US President George W Bush has ruled out raising taxes to pay for the cost of the massive recovery effort on the hurricane-hit Gulf Coast.
Large parts of New Orleans remain under water
He indicated the programme, which White House officials say could cost up to $200bn (£110bn), might be partially funded by spending cuts in other areas.
"You bet it will cost money, but I'm confident we can handle it," he said.
The president has said he accepts that his government did not deal adequately with the effects of Hurricane Katrina.
At a memorial service at Washington's National Cathedral, he said the task of rebuilding the southern states affected by the hurricane was a chance to wipe out poverty and remnants of racial injustice.
He said those hit hardest by the hurricane were already impoverished because of years of discrimination.
"As we clear away the debris of a hurricane, let us also clear away the legacy of inequality," Mr Bush said.
"Americans of every race and religion were touched by this storm, yet some of the greatest hardship fell upon citizens already facing lives of struggle: the elderly, the vulnerable, and the poor."
Returning to New Orleans
The confirmed death toll from the hurricane has risen to 792.
About 40% of New Orleans, the area hardest-hit, is still flooded ands the sewage system is still not working properly. But, nearly three weeks after the disaster, some businesspeople are preparing to return to the city.
Over the next 10 days, some 200,000 people will be allowed back, but as the BBC's Claire Marshall reports from the city, those returning will find a very changed place.
They will have to pass military checkpoints to enter the city limits. Once inside New Orleans, they will find it difficult to get clean drinking water and food supplies.
Gulf opportunity zone Immediate incentives for job-creating investment
Recovery accounts Up to $5,000 help for job-seekers, for training, childcare etc
Urban homesteading act Federal-owned land handed out in a lottery for new homebuilding
But the US military announced on Friday it was withdrawing around 4,500 of the federal troops deployed in the region.
More than 7,000 extra troops were sent to the Gulf coast two weeks ago to help with relief efforts. The rest will remain indefinitely, spokesman Bryan Whitman said.
Ten thousand National Guard troops also left at the beginning of the week, he said, adding that total military strength in the region was now 61,000 - down about 10,000 from its peak last week.
Congress has already approved $62bn for the recovery effort along the Gulf Coast, but that is expected to run out next month.
President Bush has refused to put a price tag on his hurricane recovery plans.
"It's going to cost whatever it costs," he said at a joint news conference with Russian President Vladimir Putin on Friday.
"I'm confident we can handle it, and I'm confident we can handle our other priorities. It's going to mean that we're going to have to cut unnecessary spending."
The president's approval ratings have slumped to 40%, the lowest of his time in office.
Continuing conflict in Iraq and rising fuel prices were affecting his support even before Hurricane Katrina struck on 29 August, correspondents say.