Outlook uncertain for bill creating Katrina recovery organization
Baker said he and other members of the state's congressional delegation are working under a tight deadline because banks and mortgage companies might soon start foreclosure proceedings against many of the estimated 205,000 Louisiana homeowners whose residences are uninhabitable.
"We are very late right now. We are soon approaching the six-month anniversary of the storm. Homeowners have not paid mortgage notes. There is a point which mortgage companies and banks have to take action," said Baker, whose bill is backed by some banking and mortgage groups.
The House Financial Services Committee approved the bill in December and it is awaiting floor action. The measure would allow the proposed corporation to buy properties destroyed by the hurricane at roughly pre-Katrina values. It would be financed by the issuance of up to $30 billion in U.S. Treasury bonds, with some costs being recouped from the eventual resale of the property.
In a news conference Thursday, Bush defended his administration's opposition to the plan by noting the Gulf Coast region has received $85 billion in recovery money and that he is concerned about creating an additional federal bureaucracy through Baker's bill.
"We'll continue to work with the folks down there. But I want to remind the people in that part of the world, $85 billion is a lot," Bush said.
Baker said he has been frustrated because the White House has not proposed an alternative. So far, Bush administration officials have placed the onus on Louisiana officials to develop a plan based on $6.2 billion in recently allocated Community Development Block Grant funding for recovery efforts there.
Baker complained the block-grant structure is more bureaucratic than his proposal and not all of the money will go to housing, leaving as many as 185,000 homeowners without any help.
"We are not in any position to dictate anything. Almost any set of terms and conditions they would wish to place on this style of resolution, the delegation and the governor would willingly accept," Baker said. "We have not had any suggestive modification."
Acknowledging that he is fighting Katrina fatigue among many fellow lawmakers, Baker said that he needs to show the House that the Senate is also moving on a parallel path.
A Senate Democratic aide was more pessimistic about Baker's chances. "House Republicans are giving Baker a lot of problems [over cost]," the aide said.
Louisiana lawmakers did receive some good news Thursday, when Senate Banking Chairman Shelby announced he would hold a Feb. 15 hearing on Baker's bill.
Sen. David Vitter, R-La., said he would explore at the hearing whether lawmakers could use a portion of the block-grant money to help establish a redevelopment authority similar to what Baker proposed.