Shelby spoke as his panel examined a legislative proposal to create a government-sponsored corporation to redevelop areas devastated by Katrina -- a measure that has encountered strong White House opposition.
"Federal assistance to rebuild must be focused upon helping those who cannot help themselves. Federal assistance should also support the functioning of a private market," said Shelby, who has been noncommittal on the bill sponsored by Rep. Richard Baker, R-La.
Under his bill, the federal corporation would buy properties destroyed by the hurricane at roughly pre-Katrina values. The Baker bill would be financed by the issuance of up to $30 billion in U.S. Treasury bonds, with some costs recouped from the eventual resale of property.
Shelby provided little insight into his views of the Baker bill during the hearing but cautioned lawmakers that any proposal must not impose a "one-size-fits-all, centralized solution."
Baker said his bipartisan measure could fit under the priorities that Shelby spelled out during the hearing and noted he is amenable to making changes in the bill, including lowering the debt limit to $20 billion. Baker said his bill would establish local planning councils that would create a communitywide plan for rebuilding parishes.
"It's a marriage of federal assets with local planning," Baker said. The House Financial Services Committee approved Baker's bill last year, but the lawmaker says he needs to show House GOP leaders that the Senate is moving on a parallel path before his bill can move forward.
Sen. David Vitter, R-La., said he was optimistic that a compromise could be reached between the Louisiana congressional delegation and the Bush administration, noting that the White House wants to see a fully developed rebuilding plan for New Orleans that includes a smaller footprint for the city.
"The money isn't disbursed until that happens," Vitter said. "I'm actually hopeful that at the federal level we're going to have a breakthrough soon, either with the Baker bill, a modification with it, or increased federal commitment."
The White House contends that it has already contributed a sufficient amount for rebuilding to Louisiana, including recently sending $6.2 billion to the state through community block grants. During the hearing, Sen. Wayne Allard, R-Colo., unveiled his proposal to aid rebuilding with a measure modeled on homestead initiatives of the 19th century, allowing HUD to take over vacant properties.
The Allard measure was written with advice from the Bush administration. Sen. Evan Bayh, D-Ind., cautioned lawmakers that any legislation must have a component that focuses on low-income homeowners.
Baker said his bill would fit that requirement, noting that the legislation would aid residents of New Orleans' impoverished Ninth Ward, where 43 percent of the residents have paid off their mortgage.