That sounds like a lot of money, and it is, though probably not as much as people think. This adds up to about $9 billion per year. Compare this to costs in this year's federal budget: $31 billion for veteran's benefits, $40 billion for "administration of justice," $31 billion on environmental spending, $80 billion on education. So, the cost of a return to the moon is significantly less than these important costs.
I think NASA's in trouble, though, because of their timing. This announcement was made just days after the president requested another $60 billion for Katrina relief on top of a $400 billion federal deficit. Plus, we have two major military conflicts to pay for. So it is difficult to ask for even more spending to go to the moon.
The reason for the bad timing has to do with the federal budget process. This is the time of year when the 2007 budget is being prepared by the president for submission to Congress, so government agencies have to figure out what they want and need and justify those figures. It is just bad luck on NASA's part to time the announcement of the moon program right as unexpected major spending becomes necessary.