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White House to Trim Katrina Spending Request

White House to Trim
Katrina Spending Request By DAVID ROGERS
October 19, 2005

WASHINGTON -- The White House is significantly scaling back its Hurricane Katrina spending requests to keep the next relief package in the $20 billion range and offset the costs with equivalent savings.

Combined with funds unspent from prior disaster-aid bills, the administration believes the new money will be sufficient to carry the recovery effort into the spring, according to people familiar with the planning. Reducing the request also has the political advantage of easing the pressure on Republicans in Congress to come up with far more savings than they are already struggling to achieve.

A formal budget request isn't expected to be announced by the White House until next week. President Bush is expected to discuss his strategy today with House and Senate Republican leaders, who are working to meet conservative demands to constrain spending.

Congress pledged to enact a $35 billion five-year deficit-reduction bill this fall, but the rapid succession of Katrina-related spending and tax-relief bills -- now totaling near $70 billion -- has led to demands that the savings package be enlarged.

House Speaker Dennis Hastert (R., Ill.) has pledged to add at least $15 billion in five-year savings, but meeting this goal won't be easy given the divisions in his caucus and signals from Senate Republicans that they are having difficulty just getting to the initial $35 billion target.

The first down payment -- a $15 billion five-year savings bill that affects federal student loan rates and Pension Benefit Guaranty Corp. premiums -- cleared the Senate Health, Education, Labor and Pensions Committee yesterday on a bipartisan 15-5 vote.

But given opposition from a Republican on his committee, Senate Agriculture Committee Chairman Saxby Chambliss (R., Ga.) was forced to back away from cuts in the food-stamp program to be voted upon today. And while hopeful of a deal, Senate Finance Committee Chairman Charles Grassley (R., Iowa) said he was still several votes short of what was needed in his panel for an estimated $10 billion to $12 billion five-year package of Medicaid and Medicare savings.

Mr. Hastert also has problems in the House, and despite the bold rhetoric of recent days, the leadership admits it is still uncertain it has sufficient Republican votes to pass a resolution this week committing to the extra $15 billion in savings.

"We still intend to move ahead with whatever the maximum amount of savings 218 members will agree to," said Rep. Roy Blunt (R., Mo.), who has stepped in as Mr. Hastert's second-in-command.

But a vote tomorrow, as predicted earlier, is uncertain now as Mr. Hastert adjusts to the upheaval of his former deputy, Rep. Tom DeLay (R., Texas), stepping down as majority leader following his indictment for allegedly violating state campaign laws in Texas.

The awkward transition was illustrated by a nearly two-hour leadership meeting in the speaker's dining room on the first floor of the Capitol. The site, long used to host Texas-delegation luncheons, was chosen apparently to ease the inclusion of Mr. DeLay, since he is no longer in the leadership. The result was that Mr. Hastert, the most powerful man in the House, had to leave his regular meeting room on the second floor so he could still confer with Mr. DeLay in a quasileadership setting.

Katrina's impact also is being felt in two pay fights: one over legislative salaries and another on the federal minimum wage.

On a 92-6 vote, the Senate agreed to forgo a 1.9% cost-of-living increase, which would boost the salaries of most lawmakers by $3,100 to $165,200. This was followed by a renewed fight by Sen. Edward Kennedy (D., Mass.) to raise the federal minimum wage to $7.25 an hour over the next two years, from its level of $5.15.

Labor and Democratic supporters believe they already have 50 votes for the proposal, and Mr. Kennedy has argued that Congress should act to help low-wage workers, not reduce government benefits.

"The images of Katrina were a shocking reminder that the American dream remains out of reach for millions of working Americans." Mr. Kennedy said. "It's little wonder that so many in the Gulf region were living in poverty when Katrina hit. ... The minimum wage that many receive cannot cover their bills or support their families."

--Brody Mullins contributed to this article.

Write to David Rogers at 1
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