Katrina will spawn the biggest relief effort in recent history, a massive public works project and a major reassessment of emergency response. It also could restructure government at every level.

As the nation attempts to sort out the lessons of Hurricane Katrina and its aftermath, government, in both its political and bureaucratic aspects, is hunkering down and sorting out as well. In a variety of areas, politicians, policies, agencies and first responders have been found wanting. Now comes the question: What next? Government Executive takes a preliminary look at key failings, challenges and problems ahead for federalism, intergovernmental coordination, contracting, public health preparedness, energy and environmental protection through the eyes of government historians, experts, and federal, state and local officials.

Who's in Charge?

What does the response to Hurricane Katrina say about the state of federalism and governmental organization under the Bush administration? According to scholars and state, local and federal officials, it is an illuminating case study in the contradictions of Bush-style conservatism. It may be less surprising than it appears that a president whose political base is hostile to big government has expanded both bureaucracy and spending.

But, says Pulitzer Prize-winning presidential historian James MacGregor Burns-who counts himself a Bush admirer for both having an ideology and running a disciplined political operation-Katrina illustrates the peril of centralizing power on key issues (in this case, homeland security and emergency management), while retaining the traditional conservative distrust of professional civil servants at any level. "[Bush administration officials] mainly view civil service as 'bureaucracy,' something to be condemned, something they don't really have much respect for," he says. "I think this is rather tragic, because whatever bureaucracy's failings, there are some really wonderful people at every level of government trying to avert and address problems."

Some state and local officials say Washington has insisted on calling the shots on emergency management issues for which they have little appreciation. Rob Harper, public information officer at Washington state's Emergency Management Division, says that since Sept. 11, the Bush administration has decided that in the case of homeland security, the federal government automatically knew better, and has since shown little interest in state-specific nonterrorist matters.

This is no abstraction to Harper: In a recent meeting, he recalls, a Washington-based official at the Homeland Security Department derided the state's emergency management officials for being inadequately receptive to a lecture on bioterrorism. "My response was, well, we have some natural hazards that are probably greater than the threat terrorism poses and that other places won't ever have to worry about. We have the offshore Cascadia earthquake fault that rivals the one of Sumatra that caused the tsunami. We have a hazard off of Mount Rainier that could bury tens of thousands in minutes. Those are serious things."

William L. Waugh Jr., a public administration professor at Georgia State University who studies and consults on terrorism, natural disasters and emergency management, says Harper's sentiments are hardly unique. "One would think it would be the case with the Bush administration that a lot of attention or deference would be paid to states and localities on these issues, yet people have voiced concerns repeatedly that the Department of Homeland Security has not been inclusive or proactive about seeking out the opinions of state and local officials, or sensitive to their specific issues," he says.

The sad irony of all this, says R. Scott Fosler, a past president of the National Academy of Public Administration, is that emergency management a decade ago was based on assertively federalist thinking.

As head of a NAPA team assigned to produce a report that addressed the federal government's failures in August 1992 in responding to Hurricane Andrew, Fosler and his colleagues found that what was needed was not a massive federal response or hierarchy. "What we concluded was that the problem was not just FEMA per se, but the definition and mission of placing emergency management within a broader context of national networks," Fosler says. "And that gets exactly to the federalism issue-there is no way one single agency, state or federal, can hope to take responsibility in a catastrophic situation. One of the keys was to clarify and define the mission in a way that determines what the proper roles for governments, the private sector, NGOs and charitable organizations are."

And that, he says, led to another key matter-the importance of having not only experienced, professional leadership at FEMA, but leadership that, in addition to understanding the network concept with FEMA as a coordinating hub, also could apply an "all hazards" approach, which recognizes that emergency management operates on a continuum. It makes little difference who or what causes disasters, Fosler says; what matters is who's responsible for what. And to address that, he says, equal consideration has to be given to prevention, mitigation, response and recovery.

Part of the problem with the administration's notion of homeland security, he says, is that it's focused so much on preventing terrorism that it has marginalized the importance of the mitigation/response/recovery elements. It is DHS' duty to balance terrorism and other hazards and to effectively coordinate prevention and response among all levels of government. So far, things appear quite out of balance.

Fosler holds that suddenly pulling FEMA out of Homeland Security likely would be just as bad as it was to thrust FEMA into Homeland Security. "The important thing is to figure out why DHS did not perform the role it should have," he says. "And if it's not just about the personnel and management but the structure, the administration and Congress need to act swiftly to determine what the structure should be."

