Salon editorial fellow Aaron Kinney asks whether Hurricane Katrina will force the Bush administration to come to terms with fiscal reality.
The damage that Hurricane Katrina wreaked upon New Orleans could reach $50 billion, according to credit ratings company Standard & Poor's, but who really knows how high that figure will go? Floodwaters must be sucked out of the city. Entire neighborhoods will have to be razed and rebuilt. Levees must be repaired and fundamentally reinforced. Buildings that survived the flood must be repaired. Toxic materials washing through the city streets have to be removed. And thousands of New Orleans residents will require assistance to pay their rent and earn a living.
Some of this money will come from private sources, including the impressive $15 million pledge made by Wal-Mart, but clearly the federal government is going to have to spend more than the $10.5 billion the Senate approved last night for disaster relief. According to the staff of Senate Minority Leader Harry Reid, the Federal Emergency Management Agency is already spending $500 million a day. With the budget deficit already at staggering levels and with billions still to be spent on the military campaigns in Iraq and Afghanistan, it would seem we've finally reached a point where President Bush will have to do something he loathes in order to pull America back from the financial brink: raise taxes.
Don't count on it. The president refused to roll back any of his tax cuts in the face of the Iraq war, bequeathing that debt to future generations. And on Thursday came word that, in the midst of the worst natural disaster in American history, the GOP leadership intends to push ahead with yet another tax cut for the wealthy. As New Orleans roiled with violence and chaos spread throughout the city, GOP chairman Ken Mehlman sent an e-mail to supporters urging them to support a bill repealing the estate tax, which is scheduled for a hearing in Congress next week. Repealing the estate tax would reduce government revenue by up to $400 billion over the next decade, according to the Tax Policy Center.
Liberals don't want to raise taxes just for the sake of it, or because people shouldn't be able to keep their own money, or because the federal government should have more power over Americans' lives. Taxes must be raised because the Bush administration is leading this country on a path of financial disaster. At some point, the books must be balanced and the administration's supply-side misadventure must be stopped.
Conservatives and free marketers will argue that raising taxes now, especially with skyrocketing gasoline prices threatening to run the economy aground, would slow the economy at a critical time. But assuming we can get oil prices under control and avert a fuel crisis, modest tax increases are precisely what the economy needs. American consumers want to know that someone is at the tiller of this ship. Abandoning the estate tax and partially repealing the administration's tax cuts for the wealthy would demonstrate federal leadership and boost the public's confidence in the direction our country is taking. It would show that the government is aware of our fiscal mess, indeed, of reality, and that it's trying to address it. It would give meaning to the president's talk of sacrifice.
By catering to the wealthiest Americans while impoverished New Orleanians cry out for help or float dead in the streets, the Republican leadership is sending exactly the wrong message. Mehlman might as well be transmitting his e-mails from another planet.