[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
A VISION AND STRATEGY FOR REBUILDING NEW ORLEANS
=======================================================================
(109-35)
HEARING
BEFORE THE
SUBCOMMITTEE ON
ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS AND EMERGENCY MANAGEMENT
AND
SUBCOMMITTEE ON
WATER RESOURCES AND ENVIRONMENT
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
OCTOBER 18, 2005
__________
Printed for the use of the
Committee on Transportation and Infrastructure
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WASHINGTON : 2006
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
DON YOUNG, Alaska, Chairman
THOMAS E. PETRI, Wisconsin, Vice- JAMES L. OBERSTAR, Minnesota
Chair NICK J. RAHALL, II, West Virginia
SHERWOOD L. BOEHLERT, New York PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee ELEANOR HOLMES NORTON, District of
WAYNE T. GILCHREST, Maryland Columbia
JOHN L. MICA, Florida JERROLD NADLER, New York
PETER HOEKSTRA, Michigan CORRINE BROWN, Florida
VERNON J. EHLERS, Michigan BOB FILNER, California
SPENCER BACHUS, Alabama EDDIE BERNICE JOHNSON, Texas
STEVEN C. LaTOURETTE, Ohio GENE TAYLOR, Mississippi
SUE W. KELLY, New York JUANITA MILLENDER-McDONALD,
RICHARD H. BAKER, Louisiana California
ROBERT W. NEY, Ohio ELIJAH E. CUMMINGS, Maryland
FRANK A. LoBIONDO, New Jersey EARL BLUMENAUER, Oregon
JERRY MORAN, Kansas ELLEN O. TAUSCHER, California
GARY G. MILLER, California BILL PASCRELL, Jr., New Jersey
ROBIN HAYES, North Carolina LEONARD L. BOSWELL, Iowa
ROB SIMMONS, Connecticut TIM HOLDEN, Pennsylvania
HENRY E. BROWN, Jr., South Carolina BRIAN BAIRD, Washington
TIMOTHY V. JOHNSON, Illinois SHELLEY BERKLEY, Nevada
TODD RUSSELL PLATTS, Pennsylvania JIM MATHESON, Utah
SAM GRAVES, Missouri MICHAEL M. HONDA, California
MARK R. KENNEDY, Minnesota RICK LARSEN, Washington
BILL SHUSTER, Pennsylvania MICHAEL E. CAPUANO, Massachusetts
JOHN BOOZMAN, Arkansas ANTHONY D. WEINER, New York
JIM GERLACH, Pennsylvania JULIA CARSON, Indiana
MARIO DIAZ-BALART, Florida TIMOTHY H. BISHOP, New York
JON C. PORTER, Nevada MICHAEL H. MICHAUD, Maine
TOM OSBORNE, Nebraska LINCOLN DAVIS, Tennessee
KENNY MARCHANT, Texas BEN CHANDLER, Kentucky
MICHAEL E. SODREL, Indiana BRIAN HIGGINS, New York
CHARLES W. DENT, Pennsylvania RUSS CARNAHAN, Missouri
TED POE, Texas ALLYSON Y. SCHWARTZ, Pennsylvania
DAVID G. REICHERT, Washington JOHN T. SALAZAR, Colorado
CONNIE MACK, Florida JOHN BARROW, Georgia
JOHN R. `RANDY' KUHL, Jr., New York
LUIS G. FORTUNO, Puerto Rico
LYNN A. WESTMORELAND, Georgia
CHARLES W. BOUSTANY, Jr., Louisiana
JEAN SCHMIDT, Ohio
(ii)
Subcommittee on Economic Development, Public Buildings and Emergency
Management
BILL SHUSTER, Pennsylvania, Chairman
JIM GERLACH, Pennsylvania ELEANOR HOLMES NORTON, District of
KENNY MARCHANT, Texas, Vice-Chair Columbia
CHARLES W. DENT, Pennsylvania MICHAEL H. MICHAUD, Maine
JOHN R. `RANDY' KUHL, Jr., New York LINCOLN DAVIS, Tennessee
DON YOUNG, Alaska JULIA CARSON, Indiana
(Ex Officio) JAMES L. OBERSTAR, Minnesota
(Ex Officio)
Subcommittee on Water Resources and Environment
JOHN J. DUNCAN, Jr., Tennessee, Chairman
SHERWOOD L. BOEHLERT, New York EDDIE BERNICE JOHNSON, Texas
WAYNE T. GILCHREST, Maryland JOHN T. SALAZAR, Colorado
VERNON J. EHLERS, Michigan JERRY F. COSTELLO, Illinois
STEVEN C. LaTOURETTE, Ohio GENE TAYLOR, Mississippi
SUE W. KELLY, New York BRIAN BAIRD, Washington
RICHARD H. BAKER, Louisiana TIMOTHY H. BISHOP, New York
ROBERT W. NEY, Ohio BRIAN HIGGINS, New York
GARY G. MILLER, California ALLYSON Y. SCHWARTZ, Pennsylvania
HENRY E. BROWN, Jr., South Carolina EARL BLUMENAUER, Oregon
BILL SHUSTER, Pennsylvania ELLEN O. TAUSCHER, California
JOHN BOOZMAN, Arkansas BILL PASCRELL, Jr., New Jersey
JIM GERLACH, Pennsylvania RUSS CARNAHAN, Missouri
TOM OSBORNE, Nebraska NICK J. RAHALL, II, West Virginia
TED POE, Texas ELEANOR HOLMES NORTON, District of
CONNIE MACK, Florida Columbia
LUIS G. FORTUNO, Puerto Rico JOHN BARROW, Georgia
CHARLES W. BOUSTANY, Jr., JAMES L. OBERSTAR, Minnesota
Louisiana, Vice-Chair (Ex Officio)
JEAN SCHMIDT, Ohio
DON YOUNG, Alaska
(Ex Officio)
(iii)
CONTENTS
TESTIMONY
Page
Baker, Hon. Richard H., a Representative in Congress from the
State of Louisiana............................................. 8
Blanco, Hon. Kathleen Babineaux, Governor, State of Louisiana... 16
Farmer, Paul, Executive Director, American Planning Association,
Washington, D.C................................................ 47
Felmy, John, Chief Economist, American Petroleum Institute,
Washington, D.C................................................ 47
Jefferson, Hon. William J., a Representative in Congress from
the State of Louisiana......................................... 8
LaGrange, Gary P., President and Chief Executive Officer, Port
of New Orleans................................................. 47
Landrieu, Hon. Mitchell J., Lieutenant Governor, State of
Louisiana...................................................... 16
Marsalis, Wynton, Musician, New York, New York.................. 16
Nagin, Hon. C. Ray, Mayor, New Orleans, Louisiana............... 16
Perry, J. Stephen, President and CEO, New Orleans Metropolitan
Convention and Visitors Bureau................................. 47
Ringo, Jerome, Chair, National Wildlife Federation, Lake
Charles, Louisiana............................................. 47
St. Julien, Mtumishi, Executive Director, the Finance Authority,
New Orleans, Louisiana......................................... 47
Voisin, Michael C., Owner and General Manager, Motivatit
Seafoods, Inc., Houma, Louisiana............................... 47
PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS
Carnahan, Hon. Russ, of Missouri................................. 77
Costello, Hon. Jerry F., of Illinois............................. 78
Jefferson, Hon. William J., of Louisiana........................ 135
Menendez, Hon. Robert, of New Jersey............................. 166
Norton, Hon. Eleanor Holmes, of the District of Columbia......... 174
Oberstar, Hon. James L., of Minnesota............................ 178
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Blanco, Hon. Kathleen Babineaux................................. 73
Farmer, Paul.................................................... 80
Felmy, John..................................................... 93
LaGrange, Gary P................................................. 145
Landrieu, Hon. Mitchell J........................................ 149
Marsalis, Wynton................................................ 165
Nagin, Hon. C. Ray.............................................. 167
Perry, J. Stephen............................................... 183
Ringo, Jerome................................................... 191
St. Julien, Mtumishi............................................. 198
Voisin, Michael C............................................... 201
A VISION AND STRATEGY FOR REBUILDING NEW ORLEANS
----------
Tuesday, October 18, 2005
House of Representatives, Committee on
Transportation and, Infrastructure,
Subcommittee on Water Resources and Environment
and Subcommittee on Economic Development,
Public Buildings and Emergency Management,
Washington, D.C.
The committee met, pursuant to call, at 9:30 a.m. in room
2167, Rayburn House Office Building, Hon. John J. Duncan and
Hon. Bill Shuster [chairmen of the committees] presiding.
Mr. Duncan. I want to welcome everyone to our hearing on
the Vision and Strategy for Rebuilding New Orleans. We are
joined today by our colleagues from the Subcommittee on
Economic Development, Public Buildings and Emergency
Management. I am honored to chair this hearing today with my
good friend, Chairman Shuster of that Subcommittee, along with
the Ranking Members, who will be here shortly.
The flooding of New Orleans in the wake of Hurricane
Katrina was one of the worst disasters in our Nation's history.
On October 4th of this year, just a few days ago, I had the
privilege to lead a delegation of 11 members to the Gulf Coast.
What we saw there was some of the worst devastation; one of the
most monumental disasters this Country has ever seen. We saw
first-hand the devastating impacts of the flooding, wind damage
and storm surges caused by the hurricane. In fact, while most
of the publicity was for New Orleans and Louisiana, because of
the numbers of people involved, we saw by far the worst damage
along the coast of Mississippi.
Hurricane Katrina has taught us a lesson on the importance
of infrastructure. When infrastructure fails, the impacts can
be devastating. We don't notice it when everything is working,
only when it is gone. Flood control projects are often debated
by anti-development groups and others who call them pork
projects, but as Katrina showed, these projects can be and are
critical investments for our Nation's security.
In fact, in 1965, Congress authorized a barrier protection
project that might have kept the City of New Orleans from being
inundated with floodwaters. This project was halted in the late
1970s by a string of environmental lawsuits. The Federal
Government, together with States and local communities, must
continue to invest in flood protection.
No one knows where the next hurricane will hit, or which
river valley will receive torrential rainfalls. So we must
invest on a national scale. This nationwide effort will
continue. New Orleans and the rest of the Gulf Coast will be
rebuilt. It's just a question of how it will be rebuilt, and of
course, there may be some parts of New Orleans and other places
that should not be rebuilt.
We have to, on this Committee and in these subcommittees,
be good stewards of the taxpayers' dollars. I grew up in a
political family and I have followed this Congress closely
since the mid-1960s. I don't think I have ever seen an issue
flip so quickly as this did. There was a nationwide outpouring
of tremendous sympathy for the first two or three weeks, and
then most people around the Country seemed to feel that we were
sending too much money too fast to that area and there was
great concern that some or much of it might be spent in
scandalous or wasteful ways.
We can't allow Federal tax dollars to be wasted or spent on
unnecessary projects. We must ensure that appropriate projects
are authorized to provide an adequate level of protection for
New Orleans and the Gulf Coast and appropriate cost-sharing
responsibilities for local project sponsors and integration of
navigation, flood control and ecosystem restoration. We live in
a country with thousands of miles of coastline, so we must also
keep in mind that whatever decisions we make regarding New
Orleans, Southern Louisiana, Mississippi and Alabama will have
implications for flood control policy everywhere in the U.S.
The Federal Government will work in partnership with the
City of New Orleans and other affected cities, as well as the
States of Louisiana, Mississippi and Alabama to return the Gulf
Coast to prosperity. That area is a very important part of this
Country for many, many reasons, and we will hear more about
that as we listen to the witnesses later this morning.
But to make decisions about Federal hurricane protection
projects for New Orleans, we need to know how the city can be
rebuilt. Today we will hear from elected officials from the
State of Louisiana and the City of New Orleans about their
vision for rebuilding New Orleans, the process they will use to
make rebuilding decisions, and how the Federal Government can
help.
The Federal Government cannot do it all. The Federal
Government cannot do it alone and certainly we do not have the
$250 billion or figures such as that to be devoted to this
project that we have sometimes heard. The Congress has already
appropriated $62 billion to go to this effort, and we need to
make sure that that money is being spent wisely and in a way
that is fair to taxpayers all over the Country.
Our hearing today will also provide the communities and
industries that give New Orleans its vital culture and vital
economy an opportunity to share their views on rebuilding. I
look forward to hearing from each of the witnesses.
Before I turn to the Ranking Member, Ms. Johnson, for any
statement that she wishes to make, I will make a statement
about the process. We are going to allow opening statements
only for chairmen and ranking members and affected members.
Following opening statements, we will hear from Representative
Baker and Representative Jefferson on panel one. We have to do
this, because we are having testimony from Governor Blanco by
video. We are having a videoteleconference, and the time is
fixed. We have to get to that at 10:30, and then we will have
until 11:15 to ask Governor Blanco questions.
We first thought we were also going to have Mayor Nagin's
testimony by videoconference, but he has requested and we are
pleased that he will be here in person to testify.
At this time, I would like to turn to Ms. Johnson and then
Chairman Shuster for their statements.
Ms. Johnson. Thank you very much, Mr. Chairman, for holding
this first in a series of hearings on the aftermath of the
Hurricanes Katrina and Rita and their devastating impact on the
City of New Orleans and the greater Gulf Coast region.
Just yesterday the National Weather Service named its 21st
storm for 2005, tying a 72 year old record for the most active
hurricane season the Atlantic Ocean. With roughly six weeks
remaining in the hurricane season, no one needs to tell our
invited witnesses that this has been a historic year for
natural disasters, both in the impacts on everybody lives, but
also in raising the question whether the 2005 hurricane season
was just an overly active year or a warning of things to come.
Yet while the history books have yet to reflect what
actually exactly happened and what lessons can be learned from
these storms, one thing is certain: the City of New Orleans
must be rebuilt and the magical spirit that made that city
great must be preserved. Anyone who watched the coverage of
Hurricane Katrina could not help but be moved by the pictures
and the stories of those least able to escape the path of the
approaching storm, as well as the heroic efforts of those
responsible for saving the countless numbers trapped by the
rising floodwaters.
The coverage also exposed a side of the Gulf region that
many probably did not even know existed: the widespread poverty
that plagues so many of the region's citizens. Without special
attention, these individuals are the first ones to get lost in
rebuilding efforts.
Mr. Chairman, I am thankful that we have invited guests who
can provide us with first-hand accounts of the devastation
caused by Hurricane Katrina, its impacts to local communities
and cultures as well as where those who live and work in the
region believe we should go from here.
As with any major rebuilding effort, it is essential to
understand exactly what was lost, what must be preserved and
where things might be improved upon. We must resist the
temptation to build first and understanding the resulting
consequences later. This type of approach will only lead to
costly and ineffective efforts to restore the City of New
Orleans and the Gulf region.
In addition, this build first but ask questions later
mentality has the greatest potential to displace vulnerable
populations with the smallest voice in this debate.
Again, I welcome the witnesses. I thank you for your
opening statements, and I look forward to listening to the
testimony.
Mr. Duncan. Thank you very much, Ms. Johnson. This is the
first in a series of three hearings. We will hold hearings on
Thursday and we will hear from experts from the Army Corps of
Engineers and others. Then on the 27th, we will have hearings
from some of the associations and some of the technical people
that have the most knowledge about what needs to be done.
We are planning these hearings to be not blame or fault-
finding hearings, but hearings about what should be done to
prepare for the future and to help rebuild the affected areas.
Much of these hearings will be chaired by my good friend and
colleague, Chairman Bill Shuster, who chairs the Subcommittee
on Economic Development, Public Buildings and Emergency
Management, which has oversight jurisdiction over FEMA and
other agencies.
Chairman Shuster.
Mr. Shuster. Thank you, Chairman Duncan. I want to thank
you for working with me in putting this joint hearing together
today. I think this is important and I hope other committees in
Congress look at doing joint hearings, because I know that the
witnesses that will be here today, it's difficult for them to
leave the Gulf Coast, come up to Washington to spend a day or
two up here when they should be really focusing at home. So
this is important, that we best utilize their time, getting
them up here, letting us hear what they have to say and making
sure they get back down to the Gulf Coast in a timely manner.
I want to thank the witnesses for being here today. As I
said, it's difficult to leave the immediate issues they are
facing in Louisiana to testify. But testifying on long term
goals and strategies for rebuilding in New Orleans is
important.
New Orleans is one of America's great treasures, and I
believe it's appropriate to remind our Congressional colleagues
and the Country of New Orleans' unique place in our cultural
history. At this point, the future of New Orleans is largely
unwritten and uncertain, other than the general goal of
rebuilding New Orleans. It's not clear to me that a plan
exists. One thing is for certain, however, most of the Federal
recovery dollars will flow through this Committee and how we
spend those dollars will profoundly impact New Orleans for at
least the next 100 years.
One of our greatest challenges as a Committee will be to
ensure that the projects and programs we fund support local
goals and decisions. Just a little over a week ago, President
Bush made clear his vision for the rebuilding process. I think
he had it right: it should be federally supported but locally
driven.
It also has to be fiscally responsible, and we must use
common sense as we move forward. I would remind everybody that
this is not our money, it's the taxpayers' money and they
demand nothing less.
As all my colleagues know, rebuilding New Orleans will be a
massive and complicated matter. It raises a number of important
questions that I hope our witnesses will be able to discuss
today. For example, after the 1993 Midwest floods, a number of
communities chose to use FEMA mitigation funds to relocate out
of harm's way rather than rebuild.
Are there high risk areas of the city that should be
relocated instead of being rebuilt? What should the Federal
role be? How do we utilize local residents and businesses in
the reconstruction and rebuild the economy along with the
infrastructure? How do we increase home ownership and how do we
help local governments survive in the short term so that they
can succeed in the long term?
I look forward to hearing from today's witnesses on their
vision and strategy for rebuilding New Orleans and also how
they believe these visions and strategies can best be
implemented. Again, Chairman Duncan, thank you for chairing
this Committee.
Mr. Duncan. Thank you very much, Chairman Shuster.
Before we go to Ms. Norton, I want to welcome the newest
member of the Committee, the person who will become the newest
member of the Subcommittee at our next markup, Mrs. Schmidt
from Ohio.
Next we have the Ranking Member of the Subcommittee on
Economic Development, Public Buildings and Emergency
Management, our colleague from the District of Columbia, Ms.
Norton.
Ms. Norton. Thank you, Mr. Chairman. I thank both Chairmen
and our Ranking Member for scheduling this very important
hearing.
I'm pleased to serve on both subcommittees. Together, these
two subcommittees are the major authorizers for emergency
relief, for short and long term relief, and for major elements
of the rebuilding of the Gulf Coast, only now in the startup
stage. We cannot do our job as a committee unless and until we
hear from the officials and residents who were hurt, must guide
and live with the rebuilding effort. This hearing begins our
efforts for New Orleans and particularly by hearing from State
and city leaders and from other officials who will have the
responsibility for designing and leading the rebuilding efforts
in their city.
The scale of the damage left by Hurricanes Katrina and Rita
is unprecedented in modern America. The challenges are beyond
any that have been confronted not only by State and local
officials, but also the Federal agencies charged with
responsibility, including FEMA and the Corps of Engineers. Our
interest today is in the vision of those who lead and live in
the State and city and the strategies that they and their
Federal partners believe can get us from here to where they
want and deserve to be.
In turn, our subcommittees must ensure that our programs
are tailored to unprecedented conditions, including the
temporary destruction of the economy of a vital region of the
United States and its lead city, New Orleans. Some of the
problems are already clear. For example, the Stafford Act
requires that preferences be given to local residents and
businesses in contracting for Federal disaster rebuilding. But
residents have been scattered across the face of our Country
and business and commerce are crippled by the lack of capital,
employees and customers.
Already after some criticism and pressure from our
Committee and others in the Congress about no-bid contracts,
and the limited number of contracts to regional firms, FEMA has
announced that it will re-bid five $100,000 million housing
contracts.
We can help rebuild New Orleans. But we understand our
obligation to be helpful to Governor Blanco and Mayor Nagin in
meeting the challenges of safer and smarter rebuilding. Above
all, we want to ensure that the 300 evacuees that we were
pleased to house here in the District of Columbia and the
hundreds of thousands of New Orleans residents throughout the
United States are getting the assistance they will need in
short term and affordable long term housing.
Policy decisions about where and how to house evacuees can
determine who participates in the rebuilding efforts and
indeed, who ultimately returns to New Orleans at all. I look
forward to hearing from today's witnesses with the knowledge
and the wisdom we will all need to get the job done together.
Thank you very much, Mr. Chairman.
Mr. Duncan. Thank you, Ms. Norton.
As I mentioned earlier, I was instructed that we would
allow opening statements from the Chairmen and Ranking Members
and members from the affected areas. Then if we have any time
after that, we will go to other members in order, but we will
have to stop at 10:30 to handle this videoteleconference with
the Governor.
So we will now go at this time to Mr. Boustany.
Mr. Boustany. I want to thank you, Chairman Duncan and
Chairman Shuster, for convening this joint hearing today. Both
of you personally reached out in the immediate days after
Hurricanes Katrina and Rita to offer your support and
condolences. I appreciate all you have done, also the work your
staff has done in helping us respond to this unprecedented
devastation in the Gulf Coast region.
Today we are focusing on the rebuilding of New Orleans. But
the devastation reaches far beyond. In fact, in southwest
Louisiana, my district, the Seventh Congressional District of
Louisiana, Cameron Parish was almost completely destroyed, with
massive flooding and hurricane force winds. Vermilion Parish,
another coastal parish, had extensive flooding, crops were
destroyed from saltwater and homes were lifted from their
foundations. The storm surge from Rita, in fact, impacted
regions as far as 40 to 50 miles inland, with hurricane forces
reaching up into central Louisiana.
In addition, southwest Louisiana supplies much of the
Nation's energy. Oil and gas production is still at this time
less than half of the pre-Katrina capacity.
Local officials and emergency responders in my district did
an outstanding job in evacuating those communities in Rita's
path and thus saving countless lives. Now we must focus on
rebuilding not only New Orleans but much of the Gulf Coast
region.
I think it is important at this stage to remember that
Government cannot micromanage economic recovery. The Federal
role in this recovery must be targeted, spending must be
prudent and fiscally sound with proper oversight and
accountability. Federal actions must at every stage spur
private investment. In my mind, rebuilding New Orleans and
restoring New Orleans to the great city it has always been
hinges on our ability to provide a safe environment in which
businesses can thrive and communities can flourish.
The Subcommittee will hear more in-depth testimony on the
hurricane and flood protection needs for a rebuilt New Orleans
on Thursday. But I think this is really a key issue. It must be
a top priority in order for us to attract insurers back into
this region, because business investment won't follow unless we
can attract insurers back.
I know the Corps is well underway in its work to prepare
the levee systems in preparation for the 2006 hurricane season.
But we need to make sure a rebuilt New Orleans is prepared for
a future category 5 hurricane. And I want to work with my
colleagues to ensure the Corps develops a comprehensive, peer-
reviewed levee plan with an expedited time frame and a specific
time frame for implementation.
We need to revisit the feasibility of constructing a Lake
Pontchartrain barrier, an issue that this Subcommittee grappled
with nearly 30 years ago. I think we need to take this up
again.
Another priority must be rebuilding health care
infrastructure in New Orleans. LSU Medical Center and its
teaching hospitals, including the only level one trauma center
in the entire region, were devastated. This is critically
important in rebuilding our economy and our health care
infrastructure for the entire State.
New Orleans will be rebuilt, bigger and better than before.
But we need to make sure it's safe for occupation as well. I
thank the Committee for holding this series of hearings, and I
look forward to working with my colleagues as we move forward
with the rebuilding process. Thank you.
