[Senate Hearing 110-292]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 110-292
 
 GAO'S ANALYSIS OF THE GULF COAST RECOVERY: A DIALOGUE ON REMOVING THE 
                    OBSTACLES TO THE RECOVERY EFFORT 

=======================================================================

                                HEARING

                               before the

                AD HOC SUBCOMMITTEE ON DISASTER RECOVERY

                                 of the

                              COMMITTEE ON
                         HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 12, 2007

                               __________

        Available via http://www.access.gpo.gov/congress/senate

       Printed for the use of the Committee on Homeland Security
                        and Governmental Affairs

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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TED STEVENS, Alaska
THOMAS R. CARPER, Delaware           GEORGE V. VOINOVICH, Ohio
MARK L. PRYOR, Arkansas              NORM COLEMAN, Minnesota
MARY L. LANDRIEU, Louisiana          TOM COBURN, Oklahoma
BARACK OBAMA, Illinois               PETE V. DOMENICI, New Mexico
CLAIRE McCASKILL, Missouri           JOHN WARNER, Virginia
JON TESTER, Montana                  JOHN E. SUNUNU, New Hampshire

                  Michael L. Alexander, Staff Director
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
                  Trina Driessnack Tyrer, Chief Clerk


                AD HOC SUBCOMMITTEE ON DISASTER RECOVERY

                 MARY L. LANDRIEU, Louisiana, Chairman
THOMAS R. CARPER, Delaware           TED STEVENS, Alaska
MARK L. PRYOR, Arkansas              PETE V. DOMENICI, New Mexico

                     Donny Williams, Staff Director
                Chip Abernathy, Minority Staff Director
                        Amanda Fox, Chief Clerk

























                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Landrieu.............................................     1
    Senator Stevens..............................................     8
    Senator Carper...............................................    19

                               WITNESSES
                        Thursday, April 12, 2007

Stanley J. Czerwinski, Director of Strategic Issues, U.S. 
  Government Accountability Office...............................     9
Donald E. Powell, Federal Coordinator for Gulf Coast Rebuilding, 
  U.S. Department of Homeland Security...........................    13
Donna D. Fraiche, Chairman, Long-Term Community Planning Task 
  Force, Louisiana Recovery Authority............................    25
Hon. John Thomas Longo, Mayor, City of Waveland, Mississippi.....    28
Edward J. Blakely, Executive Director, Recovery Management, City 
  of New Orleans.................................................    30
Ernest Broussard, Jr., AICP, CEcD, Executive Director, Cameron 
  Parish Planning and Development Authority......................    31

                     Alphabetical List of Witnesses

Blakely, Edward J.:
    Testimony....................................................    30
    Prepared statement...........................................   106
Broussard, Ernest Jr.:
    Testimony....................................................    31
    Prepared statement...........................................   113
Czerwinski, Stanley J.:
    Testimony....................................................     8
    Prepared statement...........................................    39
Fraiche, Donna D.:
    Testimony....................................................    25
    Prepared statement...........................................    70
Longo, Hon. John Thomas:
    Testimony....................................................    28
    Prepared statement...........................................   104
Powell, Donald E.:
    Testimony....................................................    13
    Prepared statement...........................................    56

                                APPENDIX

Charts submitted for the Record by Senator Landrieu..............   119
Bryan McDonald, Director of Governor Haley Barbour's Office of 
  Recovery and Renewal, prepared statement.......................   122


 GAO'S ANALYSIS OF THE GULF COAST RECOVERY: A DIALOGUE ON REMOVING THE 
                    OBSTACLES TO THE RECOVERY EFFORT

                              ----------                              


                        THURSDAY, APRIL 12, 2007

                                     U.S. Senate,  
               Ad Hoc Subcommittee on Disaster Recovery    
                    of the Committee on Homeland Security  
                                        and Governmental Affairs,  
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2 p.m., in 
Room SD-342, Dirksen Senate Office Building, Hon. Mary 
Landrieu, Chairman of the Subcommittee, presiding.
    Present: Senators Landrieu, Stevens, and Carper.

             OPENING STATEMENT OF CHAIRMAN LANDRIEU

    Senator Landrieu. Good afternoon. The Subcommittee on 
Disaster Recovery will come to order. I am pleased to welcome 
our panel and call our Subcommittee to order, and we are 
looking forward to some excellent testimony to help us get 
started off in the right direction on this brand-new and very 
important Subcommittee of the Homeland Security and 
Governmental Affairs Committee.
    I am a new Member of the full Committee, Senator Stevens 
has served for many years, but neither one of us are strangers 
to the work that is before us in terms of disaster prevention, 
response, and recovery.
    Let me begin by saying how pleased I am to have Senator 
Stevens serve as my Ranking Member. We are looking forward to 
working very closely together on this Subcommittee to do the 
work that is before us.
    I will recognize the panelists in just a moment, but I do 
have an opening statement, and I would like to begin the first 
hearing of the Subcommittee to signify the significance of what 
we are doing by reading partially into the record the weather 
message that came over the news service on Sunday, August 28. 
There have been other messages read like this in the history of 
our country, but I thought part of this was worth reading. This 
is Sunday, August 28, 2005:
    `` . . . Devastating damage expected . . . Hurricane 
Katrina . . . a most powerful hurricane with unprecedented 
strength . . . rivaling the intensity of Hurricane Camille in 
1969.
    ``Most of the area will be uninhabitable for weeks . . . 
perhaps longer. At least one-half of well-constructed homes 
will have roof and wall failure. All gabled roofs will fail . . 
. leaving those homes severely damaged or destroyed.
    ``The majority of industrial buildings will become non 
functional. Partial to complete walls and roof failure is 
expected. All wood framed low rising apartment buildings will 
be destroyed. Concrete block low rise apartments will sustain 
major damage . . . including some wall and roof failure.
    ``High rise office buildings and apartment buildings will 
sway dangerously . . . a few to the point of total collapse. 
All windows will blow out.
    ``Airborne debris will be widespread . . . and may include 
heavy items such as household appliances and even light 
vehicles. Sport utility vehicles and light trucks will be 
moved. The blown debris will created additional destruction. 
Persons . . . pets . . . and livestock exposed to the winds 
will face certain death if struck.
    ``Power outages will last for weeks . . . as most power 
poles will be down and transformers destroyed. Water shortages 
will make human suffering incredible by modern standards.
    ``The vast majority of . . . trees will be snapped or 
uprooted. Only the heartiest will remain standing . . . but be 
totally defoliated. Few crops will remain. Livestock left 
exposed to the winds will be killed.''
    This was issued by Max Mayfield the day before Hurricane 
Katrina, which was a Category 5 storm out on the Gulf, but then 
it turned into a Category 3--by probably no other than God's 
grace--before it hit. But, nonetheless, the predictions came 
true. And this government, and at the Federal, State, and local 
level, along with many private sector corporations and 
businesses, as well as individuals, have been dealing with the 
aftermath of this situation.
    While we have made some progress, this record will show, as 
this Subcommittee works, that the progress has not been 
sufficient, and that will, I think, be very clear as this 
Subcommittee goes forward.
    But devastating damage, uninhabitable for weeks, not just 
in the city of New Orleans but in the parishes of St. Bernard 
and Cameron along the Mississippi Gulf Coast, homes were 
destroyed, widespread long-term power outages, lack of water, 
and shelter. This all happened, and Hurricane Katrina, as I 
said, was not even the storm that it could have been. It could 
have been a Category 5, with winds over 155 miles an hour and 
storm surges over 18 feet. But as Max Mayfield stated--and he 
said this upon his retirement, which was just this year, on 
January 3--Max Mayfield, a great American stated, ``We are 
eventually going to get a strong enough storm in a densely 
populated area to have a major disaster. I know people don't 
want to hear this, and I am generally a . . . positive person, 
but we are setting ourselves up for this major disaster.''
    This was this year, after Hurricanes Katrina and Rita hit 
the Gulf Coast, and Max Mayfield was one of the ones that 
helped to write this warning, trying to get the attention of 
the country.
    That is why this Subcommittee has been formed, and I want 
to thank Senator Lieberman for helping to form this 
Subcommittee. He has reorganized, as Chairman of the Homeland 
Security and Governmental Affairs Committee, this Subcommittee 
and another one that will be chaired by Senator Pryor, who is 
also going to serve as a Member of this Subcommittee, to stay 
focused on the real threats to the Nation from natural 
disasters and manmade disasters of a catastrophic scope.
    As I mentioned, I have the great help and support of 
Senator Stevens in this endeavor. We also have Senator Carper, 
who has agreed to serve, former Governor of Delaware, who 
brings his own set of abilities and experiences, as well as 
Senator Domenici from New Mexico, a longstanding Member of the 
Senate and former Chair of the Budget Committee, who 
understands that it is one thing to talk, it is another thing 
to apply resources to actually deal with the problem.
    So we are going to build a better FEMA, at a minimum. We 
are going to make sure that we are prepared as a Nation. We are 
going to establish, and help establish with the cooperation of 
other committees, safe and effective evacuation methods and 
routes. We are going to make certain that the Federal role is 
clear and decisive in terms of what it can do to help citizens 
fully recover their lives, their homes, their dreams, their 
businesses, their families, their communities, their 
livelihoods. And, of course, we are going to do this trying to 
prevent as much loss of life as possible.
    We intend to work hard on this Subcommittee. We have 
drafted a very ambitious schedule which Senator Stevens has 
helped me to outline. We intend to be very problem-solving. We 
intend to be very focused on solving immediate problems of this 
current recovery that is under way along the Gulf Coast, which, 
by most measures, will last for at least a decade, depending on 
whether you are in Waveland, Chairman Powell, or whether you 
are in New Orleans, or whether you are in St. Bernard, or 
whether you are in Lower Cameron. But it is also going to stay 
focused on the future so that we can hopefully mitigate against 
the damage that is sure to come from another serious storm and 
get the response better coordinated at every level.
    So I am going to submit the rest of my statement to the 
record and only to end with a chart that I had the staff blow 
up, because one of my main goals is to get this country to 
grasp the scope of this disaster and to get their arms, their 
head, and their heart around the scope of this disaster. And I 
have to say I do not think I have been very successful, but 
just because I have not been successful yet does not mean I am 
going to stop trying.
    I do not know how many more speeches I have to give or how 
many Senators I need to bring down or how many House Members I 
need to bring down. But like Senator Stevens has gotten half 
the Senate over to Alaska in his term to see actually how big 
of a place Alaska is, which people still have a hard time 
understanding, Senator, I thought maybe I would have these 
blown up. And if you bear with me just a moment and look at the 
first one, this was done by GAO, which is why I asked them to 
be one of our first to testify.\1\
---------------------------------------------------------------------------
    \1\ Charts submitted for the Record by Senator Landrieu appears in 
the Appendix on page 119.
---------------------------------------------------------------------------
    If you will see the far screen, it is Hurricane Camille. 
Now, for any of you from the southern part of the country, 
Hurricane Camille was the measure before Hurricane Katrina. It 
was, ``Did you live through Camille, before Camille, or after 
Camille?'' In the lore of hurricanes, Hurricane Audrey was when 
my mother was a child; Hurricane Camille was when I was a 
child. And we were always waiting for the next big one. Well, 
we think we got it with Hurricanes Katrina and Rita.
    But Hurricane Camille, which is still talked about in 
barrooms and restaurants all over the South, you can see the 
damage was severe, but that is what it represents. You can see 
the casualties, the homes, etc.
    Then you look over here to Hurricane Andrew, where you can 
see 2 million people evacuated. You can see the damage, etc.
    But then I want you to take a hard look at this chart for 
Hurricane Katrina. The overwhelming damage that has been done 
in terms of casualties, building loss, homes destroyed, people 
evacuated was about the same. But nothing else was the same. 
The evacuation was the same--about 2 million people fleeing to 
higher ground, trying to find safety, confused about where the 
storm was really going to come, not having the communication 
systems that they needed, not sure what roads were going to be 
open, not sure what hotels would be available, not enough 
shelters for everybody, not enough water in the cart. Two 
million people fled and had to find safety within 48 hours. But 
the sad story of this is that many of them still cannot get 
back because there were no homes to come back to, no office 
buildings, no small businesses--20,000 lost.
    And to finally just say for the record that the most I have 
been able to ascertain to date is that the impact of Hurricane 
Andrew to Florida was $139 per capita. When the World Trade 
Towers collapsed in New York after being hit by terrorists, the 
impact on New York State was $390. The best figures that I have 
to start this Subcommittee off with, the impact of Hurricane 
Katrina alone--not counting Hurricane Rita--is $4,700 per 
capita in the State of Louisiana. When we add Hurricane Rita 
and when we add Mississippi--because those numbers are very 
hard for us to get, and I am working on them as fast as anybody 
in Washington--that may go up.
    But that is what this Subcommittee's job is. This is not a 
Subcommittee focused on getting trailers to tornado sites. And 
I know tornadoes are terrible and tornadoes can destroy a lot 
and they can destroy hundreds of homes. And that is a major 
disaster. But this Subcommittee is going to focus its energy on 
catastrophic disasters because we have found the Federal 
Government, and to some degree State governments and local 
governments, wholly unprepared to either react to quickly, 
respond to effectively, or help this part of the country to 
rebuild.
    Now, the final thing I will say is this: America has spent 
a good part of its career building itself. It is what we do 
every day here to make a more perfect union, and we do a lot of 
rebuilding around the world, and we do it pretty well. It is 
about time we start doing a better job right here at home after 
catastrophes like this.
    So I will submit the rest of my statement for the record.
             OPENING STATEMENT OF CHAIRMAN MARY L. LANDRIEU
    URGENT--WEATHER MESSAGE
    NATIONAL WEATHER SERVICE NEW ORLEANS LA
    1011 AM CDT SUN AUG 28 2005