This could argue for either restoring FEMA to independent agency status operating with its late 1990s-era philosophy or rewiring DHS to accommodate a FEMA that takes a more network-centric approach to disasters, Fosler says. But, he emphasizes,"If you don't put people in charge of agencies who believe in them, who have the capacity and experience, it's not going to work."

Watching the Money

Reconstruction in the wake of Hurricane Katrina looks familiar to anyone witnessing the rebuilding of Iraq during the past two-and-a-half years. The government is relying largely on private contractors to complete huge projects quickly. But there's one big difference: During this latest emergency, lawmakers, auditors and even ordinary citizens are watching the contractors like a well-trained baby sitter would a child.

"The public, who has never cared about contracting at all, is outraged," says Danielle Brian, executive director of the Washington-based nonprofit Project on Government Oversight, referring to concern that contracts are being awarded without competition. If that's true, then it's probably a consequence of widespread reporting of waste and abuse in Iraq reconstruction. "Iraq is a cautionary tale for Katrina," says Gordon Adams, professor of international affairs at The George Washington University.

This time, the watchdogs were ready. The legislation Congress passed on Sept. 8 provided $51.8 billion for Hurricane Katrina relief efforts and set aside $15 million for the DHS inspector general's office. In addition, lawmakers, including Sens. Susan Collins, R-Maine, and Joseph Lieberman, D-Conn., and Rep. Henry Waxman, D-Calif., have proposed a variety of oversight and auditing bills. Homeland Security's inspector general opened a new unit to oversee hurricane-related spending. And the media and nonprofit groups have covered contracting in the region so heavily that taxpayers also are tuned in.

Waxman, an outspoken critic of contracting abuse in Iraq, says he already sees similar problems emerging from the Gulf Coast. He points to no-bid contracts, used by FEMA and the U.S. Army Corps of Engineers, as a danger sign. "That's how we got in to so much trouble with our contracts in Iraq," he says.

James Mitchell, spokesman for the special inspector general for Iraq reconstruction, says many of the 61 criminal cases under investigation originate from the early days of reconstruction, before the office was set up. Early oversight is essential, he says, which is why Mitchell thinks the Gulf Coast needs the immediate attention of an inspector general.

Not everyone agrees. Barbara Bodine, a former ambassador who spent three months in 2003 as American coordinator for the reconstruction of Baghdad, warns against auditing excess. "The one thing I remember in Iraq, in the middle of high chaos, is that seven auditors showed up. I was like, 'This is really not the time. We have a crisis on our hands.' " The auditing, she says, needs to be done afterward. In the midst of a crisis, Bodine says a contracting coordinator should check contracts and look for signs of duplication or waste.

For now, contracting offices in Gulf Coast states are consumed with their immediate cleanup tasks. "There's not enough time to do anything but a limited competition," says Rich Johnson, director of contracting for the Army Corps' Mississippi Valley division. The Army Corps is responsible for ice and water delivery, water removal, temporary power, debris removal, temporary housing and roofing repair contracts in Hurricane Katrina's cleanup. A FEMA spokesman also says that competition is limited out of necessity to get contracts in place quickly.

Lessons for the next emergency already are emerging, such as the need for better planning. The Army Corps had pre-competed contracts for ice and debris removal, but had to quickly award contracts without competition when they ran out of capacity, says Johnson. FEMA had some pre-competed contracts, but not for many essential emergency services, such as trailers for temporary housing. "It looks like a lack of planning, a lack of foresight . . . a lack of imagining," says Bodine. No-bid contracts should be the exception because many emergency needs are predictable, she says.

Still, James Nagle, a lawyer and author of A History of Government Contracting (The George Washington University, 1992), says it's impossible to hold contracts to the same competitive standards used during normal times. "So the government will probably have to do what they did after Pearl Harbor and every other major catastrophe," he says. "But these methods are often criticized later."

Anemic Medical Response

While Katrina spread destruction across much of the Gulf Coast region, it seemed to cause relatively few injuries and deaths, at least compared with initial estimates by New Orleans officials that fatalities could top 10,000. The most critical challenges facing medical personnel were associated with trying to evacuate hospitals that lost power and communications. Delivery of medical assistance to those who stayed in the area, while uneven, appeared largely competent.

But the unprecedented emergency evacuation of the area has strained the health care services of the surrounding major cities, which absorbed hundreds of seriously ill patients from Gulf Coast hospitals as well as the tens of thousands of people who evacuated on their own, but required some form of medical care once they arrived.