Mr. Duncan. Thank you very much, Dr. Boustany. Dr. Boustany
is not only from the affected area, but he is vice chairman of
our Water Resources and Environment Subcommittee, and a very
active member of the Subcommittee.
We will go next to Congressman Taylor and then to
Congressman Baker. Congressman Taylor, who also helped host us
when our delegation visited Mississippi. We appreciate, Gene,
very much, your accommodations at that time.
Mr. Taylor. Thank you, Mr. Chairman. I want to thank my
colleagues who were able to visit south Mississippi and coastal
Louisiana for coming down to see first-hand the challenges that
confront us.
Mr. Chairman, what is good for New Orleans is good for
south Mississippi, what's good for south Mississippi is good
for New Orleans. I very much welcome this hearing today. Also
we want to keep in mind that this is a region that was hurt by
this storm and not just a city, that it affected hundreds of
thousands of south Mississippians every bit as much as it
affected New Orleans.
And we certainly want to help our neighbors to the west. We
want to help them rebuild their beautiful city, we want to help
with the Mississippi River delta restoration project,
inappropriately called the Louisiana Coastal Initiative.
Because what is important for the Mississippi River is of great
importance to south Mississippi as well.
We also hope at some point that my colleagues from
Louisiana could give me some idea of how many people from
Louisiana lived outside the flood plain and yet were flooded by
this storm. I think we have a lot in common there that a heck
of a lot of people were told by their insurers, by their
bankers, by their mortgage landers, that they were outside the
flood plain, they don't get flood insurance, only to have an
unprecedented storm directly affect their lives, their homes
and now put them in a situation where their wind insurance is
saying, we're not going to pay, it's a water event. Their homes
are destroyed and they have no Federal flood insurance.
So I know that this affects tens of thousands of south
Mississippians. I presume it affects a heck of a lot of
Louisianans. I would hope that this body could find some fair
way to make these peoples' lives whole.
What we want to see is that person who has invested in
coastal Louisiana and south Mississippi for decades, coached at
our Little Leagues, taught at our schools, attended our
churches, we want to see to it that they are able to make their
lives whole, to get their lives going again rather than having
to sell out cheap to some developer. Because all the plans that
I see thus far really do benefit just the guy who comes in from
outside, buys cheap, sells high and doesn't pay any taxes on
it. That's not what I want to see, and I can't believe it's
what this Congress wants to see.
But I thank Mr. Baker for appearing before this panel, I'm
very pleased we have such a distinguished panel of Louisianans
joining us this morning.
Mr. Duncan. Thank you very much, Mr. Taylor.
Before we go to Mr. Baker, Ms. Johnson has made a special
request.
Ms. Johnson. Thank you, Mr. Chairman. I want to say happy
birthday to Mr. Wynton Marsalis, one of my favorite musicians,
and a native of New Orleans. I am sorry that you are here under
these circumstances, but delighted to see you.
Mr. Duncan. All right, thank you very much.
Now our distinguished colleague, Richard Baker, who also
helped host us when our delegation came to Louisiana and made a
very impressive presentation at that time. Congressman Baker is
a very valuable member of our Water Resources Environment
Subcommittee and is a lead witness here today. Congressman
Baker.
TESTIMONY OF THE HONORABLE RICHARD H. BAKER, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF LOUISIANA; THE HONORABLE WILLIAM
J. JEFFERSON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF
LOUISIANA
Mr. Baker. Thank you, Mr. Chairman. I appreciate the
courtesy you have afforded me this morning, and wish to
acknowledge that my principal assignment of committee
responsibility in the Congress is as member of the House
Transportation Committee. My secondary obligation in the House
is as a member of the House Financial Services Committee. I
wish to speak for a moment to some of those obligations in the
resolution that is being discussed this morning.
Others will certainly validate the need to rebuild this
region, and I think that appropriate, because some of you are
simply asking the question, why go back. Others will validate
the economic significance of this region which I think
important, because many do not understand how the Port of New
Orleans, the energy production and our aquaculture really does
impact our national economy.
Others will outline the necessity for important local
perspectives in developing the redevelopment plans which
obviously will ultimately be proposed to the Congress. And I
think that highly appropriate and necessary.
But what has not squarely been addressed, at least to this
point, is how we can assure as Louisianans access to continued
Federal dollars over the coming years, and I say it that way,
coming years, with appropriate accountability to you and your
constituents for the manner in which your hard-working
taxpayers' dollars are spent in our State. It's not lost on me
that an increasing number of members are expressing their
concerns with votes against various measures. I handled a
rather innocuous bill just last week which had 65 votes against
it on final passage. Clearly, a message is being received by me
and others in the delegation that there needs to be more
disclosure, transparent disclosure and accountability in how we
go forward.
I will introduce this week with most members of the
Louisiana delegation a measure to create a Louisiana Recovery
Corporation. This will be a unique institution, intended at the
moment only for Louisiana, but I have talked with Mr. Taylor
and those affected in Texas as well about the appropriateness
of a similar corporation for their particular communities. The
uniqueness of this entity is that it will be an off budget
enterprise, so we would not have the necessity of returning to
the Congress for renewed appropriations measures.
Secondly, it would be given broad authority to issue public
debt obligations approved by the United States Treasury. This
would give assurance to the Congress and the Administration
that there is Federal oversight of these debt issuances and the
debt that's being issued and therefore the capital being raised
will be deployed for a plan generated from the local level up,
as the President has indicted he would like to see us proceed.
There is precedent for such an entity being created. In the
course of our Nation's history, there have been three which are
large real estate acquisition and disposition entities with
similar powers and responsibilities. Before redevelopment can
proceed, however, it must be preceded by restoration of levee
integrity. It's already clear in the insurance markets that if
insurance were to be made available, it would be at such a high
price or simply not available at all unless levee integrity is
absolutely assured.
Environmental restoration is the second necessary step.
Permanent habitation cannot occur until those pollutants which
have been deposited by the flood are removed and assurance is
given to homeowners that it will be safe for their children to
play again in the back yard.
Restoration of essential public utilities is critical for
large scale redevelopment capacity. In order for those steps to
occur, it cannot at this moment, I do not believe, be achieved
either by local or State resources. Unfortunately, Standard and
Poors, Moodys and Fitch have all put the State and the cities
on a negative credit watch. That's the first step to a
downgrade.
That means were we to issue debt for our own
reconstruction, it would come at an inordinate expense and some
uncertainty as to our ability to market that debt in capital
markets. For that reason, it is essential to have the Federal
Government's full faith and credit backing the debt issuances
that do have the potential for a repayment at the tail end of
the project.
How so? Well, with stage financing and the ability to
establish levee integrity, environmental remediation and public
utilities, we could then create large expanses of reclaimed
properties available for redevelopment. Those redevelopment
areas would then be proposed by local community leadership.
Mayor Nagin, Governor Blanco and others have proposed and
established commissions that involve local community leadership
with various perspectives on how communities should be rebuilt.
In an ancillary matter, we will consider a governmental
reform in the manner of Fannie Mae and Freddie Mac, two of the
large housing Government-sponsored enterprises later this month
on the House floor. As an element of those reforms, there is
established an affordable housing fund heretofore not existing,
which would dedicate somewhere between $500 million and a
billion dollars annually of non-taxpayer money to affordable
housing goals.
So this would be an augment to the redevelopment plan for
those concerned that this is only about developers getting rich
off the purchase of property from this entity to make money at
the expense of the affected constituents in the arena. There
will be mixed-use, affordable housing, subsidized housing,
multi-family housing, to a great extent financed by the
resources of Fannie and Freddie as well as the Federal Home
Loan Bank.
To have the ability to complete such a large scale
reclamation project can only be achieved with Federal
resources. But the U.S. taxpayer, accordingly, deserves some
assurances that the dollars spent are wisely spent and that
there is some potential mechanism for partial repayment. And I
emphasize the word partial repayment. I would not represent to
this Congress that any development plan would make U.S.
taxpayers whole as a result of some innovative or new strategy
for reclamation.
The plan will call for the large scale sale of properties
ready for redevelopment to the private marketplace, but
homeowners will not be dispossessed. Several options will be
offered to a homeowner. One, you can take a cash settlement and
move on with life in another community somewhere else if that
is your determination.
Secondly, you can reserve the right to your 100 by 150 foot
parcel subsequent to the redevelopment activity if you choose
to wait that period of time and you can rebuild on a relatively
similar size lot in a relatively same location once the
redevelopment has been concluded. And I want to emphasize that.
There is great concern expressed by Mr. Jefferson and others to
me that bulldozers will run, peoples' property will be taken
and they will be dispossessed from their communities and unable
to return.
This proposal will not do that. If you choose to stay, you
can stay. It is your decision. You will simply have to await
the restoration process before you are able to return to
normality.
There is one other provision which has received some
statements of concern. If you are building a highway project
and you have reached negotiated settlement with 99 out of 100
landowners, and one person refuses to sell his property at what
is determined to be the appropriate level of compensation for
that project to move forward, the public interest requires the
Government to act and you subsequently litigate that value in
court, so that the project can move forward.
I am not going to run from it, there is a necessity for
some limited right of eminent domain, so that the redevelopment
proposal can move forward and families can be restored and home
ownership be re-established. But that is the last element in a
long process of opportunities and choices which homeowners will
make.
Ultimately, the commission will have a very difficult
responsibility in assessing the literal thousands of financial
relationships of those who own outright to those who just
bought last month with their 95 percent LTD ratio in their
mortgage, and the ability for the commission to provide
individuals some measure of compensation to move on with life,
to provide some measure of compensation to the lending entities
to not cause disparate economic difficulty in broad sectors of
our financial economy is essential and very important.
Stated a more simply pointed way, I believe the plan will
afford us a mechanism to rebuild devastated communities in a
responsible manner, minimizing the cost to the United States
taxpayer while respecting the right of private property
ownership. That is my goal. It will not be easy. It can be
done.
I am not aware of another plan that speaks to the need to
measure Federal resources flowing to communities with
accountability. There's a lot of planning going on and a lot of
commissions out there. But we just can't ask you to give us
money and go away. I understand that.
If you will give us a chance to explain how we intend to
proceed with the Louisiana Recovery Corporation, I am hoping,
Mr. Chairman, that you and members will find it to be an
acceptable path. I thank you for the time.
Mr. Duncan. All right, thank you very much, Congressman
Baker. Those are some very good suggestions. Obviously we won't
be able to give everybody everything that we want, and
obviously as I said earlier, the Federal Government, people
want to help in that area, but the Federal Government won't be
able to do it alone. Insurance companies will have to do their
part. The State governments will have to do their parts and so
forth.
Next we will hear from our very distinguished colleague,
Congressman Jefferson, who represents so much of the affected
area. Congressman Jefferson.
Mr. Jefferson. Thank you, and good morning.
I would like to thank the Chairs and Ranking Members of the
subcommittees represented here for allowing me the opportunity
to appear before you to give testimony on Congressional efforts
to revive and rebuild New Orleans in the wake of Hurricanes
Katrina and Rita.
I need not spend much time cataloging the devastation that
we have experienced as a result of these hurricanes and the
consequent flooding of huge portions of southeastern Louisiana.
As we have all seen, these terrible storms were indiscriminate
in their destruction, leaving behind unprecedented amounts of
property damage, human casualties and economic losses.
It is estimated that nearly 228,000 occupied housing units,
representing more than 45 percent of the housing stock in the
metropolitan New Orleans area, were flooded. This total
included 120,000 owner occupied units and 108,000 units
occupied by renters, representing 39 and 56 percent of those
respective stocks. Moreover, New Orleans and a number of
surrounding towns have been virtually shuttered for almost
seven weeks, decimating the revenue base and forcing dramatic
reductions in the labor force, just at a time when those
workers are desperately needed to assist the recovery efforts.
A further effect of the storms was the disproportionate
adverse impact on the State's most vulnerable and poor
citizens. Thirty-eight of the metropolitan areas, 49 extreme
priority assistance tracts, were flooded. All 38 of the flooded
property tracts were in the city of New Orleans.
Sadly, these tragic effects were not inevitable. They
represent an unfortunate intersection of weather and water with
the socioeconomic geography that had evolved over decades.
Accordingly, as we confront the future, our goal should not
be merely recovery, but transformation, a socioeconomic
revolution that leaves a region not just like it was, but
better. Those impacted by the storms deserve no less. The
limited Federal resources we can garner to meet New Orleans's
needs must target quality outcomes relying on existing, proven
tools that meet the scale of the task.
To that end, we should focus, I believe, on four principal
goals. First, we must create a region that is survivable for
the long term against storms that are ever more frequent and
more ferocious each year. Second, we must commit to turning the
region into an example of higher quality sustainable
development. Third, we must replace neighborhoods of
concentrated poverty with neighborhoods of choice and
connection. And finally, we must transform the region from a
low wage economy to one of the highest skilled work force
commanding among the highest salaries in our region.
Without question, these are daunting goals. But this much
is clear: the reconstruction of New Orleans and southern
Louisiana in a proper way is going to require sustained,
serious and even visionary concentration over many years from
the grass roots level to Capitol Hill. But I am confident that
the will exists among my colleagues here in Congress and my
fellow Louisianans to achieve these goals.
With this firm commitment, we can rebuild those areas
shattered by hurricanes in a way that makes them more
survivable, these areas more sustainable and more inclusive and
more competitive in the global economy than they were before
the storms. To enhance survivability, the Army Corps of
Engineers testified before the Congress a few weeks ago, they
could build to a category 3 levee by next June at a cost of
$1.6 billion to protect New Orleans and the New Orleans area,
which means New Orleans and Jefferson Parish, basically,
against a category 3 storm, and then it could build to protect
against a category 5 storm over the next 8 to 10 years at a
cost of another $5 billion or so.
In later discussion with the Corps in my office, they
explained to me that the time to rebuild to a category 5 was so
long because of three principal reasons. One was the legal
reasons, they explained, were expropriation concerns and
environmental issues. The second was local share issues of how
local government is going to pay for their share of the
project.
And the other was just geography issues about how long it
takes to settle levees when you rebuild, you build some more
and you wait for it to settle. It just takes time. And even
with those, we are able to mitigate and reduce those concerns,
it gets us to a position where we are talking about a four or
five year project, even then, to get to category 5 protection.
But while building a dependable levee and hurricane
protection system is vital, it's not enough really to really on
engineering oriented sea wall or levee oriented approach to
flood protection. If Hurricane Katrina taught New Orleaneans
and the rest of us anything, it is that attempting to dominate
nature solely with structural barriers is insufficient.
Moreover, given the time required to enhance those barriers to
protect against a category 5 storm, as we revealed in the
interim, we must ensure that survivability and sustainability
remain in the fore of any decision making.
As we move forward, we must plan where and how to rebuild
scientifically, systematically and democratically. We must
rebuild for all who were displaced and for future generations.
State and local governments should call upon leading
environmental engineering and urban design experts to provide
guidance both to Government and to the citizens of New Orleans
as to the best path forward.
Planning in a systematic, transparent and objective way
with an open and honest discussion of the costs and benefits of
each approach will ensure that the city has a solid foundation
on which to build, not the cost and benefit approaches we
normally talk about here, which is to say, economic costs and
benefits, but the costs if a catastrophe strikes, which we have
not taken into account over the years.
We must confront perhaps the most extraordinary urban
housing crisis our Country has ever witnessed. We must move
forward aggressively and creatively to re-settle those
displaced by the deluge in safe, comfortable homes and
economically integrated neighborhoods, or as a recent Brookings
Institution report describes them, neighborhoods of choice and
connection.
The images that pervaded media coverage in the days after
Hurricane Katrina struck New Orleans exposed what President
Bush has described as a deep, persistent poverty. As we move
forward with the rebuilding of New Orleans, therefore, we must
replace neighborhoods of extreme poverty with neighborhoods of
choice and connection. The Brookings Institution report I
referenced earlier describes neighborhoods of choice as
``desirable communities that families of all income levels seek
out for their quality, distinctiveness, sociability, location
and amenities. These neighborhoods are most importantly
economically integrated, or mixed income neighborhoods.''
The same report defines neighborhoods of connection as
those that lead families to opportunity rather than isolated by
residents. These neighborhoods offer their residents good
schools and timely services, provide their citizens easy access
to nearby or distant job markets, as well as a connection to
the mainstream life of the region.
Shortly after Katrina hit, the American Institute of
Architects reached out to me and others in Government to offer
their expertise in planning and helping to develop just such
neighborhoods in a renewed New Orleans. Such neighborhoods may
represent the best hope to solve many of the city's urban
dilemmas. They rejected the concentrated poverty, residential
segregation and economic isolation that characterized too much
of the city. They also represent a vision of a city rich in
economically integrated neighborhoods, attractive to all
classes of people, with schools on a path to excellence,
traversed by notably better public transportation, and tighter
links to greater economic opportunity.
So obviously the question becomes, how do we convert this
vision into reality? That is of course why we are all here
today. This Committee will play an essential role in the
rebuilding process.
This Committee holds the charge of ensuring that New
Orleans and the surrounding region are able to access all the
Federal tools and resources necessary for it to rebuild to a
first class infrastructure situation as it is rebuilt, from
flood and hurricane protection to transportation to connect
communities to port system reconstruction, so crucial not just
to New Orleans but to 28 States over thousands of miles of
inland waterways, to roads and rail. The New Orleans area will
need this Committee's support to implement a comprehensive plan
to ensure that.
Since Congress returned from its August work period to
confront the effect of Hurricanes Katrina and now Rita, we have
made significant progress. While Congress cannot write the
individual recovery plans for each city and parish in our
State, it can and must create a box of tools that give our
State and local governments the authorities they need to make
and carry out local plans for recovery. Congress has begun to
do that weighty task.
We are grateful to the Congress for having passed the
largest disaster recovery appropriations package in our
Nation's history, already committing direct spending of more
than $60 billion to the recovery and reconstruction effort. As
of last week or a few weeks ago now, some $21 billion of that
money had been obligated or spent, leaving $38 billion still
unobligated. These FEMA dollars can be used for a wide range of
purposes, as you know, including replacement and rehabilitation
of infrastructure, water and sewer system rehabilitation, fire
and police stations, public hospitals and clinics and schools,
housing assistance, loans to State and local governments for
operating expenses to certain health care expenses.
We have also passed several pieces of legislation providing
individual tax relief and the rest that you have all voted for
and supported. Under the current FEMA provisions, FEMA pays 75
percent of the costs of these projects that I have mentioned,
such as police and fire and any public infrastructure that has
been destroyed.
The rest is paid by local share. This share is unlikely to
come, as Representative Baker said, from State and communities
that have been severely reduced in their tax bases. We
therefore must make provision on our level for States and
cities to find ways to take self-help steps to take advantage
of resources that are under the Stafford Act to rebuild
critical infrastructure.
While the news laws that we have passed move the ball
forward, there are many proposals to be enacted. I see that my
time is fast getting away from us here, but let me just say
this. We have in this Congress passed a few provisions which
are on our side, the tax side, the Ways and Means side, that
will give our city and our State the tools it needs to borrow
money virtually tax-free over the next several years, to permit
it to raise the money it needs to meet local share requirements
and a way to self-help itself, to permit it to refinance its
current bond obligations because of Federal limitations now on
that, not to lower the interest rate, but to extend the time
for repayment, to give them more wherewithal to do the things
they need to do to meet local share requirements.
But there is going to be, over the next several years, an
important role for this Congress to play in permitting these
self-help opportunities and in giving direct help to our State
and to our local areas to rebuild. I am confident that with the
efforts that are being made, with the reaching out that is
being done by members of Congress and others around this
Country that we will rebuild our city bigger and better and
safer than it has ever been in the future, with more
opportunity for more people and with a more shining example of
what an urban city, a modern urban city ought to be these days.
So I thank the Committee and there are many issues,
proposals out here that we have to work through, some of which
Mr. Baker has talked about and others have talked about. But I
feel confident that there are enough good ideas around that at
the end of the day, we will have a chance to rebuild a New
Orleans with the collective help of all of you that we can all
be proud of and that can serve our constituents well.
Thank you very much for the chance to be here.
Mr. Duncan. Thank you very much, Mr. Jefferson.
We are fortunate that on the Water Resources and
Environment Subcommittee we have as members Congressman Taylor,
Congressman Baker and Congressman Boustany, three members who,
along with you, Congressman Jefferson, and your work on the
Ways and Means Committee, the four of you have really been the
leaders in the House in this whole tremendous effort that has
already begun but will continue for quite some time.
We have a rule in this Subcommittee that we do not question
members on members' panels, in consideration of other witnesses
that have come from all over the Country and in consideration
of the fact that each of you have such busy schedules, and also
that we have a chance to later question you on the Floor or
various other places.
In addition to that, Governor Blanco has been waiting since
about the time that Congressman Baker began testifying. So
Congressman Baker, you are a member of the Subcommittee, if you
wish to take a seat on the dais, you are certainly welcome. We
will welcome Congressman Jefferson to stay as long as he is
able.
In my six years as Chairman of the Aviation Subcommittee,
and this is now five years as Chairman of this Subcommittee, I
have had the privilege to chair about 200 hearings, I suppose.
I have had many Governors testify, but I have never had any
witness testify over the videoteleconference. I don't know how
this is going to work. There is Governor Blanco now. I hope she
can hear us, and I hope she has been able to hear the very
important testimony that Congressman Baker and Congressman
Jefferson have given. We will see how this works.
We certainly are pleased to have Governor Blanco. We did
allow her to testify in this manner because of the tremendous
work that she is having to do there in her State and because of
scheduling difficulties. After her testimony, Mayor Nagin will
be here to testify in person. We are pleased at this time to
have as our next witness the Honorable Kathleen Babineaux
Blanco, Governor of the State of Louisiana, from Baton Rouge.
Governor Blanco, I hope you can see us and hear us, and we
welcome you to the Subcommittee. You may begin your testimony.
TESTIMONY OF THE HONORABLE KATHLEEN BABINEAUX BLANCO, GOVERNOR,
STATE OF LOUISIANA; THE HONORABLE C. RAY NAGIN, MAYOR, NEW
ORLEANS, LOUISIANA; THE HONORABLE MITCHELL J. LANDRIEU,
LIEUTENANT GOVERNOR, STATE OF LOUISIANA; WYNTON MARSALIS,
MUSICIAN, NEW YORK, NEW YORK
Governor Blanco. Indeed, sir, I can see you and hear you,
and I appreciate this opportunity to speak to you.
Mr. Chairman and Ranking Members, committee members, thank
you indeed for allowing me to videoconference in with you
today. In the worst natural disaster in this Nation's history,
Hurricanes Katrina and Rita hit New Orleans and most of south
Louisiana hard. You have all seen and read about the
devastation. Hundreds and thousands of our citizens remain
scattered all across the Nation. Over 200,000 homes have been
destroyed, leaving tens of thousands still homeless.
The hurricanes shuttered or displaced almost 81,000 firms.
That is 41 percent of Louisiana's businesses. The Congressional
Budget Office reports that more than $375,000 Louisiana
citizens lost their jobs.
The task of rebuilding Louisiana is massive and it is
complex. Many schools, universities, hospitals, churches,
businesses, utility systems, have been destroyed. Much of our
transportation and port infrastructure, both sea and air, has
been damaged or destroyed. Indeed, entire communities, entire
parishes, have been destroyed.
These mothers and fathers and sisters and brothers and
their children want to come home. And I want them to come home.
They want us to rebuild and I insist that we rebuilt. But we
must protect what we rebuild.
