research fellow at the American Enterprise Institute and Bruce Bartlett, senior fellow at the National Center for Policy Analysis, both suggested an easy cut would be to remove pork in the recently approved transportation bill.

"That bill has more than $20 billion of pork," Bartlett said. "I've been sending emails saying our response should be to reopen the highway bill and cut spending out of that."

Bartlett noted President Bush started out saying he would veto the transportation bill if it came in at more than $256 billion, and it came in at $295 billion and he signed it anyway.

"If we go back to the president's own veto number, we have most of the $62 billion [in approved disaster relief] right there," Bartlett said.

The pork-laden energy bill also has billions of dollars that could be cut, said Tom Schatz, president of Citizens Against Government Waste.

The federal government uses every situation as an excuse to spend more and control citizens' lives in additional areas and more ways. It is high time for a federal Taxpayers Bill of Rights.