The Cost of Katrina and How it May Impact Montana – What’s the Future of the Economic Gravy Train?

The cost of Katrina was the subject on talk radio as I listened recently when the host accepted a call from a researcher at the Cato Institute. (Cato is a conservative “think tank headquartered in Washington, D.C.) The researcher echoed the concerns of other listeners on the estimated $200 billion price tag of the hurricane. He said the simple solution was to cut non-essential spending from the budget, and that in a quick analysis that very morning, Cato budget experts had easily identified over $60 billion in obvious cuts in federal spending.

By Former Montana Secretary of State Bob Brown

Near the top of his “obvious” list was elimination of the government subsidy for Amtrak. Amtrak has been identified by others as an example of wasteful spending. And various commentators in the past few days have fingered excessive “pork” in the recently passed transportation bill as a likely place to reduce unnecessary spending.

We Montanans like to think of ourselves as independent-living, rugged individualists, but the truth is that we have become heavily dependent on the taxpayers of the other 49 states. We consider Amtrak our lifeline, but it is government subsidies that keep it running.

The transportation bill is particularly generous to Montana. Senator Baucus vows a fight to the finish to keep it from being reconsidered, describing the bill as “our economic development program for Montana.”

When it comes to government money, no doubt about it, Montana has done well in Washington. According to U.S. Census Bureau statistics, for every dollar Montanans pay in federal taxes we receive back $1.60. Only six other states enjoy a better return on their tax dollar.

The likelihood of the gravy train rolling on forever, however, is nonexistent. The country can’t afford it. The national debt is spiraling out of sight.

But cutting the budget means threatening sacred cows. Two of the cows most sacred to Montana are Amtrak and highway construction projects. Other states have their sacred government-funded cows, too. They also have able congressional advocates protecting them.

Congressional coalitions forged to pass spending legislation will reunite to protect it. Well-intentioned budget cutters will likely learn that it is about as difficult politically as it is biologically to cut pork from a cow.

All we are doing now to pay for our deficit spending is borrowing. Other countries such as China and India, with far lower standards of living than ours, are nonetheless sacrificing to cash in on the opportunity to fund our exploding national debt. They are disciplined, determined and focused on the future.

The more money we borrow from other countries to pay our bills the more control they will have over us and the future of our children. They know it, and as they look ahead, they’re counting on our continued fiscal irresponsibility as they count our I.O.U’s.

Katrina’s catastrophe has been a wake-up call for Americans willing to hear and heed it. Even our great nation has its limits. We want our tax cuts at the same time we want our spending increases. If this generation’s reckless fiscal policies continue, our children will be in no position to respond to future Katrinas. They will be too busy paying off our debt to China. The alternative of making some modest reductions in spending now, and raising some taxes or perhaps postponing tax cuts, is the least this generation owes to its kids.

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Bob Brown is a Senior Fellow at the Center for the Rocky Mountain West http://crmw.org/ . He is an educator who served Montana in both the Montana House and Senate and as Secretary of State. [email protected]