    . . . DEVASTATING DAMAGE EXPECTED. . . . HURRICANE KATRINA . . . A 
MOST POWERFUL HURRICANE WITH UNPRECEDENTED STRENGTH . . . RIVALING THE 
INTENSITY OF HURRICANE CAMILLE OF 1969.
    MOST OF THE AREA WILL BE UNINHABITABLE FOR WEEKS . . . PERHAPS 
LONGER. AT LEAST ONE HALF OF WELL CONSTRUCTED HOMES WILL HAVE ROOF AND 
WALL FAILURE. ALL GABLED ROOFS WILL FAIL . . . LEAVING THOSE HOMES 
SEVERELY DAMAGED OR DESTROYED.
    THE MAJORITY OF INDUSTRIAL BUILDINGS WILL BECOME NON FUNCTIONAL. 
PARTIAL TO COMPLETE WALL AND ROOF FAILURE IS EXPECTED. ALL WOOD FRAMED 
LOW RISING APARTMENT BUILDINGS WILL BE DESTROYED. CONCRETE BLOCK LOW 
RISE APARTMENTS WILL SUSTAIN MAJOR DAMAGE . . . INCLUDING SOME WALL AND 
ROOF FAILURE.
    HIGH RISE OFFICE AND APARTMENT BUILDINGS WILL SWAY DANGEROUSLY . . 
. A FEW TO THE POINT OF TOTAL COLLAPSE. ALL WINDOWS WILL BLOW OUT.
    AIRBORNE DEBRIS WILL BE WIDESPREAD . . . AND MAY INCLUDE HEAVY 
ITEMS SUCH AS HOUSEHOLD APPLIANCES AND EVEN LIGHT VEHICLES. SPORT 
UTILITY VEHICLES AND LIGHT TRUCKS WILL BE MOVED. THE BLOWN DEBRIS WILL 
CREATE ADDITIONAL DESTRUCTION. PERSONS . . . PETS . . . AND LIVESTOCK 
EXPOSED TO THE WINDS WILL FACE CERTAIN DEATH IF STRUCK.
    POWER OUTAGES WILL LAST FOR WEEKS . . . AS MOST POWER POLES WILL BE 
DOWN AND TRANSFORMERS DESTROYED. WATER SHORTAGES WILL MAKE HUMAN 
SUFFERING INCREDIBLE BY MODERN STANDARDS.
    THE VAST MAJORITY OF NATIVE TREES WILL BE SNAPPED OR UPROOTED. ONLY 
THE HEARTIEST WILL REMAIN STANDING . . . BUT BE TOTALLY DEFOLIATED. FEW 
CROPS WILL REMAIN. LIVESTOCK LEFT EXPOSED TO THE WINDS WILL BE KILLED.

                               __________

    ``We're eventually going to get a strong enough storm in a densely 
populated area to have a major disaster. I know people don't want to 
hear this, and I'm generally a very positive person, but we're setting 
ourselves up for this major disaster.''
        -- Max Mayfield, January 3 2007--upon resigning as head of the 
        National Hurricane Center

    Devastating damage. . . .
    Area uninhabitable for weeks . . .
    Homes destroyed, wide-spread, long-term power outages, lack of 
water and shelter. . . .
    This all happened. And Hurricane Katrina wasn't even the storm it 
could have been. It could have been a true Category 5--with winds over 
155 miles per hour and storm surges over 18 feet--but thankfully, it 
weakened. However, the ``big storm'' is still waiting to happen. And it 
could happen. As Max Mayfield stated this January. There will be 
another major storm that hits and devastates one of our cities. This 
could happen. To New Orleans. To Houston. To Miami. To Charleston. To 
New York. And the question is--are we prepared? Did we learn from 
Hurricanes Katrina and Rita?
    This is why Chairman Lieberman and I created this Subcommittee--the 
Subcommittee on Disaster Recovery. We created it for many reasons:

      To make sure that we are prepared.
      To establish safe and effective evacuation methods and 
routes.
      To make certain that we have a FEMA that works.
      To ensure that our citizens can fully recover their 
lives, their homes, their families, their communities, and their 
livelihoods.
      To prevent the loss of life that occurred.
      To protect the elderly, the disabled, those without 
means.

