Hurricane Katrina's economic toll could include the loss of up to 400,000 jobs and slower US growth, a congressional report said yesterday as the White House prepared a roughly $50 billion (€40.25 billion) request for the troubled Gulf Coast.
President George W Bush was expected to submit his second budget request for Katrina relief in mid-afternoon and Congress will likely approve it this week. It comes after a $10.5 billion measure he signed on Friday and is expected to be followed by an additional, longer-term package that some say could top $100 billion.
Giving a preliminary tally of the damage from the storm to the US economy, Douglas Holtz-Eakin, director of the Congressional Budget Office, said the "evidence to date suggests that overall economic effects will be significant but not overwhelming".
The report said Katrina could slow economic growth in the second half of the year by one-half to one percentage point.
Mr Holtz-Eakin also said rebuilding from probably the deadliest national disaster to hit the United States ultimately could help the unemployment situation by providing more jobs.
But he acknowledged the estimates were "fraught with uncertainty".
Katrina's destruction could reduce employment through the end of this year by about 400,000, the report said. Employment for September will decline significantly as a direct consequence of the hurricane, the budget office said.
Congressional sources who are familiar with the deliberations over the aid package Bush was preparing said it was likely to be around $50 billion.
The spending will add to an already large US budget deficit. Numbers being talked about for total spending on Katrina relief hover around $150 billion to $200 billion. - (Reuters)
