PAYING FOR KATRINA

No one knows the cost of the huge tasks of relief, cleanup and reconstruction after the worst national disaster in our history. Estimates keep mounting.

Congressional leaders, having passed $62 billion in aid already, foresee expenses of $100 billion or up to $200 billion that will swamp this year’s federal budget and probably go on for several years. Additional annual deficits and a huge increase in the already formidable national debt look inevitable.

Immediate costs include the continuing search for hurricane victims, caring for perhaps 1 million evacuees, pumping out and rebuilding New Orleans, restoring and upgrading the protective levees, restoring fresh water and electrical service in New Orleans and along the rest of the damaged Gulf Coast area, providing alternate routes for the huge volume of trade down the Mississippi River, getting many thousands of displaced children into schools across the country, and all the other urgent needs to recover from the effects of Hurricane Katrina and protect against future storms.

Those costs, still largely unknown, will come on top of the continuing costs of the war in Iraq, also open-ended. This combined load will enormously enlarge the already high budget deficit and national debt.

How to pay for it all? An overall solution seems obvious, but it would require leadership and drastic flexibility in the face of unexpected circumstances. It would require abandoning efforts to renew previous tax cuts and abandoning new efforts to repeal the capital gains tax and the estate tax (both of which primarily benefit the very rich). The president’s Social Security reform already is as good as gone, but any reform there now would need to include taxes on incomes above $90,000, rather than the current limit.

Taken together, the total saving in federal government revenues could probably equal or exceed the tremendous costs facing the government. And the burden would be spread to all Americans instead of being levied mainly on the middle class and poor, as at present. President Bush, who has acknowledged that the federal government’s initial response produced “unacceptable” results, should take the lead. If he doesn’t, Congress should do so.

Restructuring domestic policy to benefit all the people rather than primarily the rich is long overdue and should not require Katrina’s unexpected burden as an excuse. But Katrina can serve a political purpose, for the president and for members of Congress. Instead of merely staying the course, they would be credited with correcting the course to meet this unprecedented challenge.