So, How Do We Pay for Katrina Relief?

    U.S. lawmakers on Sunday differed over how to pay for rebuilding the Gulf Coast in the aftermath of Hurricane Katrina, in a preview of the likely battles ahead as Congress struggles with a price tag that some say could top $200 billion.

    Democrats on the Sunday talk shows said tax cuts should not be extended and proposals like eliminating the estate tax should be rejected because they only benefit the wealthiest.

    Republicans said spending cuts were the way to go, including from the highway bill, which has been criticized for being stuffed with “pork” or pet projects.

    President George W. Bush has ruled out raising taxes to pay for what is expected to be one of the world’s largest reconstruction efforts. He has not provided a cost estimate, but some in Congress say it could top $200 billion.

    Former President Bill Clinton said Democrats should oppose tax cuts and that he was concerned that increasing the budget deficit would increase foreign holdings of U.S. debt.

    Sen. David Vitter, a Republican from Louisiana, which was hard-hit by the hurricane, said he opposed tax increases, and what was required were incentives for businesses to return and reinvest and create jobs in his state.

    “And we can’t have that completely counteracted by a big, big tax increase by not making the current cuts permanent,” Vitter said on ABC’s “This Week.”

    Sen. Joseph Biden of Delaware, the senior Democrat on the Senate Foreign Relations Committee, said funds should not be taken from Iraq efforts for Katrina relief.

    “I think we have two national emergencies: one relates to our interest in Iraq and the other in the Gulf, and I don’t think you can take from one to deal with the other,” Biden said on CNN’s “Late Edition.”

    “We don’t have to raise new taxes, but we don’t have to go forward with further tax cuts for the wealthy,” he said, citing the estate tax cut.

    Reducing government spending could hurt programs needed to help victims of Hurricane Katrina such as health, education, insurance and employment, Biden said. “We’ve got ourselves a conundrum here.”

    Sen. Jon Kyl, an Arizona Republican, said he voted against the highway bill, which was stuffed with unrelated projects, and suggested some of those funds be redirected to Katrina relief.

    “There’s a lot of fat in the current budget,” he said on CNN.

    House conservatives plan to put forward proposals in a drive called “Operation Offset” aimed at finding ways to pay for the Katrina expenses, Rep. Mike Pence, an Indiana Republican, said.

    Those will include proposals to set aside about 6,000 add-on projects in the recent highway bill, he said on ABC.

    Congress should also take a hard look at delaying implementation of the new prescription drug program, which would put $40 billion back on the books for Katrina, Pence said.

    Sen. Lindsey Graham, a South Carolina Republican, said the government was failing at controlling spending and that some type of across-the-board spending cut would be appropriate.

    “There’s so much opportunity here to go back into the budget and extract some savings to help pay for this hurricane relief that I look at it as an opportunity for the Congress to get back to its roots of being fiscally sound and conservative,” Graham said on the “Fox News Sunday” program. “Maybe something good can come from this hurricane.”