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Budget Hit Looms as Senate OKs $10.5 Billion in Immediate Aid

Times Staff Writers

Congressional leaders conveyed a bipartisan sense of urgency Thursday amid mounting criticism over relief efforts for victims of Hurricane Katrina, announcing they were cutting short their summer recess to act on a Bush administration request for $10.5 billion to cover immediate needs.

Amid reports of an increasingly desperate situation along the ravaged Gulf Coast, Congress was expected today to give the funds final approval. The Senate approved the funding by voice vote Thursday night.

Democrats and Republicans also began to assess how the calamity had scrambled the political landscape and their legislative agendas.

“Beyond the immediate humanitarian disaster we have got to face, there are countless long-term issues that are going to arise, from the country’s fuel supply to rebuilding the city to public health issues and flood control,” said Tim Barry, chief of staff for House Majority Leader Tom DeLay (R-Texas). “It’s going to be a massive ripple effect across just about every part of government.”

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The movement toward a storm-response package came after President Bush, Vice President Dick Cheney and other senior officials conferred with congressional leaders Thursday on the relief effort and the need for a quick infusion of cash for the Federal Emergency Management Agency.

One Democratic leadership aide said there was no discussion during the phone call between Bush and the congressional leaders of what the ultimate cost of reconstruction might be. Congressional aides familiar with the appropriations process said there would probably be another injection of funds for immediate relief efforts in two or three weeks, followed by a massive reconstruction aid package once the damage is calculated.

The initial $10.5 billion will go largely to FEMA, but some money is earmarked for the Pentagon, which has deployed troops, ships and equipment in the relief effort, said Jim Manley, a spokesman for Senate Minority Leader Harry Reid (D-Nev.).

“FEMA is spending money at a rate of $500 million a day and will soon run out of funds,” Manley said. “The $10 billion will keep the relief effort going for the next 20 days” while detailed assessments of the damage are conducted.

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As in previous national emergencies, both political parties stressed the need to put politics aside and address urgent humanitarian needs. But committee chairmen also planned hearings on the preparations that state and federal agencies made before the hurricane and how they handled its aftermath.

And although the initial emergency funding is expected to pass without significant opposition and with few questions, the much larger aid package that will be assembled in the weeks to come is sure to spark debate, lawmakers and aides said.

One question already on the table is whether it is wise for the federal government to fund the reconstruction of New Orleans, a city built mostly below sea level in a location that has proved vulnerable. House Speaker J. Dennis Hastert (R-Ill.) expressed reservations about that in an interview with an Illinois newspaper published Thursday.

“It doesn’t make sense to me,” the Daily Herald of Arlington Heights quoted Hastert as saying. “And it’s a question that certainly we should ask.”

His remarks brought a swift response from one Louisiana lawmaker, Rep. Charlie Melancon, a Democrat. “The world loves New Orleans, and I assure you that great city and the communities in southeast Louisiana will be rebuilt.... Regardless of what you hear, do not be misled. We will rebuild all of southeast Louisiana,” Melancon said in a statement.

A visibly angry Louisiana Gov. Kathleen Babineaux Blanco demanded an apology from Hastert. “To even suggest that one of the most historic cities is not worth the investment is an offense to me, the state of Louisiana and the citizens of New Orleans,” Blanco said. “To destroy hope when hope is the only thing you have left is unthinkable for a leader in his position. I expect an apology as soon as possible.”

With the cost of reconstruction expected to far exceed the $14 billion the federal government spent in Florida last year after a series of hurricanes, some congressional analysts were predicting that Bush’s efforts to curb federal spending and overhaul Social Security would be dashed.

“This is a serious matter that calls into question all sorts of things,” said Steve Bell, chief of staff to Sen. Pete V. Domenici (R-N.M.), chairman of a subcommittee that will handle much of the relief funding. “Do you think we’re going to be able to pass substantial Medicaid cuts and Social Security reform in the middle of this? You can’t put that much on the plate.”

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The disaster in the Gulf Coast changes the political dynamic on other big issues before Congress. For example, images of stranded hurricane victims in squalid shelters give Democrats ammunition against GOP plans to hold a vote next week on repealing the estate tax, a measure critics say benefits only the wealthiest taxpayers.

That vote had been scheduled before Congress began its monthlong August recess. In a letter Thursday, Reid urged GOP leaders to postpone the issue.

“Given the tragic and devastating events along the Gulf Coast, members of the Senate would have great difficulty explaining why we were debating the estate tax during our first days back,” Reid said in his missive to Senate Majority Leader Bill Frist (R-Tenn.).

A nonpartisan budget analyst said it would be politically inopportune to cut taxes on the wealthy while the government was grappling with a humanitarian disaster that will add billions to the federal deficit.

“People would wonder what the heck the Senate is up to with all that is going on in Iraq and New Orleans,” said Robert Bixby, executive director of the Concord Coalition, a watchdog group.

Bob Stevenson, Frist’s spokesman, said there was no plan to pull the tax bill from the schedule but that Frist was prepared to do so if necessary to make progress on relief.

Although it is not yet known how much aid money will be needed, there will be pressure to add to whatever Bush requests.

Many lawmakers from the affected states have powerful hands in the budget process. Sen. Thad Cochran (R-Miss.) is chairman of the Senate Appropriations Committee, whose members include Sen. Mary L. Landrieu (D-La.) and Sen. Richard C. Shelby (R-Ala.).

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Lawmakers from other regions also may drive up the cost. Some already are looking at the disaster relief bill as a vehicle for proposals to help their constituents.

Republican Sens. Olympia J. Snowe and Susan Collins of Maine issued a news release calling on Bush to include $900 million in additional help for the poor to pay winter heating bills, which they warned would skyrocket as a result of storm damage to the energy-rich Gulf Coast.

In an interview, Rep. Ray LaHood (R-Ill.) said he hoped any emergency spending bill for the Gulf Coast would include aid to Midwestern farmers grappling with a drought.

The prospect of Congress approving a vast package of relief funding, possibly festooned with cash for other parts of the country, suggested that another casualty of the hurricane would be Congress’ fledgling efforts to rein in spending.

A key test will come within weeks of Congress’ return next week, because this month lawmakers are supposed to produce a package of cuts in Medicaid and other entitlement programs totaling $37 billion over five years. Those savings may be dwarfed by the money that goes out the door in one shot for disaster relief.

It is shaping up to be the latest in a series of episodes during the Bush presidency in which the traditional conservative commitment to fiscal discipline has taken a back seat to what have been seen as more urgent priorities, such as responding to the Sept. 11 terrorist attacks, pulling the economy out of recession and funding the war and occupation in Iraq.

“You see horrible images and human suffering and say, ‘Do what it takes,’ but then that attitude reverberates through other things. When Congress and the president get in a ‘do what it takes’ mood, it means borrow the money,” said Bixby of the Concord Coalition.

For many members of Congress, this disaster is overlaid with personal tragedy. Lawmakers and staffers have relatives and friends caught up in Katrina’s destruction. Sen. Trent Lott (R-Miss.) and Rep. Gene Taylor (D-Miss.) lost their homes.

Although technically the Senate reconvened Thursday night and the House was doing so today, the emergency funding was expected to pass under rules that require few lawmakers to be at the Capitol.


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