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Report: Government's tab for hurricanes to be less than $150-billion

WASHINGTON - The federal government's tab for hurricane relief and rebuilding efforts is likely to cost less than $150-billion, Congress' top budget analyst said Thursday, an amount significantly less than original estimates tossed about in the immediate aftermath of the disaster.

Congressional Budget Office director Douglas Holtz-Eakin told the House Budget Committee that his agency now estimates damage to homes, government buildings, oil refineries and businesses will be $70-billion to $130-billion. Of that, at least $40-billion is covered by private insurance, he said.

Those figures don't include the immediate relief and rescue efforts, which have been paid out of the $62-billion Congress has already approved. About $20-billion of those funds has been earmarked so far, Federal Emergency Management Agency chief R. David Paulison told lawmakers.

But Holtz-Eakin said the total costs to taxpayers will come nowhere close to estimates of $300-billion to $400-billion made by some a month ago.

"There's nothing that we've seen so far that adds up to even approach $200-billion," he said. "Everything we've seen is in the vicinity of $150-billion or below."

CBO also updated its estimate of the budget deficit for the fiscal year that ended Sept. 30, estimating $317-billion in red ink, significantly less than 2004's record $412 billion - and $14-billion less than CBO estimated seven weeks ago.

Congress is already conducting hearings on whether the money appropriated so far is being spent wisely. Paulison said four federal contracts that were awarded with little or no competition will be rebid in an effort to save money.

FEMA awarded no-bid contracts of as much as $100-million each for housing and construction to four firms - Bechtel Corp., Fluor Corp., the Shaw Group, and CH2M Hill - it had reviewed shortly before Katrina slammed into the Gulf Coast. So far, the four companies have made a combined $132-million, FEMA officials said.

[Last modified October 7, 2005, 01:51:07]