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Anniversary Raises Questions about Aid to Katrina Survivors

August 29, 2006 at 12:00 AM EDT
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RAY SUAREZ: A closer look now at where the money is and what it takes to get it. Paul Singer of the National Journal has been tracking the Katrina money trail for several months. He’s also repeatedly visited the region since the storm.

And, Paul, one commonplace of the coverage over the last several days has been elected and appointed officials noting with pride how much their level of government has made available for Katrina recovery. And people down at street level saying, “I’ve been waiting months, I’ve been waiting weeks, I’ve been waiting a year for this check, that bit of help, this bit of aid.”

What happens between that legislative chamber and that block where the checks aren’t being received?

PAUL SINGER, National Journal: Well, the first thing that happens is process, government process. Money is approved, but it has to be approved through some agency. The agency has to get it and has to process the money and decide who is eligible.

That process requires inspections and people to go in and make sure that you are actually the eligible person, and then it has to be distributed to you. There’s all kinds of layers of — for want of a better word — red tape, that stands between you, whether you’re a mayor of a town or a citizen, and the millions or billions of dollars that have been promised to you.

Where is the money?

Paul Singer
National Journal
[I]t's impossible to know at any given moment in time how much has been spent, and there's nobody in the federal government that's tracking it that way anyway. You can't call anyone and say, 'Hey, where is it all?'

RAY SUAREZ: Big numbers are being thrown around, especially in the case of the federal government which is citing over $100 billion in various kinds of aid to the Gulf Coast. How much of that has actually been spent, or can we even know how much of it has actually been spent?

PAUL SINGER: I don't believe you can know with precision how much has been spent. The federal government is now claiming about $45 billion has actually been spent, but even there we know that some of that money has gone to the state to be further processed, that is, handed out to local communities, and that money has not actually gotten to those local communities yet.

So it's impossible to know at any given moment in time how much has been spent, and there's nobody in the federal government that's tracking it that way anyway. You can't call anyone and say, "Hey, where is it all?" because they don't organize it that way.

RAY SUAREZ: Well, if you're a person, let's say, in New Orleans, who has been waiting for a specific amount of money to go to work fixing your house again, what is it that's holding it up? What are you waiting for to happen?

PAUL SINGER: Well, if you're an individual waiting for money for your house, that's probably coming through the HUD grants that went to the states. At this point, there's about $11 billion, I believe, still hanging out in Mississippi and Louisiana that the federal has put aside for that purpose.

But at this point, you're waiting for the state to figure out the eligibility criteria for that money, to review your case individually to figure out whether they should subtract some money because you already got an insurance payment or maybe you got some money from FEMA that would be subtracted from that, and to figure out exactly what you as an individual are entitled to. And then you'll get that check at some point.

But that involves setting up a whole new process that doesn't yet exist. The states have to create this from scratch.

Signs of regrowth

Paul Singer
National Journal
[I]f you can get the Superdome after what it went through built up and ready for a football game on the ... 25th of September, that seems to be a model of something. That's a building that was destroyed and is been rebuilt and is up and running.

RAY SUAREZ: Are there signs, from what you've been able to see from your reporting, that there are things on the verge of happening, that major inflows of money are about to break into that region, now that some legislative things have happened, some process things have happened?

PAUL SINGER: Yes, well, certainly this housing money is the next big sign and the next big thing that's going to happen down there. The housing money will start to flow. That will have all kinds of trickle-down value to it, because people start to move back into their homes. They start to purchase again. They start to be customers for businesses that can reopen again.

That's really the key. And I believe they just started in Mississippi distributing some of that money, you know, a few dozen checks maybe, but in Louisiana they have not yet started, but they will be starting sometime probably in the next month or so. That's the next thing you'll see that will be the real big excitement.

RAY SUAREZ: Have there been any examples that are really beacons to the rest of the aid system, where you can look at it now one year on and say, "This worked. It went and helped the people it was supposed to help"?

PAUL SINGER: Yes. I'll give you one kind of a funny example is the Superdome is going to reopen. And that took $75 million out of a pot of money that the feds had set aside for reconstruction in Louisiana.

I mean, if you can get the Superdome after what it went through built up and ready for a football game on the -- what is it -- 25th of September, that seems to be a model of something. That's a building that was destroyed and is been rebuilt and is up and running.

So could you use other examples? Would there be other places where you could have done something like that? You know, there are highways being built. There are roads that were cleared. And, frankly, there are some 100,000-something people living in trailers. Well, at least they've got the trailers. They're not homeless.

Those are the sort of things where you have to say, "Well, it wasn't a complete failure. It hasn't been a complete failure to deliver resources."

But reconstruction of public facilities comes last. It is assistance to individuals in the evacuation, in the emergency housing, in the emergency food, those are the things that come first. That's where the first money went. Now we're getting down to the longer-term rebuilding. It takes a lot longer; there's a lot more process, and it comes last.

RAY SUAREZ: Well, it's not difficult -- it doesn't take much imagination to see how somebody who is still waiting for a housing check would look at the $75 million tab for the Superdome and say, "Hey, wait a minute."

PAUL SINGER: Well, and, in fact, the funny thing about that is that the total of reconstruction money for the local governments to rebuild stuff like city halls and, you know, public facilities that has been paid in Louisiana is about $200 million. If the Superdome sucked up $75 million of that, it's kind of an odd lack of balance. And you ask why exactly that is. Well, you know, the Superdome had only one thing to focus on. It was the Superdome.

RAY SUAREZ: Paul Singer, thanks a lot for being with us.

PAUL SINGER: Thank you very much for the time.

