Costs of Katrina May Be Less
The AP’s Andrew Taylor is reporting that the federal tab for Katrina might come in under $150 billion. That’s still alot of money but it isn’t nearly as costly as was originally estimated. Here’s the significant part of the article:
Congressional Budget Office Director Douglas Holtz-Eakin told the House Budget Committee that his agency now estimates damage to homes, government buildings, oil refineries and businesses will total between $70 billion and $130 billion. Of that, at least $40 billion is covered by private insurance, he said. Those figures don’t include the immediate relief and rescue efforts, which have been paid for out of the $62 billion Congress has already approved. About $20 billion of those funds have been earmarked so far, FEMA chief R. David Paulison told lawmakers. But Holtz-Eakin said the total costs to taxpayers will come nowhere close to estimates of $300 billion to $400 billion made by some a month ago.
This is welcome news. It might get brighter if Congress uses offsets to partially pay for the relief appropriations, which I suspect will happen. the reason for my optimism for finding offsets is because of Glenn Reynolds’s Porkbusters campaign & outcries all across the country to cut spending.
The effort also picked up steam this weekend when Tom DeLay told Chris Wallace that he was joining a group of Republicans to make spending cuts part of their fall agenda. It’s true that DeLay had been reluctant to cut spending prior to his indictment, he’s fully engaged with that effort now. Whether a legislator led the charge or is a Johnny-come-lately to the effort isn’t significant now. Each bit of support is welcome.
Here’s the other ray of sunshine in the AP story:
CBO also updated its estimate of the budget deficit for the fiscal year that ended Sept. 30, estimating $317 billion in red ink, significantly less than 2004’s record $412 billion and $14 billion less than CBO estimated just seven weeks ago. The improvement in the deficit came despite increased costs for hurricane aid and rising monthly costs of the war in Iraq.
The only logical explanations for this is that the President’s tax cuts have generated far more revenue than the Clinton apologists predicted. I’ll make sure I keep track of this development the next time anyone wants to raise taxes.
Cross-posted at BoxerWatch