http://www.whitehouse.gov/news/releases/2005/09/20050916-6.html Q Al, where's the money coming from for this?
DIRECTOR HUBBARD: Where's the money coming from? It's coming from the American taxpayer.
Q Right, but you're already spending more than you take in, so how much more is there to --
DIRECTOR HUBBARD: Well, if you want to know the --
Q Are we going to have to borrow it, or are you going to raise taxes? I mean, if it's coming from the taxpayer that suggests maybe you're going to have to raise taxes.
DIRECTOR HUBBARD: The most important thing that we need to do is make sure that this economy remains very, very strong. A strong economy is what will provide the resources for the rebuilding for the disaster as a result of the Katrina storm. We're fortunate that the economy is very, very strong now; it will continue to be strong. But the last thing in the world we need to do is raise taxes and retard economic growth.
Q So where does the money come from? Obviously, you've got to borrow it or offsets in the budget, what?
DIRECTOR HUBBARD: Well, again, the money is going to come from the federal government, it's going to come from the federal taxpayer. This President is committed to, as you know, cutting the deficit in half. This in no way will adversely impact his commitment to cut the deficit in half by 2009. At the same time, unfortunately, because of the biggest national disaster I think we've ever faced, we're going to have to spend significant amounts of money on a one-time basis. And that's what's important: it's one time, it's not recurring. But the President is committed, and I know the American people are committed to doing everything that's necessary, but no more than is necessary, and doing it in a very prudent way.
Q -- significant amount? How much?
DIRECTOR HUBBARD: Pardon me?
Q How much? Do you have a ballpark figure for how much this is all going to cost the American taxpayer?
MR. McCLELLAN: Are you talking about the overall costs?
Q Yes.
MR. McCLELLAN: Well, one, I think -- and we talked about it the last couple of days, in terms of the longer-term recovery and reconstruction efforts, and the President made very clear last night that we're going to do what it takes to meet the needs of the people who have been affected by this and to meet the needs of the region. But as we do, we need to work with state and local officials to make sure it's done in a well thought out, well planned way. And that's why he emphasized we're going to make sure that the money is spent wisely and it's going to what it's supposed to go for.
But in terms of the longer-term reconstruction needs, I think that we're still assessing what those needs are. It's not clear exactly what those longer-term needs are going to be. And so it would be speculating at this point and we're not going to get into speculating about it.
Q Is the $200 billion figure --
MR. McCLELLAN: I mean, it's speculating about it, and we're not going to get into speculating about it. What we are going to do is make sure that the needs of the people are met.
Q So there were no internal initial investments for how much this will cost? None?
MR. McCLELLAN: For the longer-term? I think that's something that's still being assessed --
DIRECTOR HUBBARD: Right. I mean, you know, you've got --
MR. McCLELLAN: -- as our OMB Director has said over the last couple weeks, too.
Q Allan, can I just clear this up? So the money will be borrowed, so it will add to the deficit, right?
DIRECTOR HUBBARD: Well, there's no question that this -- the recovery will be paid for by the federal taxpayer and it will add to the deficit. That's right.
Q Do you have scores for these --
MR. McCLELLAN: But as he emphasized, it's a one-time cost here that you're talking about.
DIRECTOR HUBBARD: Right.
Q Do you have scores for the initiative you announced last night?
DIRECTOR HUBBARD: Yes, we do.
Q Can we --
DIRECTOR HUBBARD: Sure. For the incentives, the faster write-offs, et cetera -- again, these are approximate costs -- and, by the way, I hope that we're understating them, because if business responds even more quickly than we anticipate, it will cost a little more. But we're talking about around $2 billion for those initiatives.
Q Over what period?
Q Is that --
DIRECTOR HUBBARD: Yes, that's that for the Gulf opportunity zone.
MR. ALLEN: And about $2 billion for the education initiative, that's the focus of that one. The Homesteading Act, we are analyzing that, because this is housing stock that already exists in HUD and other agencies, we don't have a number that I can give you on that definitively at this point.
Q Claude, what is the percentage of housing stock in the New Orleans area?
MR. ALLEN: We found of about 4,000 units that are available throughout the region, about a thousand of them -- just HUD stock -- are in the New Orleans area alone. There are other -- we've done an inventory of vacant buildings, vacant lots, vacant facilities, and that does not include the additional vacancies that exist.
Q Who is going to measure sweat equity?
MR. ALLEN: Well, that is something we work with the state and local government about. Certainly, in partnership with organizations, as the President mentioned last night, like Habitat for Humanity, they have standards that they use to work with individuals who are trying to get home ownership. We will work with organizations, hope to partner additionally with organizations like that, that are willing to go in and help provide the assistance.
We're also looking to work with nonprofit organizations other than Habitat that currently help provide, whether there's low income mortgages and other assistance. So it will be a public/private partnership that we're seeking to work in this area.
Q Claude, do you -- can you name any specific programs that will be cut or eliminated already in order to make room without adding too much to the deficit in order to pay for Katrina relief?
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