In Atlanta, an estimated 30,000 displaced people sought care in the days after Katrina, putting a tremendous strain on the city's medical infrastructure. "On any given night, Atlanta can't handle our own 911 calls," says Dr. Arthur Kellerman, chairman of the Department of Emergency Medicine at Emory University.

Ambulances with patients are redirected two, three or more times before finding an emergency room that can take them. "You've got patients who are in ER hallways waiting for a nonexistent inpatient care bed," says Kellerman. "How are we supposed to handle [such] extraordinary stress on the system?"

Atlanta coped by diverting patients from hospitals to specialized care facilities, Kellerman says. "We're meeting their health needs by [sending] people who need it to primary care [providers], dialysis centers and other places to keep them from going to the ER." It wasn't easy, he says.

Kellerman has tried to get state and federal officials to collect data on the effect of Katrina victims on the health care systems in the major cities to which they have flocked. Such information would be invaluable to improving the national response to a medical disaster, he says. But he has faced a widespread reluctance to collect those numbers-in part, he believes, because the statistics won't be pretty.

"I've been trying to get officials to monitor on a daily basis what's going on," he says, "so we could see what's happening with the numbers of ambulance diversions, the numbers of people in hallways. Here we have a natural experiment unfolding, but nobody's looking at that. I find that dumbfounding. This is a real-world test of our ability to handle a crisis, not a tabletop exercise."

The nightmare medical disaster for most emergency planners isn't a hurricane but a pandemic or bioterror attack. The United States' ability to respond is worrisome to many, at least in part for the weaknesses Kellerman is trying to highlight.

"We're about 5 percent as prepared for bioterror as we were for Katrina," says Chuck Ludlam, who as counsel to Sen. Lieberman developed a bioterror-preparedness program, which was the basis for President Bush's Bioshield initiative.

For one thing, says Ludlam, the federal government has no "boots on the ground" to respond to a medical catastrophe. In such an event, the government will be forced to rely on an untested cadre of volunteers and the same state and local health systems Kellerman says have trouble handling their own emergency calls.

Energy Vulnerability Continues

Hundreds of offshore oil and gas platforms dot the waters of the Gulf of Mexico and hundreds of oil-industry facilities and refineries line the coast. "There's a reason for this geographic concentration in a high-risk hurricane area," says Red Cavaney, president and chief executive officer of the American Petroleum Institute, a trade association of the oil and gas industry. "Government policies have limited offshore exploration and production to the central and western Gulf Coast, and our offshore facilities have been welcomed in communities in the region," he says. Offshore drilling is largely prohibited elsewhere in the Gulf Coast, and along the Atlantic and Pacific coasts.

Those restrictions, and the fact that nobody wants a refinery in their backyard (and only the poorest citizens will tolerate one), mean that the nation's energy infrastructure is highly concentrated and highly vulnerable to hurricanes such as Katrina and Rita. With 29 percent of domestic oil production and 19 percent of domestic natural gas production coming from the Gulf of Mexico, a blow to energy operations there has far-reaching consequences.

"It is ironic that we talk so much about diversifying the sources of our energy supplies from abroad, yet we have done so little to geographically diversify our oil and natural gas presence here at home," Cavaney says.

Before Hurricane Katrina struck at the heart of oil and gas operations in Louisiana and Mississippi, officials in the Interior Department's Minerals Management Service, which oversees offshore oil and gas operations, implemented its continuity-of-operations plan and moved critical operations to Houston.

But on Sept. 22, before MMS could even locate all 600 employees displaced by Katrina, it was forced to close its temporary Houston office, this time on account of Rita. By then the cumulative oil and gas production shutdown over the previous four weeks equaled 5.2 percent and 3.6 percent, respectively, of annual oil and gas production in the Gulf of Mexico, according to MMS. And that was before Rita made landfall.

Katrina was a significant enough blow to prompt the Bush administration to release oil from the Strategic Petroleum Reserve. It is only the second time the reserve has been tapped since it was created by the 1975 Energy Policy and Conservation Act following the 1973 to 1974 oil embargo by Arab states. The first time was during the 1991 Persian Gulf War.

While there is widespread agreement that the nation's oil dependence poses enormous economic and national security risks, there is little agreement on what to do about it. The 1,724-page Energy Policy Act of 2005 calls for a comprehensive inventory and analysis of oil and gas reserves for all areas of the Outer Continental Shelf-85 percent of which is now off limits to development-but did little to address the nation's growing demand for oil.

