February 3, 2006
U.S. Plans $18 Billion More for Gulf, but Local Officials Are Skeptical
By JAMES DAO
WASHINGTON, Feb. 2 — The Bush administration announced Thursday that it would ask Congress to provide $18 billion more for Gulf Coast reconstruction this year, on top of $67 billion appropriated last year. But it provided no details about how the money would be spent, and made clear that it did not plan to request additional aid for the region in its 2007 federal budget.
Congressional officials said they expected the $18 billion plan, details of which will be released over the coming month, to call for rebuilding a damaged Veterans Administration hospital in New Orleans, strengthening levees and replenishing the Federal Emergency Management Agency's disaster relief fund.
But there was bipartisan concern among Gulf Coast lawmakers that the plan would not leave enough money for rebuilding permanent housing, widely considered the region's most pressing need.
"Any ongoing help is a good thing," said Senator David Vitter, Republican of Louisiana. "But it is pretty frustrating, because I don't know what that figure represents."
The White House also became embroiled in an argument Thursday with Louisiana's Congressional delegation over President Bush's opposition to a plan by Representative Richard H. Baker, a Republican from Baton Rouge, to create a nonprofit corporation that would use bond proceeds to redevelop flooded areas.
A consensus of Louisiana officials has backed Mr. Baker's bill, which would compensate property owners for at least 60 percent of their mortgages and then sell cleared properties to private developers, as the best way to rebuild New Orleans and surrounding parishes. Many property owners and small-business operators in those areas sustained severe flood damage but lacked flood insurance.
The White House has opposed the bill as expensive and bureaucratic. On Thursday, Donald E. Powell, the federal coordinator for Gulf Coast rebuilding, detailed the administration's objections in a Washington Post op-ed article, saying Mr. Baker's plan would provide insufficient Congressional oversight and "destroy free-market mechanisms."
In a news conference, Mr. Powell said the $6.2 billion in community development block grants that Congress approved for Louisiana in December provided the best method of rebuilding damaged houses.
Mr. Powell said $1 billion of that money would be sufficient to compensate homeowners outside the flood plain who did not have flood insurance. Louisiana would be free to direct the remaining $5 billion to help property owners in the flood plain, he said.
"We believe that the C.D.B.G. money meets the needs of the uninsured homeowner outside the flood plain," Mr. Powell said, using the abbreviation for the block grants. "It's more direct. It doesn't have the bureaucracy. It doesn't compete with the private sector."
Mr. Powell's remarks provoked an angry reaction from Louisiana lawmakers, particularly Mr. Baker, who accused Mr. Powell of spreading "gross mischaracterizations" about his bill and spending a "dumbfounding" amount of time fighting it.
"We're not asking for handouts, we're not asking for huge giveaways, we're not asking for huge government bureaucracies," Mr. Baker said at a news conference. "We're asking that you help clean the mess up and then get out of the way so we can rebuild."
Mr. Baker said two-thirds of property owners inside the flood plain in and around New Orleans did not have flood insurance, often because they had been told by mortgage brokers that federally constructed levees would protect them. He estimated that partially compensating those property owners would cost well over $20 billion.
Louisiana officials also assert that Mississippi has received a disproportionate share of block grant money: $5 billion, even though Louisiana had three times as many damaged homes.
Also on Thursday, Gov. Kathleen Babineaux Blanco of Louisiana and Gov. Haley Barbour of Mississippi told a Senate committee that the single most important need for both states in preparing for the next disaster was establishing a reliable communications system.
"My head of the National Guard might as well have been a Civil War general," Mr. Barbour told the Senate Homeland Security and Governmental Affairs Committee, referring to the lack of radio and telephone communication after the storm.
Ms. Blanco spent much of the hearing answering questions about why she had resisted pressure from Mr. Bush to have the federal government take over National Guard troops in her state, a move the Bush administration said was necessary to create a single chain of command.
"It's very important for a governor to be able to retain control of the National Guard," she said.