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US Economy To Take Only Short-Term Hit From Katrina: White House
Washington (AFP) Sep 19, 2005 Hurricane Katrina will have only a short-term hit on the US economy and the government can afford the huge reconstruction spending that it plans, the White House said Monday. "This storm has had an impact, and it will have a short-term impact on our national economy," White House spokesman Scott McClellan told reporters. "It's going to have an impact in the short term on the upcoming quarters that we'll see coming out in terms of growth and job creation," he said. "But I think if you look at what most economists are saying, they continue to see strong and sustained growth as we move forward." Analysts including forecasters at the Congressional Budget Office say Katrina could shave 0.5 to 1.0 percentage points off US growth over the next two quarters. The hurricane dented US oil production on the Gulf Coast after battering the worst-hit states of Louisiana and Mississippi. President George W. Bush has promised "one of the largest reconstruction efforts ever" in the flooded city of New Orleans, McClellan recalled. "The president made clear that the infrastructure is going to be costly. But the federal government is going to be there to pick up a large portion of those costs," he said. Economists have expressed concern that the reconstruction spending could swell a US budget deficit that is already groaning from the impact of huge tax cuts coupled with military spending in Iraq and Afghanistan. McClellan said the longer-term bill from Katrina was still being evaluated. "But the president recognizes the significant costs that are going to be borne by the federal government relating to the Katrina rebuilding efforts needs to be offset by additional cuts elsewhere in the budget," he said. "And that's why we are working with Congress to identify areas where we can cut, and those areas would be the unnecessary spending." Related Links SpaceDaily Search SpaceDaily Subscribe To SpaceDaily Express
ASEAN Holds First Joint Disaster Drill After Indian Ocean Tsunami
Kuala Lumpur (AFP) Sep 19, 2005Some 200 personnel took part in Southeast Asia's first joint disaster drill Monday, aimed at preparing the region to respond more effectively to events like last year's tsunami tragedy. |
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