Our people of coastal Louisiana must feel safe. They must
be safe. They deserve no less. We must build newer, higher,
stronger levees to protect New Orleans and other south
Louisiana communities.
Repairing the damaged levees is only a step. But it is an
important first step. New Orleans must be protected. Without
better levees, who will invest, who will insure, who will
return? Without restoring and improving the critical
infrastructure, levees and drainage canals, roads and bridges,
hospitals and schools, we can't rebuild New Orleans.
Let there be no doubt about the importance of the New
Orleans area to the economic health of the Nation. America's
economy must have a vibrant, commercial port at the mouth of
the Mississippi River, its most important waterway. South
Louisiana is the center point of the Nation's energy economy.
This is the export hub of the Nation's bread basket. This
region fills the Nation's restaurants and supermarkets with
seafood.
Indeed, the quality of life of our Country depends on a
vibrant Louisiana economy. Just as the Nation recreated the
economic greatness of New York City after 9/11, the Nation
needs New Orleans, the Nation needs south Louisiana. America
needs this region not only for our rich culture but also for
the unparalleled and unique contribution that we make to
America's economy.
We are working hard to restore Louisiana and to bring our
people back, back to sound homes, quality jobs and revived
neighborhoods. But we must have help from Congress. That is why
I am here today. We are dealing with a crushing blow to the
revenues of both State and local governments. Jobs and
businesses are at the heart of our recovery efforts. Without a
thriving business community providing quality jobs, our people
will have no reason to come home.
In the first 18 months of my administration, we scored
success after success as we brought in new industries and
enhanced existing businesses. We closed deals worth $3 billion
of new capital investment for Louisiana. We scored those
successes with targeted State tax credits and tax incentives
that reward companies for investing in Louisiana and creating
quality jobs.
We are proposing to use the very same kind of economic
development tools in our tool basket in the recovery of
Louisiana. But the problems are so great, we need additional
help. That is why we are here today.
We need direct incentives to help businesses and
individuals move back, so that they can move back into the
storm zone. That is an idea that President Bush included in his
Gulf Opportunity Zone proposal. We support that.
Up to $30 billion in tax-exempt hurricane recovery bonds
are essential to our efforts. This would dramatically lower the
cost of capital to companies of all sizes. A job creation tax
credit would motivate large companies with significant payrolls
to remain in the region. A $10 billion Louisiana business
development fund to provide grants to small businesses that
returned to the affected areas of our State would be critical.
We are asking you to help us in all these counts.
We need your help with these important incentives in order
to regain our footing. If you help us with these incentives, we
believe that we only have to step aside and let business do
what it knows how to do.
We project a 20 percent shortfall in State tax collections
because our economy has been stopped in its tracks. But just
yesterday, I announced the creation of a bridge loan program to
help our small businesses with much needed cash flow. The need
for financial assistance is so great in the damaged area that
this program will be tapped out in two to three days. Our
businesses need more of this kind of immediate help. I have
asked the United States Senate and President Bush for $200
million to fund these kinds of bridge loans. That is the size
of our need.
We are making other advances. Days ago, we reopened an
important bridge on Interstate 10 east of New Orleans,
connecting New Orleans to the east. This temporary repair was
completed earlier and at a lower cost than we estimated and by
Louisiana contractors, I proudly add. A permanent repair to
this section of I-10 will cost about $600 million. That is just
one part of the needed repairs to the infrastructure in and
around the City of New Orleans. Roads and bridges that are not
normally eligible for Federal aid suffered about $845 million
worth of damage.
South Louisiana's port system is functioning, but only at a
fraction of its capacity. Damage to public port and rail
facilities alone totaled more than $825 million. The Federal
navigation system on the river suffered more than $300 million
in damage.
Those are just a part of this massive recovery effort, an
effort that requires a daring, yet a realistic plan. To recover
from the trauma of this devastation, we cannot simply recreate
the protection levees that those storms destroyed. It's
essential that we build stronger, smarter and safer.
To coordinate the continuing rebuilding effort, I have
created the Louisiana Recovery Authority. They will function as
my board of directors of our recovery effort. I have selected
some of the best minds from or with connections to Louisiana. I
have appointed as chair Dr. Norman Francis. He is President of
Xavier University in New Orleans, and one of our State's most
respected leaders.
As Vice Chair, I have appointed Walter Isaacson, a New
Orleans native who has served as managing editor of Time
Magazine, Chairman and CEO of the Cable News Network, otherwise
known as CNN, and he is now President of the Aspen Institute. I
have directed these members to act boldly, reach out for new
ideas, forget old limits, ignore the ancient rivalries of
politics, race and region, imagine a better Louisiana and help
me create it.
This Authority will go to work immediately. They will focus
on prioritizing key issues, safety, housing, jobs,
transportation, education, infrastructure needs, economic and
work force development, health care, the environment and family
services. I am confident that this Authority can deliver
tangible results in a timely fashion.
I want to spend a moment addressing the issue of fiscal and
financial accountability. I understand the questions that some
in Congress have about how our State will handle the Federal
funds that are coming to us for disaster relief and recovery.
First, during my administration, the financial operations of
the State of Louisiana have been highly rated for government
accountability. But I want to emphasize that the financial
affairs of Louisiana will be transparent and wide open as it
pertains to this period of recovery, more so than ever before.
I believe that we will stand well to the expected scrutiny by
the public, the Congress and the media.
Second, in addition to our normal auditing processes, we
will hire a Big Four accounting firm to audit every single
recovery dollar that the State receives. We will then have a
second Big Four accounting firm audit the audit of the first
firm. And finally, on top of that, I directed the Louisiana
Recovery Authority to appoint an audit committee to add further
oversight to this financial accountability process. I expect to
account for every single penny of Federal money that is
received by the State of Louisiana. I believe that this process
will enable us to do it in a way that inspires public
confidence.
Only with the confidence of the public and this Congress
can we properly restore New Orleans and south Louisiana, a task
that we believe is vital to the future of our Nation. I come to
you today to ask on behalf of hundreds of thousands of United
States citizens who call Louisiana home to continue your
generous support of our recovery efforts. Without the financial
support of Congress and the American people, we cannot
adequately meet the challenges before us.
But I am confident that with the support of our President
and each of you, we will be able to bring our people home,
restore our communities and reunite our families in a stronger,
more vibrant Louisiana.
President Bush has repeatedly expressed his desire that we
succeed in these rebuilding and restoration efforts. He is
fully committed and Louisiana appreciates his commitment.
That is the awesome task before us. And I hope each of you
will become our partners in this historic undertaking, and I
appreciate the opportunity to speak to you today. Thank you.
Mr. Duncan. Thank you very much, Governor Blanco. We will
have some questions for you. This is, as you know, a joint
hearing of the Subcommittee on Water Resources and Environment,
which oversees, among other things, the Army Corps and the EPA.
Then the Subcommittee on Economic Development, Public Buildings
and Emergency Management, which has oversight jurisdiction over
FEMA and other areas, and certainly economic development and
Federal Government buildings, that are also great concerns.
Co-chairing this hearing with me is Chairman Bill Shuster,
who was one of the first members of Congress to go to the scene
and also accompanied us on the larger delegation that came down
two weeks ago today. I am going to yield my time for questions
to Chairman Shuster at this time.
Mr. Shuster. Thank you, Mr. Chairman. I appreciate that.
Can you hear me, Governor?
Governor Blanco. Yes, I can.
Mr. Shuster. First of all, welcome. I thank you for
appearing before us here today.
The first thing I would like to say is that there is no
doubt in my mind that this Nation and this Congress will
support and send billions of dollars, which we already have, to
the Gulf Coast and to Louisiana for the rebuilding effort. I
think it is important that we ask questions. The folks in my
district, the rural district in Pennsylvania and Pennsylvanians
in general hear all about the rebuilding, and of course, as I
said, I am sure we are going to be assisting, and I know people
in Pennsylvania are ready to contribute to the effort with
their funds, with donations and with their time.
But again, the question that is imperative to ask is not
only about the rebuild, but what about what parts of New
Orleans there needs to be mitigation, what parts of New Orleans
do we look at and say, maybe it doesn't make sense to rebuild
them where they are, maybe we need to put them in other places.
I don't hear a plan, and I hope there is a plan put forward. Is
there a process that you will go through, you and the Mayor, I
will ask the same question to the Mayor, is there a process
that you are going to put forward to decide where it may not
make sense to rebuild in certain parts of New Orleans?
Look to the floods in 1993 in the Midwest, there were whole
towns that decided to move, because it didn't make sense being
where they are. In my district in Pennsylvania, we are right
now going through mitigation where there are going to be eight
to ten houses that have decided they are going to move, because
it doesn't make sense to be where they are or to spend the
money to protect those houses. The cost benefit isn't there.
So can you talk a little bit about the plan or the process,
if there is one, for determining where to rebuild, where not to
rebuild in New Orleans?
Governor Blanco. Chairman Shuster, I do appreciate your
concerns and the generosity of the people of your district and
the people of the United States. Indeed, Louisiana has been
blessed to be the beneficiary of so much outpouring from our
fellow citizens.
We do know that there are some difficult decisions that
have to come before us. The Louisiana Recovery Authority and
indeed the Mayor's own commission will be struggling with those
particular issues as we move through these next few months and
few weeks.
We have the monumental task of simply creating order right
now. But those decisions are the kinds of decisions that are
going to be determined as the process evolves. We will be
bringing in experts on land use initiatives, probably new
construction concepts.
Indeed, I think the most important thing that we have to
consider is how to create safer communities. People do not want
to put their lives in jeopardy, nor do they want to put their
properties in jeopardy.
So those issues will be coming before us in the next weeks
and months as we conclude our own groups of people doing this
deep analysis.
Mr. Duncan. Governor Blanco, this is Chairman Duncan again.
I was a little bit concerned about this, because they first
told me, when we first started this hearing this morning, that
the hookup was working fine. Then we lost it for a few minutes
and then it came back. We were able to hear your testimony
perfectly, but for some reason we are having a problem with
both the video and the sound system at this time.
They do tell me it is fixable. What we are going to do, I
apologize to you, but what we are going to do is we are going
to have Mayor Nagin present his testimony at this time. He is
here with us in person. Hopefully, after Mayor Nagin finishes
his testimony, we will be able to get back with Governor
Blanco.
We are very pleased to have the Honorable C. Ray Nagin, who
is the Mayor of New Orleans. He met with our delegation that
journeyed to New Orleans two weeks ago, and we're so honored
and pleased to have him here with us here today.
Mayor Nagin, you may begin your presentation.
Mayor Nagin. Mr. Chairman and members of the Committee, I
want to thank you for holding this session this morning. It's
so good to see some of you who visited New Orleans and had an
opportunity to see first hand some of the devastation that has
happened in this wonderful city.
I am in a very unique position from most, I was there from
the beginning. I strayed on the ground in New Orleans, I was
among the people, I know what happened, I saw it unfold. I was
able to impact it, hopefully history will say in a very
positive manner.
We evacuated 1.5 million people from the region before the
storm hit. It will go down in history as the most successful
evacuation ever undertaken by this Country. You saw the
complexities of this evacuation when Hurricane Rita was
approaching the Texas coast. And you saw exactly what Louisiana
has learned over the years in doing evacuations and how
smoothly ours has gone. So we have something to share with the
Nation as it relates to evacuations.
Ladies and gentlemen of this Committee, I have also had the
opportunity to visit shelters throughout this Country. I have
had the opportunity to visit all of the shelters in the State
of Louisiana. I have also had the opportunity to visit the
morgue that is in St. Gabriel in Louisiana. And I can tell you
that it is an amazing thing to see the process that is going on
in our State. After evacuating 1.5 million people, we have
about 1,000 confirmed deaths.
The thing that really got me when I visited the morgue,
there were 361 people, or bodies, that could not be identified.
We are still in the process of trying to identify them.
The other thing that struck me from looking at the
statistics was the media basically painted the death, the
destruction and the misery as being mainly poor, black people.
But when I went to the morgue and saw what was happening, the
people that were affected are just like you and I, they are
black, they are white, they are Hispanic. As a matter of fact,
there is an even break of people that died during the storm as
it relates to African-American and Caucasian. It is almost an
even split.
This tragedy affected just about everyone. Katrina did not
discriminate. It hit some of the poor areas of the City of New
Orleans, it hit some of the not so poor areas of the City of
New Orleans. There are lots of people and families that are
hurting throughout this Nation. The New Orleans diaspora
extends over at least 44 different States. We probably have
600,000 people in hotel rooms throughout this Country.
We are here today to basically ask you for expedited
support. We need New Orleans back. We need it back in its full
form, and we need your help as the Federal Government.
I was on Bourbon Street last night, I wasn't at the strip
clubs, let me just make that clear. I was enjoying a nice meal
at the Bourbon Cafe, which is owned by the Brennans, a
wonderful New Orleans family. I did get a chance to view
Bourbon Street, and it was packed. There were lots of
activities. There was a lady on a balcony throwing beads down
to some of the workers, and they were having a great old time.
They really reminded me of what we all know and love about
the great City of New Orleans. That is that it is the most
unique place probably in the world.
I know there is great debate about whether we should or
should not rebuild. In my mind there is no question: we should
rebuild. We can have the debate about whether certain sections
should come up or not. But the great City of New Orleans that
is so culturally unique, that has given this Country so much,
whether it be jazz, whether it be food, whether it be music,
whether it be the wonderful people that when you come to New
Orleans they make you feel so comfortable. There is no doubt we
should rebuild.
And if we are going to start this discussion about whether
we should rebuild communities that have natural disasters that
attack them on a regular basis, I don't think we want to go
down that road. Because then we would be talking about
California that sits on a fault line, or we would be talking
about Florida that got hit with six hurricanes, I think, last
year. We would be talking about the north that has snow
blizzards and that devastates and causes problems. This is a
unique American icon.
And it deserves the cypriot from this Committee and this
Congress. Because when nobody else wanted to drill oil off
their coasts, Louisiana did it. When nobody else wanted to
drill for natural gas and have salt domes, Louisiana did it. We
are a very unique place economically. We have a port that is
strategically positioned for one of the greatest land deals
that ever happened, the Louisiana Purchase, that fueled this
entire Country. This is a place that deserves Federal support,
and I am encouraging all of you to do it.
Just for the sake of background, the City of New Orleans
and the Port of New Orleans is the only deepwater port with
access to six class one rail lines. The Mississippi River
transports a big percentage of the Nation's oil and natural
gas, probably 30 percent of the domestically produced oil and
gas. We are the top importer of five different raw materials:
steel, raw metals, natural rubber, plywood and coffee.
When you look at our port from a strategic standpoint for
the Nation, if you look to the west and you see the west coast
and you see the ships that are coming in from various parts of
the world, and you see those ships docked for seven days before
they can offload their cargo, and when you look at Miami to the
east, and you see their facilities pretty much at capacity, you
truly start to appreciate how wonderful and how unique and how
well positioned the Port of New Orleans is.
Then when you talk to the grain farmers that harvested and
are looking for ways to get their grain to market, and then you
have the soybean farmers right behind them, getting ready to
move their products, and they have to come through the Port of
New Orleans, there is no doubt that we should rebuild.
My vision to rebuild New Orleans includes the citizens, the
private sector and Government. Our top priority is securing a
commitment now to upgrade our levee systems. This Congress,
this Federal Government in my opinion should give us the
cypriot to immediately upgrade our levee systems to make sure
that we can withstand another Katrina or whatever the next one
that comes, maybe it is a Wilma, I hope not. We have already
gone through the various cycles of a washington machine.
Katrina was the wash cycle, Rita was the rinse cycle. And I'm
hoping that Wilma is not the spin cycle.
But we have determined that we need hurricane protection,
and we need it in the worst way. But as we are thinking about
the levee systems, I would like this Congress to also consider
our wetlands. Our wetlands provided us a significant amount of
hurricane protection. For every mile of wetlands, it provided
us a subsidence of least a foot of storm surge. And the big
problem we had with Katrina was not only the winds, but the
storm surge that overtopped our levees. So we need your support
with flood control.
To bring back New Orleans, we also must revitalize our
business climate. There are a couple of things I would like for
you to consider as we are thinking about how we go about this
recovery. I urge you to establish a minimum funding formula
that is based upon the number of people affected and the number
of buildings damaged. That way we can assure that the dollars
that are necessary go to the most affected areas.
I also encourage you to look at local workers and
businesses and make sure that they get an opportunity, a fair
opportunity to participate in this rebuilding process. I am
also asking for Congress to establish a New Orleans, a Katrina
tax recovery and jobs incentives zone that would allow us to
create the incentives necessary to jump start our economy.
We also need assistance as it relates to critical
infrastructures, like our universities, hospitals and
businesses who need bridge assistance as they are out there,
spread throughout the Country, and trying to decide whether
they want to come back.
One of the biggest struggles we had was dealing with how
Federal dollars flow to our affected areas on a timely basis.
We have really had some struggles, and as a result of my total
economy being collapsed, I have no revenues coming in at the
moment to run city government. I have already laid off half of
my work force, which is about 3,000 workers, in the City of New
Orleans, because we have no revenues coming in.
I encourage, I strongly implore you to make some
adjustments, further adjustments to the Stafford Act that will
allow for a government to continue to operate in the event of a
catastrophic crisis such as this. I know that you have made
some progress, but we still need further help.
On the transportation side, our transportation system has
been severely impacted. We lost a major bridge to the east,
which I understand part of it has been restored. One of the
other things I am asking for is I need a rail system for future
events that would allow us to effectively move residents from
the City of New Orleans to as far away as Baton Rouge. We also
need assistance to restore our airport to pre-Katrina service
levels. Right now we are limping along and it is just not good
enough.
Mr. Duncan. Mayor Nagin, we have just a few more minutes
with the Governor, so if you could take just a minute or two
and sum up, and then we will go back to the Governor.
Mayor Nagin. I will sum up right quickly and say to you,
ladies and gentlemen, I know there has been lots of discussion
and debate about Louisiana and New Orleans as it relates to
whether we can handle the amount of money that the Congress is
talking about sending to us. I have no doubt we can do that.
Why don't you just take a minute and google me, and you
will see that since I have been in office almost four years, my
whole focus has been on reform, reforming government, honesty
and integrity. I think our Governor has also been about the
same thing.
I have set up a 17 member commission of some of the best
and brightest, people of very high integrity in New Orleans. We
promise and pledge to you that whatever money you send down,
and I am not going to get into a debate about whether it should
be $50 billion, $100 billion or $250 billion. You make that
decision and we will work with you as the Congress to ensure
that this money is spent very well and you won't have anything
to worry about.
Thank you very much.
Mr. Duncan. Thank you very much, and we will go back to
Chairman Shuster, who was talking to the Governor. Then we will
go to the Ranking Member of the full Committee, Congressman
Oberstar, for any statement or comments.
Mr. Shuster. Thank you, Mr. Chairman.
Governor, we didn't hear a lot of your response, but the
question was dealing with mitigation and with looking at what
parts may not make sense to rebuild. As I said, I want to also
go back to the beginning, I don't think there is a debate in
this Country about whether to rebuild or not to rebuild. It is,
are there parts of New Orleans or parts of Mississippi and
Louisiana that don't make sense to rebuild.
So if you could continue with your answer there, I would
appreciate it.
Governor Blanco. Those difficult decisions will be made in
the coming weeks and months. The Louisiana Recovery Authority
that I have appointed will be looking at a variety of
strategies. We will be talking to land use experts from around
the Nation, and indeed, from around the world to determine
exactly what needs to happen in the future.
I think that building codes will be certainly changed
pretty dramatically to encourage different forms of housing
units, for instance, or even building for business units. I
think that right now, we are not prepared to identify
specifically anything new. This is a gradual process that will
come forth as we move through these next weeks and these next
months.
Mr. Shuster. Thank you. I obviously think that is what you
have to do. But for me, it is important that there is a process
and there is a critical eye looking at those different areas.
The other thing that I want to mention, make a statement,
when we talk about rebuilding the levees, as you build them up,
you are also going to have to build them out. I am not an
engineer, but I have talked to the Corps, we are going to
displace people by building those levees up. So this is not a
statement, it is a question that you probably can't answer, I
don't know if you are an engineer or not.
But as we go up and we displace people, do we need to raise
the levees if we are going to displace people, and instead, not
build close to the levees at their present height and width,
and do we take those people out of the flood plain, the
potential flood plain? I don't know that, and I think that is
something we also need to take a close look at.
Governor Blanco. And I am not an engineer either, sir, but
I think that those questions are yet to be resolved. Each
property owner will also be making their own decisions as to
whether or not they feel it is appropriate to be building there
or not. I think that we will develop tools to address all of
these concerns, and I think many issues will become self-
apparent.
Mr. Shuster. A final question, do you believe the creation
of a recovery czar, or there was also talk about a new Federal
department modeled after the Tennessee Valley Authority, do you
think that is necessary for the rebuilding effort that will go
on for the next two or three years? What are your thoughts?
Governor Blanco. Well, I think that Louisiana people want
to be self-empowered to determine all of the issues that come
before us. But indeed already, President Bush has named various
people to work with us and to be point people. It may become
apparent that we need a point person in Washington, so that we
don't have to be disturbing a whole lot of otherwise very busy
people, as we have been doing.
But it would be good to have a coordinated effort.
Mr. Shuster. Thank you very much, Mr. Chairman.
Mr. Duncan. Thank you, Chairman Shuster. We are always
pleased to have the Ranking Member of the full Committee, the
senior member of the Committee, who also accompanied our
delegation down to Louisiana, Mississippi and Alabama two weeks
ago, Mr. Oberstar.
Mr. Oberstar. Thank you, Mr. Chairman. We were very honored
to be there under your distinguished leadership and that of
Chairman Shuster, and to be received by Mr. Baker, who
displayed an extraordinary command of the history and evolution
of the flood control and levee protections of New Orleans and
the Gulf Coast area.
Mayor Nagin, we are very honored to have your presence, and
the very distinguished presentation that you made to our
delegation, ending on a note of sadness of having to go from
our meeting to a news conference to announce the laying off of
half your community work force.
Governor Blanco, thank you for being with us from afar, and
Lieutenant Governor Landrieu, we have met on other occasions
when my wife and I have been in her home town, New Orleans.
The question of rebuilding New Orleans, this is a city that
taught America how to eat. It taught us to appreciate music, a
jazz form that Louie Armstrong brought to the beleaguered
Soviet Union, to the largest crowd that had ever been assembled
to welcome a foreign visitor. It taught us to bridge cultures,
Canada, Spain, France. It taught us to bury our dead with a
celebratory march.
In the aftermath of September 11th, this Congress rushed to
the Floor to appropriate $20 billion to help rebuild New York
City, appropriately. Shortly after, another $5 billion to
restore the economic health of the airlines, another $10
billion in loan guarantees and additional billions to rebuild a
path, the subway system. There was no question about how we are
going to pay for it. There was no question about whether, but
only how to rebuild.
New York is a financial center and symbol to the world, and
New Orleans is a cultural center and symbol to at least four
nations: the U.S., Canada, Acadia, where I just visited
recently, New Brunswick, and Spain and France. You led out a
vision when we visited with you in New Orleans. And we must not
be quibbling about where that money is going to come from. We
will find a way to do that.
What we need from you, from the Governor, the Lieutenant
Governor, is your vision of where, how, what you are going to
rebuild. We will help you with the finances. That is our
responsibility.
When the snows come in northern Minnesota in another three
weeks or so, that snow will be there until March. It doesn't go
away. It is like your water, when the canal levees broke on
17th and Industrial. The water stayed there, depressed the
soil, created further problems.