    We intend to work hard on this Subcommittee. We have drafted an 
ambitious schedule in which we intend to oversee the recovery of the 
Gulf Coast from the hurricanes of 2005--removing impediments to the 
recovery and eliminating the red tape that threatens to drown our 
people a second time. We intend to solve problems in this Subcommittee 
and build a better FEMA. Today is the first of many hearings--hearings 
that will oversee the recovery at hand in the Gulf States and also look 
to the future to determine what must be done to recreate the most 
effective disaster response and recovery system possible. That is my 
charge, my commitment, and my responsibility--and you will find that I 
am very serious about it.
    I would now like to officially bring to order this first hearing of 
the new Subcommittee on Disaster Recovery. I am absolutely thrilled to 
be joined by Senator Ted Stevens, the Ranking Member of this 
Subcommittee, along with Senators Pete Domenici, Tom Carper, and Mark 
Pryor. I look forward to working with these wonderful colleagues of 
mine, all of whom, I know, share my dedication and passion for both the 
current recovery efforts underway and the future preparedness of this 
country to handle a catastrophe.
    If you look behind me, you will find three charts that illustrate 
the magnitude of three of our Nation's most costly and deadly 
hurricanes. First, you see the damage of Camille, which at the time was 
a storm like none the country had experienced. Growing up on the Gulf 
Coast, I would often hear about Camille and the awesome power of that 
storm. This Category 5 hurricane took over 250 lives and cost nearly 
$10 billion in damages, in 2005 dollar terms. The next extremely 
serious storm that most of us clearly remember is Hurricane Andrew, 
which was a $38 billion storm in 2005 dollars, and devastated 
Homestead, Florida and the surrounding area.
    Now please take a moment and just look at the startling image that 
is Hurricane Katrina. If you look closely, the purple area is 
superimposed over the striped and solid blue areas which represent the 
impacts of Hurricanes Camille and Andrew. I saw this chart for the 
first time two days ago and my heart nearly stopped. This chart is 
wonderful because at first glance, it looks like some kind of massive 
mistake--like the printer broke and the ink just splattered all over 
the page. But that's not the case. This is Hurricane Katrina--and 
Hurricane Katrina only--and does not mention Rita. This is the enormity 
of it all. This is the massive impact and rebuilding that we are 
dealing with. This illustrates the scale and the magnitude of this 
disaster and what we are now dealing with.
    I want to draw the numbers out from this chart a bit more for 
everyone here to consider, 1,836 people perished in Hurricane Katrina's 
murky floodwaters, 90,000 square miles of Gulf Coast land was 
devastated by Hurricane Katrina, an area that dwarfs the land mass of 
Great Britain, 650,000 people were displaced, and 275,000 homes were 
completely destroyed, more than 200,000 of which were in Louisiana. 
Thousands of renters lost their rental units. In Louisiana alone, a 
quarter of a million jobs were lost, 20,000 businesses were destroyed, 
billions and billions of dollars of property damage was incurred, and 
as you know, there were 22 levee breaks that filled the city with up to 
20 feet of water in some places for 6 to 8 weeks. These facts are well 
illustrated by the chart behind me.
    This Subcommittee has jurisdiction over the way we house victims 
during and after disasters. We also have responsibility over any and 
all long term recovery activities. Through this new Subcommittee, we 
have an opportunity to make sure that what has taken place since 
Hurricane Katrina never takes place in any other city, State, or region 
in this country. Through the Gulf Coast's misfortune, we have a shot at 
making a disaster recovery mechanism that provides Federal, State, and 
local actors both the resources and the flexibility to rebuild in the 
aftermath of disaster efficiently and intelligently.
    I would like to thank the three distinguished panels for making the 
trip to Capitol Hill; particularly those from Louisiana and 
Mississippi, who made the long journey during your hectic work week. I 
understand that every moment for you away from the recovery effort is a 
moment that could have been spent making a difference. We sincerely 
hope that your presence here will help guide this Subcommittee towards 
improving our disaster recovery efforts.
    At the request of Chairman Joe Lieberman and Ranking Member Susan 
Collins, who have been steadfast and ardent advocates for the Gulf 
Coast beginning when the first winds of Hurricane Katrina blew on until 
this very day, GAO has begun a series of reviews and reports on the 
progress of the Gulf Coast recovery. GAO has been asked to keep track 
of a variety of matters that deal with the recovery specifically, but 
also in a broader manner, the entire recovery effort. We are very 
grateful that GAO has taken on this, which is a massive and ever 
evolving task, and I am certain that our request will be broadened as 
we seek to find ways to further improve our mechanism.
    I read GAO's testimony, and while I appreciate the effort, I am 
concerned. I am concerned because despite their hard work, there are 
significant questions as to whether the Federal contribution truly 
meets the needs for the scale of a disaster, or rather, catastrophe 
caused by the 2005 hurricane season. There are a number of questions 
that need to be answered:

    (1)  Are the funds appropriated by Congress adequate to fulfill the 
needs of the 90,000 square miles of devastation suffered by the Gulf 
Coast?
    (2)  Is there a need for the Congress to appropriate more funds in 
the future to help rebuild? What processes are in place to assess the 
need for more funds and how are those needs communicated to the White 
House and the appropriators in Congress?
    (3)  Do the damages and issues that we see so effectively 
illustrated on this chart warrant the waiver of the 10 percent public 
assistance match requirement--from here the answer is clearly yes?
    (4)  Was using CDBG the right choice for this recovery? Were there 
enough CDBG funds distributed?
    (5)  Does it make sense to deduct the money received from SBA loans 
and other forms of critically needed assistance from the CDBG funds 
provided to storm victims, when these dollars were meant to be a 
completely separate pot of assistance meant to bring our people back 
home and get our cities moving again?
    (6)  Is enough being done for people who did not own their homes 
and our large renting population?
    (7)  What are some of the differences between Mississippi and 
Louisiana's housing programs?
       (a)  What are some of the pros and cons for both programs?
       (b)  Is either State truly moving as quickly and effectively as 
they could be moving to get money out of the door and into the hands of 
storm victims?
       (c)  How are both States taking care of renters and low income 
individuals through their CDBG funds?

    These are questions that are left outstanding from GAO's 
preliminary work and if GAO cannot answer these questions now, I will 
ask my colleagues to join me in requesting that GAO delve further into 
the recovery to provide answers in the weeks to come.
    I am pleased that once again the Federal Coordinator, Chairman 
Donald Powell has interrupted his schedule to join us. The Chairman has 
been very responsive to Congress, and his reputation for being truly 
concerned for the rebuilding and for truly caring about the people so 
gravely impacted by catastrophic aftermath of the hurricanes precedes 
him. Chairman Powell has a difficult position. As the Federal 
Coordinator, he is the liaison between the Federal, State, and local 
actors participating in the recovery activities. GAO has praised the 
job the Chairman is doing, and I agree that he is working hard. 
However, I question whether the authority he was provided by the 
President is adequate for such a heavy responsibility and hope to hear 
from both GAO and the Chairman on whether they believe the role of the 
Federal Coordinator can be strengthened and most meaningfully used in 
the years to come.
    I am also interested to learn more about what the Chairman thinks 
are some of the challenges facing the recovery, both with regard to the 
CDBG programs and the Public Assistance programs that are being used to 
deliver vital recovery resources. What I hope will not happen is what 
happens all too often at these hearings, the Federal Coordinator comes 
and tell me everything is alright. Believe me, I know that everyone is 
working hard and doing their best--but everything is not perfect. For 
example, there are over 20,000 Public Works projects currently in 
different phases of being administered in the State of Louisiana, and 
State and localities throughout the Gulf Coast are finding that the 
original estimates for rebuilding were grossly understated by FEMA, I 
want the Chairman to explain what is being done to ensure that the 
worksheets are updated so that the proper amount of funds are provided 
for these projects. This is just one of a myriad of problems, and they 
all need answers.
    I am equally interested to hear from the State and local panels 
made up of individuals from Mississippi and Louisiana. It is essential 
that we begin to foster a dialogue between the actors, which is 
something I hope to do, with the help of Senator Stevens. We need to 
hear from them, what they're experiences have been up until this point. 
We need to hear what suggestions they have for the Federal Coordinator, 
and the Coordinator needs to communicate his concerns to them. This 
hearing, through GAO's work, will provide an excellent overview of the 
many working parts of this recovery. However, a far more critical 
examination of these policies and programs must be undertaken before we 
can believe to rest comfortably assured that our efforts are the right 
efforts and are effective. While we did not intend for this hearing to 
get into the weeds of the different programs, we do hope that today we 
can paint a clear picture of what programs are in motion and where 
problems are apparent from the Federal, State, and local levels.
    I am excited to begin the work and to lead this new Subcommittee in 
its effort to look after the efforts being made to rebuild the lives of 
our fellow American citizens. With the help of Senator Stevens, we can 
make sure that we are adequately prepared to respond to a disaster or 
catastrophe--whether it occurs in Louisiana or Alaska, Seattle, Miami, 
or any where else in this country. I would like to turn it over to the 
Ranking Member Senator Stevens for his opening statement.

              OPENING STATEMENT OF SENATOR STEVENS

    Senator Stevens. Well, thank you very much. I am delighted 
to join you on this new Subcommittee, and I would ask you to 
put my opening statement in the record also.
    In a State like ours, which is one-fifth the size of the 
United States and half the coastline of the United States, we 
have disasters almost daily. And we understand the problems 
that you have just outlined. I did take a trip, as you know, 
one of the first trips down to your area, and I was appalled at 
the damage I saw and some of the failures of the systems that 
were there that should have prevented some of that damage. But 
I am anxious to go through some of the findings as a result of 
this disaster with you and to see what we can do to prevent a 
repetition of the type of losses your area has suffered.
    But I also am very interested in trying to find ways to 
have a better warning system for disasters, to have a better 
system of preparation for people to know where they can go when 
there is a disaster, to really have disaster coordinators 
available on a basis before the emergencies exist.
    We know areas which are prone to particular types of 
disasters. We are earthquake prone, and most people do not know 
we had a typhoon off the northwest coast of Alaska not too long 
ago. It is the first one in history.
    There is change going on in our climate. I think some of 
those things can be prevented from becoming disasters if we 
understand them and try to work in advance.
    So I am delighted you are willing to take this on. I am 
happy to work with you and am looking forward to the testimony 
today.
    [The prepared statement of Senator Stevens follows:]
                 PREPARED STATEMENT OF SENATOR STEVENS
    I am pleased to be here with my colleague Senator Landrieu for the 
inaugural hearing of the Subcommittee on Disaster Recovery discussing 
the Gulf Coast recovery efforts.
    I wanted to take the opportunity to thank the GAO for giving us a 
preview of their report, which I understand will be available by June. 
I am sure all of us here today will be interested in your findings.
    I also wanted to thank the Federal Coordinator and all of the local 
and State officials here today for taking the time to come here to 
assist us in understanding the current situation in the Gulf Coast 
region.
    I, and my fellow Alaskans, understand your plight. The most 
powerful earthquake ever measured in North America, the Good Friday 
earthquake, had its epicenter in Prince William Sound less than 75 
miles from Anchorage causing extensive regional damage. Our State must 
face the full gambit of natural disasters from earthquakes to tsunamis 
to forest fires to volcanoes. We understand your situation and want to 
help.
    When regional disasters such as these occur, the Federal Government 
must step in to provide assistance and expertise. Effective and 
efficient rebuilding cannot occur, however, without a partnership among 
the Federal, State, and local governments.
    I am eager to hear how this partnership is progressing, both to 
better address the situation in the Gulf Coast region and to better 
prepare ourselves for future events.

