One on One With Senate Budget Chairman Judd Gregg
Wednesday, September 14, 2005SUSIE GHARIB: Global insurer Lloyd's of London estimated today its net losses to Hurricane Katrina will run about $2.5 Billion. That would make Katrina the second biggest single-event loss in Lloyd's history after the September 11th attacks. Damage estimates made right after the storm hit were all across the board, but analyst now say Katrina should be the global insurance industry's costliest ever disaster. It will also be the costliest natural disaster ever for American taxpayers. To better understand the size of that challenge, Washington Bureau Chief Darren Gersh talked with Senate Budget Chairman, Judd Gregg today. And Darren began by asking the Senator about Katrina's impact on the federal budget.
SENATE BUDGET CHAIRMAN JUDD GREGG: It will be significant. In the short term, it will mean the deficit goes up probably 150, maybe even more. In the long-term it may have an impact in that this is a very prosperous part of our country which generates a lot of revenue with the Federal Government, and it will have an impact. And then there will be a long-term build-out issue and I can't imagine lasting five, maybe ten years to reconstruct the area that will continue to pay for. I don't know how much that will be.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: But clearly in the short-term it will spike the deficit clearly.
GREGG: There's speculation that this catastrophe is going to refocus these thrusts of government. There will be more of an activist government and more of an active government and that agenda will change and see the social security tax cuts, and other reforms, pushed off the table by Katrina.
GERSH: Do you think that's likely to happen?
GREGG: Well, I think it is clear somethings we were going to do this fall won't be done or hoped to do this fall, Social Security is one, immigration reform would be another. Health Care reform, which I had hoped, I think that's on the floor and discussed, might be another. So yes, the practical effect of the Hurricane is that the calendar has been overwhelmed by the need to address this region of the country which has been so devastated and the people need help down there and need federal assistance.
GERSH: You don't see this changing the orientation up here towards more of an act of government that might last for a number of years if some people are speculating?
GREGG: Not in the sense that there will be systematic change, no. I do think, and I do believe strongly that we need an on-the-ground identity in the gulf coast where there's a strong individual who has the authority to manage all the federal resources and core nature those resources with the state and regional government like hush either hoover after the floods. And there has to be a parallel effort and audit and management so you are sure the dollars are used effectively and not wasted.
GERSH: Let me follow up on what you said about auditing and making sure money is spent wisely. You were a governor and now a senator. You know how big events can be used by people to insert their spending into the government saying it is related to Katrina, everything from dredging your port to helping farmers, worthy causes, perhaps, but not necessarily disaster-related. How will you keep this out of the budget and make sure the stuff that's really needed is in there?
GREGG: I have been pressing the administration very hard and leadership very hard to make sure we have a priority. As we move the programs quickly through the senate or through congress, that those programs have at least met a threshold test of priorities. And one of the priorities has to be that it is Katrina-specific. And that it is not to reimburse the farmers in the midwest who happen to have fertilizer price go up as a result of the Katrina event. One of the standards should be everything is set. All programs put in place because of Katrina should have a date one or two years down the road to actually look at them again in order to keep them going. It is a concern for me. We will end up spending alot of money on a lot of things that are not appropriate to this relief effort.
GERSH: Let's talk about using rebuilding as an effort to showcase conservative ideas. Tax cuts maybe vouchers, maybe other programs. Is that appropriate in this case? Would you like to see the Republican leadership do something like that?
GREGG: What's appropriate is to come up with ideas that will help these people as quickly as possible and use tax dollars most effectively. There have been ideas put forward which will work, whether they are conservative or liberal is not the issue, it is whether the programs work.
GERSH: All right. Senator Judd Gregg, thank you very much.
GREGG: Thank you.
