Fiscal Responsibility and Gulf Coast Reconstruction

Hello. This is Senator Barack Obama and today is Wednesday November 16th, 2005. You know it has been almost three months now since the tragedy in Katrina and some of you I think have probably read some pretty disturbing reports about the lack of progress that's been made in rebuilding the coast. Congress has allocated a large sum of money to FEMA to initiate some of the rebuilding, but unfortunately the reports we're getting back aren't too good. We're seeing businesses not getting small business loans so that they can rebuild. There was a report in yesterdays newspaper that FEMA was going to kick out 150,000-- that's right 150,000 displaced persons from the hotels where they are currently staying. There has been a great deal of attention on the no-bid contracts that have been issued. And, unfortunately, we haven't really figured out how to pay for the reconstruction efforts in addition to putting together the kind of oversight that we need.

I'm going to focus today just real quickly on the budget issues involved, because one of the things that you are hearing here in Washington is the notion that because of Katrina we should drastically cut spending in other areas. Now, let's assume that it's going to cost us about 100 billion dollars for Gulf Coast reconstruction. The question is how do we go about it. The proposals that we've been hearing from the Republican controlled House and Senate basically involves cutting programs, many of them targeting the poor--cutting Medicaid, which provides health insurance for the very same folks that were displaced as a consequence of Katrina, cutting back food stamp programs, cutting back support for student loan programs. Now, I'm not opposed to cutting spending judiciously as a part of a package that would be fiscally responsible in approaching Gulf Coast reconstruction. Let me give you an example of what we could be doing.

The first thing we would do would be to say we're going to eliminate 50 billion dollars of additional tax breaks that have been purposed by the Republicans despite the fact that we've got record breaking deficits, despite the fact that we've got the costs of Katrina. There are simple ways not of increasing taxes, which is the first thing that you'll here whenever taxes are discussed by the Republicans, but deferring or putting off tax breaks that are currently projected to be provided to some of the wealthiest Americans. We could right now eliminate tax cuts that are going disproportionately to people making 200,000 dollars a year or more. In fact, most of the beneficiaries make over a million dollars. That would raise 50 billion dollars that immediately could go to paying for Katrina relief.

Now, once we did that we'd still have to look at some of our spending priorities. In fact, there is some waste in government or at least there are projects that are well-intentioned, are good solid projects, but are luxuries that we can't afford right now. Let me give you a couple of examples. We could defer 10 billion dollars of spending for a mission to Mars. I grew up loving the space program and I hope that at some point we land a man or woman on Mars, but right now we can't afford it and investing 10 billion dollars may not be the best way to do it. There's several billion dollars of business subsidies that we could eliminate. We could also eliminate some of the earmarks in the recent transportation bill. Earmarks are basically additions that each Senator obtains for his state. Many of the projects are worthy, they're for roads and bridges, levees. But some of the projects aren't so great. The biggest example that's been publicized is the so-called Bridge to Nowhere in Alaska that costs something like 200 and fifty or sixty million dollars, apparently is going to be servicing about fifty people. Those kinds of projects are ones that we could defer and put on hold.

Now if, in fact, we did those two things--we deferred or rolled-back tax cuts for the wealthy and we made some cuts in projects that aren't priorities--we could come up with 100 billion dollars pretty easily and that 100 billion dollars could be used for Gulf Coast spending without adding to the deficit and burdening our children and our grandchildren. That is something that I have been trying to push here in the Senate. I haven't gotten any Republican partners right now, because ideologically at least it's very hard for them to do anything on taxes without getting attacked by their base or people like Grover Norquist. So, I'm still hopeful that we could make some movement on this.

In addition, even as we're looking at the fiscal issues related to Gulf Coast reconstruction, I'm going to be here in the Senate trying to call for some better oversight over how the money is spent. Americans are extraordinarily generous, but they don't like to see their money wasted. And so, in discussions this week on the floor, I'm going to be proposing that we make certain that no-bid contracts are re-bid and that, in fact, we make sure that we've got some sort of accounting mechanism so that the money that is being spent is actually going to the people who need it.

I hope that everybody has a terrific week and I will talk to you next week. If you guys have any questions or interests about where I stand on certain issues, please feel free to contact our website. I look forward to talking to you soon. Bye-bye.