    Senator Landrieu. Let us begin with our first panel. We 
have received a report, which I have read in detail, and I am 
pleased to have the Director of Strategic Issues with the U.S. 
Government Accountability Office (GAO), with us, Stanley 
Czerwinski. I am very happy to have you with us, and, of 
course, Chairman Don Powell, who is the Federal Coordinator for 
Gulf Coast Rebuilding, who has a tremendous amount of hands-on 
experience and has been a pleasure to work with through these 
last almost 2 years now, it will be in August.
    So why don't we begin, Mr. Czerwinski, with your testimony, 
please.

 TESTIMONY OF STANLEY J. CZERWINSKI,\1\ DIRECTOR OF STRATEGIC 
         ISSUES, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Czerwinski. Madam Chairman and Senator Stevens, thank 
you for asking GAO to assist you with oversight of the 
rebuilding of the Gulf Coast. As you mentioned in your opening 
statement, Madam Chairman, you are absolutely right. This could 
take years, maybe decades, and the rebuilding challenge 
promises to surpass the challenges faced in the immediate 
response and recovery.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Czerwinski appears in the 
Appendix on page 39.
---------------------------------------------------------------------------
    In such a time, congressional oversight becomes especially 
important, and at your request, what we have done is try to 
analyze some of the key challenges facing you and today give 
you some preliminary observations. Our goal is to help you try 
to set an agenda for oversight of this area.
    Today what I would like to do is to focus on three issues: 
First of all, the resources needed to rebuild the Gulf Coast; 
second is the mechanisms that the Federal Government has to 
deliver those resources; and, third, the partnerships that are 
going to be needed to be put in place among the Federal 
Government, State and local governments, and private for-profit 
and nonprofit players to make this happen.
    CBO estimates the loss in the Gulf Coast at between $70 and 
$130 billion. That is a very conservative estimate because the 
key word there is ``loss''--not what it takes to rebuild. There 
are other reputable estimates that run as high as 50 to 100 
percent higher than that amount. Regardless of what number you 
choose, the bottom line is that the problem is huge, and it is 
going to take the concerted effort and investment of the 
Federal Government, State and local partners, and the nonprofit 
and for-profit sectors.
    Congress has already made available over $110 billion to 
the Gulf Coast. The vast majority of that money, though, has 
gone into the immediate response and recovery, with a much 
smaller amount going into rebuilding. The good news is that the 
money that is out there for building today is enough to address 
what you are facing today, though not necessarily in the 
future. The bad news is that the money is not getting into the 
hands of those who need it fast enough. It is like if you are 
driving in your car and your gas gauge says the tank is reading 
pretty good, but yet your engine light is coming on and saying, 
``We are not getting enough gas.'' You do not know which to 
believe. In this case, you believe both.
    What I would like to do is talk a little bit about the 
mechanisms being used to deliver the money to the Gulf Coast.
    Faced with the need to get money to the Gulf Coast very 
quickly, the Congress did the prudent thing. It looked at 
vehicles it had on the shelf to deliver money, and essentially 
there were three. Today I want to focus on two of them, 
primarily: One is FEMA's Public Assistance Program and the 
other is HUD's Community Development Block Program.
    Before I do that, I wanted to spend a second on the other 
piece, and that is, GO Zones. GO Zones are tax credits. The tax 
credits are very good at making deals come together, but they 
are not very good at starting the project. They are the 
sweetener that can make it finally happen.
    If you look at what has been used for GO Zone credits, 
right now you will find very little. But I urge you not to use 
that as a measure of the sense of the quality of that mechanism 
and to think about what you are going to need going forward, 
because it actually will complement the other two mechanisms I 
want to talk about today.
    The two major vehicles I want to talk about are Public 
Assistance in FEMA's program and CDBG, which is part of HUD.
    Public Assistance is project based, essentially going to 
State and local governments to help them rebuild their public 
infrastructure--buildings, utilities, roads, etc. Because it is 
project based, it has very specific rules that the State and 
locals have to follow and a very detailed process. This has 
certain strengths. It helps ensure the Federal Government that 
it is not paying more than it should. It also keeps you from 
doing projects that should not be or overbuilding. But there is 
also a cost to this because it is a very cumbersome, time-
consuming process.
    Madam Chairman, as you noted in your opening statement, 
there are disasters and there are catastrophic disasters. 
Public Assistance is best used in typical disasters, and it 
works best looking at a specific project. When you start to 
have a whole area that is destroyed, you start to run into some 
problems with Public Assistance: Because it looks at particular 
structure, it does not look at the comprehensive piece. Then 
what the State and locals find themselves doing is going 
through a lot of effort to try to get just one particular piece 
that may or may not make sense in the overall scheme.
    An example would be if an area had a police station in one 
area, say a courthouse in another, and a jail in another. Under 
Public Assistance, they would get funding for each individual 
piece, where it is, to rebuild it the way it was. If you have 
to rebuild all three at once, it may make sense to bring it 
together, and you could do it a little bit more efficiently. It 
is very hard to do this under the Public Assistance Program.
    The Community Development Block Grant Program is the exact 
opposite of that. It is money that is given to State and local 
governments with wide discretion, and in the case of 
Mississippi and Louisiana, they chose to do the same thing. And 
it was actually, I think, the right thing. They focused on 
housing, particularly homeownership.
    In this case, what becomes important is to look at how the 
States have actually implemented it, because once the Federal 
Government gives them money, it is really up to the States to 
do what they want with it.
    Louisiana and Mississippi faced very different 
circumstances. As you know, the major challenge in Louisiana is 
the population loss. The people are gone. You want to bring 
them back. In Mississippi, it is more an issue of stock. How do 
you rebuild the housing stock? So it is not surprising that 
both States chose different programs.
    I know you have a representative from the Louisiana 
Recovery Authority (LRA) up here later today, so I will not go 
into much detail on that program. I will leave it to Ms. 
Fraiche, except to say that Louisiana came up with a catch-all 
program that says let's bring everybody home and let's try to 
rebuild.
    Mississippi took a much more targeted approach, and what 
they did was in two phases. The first phase is for homeowners 
who were outside the floodplain and, therefore, did not have 
flood insurance, but because the extent of surge from Hurricane 
Katrina was so large, they actually lost their homes. These are 
people who did everything they should. They had private 
insurance, but not flood insurance. This program is designed to 
make them whole. It is very easy to identify those people and 
to reach those people, and Mississippi has. They are virtually 
done with phase one. The second phase, though, of Mississippi's 
program is much more challenging in that it is trying to get 
everybody else, i.e., low and moderate homeowners, those who 
were uninsured and underinsured. In that case, Mississippi has 
not distributed any benefits yet. That phase of the program 
really has not started.
    At this Subcommittee's request, we are beginning a review 
of the CDBG program and how it is implemented by the States of 
Louisiana and Mississippi, and we will be reporting more to you 
later.
    I would now like to turn to the role of the Federal Gulf 
Coast Coordinator. We have spent a lot of time on the Gulf 
Coast, and we have done a lot of talking to State people and 
local people in Louisiana and Mississippi, and we have heard 
one thing uniformly from them: They tell us this man is doing a 
great job. They have very high praise for him. They say that he 
and his staff are engaged, hands-on, on the ground, and making 
improvements.
    What I would say is that improvements in my 
characterization are at the micro level. When there is a 
problem, they trouble-shoot it. When there is an issue, they 
push it forward. When there is a challenge, they raise it. They 
are working with State and local governments to help them get 
their message across. For example, Louisiana officials told us 
that the Office of the Coordinator helped them make the case to 
the Federal Government that they needed more CDBG funds, and 
they got it. That is exactly the right approach that we would 
say for this stage of rebuilding. However, we are about to hit 
a critical stage of rebuilding that requires us to think about 
where we want to go beyond this.
    I mentioned different funding streams coming together: 
Public Assistance for infrastructure, CDBG for housing, GO 
Zones for economic development. Right now those streams and 
those delivery mechanisms are all working in isolation.
    To give you an example, if you want people to come back, 
you have to rebuild the homes. But if you do not have the 
infrastructure there along with the homes, they still will not 
come back. Or if they do come back but you do not have economic 
development, what will they come back to?
    So the challenge then is to bring together these different 
pieces in a concerted way, and also to bring it together with 
the players who really have to take responsibility. It is not 
just a Federal program. It is the responsibility of those on 
the Gulf Coast.
    There is a lot of interplay going on between the 
communities, and, Madam Chairman, you know the area much better 
than I do. For example, we were speaking to the CAO in St 
Bernard's Parish, and he told us, ``We have a plan to rebuild, 
but we realize that anything that we do is inextricably linked 
to what New Orleans does.''
    What we would suggest is that there is a need to look at 
the vehicles that we are using to provide the funding and the 
partnerships at the State and local level together and to come 
up with essentially a coordinated approach. In this regard, we 
believe that the Federal Coordinator is in a unique position. 
He has built up good will. He is highly respected and now has 
an opportunity to shape where things go in the future.
    How do we bring the resources together? How do we 
essentially increase the partnerships among the various parties 
and then leverage private investment? Today, in giving the 
coordinator a chance to talk about his role, I think that the 
Subcommittee is giving him an opportunity to articulate his 
vision of where he wants this to evolve and what we can do to 
help it.
    In sum, we believe that Congress has done a very good job 
of using the tools at hand to deliver benefits so far. The 
mechanisms that we are using do have some limitations. In the 
future, there may be more need for resources, but right now the 
major challenge is getting the resources to those who need 
them. Before we address the need for more resources we need a 
concerted vision, a strategy, a goal, that not only talks about 
how we deliver the money but also what the partnerships of the 
Gulf Coast do.
    In this environment, we believe that congressional 
oversight is especially important, and we are very appreciative 
of you asking us to help you. As you go forward, we are ready 
to help you with any kind of work that you would like us to do, 
and we look forward to working with you throughout.
    That concludes my statement, Madam Chairman. I would be 
happy to answer any questions you may have.
    Senator Landrieu. Thank you very much, and we will have 
some questions.
    I would like to turn to Don Powell, who is the coordinator, 
in just a moment, and refer the Subcommittee Members that, as 
you all are aware, GAO is a great resource for us, and they 
have already conducted and completed, as of my last review, 
approximately 25 to 30 individual reports on individual 
subjects related to this disaster response and recovery. So I 
recommend them to the core staff and Members of the 
Subcommittee.
    Mr. Powell.

