Money, Money, Everywhere

What it now will take, according to some estimates, is at least $200 billion, and the bayous were bipartisan in their enthusiasm for Bush's kitchen-sink approach. "I think it's the best speech he has ever given," declared Michael Olivier, the state Economic Development secretary. John Maginnis, a plugged-in Louisiana pundit, had an explanation for the official good cheer. "Everyone wants all of the money," he said. For their part, White House officials insisted that the overall federal budget can withstand Katrina. In a $13 trillion economy, they said, the hurricane isn't a disaster. The day after his speech, the president ruled out increasing taxes, saying costs could be handled by cutting unspecified "unnecessary spending." He even renewed his pledge to seek new tax cuts in the name of stimulating the economy. His advisers did the follow-up. "We're fortunate that the economy is very, very strong right now; it will continue to be strong," said Al Hubbard, director of Bush's National Economic Council.

But not every Republican was so sanguine, and the first sign of an internecine war on the budget emerged at a recent gathering of the House Republican Conference. Rep. Mike Pence, the House's leading deficit hawk, challenged Joshua Bolten, a former Goldman Sachs banker who runs the Office of Management and Budget. There to seek a tranche of $50 billion in relief money, Bolten brushed aside the congressman's insistent fiscal questions. Pence suggested a yearlong delay in launching the Medicare drug benefit; several allies floated the idea of a 10 percent, across-the-board cut in every category of spending. No dice. Bolten agreed that spending "offsets" were a "worthy topic," but stayed mum. It was "not the time to have this debate," he told the assembled Republicans, saying the cash was needed immediately to save lives in the region.

Even as Bush spoke in New Orleans, questions were multiplying--about who would pay for the costs of recovery, and the implications of those costs for the rest of the Bush agenda; about what the federal government could do to ensure that the flood of cash would be well and wisely spent; about the geographical, cultural and even racial politics of what it would be spent on. New Orleans and the Gulf Coast weren't built to be the ground upon which we argue, once again, some of the basic issues of American life. But that discussion has already begun.

With no control of the White House or Congress, Beltway Democrats came up with a long list of short-term proposals, but no sweeping Marshall Plan of their own. And they continued to dwell on the need for an independent, 9/11-style commission to investigate the original disaster response. Only such a body can prevent a GOP "whitewash," said Harry Reid, the Senate's Democratic leader. "We can't know how to go forward," he said, "unless we know what went wrong."

Beyond the illuminated confines of Jackson Square, there were those who thought Bush was lurching forward, like a free-spending conventioneer maxing out his credit card as he roamed the Quarter. "He got clobbered on the disaster relief, and now he is overcompensating by promising the moon," said Chris Edwards, director of tax policy at the Cato Institute in Washington. "We are going to make New Orleans 'better'? To say that is imprudent and crazy." The president's upbeat view of the budget drew jeers from some quarters beyond the French. In New York, centrist Democrats on Wall Street were dubious, citing America's growing reputation for a lack of fiscal discipline. Years of profligate spending and tax cutting have made it unnecessarily risky to accomplish the rebuilding of the Gulf Coast, said Citigroup's Robert Rubin, the former Clinton Treasury secretary who left behind a towering budget surplus. "It's a job we have to do, but we're operating out of a deep fiscal hole," he said.

Rubin has some allies in the GOP--and one of the risks for Bush is that Rubin will soon have many more. For now, most of the party in Congress remains loyal to the modern GOP orthodoxy, which is to cut taxes like a Republican while spending money like a Democrat. Bush has never vetoed a spending bill sent to him by his Republican allies--or any bill, for that matter. The prescription-drug plan they passed is now estimated to cost $700 billion over 10 years; their highway bill, at $286 billion, was the biggest ever--and $36 billion larger than the largest Bush had said he would accept.