WASHINGTON, Sept. 7 - Hurricane Katrina is about to blow a hole in the federal budget, and it is already jeopardizing President Bush's agenda for cutting taxes and reducing the deficit.

The Congressional Budget Office reported today that it had told congressional leaders that Hurricane Katrina could reduce employment this year by 400,000 jobs and could slow the economy's expansion by as much as a full percentage point. As a nonpartisan advisor to Congress, the office had previously predicted that the economy would grow by 3.7 percent in 2005 and by 3.4 percent in 2004. The budget office's report came in a nine-page memo delivered Tuesday to Sen. Bill Frist, Republican of Tennessee and the majority leader.

Also on Tuesday, administration officials told Republican lawmakers that relief efforts were running close to $700 million a day, and that the total federal cost could reach as high as $100 billion.

That would be many times the cost of any other natural disaster or even the $21 billion that was allocated for New York City after the terrorist attacks of Sept. 11, 2001.

Still, the budget office saidin its report that the start of the recovery of the country's refineries was promising. "Last week, it appeared that larger economic impacts might occur, but despite continued uncertainty, progress in opening refineries and restarting pipelines now makes those larger impacts less likely."

It added: "While making specific estimates is fraught with uncertainty, evidence to date suggests that overall economic effects will be significant but not overwhelming."

But the expenses of Katrina are mounting just as Mr. Bush and Republican leaders are trying to push through spending cuts for programs like Medicaid and student loans, extend about $70 billion in expiring tax cuts, and reduce the federal budget deficit.

"There is no question but that the costs of this are going to exceed the costs of New York City after 9/11 by a significant multiple," said Senator Judd Gregg, Republican of New Hampshire and chairman of the Senate Budget Committee.

White House officials are planning to ask Congress as early as Wednesday for a second round of emergency financing, perhaps as much as $40 billion, but they said even that would be a "stopgap" measure while they assessed the full costs.

Though it is still too early for accurate estimates, the costs are all but certain to wreak havoc with Mr. Bush's plans to reduce the federal deficit and possibly his plans to extend tax cuts.

On Monday, Mr. Frist postponed plans to push for a vote on repealing the estate tax, a move that would benefit the wealthiest 1 percent of households, costing more than $70 billion a year once fully put in effect.

House and Senate leaders are also grappling with their pre-hurricane plan to propose $35 billion in spending cuts over the next five years for entitlement programs like Medicaid, student loans, food stamps and welfare payments.

Those cuts could suddenly prove politically unpalatable to Mr. Bush and Republican lawmakers, who are trying to rebuff criticism that the federal government shortchanged the hurricane's poorest victims.

Congressional Democrats are already using the hurricane as a reason to block Republican tax and spending plans.

"Democrats think this is the worst possible time to be cutting taxes for those at the very top and cutting the social safety net of those at the very bottom, and adding $35 billion," said Thomas S. Kahn, staff director for Democrats on the House Budget Committee.

Budget analysts said the magnitude and unique characteristics of the hurricane made it unlike any previous natural disaster, resulting in a variety of extraordinary costs:

¶Shelter for as many as a million people for months.

¶A potentially high share of uninsured property losses that stem from flooding, which is not covered by private insurers.

¶Education and health care for hundreds of thousands forced to live outside their home states.

"Katrina could easily become a milestone in the history of the federal budget," said Stanley Collender, a longtime budget analyst here. "Policies that never would have been considered before could now become standard."

Indeed, there were signs on Tuesday that Republicans and Democrats had already begun to compete with each other over who might be willing to spend more.

Senator Harry Reid of Nevada, the Senate Democratic leader, predicted on Tuesday that costs could total $150 billion. Top Republican lawmakers, meanwhile, have begun to call for "stimulus" measures to buck up the overall economy.

White House officials contend that costs attributable to the hurricane are separate from Mr. Bush's underlying budget goals, which include cutting the deficit in half over the next four years and permanently extending most of the tax cuts passed in 2001 and 2003.

Budget analysts also note that natural disasters are essentially one-time costs that do not affect the government's long-run fiscal health.

"We can afford $100 billion - one time," said Douglas Holtz-Eakin, director of the Congressional Budget Office. "What we cannot afford is $100 billion in additional spending year after year."

The problem is that, even without the hurricane, the federal government's underlying fiscal health is in poor shape. In July, the White House predicted that surging tax revenues would reduce the deficit this year to $333 billion from $412 billion in 2004.

But many analysts believe that the tax surge was largely a one-time event and that overall government spending is still poised to climb rapidly as a result of the war in Iraq, the Medicare prescription drug benefit and the growing number of baby boomers who will soon reach retirement age.

Before the hurricane, House and Senate Republicans were preparing to work out $35 billion in spending cuts over the next five years that would trim Medicaid payments by $10 billion and make smaller cuts in student loan programs, farm programs, food stamps, housing and cash assistance to poor families.

Under the budget resolution that Congress passed this spring, Congressional committees are supposed to spell out the proposed cuts by Sept. 16. House and Senate leaders had been planning to pass the cuts within a week or so after that.