TESTIMONY OF DONALD E. POWELL,\1\ FEDERAL COORDINATOR FOR GULF 
     COAST REBUILDING, U.S. DEPARTMENT OF HOMELAND SECURITY

    Mr. Powell. Thank you. Good afternoon, Subcommittee 
Chairman Landrieu, Ranking Member Stevens, and distinguished 
Members of the Senate Homeland Security and Governmental 
Affairs Subcommittee on Disaster Recovery. I am Don Powell, and 
I am pleased to appear before you today as the Federal 
Coordinator of Gulf Coast Rebuilding. I am here today to 
discuss the progress we have made in the Gulf Coast region and 
both the challenges and opportunities we face in this 
unprecedented domestic recovery, as well as the long-term 
rebuilding effort.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Powell appears in the Appendix on 
page 56.
---------------------------------------------------------------------------
    Before I begin my testimony, I would like to thank Senator 
Landrieu for inviting me here today. I understand this is the 
inaugural hearing for the newly formed Subcommittee on Disaster 
Recovery, and I am honored to be on its first witness panel.
    Although Senator Landrieu and I were introduced by 
Hurricane Katrina, we have developed a dynamic working 
relationship and, more importantly to me, a deep friendship 
based on honesty and mutual respect. Our shared vision and work 
for New Orleans and the great State of Louisiana has been based 
on common principles and has remained above partisan discourse. 
And for that, Senator, I am grateful.
    In the aftermath of the most powerful and destructive 
natural disaster in our Nation's history, President Bush 
created the Office of the Federal Coordinator for Gulf Coast 
Rebuilding and asked me to coordinate the long-term Federal 
rebuilding effort in support of State and local officials.
    The President is committed to supporting the local recovery 
and rebuilding efforts in Alabama, Florida, Louisiana, 
Mississippi, and Texas from the damage sustained from 
Hurricanes Katrina, Rita, and Wilma in 2005. The entire Gulf 
Coast region is of great historical, cultural, and economic 
importance to this country, and we strive to ensure that State 
and local governments have the resources they need to help the 
residents get back on their feet. Whole communities were 
ravaged by Hurricanes Katrina and Rita, but I am confident that 
together we will see a better tomorrow for our fellow Americans 
in these affected areas.
    Fundamentally, my job is to ensure that the Federal 
Government provides thoughtful, coordinated, and effective 
support to the State and local leaders who are driving the 
long-term rebuilding and renewal of the Gulf Coast. I do this 
by working closely with the people in the affected regions, 
including stakeholders from the public, private, and nonprofit 
sectors to identify and prioritize the needs for long-term 
rebuilding. I then communicate those realities to the 
decisionmakers in Washington, advising the President and his 
leadership team on the most effective, integrated, and fiscally 
responsible strategies for full and vibrant recovery. Finally, 
I work with other Federal agencies to help ensure the 
successful implementation of these strategies.
    President Bush has made a commitment that the Federal 
Government would be a full partner in the recovery and 
rebuilding of the areas devastated by Hurricanes Rita and 
Katrina, and he is keeping that promise. To date, the Federal 
Government has committed more than $110 billion for the 
recovery effort through programs as varied as HUD's Community 
Development Block Grants, funding the Corps of Engineers, FEMA 
Public Assistance funding for infrastructure, Small Business 
Administration loans, and Department of Education and 
Department of Labor Federal grant funding, just to name a few. 
This figure does not include the cost of the GO Zone tax 
legislation from which some provisions were extended to the end 
of the 109 Congress at the President's urging.
    This Administration also understands the importance of 
being good stewards of the substantial amount of taxpayers' 
money that has been spent on this effort. We rely on State, 
local, and congressional oversight and accountability 
mechanisms in place to assist in the protection of the American 
taxpayer. If Americans see their tax dollars being ill spent, 
their support, which is critical, will wane. It is my duty to 
review the various plans and strategies brought to us from the 
region to ensure that they are conducive to the prudent, 
effective, and appropriate investment of taxpayer dollars.
    It has now been over 18 months since Hurricane Katrina tore 
through an area of the Gulf Coast equivalent to the size of 
Great Britain. A few weeks later, Hurricane Rita followed 
Hurricane Katrina's path into the Gulf of Mexico and then made 
landfall on the coast of Texas and Louisiana. In many towns and 
communities along the Gulf Coast, we have been pleased and even 
encouraged by the progress being made. For today's purposes, I 
will focus mainly upon my work in Mississippi and Louisiana.
    The President has made it abundantly clear that the vision 
and plans for rebuilding the entire Gulf Coast should take a 
bottom-up approach that starts from local and State leadership, 
not from Washington, DC. Rebuilding should be an exercise in 
coordinated, thoughtful, and prudent planning, but not 
centralized planning.
    In that spirit, Governors Blanco and Barbour brought 
together diverse and talented teams tasked with rebuilding 
their respective States. Governor Blanco formed the Louisiana 
Recovery Authority (LRA) and Governor Barbour formed the 
Mississippi Development Authority (MDA). Our office has worked 
well and tirelessly with both the LRA and MDA to assist them in 
finding the best pathways to success, and we will continue to 
do so until they no longer request our assistance.
    From the beginning, the people of Louisiana all agreed that 
levees were paramount to the revitalization of New Orleans, and 
the President made it clear that public safety is a critical 
part of the long-term rebuilding in that area. People must feel 
safe and secure in their decisions to come back, whether as a 
resident or a business owner. President Bush promised a better 
and stronger hurricane protection system, and the current New 
Orleans levee system is far better than it was before Hurricane 
Katrina. But our work is still ongoing. Specifically, the 
President requested and secured nearly $6 billion for the U.S. 
Army Corps of Engineers to repair and enhance the levees and 
the entire hurricane protection system. The planned 
improvements will be the best, most comprehensive system even 
known by New Orleans.
    It should be noted, however, that hurricane and flood 
damage reduction systems have one primary purpose: To reduce 
risk. There will never be a guarantee that the risks are 
completely eliminated, and this is especially true for the 
areas like New Orleans that are below sea level. It is simply 
not possible to design a system that will eliminate all risk of 
flooding from every conceivable storm or track of storm 
imaginable. Each and every storm has its own unique 
characteristics, from storm surge to wind speed to length of 
storm.
    Given this reality, it is important for citizens to take 
precautions to safeguard their homes and their lives by 
utilizing safe building standards and adhering to at least the 
minimum required base flood elevations, carrying property and 
flood insurance, demanding a meaningful evacuation plan from 
their State and local officials, and following that evacuation 
plan when instructed to do so.
    The most pressing need for Federal assistance in both 
Louisiana and Mississippi was housing. The Community 
Development Block Grants Program was chosen because it is a 
well tested mechanism for a long-term disaster recovery that 
provides the State with the greatest flexibility in how funds 
may be spent. This flexibility is one of the primary attributes 
of the CDBG funds because it allows State leaders, those 
closest to the local issues, to make the decisions on where to 
best use the money.
    Both Louisiana and Mississippi used their CDBG funds to 
establish a homeowner grants program to assist their citizens 
in rebuilding. The Louisiana Recovery authority established the 
Road Home Program, and Mississippi utilized the Homeowner 
Assistance Program.
    To help communities replenish their funds spent on public 
infrastructure, there is FEMA's Public Assistance Program. 
Historically, this process has worked well, but the size and 
scale of Hurricanes Katrina and Rita made the program more 
sluggish than people along the Gulf Coast would like. To that 
end, and at our urging, several months ago FEMA made 
significant changes in its operations in Louisiana and 
Mississippi in an effort to streamline processes and hasten the 
delivery of Public Assistance funding to applicants seeking to 
rebuild infrastructure.
    In Louisiana, for example, FEMA increased staffing of 
experienced personnel and added an experienced senior public 
assistance officer dedicated to each parish. FEMA has also 
reduced average processing of grants from many months to 
several weeks by removing bottlenecks and creating better 
reports to track the status and progress of Project Worksheets 
(PW). We also continue our work with our State partners so that 
they may find ways to expedite their respective processes as 
well.
    President Bush is committed to rebuilding the Gulf Coast, 
and rebuilding it better and stronger than it was before 
Hurricanes Katrina and Rita. A tremendous amount of progress 
has been achieved and a tremendous amount of work still lies 
ahead. We move forward each day determined to ensure that the 
Federal Government continues to do its part to support and 
strengthen the State and local leaders who must drive the 
rebuilding effort.
    I am confident that when history writes the book on 
Hurricanes Katrina and Rita, it will be a story of renewal. The 
Gulf Coast States and its leaders have a chance to restore 
their communities and revive hope and opportunity. Thank you.
    Senator Landrieu. Thank you, Chairman Powell.
    I would like to now recognize Senator Carper, who has 
joined us. We thank him very much for being a part of this 
Subcommittee, and we would like to start now the first round of 
5 minutes each. And then if we go to a second round, then to 
our next panel.
    Let me begin, if I could, Mr. Czerwinski, with you. You 
mentioned the $110 billion, and that is a number that is thrown 
around here a lot for different reasons, but we will leave 
those aside. I would like to just get clear for the record if 
you could, say, break down the $110 billion, as you did in your 
testimony but repeat it. How much has gone for immediate short-
term individual assistance, how much for the insurance, which 
people paid premiums for, although the program came up? And 
what has been basically the remaining for the rebuilding 
effort? You said most of the money has gone for the short term, 
a smaller amount for the long term, and could you be a little 
bit more clear about those numbers?
    Mr. Czerwinski. Sure, Senator Landrieu. When it comes to 
