press clipping

WASHINGTON -- The debate over how to rebuild homes and communities destroyed by Hurricane Katrina erupted into public warfare between Louisiana and the White House on Thursday as the Bush administration sharply denounced the state's preferred solution and the author of the Louisiana plan accused the administration of misleading the public in an effort to kill the proposal. Advertisement

In the wake of criticism that President Bush didn't say enough in Tuesday's State of the Union address about federal help to redevelop the Gulf Coast, the administration's hurricane recovery coordinator launched a media blitz Thursday that included appearances on national TV news shows and an op-ed column in The Washington Post. He also held a news conference in which he announced that the president will request an additional $18 billion in emergency spending for hurricane recovery efforts.

Donald Powell, the Gulf Coast rebuilding coordinator, said the additional money would go to housing and levee improvements, among other things, but details won't be available for 10 to 30 days.

The new spending request would take federal spending on Hurricanes Katrina and Rita to more than $100 billion, Powell said, adding, "That's a lot of money."

The administration's recent references to $85 billion already committed to the Gulf Coast have raised questions about where the money is going. Members of Powell's staff said the figure includes billions for the flood insurance program and temporary housing provided by FEMA, money that the federal government is obligated by law to spend after a natural disaster.

Powell's office estimates that $10.5 billion will be spent for temporary housing; $30 billion for more permanent housing solutions, including block grants and flood insurance; and $15.8 billion for infrastructure, such as levees and highways. Another $31 billion is for assistance to individuals, a figure that includes FEMA assistance, health-care money and education dollars.

Objections to Baker bill

Powell also expressed in the strongest terms yet the administration's opposition to a bill by Rep. Richard Baker, R-Baton Rouge, that would create a federal corporation to buy out damaged and destroyed homes, and provide some repayment to owners and mortgage companies.

The heart of Powell's column in the Post spelled out three major areas in which the administration objects to the Baker plan.

The president has "established important principles that will guide the federal role in the response" to hurricane rebuilding, Powell said. "State and local leaders -- not those in Washington -- must develop the recovery plan; taxpayer dollars must be spent wisely, with strong congressional oversight and accountability mechanisms in place; and, finally, markets must be able to work properly without interference from the government."

He said $6.2 billion in community development block grants made available to Louisiana was more than sufficient to provide housing assistance to those living outside of flood zones who lacked insurance.

That, he said, should cost only $1 billion, leaving more than $5 billion for other needs, including helping homeowners within the flood zones who either lacked insurance or whose insurance coverage was insufficient to cover rebuilding costs.

Baker's Louisiana Recovery Corp. would use as much as $30 billion backed by federal bonds to pay for housing buyouts with some percentage of that being returned to the federal Treasury when the corporation sells the property.

'Just disturbing'

Baker was outraged by Powell's comments.

"That Mr. Powell would take out op-ed space specifically to undermine my legislation is disappointing to say the least," Baker said in a written statement. "That he would use that column to spread gross mischaracterizations of the legislation is just disturbing. If I had any worries that my legislation was dead, I am now certain that it isn't, or else Mr. Powell would not be shooting at it."

He said White House suggestions that Louisiana's housing problems can be solved by helping 20,000 homeowners outside flood zones rebuild is ludicrous, given the estimates that 200,000 homes were either seriously damaged or destroyed.

"If you relegate the solution to just helping people outside the flood zone, then you're relegating most of our country to not receiving housing help in the event of a major catastrophe like Katrina," Baker said.

Sen. Mary Landrieu, D-La., issued a point-by-point rebuttal of Powell's column, noting that the Baker plan was a locally produced and supported plan, that it would have the same oversight as other federal programs and it would depend on the private sector to rebuild communities based on local planning.

Baker said he was encouraged later in the day when he received a call from White House domestic policy adviser Al Hubbard, who suggested that they talk about Louisiana's housing crisis. If the administration would devote a sizable portion of the new $18 billion to housing in Louisiana, Baker said, "We could be a long way to meeting the problem."

But early indications are that the emergency financing is intended for the Federal Emergency Management Agency, Department of Housing and Urban Development and Small Business Administration, and perhaps for damaged military facilities in the hurricane zone -- not for new major housing restoration programs.

Waiting for details

Reaction to the new spending proposal was uncertain because no details were provided.

"We certainly welcome additional federal assistance," Landrieu said. "But I am highly concerned that the administration's proposal, which lacks details, will put more money into dysfunctional federal bureaucracies like FEMA and won't adequately address urgent needs such as housing, levees and flood protection."

Landrieu urged Bush to consider giving Louisiana a share of royalties from offshore oil and gas produced off its coast to help finance the state's massive post-Katrina needs. Powell was noncommittal to that idea during his news conference Thursday.

Sen. David Vitter, R-La., said it's difficult to assess the proposal until details are made available.

Rep. Bobby Jindal, R-Kenner, said he's "encouraged by the latest commitment to the Gulf Coast region and the rebuilding of south Louisiana."

"Obviously, the details of their request are important, and I encourage the administration to set strong priorities with this new funding," Jindal said.

The announcement of the request for new hurricane recovery spending came on the same day the administration announced it will seek $120 billion more for the wars in Iraq and Afghanistan. Powell said the money for the Gulf Coast recovery would be for fiscal year 2006, which ends Sept. 30, and is seen by the administration as the last Katrina-related spending item of the year.

He said he did not anticipate any Katrina-related funds would be requested in the president's 2007 budget, due out Monday.

On an appearance on CNN, Powell said the administration has committed $85 billion already in hurricane relief, including about $24.5 billion for housing.

But he said the size of the commitment should not be minimized.

"The president, as I mentioned, is committed to assisting the rebuilding of the Gulf Coast," Powell said on CNN. "The plans need to be developed by the local people for the long-term rebuilding, and I've been coordinating and working with many of the parish presidents, New Orleans leadership and state leadership about those building plans."

The $24.5 billion figure includes $4 billion for temporary housing as well as $11.8 billion in payouts from the federal flood insurance program, Powell's staff said.

That number also includes $6.2 billion in Community Development Block Grants, $1.5 billion in home loans from the Small Business Administration, $265 million for a temporary apartment program administered by the U.S. Department of Housing and Urban Development, $38 million in mortgage assistance, $70 million in low-income tax credits, and $630 million in rural housing assistance.

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Bruce Alpert can be reached at bruce.alpert@newhouse.com or (202) 383-7861. Laura Maggi can be reached at lmaggi@timespicayune.com or at (225) 342-5590.