New Orleans Reconstruction: Who's Paying?

In an address to the nation last night, President Bush outlined a very aggressive and quite comprehensive plan for rebuilding the areas ravaged by Hurricane Katrina. That plan also included a sweeping relocation plan including a lottery for federal land, training incentives, and tax breaks for individuals and businesses impacted by the storm. (ABC: Bush Rules Out Tax Hike to Fund Recovery.)

That some form of reconstruction aid is required goes without saying. What form that aid should take and the source of funding for it remains questionable, however. Last night's speech was eerily reminiscent of Lyndon Johnson's "Great Society" address. Like Johnson, Bush is attempting an unprecedented urban economic program while also trying to pay for an expensive war that is both open-ended and increasingly unpopular. The detrimental economic impact of Johnson's Great Society lasted for over a decade. There's little reason to believe Bush's reconstruction plan would enjoy any greater success.

Where the money for this plan will come from has yet to be answered. The president ruled out a tax increase to pay for the reconstruction, but that may well prove to be a pledge that cannot be kept. The next federal budget debate will occur in the mid-term election campaign. Congress will be most reluctant to approve a tax hike while campaigning for reelection, but at the same time they will be equally reluctant to enact the sweeping budget cuts that will be necessary to pay for both the war on terror and the reconstruction of the gulf coast.

How much of this reconstruction is even necessary? Business will flock to New Orleans with or without tax incentives. The city, despite the ravages of Katrina, is a tourist Mecca. As the flood waters recede, businesses will reopen. We don't have to bribe them to do so. Individuals, on the other hand, have lost everything they own, and they certainly need financial assistance to rebuild. 50% of those that were made homeless by the hurricane have no intention of returning to New Orleans. So what they really need is assistance to start over and job placement services.

Equally important will be funding to fix the problem that plagued everyone in the days leading up to the storm and in its immediate aftermath. There was no viable evacuation plan, no viable plan for maintaining order in the effected areas, and no viable plan for housing, feeding, and ultimately relocating the refugees. After we take care of those that lost everything in the flooding, that must be our next priority. A repeat of the local, state, and federal ineptitude in dealing with this type of disaster is simply unacceptable. That is where I want to see my tax dollars spent. Get the people that were effected back on their feet, and implement and fund a viable plan to minimize the impacts of the next disaster. Anything else is a waste of money.

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