disasters, it is very difficult to come up with precise 
accounting of funds because of the way that it is budgeted. A 
lot of the money goes into what they call a Disaster Relief 
Fund and it gets mixed together for various purposes. So what I 
will talk about is rough magnitudes.
    Of the major pieces that go into rebuilding, as Chairman 
Powell mentioned, the single major piece is Community 
Development Block Grants, and that one runs about $17 billion, 
so we know that piece is exactly for rebuilding.
    There is a segment of the Public Assistance Program, as I 
mentioned, that goes to rebuilding. That is harder to tease out 
because it gets mixed in for other processes like debris 
removal. So that is harder to figure out. But it is certainly 
not larger than what is going out in Community Development 
Block Grants.
    And then there are a few other pieces.
    Senator Landrieu. Well, it is very important for the 
country to understand this, so if you want to present this 
testimony to the Subcommittee in a different way, then you can. 
But it is very important for us to have on the record of this 
Subcommittee as much as we can where this $110 billion has gone 
to, to date, so we can arrive at whether we have spent enough 
or not spent enough or what it is going to. So I think for the 
purposes here, we can say that not much more than $16 billion 
has gone to the long-term recovery. It could be another half of 
that amount or--would that be fair?
    Mr. Czerwinski. That is probably fair.
    Senator Landrieu. I do not want to lead you here.
    Mr. Czerwinski. That is probably a fair rough magnitude to 
talk about.
    Senator Landrieu. We know that $23 billion went to flood, 
and, Chairman Powell, if you have these numbers?
    Mr. Powell. Yes, I do.
    Senator Landrieu. Twenty-three billion dollars went to 
flood. The rest of it basically went to immediate emergency 
shelter, individual temporary assistance in the direct 
aftermath of the disaster because of the multitude, millions of 
people involved in that evacuation, re-sheltering effort, etc. 
Is that correct?
    Mr. Czerwinski. That is correct, Madam Chairman.
    Senator Landrieu. OK. In your statement, you talked about 
the most flexible program, the Community Development Block 
Grant initiative. As you will recall, our delegation--I will 
use this word carefully, but it is kind of what we were doing--
flailing around, looking for what might work in a situation 
that appeared to all of us to overwhelm what was currently 
available and came upon the Community Development Block Grant, 
looking for a more quick, flexible way to get money to 
Mississippi and Louisiana, because we were not able to identify 
any other mechanisms through FEMA or HUD, even though that goes 
through HUD, but others to do it. And I think given the choices 
we had, we made the best choice.
    Are there today impediments--and what are they, one or two 
impediments--to that Community Development Block Grant program 
that is keeping the money that you said from getting to the 
people at the other end that need them? And, Chairman Powell, 
if you want to jump in and answer this question as well. But 
would you identify the barriers? Or do they not exist?
    Mr. Czerwinski. Well, first of all, you did a very good job 
in picking Community Development Block Grants.
    Senator Landrieu. Well, I don't know if we did, but----
    Mr. Czerwinski. In our sense, that is a very good way of 
delivering money, and HUD has done a good job of coming up with 
a way to expedite that funding.
    Where there is an issue is in the balance between 
determining accountability on one end and getting recipients 
and benefits on the other, and, frankly, the State has 
struggled some with that. And in this regard, lately HUD has 
stepped in and provided some technical assistance because this 
is something that HUD does every day, with varying degrees of 
success. But that is probably the major issue--determining how 
much verification you need versus how much need there is to get 
the benefits to people.
    Senator Landrieu. Mr. Powell, do you want to add anything?
    Mr. Powell. Yes. I think clearly that the CDBG offered the 
best vehicle for flexibility. I think it is important that we 
recognize that these programs were designed by the State, with 
the State's need, and that is the reason you find the State of 
Louisiana's plan a little bit different than the State of 
Mississippi's. They are developed by the States.
    What you may be referring to, Senator, is the issue as it 
relates to the 10 percent--I will just bring it up, the 10 
percent about the ``red tape''----
    Senator Landrieu. Good, because I was going to ask you 
about that.
    Mr. Powell. Yes. And it is law that both HUD and FEMA have 
to follow different courses as it relates to, for instance, 
environmental charges.
    But at the end of the day, these plans are designed by the 
State. They are designed by the State, and we in our office are 
in constant contact with those people to make sure that there 
is no impediment, that the Federal Government is not an 
impediment to making sure that those things run smoothly, as 
smoothly as they should.
    Senator Landrieu. My time is up. Senator Stevens.
    Senator Stevens. Well, I would ask you, Mr. Powell, what 
would you think about having these areas that are disaster 
prone have Federal Coordinators in advance, having them be part 
of the preparation for and activities regarding to prevention 
of damage should the disasters occur?
    Mr. Powell. I have thought about that, Senator, and every 
catastrophic event, especially one such as this one--
incidentally, I have not found a way to describe this one that 
appropriately describes it--is unique. And it may be best--I 
think clearly we have learned some lessons from this, and I 
think we have changed the way we do business.
    I don't know if it would be good business to have someone 
in place before. I think it is more important to make sure that 
we have procedures and policies and regulations in place that 
will speak to the immediate relief and understanding some 
things that maybe we can do better the next time around. I 
think it is important that we have policies, procedures, and 
laws in place, perhaps more than having a coordinator in place. 
I think the coordinator really plays a role more in the long-
term recovery, and I think it is important for us to 
distinguish between long-term and immediate relief.
    Senator Stevens. Well, my mind goes back to one of the 
major floods we had, and I found that as we recovered, we had 
the Small Business Administration in one place, we had the Red 
Cross in another, we had the State welfare people here, and we 
had FEMA there. And people did not have their cars anyway. We 
took it upon ourselves to find a mall, and we put these people 
all in the same place, and we provided some transportation to 
bring people to there. And so they were coordinated in terms of 
what efforts, what assistance might be available to help them 
recover from the activities.
    Another one I go back to, I remember James Lee Witt with 
FEMA, and we had a monstrous fire, and it was beginning of 
spring. We had some rental allowances for them to go live in 
town until the houses were built. We looked at it and said, 
Well, why don't we just give you the allowances. You can rent a 
trailer for your own house and you can be there and supervise 
your rebuilding. Another place we organized and went to schools 
and churches, and we had prepositioned disaster recovery--
blankets, etc.--already out there.
    Now, it does seem to me that in most instances we wait 
until it is over to find out what people need, and we do not 
have prepositioned activities, we do not have prior 
coordination methods. There was no reason for these people to 
have to go four different places to determine which one is 
going to help them after a disaster.
    Now, you cannot anticipate what happened in New Orleans 
unless you went down and took a look at some of the faulty 
design of some of those flood barriers. But the concepts that 
are involved in it are the same. When we were down there, they 
were having to find some way to go 3 and 5 miles apart to find 
out what assistance is going to be made available to them from 
any particular agency when they should have had some 
coordination prior to it, saying if there is a disaster, this 
is what is going to happen.
    As a matter of fact, we at one time under the Stafford Act 
required disaster pre-planning and had a plan in effect to be 
executed. Those unfortunately fell apart.
    I remember once we went to the Valdez with Senator 
McClelland and the whole Appropriations Committee, looking at 
the situation as far as the pipeline was concerned there, and 
we asked what would happen if there was an oil spill from one 
of these tankers. And they came out with these small boats, and 
they actually dumped about 200 dozen tennis balls in the water, 
and they had these skimmers to pick them up that showed us what 
would happen. Well, 15 years later, it happened, but no one 
knew where even the tennis balls were. And we now have in our 
areas citizens advisory committees that advise on how to 
prepare, how to execute the rescue and recovery activities 
should a disaster happen. Why shouldn't that be national?
    Mr. Powell. I think the National Response Plan is for 
immediate Federal response. The State government also has a 
role, and it is critical in those procedures, and I think it is 
a partnership. And that is the reason we can probably do a 
better job in coordinating with the State.
    However, my focus, again, is on long-term rebuilding, but I 
think there is no question that coordination, both at the State 
level and the local level and the Federal Government, could be 
better.
    Senator Stevens. It is taking a long time down there in 
Senator Landrieu's place to decide what the design of these new 
houses are going to be and how they are going to have to be 
constructed in this recovery period. Don't you think that could 
have been planned in advance, too?
    Mr. Powell. Absolutely. I do, Senator. I think it is 
important that somehow we empower people to make decisions. I 
think that is critically important, make decisions on the 
ground, understanding that sometimes those decisions are going 
to be poor and they are going to exercise poor judgment. But 
sometimes the culture is such that no one wants to make a 
decision.
    Senator Stevens. Do you work under FEMA?
    Mr. Powell. No, sir. I work with FEMA. We are part of DHS.
    Senator Stevens. Thank you very much.
    Senator Landrieu. Thank you, Mr. Chairman.
    One of the reasons that some of the decisions were hard to 
make is because no one could really make them without the flood 
maps, and the flood maps, which are being designed by the 
Federal Government for Louisiana and Mississippi, are not even 
yet complete, and it is 18 months. So before someone can 
rebuild a house, they need to have an elevation. They do not 
have their elevation, so it is very difficult. That is just one 
of a dozen things that are, I think, holding people up. So 
either people like me who can make quick decisions are having a 
hard time.
    Go ahead, Senator Carper.

