August 3, 2007Trying to get a handle on the long-term costs of recovery from Hurricane Katrina and related disasters, the House Budget Committee learned Thursday that the more than $100 billion already provided by Congress will not be enough.
With some estimates for capital losses amounting to as much as $150 billion and a State of Louisiana estimate of economic losses of up to $200 billion, the committee seemed to reel at the prospect for making room over the next several years in federal budgets for recovery programs.
Some members questioned whether federal officials are leaning on states and localities hard enough to trim any waste, fraud or abuse in meeting the needs of the four Gulf states hammered by hurricanes Katrina and Rita two years ago.
States and local governments are mainly responsible, with oversight from various federal agencies, for administering the recovery programs.
Testimony submitted by the Government Accountability Office, Congressional Budget Office and Donald Powell, the chief federal coordinator for Gulf Coast rebuilding, showed that the numbers already appropriated and spent on the cleanup are mounting.
Both GAO and CBO largely concurred that Congress and the Bush administration had provided nearly $95 billion in five emergency spending bills for "immediate relief and long-term recovery of the Gulf Coast region," as a report delivered by CBO Director Peter Orszag put it.
In addition to direct appropriations, Congress has authorized $17 billion in federally backed loans to the National Flood Insurance Program, as well as $16 billion in tax breaks for hurricane victims between 2006 and 2016.
The bulk of the money goes to the Federal Emergency Management Agency, the Housing and Urban Development Department and the Army Corps of Engineers.
Of the $45.3 billion for FEMA, about $30.1 billion already has been spent. HUD, so far, has gotten $16.2 billion and doled out $4.8 billion, mostly for housing programs to replace and repair public and private housing stock and for rental assistance.
On the latter issue, the Rev. Donald Boutte, pastor of St. John Baptist Church in New Orleans, implored the committee to set aside budget allocations for more money for construction of rental units in his city.
Not only has the loss depleted the availability of decent, low-cost housing in the city, he said, the shortage of affordable housing has led to soaring rents.
"Today, entry-level school teachers, new police officers, construction workers and even some clergy are in serious need of affordable housing," Boutte said.
On another note, Powell said the Corps has strengthened the Louisiana levees so that "hurricane protection in southeast Louisiana is better than it has ever been." More than 220 miles of levees and floodwalls have been repaired or restored, he said.
August 3, 2007