But when our snow leaves, it enriches the soil with the
nitrogen deposits, brings new growth. But when in Gulfport, 28
foot wave surges blew in, photographs I took on that tour
showed salt residue left behind, killed the trees, killed the
grass, blew everything off its foundations, nothing like it.
Cold weather in the norther climes, my district and that of
Chairman Young, and every fall the glacier makes a return
visit, in the spring it retreats. But that salt water isn't
going to retreat. It's going to be in that ground.
I will just tell you the story of Rosalie, who was my
mother-in-law's caregiver until she, until Mary Denechaud
passed away three weeks before the hurricane. Rosalie works in
New Orleans, lives in Mississippi, drives back and forth. Lives
in a trailer with an ailing husband, many children. Her trailer
was blown away by the storm. She is now trying to care for her
ailing husband on Baton Rouge and for an aunt, a cousin, and 10
or 12 children of her extended family in a trailer. She wants
to rebuild her life and that of her city, the city that she
loves.
She is no different from the 250,000 or more, 300,000 plus
who have had to leave New Orleans. We should find a way for
them to come back, for New Orleans to come back, for Louisiana
to rebuild, this tragedy strikes, as you alluded to.
The corn farmers in Minnesota and Iowa, Illinois,
Wisconsin, Nebraska and now the soybean farmers, because New
Orleans is the world's most important grain export facility,
they are the most important coffee import facility and sugar
and other products. The port is critical, community is vital
and the debt of the Nation is great. We owe it to the people to
help them rebuild.
We did not ask when or how or what were the offsets when
Northridge earthquake struck, when San Francisco shook in 1989,
bridges collapsed. We didn't ask where the money was going to
come from and whether it should be rebuilt or why do you want
to live on an earthquake fault, just how much is it going to
cost and how are you going to use the money. And that we should
do for New Orleans, for Gulfport, for Mobile, for all the
people in the path of weapons of nature of mass destruction.
Thank you, Mr. Chairman.
Mr. Duncan. Thank you very much, Mr. Oberstar.
The Vice Chairman of our Subcommittee is Dr. Boustany. We
will go to him for any questions he has at this time.
Mr. Boustany. Thank you, Mr. Chairman.
Governor Blanco, welcome. It is good to see you. You
mentioned earlier transparency, and we were talking about money
and so forth, and you talked about the decline in tax revenues
as a result of the disaster, ranging anywhere from 20 to 30
percent. Can you give us some indication of what the status is
of the State's finances beyond that, and talk a little bit
about the State's rainy day fund, what authority you have to
tap into this, what is the legislature's authority and what is
the intent for those funds?
Governor Blanco. Well, the State does have a very strong
and solid rainy day fund. We also have one of the most tightly
designed access routes into that rainy day fund. It is locked
by constitutional demands.
We have to abide by the revenue estimating conference's
estimate, and it has to have an actual reduction from the
previous year. Of that, we can only get into one-third of it.
So in order to really access that money, which would be
approximately maybe $400 million, and incidentally, we are
looking at a $1.5 billion shortfall in State revenues right
now, but to access that $400 million we would have to call for
a legislative session, a constitutional amendment that would
have to be passed by two-thirds vote of both houses and then go
to a vote of the people.
We are certainly looking at all this, but then we have
problems with our electoral process. When we are examining the
situation with regard to calling a statewide election, and we
have one devastated region where our citizens are displaced
across the United States, and they are still Louisiana citizens
who want to be able to vote, we have a tremendous problem that
we have to solve before we can go in to bringing it to a vote
of the people.
Of course, the secretary of state, who is in charge of
voting procedures, is looking carefully at all of these options
and trying to discern what is appropriate, what is fair to all
of the citizens of Louisiana, to the citizens who are the
caretakers as well as the citizens who have been displaced.
So nothing is exactly easy to accomplish in the environment
that we currently live in. Everything has something of a
complication. But indeed, we are going to be looking at all of
these issues in order to try and stabilize our own situation.
We undoubtedly will exhaust all resources that are available to
the State of Louisiana, not just the rainy day fund, but other
funds that have been set aside for very special and protected
investments. I cannot even imagine a greater time to define as
a rainy day than what Louisiana is facing right now.
So again, Congressman Boustany, we thank you for the hard
work that you have done in order to make this effort sensible
and workable. But let it be known that the State of Louisiana
is facing extraordinary difficulties. Again, we believe a
conservative estimate of our shortfall on the State side of our
revenue stream will be at least $1.5 billion. That is
approximately 20 or more percent of what we normally realize
from State collections as perhaps a $7.5 billion revenue
stream.
Now, again, let me say that is from the State side. We use
a significant amount of our funds to attract Federal funds. So
a significant amount of this money would be used to bring in
more Federal revenues in our ordinary world. When we have this
shortfall on the State side, that means that perhaps there
would be $2 for every $1 lost from the Federal revenue stream
as well. So our situation is even more complicated than what
becomes initially apparent.
Mr. Boustany. Governor, thank you for that answer. I think
it was important to elucidate more about the finances. It
really shows the dire straits that we are in as a State. I
appreciate your hard work.
One other quick question. You are proposing this commission
to work with you, and I know Mayor Nagin has a commission that
you are putting together. How do you envision those two working
together? Could you talk a little bit about that?
Governor Blanco. I envision these two working together
beautifully. Mayor Nagin and I are in regular conversations
about it. Just before I appointed mine, or a week or two before
I appointed mine, I contacted him and suggested that he appoint
a point person from his commission to work with ours. Indeed,
he returned the invitation and we have done that.
We believe that it is important for the local communities,
New Orleans has been the leader in this, to appoint such
commissions all across south Louisiana in the dramatically
affected areas in order to focus local eyes on local recovery
needs. This will be the best tool that our State recovery team
will be able to use, it will be the best tool that we will have
to understand the depths of the problems at each local area. We
want local participation. We want their eyes and ears
delivering to us the kinds of information that we will need as
we begin our deliberations.
My authority is a State authority. We have urban
devastation, certainly, in the Orleans region. But we have
rural devastation across the rest of south Louisiana. Every
coastal parish and indeed some inland parishes have been
affected by the devastation of this hurricane season.
So our needs are great. They spread far and wide. So my
Louisiana Recovery Authority covers a lot of dimension, a lot
of breadth and width that the New Orleans group does not need
to deal with. But we do.
Mr. Duncan. Thank you very much, Dr. Boustany.
The first member here on the minority side was Mrs.
Tauscher. I am going to go to her and I apologize to other
members, because we do have to let Governor Blanco go after
Mrs. Tauscher's questions. Then we will go to Lieutenant
Governor Landrieu and Mr. Marsalis and back to the regular
panel.
Mrs. Tauscher.
Mrs. Tauscher. Thank you, Mr. Chairman.
Governor, Lieutenant Governor, Mayor, and the many
supporters of the Gulf region, let me first of all send my
condolences from the people that I represent in California's
Tenth Congressional District and reiterate our strong support
for all of you, that we hope that your folks can return home as
soon as possible. I am very appreciative of your testimony.
I think we are all deeply concerned that first and
foremost, that their return be guaranteed by making sure that
we do everything we can to create a safe environment. And that
is about making sure that the levees are restored, way beyond
where they were before, clearly, but also that we do all the
good work to make sure that the efforts of providing hope for
people are really balanced with understanding that there is a
test that we have to pass. And that test is that we are going
to put together the best engineering and the best people that
can possibly assure that there is no doubt that there will be
no such thing as another situation that we lived through with
Katrina.
So let me offer my condolences and my hopes that we can
continue to work together.
I don't really have any questions, Mr. Chairman. I do want
to say one thing. I did spend 14 years on Wall Street as a very
small child. And I will tell you that it is a very big
challenge that you are facing. You have to do many things at
once. You have to restore a sense of hopefulness for people
that have had devastating situations to them, loss of family,
loss of their livelihoods, loss of their homes, loss of their
possessions and loss of hope.
Wall Street is a very tough place to operate. At the same
time that you are restoring hope, the pragmatism has to be
there to send a very clear signal to the financial markets, the
bond markets that you will return. You have to calibrate the
sense of hopefulness that you have to deliver with your heart
with a very smart head. All the things you have to do to make
sure that people have a restoration of confidence that the
business and vitality, that the travel and tourism will return
and return quickly, so that you can get Wall Street and your
creditors to stand by you.
I think that I understand from your presentation that you
have a keen awareness of you, so I think many of us are
standing ready to support that.
Mr. Chairman, I yield back. I want to say I appreciate that
I really appreciate that we had this hearing. I look forward to
hearing the rest of the testimony, and good luck to all of you.
Mr. Duncan. Thank you very much.
To close out Governor Blanco's portion, we are going to go
to Ms. Norton. She has some comments. Then one final question
from Dr. Boustany.
Ms. Norton. Thank you very much. I thank Governor Blanco
for being with us and helping us as we try to decide how to
help New Orleans and the Gulf region.
I am impressed that there are mechanisms being put in place
ahead of time to avoid accountability problems such as the
accountability panels, apparently more than one, you spoke of.
I understand from testimony that was taken at the first hearing
we had that Louisiana's legislative auditor is working, and
inspector general, are working with the Department of Homeland
Security Inspector General, Mr. Skinner, who testified before
us, and that you have dedicated 36 auditors to review
transactions.
I do believe that is the kind of action ahead of time, and
by the way, I don't know that our IGs regularly take action
ahead of time, that I think is very useful here.
My question goes to these various committees and
authorities that are beginning to come forward, because I think
that of course we want to see such action taken by the State
and the city. I understand the relationship between the
Louisiana authority and the Bring New Orleans Back Authority.
After all, the city is a creature of the State and must work
together with the State.
We have had testimony from a member of your delegation this
morning, Representative Baker, who testified concerning
something called the Louisiana Recovery Authority, who said
that most of the delegation was in agreement that there should
be such an authority. I wonder if you have been consulted about
this recovery, is it authority or corporation? I am sorry, it
is a corporation.
We are not sure who would be on that corporation. I think
the point of Representative Baker was to aid in the rebuilding
effort with mechanisms that perhaps would not be available
otherwise, I am not sure. But given the fact that this is yet
another authority or corporation, I wonder whether, how much
consultation there is with your entire delegation in the House
and the Senate, and whether these matters are matters that you
have somebody here working on with your delegation and whether
you know anything about this Recovery Corporation.
Governor Blanco. Thank you. I do believe that there will be
ongoing discussions about this, and many other kinds of
organizations that may be necessary to fulfill our complete
mission. I believe that the Louisiana Recovery Authority that I
have created must sit down with the members of Congress, and we
plan to do that very shortly, to discern what kinds of
organizations might yet be needed.
We don't exclude any ideas at this point in time. We
believe that all good ideas must be put on the table for clear
examination. I think as each of our communities and the State
and the Congress develop a comprehensive plan, many of these
authorities or commissions or initiatives may become self-
apparent.
So right now, we don't take anything off the table. We
believe that every good idea deserves examination, and
coordination efforts are important. We will be doing just that
very thing, we will be coordinating our efforts with our
members of Congress who indeed are working very hard, each in
their own way, to bring forth the best concepts to try and
identify the things that are necessary.
Ms. Norton. Thank you, Mr. Chairman. That is my only
question.
Mr. Duncan. All right, thank you, Ms. Norton
Dr. Boustany.
Mr. Boustany. Thank you, Mr. Chairman.
I have two quick questions, and I would like to yield some
time to Mr. Baker so he could respond as well, if that is okay.
Mr. Duncan. Just make both of them in one question. We need
to move on as quickly as we can.
Mr. Boustany. Yes, sir.
Governor Blanco, what has the State spent today and what
percentage of the annual budget does that represent?
Governor Blanco. Mr. Boustany, we have not put a dollar
figure on our expenditures, but we do know that money is
running through our hands very quickly, because of the
situation that we have been in as we speak. We have a hold on
State spending, I put a freeze on hiring, I put a freeze on
spending of all kinds.
Everything has to be justified, and it has to be recovery-
oriented as we speak. But we have some expenditures that have
not totally been identified yet.
Mr. Boustany. When did you call the special session?
Governor Blanco. On November 6th.
Mr. Boustany. Thank you. I want to yield to Mr. Baker.
Mr. Baker. Just a brief statement, Mr. Chairman. With
regard to the recovery corporation as proposed, the State's
credit has already been impaired and the concept is to allow
Federal resources to issue public debt over a long period of
time, enabling us to have a year over year construction effort
funded off budget, out of Congressional appropriation
necessity.
I have visited with Mr. Copland, who is the person
appointed by Governor Blanco to coordinate the Katrina-Rita
response, as to the elements of the Recovery Corporation, and
have shared the information available with their staffs in
order to accommodate appropriate communication. I just suggest
that in going forward, if we are spending Federal resources on
my State's problems, we should exhibit some accountability to
Federal taxpayers as to how those resources are deployed. Thus
the reason for the Recovery Corporation, and I appreciate the
gentlelady's questions.
Mr. Duncan. All right. For closing comments to the
Governor, Ms. Johnson.
Ms. Johnson. Thank you very much, Mr. Chairman, and thank
you, Governor for appearing. We recognize that you are facing a
very difficult task and we will try to be supportive as we move
through this process. I look forward to the rest of the
testimony. Thank you.
Mr. Duncan. Thank you very much. Thank you, Governor
Blanco, for being with us today.
Now we will go back to the regular panel, which of course
still includes Mayor Nagin, who can be here with us until noon.
I would like to introduce and thank him for being here, the
Honorable Mitchell J. Landrieu, who is the Lieutenant Governor
of the State of Louisiana, and Mr. Wynton Marsalis, who is a
musician from New York City, also, I understand, a native of
New Orleans.
Governor Landrieu, you may begin your testimony.
Lt. Governor Landrieu. Mr. Chairman, members of the
Committee, thank you so much for allowing me to be with you. It
is a great honor, of course, to be with Wynton Marsalis, Mayor
Nagin, Governor Blanco, Congressman Jefferson and Congressman
Baker earlier, and Congressman Boustany. Thank you for allowing
me to be here.
This, as you know, was truly an American tragedy. It
requires an American response. As Mayor Nagin said earlier,
there were some of us, me included, who were on the ground when
this happened. If you go into some areas of Congressman
Boustany's district in Cameron Parish, there is not a building
standing. I know the same is true in the area of Mississippi
and Bay St. Louis and in Gulfport and in those areas. There are
some neighborhoods in New Orleans that do not exist any more.
But Mr. Chairman, I have a lot of missions this morning,
and unfortunately, as an ambassador of the State of Louisiana
whose job it is to help re-image the State to the Nation and to
the rest of the world, I would like to speak to two
uncomfortable points, if I might, because I would like to end
the myths today.
There are some members of Congress and of course members
all over the Country that have said, you should not rebuild,
because for some reason New Orleans or south Louisiana is
located in a not very smart place. There are some who have said
that we should not send Louisiana any money because they are
corrupt.
I think Congressman Oberstar spoke to the issues that
basically could fall under the heading of there but for the
grace of God go I. There have been many tremendous natural
tragedies in this Country that have decimated and obliterated
areas. This Nation has responded in a very real way.
I don't recall there being any pushback in Mississippi,
Texas or New York post September 11th, or, if I might remind
you, in 1976 when New York went bankrupt. So it is very curious
to many of us in Louisiana why the pushback is coming now.
Hopefully we can make the case to you that choosing not to
rebuild the soul of America or the cradle of culture will be
bad for the Nation and Louisiana as well.
Secondly, I shall say to you more directly than the Mayor
or the Governor did that Louisiana does not have a corner on
the market in terms of public corruption. I should not have to
remind you that in the past ten years, governors of New Jersey,
Connecticut, Rhode Island, Arizona, Illinois, Ohio and Alabama
have had their own troubles with ethics and other matters.
There are a number of other public officials that are facing
that now.
I should also remind you that members of this Committee can
take a look at the public integrity division section on the web
site at the Department of Justice, and I assure you that you
will find the same issues in your States as well. Just to give
you a few in the last ten years: California, 1,296; New York,
1,191; Illinois, 1,028; Florida, 719; Texas, 651, et cetera.
So I assure you, just as no member of Congress would like
to have themselves tainted by the actions of a few, nor do the
people of Louisiana. And on behalf of the people of Louisiana,
I came to assure you that those 4.3 million people are people
of faith, family and country. One point five million people
were evacuated, 1,000 of our brothers and sisters and mothers
and fathers are dead, 40 percent of our businesses are gone,
and we would like to ask you respectfully and as nicely as we
possibly can to please, let us stay focused on the issue at
hand. The issue is whether or not you want to rebuild one of
the great States of America.
In an effort to do that, I would like to mention to you
that we understand that we are part of an area of the Country
called the New South. In the 1990s, most of the people that
moved in this Country, moved from outside of the Country into
the Country moved into the 14 lower southern States. This is an
area of economic engine. It is really important to the rest of
the Country and some of those specific issues were addressed
before.
I would like to say to you though that, with Wynton
Marsalis sitting next to me, we fully understand that culture
is a really important part of what it is that we do, as is
tourism. This industry is ready to stand up with your help. The
tourism industry in Louisiana provides about $9.6 billion in
the economy and 126,000 jobs.
On the cultural economy side, jobs provided by food, music
and things that were alluded to earlier represent about
144,000. We have shortly after the storm come together with a
national advisory board and a local advisory board and come to
you with a very direct and important plan that if funded can
provide jobs today. As a matter of fact, if we could find a way
to work with FEMA to provide housing, we could provide 4,000
jobs starting tomorrow.
Most of our hotel rooms and restaurants will be open and
operating on January 1st. One of the things we could do to jump
start the economy is to focus on the cultural assets of the
State.
So many people have spoken about the soul of America. I
talked about how important culture is. Culture isn't important
just because it is fun, culture is important because it
provides jobs. And we do that about as well as anybody else in
the Country.
So we come to you today to tell you that we are here to
help ourselves. We are here to give you a transparent delivery
system. We are here to make sure that every dollar is well
spent, and we are here to make sure that it is well directed.
I thank you for your time.
Mr. Duncan. Thank you very much, Governor Landrieu.
Governor Landrieu requested that he be accompanied by Mr.
Marsalis, and Mr. Marsalis, we are pleased to have you here
with us. You may give any statement you wish to make at this
time.
Mr. Marsalis. It is a great pleasure to be here, and an
honor. I must say it is important to understand about New
Orleans culture and what we represent to the United Sates of
America, the amalgam of ideas that went into the building of
New Orleans, the combination of French, Spanish, West African,
British, the things that went into our city, what we created.
And the Nation has drunk from the stream of our culture for
over 200 and something years. Now it is time for us to seek
support and for that to be recognized.
There is a point I like to make about Louis Armstrong. We
know he traveled around the world representing the United
States of America. And we know, of course, of his genius as a
musician. However, as a Nation, we have yet to embrace the
actual fact of his artistry and what he represented to the
world in the way that we perhaps should have done. We have not
received the benefits that come with recognizing such a great
figure.
So now is the time for us to signal to the world that we
are a new United States of America. We have an opportunity to
in fact do things that will impact the culture of our Nation
and bring people closer together. We are big on slogans, a lot
of times we like to come with the we are the world, feel good
story. But underneath that is nothing but tatters and stuff
that is quite ugly.
I want us to keep in mind that our people are spread all
over the United States of America. These people are hurt and
separated from their families. They are dazed, shocked,
confused. They need to get a very clear signal from the
leadership of our Country that they are loved. They are being
loved by people all over the Country, individual people are
doing all types of heroic things. But they need to get a clear
signal from our Government, from our leadership, hey, we are
with you.
There are two types of people in the culture business. One
is the culture from above. That is big organizations that you
give money to. They might ever meet the regular people. Then
there is the culture from below. What makes New Orleans such a
unique city in the world is that our culture comes from the
street up. We have a combination of that elegance and wildness
that is desired all over the world. Beethoven had it, Picasso
had it. That is why their art endures. The Greeks had it. When
we read Homer, that is what we are reading. Odysseus was like
this, but he also was like that.
So we have to understand that that combination of elegance
and wildness is important. In New Orleans, a lot of times we
think of us only as kind of frat boy kind of going to Bourbon
Street and get drunk. We are much more than that, and it is
important for us to make sure that that neighborhood
infrastructure is maintained, because these are people who many
times don't have a voice that is heard.
It is important when we are assigning this money, when we
look at things, I have to ask these committees to be vigilant
and understanding that the urban renewal programs that we have
had since the 1950s, destroying neighborhoods of people,
confusing them with slums, and rebuilding them with big
buildings with big parking lots, we need to reverse a lot of
that and be a part of the New South.
I assure you, the people of New Orleans want to come back.
If I could tell you how many phone calls I get from people from
home, man, do something. We don't know what. But it is not just
the people with the big business interests who many times have
the most arrogance and carry the biggest stick. It's a lot of
the quiet people that put their Mardi Gras Indian suit on, play
that quiet gig in the hotel, teach in elementary and middle
schools.
You don't see those people. Those people are very, very
important. They are the fabric of our Nation. These are the
people that are our constituents everywhere. They are looking
to us for a very clear signal that we are going to do more than
just give lip service and give the money to somebody who is
going to waste it. We are about the people.
I assure you, when you look at a city like Newark, New
Jersey, what New Jersey PAC has done for the rebuilding of that
city in the last ten years, it is phenomenal. When you look at
a city like Vienna, and how they utilized the art of Beethoven
and Mozart and the Strausses, you get an idea of the power of
the arts.
New Orleans represents that and more to our Nation. We have
never visited with the type of love and care that the music of
Beethoven has been visited by the city of Vienna. But this is a
grand opportunity for us to do that. So I thank you for having
me and letting me speak. I assure you, when you invest in our
culture in New Orleans, you will not be disappointed.
Mr. Duncan. Thank you very much, Mr. Marsalis. And thank
all of the witnesses for being here.
I am trying to save my questions until later to give more
members a chance to participate. But I do have one question at
this time. I have read several articles with all sorts of
widely varying estimates as to how much insurance is going to
cover of the damage that was done. The costs range from $20
billion to $100 billion. I wonder, Mayor Nagin, if you or
Governor Landrieu can help us on that. Are you still having
trouble? I know there is some dispute over whether this damage
was caused by wind and the wind surge or whether it was flood
damage, which a lot of people apparently did not have flood
coverage. What can you tell us about that?
Mayor Nagin. Well, what I can tell you is it is not a very
pretty picture. It is my understanding that the insurance
companies are estimating that they may only cover maybe a fifth
of the property damage that happened in New Orleans and in the
region. Most claims that are coming through are being processed
only as flood events. It is pretty curious to me that, when you
think of floods, you think of the Mississippi overflowing,
because there was too much snow up north and it overflowed the
banks.
But this was a hurricane. Hurricane winds caused the storm
surge to flood New Orleans. It is a very difficult issue, and I
understand that Mississippi is seeking some legal action. I am
hoping that the State of Louisiana will follow that lead.
Mr. Duncan. Governor?
Lt. Governor Landrieu. Mr. Chairman, Louisiana and
Mississippi might be the only place where somebody would
consider themselves lucky if a tree fell on their house and
they got flooded. That is because that particular fact would
allow you to recover from your homeowner's insurance and from
your flood policy, because there is a loud noise coming from
the insurance industry about the issues that the Mayor just
spoke about earlier. It is a very difficult problem, as I said
earlier, for many, many neighborhoods and large spots of land.
However, make no mistake about it, when there is homeowners
coverage and when there is property damage coverage, the
insurance industry is stepping up to the plate. So when members
of the Committee speak about the private industry and the
public industry, we are not just talking about Federal dollars,
we are talking about dollars from the private sector as well.