              OPENING STATEMENT OF SENATOR CARPER

    Senator Carper. Thank you, Madam Chairman.
    Gentlemen, welcome. We are delighted that you are here. 
Thank you for your stewardship.
    Mr. Powell, you spoke about the kind of working 
relationship, good working relationship that you and the folks 
who work for you have developed with our Chairman, and I think 
that speaks volumes really for both of you. And it inures to 
the benefit of the folks that she represents and the folks that 
pay our salaries.
    Senator Landrieu has dragged, I think, most of us down to 
New Orleans in the months since Hurricane Katrina struck there, 
and when I was down a year or so ago, we had another 
Subcommittee hearing, and I may touch on a couple things that 
we covered at that Subcommittee hearing.
    But we got in a helicopter and we ended up flying down 
around the coastal wetlands to see really how they are 
disappearing and to have a better understanding of how 
dramatically their disappearance is going to affect the future 
of New Orleans and other surrounding neighborhoods and 
communities.
    Let me just ask you, if I could, how have concerns about 
the Army Corps of Engineers' plans to rebuild levees in New 
Orleans and to restore the coastal wetlands affected the 
recovery effort? Have doubts about the Corps' ability to build 
a reliable product played a role in keeping residents from 
returning home?
    Mr. Powell. It is critical, Senator. The safety of the 
citizens in that area is the most important thing. I can recall 
when I first went down there, and I came back and visited with 
the Administration. I said there are three issues in New 
Orleans: One is levees, two is levees, and three is levees. It 
is critical.
    The integrity of the levee system is of paramount 
importance, and I know that the Corps of Engineers understand 
their charge and their responsibility. I think they did 
extraordinary work right after the storm in repairing the 
breaches, inspecting the 220-mile levee system for any weakness 
in making those repairs. The levee system is better and 
stronger today than it was before Hurricane Katrina. The 
President is committed to making sure that this levee system is 
better than it has ever been.
    Shortly, there will be the results of a study that has been 
in the marketplace for some time that will model storms, and 
that study will be the plan that the Corps will use in order to 
build and protect against a 100-year flood. And that should be 
out within the next 30 to 60 days.
    So the Corps is committed and this Administration is 
committed to rebuilding the levee system to the 100-year flood 
protection.
    Senator Carper. You mentioned the No. 1 issue is levees, 
No. 2, levees, No. 3, levees. Would No. 4 be coastal wetlands 
and rebuilding the coastal wetlands?
    Mr. Powell. The whole hurricane protection system, which 
would include the wetlands. Incidentally, that is another 
reason--and Senator Landrieu worked very hard, I can assure 
you. She was passionate about this.
    Senator Carper. I have noticed.
    Mr. Powell. Well, what I am about to say is that this 
President led the effort for the revenue sharing, and I think 
the State legislature and the people of Louisiana have 
dedicated the income from that to restore the wetlands. So 
hurricane protection includes the wetlands and the levee system 
and the whole hurricane protection system.
    Senator Carper. Good. Mr. Czerwinski, do you have any 
comments on my question?
    Mr. Czerwinski. I think the point that you make, Senator 
Carper, talks about the interlocking nature of anything that we 
do so that when we look at the different aspects of rebuilding, 
we have to look at them as they affect one another. So you are 
absolutely right when you talk about the wetlands being a 
priority, but it also has to be fitting in with the way that 
the State and local governments want to go about doing all 
developments not just in wetland areas. They have to be 
partnering in that.
    Senator Carper. Alright. Thanks.
    Another committee that I serve on, the Banking Committee, 
is chaired by Senator Chris Dodd of Connecticut, and we held 
hearings a day or so ago, and we focused on flood insurance. 
And, Mr. Powell, I think you mentioned somewhere in your 
testimony that people have got to be responsible in how they 
rebuild by carrying flood insurance, and there is a 
requirement, actually, in a lot of places to have it. Not all 
the lenders are actually doing what they ought to be doing 
under the law, but can you give us any information about the 
availability of flood insurance and maybe other forms of 
homeowners' insurance in the area that we are talking about?
    Mr. Powell. Well, in designated areas that are designated 
flood areas, flood insurance is available through the 
government. It is an issue that we in our office have been 
dealing with for some time. We assembled the CEOs of the major 
insurance companies in America, a year or so ago.
    As you mentioned, it is important that local people 
establish building codes to make sure the buildings codes are 
sufficient. I think insurance companies are looking at that.
    It is also important to understand, in my view, that 
insurance is a State issue and it is a marketplace issue. Its 
affordability is an issue along the entire Gulf. This is not 
unique to Louisiana and Mississippi, as you know, and Florida 
and the whole coastal line. But it is a market issue and one 
that we believe that the market in time, together with working 
with the State, will resolve.
    Senator Carper. Madam Chairman, thank you. Gentlemen, thank 
you very much for your testimony.
    Senator Landrieu. Thank you.
    If the Subcommittee would allow me just to follow up with a 
few more questions, then we will go on to our next panel. And 
if you have others for this panel, please jump in. But I need 
to follow up, though, with you, Chairman Powell. As well as we 
work together, and we do, and respect each other, we have very 
different opinions about certain things, and I want to follow 
up on this levee issue.
    You say in your testimony, ``President Bush promised a 
better and stronger hurricane protection system.'' This 
statement seems inconsistent, however, with the 
Administration's recent request to shift $1.3 billion 
previously allocated between levee projects instead of 
authorizing an additional $1.3 billion.
    This Congress has put the $1.3 billion back in the budget. 
The President says he has issued a veto threat saying it is 
neither necessary and it is extraneous and it is not cost-
effective.
    I know you have to carry the President's message, but what 
would you say if I argued with you that his words are not 
matching his budget documents?
    Mr. Powell. Senator, let the record also reflect that I am 
a New Orleans Saints fan. I am not a Cowboy fan.
    Senator Landrieu. See how he tries to divert.
    Senator Carper. He is good. [Laughter.]
    Senator Landrieu. He is good, but I am not going to let him 
off the hook.
    Senator Carper. We can learn from him.
    Senator Landrieu. Yes.
    Mr. Powell. I spend a lot of time briefing the President on 
the Gulf Coast area. Without question, there is no reservation 
in my mind he is committed to building the levee system better 
and stronger than it has ever been. There is no question in my 
mind that he is committed to spending the necessary money to 
protect the people against a 100-year flood. No question in my 
mind.
    The vehicle, as I understand it, the reason for 
transferring the $1.3 billion from one supplemental to another 
supplemental--and I am not a legislative person, and I do not 
understand the mechanics of that, but I do understand his 
commitment--was to make sure that work did not cease and to 
make sure that work would continue and would not stop. Because 
as I understand it, when Congress appropriates it, it 
appropriates it for specific issues. The way I describe it in 
my simple mind, you have five or six checkbooks and you can 
only write a check out of that account for specific areas. So 
when that checkbook has a zero balance and this one has money 
in it, we want to transfer it from that checkbook to that 
checkbook in order that the work would continue. But there is 
no question in my mind about his commitment.
    Senator Landrieu. You have described the process, but I 
have to get on the record that the checkbook system only works 
if you have someone actually filling in when all the checkbooks 
go down to zero, with the appropriate amount of money. Now, if 
you start off short $1 billion, it does not matter how much is 
in each checkbook, because at the end you are still going to be 
$1 billion short, and that is my problem and that is our 
problem.
    We are $1.3 billion short, and we cannot get this money, if 
it is moved, out of the regular appropriations, and I will tell 
you why. The total appropriations for the entire United States 
of America for new construction for the Corps of Engineers is 
only $1.5 billion. So I most certainly cannot be put in the 
position as the appropriator representing Louisiana to go ask 
the Committee for all the money they have for this levee 
project. And I am not going to do it.
    So I need you to take this message back to the President. 
This money has to come to us through emergency supplemental. It 
can come in this emergency supplemental or another one. I 
cannot fund this through regular appropriations, and he needs 
to ask for it. And if he does not, we will put it in the 
supplemental.
    The other thing I want to ask--and then I am going to go on 
to the other panel--is on the 10-percent waiver. You mentioned 
it, Mr. Czerwinski, and I need to let the Subcommittee Members 
and the staff focus on this, 10 percent of all of the FEMA 
Public Assistance money, correct? Because it is a 90-10 split.
    Mr. Czerwinski. Correct.
    Senator Landrieu. We have asked for a waiver of that 10 
percent to expedite these projects because every elected 
official along the Gulf Coast for the most part, that I know 
of--and if there is one that has not put his name to this, then 
please let me know. But everyone I have talked to--big city 
mayors, little city mayors--says that this 10-percent match--it 
is not that we do not have the money. It is the way it is being 
required to put it up is causing just a complete shutdown of 
these projects.
    So while the money is there, you say--I am not sure I 
agree--the money to rebuild, they cannot access it because of 
our rule. We have asked that rule to be waived, and, again, the 
President is blocking it.
    So what would you say to that? And then we are going to go 
to the next panel.
    Mr. Czerwinski. We talked to a lot of State and local 
officials about this issue and uniformly heard the same thing, 
Madam Chairman, and that is, when you have a disaster of this 
magnitude, it becomes virtually impossible for the local 
governments to come up with the up-front money on their own. 
Their fiscal capacity is down. Their needs are great.
    So what they then have to do is rely on contractors who can 
essentially front the money for them, i.e., the big 
contractors. Of course, what this means is that the larger 
contractors know they have a position that is to their 
advantage, and there is a large carrying cost to that. So that 
is one effect of it.
    The other is that it tends to squeeze out the smaller 
contractors from being able to participate, which are typically 
your local contractors. So it does have a hamstring effect on 
getting the projects done.
    Senator Landrieu. So, to conclude, not only does it 
increase the risk of large contractors who cease to be 
interested in fronting the money when they have not been paid 
for the last project they did, but it also puts a damper on the 
small local contractors, the ones you want to get back in 
business because they are the ones leading their own recovery. 
Many of these small business owners are trying to rebuild their 
own homes and businesses. Is that correct?
    Mr. Czerwinski. The way the small contractors would get 
involved is if it was sub-contracted to them, but then what you 
are doing is you are putting a pyramid in place, which has 
additional costs. And the way the large contractors carry this 
is they raise their bid. If they know they are getting their 
money later versus earlier, and they know that there are not 
many other games in town, then they can charge more for the 
construction.
    Senator Landrieu. And it is true this was waived in 
September 11, 2001, and it was waived in the previous 
disasters, correct?
    Mr. Czerwinski. We have issued reports that have shown that 
in other disasters it has been waived.
    Senator Landrieu. Thank you. Let's go to the next panel. 
Thank you very much. And if you all could stay to hear this 
next panel, I would appreciate it because it is some excellent 
testimony that we are about to receive, unless you have to run. 
But thank you.
    Thank you all very much. Our next panel is leading members 
of the recovery effort along the Gulf Coast. I will introduce 
them as they are seated here and ask them to summarize their 
statements for the record. I think we are limiting the time to 
3 minutes each for opening statements and then a round of 
questions. Let me just briefly introduce them:
    Donna Fraiche, who is an outstanding leader in the city of 
New Orleans and is chairing the Long-Term Community Planning 
Task Force for the Louisiana Recovery Authority, is 
representing herself and her committee and also Dr. Norman 
Francis, who leads the recovery effort for Louisiana. Ms. 
Fraiche practices law as a member of the Health Care and Public 
Policy Department in New Orleans, Baton Rouge, and Washington. 
She has recently served as Chair of the Board of Trustees at 
Loyola University. She is the treasurer of the Louisiana 
Supreme Court Historical Society, and she has given numerous, 
untold hours to this recovery.
    Ms. Fraiche, we appreciate you being here.
    Our next panelist is the Hon. John Tommy Longo from 
Waveland, Mississippi. Mayor Longo is a lifelong resident of 
the great city of Waveland, of about 10,000 before the storm. 
He attended St. Stanislaus High School and then studied 
business at Pearl River and Mississippi College. He lived 
through the storm in Waveland with his family and has an 
amazing story of survival and recovery to tell. He will tell 
part of that today.
    Thank you, Mayor, for being with us and for your bravery 
and your help.
    Dr. Ed Blakely is the Executive Director of Recovery 
Management of the City of New Orleans, basically recently on 
board, I think for the last 6 months. But he comes with a long 
history of urban and community planning and regional 
development, most recently chairing the Urban and Regional 
Planning and Director of the Planning Research Centre at the 
University of Sydney. Prior to that he was Dean of the Graduate 
School at the New School's University; and worked very closely, 
Senator Stevens, with our former colleague, Bob Kerrey, who 
gave very glowing compliments. He previously served as 
Professor and Chair of the Department of City and Regional 
Planning at the University of California at Berkeley and has 
helped with the recovery on the West Coast and also in New 
York.
    We thank you, Dr. Blakely, for joining us.
    Ernie Broussard is a good friend from the western part of 
the State, from Cameron Parish. Mr. Broussard has been 
directing the efforts of the revitalization, and he chairs the 
Cameron Parish Planning and Development Authority. He has a 
degree in planning and urban design from the University of 
Southwest Louisiana, and he has given some excellent help over 
the last 18 months to that region. He has over 30 years of 
experience in government, capital project management, land use 
administration, and the parish and the region could not have a 
better person on than Mr. Broussard. Plus he is actually a 
Cajun cowboy, leads the annual rodeo and roundup, and I have 
been to rounding up with him before.
    And it is good to see you, Mr. Broussard, and thank you for 
being here.
    Ms. Fraiche, why don't we start with you.

