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Sunday, February 11, 2007

When $110 Billion Isn't

5 states, 3 storms slice up federal pie
Sunday, February 11, 2007
By Bill Walsh
WASHINGTON -- In the wake of the brutal 2005 hurricane season, the White House and Congress made a point of repeatedly noting that $110 billion in federal aid had been dispatched to the Gulf Coast, the most ever for a disaster. The total was widely touted as a blessing.

But as the region struggles to rebuild 18 months later, the figure has become something of a political curse, especially for Louisiana officials who say they have been consistently shortchanged and are back in the nation's capital looking for more.

The new Democratic majority in Congress seems more than willing to cut bureaucratic red tape to speed the recovery, but hasn't committed to the infusion of new cash the state says it needs.
Republicans and the Bush administration, meanwhile, say the state needs to spend what it has first.

Louisianians making the rounds on Capitol Hill last week kept hearing the same question: Didn't we just send you $110 billion?

"I hear it all the time," said Walter Leger, of the Louisiana Recovery Authority, the state entity in charge of rebuilding programs. "It's frustrating."

The LRA estimates that in Hurricanes Katrina and Rita, Louisiana alone sustained upwards of $100 billion in losses, but hasn't gotten anywhere near that amount. Leger figures the state has $34 billion in "uncompensated losses."

A misinterpretation
He says the $110 billion in federal assistance for the Gulf Coast is widely misinterpreted. First, the money was divided among the five Gulf Coast states and covers damage from Katrina, Rita and Wilma, which hit south Florida. The LRA figures that Louisiana's share of that was about $59 billion, but even that is misleading.

About $18 billion came in the form of disaster relief, which includes the kind of post-crisis assistance -- health care, evacuee assistance, business loans -- the federal government routinely extends in a major crisis. An additional $14.7 billion was in payouts from the National Flood Insurance Program, for which Louisiana policyholders had paid premiums.

By the LRA's calculations, the state has received $26.4 billion in genuine federal help, including money to rebuild levees, homes, schools and community infrastructure.

"A lot has been said about the $110 billion," said Rep. Richard Baker, R-Baton Rouge. "We just haven't seen it."

But skeptics of the state's position aren't hard to find in Washington. The skeptic in chief is President Bush, who has said that the state doesn't need more money, but to spend what it already has.

Shortchanged from start Exhibit A, he said, is Gov. Kathleen Blanco's Road Home housing program, which has been allocated nearly $12 billion; as of Thursday, 590 people had gotten checks totaling $38.3 million.

"I think it's important for the state and the parishes to use what they have right now," said Donald Powell, Bush's Gulf Coast recovery coordinator. "My job is to look at the needs and make recommendations for more funding. But I think anyone would be hard- pressed right now to recommend more funding when the vast majority of the state's federal funds remain unspent."

There also is no shortage of doubters on Capitol Hill. At a hearing last week, Rep. Spencer Bachus, R-Ala., said he thought Louisiana had enough. He read aloud comments Blanco made a year ago praising President Bush and touting the "carefully crafted, legitimate numbers" for the assistance received.

But Leger said Bachus was quoting her out of context and that Louisiana has been shortchanged from the start.

"If we got $59 billion, that means the rest went to Mississippi, Alabama and Texas, and we had four times the damage," Leger said. "That's not fair. That's what people ought to be looking at."

He and Democrats in the state's delegation told the House Financial Services Committee last week that Mississippi has fared far better because of its Republican political clout on Capitol Hill. In December 2005, Mississippi got $5.2 billion for housing recovery in an emergency supplemental spending bill and Louisiana got $6.2 billion, even though Louisiana had far more damage from flooding.

According to the Office of Gulf Coast Rebuilding, Louisiana had 204,737 homes destroyed or with major damage. Together, Mississippi, Alabama and Texas had 77,173.

It helped Mississippi's case in Congress that the man making the final spending decisions, Sen. Thad Cochran, chairman of the Senate Appropriations Committee, is the state's senior senator.

Louisiana officials say the unfairness continued in the supplemental spending package passed in the summer of 2006 in which the state got an additional $4.2 billion for housing. Leger estimated that the actual need was $8 billion to $9 billion, but because of Mississippi's clout, Louisiana's portion was limited.

"I don't begrudge Mississippi its money, but we have to ask what does it really take to fund the recovery?" Rep. William Jefferson, D- New Orleans, said. "There just isn't enough money starting out to measure up to the scope of the damage. The amount was pulled out of the air and politics took over."

The 10 percent rule
The disparity, they say, continues today. At the top of Blanco's wish list is waiving the requirement that Louisiana pay 10 percent of the disaster recovery costs. The Bush
administration reduced the amount from 25 percent, but the Blanco administration says it has cost Louisiana $400 million that could be spent on rebuilding and will cost plenty more.

She says that the federal government waived the local cost-share for Hawaii in 1992 when Hurricane Iniki hit and for Louisiana and Florida the same year after Hurricane Andrew. The local contribution was also waived for New York after the 2001 terrorist attacks.

Powell, the Bush-appointed recovery coordinator, said that extra money was given to Louisiana to cover the state's share and that it's important for locals to take some "ownership of these

But state officials say they will be in a better position to help themselves when they receive a little more help from Washington.

A pamphlet members of the LRA were handing out on Capitol Hill last week quoted from Bush's Sept. 15, 2005, speech in Jackson Square promising "an unprecedented response to an unprecedented crisis."

"We are still waiting to be treated like other states," it says.
From Jenni

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