Size of Recovery Plan May Swamp Bush's 2nd-Term Agenda

A Call To Action

By Peter G. Gosselin and Janet Hook
Times Staff Writer

7:35 PM PDT, September 9, 2005

WASHINGTON — President Bush, who came to office pledging to complete the Reagan revolution against big government, is set to preside over one of the biggest government undertakings in recent U.S. history -- the reconstruction of the storm-ravaged Gulf Coast.

In doing so, the president is turning to many of the New Deal and Great Society programs that he long criticized as too costly and a threat to Americans' sense of self-reliance.

The size of the administration's relief and recovery plan alone threatens to swamp much of what had been Bush's second-term agenda -- making previously approved tax cuts permanent, introducing personal investments to Social Security and advancing other "ownership society" programs.

The top-down nature of the relief plan and the White House's seemingly open-ended commitment to spend on reconstruction has left many of the president's conservative allies rattled.

"It's a great time for the president to stand up and ... make priorities" by advocating cuts elsewhere in the federal budget to pay for relief efforts, said Sen. Tom Coburn, R-Okla. "That's my disappointment. We don't have that leadership."

Some conservatives complain that, if anything, the president is expanding Washington's responsibilities for disaster relief and the costs it must bear.

"The president's plan is a big change from what has been the traditional federal role in disasters," said William Niskanen, chairman of the Cato Institute, a Washington think tank that advocates small government.

"The effect is going to be to indefinitely defer things he's wanted to do, like Social Security (restructuring)," Niskanen said, "and I don't think there's any possibility of eliminating the estate tax," another Bush priority before Hurricane Katrina struck the Gulf Coast.

Administration officials have answered charges both of foot-dragging in their initial response to the storm and of subsequently going overboard in opening the federal wallet to its victims by asserting that the devastation is so great their sole focus must now be to aid recovery.

Some conservatives support that effort, but expect the president to eventually set limits. "There are no limits to what (Bush) will do right now," said Ronald D. Utt, a research fellow at the conservative Heritage Foundation think tank.

But he added, "Once the emotional waters recede, then (the administration) will get down to the brass tacks of saying no."

Still, administration actions have left some Bush supporters with a sense of political vertigo as the president and his chief aides appear to embrace positions about which they were sharply critical only a few weeks ago.

"It bothers me enormously how we've responded to this problem. This is just way out of bounds," Niskanen said.

In making his case for Social Security personal accounts this year, Bush has repeatedly warned Americans about the dangers of becoming overdependent on government benefits that can be taken away or run out of money.

But in discussing government aid to the stricken areas Thursday, he declared "The people who have been hurt by this storm ... need to know that the government is going to be with you for the long haul."

He added, "In all the steps we take, our goal is not to simply provide benefits, but to make them easy and simple as possible to collect."

In the past, Bush has been particularly pointed in his criticism of New Deal and Great Society programs, such as welfare and Medicaid, which he said saps people of the incentive to support themselves.

But Congress -- with the administration's blessing -- late this week was moving to make an estimated $6.2 billion more available for welfare payments. Administration officials also were opening up Medicaid, which even before the storm provided health insurance to nearly 2 million in Mississippi and Louisiana, to millions more.

"There are a lot of people who are really hurting and don't have anything much to their name and need coverage right away," Mark McClellan, head of the government's Centers for Medicare and Medicaid Services, said Friday.

Even the administration's heavy reliance on the military to provide relief efforts appeared to run across the grain of many of the president's long-held positions and Washington's past practice in disasters.

"In the past, our surge capacity for handling natural disasters was at the bottom, in community and church groups, charities and voluntary organizations," said William L. Waugh Jr., an authority on disaster response at Georgia State University in Atlanta and a consultant to the Department of Homeland Security. "This time, it's at the top with the military."

He added: "Basically, we've declared war on Hurricane Katrina."

The political climate has become more receptive to big government in part because the Bush presidency has been dominated by issues and challenges that called for a strong government response: the Sept. 11 attacks, the wars in Afghanistan and Iraq; the economic downturn; and now hurricane damage of unprecedented scope.

Nevertheless, Bush has consistently touted the importance of shrinking the size of government even as he has expanded the military in response to the Sept. 11 attacks. But in the wake of the hurricane, the administration appears to have put aside its interest in small government for the time being.

"The president has made it clear to everyone that we've got enormous challenges to address and we need to think big," White House press secretary Scott McClellan said Wednesday. "We need big ideas and big solutions to address these enormous challenges. ... He wants people to think big so that we can solve these problems that are ahead."

Indeed, it is the sheer size of the administration's relief plan that has taken many conservatives and others by surprise. At more than $62 billion and counting, the effort invited comparison with such undertakings as the government's Marshall Plan for rebuilding Europe after World War II.

"There really isn't a proper historical analogy. We're crossing a threshold in terms of size," said Stanford University historian David M. Kennedy.

The $62.3 billion in hurricane relief that the House and Senate approved with almost no debate dwarfs the $37 billion in entitlement program savings that the two chambers' budgets call for over the next five years -- savings that were much ballyhooed as the first such exercise of fiscal discipline in a decade. Legislation making those savings in Medicaid and other popular programs was supposed to be detailed this month. But GOP leaders this week announced they had postponed indefinitely action on those budget decisions.

"I have to be a little pessimistic," said Rep. Jeff Flake, R-Ariz., one of a small band of conservatives who want to curb spending. "There is no real stomach for fiscal discipline right now."

Flake said he tried to argue, at a recent closed-door meeting of House Republicans, to pay for the relief with offsetting cuts in other federal programs, but was hooted down.

A top Bush goal has been making permanent the elements of his earlier tax cuts that are due to expire by 2010. That's why Senate GOP leaders had planned to vote this week on a bill to make permanent the scheduled temporary repeal of the estate tax.

But with Democrats howling in protest against cutting taxes for the wealthy while poor hurricane victims suffer, GOP leaders postponed the vote.

The question is when, if ever, the political climate will become more amenable to cutting taxes. Democrats are arguing that the government cannot afford to cut taxes as relief costs skyrocket.

But they may have a harder time opposing the tax cuts in the wings than they did postponing the vote on ending estate taxes: The $70-billion tax cut is expected to include middle-class relief such as protection from the higher rates of the alternative minimum tax and college tuition tax breaks.

Senate Finance Chairman Charles Grassley, R-Iowa, on Thursday called Democrats' arguments against tax cuts "irresponsible and disingenuous." Still, he did not say when his panel would act on them and the entitlement cuts.

Times staff writers Ricardo Alonso-Zaldivar and Warren Vieth contributed to this report.


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