Those issues are being taken care of, but unfortunately, I
think the Mayor is absolutely correct, it will only cover a
very small portion because of the onset of the damage and the
position that some members in the insurance industry have
taken.
Mr. Duncan. All right, Mr. Pascrell.
Mr. Pascrell. I hope we are listening to the Lieutenant
Governor and the Mayor as well as Wynton. I think that the
entire situation in the Gulf hurricanes will shed a tremendous
amount of life and light on insurance policies, not only in the
Gulf but throughout the United States of America.
Let us shift the scene for a second up to New Jersey. I am
interested that you mentioned us in your presentation,
Lieutenant Governor.
[Laughter.]
Mr. Pascrell. Seriously, we have had flooding in the past,
we have had eight days of rain and the people who have home
insurance, many of them flooded out, many of them could not get
flood insurance because this is an act of God. And insurance
policies changed about ten years ago, because electric is
needed, pumps need to be used when you pump water that gets
into your cellar.
I think we should take a look, this Committee should take a
look at not only helping, and we will help Louisiana,
Mississippi and the other States in the Gulf, but I think we
need to take a total examination of the insurance industry in
this Country, of how it has desolated insurance policies and
not helped the homeowner. Because you are going to find that
many of the constituents in your town, in your city, Mr. Mayor,
their policies are to the wind right now. It is no different in
any other part of the Country.
So we have insurance and assurances, but they are not
covering the damage.
I have one question to ask of you, Mr. Mayor, about the
schools that have been damaged. It seems to me, from the
reports that I have read in depth, and I will be going next
week, that the parochial schools are getting cleaned up, the
areas, faster than the public schools. I want you to reassure
this Committee that we are trying to give equal opportunity to
everybody.
Mayor Nagin. The school system is a very challenging
situation in the City of New Orleans. But I do have good news
on both fronts. Algiers, which is an area on the west bank of
the river, was virtually not damaged, not flooded. Both the
private, parochial and public schools are coming up in that
area very quickly. As a matter of fact, in the next week or so
there will be public schools, at least eight public schools
open on that side of the river.
On the other side, where we had most of the flooding and
damage, it is a little bit of a different story. Most of the
public schools that are talking about opening, as well as the
private and parochial schools, are targeting January 1 for
limited offerings.
Our public school system was in crisis before the storm.
Its buildings and its infrastructure was in severe disrepair.
So in a way Katrina cleansed us in a way where we can now focus
on building the types of structures for the children in our
city.
But if I could just mention for a moment, we also have
another struggle, and that is our universities. Our
universities also received significant amounts of damage. The
University of New Orleans I think is getting ready to start up.
Tulane University is trying to get itself together.
But we have some historically black colleges that were
really devastated. Xavier University, which graduates more
African-Americans that go to medical school and become
pharmacists than anybody else in the Country. Dillard
University, those two institutions, as well as Southern
University of New Orleans, received significant damage and are
struggling to get back on their feet.
Mr. Pascrell. Would you agree, Mr. Mayor, mayor to mayor,
would you agree that, you understand the anxiety in Congress of
providing dollars and we are not sure what we are going to
build in New Orleans. I am sure you feel the same anxiety.
How do we get to that point as to what we want the shape of
the city, the contour of the city to be, and the city that you
would like, reflecting the culture, obviously, and reflecting
the industry that is there? How close are we, are our engineers
to designing options that could be laid before the citizens of
New Orleans to make a decision as to what we want our own city
to be like?
Mayor Nagin. I think the vision of the city of New Orleans
is to basically rebuild it into something that is better than
what we had before. When I first flew around the city and saw
the devastation, I ended along the French Quarter, Tremayne and
uptown areas. It was like God placed a hedge around the city as
it relates to its culturally unique aspects. Taking the people
out, because the people are really what makes New Orleans
special.
So we have a foundation to build around. Everything west of
the Industrial Canal is ready to go to rebuild, where we can
rebuild, all the schools, we can have the best school system in
America, we can have transportation systems, we can continue to
have the most unique neighborhoods in New Orleans and in the
world that we have had before. And all that can be protected
pretty quickly. The Corps is saying that they are going to
build the levee systems up to 17 feet by June of next year. So
we will have a pretty self-contained area to really grow and
get our city back.
The question is, on the east bank of the Industrial Canal,
which had the most significant flooding, which is New Orleans
East and the Lower Ninth Ward, how do we protect that. And that
question has not been answered yet. But the rest of the city,
we can rebuild, we can make it one of the most liveable, unique
cities in the world.
Mr. Pascrell. Thank you, Mr. Mayor.
Mr. Shuster. [Presiding] The gentleman's time has expired.
I know that the Mayor has about 15 more minutes, is that
correct, Mr. Mayor?
Mayor Nagin. Yes, sir.
Mr. Shuster. Okay, so we are going to adhere very closely
to the five minute rule.
I have two things, one a statement. I just want to make
sure it is very clear, because I have been one of those people
talking about the rebuilding effort. I have never said, and
quite frankly, I don't know that I have heard anybody in public
life say don't build New Orleans. It is, I think, we make sure
we question, we would be abdicating our responsibility by
saying, just give them the money, let them build wherever they
want to.
There are parts of New Orleans that we need to look at
closely, you need to look at. That is a question I am going to
come back to over and over again. Does it make sense to rebuild
this part, that part. There is no question in my mind New
Orleans is important to this Nation, economically, culturally.
So once again, I want to make sure that, if you have heard
anybody in public life say, don't rebuild New Orleans, let me
know, because I would like to talk to them.
One quick question I have for the Mayor. We were down there
two weeks ago and I know your problem with your revenues. It is
extremely important to you, I know, to get people to move back
into New Orleans.
Mayor Nagin. Yes, sir.
Mr. Shuster. Is FEMA's strategy on housing, long term,
short term, is that going to accomplish that? Can you talk
about that just a bit?
Mayor Nagin. Short term, once we get the trailers and all
the regulation worked out, we should be able to repopulate
pretty quickly. What we are doing is identifying every
available open space in New Orleans, and we are trying to
design, both from the short term temporary living space as well
as long term to go up vertically and re-establish some of our
unique neighborhoods.
Long term, I am not sure FEMA is set up to handle that. I
think that is where we do a hand-off, if you will, or a baton
toss to HUD. HUD will come in and hopefully help us with the
long term housing needs that we have.
Right now, we think we can repopulate the city of New
Orleans, whereas pre-Katrina it was about 480,000 people, we
think we can quickly re-populate up to about 300,000 to 350,000
maybe. Beyond that, we are going to need HUD's assistance for
more long term housing.
Mr. Shuster. Do you feel fairly confident that FEMA's
strategy to get up to that 350,000, 380,000 is going in the
right direction?
Mayor Nagin. We have a wonderful chief officer. His name is
Admiral Allen. But I will tell you, if I have any
recommendation to anybody in the Federal Government right now,
it is take a hard look at FEMA and figure out how to reorganize
that agency. It is not modern enough, not updated enough and
not quick enough to deal with this type of crisis.
Mr. Shuster. Thank you. I will now to go Mr. Gilchrest for
five minutes.
Mr. Gilchrest. Thank you, Mr. Chairman.
Gentlemen, I want to compliment you on the work you have
done since the hurricane. I also want you to know that all of
us up here, mainly because of Richard Baker and Charlie
Boustany, we feel the depth of your sense of urgency for these
issues. Mr. Marsalis, I can play a couple of Irish songs on the
piano, maybe we could get together some time and do a gig there
in the French Quarter.
[Laughter.]
Mr. Gilchrest. I want to just quickly make a couple of
points, because I share Mr. Shuster's sentiment about not only
rebuilding lower Louisiana, the Gulf of Mexico, but there is an
extraordinary opportunity for the rest of the Country to see
what you do in Louisiana so that human activity does not have
to be grossly incompatible with nature's design, and when a
storm hits, that storm tragedy is exacerbated.
But what you can do, and what we can watch and learn from,
is show how human activity can be compatible with nature's
design. And you are working on that with 2050, you are working
on that with Louisiana Coastal Restoration. You are putting
these commissions together.
Here is what we need to continue to follow up on, so we can
be of assistance. FEMA studied storms between 1972 and 2005 and
found in the Gulf of Mexico, Louisiana, Alabama, and
Mississippi, are most likely to receive the most devastation
from these storms. The Corps of Engineers, U.S. Geological
Survey, NOAA, a whole range of Federal agencies have said that
if nothing is done, and you know this, by 2050, 500 square
miles of coast line is going to be lost. As much as 800,000
square acres is going to be lost.
We have also heard that under the present plan, the best
that can be done will be to restore half of that under these
commission recommendations. We think we want to do more than
half.
But what we are dealing with up here in Congress is how to
appropriate money with the best available science so that we
can protect New Orleans, the oil and gas infrastructure, the
enormous fisheries that you have there, the coastal
communities. What we are facing, though, is an understanding of
what to do about sea level rise, subsidence, levees, where is
it appropriate to have canals, what kinds of storms are going
to be coming through there to impact that. Plate tectonics
underneath New Orleans, underneath about 600 feet of mud, that
creates more instability with the levees. The coastal barrier
islands.
So all of these issues, we don't have control over sea
level rise. We don't have control over storms and we don't have
control over plate tectonics.
So the sense of urgency that we have, and I represent the
Chesapeake Bay. I know most often, including myself, there is a
disconnect between the sound fundamentals of those scientific
researchers and then what elected officials want to do. So we
feel the sense of urgency. You can be a laboratory for the
United States on how to deal with subsidence, how to deal with
the re-engineering of the Mississippi River, how to deal with
the coastal wetlands which are those buffers that will protect
the infrastructure for oil and gas. Ninety percent of the
fisheries spawn in the wetlands that are caught in the Gulf of
Mexico.
I represent a beautiful area that I want to restore and
benefit. And I think we will be looking to the coastal areas of
Louisiana from Lafayette or New Orleans on down on telling us
how this all can be done.
Mayor Nagin. My comments to that are, I agree with you, I
think we can do something unique and teach the Nation. I think
this Nation has a wonderful Corps of Engineers, and they are
very talented in what they do. I have seen the wonderful work
they do with the Mississippi. I saw the work they did after the
storm event. And the issue is whether the Nation has the will
to give them the resources they need to protect the coast line.
The Corps' budget has been cut over the past, since I have
been in office three or four years, every year I come up here
to try and get a plus-up to make sure that the Corps has the
resources that it needs. This can be fixed. We have people from
Holland, from Germany, we have the Corps of Engineers, we have
the best minds in the Country working on this particular
challenge right now. They can fix this. We can protect this
area, but it is going to take some resources.
Lt. Governor Landrieu. Mr. Chairman, I would agree with
you, Congressman. And I agree with the Mayor. I really do
believe that it is a matter of will power. It is a matter of
money. And of course, it is a matter of accountability.
I thank you for your comments about the need to rebuild
this metropolitan area of New Orleans. If we can get us past
that issue so we don't have to discuss it any more and get into
the how to, I think the idea of becoming a laboratory of
democracy, if you will, for the Nation, is a very good one. And
I think that we have some wonderful opportunities to address
not only wetlands, not only address the energy issues that we
face, but poverty as well, which of course has become a major
issue brought to the forefront.
So I think everybody in Louisiana, the Mayor, the Governor,
the Congressional delegation, all the elected officials and the
people stand ready to work with you hand in hand, to make sure
that you rebuild it, as the Mayor said, better than it was
before.
Mayor Nagin. Can I just make one other comment? There is a
new phenomenon that I just started reading about called the
loop current. I think this panel may want to study it a little
bit.
The question I have always asked is, what caused this
hurricane to be so powerful and to have such momentum when it
hit the coast. I have talked to Max Mayfield at the Hurricane
Center a little bit about this. What is happening is there is a
new phenomenon of warm water that is coming from the Caribbean
around Cuba and entering the Gulf of Mexico. Normally when a
hurricane hits the Gulf, it hits the warm waters and then when
it gets close to the coast, the waters are cooler so that the
hurricane starts to dissipate.
This new phenomenon has warm water that instead of just
being on the surface a couple of feet deep it goes down 200 or
300 feet deep. So when a hurricane hits that warm water, it's
like throwing gasoline on a fire. So I make this point just to
tell you that even though the Corps is saying, Mississippi,
Alabama and Louisiana is now in danger of having a catastrophe,
with this new loop current, it is going to impact Florida,
Texas and every State along the Gulf coast. We need to give the
Corps the resources to make sure that this Nation is protected
more fully.
Mr. Shuster. I would now like to recognize the Ranking
Member of the Economic Development and Emergency Management
Subcommittee, Ms. Norton.
Ms. Norton. Thank you, Mr. Chairman.
If I may say, the Chairman is right, no one in our
Subcommittee has ever suggested that the great City of New
Orleans not be rebuilt. But what gives rise to this concern or
the kind of comments that were reported made by a member of the
other body, I am not humorous when I suggest we should turn it
back to what it was, a wetland.
I am not going to ask that this remark and other slanderous
remarks of this member of the other body, I don't think he said
this on the Senate Floor or any such remark on the House Floor.
You would have your words taken down. But that is the kind of
remark that makes it seem as though some parts of America,
parts like this vital region that we depend upon in so many
respects, are not worth recovering. It is not a serious remark,
although he said he wasn't being humorous.
I am not being entirely humorous when I look for, ask you a
question about quick repopulation. It is really based on
testimony from Lieutenant Governor Landrieu and Mayor Nagin.
There will be many benchmarks. For a short term benchmark, I
want you to know that a lot of folks out here, Mr. Marsalis,
are hoping that Mardi Gras will be a short term benchmark.
Because I am serious when I say that I think there will be
Americans all over the Country that would like to come down
there, use Mardi Gras as an excuse, some out of curiosity, some
to have a good time, and some to send to the world what we
understand in this Country and the world understands, and that
is that New Orleans is the seat of the only indigenous culture
in our Country.
I want to ask about return strategies, because Mr. Mayor,
you talked about 361 bodies still unidentified. You said that
your residents were in 44 States. We know that they were
transported by private and Federal transportation. Lieutenant
Governor Landrieu indicated that 4,000 jobs could be filled
tomorrow if there was adequate housing for them.
I want to ask about getting that housing, whether it is
trailers, and I know the dangers of these trailers, or what.
Because we have read, or perhaps it is an urban myth, that
there are signing bonuses for people to take minimum wage jobs
in fast food restaurants.
Mayor Nagin. It is true.
Ms. Norton. I am not sure the word is out here. I want to
know what FEMA or this Subcommittee can do to get 4,000 people
back to New Orleans to take those jobs right away. I want to
know, Mr. Mayor, how you are identifying the residents who are
scattered through 44 Sates so they can be identified and know
about things like 4,000 jobs that could be filled tomorrow.
Mayor Nagin. That is a lot of questions. I will try and
answer them as best I can.
With the diaspora of New Orleaneans all over the Country, I
have been asking the question of where did they go. FEMA has
provided us with a map, a map which basically has identified
where New Orleaneans are based upon when they have applied for
FEMA benefits. So we do have addresses and information to
contact our residents.
We have identified the top five cities that our residents
are in. And we are in the process of doing mailings,
teleconferences to start to reconnect and make sure that our
residents understand the opportunities and what's really
happening in the City of New Orleans.
As it relates to FEMA and how they can help, FEMA can do a
couple of things. They can really accelerate the amount of
trailers that they are moving into the New Orleans area. There
are several staging areas around the region where we have
trailers on the ground that could be expedited. Now, we are
working to identify lots and open green space to put them in
there. But we really need an expedited process.
The second area that they can help us with is that we have
hotels coming online in the City of New Orleans where we could
put people up for temporary housing. FEMA has maybe, I don't
know, the last number I heard was a couple of hundred thousand
people living in hotels around the Country. We can support the
local economy by encouraging a lot of those people to come back
and to do away with the exemption of the Federal Government not
paying hotel-motel taxes. Because if you bring people back and
they are staying in New Orleans, it could help the local
economy and the local government to get up and running quickly.
Lt. Governor Landrieu. If I might, Mr. Chairman, a couple
of brief comments. Congresswoman, you mentioned comments that
folks made, and whether they are taken seriously or not here,
they scare the heck out of people in Louisiana, which is one of
the reasons why I saw the need to direct the two issues that I
did very directly. I apologize for having to do that.
I have sat in the legislature. It is not a smart thing to
come before a committee and slap the hand that feeds you. I am
aware of that. I did that for 16 years.
However, I have to tell you how seriously people in
Louisiana take those comments. If we could just get past those
two points, that we definitely are going to rebuild and that we
are going to have structures in place to make sure that the
money is spent well, we could get on about the business of
making sure that rebuild a great portion of our Country.
I should say to you, though, I have with us today folks
from the American Hotel and Lodging Association, Metropolitan
Visitors Convention Bureau, the National Restaurant
Association, the Travel Industry of America and the Travel
Business Roundtable. We have been working with the Mayor's
office and the Governor's office to stand up the tourism
industry immediately.
One of the things we can do when we deal with, and this is
a tough issue, the front of the house, as Wynton talked about
earlier, most of the great things that people know about
downtown New Orleans, the French Quarter, the hotels, the
restaurants, are ready to open with some minimal work. Whether
or not those take a priority over building levees, whether it
takes a priority over putting people in housing trailers, to
stand up the chemical industry is a difficult issue for the
Mayor and the Governor to deal with.
But the industry that can provide these jobs now is ready,
and to have benchmarks for you. We believe that we are going to
have a semblance of Mardi Gras, to tell the Nation and the rest
of the world that Louisiana and New Orleans in particular is
alive and well. We believe that with very direct subsidies and
partnership with the private industry, we can host the jazz
festival and the Essence festival and those things that people
know about how Louisiana cultural economy can stand up very
quickly. We have a very detailed and direct plan that we have
submitted to you through your staff that we would commend to
you for your review. There will be some other testimony on that
today.
Later in the week, I believe that our office and the
Mayor's office and the head of FEMA are going to meet to speak
specifically about this housing issue dealing with the tourism
industry. If we can get that worked out, that would be great.
But it is going to require, as the Mayor alluded to, FEMA
being more flexible than they have been in the past. They are
not, in my opinion, prepared to deal with the long term housing
issues that we are going to have to face a year down the road.
They may very well be prepared to do it on the short term, but
they are not quick enough. We have to get down there with them,
talk to them and find a way to get it done so that we can put
as many people to work as is possible.
Mr. Duncan. Thank you, Governor.
Mayor, I know your timing, there was a request up here for
two more questions. Are you okay with that?
Mayor Nagin. That's fine, yes, sir.
Mr. Duncan. Mr. Dent from Pennsylvania.
Mr. Dent. Thank you, Mr. Chairman. I do have a question.
Lieutenant Governor Landrieu, I do agree with you, we have to
get to the issue of how we rebuild the Gulf and Louisiana, New
Orleans in particular. I will pledge to work with you to
rebuild your infrastructure and establish basic services,
restore productive capabilities, your petrochemical industry,
your port, financial services, fishing, agriculture, tourism.
We certainly have to work to reclaim and protect and preserve
your rich culture, history and heritage.
But Mayor, I have read recently that you proposed expanded
gambling as part of New Orleans' recovery. As an observer from
Pennsylvania, I really have to take issue with that. I think
that is about the last thing we need to do right down there
now, looking at all the needs that you have for the people
there. I would like you to explain to us what is the reason and
logic in establishing a casino, mecca or whatever, Las Vegas
Lite, whatever you want to call it, why that would be part of
this recovery effort. I just don't see that as a priority for
your region at this critical time after suffering this terrible
calamity.
Mayor Nagin. Congressman, that is an area that has been a
pretty good controversy. What happened was I wrote a letter to
the Governor. It outlined about five different aspects of what
I was proposing. It centered around trying to jump start our
economy. It focused on two key strengths that we have, tourism
and the port of New Orleans.
As it relates to the port, I was advocating some incentives
for driving jobs and opportunities with the port. I was also
advocating that we set up a recovery district where we had a 50
percent, both Federal and State employer-employee tax credit
for a period of time until we got to pre-Katrina population
levels.
As it relates to our tourism industry, I was looking at
what was happening with our convention center business and the
cancellations and our inability to host conventions in the
short term. We are going to recover, but it is going to take us
a little time to get back. I looked at what was happening in
the city and in the State. We already had a land-based casino
there, we had riverboat casinos, we have a lottery, we have
bingo, we have cockfighting, you name it. So this is nothing
new for our region.
My concept was to look for a quick investment as it relates
to the larger hotels. Any hotel that had 500 rooms or above,
and that they would be allowed to convert. They is the only
locations, and there are about six or seven locations that
would have been eligible. The Governor didn't like that idea,
so it is pretty much dead.
Mr. Dent. Thank you. I just wanted to emphasize that we
should be focusing on the productive capabilities of your
region, and focusing our efforts there as opposed to things
that redistribute wealth.
Mayor Nagin. I was trying to do both, Congressman, both
productive and the things that people are a little
uncomfortable with.
Mr. Dent. Thank you. I yield back the balance--can I yield
the balance of my time to Mr. Boozman?
Mr. Shuster. I don't think you have any time left. Too
quick on the clock. I wish that was the way in the Michigan-
Penn State game on Saturday.
[Laughter.]
Mr. Shuster. We will now go to Mr. Taylor from Mississippi.
Mr. Taylor. Thank you, Mr. Chairman. I do want to thank our
distinguished panelists from Louisiana.
A couple of things, Lieutenant Governor. If you get the
chance, I would very much welcome if you could provide me with
the number of Louisianans statewide who fell into this problem
of not having flood insurance who are not in the flood plain
yet who did flood, and therefore being told by their wind
coverage, you're out of luck. That has devastated tens of
thousands of south Mississippians.
We are trying to build a case to allow those people to buy
back into the Federal flood insurance program, pay ten years'
past premiums and then be treated as if they had been in the
program all along. I think that will also affect a lot of
Louisianans but I don't know. So again, off the top of your
head, if you could get that information, I would greatly
appreciate it.
Mayor Nagin and Lieutenant Governor, this is really going
to affect both of you. You have a program called the Louisiana
Coastal Restoration Project. I very much support it. I think
you would find more support nationwide if you called it the
Mississippi River Restoration Project, because quite frankly,
it is bigger than just Louisiana.
One of the things that representing south Mississippi I
would like to bring to your attention is that none of the plans
call for growing the Louisiana coastal marshes on the
Mississippi side of the Mississippi River Gulf outlet. As
someone who ran boats for the Coast Guard, as someone who
actually went to high school and college in New Orleans, I am a
bit more familiar with the Mississippi River Gulf outlet than
most. I know that it has been under-utilized. It has also been
a barrier to trying to get some fresh water on the marshes down
in the St. Bernard Parish area.
I would really hope that since we are giving so much
thought to the future that you in your capacity as Mayor, you
in your capacity as Lieutenant Governor would give some serious
consideration and let the Mississippi River Gulf outlet just
become a barge canal. It is a heck of a lot of money to dredge
it. It has contributed enormously to the saltwater intrusion
problem. It becomes a problem with trying to get fresh water
over again on the Mississippi side, State of Mississippi side
of that body. I think we would all be better served if you
would give some serious thought to that.
Second thing I would ask is, we are going to have some
unique opportunities for fresh water diversion, either in
places like the Violet Canal or even at the Industrial Canal
locks. And I for one, knowing that area, resent when the New
York Times and others called it a wasteful project to replace
the Industrial Canal locks. Those locks are close to a hundred
year old. There is a heck of a lot of barge traffic that has to
wait for days to get through them. It is important to the
entire commerce of the Gulf Coast that they be replaced.
