October 11, 2005

October 11, 2005 | Commentary on

Legislative Lowdown: Week of October 10

President Bush and Republican leaders on Capitol Hill say they're restoring the GOP to its historical role as the party of limited government. But will the results match the rhetoric?

Their change of tone isn't surprising. Angry constituents are demanding meaningful budget cuts to offset the spiraling costs of the hurricane relief effort. One recent national poll found 61% of all Americans (and 58% of Democrats) believe spending cuts are "the best way for the government to pay for hurricane relief." And Republican backbenchers in Congress have applied their own form of pressure. According to the Capitol Hill newspaper The Hill, members of the conservative Republican Study Committee say "they will consider a petition calling for leadership elections next year unless the House GOP leaders endorse offsets for spending on hurricane relief."

On cue, Bush enunciated what might be called his Katrina Doctrine: "Congress needs to pay for as much of the hurricane relief as possible by cutting spending." He pledged to work with lawmakers "to identify offsets" and "to free up money for the reconstruction efforts."

More specifically, Bush urged Congress to enact the cuts he proposed last January in his budget blueprint-approximately $10 billion in annual savings from entitlement programs such as Medicaid and Food Stamps, plus an additional $20 billion by eliminating or scaling back 150 failed programs. This is a good start, but since the budget picture has worsened since January, Bush should propose even more spending restraint.

Congressional budget leaders readily embraced Bush's new doctrine, though they quibbled over the details. House Budget Chairman Jim Nussle (R.-Iowa) proposed an immediate 2% across-the-board "haircut" from Uncle Sam's bloated discretionary budget-the $843 billion in government programs that Congress funds annually in appropriations bills-which could yield nearly $17 billion in annual savings. Nussle also called for unspecified additional cuts from entitlement programs.

Senate Budget Chairman Judd Gregg (R.-N.H.) concurred on the need for more spending cuts, but reiterated his longstanding (and accurate) view that the bulk of any budget discipline should come from entitlements. This prompted the usual caterwauling from lawmakers who consider entitlement programs untouchable. Senate Majority Leader Bill Frist (R.-Tenn.) pressured his colleagues further by sending a strongly worded missive to each GOP committee chairman, instructing them to identify additional spending cuts for the Katrina offset effort.

And where were Congress' leading Democrats? House Minority Leader Nancy Pelosi (D.-Calif.) and Senate Minority Leader Harry Reid (D.-Nev.) categorically rejected the notion of spending cuts to pay for the Katrina response, preferring to cover the additional cost by raising taxes and withdrawing troops from Iraq.

With their standing in the polls at its lowest ebb in many years, Republican leaders at both ends of Pennsylvania Avenue seem finally to have grasped the political necessity of scaling back the federal leviathan.

Offsets Start at Home

With so much attention focused on how to offset the cost of assisting dislocated Gulf Coast residents, no one has examined the more than $6 billion taxpayers were expected to pour into New Orleans in the fiscal year that began October 1. With Katrina obviating the need for much of this spending, the obvious course of action for Congress is to redirect these funds to the recovery effort and appropriate new funds only after all the Big Easy's fiscal 2006 money has been exhausted.

At more than $12,600 in federal funding per person in 2003 (the latest year for which data is available), New Orleans ranks among the most heavily subsidized cities nationwide. Examples of spending available for redeployment include:

  • $102.8 million for public elementary and secondary schools.

  • $119.9 million for federal housing programs and subsidies for low-income residents.

  • $103.7 million for a hodge-podge of health-related programs, including funds for family planning clinics, community health centers, breast cancer detection, HIV/AIDS prevention and treatment, immunization programs, mental health services, and maternal and child health services.

  • $552 million for Medicaid services, for the hospital and physician and nursing-home costs incurred by low-income residents.

  • $149.7 million for food stamps.

For now, the schools, hospitals, public housing projects and other entities to which all this federal "anti-poverty" money would have flowed are either submerged, destroyed or uninhabitable. Much of this assistance, moreover, didn't reach state and local officials until well after Katrina hit the Gulf. This money could cover a significant portion of whatever portable, voucher-like system of education, health or housing benefits emerges from Congress.

Michael Franc who has held a number of positions on Capitol Hill, is vice president of Government Relations.

About the Author

Michael Franc Distinguished Fellow
Government Studies

First appeared in Human Events