Interior Secretary Gale Norton said in an Aug. 22 statement: "With our reliance on imports of foreign oil climbing each year, we would be irresponsible if we did not consider how we might develop these abundant domestic resources."

Norton's view is not universally shared. In a post-Katrina letter, Natural Resources Defense Council President John Adams wrote to members of the council: "Our nation simply does not have enough oil reserves to affect world oil prices. The only way out of this mess is to reduce our appetite for oil by improving the fuel economy of our vehicles [which consume 40 percent of our oil] and by relying on smarter, cleaner and renewable ways to power our economy."

Whatever approach Congress and the Bush administration take, it won't do much, if anything, to ease near-term vulnerability and economic pain. And that pain will be felt most keenly by those citizens who call the Gulf coast home and fuel the rest of the nation.

"We don't sunbathe on our coast. We produce energy to light up Chicago and New York and California," says Sen. Mary Landrieu, D-La., whose summer home on Lake Pontchartrain and the homes of four of her siblings in New Orleans were destroyed in Katrina's wrath. "We have most of the pipelines in the nation under this state. We provide natural gas and oil, and we are proud of that contribution, but as you can see there are costs associated with that . . . and we expect the nation to help us out at this time."

Ignoring the Environment

For the federal government, one of the most enduring lessons of Hurricane Katrina might be the importance of environmental considerations in large-scale public works programs. The chemical pollution in the Gulf of Mexico-which helped trigger a fishery failure declaration from the National Oceanic and Atmospheric Administration on Sept. 9-wasn't unexpected. "That is the price of drilling for oil on your coast," says Landrieu.

Another environmental disaster-the noxious, watery soup of raw sewage and petroleum products the New Orleans flood created, was a consequence of levee failures that might have been mitigated with wiser investment.

Or so says Walter Maestri, the outspoken emergency management coordinator of suburban Jefferson Parish, who saw many of his flood mitigation programs suspended during the past five years as federal funds were redirected to homeland security priorities. Louisiana fights "terrorists like Katrina" that come back year after year, says Maestri. "When you don't fund awarded grants for draining projects and elevation of homes . . . you're going to end up in many cases with what occurs here."

While New Orleans siphons out the last of the fetid swill and starts shoveling up the toxic sludge, experts with the benefit of an arm's-length perspective on the worst natural disaster in U.S. history are thinking and talking about what constitutes an environmentally sound plan for rebuilding.

Once the debris is cleared away, local, state and federal governments will have what amounts to a blank slate for decisions about land use and public infrastructure for the first time in two centuries. Hydrologist Debra Knopman, a Clinton-era Interior Department administrator who directs the infrastructure, safety and environment division of RAND Corp., hopes decision-makers at all levels will take advantage of the opportunity to coordinate their plans. She says it's difficult for the U.S. political system to take the long view that these kinds of projects require.

"There is a critical path of decision-making in this reconstruction effort, and it's a values decision about how much protection Louisiana and New Orleans want and need. That is going to then set the stage for all the other decisions that need to get made in that region related to rebuilding or redevelopment," Knopman says. "I'm not sure we're going to get that sequence right because there's so much pressure now to act quickly."

The federal government is responsible for flood control because it's an interstate problem. There's high demand for federal flood protection all across the country, but there's a large pool of unmet needs because so many local governments are unwilling or unable to contribute more than a small portion of the cost. There's also no national priority-setting process for public flood works, and local bickering about how to build projects often causes budget-busting delays.

What happened in New Orleans is the product of this entrenched, piecemeal approach to satisfying the nation's infrastructure needs. The city was built below sea level, in a bowl rimmed with levees to keep Lake Pontchartrain and the Mississippi River from pouring in. It sinks deeper by the day-an unintended consequence of keeping it dry.

The levees disrupt the natural replenishment process for the soil on which New Orleans and its environs sit. Restraining the river pushes silt deposits too far into the Gulf of Mexico, starving the marshes south of New Orleans. Three miles of marsh can absorb a foot of storm surge. But the marshes are disappearing. The Corps of Engineers has a comprehensive plan to restore the marshes and improve flood control in New Orleans with a new system of levees that will cost $14 billion. It's stalled in Congress in part because the price is so high.

Considering the level of economic development in New Orleans, a fresh look at the idea of protecting only for a Category 3 storm is long overdue. But other cities should take a lesson from Hurricane Katrina, says Knopman. "All around major metropolitan areas," she says, "we need to revisit the level of protection given the economic assets and economic damages that could result from flooding."

NEXT STORY: Mounting Costs