But I would ask that they be replaced in a way that helps
not just Louisiana, but helps get some fresh water, again, from
the Mississippi River, starts rebuilding the coastal marshes
south of there. And Mayor, I very much agree with you, I do
think part of the problem that occurred, not only in Louisiana,
but in Hancock County, Mississippi, is because those marshes in
St. Bernard are due south of Hancock County. Had those marshes
not eroded to the point they have, they quite possibly could
have lessened the impact on places like Waveland and Bay St.
Louis.
So I would like to hear your thoughts on that. As far as I
am concerned, we are in the same boat. And what is good for you
is going to be good for us.
Mayor Nagin. Congressman, thank you for that question. Most
of the river issues are State issues, but I do have some pretty
strong opinions on them. I think the hurricane and the event
that has happened allows us a unique opportunity to revisit a
lot of different things. For example, the State of Louisiana
has multiple dock boards and levee boards that should be in my
opinion consolidated into one coordinated entity.
I think as we look to do that, we ought to look to
coordinate with Mississippi and our other neighboring States to
make sure that anything that's done at the Mississippi does not
negatively impact either State, either Louisiana or
Mississippi. It is a unique opportunity for us to come together
with the Corps of Engineers and to figure out how to make this
river work for both States. I would be very supportive of that.
Lt. Governor Landrieu. Congressman, if I might. This storm
forced you to look at words that you say before and understand
their true meaning. Unbelievable is a word that we say a lot
that I really now know and understand.
The other is, we are all in the same boat. That actually
became literally true, African-American and white, rich and
poor. Truthfully, as the Mayor said, it really has opened up a
lot of things that people didn't see before. Mississippi and
Louisiana are really partners. So when we talk about the issue
of thinking regionally so we can compete globally, when I say
that, I am actually talking about partnering with Mississippi.
We do that with your State with tourism. We now need to do it
in a lot of other ways, and we are talking about coastal
restoration.
On the issues of insurance, I am going to have the attorney
general and the commissioner of insurance contact your office
and give you their update on what they are doing on that issue,
to give you the numbers. Later you are going to have testimony
from Gary LaGrange, he is the head of the port, who is on top
of the Mississippi River Gulf outlet issue and he will tell you
about his communications with other members of Congress and the
State delegation to give you the latest on the activity. I
think you will be happy with what he has to report to you.
Mr. Shuster. Thank you.
Mr. Taylor. Lieutenant Governor, while I have you, sir--
Mr. Shuster. The gentleman's time has expired.
Mr. Taylor. I will be so quick, you can't imagine.
Let's do away, while we have the chance, with this idiotic
retribution on we charge you too much for hunting licenses and
you all charge us too much for fishing licenses.
[Laughter.]
Lt. Governor Landrieu. It's a deal.
Mr. Taylor. Thank you, Mr. Chairman.
Mr. Shuster. That was quick. That was like a shot.
If you would, Mayor, indulge us, just one more question.
The Ranking Member, Ms. Johnson, didn't have a chance to ask a
question. I believe you had one.
Ms. Johnson. Thank you very much, Mr. Chairman. My question
is pretty simple to the Mayor. To read in the paper about 97
percent of the contracts being given to large companies outside
the State met me with a great deal of chagrin. Then having the
opportunity to ask questions with some of them about whether or
not they gave any priority to hiring local people, their answer
was very unsatisfactory.
Has that improved any, one question, and number two, do you
think that starting with trying to build the levees very early
will be of any assistance?
Mayor Nagin. I must be honest, I know I am not under oath,
but I still am implored to be very honest with you, the
contract in process as it relates to this event is not going as
well as you would expect. Local people in the City of New
Orleans and in the State are not participating in any
significant level as it relates to the work that needs to be
done.
We have gotten some people's attention, but the results are
just not there yet. There are lots of companies in and around
the city of New Orleans that could really use a hand up, not a
handout. And they are ready to go to work.
In addition to that, we have a significant number of
working people outside of the State that want to come back and
participate and clean up their city. That has not worked.
It seems to me that the rules that were in place right
after this event favored quick contracting. When that happened,
you had $400 million contracts going out with no real
oversight, no real thought to how we can make this work for the
community. I think that needs to be investigated and looked at
from a Congressional standpoint to make sure that doesn't
happen again.
Lt. Governor Landrieu. I just would like to echo what the
Mayor has said, number one, no, it has not been fixed yet.
Number two, we are happy that the contracts are going to be
rebid. Number three, those five major contracts were let by the
Federal Government, FEMA, not by the State of Louisiana or the
local governments. We do think that if it was necessary for the
first two weeks to help get people out of the water and to be
safe, perhaps that was so. But now we are in a new day.
And as we think about redesign and rebuild, we really do
have to make sure that people in Louisiana have the ability,
because we certainly have the competence to rebuild the State.
Mr. Shuster. Ms. Johnson?
Ms. Johnson. In terms of the levees, my concern is that
this water is not going to cool under there for a while with
global warming. We could be subjected to another hurricane. In
rebuilding the levees, do you consider that a high priority,
and if so, how much do you think it will cost?
Mayor Nagin. I consider it to probably be if not the top
priority in the top three. The reason being is because most New
Orleaneans are still shell-shocked, if you will, from the
event. They want the comfort that the Federal Government is
going to come in and help us to make the environment safe for
them to move back in, number one, but also to invest money. If
the insurance companies continue on their current trend, there
are lots of people that will be upside down as it relates to
their equity. They are going to have to make the decision to
come out of their pockets and reinvest in New Orleans, which
most are willing to do. But they want to make sure that the
levee systems are going to be rebuilt adequately.
Mr. Shuster. I am getting the word that the Mayor has to
go, they are giving him the hook. I just want to say there is a
lot of work to be done, obviously, in New Orleans and here in
Washington. You have tough work down there, we are going to be
asking tough questions. I appreciate you coming here, Mayor,
before this Committee. We talked about it three weeks ago and I
asked you, you said you would be there. I appreciate that
greatly. Although I have to say, I almost didn't recognize you
without your signature golf shirt. But when I saw you drink
your water, I knew it was you.
[Laughter.]
Mr. Shuster. Governor Landrieu, thank you for coming. I
appreciate your fiery spirit. Myself coming from a long public
service, I appreciate your continuing on the tradition. Mr.
Marsalis, thank you. We invited you here, we thought you would
give us a different perspective, you did that eloquently. Your
words will continue to ring on.
The only thing I think that could have been done better is
if you had got that horn out and played us a tune. But other
than that, thank you all very much for coming. We appreciate
your taking the time. You are excused, and our next panel is
invited to come to the table.
Mr. St. Julien, Mr. Farmer, Mr. Perry, Mr. LaGrange, Mr.
Felmy, Mr. Ringo and Mr. Voison.
[Recess.]
Mr. Shuster. The Committee will come back to order.
Again, I want to welcome all of our second panel. We
appreciate your coming to Washington, traveling up here to
testify and help educate us and learn what your thoughts are as
we move forward in New Orleans and Louisiana and the Gulf
Coast.
We will start with Mr. St. Julien. You are recognized for
five minutes. We would like for you to try to keep within that
five minute time frame. Your entire statements, all your entire
statements, will be in the record. So Mr. St. Julien, proceed,
please.
TESTIMONY OF MTUMISHI ST. JULIEN, EXECUTIVE DIRECTOR, THE
FINANCE AUTHORITY, NEW ORLEANS, LOUISIANA; PAUL FARMER,
EXECUTIVE DIRECTOR, AMERICAN PLANNING ASSOCIATION, WASHINGTON,
D.C.; J. STEPHEN PERRY, PRESIDENT AND CEO, NEW ORLEANS
METROPOLITAN CONVENTION AND VISITORS BUREAU; GARY P. LAGRANGE,
PRESIDENT AND CHIEF EXECUTIVE OFFICER, PORT OF NEW ORLEANS;
JOHN FELMY, CHIEF ECONOMIST, AMERICAN PETROLEUM INSTITUTE,
WASHINGTON, D.C.; JEROME RINGO, CHAIR, NATIONAL WILDLIFE
FEDERATION, LAKE CHARLES, LOUISIANA; MICHAEL C. VOISIN, OWNER
AND GENERAL MANAGER, MOTIVATIT SEAFOODS, INC., HOUMA, LOUISIANA
Mr. St. Julien. Members of the Committee, thank you so
much. I am Mtumishi St. Julien, Director of the Finance Agency
for the City of New Orleans.
I am serving because I have a lot of experience in housing,
served as general counsel for public housing, served on a
Fannie Mae affordable housing advisory board, served as
president of a Freddie Mac housing advisory board and also as
the president of the National Association of Local Housing
Finance Agencies. But I made a prepared presentation, but I am
going to pass it in and just skip it, because there is a lot of
repetition of what has already been said.
I think my role primarily right now is to reinforce certain
key issues that I think are important. Number one is, in
addition to my background, I too have a house in eastern New
Orleans that was overtaken by mold. I just came back this
weekend from visiting my mother who is temporarily housed in
Baltimore and had to suffer her tears and pleas of wanting to
come back home. To be honest, I don't know what to do. I think
a lot of people in New Orleans don't know what to do. I have a
house here, don't know where the flood plains are, don't know
when the Corps of Engineers is coming in. I have to make a
decision whether I am renovating my house, whether I am
knocking it down, whether there is a possibility of building.
And that is a common issue.
There are four key points that I just want to make quickly
so these other panelists can speak. Number one, we can't build
in New Orleans without the participation of its people. New
Orleans is New Orleans because of its people and its culture,
and understand that. Therefore, when I hear issues of maybe a
czar ought to come in and deal with this redevelopment, we need
to discus that more and make sure that there is a process for
full participation of its people. Otherwise, New Orleans is not
going to be New Orleans when these buildings are built.
The second issue is, we need to quickly provide housing for
our essential workers, housing that is suitable for their
families. We have police officers, fire, who have shown their
loyalty, have shown their courage during this crisis, and many
of them not knowing where their families are. Their families
now are all over, yet they are still loyal to the City of New
Orleans, but the pressure is really tight for them to continue
working and living on a cruise ship and trying to go back and
forth and dealing with their families. We need housing for the
essential workers that is suitable for the families or
otherwise, we will not have essential workers.
The same thing with our business community. They have
essential workers, skilled workers who know their business,
ready and wanting to come back. But we need housing as quickly
as possible that is suitable for their families.
Thirdly, in our experience as a housing finance director,
it has been the private banks and financial institutions that
have been some of the most successful channels of distribution
of services in the area of housing. We need to get the local
banks and the private sector involved in the process. One
experience I have with my service in Government has been, when
Government handles money, I call it the hourglass impact. It
has a tendency for the goods to kind of get stuck at that small
waist of the hourglass.
Others have made an analogy of a cup that you will give us
something from a cup, but the distance to the lip is very, very
difficult to get to. And again, we have to be very, very
careful about our channels of distribution. That is why I feel
we need to look at the banking structures that we have, because
I think they are going to be positive in providing those and
distributing more efficiently those Federal funds than
depending on new governmental bureaucracies.
Finally, I have been hearing every day, people call me up,
and you have to understand that our people are having different
conversations than are going on here. We want to thank you all
for the work that you are doing, it is very, very important
work that you are doing. And a lot of times, it is very
difficult for our people to react or to hear what is going on,
and we hear rumors and so forth.
The reason is, and I kind of made a poster to summarize
what it is, this is the experience that the people of the City
of New Orleans and all the Gulf Coast have had, and that is,
sorry, all circuits are busy. When we left the City of New
Orleans and all the people left the Gulf Coast, this is what we
heard from the phones when we were trying to find our families.
When we would try to call our insurance adjusters, this is what
we are getting today, sorry, all circuits are busy.
When we were trying in the beginning to call FEMA and Red
Cross and so forth, this is what we continued to get. I hope
that Congress, and the evidence is clearly here that Congress
is picking up this phone and listening to our pleas for help.
Therefore, the final point that I wanted to reinforce that was
basically stated before is, there is a sense of urgency here,
we need your help, we are willing to help in any way we can, do
whatever is necessary to be accountable to the Congress,
because you have to be accountable to your citizens. But we
need the help now.
Thank you so much.
Mr. Shuster. Thank you, Mr. St. Julien.
I apologize for not introducing you as Executive Director
in the Finance Authority of New Orleans, Louisiana. In my haste
I didn't do that, so thank you and thank you for your
testimony.
Next is Mr. Paul Farmer, the Executive Director of the
American Planning Association. Mr. Farmer.
Mr. Farmer. Chairman Shuster and distinguished members of
both of the Subcommittees, thank you very much for hosting this
meeting here today, and I appreciate the opportunity to meet
with you today on this. I am Paul Farmer, the Executive
Director of APA. I appear today both as the CEO of the largest
and oldest organization in the Country dedicated to the issues
of planning and public policy making, but also as a planner who
worked in communities such as Pittsburgh and Minneapolis and
now in Oregon.
I grew up in Shreveport, Louisiana, the other end of the
State. I was fascinated by changes in my city. My sister and I
still own the home that my granddad built in 1908. I was back
there just last week. We put on a workshop on disaster recovery
and reconstruction for about 200 of our members from
Mississippi and Louisiana and even from many other States
around the Country. Our members are very hard at work on
recovery issues not only for this disaster but in disasters as
they occur around the Country.
Our members are involved in public sector and private
sector firms and activities and involved in creating plans that
reflect local values, that promote the wise stewardship of our
resources and increase choices for how we live, work, play and
how we increase the quality of life. In short, it is the kind
of transformation that we heard Representative Jefferson refer
to earlier today.
Hurricane Katrina and the subsequent flooding was among the
greatest urban disasters ever to occur in the U.S. The
rebuilding of New Orleans and the rest of the Gulf Coast will
include some of the most difficult planning issues of our time.
Environmental justice, racial equity, restoration of natural
systems, infrastructure repair, property acquisition and
condemnation, environmental cleanup, cultural heritage
preservation, hazard mitigation, economic development and urban
redevelopment, all on a scale that we have not seen before and
in a compressed time frame.
Planners are trained to examine a situation and provide a
comprehensive perspective. I believe that is what our members
are bringing to this situation. The viewpoint enables planners
to look not just at intended consequences of an act, but the
unintended consequences of growth and change.
In planning on special skills, the planners are used to
help diverse groups find common ground and mutually agreeable
solutions to community issues. A broad-based agreement is what
is necessary for a New Orleans rebirth to be sustained. We need
the town hall meetings, and those town hall meetings are going
to be held in Dallas and Fort Worth and Shreveport and Jackson
as well as New Orleans. Yes, New Orleans is its people.
Planning decisions, I believe, are among the most essential
of local government responsibilities. All the actions flow from
those coordinating kinds of decisions that we see on the ground
in New Orleans and other communities. The Federal Government
needs to provide tools and assistance, organizations such as
ours need to also provide assistance.
I have always said that good planning facilitates
responsible reinvestment. This investment of time, energy,
creativity and of course money, those are central to a city's
success. Good planning is ultimately what drives investor
confidence. Good planning is what investors need to feel
confident that their work will be rewarded, not undermined. You
heard Governor Blanco speak earlier about the comprehensive
plan her Recovery Authority will develop. And also as noted by
Governor Blanco and some of you, rebuilding levees only to pre-
Katrina standards is not likely to instill investor confidence.
Those levees failed.
The types of levees must be reconsidered with earthen
levees possibly replacing the highway type walls that failed
along the canals. And yes, Government must be prepared to use
the tool of eminent domain, just as Representative Baker
outlined, a tool of last resort. But it has to remain an
available tool.
Some property may have to be acquired for any property to
have value and for lives to be protected. We must also begin to
implement the Coast 2050 plan. What is rebuilt, where
rebuilding occurs and what standards should be used are all
challenging questions. Where not to rebuild is equally
important.
In the last decade, New Orleans set aside 20,000 acres.
Representative Shuster has raised this issue several times
today already. Other opportunities abound. That is just one
example. Schools can be brought back as true centers of the
community, showing the best of the innovative schools that are
being developed around the Country today.
Public spaces, too, I think, can be enhanced. We often
think only of the hard infrastructure, not of some of the other
infrastructure of our city. The area's unique history and
culture must be protected. Mr. Marsalis was quite eloquent on
this point.
More here than any city in the Nation, historic structures
are a critical part of both culture and economy. New Orleans
should not sacrifice this key asset on the altar of expediency.
We should use New Orleans as a laboratory of innovation in
these areas by expanding traditional rehabilitation tax credits
to spur re-use of vital structures in the city.
Additionally, we should include a residential historic tax
credit for New Orleans homeowners to assist in rebuilding in a
way that preserves the vitality of existing neighborhoods.
We also need to learn from elsewhere. Florida has shown how
regional coordination of local decisions can be effective in
post-disaster situations. Florida has also demonstrated the
value of mandated comprehensive plans with the force of law. My
home State would be well to heed this lesson.
We have posted a number of resources on the web and I
invite you and your staff and others to access those. We are
going to be providing a team to assess New Orleans in
rebuilding its planning function. We will be providing other
planning assistance teams to the smaller communities of the
Gulf Coast.
Now, effective disaster prevention, response and mitigation
measures can only occur with adequate and effective investment
in infrastructure for all our communities and in this region.
So we support pre-disaster mitigation grants, the hazard
mitigation program and other initiatives of the Congress.
Lastly, I would suggest that Congress provide new support
for expanding the community planning capacity, particularly in
these kinds of post-disaster situations. That capacity is
usually in short supply when given the nature of the decisions
to be made and coordinated.
This is not about a quick fix. Our efforts are sure to
leave a lasting and permanent effect. This is precisely why we
need to go about this rebuilding process systematically and
comprehensively, but with a sense of urgency.
Our annual conference for our organization draws about
6,000 people. We were in San Francisco last year, and I invite
you to San Antonio this year. But I really invite you to join
our conference in 2010 in New Orleans. Thank you.
Mr. Shuster. Thank you, Mr. Farmer.
Just a point to clarify. You were contracted with FEMA, or
are you contracted with the State?
Mr. Farmer. We do not have any contract with FEMA or the
State at this time. We are working through our local chapter,
our local members. We are providing our own financing from our
foundation for some of the activities that we are engaged in.
Mr. Shuster. Okay, thank you.
Next, Mr. LaGrange, who is the President and Chief
Executive Officer of the Port of New Orleans. Mr. LaGrange,
please proceed.
Mr. LaGrange. Thank you, Mr. Chairman and members of the
Subcommittee. Good afternoon to all of you. We truly appreciate
the opportunity to be heard here today.
I would be remiss if I didn't take one second to put on my
American Association of Port Authority chairman's hat and to
tell you that overall, 22 ports were affected by both Katrina
and Rita, collectively, from the golden triangle of southeast
Texas all the way over to Mobile. My former port, at Gulfport,
just totally annihilated, as I am sure Congressman Taylor has
alluded to and talked to you about, and now the Port of New
Orleans.
I can tell you that it is no small task, as you have heard
so many times and from so many good people today, to recover.
But let me tell you a little bit about the Port of New Orleans,
the things that you have already heard earlier today, some of
them, it wasn't just an accident. Two hundred and two years
ago, Thomas Jefferson and Napoleon Bonaparte entered into some
small degree of negotiations, and the result of that was the
Louisiana Purchase, which as we all recall from our history
books was for the explicit purpose of gaining access to the
Port of New Orleans for the deliverance of commerce and cargo
into mid-America and up into the northeastern seaboard.
The Mississippi River is a natural resource that not a lot
of ports have and not a lot of ports share around the Country.
We are very fortunate. And we don't take that for granted. It
connects 15,000 miles of inland navigable waterways to the
mouth of the Mississippi River.
In that same area, it serves 62 percent of the consumer
spending public of America and therefore has been dubbed the
gateway to America. It is first in the United States in five
areas in imports. It is the largest importer of steel in the
United States, the largest importer of rubber in the United
States, the largest importer of plywood and forest products in
the United States. Sometimes the largest importer of coffee.
New York will argue that, so maybe we are second this year. We
will yield to New York, but we will get it back next year, in
the United States. And we are the largest certified London
metal exchange in the United States, lead, copper, zinc,
aluminum and so on.
We are the largest exporter of poultry in the United States
and we are doubling in that capacity until that facility was
totally annihilated in the recent storm with Katrina.
Thirty percent of the Port of New Orleans as we knew it on
August 28th does not exist today. That is the bad news. The
good news is 70 percent does. And that 70 percent survived with
moderate to severe wind damage and no flooding. The 30 percent
that didn't is one of the main reasons that we are here today.
Again, if you are the fourth largest port in the United States
in tonnage, which is the Corps of Engineers' standard, somebody
has to step up to the plate and recoup that particular cargo.
From the Port of New Orleans, we touch, as the Mayor
alluded to this morning, 28 States. We can reach 28 States
without touching dry land. The net effect of that from an
economic benefit standpoint annually is $37 billion. The net
effect federally is $2.8 billion in Federal taxes paid as a
result of ships coming into the lower Mississippi River and the
Port of New Orleans. The net effect nationally is 380,000 jobs,
nationally, in the United States, as a resort of cargo flowing
through the Port of New Orleans and the lower Mississippi. If
that 30 percent portion, according to our economists, is not
restored, we are in jeopardy of losing 200,000 of the 380,000
national jobs which have resulted indirectly and directly as a
result of those activities.
I would be very remiss if I didn't give some really good,
great credit, because so much has not been given in the past,
to Federal agencies that stepped up to the plate in the early,
early days. First and foremost, the Maritime Administration
John Jamien, Secretary Mineta. On the night of the storm, I
made a phone call to my old former port director friend John
Jamien from the Port of Detroit in Wayne County. He said, what
do you need. It occurred to me at that point, because it was
all knee-jerk reaction at that time, that what we really needed
to operate a port was really simple: manpower, electrical power
and intermodal connectivity and power.
Now, the question was real quick, and John and I discussed
that on that very evening: how are we going to derive manpower?
From the Maritime Administration standpoint, through Secretary
Mineta and Donald Rumsfeld, within three days we were able to
get a green light to have six Maritime Administration vessels
deployed over the next two weeks to serve as floating
dormitories for workers to bring back, without families and
without pets, but to bring workers back to the Port of NEW so
that we could begin commerce flowing to America again
immediately.
Those six ships, four of the six are still there and today
house over 600 workers, stevedores, truck drivers, freight
forwarders, ships agents and on and on, all of the many types
of people that you need to operate a port facility.
The Army Corps of Engineers were johnny on the spot with
their surveys early on, the Coast Guard with their aids to
navigation, NOAA with their surveys. It was just a huge, huge
effort on a lot of folks' part. And our goal, we were told the
day after the storm by the doubting Thomases that we would not
get a ship back into the Port of New Orleans for six months.
Within eight days, the @@##@@Likes Flyer was calling on the
Port of NEW, in large part thanks to the first MarAd ship
arriving. That MarAd ship provided housing for the first 45
workers who came back to work that ship and to get commerce
flowing in America and at the Port of NEW again.
What is it going to take to restore the Port of NEW and get
it back to pre-Katrina days, August 28th? It is going to take
roughly, all together, private and public, roughly a little
over $1 billion to get everything rebuilt, relocated and put
back into place. As far as a public port authority at the dock
board and the Port of New Orleans, what it is going to take us,
it is not covered by insurance or FEMA, is roughly $275 million
of that $1 billion price tag. We are talking about gantry
cranes, folks, that cost $8 million to $10 million.
Mr. Shuster. Can I get you to summarize?
