Wall Street Journal
September 8, 2005


House Approves Additional $51.8 Billion

By David Rogers

WASHINGTON -- President Bush asked Congress for an additional $51.8
billion for Hurricane Katrina recovery efforts, with nearly half the
money going to provide temporary housing and financial assistance for
1.1 million households displaced by the storm.

Together with a $10.5 billion emergency spending bill approved last
week, the new request means the federal commitment for Katrina has
climbed above $62 billion -- roughly equal to the annual cost of U.S.
military operations in Iraq.

The House approved the additional funding in a 410-11 vote Thursday.
Senate approval was expected later in the day.

Mr. Bush unveiled a number of specific measures to help hurricane
victims get back on their feet, including an immediate $2,000 cash
allowance for those displaced by the disaster, a full range of health
care, job training and other government benefits, and he promised to
minimize the red tape for those trying to obtain such aid. The
president also designated Friday of next week as a national day of
prayer and remembrance for victims across the Gulf Coast.

Prominent lawmakers estimate the total cost of the multiyear recovery
could reach $150 billion to $200 billion. The White House declined to
comment on these estimates, but said the new money now will carry the
relief effort into early October, when Mr. Bush is expected to submit
a third, still-larger Katrina request.

Meanwhile in the region, Alabama, Florida, Georgia, Louisiana and
Mississippi officials have now confirmed more than 260 deaths from the
storm, but a great number of people remain unaccounted for. Louisiana
State Rep. Nita Hutter said 30 patients died at an inundated nursing
home near New Orleans after staff members evacuated, and Rep. Charlie
Melancon (D., La.) said 100 people died at a warehouse while awaiting
rescue, the Associated Press reported.

Bob Johannessen, spokesman for the state Department of Health and
Hospitals, said officials have 25,000 body bags on hand in Louisiana.
Asked if authorities expected that many bodies, he said: "We don't
know what to expect."

Vice President Dick Cheney visited Gulfport, Miss., today and toured a
particularly damaged part of the town with his wife, Lynne. Mr. Bush
dispatched Mr. Cheney to the region amid persistent criticism of the
sluggish pace of the federal response. After meeting with state and
local officials, Mr. Cheney told reporters he was struck by the "very
positive, can-do" attitude of Mississippians toward the help they are
getting. In general, Mississippi officials have been much more
complimentary of the federal hurricane response than those from
Louisiana and, particularly, New Orleans. Attorney General Alberto
Gonzales and Homeland Security Secretary Michael Chertoff accompanied

"I think the progress we're making is significant," Mr. Cheney said.
"I think the performance, in general, at least in terms of the
information I've received from locals, is definitely very impressive,"
adding: "That's not to say there's not an awful lot of work to be done
-- there is."

While Mr. Cheney spoke, a passer-by hurled an expletive at the vice
president. "First time I've heard it," Mr. Cheney said, when asked if
he was hearing a lot of such sentiments.

In New Orleans, the Army Corps of Engineers reported 23 of the 148
permanent pumps were working, including two pumps at the 17th Street
Canal, where the levee was breached last week. The state of forced
evacuations from the city remained unclear, and Brig. Gen. Michael
Fleming of the National Guard said as of midday yesterday that the
Guard hadn't been asked to forcibly evacuate anyone. "We work for the
governor. We'll do what she asks us," he said.

But there were also signs that many of the holdouts had had enough.
Michael Keegan, spokesman for U.S. Immigration and Customs
Enforcement, said rescuers were finding more and more residents
willing to leave. "Some are finally saying, 'I've had enough." They're
getting dehydrated. They are running out of food," Mr. Keegan said.

Meanwhile, Congress hurried to clear the emergency aid package, even
as Democrats and Republicans began in earnest to debate what to do
about the government's lapses in the aftermath of Katrina. "There was
a systemwide failure," said Senate Majority Leader Bill Frist of
Tennessee after Republicans met with Mr. Bush at the White House. He
said there were problems at the local, state and federal levels and
"we will get to the bottom of that" in a bipartisan congressional

But Democratic Senate leader Harry Reid of Nevada said on the Senate
floor that such a probe, led by Republican lawmakers, would be as
unbiased as having a baseball pitcher "call his own balls and

"I do not believe that the committee proposed by Speaker Hastert and
Sen. Frist is in the best interest of the American people," said Sen.
Reid. Both he and House Democratic Leader Nancy Pelosi said they
wouldn't appoint members to the panel as currently contemplated.
Democrats are pushing for an independent panel to investigate the
disaster, similar to the 9/11 Commission that examined government
missteps leading to the Sept. 11, 2001, terror attacks.

