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Press Release

    Don’t Exacerbate Katrina’s Economic Harm by Abandoning Budget Reconciliation Process

    10/06/2005

    Download the .pdf here

    Dear Member of Congress:

    On behalf of the millions of supporters of the groups signed on to this letter, we urge you to move ahead expeditiously with the reconciliation process that will reduce entitlement spending by $34.7 billion and preserve economically-vital tax cuts. Although minor schedule changes are understandable in light of the hurricane emergency, the reconciliation process is more vital than ever in light of Katrina’s destruction and subsequent rebuilding expense.

    Congress should not unduly delay or waver when it comes to moving forward with the essential process of spending cuts and growth-enhancing tax cuts. Congressionally-passed relief for hurricane victims may be necessary, but continued strong economic growth nationwide is equally important both for continuing the recovery process in affected regions and to ensuring that refugees from the hurricane have the ability to rebuild their own financial lives.

    Contrary to the outcry from some of the very same people who rarely support spending restraint of any kind, the importance of mandatory spending cuts is heightened by Hurricane Katrina and the subsequent $62.3 billion in emergency relief funding. After all, given the massive amount of unforeseen spending for hurricane relief, it makes sense to move forward in constraining spending elsewhere in the overall budget.

    Notably, recent estimates for this year’s budget deficit had fallen 22 percent from February’s projections. This improvement has been driven by strong economic growth, which in turn has pumped up personal and corporate tax collections. Revenues through August rose an astounding 13.7 percent over the first 11 months of fiscal year 2005, totaling $1.9 trillion.

    Had Congress restrained spending growth to something less than the rapid 6.9 percent rate of increase over the previous year, the deficit numbers would have been even more favorable.

    Congress must make tough choices when it comes to spending restraint, and reconciliation is an important part of this process. Our groups look forward to working with you to ensure that the Katrina disaster doesn’t turn the budget into another disaster for taxpayers.

    Sincerely,

    John Berthoud
    Matt Kibbe
    Grover Norquist
    Bill Lauderback
    Dan Clifton
    Thomas Schatz
    Karen Kerrigan
    Patricia Callahan
    Michelle Korsmo