- The Washington Times - Monday, September 26, 2005

A quarter of a trillion dollars: That’s the cost of the proposed Hurricane Katrina Disaster Relief and Economic Recovery Act that Louisiana Sens. Mary Landrieu and David Vitter unveiled on Thursday. With $62.3 billion already appropriated and a $200 billion figure circulating for total recovery cost, the Landrieu-Vitter proposal — which contains many necessary projects, such as revamping the twin spans and cleaning Lake Pontchartrain — would burst the limits of last week’s estimates. It would push total Katrina spending over $300 billion. For comparison’s sake, the much-debated 2005 Iraq supplemental cost $82 billion.

The 440-page relief package is a bid to maximize Louisiana’s take of the federal pie and should be viewed in that context. It is part of an ongoing bargaining process over the final relief package. Owing to that fact, it contains items that can either be postponed, shrunk or eliminated altogether, without undermining Congress’ pledge to rebuild New Orleans and the surrounding Gulf Coast region while energizing its economy. The task now is to identify the provisions of lesser priority and bargain them out of the final product so that hurricane-relief spending returns back to earth.

The two largest chunks of spending in the Landrieu-Vitter proposal are likely to be the most highly scrutinized. One of them is an unusual proposal to spend $40 billion on Army Corps of Engineers projects in Louisiana through a proposed nine-member “Pelican” Commission consisting of a presidentially appointed chairman, the Army Corps of Engineers chief, the head of the National Oceanic and Atmospheric Administration and six Louisianians, including the governor and the state’s Mississippi River Commission member. The commission would expedite, approve and direct Corps projects. Congress would not be consulted, though the projects would be financed exclusively with federal money. The benefit to this approach is clear: It would remove the congressional meddling which in the past has tripped up efforts to align Corps priorities with the most necessary projects. But the commission could suffer a classic principal-agent problem if it comes to be dominated by the six Louisianians.

The other major item is $50 billion in Community Development Block Grants for “communities hardest hit by Hurricane Katrina.” These grants vary widely in purpose and seem a likely target for deficit hawks. Among the stipulations: Up to $10 billion for a business redevelopment fund; another $10 billion for the Department of Housing and Urban Development; $5 billion for mortgage relief; and $750 million in grants to compensate small businesses. Other items that should draw debate include $400 million for substance abuse and mental health, $25 million for a sugar-research laboratory and money for the Christmas-tree industry.

Simple back-of-the-envelope calculations show that Congress will need to whittle away at least $100 billion of the Landrieu-Vitter proposal in order to keep within shooting distance of the $200 billion estimate. The senators themselves must know that not all this spending will pass muster; only the worthwhile items should.

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