Bridging the gap

Donald Powell
Office of Gulf Coast Rebuilding
I have a sense of urgency about everything, Ray. I would say that there's been a tremendous amount of progress along the Gulf Coast. I've been coming down here since two weeks after the storm, and I have points of reference when I'm down here.

RAY SUAREZ: Now the federal response about money and the pace of reconstruction from the president's point man on this. Donald Powell is the federal coordinator for the Office of Gulf Coast Rebuilding. He joins us from New Orleans.

Welcome to the program.

DONALD POWELL, Office of Gulf Coast Rebuilding: Good afternoon, Ray.

RAY SUAREZ: How do you explain the lag time between the appropriation of money, the authorization of money, and the time it's actually received in waiting hands?

DONALD POWELL: Ray, as you know, the president secured approximately $110 billion from Congress and the American taxpayer. That's a lot of money. And almost half of that money has been spent.

The way to look at that is, when you're paid, you get a paycheck and it's deposited in your account. Say that's $500. That $500 sits into your account until you receive bills or you have needs to make payment for some bills or some work is done, and then you pay the contractor or you pay the vendor.

The same is true here: The balance of that money is for the credit of the states along the Gulf Coast. And it's waiting on work to be done or plans to be developed.

RAY SUAREZ: So would you say that it's happening quickly enough?

DONALD POWELL: I have a sense of urgency about everything, Ray. I would say that there's been a tremendous amount of progress along the Gulf Coast. I've been coming down here since two weeks after the storm, and I have points of reference when I'm down here. And there's been a tremendous amount of progress.

The taxpayers have spent about $3 billion just on debris removal. That was very important and very, very important to the long-term rebuilding. In just three counties in Mississippi, there was more debris than all of Hurricane Andrew and the World Trade Center. And that took two years to clean up. And here we are, one year, and 100 percent of the debris in Mississippi is gone, 75 percent of the debris in Louisiana is gone. So I think that's remarkable.

Plus, there has been allocated about $6 billion just for levee enhancement. There's been a $1.8 billion dollars for education, $3 billion for health care. So the federal government in every department, every way of life, has made a contribution to the rebuilding. Just rebuilding roads, rebuilding bridges, getting airports up and going took a tremendous amount of effort. And they're up and going.

RAY SUAREZ: There are, however, people who say that they can't understand why things in some discreet areas have not moved more quickly. For instance, the Small Business Administration, where many small business owners in New Orleans say they're hanging on by their fingernails, and they don't understand why it's taken so long since they've submitted all the paperwork they were asked for to get the needed capital that's going to make the difference between shutting the doors or staying in business another day.

DONALD POWELL: Well, Small Business Administration, the SBA, has made about $10.8 billion worth of loans. That's to small business, homeowners, renters, large businesses. That's in excess of $10.5 billion. That's a lot of money into the economy.

The housing money is terribly important to the rebuilding of the Gulf Coast. There is about $5 billion in Mississippi. Mississippi received $5.5 billion of CDBG money of which they're going to use approximately $4 billion of that for housing grants. Louisiana received $10.5 billion, and they're going to use about $7.5 billion of that for housing grants.

That money will begin to flow very quickly. In fact, in Louisiana, it's already flowing. And in Mississippi, checks have been dispersed. So both states -- both states -- have begun to pay homeowners.

Understanding the hurdles ahead

Donald Powell
Office of Gulf Coast Rebuilding
[W]hat is one man's red tape is another man's accountability. So there's always that tension about getting the money out fast but getting the money out responsibly fast. And I think that's important to keep in mind, that balance.

RAY SUAREZ: Mayor Nagin of New Orleans has recently been critical of the federal government because he points out that his city's civil, critical infrastructure needs, the amount of the damage, has been well-known and well-documented for quite some time and yet the city of New Orleans itself for police stations, for fire stations, to replace missing and lost engines in squad cars, has only received $117 million, which on one level sounds like a lot of money, but it's very small compared to the needs.

DONALD POWELL: Well, there's tremendous needs for infrastructure money in Louisiana and in Mississippi. In Louisiana, the state has allocated about $1.7 billion for infrastructure. That's important that, obviously, the people of Louisiana want to be good stewards of the taxpayer's money.

That's part of my job. I take that very seriously, when we recommend to the president that so much money should be allocated for specific, identified needs. We look at the numbers; we understand the numbers.

And I would hasten to add there is that tension, that balance between the red tape -- what is one man's red tape is another man's accountability. So there's always that tension about getting the money out fast but getting the money out responsibly fast. And I think that's important to keep in mind, that balance.

I have a sense of urgency about everything. I want things to go much faster, but I think it's important that we understand that balance.

RAY SUAREZ: Over the weekend, Mary Landrieu, the senator from Louisiana, told a reporter that the administration is still having a hard time, I think, understanding the magnitude of this disaster.

Now, you've mentioned you've been down to the region a lot. But has it, has Gulf recovery become a big priority for this administration? Do you get the sense that the president is giving a part of his day over to it every day?

DONALD POWELL: I have been with the president for the last two days as he has come to the Gulf Coast. We are in contact with the White House almost on a daily basis about issues. I meet personally with the president to brief him on the conditions of the long-term recovery and other needs.

I can assure you and I can assure the people on the Gulf Coast that this president is engaged and committed to the long-term rebuilding of the Gulf Coast.

RAY SUAREZ: And how long does your brief run? The job was created for you by the president. Does it have an end by a date certain?

DONALD POWELL: We're going to stay until the job's done.

RAY SUAREZ: So you're there even past or someone in your position is there even past the Bush administration, as far as you understand it?

DONALD POWELL: You know, I was appointed by the president, and the president is committed to the long-term rebuilding of the Gulf Coast, as I am.

RAY SUAREZ: Donald Powell, thank you very much, sir.

DONALD POWELL: Thank you, Ray.