In an op-ed in today's Washington Post, E.J. Dionne, Jr. notes that although Republicans claim to be fiscally conservative, "our federal purse strings are in the hands of fiscal radicals." Spending in the aftermath of Hurricane Katrina does have lawmakers on both sides of the aisle worried about potentially massive deficits. Some have been claiming a desire to take a fiscally responsible approach to spending, however cutting budgets while ignoring the costs of tax cuts is, in the long-run, not fiscally responsible at all. As was posted yesterday in the blog, members of the House Republican Study Committee proposed drastic funding cuts in order to offset Katrina spending; cuts that would -- as Dionne said -- take "$80 billion from Medicare and $50 billion from Medicaid over five years and suggest reductions in school lunches, rent subsidies for the poor and foreign aid, among other things." He goes on to point out, however, that the amount of money the 2001 and 2003 tax cuts is costing our country this year alone amounts to $225 billion -- which could more than cover the expected costs of dealing with Katrina. It doesn't, however, look like the Republican leadership is interested in pursuing this route to offset the costs of Katrina. Yesterday Bush pledged to join in on efforts to identify cuts elsewhere in the federal budget that can offset the expenditures for disaster aid, saying "I'm going to work with Congress to prioritize what may need to be cut." Cutting programs is the opposite of what needs to be done. In fact, many are arguing that a perpetual underinvestment in the infrastructure of our country is what allowed this disaster to spiral so radically out of hand in the first place.

The Finance Committee's Medicaid bill should be on the floor of the Senate by September 26, according to Committee Chair Charles Grassley (R-IA). The bill is expected to be considered under a unanimous consent procedure. The administration does not favor the bill, as they believe the appropriate way to deal with the situation should be to pass state-by-state waivers. The House is also "unenthusiastic" about the prospect of the federal government providing 100 percent of funding for Medicaid and Children's Health Insurance Program costs through 2006 in LA, AL, and MS. Chairman Grassley, despite House and administration concerns, remains undeterred in his efforts to move forward with the legislation. He said legislation ensures that Katrina victims receive assistance similar to that given to New York after the Sept. 11 terrorist attacks, and stated, "The president made the statement that the storm did not discriminate and we're not going to discriminate. So why would he want to do something different for Louisiana than he did for New York."

The National Governor's Association sent a letter to the Chair and Ranking Member of the Senate Finance Committee, Sens. Grassley (R-IA) and Baucus (D-MT), in which they gave their approval of the committee's plan to expand Medicaid coverage to victims of Hurricane Katrina. The letter stated that the plan, which will provide 100 percent federal funding of Medicaid to hurricane victims, would be "critical to help these individuals put their lives back together and retain some sense of stability." The cost of the bill is currently uknown, however the Congressional Budget Office is working on scoring it and should have a figure soon. In endorsing the Medicaid plan the National Governor's Association went against the administration, which has stated that victims' healthcare needs can be met by individual states using administrative Medicaid waivers. Some Republican Senators on the Finance Committee also have concerns about the bill as well, partly because lawmakers are growing increasingly concerned about Katrina-related spending. Sen. Grassley acknowledged these roadblocks and plans to talk to colleagues who many stand in the way of the bill.