Mr. LaGrange. Summarize, I am doing it.
The Congressman left, so you will have to tell him for me,
but basically the Inner Harbor Navigation Canal was authorized
by Congress before I was playing Little League baseball in
1954. I am going to be 60 Saturday. That tells you something.
Construction started on that project in 2002.
We have to escalate completion of that project. That is a
Corp of Engineers project which has been punily funded,
unfortunately, by OMB in the last several years. That is a
solution to discontinuing the dredging of the Mississippi River
Gulf outlet. Please tell that to Congressman Taylor for me.
Thank you.
Mr. Shuster. Thank you, Mr. LaGrange.
Next will be Mr. Perry, who is the President and CEO of the
New Orleans Metropolitan Convention and Visitors Bureau. Mr.
Perry, please proceed.
Mr. Perry. Thank you, Mr. Shuster.
Ladies and gentlemen, thank you for the opportunity to
appear today. I appear here as the leader of New Orleans'
largest industry, the tourism and hospitality industry, and its
largest employer, with over 85,000 people. That's in the parish
or county, only about 470,000 people in the metropolitan area,
but about a million and a half people.
Eighty-five thousand people, the working men and women of
New Orleans, work largely in our industry. Not only is it the
driving economic force in the city, along with oil and gas and
petrochemical and the port, but it also helps make up the
texture and the fabric of what New Orleans is. It drives
quality of life, the restaurants, the plays, the theater the
performers. What New Orleans has meant as an indigenous creator
of American culture resides and is housed and is developed in
our industry.
New Orleans is not a highly diversified economy. We are not
an Atlanta, a Houston or a Dallas. We have much more targeted
industries, we are much less diversified, and unfortunately,
disproportionately dependent upon our three core industries:
the port, the maritime industry, oil and gas, and tourism.
I know what you are trying to get today is a sense of what
do we do to rebuilt, what does the recovery mean, what does it
take to get there. In our industry, a $5 billion to $8 billion
is dependent at this point in time on probably an infusion of
between $100 million to $200 million. That would probably be
one of the wisest investments the Federal Government would ever
make. Because with that money, we can drive another $5 billion
back into this economy in the next 12 months, the next 24
months, another $5 billion to $8 billion and on and on.
What has begun to be realized in New Orleans is that
tourism and hospitality is not just about the tourism business,
but those 85,000 people are the depositors in the banks, they
go to the hospitals, they purchase the goods and services, they
buy the cars. Without that part of the economy, New Orleans
can't live, it can't have its identity, it can't have its
culture.
Mr. Oberstar did a wonderful job today of talking about
that, with Mr. Marsalis. Because that has become not only what
we are, but it has become the economics of what we have become.
In many ways, tourism has become the new oil and gas as changes
have occurred over the years.
How do we approach this? What is really needed and what is
necessary? We have to have marketing dollars. Because you know,
after 9/11, we provided a lot of money to help New York get
back on its feet from a marketing and imaging perspective. That
is frankly critical for us as well. It is critical across the
entire Gulf Coast, from Pensacola to Gulf Shores, Alabama to
the Mississippi Gulf Coast and to us. Ten million visitors, $5
billion to $8 billion, and yet our infrastructure was some of
the least damaged, some of the least damaged in all of New
Orleans. We are the group that can get back the quickest and
the fastest and bring the most jobs and the most working people
back.
What are the priorities sitting in this Committee and
looking at us and looking at the city and thinking, how do we
tackle this massive task? In order, they are these. Number one,
the levees have to be restored and the city protected. Number
two, we have to provide housing mechanisms to provide
transitional and then eventually permanent housing to allow
people to be repopulated, the city to be repopulated and people
to come home. But those won't matter if the tourism industry
does not have the dollars to rebuild itself and to bring the
greatest sporting events of America, more SuperBowls than any
other city, more final fours, more great sporting events, more
of the national, one of the great four convention cities of
America. Our economy is based on this.
The working people cannot come home until the housing is in
place. But even if the housing is in place, if their jobs are
not back, they can't come back home.
So we have multiple billions of dollars of urban planning
to do, housing to engage in, levee construction to deal with.
The people are what matters. And those people can't come home
until tourism and the cultural economy is rebuilt. Frankly,
economic development does not occur in places where there are
not great museums, where there is not great art, not great
sports and performances, and where there are not great
restaurants and culture and parks. We have to have that to be
able to survive and to drive the economy and the economic
rebirth of the city.
What we are asserting to you today is, the $200 million
that is contained in this proposal for me will make you $8
billion back. It will allow the repopulation of the city and it
will be another piece of the puzzle that brings together the
rebirth and renaissance of New Orleans as one of the great
cities of America. Our partners with the oil and gas industry,
with the port, with the housing authority, with the Urban Land
Institute, with McKenzie, all the different groups that are
going to work with us, are absolutely critical as a whole to
make it work. The pieces have to come in order, but we have to
critically path plan and make each one go simultaneously.
We are prepared. We want you to know we are prepared. For
us, we give you unbelievable return on investment from the
private sector. I can tell you, as for seven years the chief of
staff to the former Republican Governor of Louisiana, the money
is gone for us to be able to turn to them. We looked there
first, because that's where--we didn't want to come here. We
never envisioned our industry that we look at as the third
Fortune 500 company in Louisiana coming here for funding.
But we know it is critical, because you heard from the
Governor today, $18 billion budget, only $7.5 billion of which
is State general fund and a $1.5 of it is gone, matched two and
a half times by the Federal Government. We have no resources to
go to, no way to accelerate the rebuilding. We ask for your
partnership, and we promise you phenomenal return on your
investment, economically and culturally.
Mr. Shuster. Thank you, Mr. Perry.
Next, Mr. Felmy, who is the Chief Economist at the American
Petroleum Institute. Mr. Felmy.
Mr. Felmy. Mr. Chairman, members of the Committee, thank
you very much. I am John Felmy, Chief Economist of the American
Petroleum Institute, the national trade association of the U.S.
oil and natural gas industry, representing all sectors of the
industry, including companies that make, transport and market
gasoline.
The oil and natural gas industry recognizes the
catastrophic impact of Hurricanes Katrina and Rita on millions
of Americans. The Gulf Coast is the very heartland of our
industry, and New Orleans has been a hub of our industry's
operations for many decades. We are not just responding to this
disaster, we are living it. Thousands of our workers are also
suffering the effects of living in New Orleans and throughout
this devastated region they call home, many now without their
homes.
In concert with fire and police, friends and neighbors,
suppliers and government officials, our employees are restoring
the production, bringing the refineries back online and
restarting the pipelines. Our companies have made much progress
in recovering from the hurricanes, but much remains to be done.
Let us remember, this is a once in a century natural disaster
of monumental impact. It has been 90 years since two hurricanes
of this magnitude struck the Gulf Coast in the same year. And
Katrina and Rita came within a month of one another. Their side
by side impacts directly touched 99 percent of the Gulf region
production facilities.
In recent testimony before the House Budget Committee, the
Congressional Budget Office, CBO, estimated that the energy
industry as a whole incurred between $18 billion and $31
billion in capital losses from the two hurricanes. Only the
housing industry suffered comparable financial damage,
according to CBO. Moreover, CBO estimates total capital losses
across all industries and consumer durable goods could be
between $70 billion and $130 billion.
While many refineries, pipelines and other facilities are
back in operation, some facilities are still out of service,
either because of a lack of electricity or damage. Fuels are
flowing to consumers nationwide, but below normal levels in
some areas.
At this time, energy conservation is critically important.
We support recent calls to conserve energy by President Bush,
the Alliance to Save Energy and others. API has run full page
ads in major metropolitan newspapers across the Nation, urging
consumers to use available supplies efficiently. We have urged
common sense steps, such as planning trips carefully, properly
maintaining your car, driving efficiently, and using energy
wisely at home. Access to crude oil from the Strategic
Petroleum Reserve and various Government waivers to expedite
the flow of fuels, particularly to emergency responders, has
been vital in speeding recovery.
The Gulf Coast region includes some 4,000 offshore
platforms in Federal waters, two dozen refineries and hundreds
of production, transportation and marketing facilities. These
Federal waters account for nearly 30 percent of the Nation's
crude oil production and approximately 20 percent of natural
gas production.
There is a reason for this geographic concentration.
Government policies have largely limited offshore exploration
and production to central and western Gulf. And our onshore
facilities, including refineries, have been welcomed in
communities in the region. Unfortunately, offshore oil and
natural gas development has been barred elsewhere, specifically
the eastern portion of the Gulf and the entire Atlantic and
Pacific coast.
In my written testimony I have provided you with our latest
detailed information, along with some lessons we have learned.
The situation can change markedly from day to day. But in
summary, here is where we stand. Offshore shut-in oil
production is about a million barrels per day of production of
crude oil, or 66 percent of daily Gulf of Mexico production,
down from 100 percent shut-in a couple of weeks ago. Shut-in
natural gas production is 5.5 billion cubic feet per day, which
is 55 percent of our daily Gulf production, also down from 80.4
percent a couple of weeks ago.
Of the Nation's refining capacity, 19 percent remains
offline or was restarting in the aftermath of Katrina and Rita.
Refineries in the Beaumont-Port Arthur are still down as is one
in the Houston area. Three Katrina-affected refineries remain
down, a fourth is restarting. All refineries affected by
hurricanes now have partial or full power.
As of last Friday, all on-shore interstate oil pipelines
have resumed 100 percent normal operating capacity. However,
some systems continue to experience reduced availability of
products to transport.
We know that the hurricanes have had a nationwide impact
through skyrocketing prices for gasoline and other fuels. We
understand the concerns consumers have expressed and our
companies are doing everything in their power and are working
24/7 to restore operations and get supply back to normal
levels. This work, wise energy use by consumers and a do no
harm approach by Government officials provides the quickest
path to consumer relief and tight supplies.
In conclusion, we remain focused on the serious work needed
to ensure Americans continue to get the fuel they need. We look
forward to working with the Committee in that regard. And as a
Penn Stater, I made it in time.
[Laughter.]
Mr. Shuster. We didn't make it in time on Saturday.
Thank you very much, Mr. Felmy.
Next, Mr. Ringo, who is the Chair of the National Wildlife
Federation from Lake Charles, Louisiana. Please proceed, Mr.
Ringo.
Mr. Ringo. Thank you, Mr. Chairman, distinguished Committee
members. Thank you for inviting me to provide testimony on
behalf of the National Wildlife Federation and our 4 million
members and supporters.
The rebuilding of New Orleans and the Gulf Coast is a top
priority, not just for the National Wildlife Federation and our
State affiliates, the Louisiana Wildlife Federation and the
Mississippi Wildlife Federation, but for me personally as a
native and resident of Louisiana and as a current evacuee of
Hurricane Rita. I have a longer written statement which I would
like to submit for the record of this hearing.
Louisiana has a well deserved reputation as a sportsman's
paradise. Like so many others from my State, I grew up fishing
and hunting, catching crabs, hunting for deer, goose and duck.
I grew up among people whose livelihoods were tied to the
year's catch of fish, shrimp and oysters. So I feel very
personally the dramatic loss of up to 24 miles per year now of
our wetlands that support our abundant wildlife and fisheries
and economic vitality of our State.
Congressmen, this number does not include the loss of
Hurricane Katrina. I have been at ground zero. I have seen the
losses that our coasts have suffered. Mr. Boustany, I was in
Cameron Parish two days ago and walked the streets of Cameron,
as well as Holly Beach, Louisiana. That reminded me of the
morning after of 9/11 at ground zero. It was a terrible
disaster. I went to visit the cemetery where my uncle was
buried, and all the graves had floated away. Some may never be
found.
I also spent 20 years working in the petrochemical industry
of Louisiana, so I know well how important our costal wetlands
are to our Nation's energy security. The fight to restore
Louisiana's coast is vital to wildlife and fisheries, the oil
and gas industry, and the health and safety of our people. To
achieve this, we need to restore the natural buffers that
protect our communities and lessen the destruction on our
properties. The need to restore Louisiana's coast has only been
amplified in the aftermath of Hurricane Katrina.
As we set about the task of rebuilding New Orleans, which
will include strengthening levees against future storms, we
must recognize equally the importance of restoring the vast
complex of coastal marshes and barrier islands that constitute
our first line of defense. We call upon Congress to authorize
and fund a bold, expedited restoration program in the next
post-Katrina energy bill. National Wildlife Federation
recommends a $5 billion down payment on coastal restoration to
go hand in hand with the rebuilding effort.
I won't go into the details now, but if members of the
Committee would like to see the specifics of this
recommendation, I would be happy to share them with you. I
cannot emphasize enough, both as a conservationist and as a
former industry worker, that we cannot provide blanket waivers
to our Nation's fundamental environmental statutes for this
multi-year rebuilding effort. We want the citizens of New
Orleans who return to their native city to know that their
water is safe to drink, their air to breathe and their back
yards are safe for their children to play in. Simply put, when
we rebuild New Orleans, we must rebuild it right.
Mr. Perry, to demonstrate National Wildlife Federation's
commitment to the great city, we have decided to continue our
plans to have our national convention in New Orleans this
March.
Hurricane Katrina provided a stark wakeup call, not only to
the residents of New Orleans, but to Americans everywhere on
how to address water resource issues needed in this Country. In
the aftermath of the storm, it has become clearer and clearer
that our Nation does not have an objective, reliable system to
prioritize its water resource needs.
It has now been more than 22 years since the basic
principles for planting Federal water resource projects have
been updated. It has been increasingly shown that there is a
strong need for greater oversight and accountability in the
planning process. We strongly urge Congress to address these
issues in the upcoming months to provided needed direction in
project planning and priority setting.
Furthermore, the need to restore Louisiana's wetlands to
absorb the shock of future storms is all the more critical in
the face of global warming. Global warming is a reality today.
For me and for millions of Gulf Coast residents, global warming
has hit home. As we sit here this morning, yet another tropical
storm brews in the Caribbean, likely headed to the Gulf. Warmer
ocean temperatures are the equivalent of steroids in the storm.
Due to the intense warming of the waters of the Gulf, I
fear that we will never again see a storm below a category 3
level of intensity in the Gulf of Mexico.
In conclusion, I would like to emphasize that there is no
question that we must build the great city of New Orleans and
other impacted communities along our Gulf Coast. But if we are
to avoid creating another generation of victims, we must
rebuild it right. To do this, any reconstruction effort must go
hand in hand with the ecologically sound restoration of coastal
Louisiana. We must update the Corps' antiquated playbook while
also establishing a set of criteria to help prioritize our
Nation's water projects.
All these efforts will be for naught if this Country does
not address the looming threat of global warming. We call upon
you, our elected representatives, to embrace this long term
task that recovery will be.
Thank you for this opportunity to testify. I will be happy
to address whatever questions you may have. Thank you.
Mr. Shuster. Thank you, Mr. Ringo. Next, Mr. Voison. The
name of your company, you are the owner and general manager of?
Mr. Voison. Motivatit.
Mr. Shuster. Okay, I guess I could have figured that out.
Motivatit Seafoods, Inc., from Louisiana. Thank you, sir, you
may proceed.
Mr. Voison. Thank you, Mr. Shuster. I appreciate the
opportunity of being here today.
I am the Chairman of the Louisiana Oyster Task Force. I am
also currently President of the Mollusk and Shellfish Committee
of the National Fisheries Institute, a board member of the Gulf
Oyster Industry Council and the Louisiana Oyster Dealers and
Growers Association.
I am a seventh generation oyster farmer and processor. Our
farm comprises approximately 14,000 acres of water bottoms in
coastal Louisiana which produce between 15 to 25 million pounds
of in-shell oysters annually. The State of Louisiana produces
approximately 250 million in-shell pounds of oysters annually,
or 750 million individual oysters. The Gulf States, combined
with Louisiana, produce annually approximately 500 million
pounds of in-shell oysters, totalling approximately 1.5 billion
individual oysters and maintaining approximately 4.5 billion
individual oysters in Gulf producing areas at any one time.
Hurricanes Katrina and Rita dealt a harsh blow to the
oyster and seafood community of Louisiana and the Gulf Coast.
Being a seventh generation oysterman in Louisiana, our family
has never been impacted by a disaster as drastically as by
these hurricanes. It has been two months now that the oyster
harvest in Louisiana has been closed and shut down for the
production of oysters.
Louisiana is the leading producer of oysters in the U.S.,
accounting for over 40 percent of the Nation's oysters.
Louisiana oysterman land the 250 million pounds I discussed
earlier, or the 750 million individual oysters annually.
I have submitted testimony that is much longer than my
discussion with you today. We have seven recommendations that
we would make. The first step that needs to be taken is to
provide funds to remove the debris from the navigational
channels leading to and from the area docks, St. Tammany
Parish, St. Bernard Parish, Plaquemines, Jefferson, Lafourche
and Terrebonne Parish in southern Louisiana as well as Cameron
Parish in southwestern Louisiana. These State navigational
channels are cluttered with debris and need to be cleaned.
Secondly, we need funds provided to public and State oyster
reefs that need to be cleaned from debris and lifted from under
the silt and dead marsh grass smothering the reefs. In 1992,
following Hurricane Andrew, Congress appropriated funds to
clean oyster reefs. The Department of Wildlife and Fisheries of
Louisiana put a plan in place allowing commercial fishermen,
including oyster, shrimp, crab and fin fisherman, to pull open
rakes or dredges to lift the reef and remove the marsh grass.
That program was very successful and needs to be re-implemented
immediately today.
Third, we need funds to repair and rebuild seafood docks
and dry docks that are used to unload our catch, supply fuel
and water to our boats, and repair the vessels that harvest
this bounteous crop.
Fourth, we need funds for cultch planting on damaged oyster
reefs using shells purchased from other oyster processing
facilities, dead reef material, crushed limestone or crushed
concrete to re-establish the oyster reef and allow for a clean
reef that will support an oyster spat, that hopefully by next
March we will be able to have a recovery from.
Fifth, we need funds provided to install a State oyster
hatchery facility or similar purchase of seed from existing
facilities to supplement the natural spawning this year and in
future years to improve our productivity.
Sixth, we need funds for vessel owners, farmers, oyster and
seafood processing facilities that suffered both physical and
economic losses caused by Hurricanes Katrina and Rita so we can
get back to providing jobs, planting, harvesting, selling
oysters and seafood and paying tax revenues to municipal, State
and the Federal Government.
And seventh, we must provide funds to rebuild the levee
systems and restore the coast of Louisiana to protect the
citizens of Louisiana from another catastrophic disaster that
these hurricanes have done to our home.
The Louisiana oyster and seafood community has suffered
significant and physical losses due to Hurricanes Katrina and
Rita. Oyster and seafood farming, harvesting and processing are
culturally important as an economic engine that has provided
income to coastal and municipal residents for hundreds of
years. Coastal erosion in Louisiana has been a problem for
decades, and restoring the coast in Louisiana is imperative to
protect citizens in south Louisiana, as well as numerous
businesses that are important to the U.S. economy. Providing
funds to re-establish the oyster and seafood business is a
necessary beginning point to drive this economic engine, so
that tourism as we know it in New Orleans can begin again.
Representative Oberstar earlier said that New Orleans
taught us how to eat. I would add only a couple of words to
that, it taught us how to eat seafood.
[Laughter.]
Mr. Voison. When you go to New Orleans, that's what you
eat.
I will close with the words from Raul Ernesto, he said that
most people aren't concerned with the storms that we run into,
but are concerned with whether or not we bring in the ship. I
am here today to ask you to help us bring in the ship. Thank
you.
Mr. Shuster. Thank you, Mr. Voison, we appreciate that.
Might I inquire, how many people do you employ in your
business?
Mr. Voison. Approximately 150.
Mr. Shuster. Small business, then.
Mr. Voison. Yes, sir.
Mr. Shuster. Thank you.
We are going to start with the questions, we are going to
stick to the five minute rule. If we need to, we will go to a
second round. I am going to start first with Mr. Boustany from
Louisiana.
Mr. Boustany. Thank you, Mr. Chairman.
Mr. Voison, I remember we had a conversation right after
Hurricane Katrina and you talked about moving all the oysters
beds to western Louisiana, Gulf Coast, but that's out of the
question now. The issue of debris removal is important, and it
has been somewhat neglected. I have had some conversations with
shrimpers about this, because it affects their industry, it is
going to affect shipping and so forth. So it is something we
are starting to look at to figure out how to get contracting
done in that area. I see it as something very serious that
needs to be approached.
Mr. Ringo, good to see you. I know we have had many
conversations before, and I appreciate all your comments on
coastal erosion and those issues.
One question I have for you, I did read your testimony. You
talked about creating an independent commission within the Army
to handle restoration projects, coastal restoration projects.
Do you feel that the Army Corps cannot handle this? I want to
pursue that a little bit more with you.
Mr. Ringo. The National Wildlife Federation and the
conservation community recognizes how important, and the great
work that the Corps of Engineers has done. What we also
recognize is that there are things they can do better.
We have been concerned about pork barrel spending in the
past, the selection of some of the programs that the Corps of
engineers has gotten involved in that we see have been counter-
productive to protecting. Surely they have done a lot more good
things than bad.
Our position in the conservation community is that we want
to make sure that one, there is environmental impact
consideration given with respect to Corps projects; two, that
we change the playbook that they have been using. The playbook
that the Corps of Engineers used in selecting projects and
implementing its projects has not been updated since 1983. So
we have an antiquated playbook that we are using.
So we really just want the Corps of Engineers to improve
upon its processes and how it moves forward to better the
conditions of our State and protecting our rivers.
Mr. Boustany. Thank you.
Mr. Felmy, I know certainly looking at the energy industry,
it is concentrated in the Gulf Coast and Louisiana has played a
major role in that over the years. We have the Henry hub down
there, which sets basically spot prices and future prices for
natural gas. I think it accounts for 49 percent of natural gas
production in the Country.
You mentioned spreading our infrastructure out, but we have
politically been unable to get that done. So we have to focus
for now on how do we protect what we've got down there in the
Gulf and also how do we speed up the process. We've got an
interdependence, when you're looking at rigs, to pipelines to
refineries, each of these steps requires multiple steps to get
back online.
What are you doing as an industry to improve and speed up
that process? Because I know when Ivan came through, I think we
are still dealing with some of the aftermath of Ivan.
Mr. Felmy. That is correct, Congressman. We are working
very hard across all dimensions trying to restore those
facilities. Because of course, it is our line of business. If
you are not operating, you are not making any money and you are
not proceeding with what you need to do for your shareholders.
It is a function of damage. Electricity was a very big
concern initially, because without power you can't really do
anything, whether it be a pipeline or a refinery or a gas
processing plant or anything along the way. Now it is a
question of bringing the facilities back online, both offshore,
especially importantly the gas processing plants going. Because
without that processing, it is a huge problem in terms of
getting more gas supplies.
The story from the small natural gas that is perhaps the
bigger concern in terms of what we have going forward in the
winter, because whereas in the case of oil, we can import more
oil crude or products, natural gas, we have a limited ability
to increase imports either from Canada or to get it more
through the liquefied natural gas terminals. There again,
because of limitations on LNG terminals and so on, except in
the Gulf, we have been faced with a difficult challenge there.
So we first had to find our people, we had to get places
for them to stay. We had to help them and their families. Then
it is inspecting facilities, both on shore, offshore, above the
water and then finally below the water, because if you don't
have your pipelines in proper conditions, if you haven't tested
everything, you of course can't continue to produce.
So we are moving forward, but we still do have these large
shares of production offline.
Mr. Boustany. I appreciate that. Anything Congress can do
at this stage to help expedite this?
