It’s too soon to tell exactly how much the federal government will have to spend in Hurricane Katrina’s wake, but it’s obviously going to be in the range of hundreds of billions of dollars. At this point, every penny will be added to an already-enormous deficit.
To be sure, that’s not necessarily a bad thing. Indeed, I’d argue that these kinds of unexpected crises are exactly why deficit spending exists in the first place. The Gulf Coast has suffered an unimaginable disaster, the nation needs to respond, and so we’ll put some money on the national credit card and pay it off later. Fine.
But when our fiscal picture is already deeply flawed before disaster strikes, responding to the devastation becomes complicated.
Sen. Tom Coburn, Oklahoma Republican, said the president has failed a test of leadership by not including spending cuts to pay for part of the spending. He said that with passage of the bill, the budget deficit for fiscal year 2005, which ends at the end of this month, will reach $670 billion.
Coburn’s point has merit. The deficit was over $400 billion last year; we were on track for a $333 billion deficit this year; and the number was expected, long before Katrina, to go up again next year. The need for an aggressive national response to the hurricane is obvious, but it’s not unreasonable to wonder how we’ll pay for all of this.
Coburn suggested unspecified spending cuts, but at least one other Republican senator spoke openly about an even better idea.
“There ought to be another look at the tax cuts,” [Florida Senator Mel Martinez, who served as Bush’s secretary of Housing and Urban Development] said Sept. 7. “We have to look at it all.”
As a matter of common sense, Martinez is right. The war in Iraq is already going on the national credit card, as is the war in Afghanistan, an expensive Medicare expansion, an expensive transportation plan, an expensive energy plan, and a series of extremely expensive tax cuts that primarily benefit the wealthiest Americans. We’re now poised to add hundreds of billions for the Gulf Coast — which, again, is fully justified — but at what point does the administration concede that future generations cannot be expected to bear the burden of everything we’re doing today? At what point can the Bush gang concede that maybe, just maybe, millionaires and billionaires can afford to give up just some of their lavish tax cuts?
Based on what we heard from the White House yesterday, that day is not even on the horizon.
At yesterday’s press briefing, an unidentified reporter dared to broach the subject of how Bush “proposes the country will pay for all of this.” Scott McClellan didn’t answer. The reporter followed up by asking if the country would simply go further into debt. Again, McClellan didn’t answer. Then it got interesting.
Q: Why does the President believe it is morally justified, why is it the right thing to give some of the richest people on the planet a huge tax cut right now?
McClellan: It’s not a fair —
Q: Well, that’s what the estate tax cut repeal, making it permanent, is, isn’t it? There are some people who want to hand on billions — hundreds of millions of dollars to their —
McClellan: No, no — the tax cut you’re talking about — I don’t know of any that are expiring this year. They expire in later years.
Q: Right. But why at this point in our history is it justified, morally right to do that?
McClellan: First of all, I’d have to dispute your characterization, because all Americans receive tax cuts. We went through a very difficult time, economically, and our national economy is really a lifeline for that region that has been hit by this hurricane. We must continue to keep our national economy growing and creating jobs. The latest unemployment numbers are down to 4.9 percent last week, more than 4 million jobs created since May of 2003. We’ve made tremendous progress to keep our economy growing and get people — and create jobs.
Q: And there’s no way to ask the richest people in America to sacrifice?
McClellan: And the economy — keeping our economy growing stronger is important to helping with the rebuilding and recovery efforts on the ground. The last thing we want to do is take more money from lower-income Americans that have been affected by this and that have received significant help from those — from those tax cuts.
This is utterly absurd and McClellan must know it. First, not every American received a tax cut. Second, is the White House press secretary seriously arguing that poverty-stricken families in New Orleans, who were too poor to evacuate before Katrina hit, seriously stand to lose money if Congress cancels some of the tax cuts for millionaires?
The White House’s sense of sacrifice is on full display. It’s not a pretty picture.