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Government's tab for hurricanes will be below $150 billion, Congress told
Waterbury Republican-American ^ | October 7, 2005 | Andrew Taylof

Posted on 10/07/2005 4:19:44 PM PDT by Graybeard58

WASHINGTON (AP) -- The federal government's tab for hurricane relief and rebuilding efforts is likely to cost less than $150 billion, Congress' top budget analyst said Thursday, an amount significantly less than original guesstimates tossed about in the immediate aftermath of the disaster.

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, Federal Emergency Management Agency 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.

"There's nothing that we've seen so far that adds up to even approach $200 billion," he told The Associated Press later in an interview. "Everything we've seen is in the vicinity of $150 billion or below."

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 CBO said in another report Thursday the Bush administration is now spending about $5.9 billion a month on the war in Iraq, a 19 percent increase from a year ago.

Holtz-Eakin also said Hurricanes Katrina and Rita were "unequivocally bad for the U.S. economy" but that "the economy will weather this."

The impact on the economy was illustrated Thursday as the number of hurricane-related jobless claims rose to 363,000 last week. More bad news is expected with the release Friday of unemployment figures for September.

Congress is already conducting hearings on whether the money appropriated so far is being spent wisely. Paulison said four federal contracts that were awarded with little or no competition will be rebid in an effort to save taxpayers' money.

"I've been a public servant for a long time, and I've never been a fan of no-bid contracts," Paulison told a Senate panel investigating FEMA's response to the hurricane. "Sometimes you have to do them because of the expediency of getting things done. And I can assure that you we are going to look at all of those contracts very carefully."

"All of those no-bid contracts, we are going to go back and rebid," he said.

FEMA awarded no-bid contracts of up to $100 million each for housing and construction to four firms -- Bechtel Corp., Fluor Corp., the Shaw Group, and CH2M Hill -- it had reviewed shortly before Katrina slammed into the Gulf Coast. So far, the four companies a combined $132 million, FEMA officials said.

Separately, FEMA's budget for the 2006 fiscal year that began Oct. 1 was debated Thursday by the House as part of a $31.9 billion measure funding the Homeland Security Department.

The House voted Thursday to prohibit Medicare and Medicaid coverage for erectile dysfunction drugs such as Viagra in order to cover health care costs and extended unemployment benefits for Gulf Coast hurricane victims.

The legislation, approved by voice vote, provides $500 million in federal unemployment funds to disaster states, including $400 million to Louisiana. It extends Medicaid and other health programs that assist low-income families nationwide. Bill sponsors said cutting off coverage for erectile dysfunction drugs would save the government $600 million over five years.

Three other Katrina-related bills also were debated in the House.

One would waive some Section 8 housing rules to help more displaced hurricane victims get rent vouchers and prohibit the Housing and Urban Development Department from canceling contracts with subsidized housing project damaged by the hurricane.

Two others would allow the Agriculture Department to divert money from rural public housing funding to rental assistance for storm victims and make it easier for community development block grants to be used for storm-related reconstruction.

Meanwhile, Treasury Secretary John Snow said the Bush administration, while supporting tax incentives to rebuild the Gulf Coast economy, will oppose any proposal to have the federal government guarantee state and local bonds.

"That would be a serious mistake," he said.


TOPICS: Extended News; Government; US: Alabama; US: Louisiana; US: Mississippi
KEYWORDS: 109th; contracts; federalspending; katrina; rebuildingno

1 posted on 10/07/2005 4:19:45 PM PDT by Graybeard58
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To: Graybeard58
The Chicken Littles were telling us in September we were doooooooooooooomed. What a difference a month makes!

(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
2 posted on 10/07/2005 4:25:11 PM PDT by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives On In My Heart Forever)
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To: Graybeard58

Not if Landrieu gets her way. Did you see her whining and b!tching today on the Senate floor? Those crooks in power in LA won't quit even if they got the whole 150B to themselves.


3 posted on 10/07/2005 4:28:30 PM PDT by digger48
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To: digger48

OK..lower it to 75 billion and put Landrieu in prison. You've got a deal.