Mr. Felmy. I think going forward we had some very helpful
things happen in terms of some of the fuels waivers that
happened, the SPR releases, certainly Congress has taken a step
forward with the first energy bill and now potentially some
other legislation following on.
The key thing for making our infrastructure more robust,
more diverse and more sound is to be able to have more
infrastructure. So we need, we feel more permanent
streamlining, more thoughtful looking at where we can produce
oil and gas in an environmentally sound manner.
Mr. Boustany. Thank you.
Mr. Shuster. Thank you. Next, Ms. Norton.
Ms. Norton. Thank you very much, Mr. Chairman.
Mr. Voison, I really have a question for you about whether
or not one can incrementally bring back your industry so that
people feel, given the contamination issues, you are such the
provider of seafood for our Country, that it is fit to consume.
I do want to ask Mr. St. Julien a question first, because I
think we ought to confront these notions that simply the press
spins around. The notion about the Ninth Ward, because we are
told it was so vulnerable, located so near where the levees
broke. And yet I know, we have read the testimony before you
that the Mayor and the Governor want all citizens to return to
New Orleans.
I don't know if New Orleans is so configured that the land
is all full up, as they say, or what. But may I ask you, if in
planning the city it would be possible to plan for a city of
the same number of residents, about half a million residents,
without building in the most vulnerable to natural disaster
parts of the city?
Mr. St. Julien. Thank you so much for that question. Your
analogy of the lower Ninth Ward, let me start with the lower
Ninth Ward, so we can clearly understand what's going on.
Believe it or not, this morning I got a call while I'm waiting
in here from my aunt who lives in the lower Ninth Ward, telling
me that her adjuster is coming Monday and she wanted to make
sure that I am there to help her. She is 76 years old and so
forth.
Ms. Norton. Which brings up the question where people are
wiling to insure.
Mr. St. Julien. That is correct. That key question is one
of the questions that I raised about my house. I just don't
know what to do right now, as many other people do.
But the lower Ninth Ward, just to clarify, and I did see
that article in the Washington Post, I thought the article was
an accurate article as to the breakdown of those areas that
were considered a flood zone that require insurance and those
that did not. I used to live on the second house from Caffan
Avenue on Dauphine Street, which is three blocks from the
river, in the Holy Cross neighborhood. It is popularly in the
press called the Lower Ninth, but really that is two
communities.
When you look on the river side of Claiborne Avenue, you
have a community that is extremely viable, historical, a lot of
historical buildings. In fact, my sister's house is right there
at the River Bend Industrial Canal. We went over there, it is
standing proud and tall just like the old captains' houses
there, made of the very, very thick cypress wood.
But I lived on Dauphine Street, and I have seen storms come
in and I have stood on my front porch and I have watched the
water go down Caffan Avenue and you could actually see the flow
with even whitecaps. Which tells me that the way the so-called
lower Ninth Ward is constructed is somewhat like 12 to 15 feet
lower than the area in the river.
So to answer these questions simply about the lower Ninth
Ward and whether people can come back or what should we do,
these are important questions. The distinction I am trying to
make here is you have two different communities, and let's not
oversimplify. You have an area closer to Florida Avenue which
is very, very low. And yes, you are going to have water there
continually. Yes, there is a valid question on whether we
should build close to that area or what to do.
But yet, we must make sure that the people who invested so
much of their lives there are able to get real value so they
can move and settle somewhere else.
But yet, another area which is called the lower Ninth Ward
in the press, the Holy Cross neighborhood, is very, very
important. If I am not mistaken, that is the area where the
slaughterhouse cases were, and for those of us who are lawyers,
I think the second case in constitutional law were the
slaughterhouse cases that we dealt with. Then you have the old
captains' houses.
So it is a valid question that we have to raise about
certain areas of the community. I live east of New Orleans.
That is a good 40 percent of the land mass. Again, we need to
work hard in planning and to come to decisions real fast so our
people will have choices.
I am sorry I ran on, and I forgot the second part of your
question.
Ms. Norton. That's all right. I just wanted to get that on
the record as to whether you thought that in fact planning
could be done to bring back a city of the same size.
Mr. St. Julien. I'm sorry, that was the other one. The
other point I wanted to make, certainly in terms of policy and
planning, certainly the city of Portemon and several other
cities have made in terms of planning decisions to create
greater density. We certainly can do that in the City of New
Orleans, and certainly we believe that we have the technology
and the will to rebuild, bring that entire population back even
though there might be certain areas where we may have to do
something different.
Mr. Shuster. Let me go to Mr. Gilchrest. We'll come back to
you, Ms. Norton.
Mr. Gilchrest. That was a good question, Ms. Norton, and I
enjoyed that answer.
I eat Chesapeake Bay oysters, but I know we import some
Louisiana oysters, because our population is down
significantly. We don't have shrimp, so I like to eat your
shrimp and I like my crabs. I just had a couple of your crabs
last week. Charlie said they were better. I don't know.
[Laughter.]
Mr. Gilchrest. We use Old Bay, you use some Cajun mix. But
it is all pretty good.
I hope to import some nutria, roasted, once we get rid of
ours. I have been working with Billy Tauzin for a number of
years, you have a more significant problem with the nutria than
we do up in the DelMarVa Peninsula. And we don't have anything
like this. I guess it is more difficult to fool the Marylanders
about the taste of these critters, but I guess you have better
chefs.
I just wanted to compliment all of you on the extraordinary
undertaking that you are now intimately involved in and the
difficulties. I went down with Mr. Shuster a couple of weeks
ago, I was down again last week, I actually met Charlie's
brother in Lafayette. We were joined together by a myriad of
scientists, geologist, hydrologists, climatologists,
meteorologists, wetland biologists, you name it, for three days
of an intense discussion on the ecological condition of the
Gulf of Mexico and specifically the lower portion of New
Orleans.
There was conflict with the people who was giving us
information. And Mr. Ringo, I would agree with you
wholeheartedly that the Corps of Engineers, as good as they
are, need what I would refer to as conciliance. That is a unity
of knowledge from different disciplines, seeing this picture in
its wholeness in order to restore, and it is going to take an
enormous amount of intellect and resources and cooperation.
I would recommend to everyone here, and forgive me for
making this recommendation, but I do it in all sincerity, to
sit down with a group of a myriad of scientific disciplines,
you may know a lot more about this than I do, to see what it is
going to take to protect the oil and gas industry, to protect
the ports, to protect the convention center, to protect those
communities. And to do that, the ecological conditions must be
met for the waterfowl, for oysters, which is wetlands.
What do you do about subsidence? What do you do about sea
level rise? What do you do about plate tectonics that create
that instability of the mud upon which the cities rest and the
levees rest? What do you do about all those canals which caused
that storm surge to be exacerbated? Where do you build the new
levees?
You have an enormous task ahead, and I want to compliment
Charlie and Richard and all those other folks that are
intimately involved in it. We here want to be a part of the
effort to help. Every one of my constituents has either given
to the Red Cross or quite a few of them left everything and
went down to help. They are still doing it, they are still
raising money, they are ready to go. The Nation is doing that.
The Nation wants to make sure, though, and you folks are in a
fishbowl right now, you are in a laboratory, and when we
appropriate funds to do all the myriad of restoration projects
that need to be taking place, our constituents want it done
right.
And our constituents want that sediment to build up and
counteract that subsidence. They want the wetlands to protect
the buffers. And I am not just saying that because I am a
green, radical moderate Republican. These are issues now that
are in the forefront.
So Mr. Ringo, the idea that the Corps should be a part of a
very comprehensive group is absolutely correct and sound. And
Mr. Voison?
Mr. Voison. Voison.
Mr. Gilchrest. We have more sort of Anglo-Saxon Methodists
in my neck of the woods.
[Laughter.]
Mr. Gilchrest. To restore the oyster industry, it is just
absolutely vital. That is sort of the canary in the coal mine.
I will ask you, how long do you think it will take? You
mentioned five years. Is that about the time frame to put this
back together?
Mr. Voison. Thank you, Mr. Gilchrest. I appreciate the
taste of Maryland oysters, second only to Louisiana oysters.
We actually have a plan. It is a pretty intensive plan, and
Mr. Boustany is right, I ran into him up here after Katrina,
and part of that plan included areas that he is the
representative of, and then of course, Rita came. But this
year, we will produce 100 billion pounds of in-shell oysters.
We produce 250 million annually now. We will produce 100
million this year, we didn't totally lose everything. We had a
hard right and a hard left, and there is still a little bit
there that we are going to be able to produce.
I would say year two, with good investment, the debris
removal that Mr. Boustany talked about, some of the cultch
planting and re-seeding from hatcheries, and your States, by
the way, the East Coast Shellfish Growers Association, has sent
us tremendous support, has stood up and said we will do
whatever we can, using the hatcheries that are helping the
Chesapeake rebuild at this point. The Pacific Coast Shellfish
Growers, I was out at a meeting a couple of weeks ago out in
Portland, making a presentation about the impacts of Katrina,
only to fly home to Rita. They stand in support of what we are
trying to accomplish in our rebuilding. They can't support the
whole market.
Year two we will produce about 50 percent. Year three,
given again the intensive efforts in year one, we will probably
be at 75 percent, year four, year five, given the energies that
I think will be put forth, we will probably be at about 120
percent. You might say, how can you get at 120 percent of where
you were. Well, the western part of Louisiana, Mr. Boustany's
district, was kind of an underutilized part of our State. In
some areas where there is substantial resource, the State
wasn't even testing those areas.
You might ask, somebody mentioned, I think Ms. Norton
maybe, about the safety of seafood. One of our challenges in
Louisiana was that the State lab was in New Orleans. The State
lab was closed down. Mr. Boustany's area in Lake Charles was
the secondary lab, and it got shut down with Hurricane Rita. So
the FDA has come in and brought in some mobile laboratories and
are now doing substantial testing.
The waters are all testing very well. Some of the oysters
still have some high bacterial levels. We expect openings
relatively soon relating to the hurricanes. But the damage done
by hurricanes is much greater than just the bacteria. It is the
scouring of the reefs, the sedimentation and the placement of
marsh grass.
We are going to be back, in fact, Mr. Gilchrest, your
constituents will suffer as a result of Hurricane Katrina,
because we won't be sending as many oysters up, not just for
the ability to consume them, but your processing plants this
winter will be challenged as well. We want to get back online
as quickly as we can. We have a five year plan to total
recovery.
Mr. Shuster. I thank the gentleman. If you would care to go
to another question, we will go to Ms. Norton first.
But before I go to Ms. Norton, the question she asked Mr.
St. Julien, I was not quite sure of your answer. There are two
parts to the Ninth Ward, correct?
Mr. St. Julien. Correct. I was responding to the
statements, especially in the press, that characterized the
entire neighborhood as the lower Ninth Ward, which raises the
issue, should we rebuild. Well, because one area, or maybe one
quadrant of the lower Ninth Ward is very, very low, we can't
oversimplify and say the entire area cannot be rebuilt.
Mr. Shuster. That is what I want to get. So there is part
of the Ninth Ward that is at higher risk for flooding, part of
it.
Mr. St. Julien. Correct.
Mr. Shuster. That is what I wasn't quite sure of. There are
other parts of the Ninth Ward that did not flood or got little
flooding, is that correct? Or was it pretty much all flooded?
Mr. St. Julien. Everything was flooded, but there were
different degrees. The structure of the houses were quite
different, therefore it had a different impact.
Mr. Shuster. Okay. Now I will yield to Ms. Norton for
another five minute round.
Ms. Norton. Thank you very much, Mr. Chairman.
I think Mr. Voison testified that they will have a very
substantial amount of their oyster crop ready and
uncontaminated, ready to ship this year. My concern about
incrementalism may be satisfied by your answer.
My good friend from my region, that is a very nice
conversation we had. I am not sure he has been in competition
with you on oysters, when you have 40 percent in the Country,
second only to Alaska in seafood. But I love to see that
camaraderie here. I am not sure if my concern to have seafood
fixed in New Orleans is a statement that gains interest,
though, because I am in your region, therefore I am not sure if
I want to keep you at the head of the competition.
Mr. Gilchrest. You can keep eating our oysters, but I will
give you this nutria, and a recipe book.
[Laughter.]
Ms. Norton. I have a question based on the testimony from
Mr. LaGrange. I think that the Country has been impressed with
understanding how important the port of New Orleans was. But I
really have to ask you, given how competitive our Country is,
the next question. Your testimony indicates your ports are used
for cargo for 28 States, it is hard to find an agricultural
product that does not use your port on the Mississippi or the
Gulf ports, steel, you are a transportation hub, your
intermodal advantage.
Is there any indication that given the time it will take to
get the port back to where it was that you will lose some of
this business? In other words, how unique is the port? Can some
of what you do be essentially done by other ports? Is that what
is likely to happen in the interim when we are trying to get
everything fixed, which is of course a long term matter?
Mr. LaGrange. Yes, indeed, absolutely. The cargo, right now
the port of New Orleans is back up to about 38 or 40 percent of
its capacity in terms of ship calls. Normally we have 40 to 50
ship calls a week. Right now, this week we are going to see 18
or 19 ships coming to the port.
So yes, they are going to Houston, they are going to Tampa,
they are going to Jacksonville, Port Everglades and Fort
Lauderdale. We are hoping, certainly, that they are going there
temporarily. We are in routine discussions almost on a daily
basis with all of them, as different terminals come back
online, as the rails come back, as the highways and the bridges
tend to get repaired. That gets us that access to mid-America
and every other place that we need.
It is a unique situation, the Port of New Orleans, in that
it is the largest through-put port in the Country. Eighty
percent of everything that comes into our port ends up in St.
Louis, Memphis, Chicago, Cincinnati, Pittsburgh, Tulsa. And 20
percent of that product remains. Unlike, let's say for example,
Houston, because it has a good consumer base, a bigger
population, where 80 percent of it remains to satisfy its
market and the other 20 percent of it is shipped out.
We think it is actually going to be every bit as good or
even better. The reason I say that is because of a very unique
opportunity, and there aren't a lot of opportunities these days
that are being presented to us. And that is over the next three
to five years, all of the relief aid that is coming into the
port is causing us to create distribution centers that we
normally would not have had an opportunity to showcase the port
and its other connectivity.
Three things that basically will bring a ship into a port,
that is the consumer base, number one, which we really don't
have, roughly a million people at best, metropolitan area.
Number two is a distribution facility, and number three is that
manufacturing base. The only other exception to the case is
what we have with the Mississippi River. We have to utilize
that, that is our trump card.
But you are absolutely correct in your assumption that
cargo will be lost, at least in the interim, to other ports.
Ms. Norton. I take it that when cargo goes to Houston or
Tampa or Jacksonville and the rest that they are going to a
second best, third best place that because of your intermodal
advantages, because it looks like you serve a particular
midwest part of our Country that they advantages of being less
expensive, of having the transportation hub would make it
possible for you to lure back the business that might otherwise
be lost, and might otherwise cost the consumer more in order to
get it elsewhere.
Mr. LaGrange. You nailed it exactly. Two examples that were
given in our economic impact study of Katrina are steel. Again,
all that steel that comes into the Port of New Orleans is going
to automotive plants, it is going to appliance manufacturing
facilities. That steel, the additional cost of shipping that
steel if it goes to another alternate port is going to be on
the average of $17 to $21 per ton.
On the export side, 60 percent of all the grain that goes
out of the United States comes through the lower Mississippi
River and our port. The added cost to that grain is $15 to $18
per ton before it departs to Asia. So just a couple of
examples, you are right on target with your analysis.
Mr. Shuster. And that is because you ship by water, which
is much cheaper than rail.
Mr. LaGrange. Exactly. Barge. Much cheaper to ship by
barge.
In other instances, the alternative would be to land bridge
it by rail to the west coast, and of course that ups your rate.
Mr. Shuster. Mr. Boustany?
Mr. Boustany. Thank you, Mr. Chairman.
Mr. LaGrange, I want to commend you on your efforts at the
port. You have done a great job. We read about some of the
ports early on and how quickly you were able to get things
ramped up.
I understand from your testimony, you said the estimated
costs to repair the damage is about $1 billion.
Mr. LaGrange. Yes. Not all of that is the public port
authority, though. That's total. That's everything. And some of
that could be achieved, we could relieve some of that with
possibly some of the tax incentive plans that have been
proposed by Congress that you all have been talking about. We
have seen some draft bills that have been prepared. That is
about $350 million, $380 million. That would come in rebuilding
and relocating seven or nine of our major customers from one
point in the port to another location in the port.
Mr. Boustany. That gets to my question about private
sources and discussions you have had with businesses on the
ground and what they are willing to do to help pay for some of
this recovery. I take you are already in those conversations?
Mr. LaGrange. We are in the process right now. We are
talking to them, we are just beginning that process because we
really, we don't want to be too premature, but we have to be
prepared. We are really not sure what is going to come out of
Congress. So again, would you do this, what are the different
scenarios is what we are trying to find out right now. What are
your alternatives and what are your options if this or this
happens or this or this happens. It really gets fairly complex
as we talk to each and every one of them.
We know one of them is going to divert 50 percent of its
containerized cargo to another port in another State, and they
are going to maintain a base of 50 or 60 percent in New
Orleans. We may never get that back.
Mr. Boustany. Is that because they can't get work force
back on the ground?
Mr. LaGrange. That is part of it, yes. The other part of it
is that it is going to take us, to build the new facilities, 18
months to 3 years, as we build new facilities, to relocate the
ones that have been totally devastated that are not there any
more, by the way. So that 18 months to 36 months period,
needless to say, in the interim, we have a--we are probably
going to get up to 70 or 80 percent within 6 months, but it is
going to be really hard to ever achieve 100 percent before 3
years.
Mr. Boustany. Thank you very much.
Mr. Shuster. Mr. Farmer, exactly now how are you guys, your
association working with the State of Louisiana and New
Orleans? I'm not quite clear. I guess my concern is, are you
supplementing or are you going to be conflicting with the
planning process that is going on with the governmental
planners?
Mr. Farmer. We are very much supplementing and coordinating
with. Nothing we are doing is any way going to replace. We
wouldn't do that. We have members there, members of the New
Orleans city planning department, for example, are members of
our organization.
We are looking to bring in expertise from around the
Country, New Orleans is going to be going through a period of
development of the type they haven't seen in decades. So we
have some members who come from jurisdictions around the
Country where more rapid growth is sort of normal, so we will
be assisting New Orleans with how to handle that. We will be
assisting the Mayor and his various task forces with some of
the other associations. You may have heard, the Urban Land
Institute, the American Institute of Architects, we are
collaborating with all of those again to make sure that we are
not in any way kind of stumbling over each other or replacing
any of those efforts.
Mr. Shuster. So you are doing it as a they are a member of
your association?
Mr. Farmer. Exactly. We are a membership association and we
provide a variety of books and workshops and the like. So we
are doing that collaboratively with our members in Mississippi
and Louisiana.
Mr. Shuster. Pre-Katrina, how would you assess the planning
capability infrastructure of New Orleans? I know they are
members.
Mr. Farmer. I will give you a quantitative statistic. If we
look at members, and we do a certification process, also,
nationwide, we are the entity that certifies planners
nationwide, New Orleans, or Louisiana and Mississippi both are
on sort of the low side of the 50 States when you look at per
capita number of certified planners. Colorado, for example, is
at the high end.
As I said, it is my home State, I think it is fair that
there has not been a strong culture of planning or a strong
culture of, in many ways, governmental programs in the States.
So I think that is--because I understand it, for example, the
disaster mitigation plans that were required by Congress in the
Act of 2000, what I have been told by FEMA is that only 7 of
the parishes of Louisiana had those completed, only 3 counties
in Mississippi had them completed. There are many States that
have 100 percent completed. Alabama had all but three counties
completed.
So that gives you some idea, I think, of the planning
capacity issues before Katrina.
Mr. Shuster. Thank you.
Mr. Perry, you made the comment that the least affected
industry in New Orleans was the tourism industry. Why is that?
Mr. Perry. The least impacted infrastructure. The areas of
the French Quarter, the riverfront, the warehouse and arts
district and uptown of the Garden District had virtually no
flooding, the most easily recovered, the less building damage.
We will have 95 percent of the hotels back up and fully
remediated and open by the first week of January.
Mr. Shuster. Is that because they are above sea level or
high levels?
Mr. Perry. It is slightly higher areas of the city. They
were the original areas that were settled, they were slightly
higher. Part of Canal Street got some water, the famous
Boulevard, but it stopped as it came about halfway down. The
French Quarter only got a very minor amount of water that
cleared very quickly and had none of the environmental issues
that we had in some of the other unfortunate neighborhood
areas.
Mr. Shuster. I have read about four or five feet above sea
level is what the French Quarter is?
Mr. Perry. That is correct.
Mr. Shuster. What about the buildings? When they built
those hotels, the ones that maybe did take water, were they in
a better situation because they planned, they built, they did
the things necessary to avoid that type of damage?
Mr. Perry. Most of the hotels actually came out very well,
with a couple of exceptions. The Hyatt, which you have seen on
television, is closed down for a year. We have two other
properties that will be closed until next summer. But the rest
of them really had very little water damage. Mostly it was some
windblown rain and normal storm damage. You are looking at 30
to 45 days of basic repairs.
Mr. Shuster. If the Hyatt would have built differently,
could they have prevented that?
Mr. Perry. You know, it was interesting, in many of the
newer buildings, many of the newer high rises, you had more
window explosions from pressure than you did, for example, I
live in a warehouse in the arts district, in a building that
was built in the 1870s. It was an old harness and
saddlemaking--we didn't lose one window pane. Yet brand new
buildings had windows exploding all over. So it was kind of
interesting.
And of course, the French Quarter, with 250 year old, 150
year old and older structures that appeared very fragile, the
grillwork, all of the famous French and Spanish grillwork, it
all survived beautifully.
Mr. Shuster. And the Convention Center didn't take any
water, is that correct?
Mr. Perry. The Convention Center was high and dry the whole
time. The damage that it took was from the wind, with some real
damage to the roof. We had some windblown rain damage and a lot
of glass damage. But a lot of the problems that we suffered
were from the very unfortunate human misery that was suffered
there when about 15,000 people were basically abandoned,
because the Convention Center was not a site, an official site
for a shelter.
Mr. Shuster. Do you know why that was? Was it above sea
level or below sea level?
Mr. Perry. Yes, the area along the riverfront is actually
higher. So all the way uptown, along the waterfront in the
downtown area, they did the best in terms of flooding.
Mr. Shuster. I have heard reports, I haven't had this
verified, that actually the SuperDome, the first 10 or 15 rows
are below sea level, is that accurate?
Mr. Perry. Because it is actually dug down into the ground,
the playing surface is below the ground. The arena next door
where the New Orleans Hornets and the NBA team plays took about
two feet of water. That has all been pumped out now, and that
facility will be back online by the end of February.
Mr. Shuster. All right. I appreciate everybody coming up
here, having made the trip up here, thank you very much. This
Committee, as well as other subcommittees within the full
Committee, will be relying on your expert testimony. Hopefully
we will get to talk to you from time to time to get further
information.
As I said, your full testimony will be in the record. I ask
unanimous consent that the record remain open for such time as
necessary for witnesses to submit written responses to
questions for the record. I know we have a couple of members
who came in here and wanted to submit some questions. I am not
sure exactly who to, but they will be forthcoming.
So again, thank you all very much. It was very
enlightening, and we look forward to seeing you and working
with you. The Committee is adjourned.
[Whereupon, at 1:45 p.m., the subcommittee was adjourned.]
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