Sen. Reid, however, said Democrats would support the $51.8 billion
spending bill, despite misgivings that most of the money would go to
FEMA. "Is there anyone, anyone, who believes that we should continue
to let the money go to FEMA?"

Prospects were more uncertain in the Senate, where Democratic Sen.
Mary Landrieu of hurricane-ravaged Louisiana threatened to hold out
for more funding. Republicans said that any attempt to amend the bill
could lead to delays.

The Pentagon and Army Corps of Engineers will share in the new money,
but the greatest portion would replenish a disaster-relief fund that
the Federal Emergency Management Agency is drawing down at a record

"Over the weekend, FEMA spending ramped up dramatically" to "over $2
billion a day," said White House Budget Director Josh Bolten. "We
don't expect that rate to be sustained" he said, but the
administration needs quick action on its request and will need
"substantially more."
[Additional Funds]

Today, the Labor Department reported that an estimated 10,000 workers
who lost their jobs because of Katrina filed for unemployment benefits
last week, the first wave of what likely will be hundreds of thousands
of displaced workers seeking benefits. Department analysts said the
number would have been higher except for the fact that many claims
offices in the path of the hurricane were shut down. They predicted
the number of disaster-related claims will rise sharply in coming
weeks. (See related article9.)

As many as 1.1 million households were displaced by Katrina, according
to the administration, which estimates it will need $23.2 billion in
short-term housing and financial aid for these people. An additional
$813 million is assumed to be available for disaster unemployment
insurance, providing an average of $241 weekly to idled workers. And
FEMA has budgeted $1.6 billion to continue its purchases of hundreds
of thousands of units of manufactured temporary housing.

An estimated 200,000 have already been ordered, and an additional
100,000 would now be purchased. At the same time, the Federal Housing
Administration now estimates that it faces costs of $3 billion to $4
billion for lost homes, on which it had insured the mortgages.

House Ways and Means Committee Chairman Bill Thomas (R., Calif.) said
he expects to begin moving a series of bills to make it easier for
low-income individuals who have been displaced to receive welfare-
related benefits. "We have to free up money and red tape that does not
allow relief and humanitarian opportunities to individuals," Mr.
Thomas said.

Beyond payments to individuals, the cost of repairing the Gulf Coast
infrastructure is sure to be huge. While freight activity along the
Mississippi River is rebounding, large stretches of shipping terminals
remain closed because they lack power, workers and trucks. And from
the damaged Louisiana Superdome to highways and schools, the region
faces a major rebuilding that will greatly add to the final cost of
recovery in coming years.

The administration's request promises the Army Corps of Engineers $400
million -- targeted toward dredging navigational channels and
repairing locks in the region -- plus $3 billion from the FEMA funds
to cover costs of emergency missions such as repairing damaged levees
in New Orleans. An estimated $7.6 billion is also allocated to help
state and local governments begin infrastructure repairs, but the
absence of any new money to repair major federal highways is a concern
for Mississippi, where the interstate system was badly damaged.

In addition, the administration may face objections to its proposal to
greatly expand the ability of agencies to expedite procurement
contracts that are free of some small-business and competitive

Current law allows such flexibility for purchases of as much as
$25,000. The administration wants to raise this threshold to $250,000
for purchases related to the disaster-recovery effort.

In other developments:

Administration officials told Congress they were optimistic that
energy and communications facilities in the storm-damaged area will
recover fairly quickly. David K. Garman, an undersecretary in the
Energy Department, told the House Energy and Commerce Committee
yesterday that half the oil-refining capacity knocked out by Katrina
will be back in operation within a week. Federal Communications
Commission official Kenneth P. Moran said telephone service has been
restored to two million of three million homes that lost the service.
(See related story.16)

Despite Republican objections, Democrats in Congress want to give
Katrina victims a one-year reprieve from the new bankruptcy law that
goes into effect Oct. 17. Consumer groups and bankruptcy attorneys say
the new law's increased paperwork requirements and additional costs
will further hurt hurricane victims who may be forced to seek
bankruptcy protection.

Transportation Secretary Norman Mineta said the full extent of the
damage to the transportation infrastructure has yet to be assessed.
Asked about tax rollbacks to help airlines cover fuel costs, Mr.
Mineta and Assistant Policy Secretary Tyler Duvall said the department
wouldn't be opposed to considering those moves but that the
administration "hasn't taken a position" on the issue. (See related

--Staff reporters Dionne Searcey, John J. Fialka and Joi Preciphs, as
well as the Associated Press contributed to this article.

Write to David Rogers at david.rogers@wsj.com

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