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President Bush speaks at the National Cathedral at an observance of Friday's national day of prayer.

Gallery: National Day of Prayer

• Viewers skeptical of Bush

• New Orleans partially reopening

• Aid stymied by leadership void

HIGHLIGHTS OF KATRINA AID

Some details of President Bush's aid package for Hurricane Katrina victims and regions.

• A 100 percent reimbursement to states to cover their costs of health care for treating some evacuees from August 29 through January 1, 2006.

• $1.9 billion to reimburse states for the cost of educating displaced students. The money could go to religious schools in states that provide reimbursement to the parents.

• Six-month forgiveness on student loan interest for affected areas, at an estimated cost of $100 million.

• Individual worker recovery accounts of up to $5,000 for job training.

• Increased subsidy rate on Small Business Administration loans and loan guarantees, at a cost of $130 million.

• The cost of Gulf Opportunity Zones is estimated at $1.7 billion over five years.

• Homesteading for low-income refugees to move back into the area.

• The private fundraising effort by former Presidents Bush and Clinton has received pledges of more than $100 million. Donations can be made online at www.BushClintonKatrinaFund.org.

-- The Associated Press

SPECIAL REPORT

• Rebuilding: Vital signs

• Gallery: Landmarks over time

• Storm & Flood: Making history

• I-Report: Share your photos

• Special Report

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(CNN) -- President Bush said Friday his plan for federal projects to rebuild the Gulf Coast following Hurricane Katrina will be expensive, "but I'm confident we can handle it and our other priorities."

The president commented on the budget during a joint press conference with Russian President Vladimir Putin.

Congress has already approved $62 billion in aid for the hurricane-damaged region. Analysts estimate reconstruction costs will be at least $200 billion. But two top White House officials, during a briefing with reporters Friday, refused to estimate the total cost of Bush's proposals.

Before Katrina hit, the non-partisan Congressional Budget Office estimated the 2006 budget deficit at $314 billion, down from $331 billion for the current fiscal year. Those annual deficits add to the historic federal deficit.

Bush: Let us 'clear away the legacy of inequality'

Earlier Friday, President Bush said during a national prayer service that the efforts to recover from Hurricane Katrina offer the nation the opportunity to bridge the racial and economic divide that became painfully visible during the immediate aftermath of the storm.

"Americans of every race and religion were touched by this storm, yet of the greatest hardship fell upon citizens already facing lives of struggle -- the elderly, the vulnerable and the poor," Bush told those gathered at the National Cathedral in Washington. "And this poverty has roots in generations of discrimination and segregation that closed many doors of opportunity."

Bush along with political and religious leaders from the stricken region spoke in observance of a national day of prayer for the hurricane victims.

"As we clear away the debris of a hurricane, let us also clear away the legacy of inequality," the president said. "As we rebuild homes and business, we will renew our promise as a land of equality and decency."

Bush said the nation was thankful for the heroic work of the Coast Guard, firefighters, doctors, nurses and other first responders to the storm and that the nation was committed to the rebuilding efforts.

"We are humbled by the vast and indifferent might of nature and feel small beside its power. We mourn with those who mourn and we ask for strength in the work ahead," he said. "The destruction of this hurricane is beyond any human power to control, but the restoration of broken communities and disrupted lives now lies in our hands"

Bush: "You are not alone"

President Bush pledged Thursday night to put the full might and money of the federal government behind the reconstruction of the Gulf Coast and vowed to its people that "in the journey ahead, ."

In a nationally televised address from Jackson Square in the historic French Quarter of New Orleans, Bush outlined his plans to assist recovery efforts and to prevent bureaucratic errors of the sort that slowed the response to Hurricane Katrina. Bush also vowed to help rebuild New Orleans. (Watch video of reaction to the president's speech -- 4:50)

The president said the federal government will pay for most of the costs to fix damage during and after the storm -- the most destructive hurricane ever, according to the National Oceanic and Atmospheric Administration -- struck August 29.

"Federal funds will cover the great majority of the costs of repairing public infrastructure in the disaster zone, from roads and bridges to schools and water systems," he said. (Watch video on covering cost of Katrina -- 4:34)

"Our goal is to get the work done quickly. ... And taxpayers expect this work to be done honestly and wisely, so we will have a team of inspector generals reviewing all expenditures." (Transcript of Bush's remarks)

"Within this zone, we should provide immediate incentives for job-creating investment, tax relief for small businesses, incentives to companies that create jobs, and loans and loan guarantees for small businesses, including minority-owned enterprises, to get them up and running again," he said.

Bush also talked about his plans for federally funded worker recovery accounts of up to $5,000 for evacuees to spend on job training, classes or child care during the hunt for employment.

Broader role for armed forces

Bush -- who earlier this week took responsibility for a disaster response widely seen as sluggish and confused -- said the federal government would henceforth react to large disasters differently.

He conceded "the system, at every level of government, was not well coordinated and was overwhelmed in the first few days."

"It is now clear that a challenge on this scale requires greater federal authority," he said, "and a broader role for the armed forces -- the institution of our government most capable of massive logistical operations on a moment's notice."

The president called on U.S. cities to have "clear and up-to-date plans for responding to natural disasters, disease outbreaks or terrorist attacks, for evacuating large numbers of people in an emergency and for providing the food, water and security they would need."

"I consider detailed emergency planning to be a national security priority," he said.

Reassurances to black community

The president also sought to address concerns of the black community, hit particularly hard in Louisiana.

"As all of us saw on television, there is also some deep, persistent poverty in this region as well," he said. "And that poverty has roots in a history of racial discrimination, which cut off generations from the opportunity of America.

"We have a duty to confront this poverty with bold action. So let us restore all that we have cherished from yesterday, and let us rise above the legacy of inequality."

He unveiled plans for a Urban Homesteading Act, which would make some federal property free to some poor families through a lottery system.

In turn the family would secure a mortgage or financial help to build on the lot through a charity like Habitat for Humanity, he said.

Bush praised Americans for their charitable contributions to relief funds and said "this evening the need [for donations] is still urgent."

Democrats offer alternative plan

In a joint statement released after the speech, the Democratic congressional leadership said the president needed to do more.

"The president offered comforting words tonight, but the victims of Hurricane Katrina don't need just words, they need a plan that will lead the way in recovery, rebuilding, and renewal," Sen. Harry Reid, D-Nevada, and Rep. Nancy Pelosi, D-California, said.

Hours before Bush spoke, the leaders issued their own call for a domestic "Marshall Plan," modeled on the U.S. effort after World War II, to rebuild the Gulf Coast.(Full story)

The Democratic leaders also renewed their call for an independent investigation of the Katrina response.

"It takes more than just taking responsibility to right the many wrongs that occurred over the past two weeks. The American people need answers from independent experts outside of the political arena to learn from the past and prepare and protect our nation and our communities for the future. We can and must do better," they said.

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