[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 
25-915 PDF

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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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