A few weeks ago, another downgraded projection of this year's federal deficit signaled not just a thriving economy but a glimmer of overdue, albeit limited, fiscal responsibility in Washington. Then came Hurricane Katrina, the tragic aftermath of which will require massive federal spending in rescue, relief and rebuilding efforts.

And though those deficit predictions had been lowered, they still called for red ink in excess of $300 billion this year. Katrina's untold costs, now estimated to reach -- or surpass? -- $150 billion, already have destroyed any illusions about moving closer toward budgetary balance anytime soon.

Certainly Washington must meet the considerable monetary needs of the Katrina crisis, not just this year, but for many years to come. But Congress, the White House and the American public should understand that while Katrina's victims rightly rate top priority, spending money we don't have eventually exacts a lasting price. That means spending government money on all levels -- and for all purposes -- wisely.

It also means realistically confronting the nation's financial commitments beyond those forced by Katrina. Joshua Bolten, director of the White House's Office of Management and Budget, sounded a bit too optimistic earlier this week with this assessment: "Right now we see ourselves on a continuing declining path in the deficit out over the next several years toward the 2009 goal that the president talked about. This kind of spending adds a challenge to us in meeting those goals, but I don't think it's a long-term challenge. I think the kind of spending we're talking about here is something that will be a concern in the next year or two, and not long run for the economy."

Yet if Katrina doesn't present "a long-term challenge" in terms of federal funding, what does?

Ultimately, with or without Katrina, any other natural disaster or the war on terror, prudently managing federal spending demands fixing Social Security and Medicare. As Federal Reserve Chairman Alan Greenspan warned Congress last month, "With the baby boomers starting to retire in a few years and health spending continuing to soar, our budget position will almost surely deteriorate substantially in coming years if current policies remain in place."

And the best way to avert that deterioration -- and to assure that Washington can cover its Katrina bill -- remains effective, comprehensive entitlement reform.