Fiscal year 2005 ends this Friday, Sept. 30, and House and Senate Republican leaders have not been able to pass all spending bills for FY 2006 on the floor. Thus, we can expect them to pass a stop-gap funding bill to cover federal government spending by the end of the week. According to an aide, GOP leaders in both chambers will push through a CR to fund government programs through Nov. 18. While some believe this extension will give appropriators sufficient time to wrap up their work on the outstanding FY 2006 appropriations bills, others think GOP leaders will not make their ambitious goal to pass all of the bills as separate measures this year. While the House has passed all eleven of its spending bills, the Senate has only passed eight of twelve, and only two of those have been given final approval and sent to Bush for his signature.

Last Friday, General Accountability Office Comptroller David Walker strongly urged a "strategic, long range, and integrated" examination of tax expenditures to test their relevance and priority during a time when the federal budget is experiencing increasing strains. His comments came during the unveiling of a new GAO report recommending that the OMB and the Treasury take steps to ensure greater transparency of, and accountability for, tax expenditures. Walker emphasized to reporters, as he has in the past, the importance of putting the nation on a more "prudent and sustainable course for the long term." He insisted that doling out tax preferences has an impact on the government's bottom line, and at a time when we are experiencing high deficits, it is important to reevaluate some of those expenditures.

Many Republican leaders in the House and Senate are worried about the costs of rebuilding after Katrina, even though President Bush has promised, and rightly so, to devote all the funds needed to help the devastated region. Republicans who are worried about excessive deficit-financed spending are pushing for the costs will be offset (most are suggesting by cutting the budget elsewhere). To appease them, OMB Director Josh Bolten said Tuesday that the administration would consider offsets, but did not offer any details about what would be cut and by how much. As Stan Collender correctly points out (subscription required), any offsets proposed by the administration would to little, if anything, to reduce the amount Katrina relief spending will add to the deficit, and the national debt. Because President Bush refuses to even consider not extending or rolling back some of his first term tax cuts, it will be future generations who will be paying for reconstructing the Gulf Coast. The federal government is required by law to pay at least 75 percent of the cost of rebuilding public infrastructure after a disaster (1988 Stafford Act). To comply, Congress -- besides approving about $64 billion in emergency spending -- has agreed on a tax-relief bill to expand deductions this year for victims. The final bill was scored by the Joint Committee on Taxation as costing $6.1 billion over 10 years. Congress hopes these targeted tax cuts will spur employment of low-income workers on the Gulf Coast. In addition, President Bush signed three bills today to help in the aftermath of the disaster. The bills waive Pell Grant and other federal student loan requirements for displaced college students and expand Temporary Assistance to Needy Families eligibility for victims. CNN.com: House Passes Tax Breaks for Hurricane Katrina Victims

Last week, twenty-one Republican members of the House sent a letter to President Bush, in which they urged him to cut non-defense discretionary spending to offset additional spending dealing with the hurricane aftermath. The letter said, "Congress and the President have a historic opportunity to show the American people that we are not afraid to make hard choices on cutting current federal spending when a national disaster requires investment of tens, possibly hundreds, of billions of dollars." Cutting spending elsewhere in the budget, most likely for supports and programs benefiting low-income Americans is certainly not a hard choice for Congress as they continue to push the completion of reconciliation bills cutting entitlement spending simply to offset the cost of new tax cuts or the rich. Perhaps Congress and President Bush should be sincere in their claims to be able to make hard choices and call upon those Americans who can best afford to pay to shoulder just a tiny bit more of the burden through choosing not to pass new tax cuts for the wealthy this year. Cutting non-defense discretionary programs to pay for emergency hurricane relief funding is akin to robbing Peter to pay Paul and continues to concentrate the burden on low- and middle-income Americans. Also, Reps. Hensarling and Flake, members of the conservative Republican Study Committee, sent a letter to Speaker Dennis Hastert and Majority Leader Tom DeLay, in which they suggested that the 2006 implementation of the Medicare prescription drug benefit be delayed in order to contain costs, which are expected to sky-rocket with all of the post-Katrina spending. In reality, though, these costs should be dealt with by promoting an agenda based on shared sacrifice -- not on cutting money further from the budget so that people don't have access to the services they rely upon. It's time the President to call for a renewal of shared sacrifice in rebuilding the Gulf Coast through our tax code.