September 2, 2005
JS-2699

Snow Holds Press Conference on the Economic Effects of Hurricane Katrina

Thank you all for coming.  For all Americans, our hearts and prayers are with the people of the Gulf Coast during this difficult time.  This is a time for all of us to do whatever we can to help those affected by Hurricane Katrina.

Katrina is a disaster on many levels, but I'm confident that the residents of places like New Orleans and Gulfport, Mississippi, and southern Alabama will recover.  It's the spirit of Americans to do so.  Americans are resilient.  We picked ourselves up after 9/11, we picked ourselves up after other disasters, and we have the will and the resources and the resolve to do so again.  

America is a compassionate nation.   We are all doing what we can to help.  Many people are making donations to charitable organizations like the Red Cross that are assisting in the relief efforts.  I was also heartened to see businesses providing assistance as well. 

For the federal government, getting assistance to those in need is our first priority.  FEMA, under the leadership of Mike Brown, and other federal agencies have been rushing tons of food, medicine, water and ice to the victims of this disaster.

I also commend the Congress for quickly approving the President's request for an additional $10.5 billion in emergency funding to assist in this effort. 

At the Treasury, we have been doing our part as well.  We have been in regular contact with financial market leaders, banking leaders, business leaders and federal regulators to ensure that we do everything we can possibly do to make sure the financial system is functioning smoothly.

Chairman Greenspan and I just met this afternoon.  We discussed the current state of the economy, and potential impacts of Katrina and her aftermath.  The devastation in the Gulf Coast region is widespread, encompassing more than 90,000 square miles.  People have lost their homes, many have lost their jobs.  This is a challenging time for our country. 

We are fortunate that we are dealing with this situation from a position of strength. Today we learned that the economy created 169,000 new jobs last month and that the unemployment rate has hit a four-year low at 4.9%.  The American economy has been steadily expanding and creating jobs for 27 straight months now.

The oil and gas supply, obviously, is of immediate concern. As the President has said, we view this event as a temporary disruption – one that the government and private sector, together, can address by repairing refineries and getting pipelines up and running.  Private citizens can contribute to these efforts, as the President has asked them to do, by conserving energy in their day-to-day lives.

Secretary Bodman is approving loans of crude oil from the Strategic Petroleum Reserve, the EPA has provided a temporary waiver that eases restrictions on gasoline additives as well. I was also pleased that the International Energy Agency has agreed to provide 60 million barrels of oil and gasoline over the next month, 2 million barrels per day.

At Treasury, the IRS today announced that we have waived a tax regulation that will immediately increase the available supply of diesel fuel nationwide by allowing dyed diesel fuel, which is ordinarily not subject to federal excise taxes because it is intended for off-road use in farm equipment or in government vehicles such as school buses, to be used on-road.  This will immediately increase the usable supply of diesel fuel nationwide, which is especially needed in Gulf Coast relief efforts.  At a time like this, the tax treatment of fuel is far less important than getting fuel to those who need it, particularly those involved in the transportation of food and medical supplies to those affected by the hurricane.

We have also extended the September tax filing and payment deadlines until October 31st for affected areas and have relaxed income-requirements for low-income housing so that victims of Hurricane Katrina can take refuge in any housing available regardless of income.  Treasury is actively supporting both the Postal Service and the Social Security Administration to ensure timely delivery of Social Security and Supplement Security Income checks to impacted areas. 

Our ability to deal with this catastrophe is enhanced by our economic strength. I am confident that the American economy will continue to prove its incredible vigor and resilience.