Following the devastating hurricane and flooding in the Gulf region, President Bush sent Congress two separate requests in hurricane relief, which the House and the Senate passed without delay. They raise Katrina's cost to federal taxpayers to $62.3 billion so far. This of course is on top to the billions of dollars private citizens have donated to come to the rescue of the victims of the hurricane. Now, members of Congress must make a sacrifice of their own and cut low priority spending and wasteful programs--such as broken international aid programs--to offset the new financial burden our nation faces.

White House budget director Joshua B. Bolten announced, "This will not be the last request."  No matter what the final number is, the mounting cost of the hurricane and its aftermath comes at a time when the federal budget deficit, even though in retreat, is very large and the cost of the war in Iraq steadily increasing. So while the federal government should help pay for the recovery of Louisiana and Mississippi, the president and Congress should make sure that it does not impose excessive costs on the American economy, because that is what the American people want and there is a multitude of waste to be cut. The president should request that the $62 billion be offset with equivalent spending cuts. The good news is that it shouldn't be too difficult.

First, American taxpayers want spending to go down and will support the administration in its effort. Polls show that 71 percent of Americans are more bothered by how their taxes are spent than by the amount of taxes they pay and that the average American feels that nearly half of his or her tax dollars are wasted.

Second, there is a lot of fat in the budget. During the last five years, total federal spending increased by 40.3 percent from $1.86 trillion in FY2001 to $2.6 trillion in FY2006. Contrary to general beliefs, most of the new spending is unrelated to 9/11 or Iraq. In fact, defense spending accounts for less than one-third of the $610 billion increase in discretionary spending since 2001.

Table 1. Proposed Spending Cuts to Offset Bush Hurricane Relief Request   
(Figures are FY2006 outlays in $billions)

Source: de Rugy's calculation from the Budget of the U.S. Government, FY2006.

Table 1 proposes a series of program termination that would save taxpayers another $62 billion. Of course, the items should be trimmed regardless of Katrina. However, can we really justify billions going to Vocational and Adult Education when so many adults and children just lost everything they owned?  The work of many government employees, among them NASA workers and air traffic controllers should be privatized. And the federal government should also sell its defective business operations like Amtrak.

But this is also the opportunity to cut billions of dollars earmarked for ineffective international aid agencies. Many studies have shown how the $2.7 billion spent on foreign economic aid does not promote economic growth abroad and sometimes enriches corrupt and odious regimes. The Agency for International Development (USAID) has proven ineffective, wasteful if not destructive and needs to be abolished.

A 2005 AEI working paper by Roger Bate and Ben Schwab shows that in 2004, instead of concentrating its activities on life saving operations abroad, the agency spent 81% of its budget in the United States mainly on consultants, contractors, conferences and building a self-serving consensus. In its health programs the agency buys very few commodities that would actually save lives such as insecticide sprays, drugs, bed nets, and condoms, but spends huge amounts to educate people about how to save themselves. As a result, USAID programs are akin to a food aid program that consists of giving out menus rather than food.

The recent Tsunami disaster is likely to provide yet another tragic example of the agency's failure to help. When malaria reappeared in some post-tsunami locations (Aceh in particular), USAID's malaria "all talk no goodies" approach did little to stop mosquitoes from injecting survivors with the mortal parasite.

To add insult to injuries, USAID's contracting culture has led the agency to actively argue against fighting malaria through spraying insecticides to kill mosquitoes. The agency's dislike of insecticide spraying in poor disease-riddled regions should be contrasted with US domestic policy where one of the first actions taken in the aftermath of Hurricane Katrina was to spray New Orleans and its environs with insecticides. The entire agency should be scrapped and aid, where it is done at all, should pass through better agencies like the Millennium Challenge Corporation.

Like millions of Americans whom have made personal sacrifice to help the survivors of Katrina's devastations, the President and Congress should make a sacrifice of their own and cut low priority spending and wasteful programs to offset the new hurricane relief spending increase. Being compasionate should not prevent lawmakers from being responsible leaders.

Veronique de Rugy is a research fellow at the American Enterprise Institute. Roger Bate is a resident fellow at the American Enterprise Institute.