[StBernard] Rejection of Building Plan Causes Dismay in Louisiana

[Westley Annis]

January 26, 2006
Rejection of Building Plan Causes Dismay in Louisiana 
By ADAM NOSSITER
NEW ORLEANS, Jan. 25 - The White House decision to withhold support from a
major Congressional reconstruction plan left Louisiana officials expressing
bewilderment on Wednesday over what they characterized as the lack of a
workable alternative from the Bush administration. 

Congress has appropriated $6.2 billion in reconstruction aid, but officials
say that is not enough to meet housing needs.

"The White House simply needs to tell us what their plan is," Gov. Kathleen
Babineaux Blanco said Wednesday at a news conference in Baton Rouge. "We
don't see an adequate plan. You can't fix a $12 billion problem with $6
billion."

Other estimates have put the reconstruction cost much higher, with some
going as high as $80 billion.

With whole neighborhoods in ruins nearly five months after Hurricane
Katrina, officials of both political parties had lined up behind the
Congressional reconstruction plan, which would have set up a federal agency
to buy out flooded homeowners, cleaned up the land and sold it to builders. 

Planners and officials had described the proposal, by Representative Richard
H. Baker, Republican of Louisiana, as the best hope for avoiding what is
starting to occur, islets of rebuilding in seas of destruction. 

A measure setting up the agency, the Louisiana Reconstruction Corporation,
was approved by the House Financial Services Committee before Congress
adjourned last month. White House officials told Mr. Baker on Monday,
however, that they would not support his bill. 

He joined Ms. Blanco at the news conference on Wednesday.

Thousands of homeowners remain in limbo. Officials here say the storm
destroyed or damaged more than 200,000 houses. 

Emerging from the officials' statements on Wednesday was a sharp
disagreement with the White House over the state's needs. Although Mr. Baker
and Ms. Blanco described a sight that has become grimly familiar to
residents, block after block of ruined houses, the administration has begun
to concentrate on a much smaller picture of destruction. 

Donald E. Powell, the federal coordinator for Gulf Coast rebuilding, spoke
this week of helping homeowners who lacked flood insurance because they were
not in the federally designated flood plain, a number that comes to 20,000,
an aide said. The $6.2 billion in block grants for Louisiana will be enough
to help them, Mr. Powell said. 

Louisiana state officials say that number understates the problem, failing
to include tens of thousands of other homeowners whose houses were destroyed
. 

"Our count indicates far in excess of 200,000," Mr. Baker said. "What
happened to the other 185,00?" 

Administration officials have suggested that Louisiana follow Mississippi's
lead in providing grants to homeowners. Ms. Blanco, a Democrat, rejected
that approach on Wednesday, saying the state did not have enough money for
it.

Representative Bobby Jindal, a Republican from New Orleans suburbs, also
said 20,000 homeowners represented a significant understatement. 

"I very strongly disagree with their methodology in terms of the final
numbers," Mr. Jindal said. 

Administration objections to Mr. Baker's bill centered on two aspects, Mr.
Powell suggested. The bill would add a federal bureaucracy and set up what
would be a government real estate agency, "which we don't think is a good
business," said Mr. Powell, a former chairman of the Federal Deposit
Insurance Corporation. 

The cost of Mr. Baker's plan- he and an aide used figures from $30 billion
to $80 billion - prompted wariness, too. Old suspicions about how Louisiana
spends its money have not disappeared. 

Mr. Powell has all but put state officials on notice that close watch will
be kept on the Community Development Block Grant money. 

"I think it's important for Louisiana to spend this money in a very prudent
and wise manner," he said on Tuesday. 

That was echoed by an administration supporter on a rebuilding committee,
Donald T. Bollinger, a shipbuilder, who said, "I think we have to
demonstrate to Congress and the president that we are going to handle our
C.D.B.G. grants responsibly." 

Mr. Bollinger, a major fund-raiser for President Bush, was not so
pessimistic about the rejection of Mr. Baker's plan.

"Everybody wants to think that if the Baker bill fails we have no other
solution," he said. "I don't agree with that at all. I know we need a tool
similar to that." 

More typical of the disappointment was a statement by Walter Isaacson, a
member of the Louisiana Recovery Authority, created by Governor Blanco.

"We tried to have a prudent plan that was a way to build a safer city," Mr.
Isaacson said. "This undercuts us, and undercuts the credibility of a
president when he says he wants New Orleans to be able to rebuild itself."