4 posted on 10/07/2005 4:31:00 PM PDT by samadams2000 (Nothing fills the void of a passing hurricane better than government)
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To: Graybeard58
The federal government's tab for hurricane relief and rebuilding efforts is likely to cost less than $150 billion, Congress' top budget analyst said Thursday

The American taxpayer's tab for hurricane relief, giving money to those people who didn't insure their properties, corruption donations and vote buying is likely to cost less than $150,000,000,000.00 Congress' top budget analyst said Thursday...

There, I fixed the first phrase in the article for you.

5 posted on 10/07/2005 4:31:22 PM PDT by xrp (Conservative votes are to Republicans what 90% of black votes are to Democrats (taken for granted))
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To: Graybeard58

Yeah, but Mary Landrieu and her RINO pal (Vetter) want a full $250 billion just for LA. Not saying they'll get it, but that's what they're pushing for....


6 posted on 10/07/2005 4:32:49 PM PDT by Enchante (Mary Mapes, Dan Rather: so proud to be genuine FRAUDcasters!)
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To: samadams2000

I used to kinda like her, too. For a lib, she's not quite as skanky as the rest of the Senate FemDems.


Til she opened her mouth


7 posted on 10/07/2005 4:37:50 PM PDT by digger48
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To: Graybeard58

$150 billion is a lot of money.


8 posted on 10/07/2005 4:45:35 PM PDT by Cicero (Marcus Tullius)
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To: Graybeard58
Government's tab Taxpayer money to be spent on hurricane relief will be below $150 billion, Congress told.

There. I fixed it. I really don't like it when folks pretend like government has money of their own.

9 posted on 10/07/2005 4:48:36 PM PDT by SaveTheChief ("I can't wait until I'm old enough to feel ways about stuff." - Phillip J. Fry)
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To: Graybeard58

So rebuilding $70 to 130 billion in damage will only end up costing us the 62 billion of immediate federal relief, 40 billion of private insurance, and an additional 150 billion federal dollars later.

What a deal!


10 posted on 10/07/2005 4:50:45 PM PDT by CGTRWK
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To: Graybeard58
The federal government's tab for hurricane relief and rebuilding efforts is likely to cost less than $150 billion

Correction ===> "The US TAXPAYERS tab for hurricane relief and rebuilding efforts is likely to cost less than $150 billion"

11 posted on 10/07/2005 5:04:38 PM PDT by stockpirate (John Kerry & FBI files ==> http://www.freerepublic.com/~stockpirate/)
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To: CGTRWK

Why does the federal governement need to engage in rebuilding? The federal government should only fix/rebuild federal property.


12 posted on 10/07/2005 5:04:56 PM PDT by oblomov
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To: stockpirate
"The US TAXPAYERS tab for hurricane relief and rebuilding efforts is likely to cost less than $150 billion"

Like anything else the government undertakes, figure on the tab always being much higher, perhaps double.
13 posted on 10/07/2005 5:08:43 PM PDT by adorno
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To: Enchante

Better watch out. If Mary Landrieu doesn't get the quarter trillion she feels entitled to, she's liable to punch someone in the face.


14 posted on 10/07/2005 5:35:04 PM PDT by jeffers
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To: Graybeard58
Government's tab for hurricanes will be below $150 billion, Congress told

TAXPAYERS PAY THE TAB

not the "government".

Once again, taxpayers have a gun to their head and are being forced to fork over billions of dollars, a large percent of which will go to welfare groupies who have been in the cart we have been pulling for decades.

The masters are making the slaves pay up again.

15 posted on 10/07/2005 5:35:27 PM PDT by Dont_Tread_On_Me_888 (Bush's #1 priority Africa. #2 priority appease Fox and Mexico . . . USA priority #64.)
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To: Cicero
$150 billion is a lot of money.

Sure is...That would make 150,000 millionaires...

16 posted on 10/07/2005 7:30:49 PM PDT by Iscool
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