TESTIMONY OF DONNA D. FRAICHE,\1\ CHAIRMAN, LONG-TERM COMMUNITY 
       PLANNING TASK FORCE, LOUISIANA RECOVERY AUTHORITY

    Ms. Fraiche. Thank you very much. Madam Chairman, Senator 
Stevens, and Members of the Subcommittee, my name is Donna 
Fraiche. I am a long-time resident of New Orleans, Louisiana. I 
have nearly 50 family members, some even on the Mississippi 
Gulf Coast, that were directly affected by the storms, and I 
have the house that everybody is coming to. But I think I am 
the only one here on the panel today not being paid to be here. 
In my other life, I do have a law practice sometimes.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Fraiche appears in the Appendix 
on page 70.
---------------------------------------------------------------------------
    Thank you so very much for inviting me to speak on behalf 
of the Louisiana Recovery Authority, more commonly known as the 
LRA, about the progress of our recovery and the long-term 
challenges Louisiana is facing in the aftermaths of these 
hurricanes--Katrina and Rita, the two most catastrophic and 
costly disasters in American history.
    In October 2005, the LRA was established by executive order 
of the Governor of the State of Louisiana, Kathleen Blanco, to 
plan and coordinate recovery efforts and special funding in the 
aftermath of these catastrophes. The legislature later codified 
the work of this body, and I chair the Long-Term Community 
Planning Task Force.
    The commitment is to rebuild Louisiana safer, stronger, 
smarter. That is our litmus test by which we measure this 
important work. I want to personally thank the Members of this 
Subcommittee who have traveled far to Louisiana to witness 
firsthand the magnitude of the disasters. I would also like to 
express our sincere gratitude to Congress and the American 
people for their unprecedented generosity. Congress has 
appropriated $110 billion to help the five States hit by the 
hurricanes in 2005, and we estimate roughly $59 billion in 
Federal hurricane response that has been allocated to 
Louisiana. However, most of these funds went to pay for 
emergency response and contractually obligated flood insurance 
payments to policyholders. We are thankful for the estimated 
$26 billion that has been allocated to the State to help us 
rebuild homes and our fiscal infrastructure, but it is 
important to put that number in perspective as the GAO 
suggested.
    Hurricanes Katrina and Rita, exacerbated by the failures of 
the Federal levee systems, which flooded an area 9 times the 
size of Washington, DC, caused an estimated $100 billion in 
damages to homes, properties, businesses, and infrastructure in 
Louisiana alone. Congressional appropriations were about $26 
billion, but our families and businesses have received $40 
billion in insurance payments compared to $100 billion in 
physical damages, and that leaves us with a hole of $35 billion 
as a gap necessary to rebuild South Louisiana. Put another way, 
it is about $20,000 per household in the State of uncovered 
losses.
    We sustained 77 percent of the Gulf Coast total housing 
damage, 22 parishes across South Louisiana were declared 
disasters, impacting 2 million people.
    But you have called today's hearing to focus on the 
progress of this recovery and the long-term challenges. Let me 
address that. It would be foolish to ask for Federal assistance 
without a visionary plan for recovery and implementation.
    In an effort to turn this tragedy into opportunity, 
Louisiana has embarked on one of the most ambitious and dynamic 
planning efforts in our Nation's history. From the ground up, 
this combines efforts of local, State, and Federal partners 
along with experts, stakeholders, and citizens in a 
comprehensive, long-term planning known as ``Louisiana 
Speaks.'' Unlike most other LRA programs, this was funded 
almost entirely through donations of private citizens and 
national philanthropic organizations raised through the 
Louisiana Recovery Authority support foundations. With this we 
hired a ``dream team'' of top professional planners and 
architects to develop best practice resources to support the 
planning and redevelopment for individuals, neighborhoods, 
parishes, and regions.
    Through Louisiana Speaks, tens of thousands of citizens 
across South Louisiana, including those that are still 
displaced, were asked and their voices were heard. 
Acknowledging this immense planning task at hand, the State and 
the LRA began working with FEMA to establish long-term 
community recovery teams in order to address parish-level 
recovery, with supporting implementation of prioritized 
recovery projects by setting aside $200 million in CDBG 
flexible funds currently available to the State.
    Additionally, the board has stated its intention to expand 
these allocations by $550 million if we could just get that 10-
percent FEMA match waived.
    In addition, funding for these purposes will be one step 
closer to ensuring sustainable long-term recovery for local 
communities, and to give you an example, the LRA helped to 
secure funding from the Rockefeller Foundation to create a 
citizen-driven, grass-roots plan for the entire city of New 
Orleans, know as UNOP, and we are working closely with Dr. 
Blakely to implement that plan.
    We also put together pattern books used by the architects, 
the contractors, and citizens for approximately 100,000 people 
in the State and tool kits free of charge on how to plan.
    Mother Nature wiped out entire communities where I grew up, 
including St. Bernard, but there is a silver lining to these 
events in that the destruction provided us the opportunity to 
locate and identify where to rebuild safer and smarter.
    We had an extensive public outreach to engage citizens in 
development of this vision. In fact, we did paper ballots we 
distributed to individuals all over the area and outside in 
many of the States where we focused on five key recovery 
planning questions, spanning economic development, coastal 
recovery, growth land use patterns, and risk management 
property rights. This is the largest and most inclusive 
regional planning outreach ever conducted in the United States, 
and we have gotten tens of thousands of responses--mandates, as 
it were, for public policy. This includes ballots from 
displaced residents in 32 different States. The response rate 
was even better than after September 11, 2001, where New York 
received 2,000 responses.
    A team of national experts, local planners, and we hope 
elected leaders of the future are now using this data to create 
a consensus-based vision for South Louisiana, which will be 
released and delivered to Congress in May 2007. And to make 
this long-term vision a reality, we set aside $50 million in 
CDBG funds for regional investment projects. But, again, if 
Congress appropriates additional funds or waives the 10-percent 
FEMA match requirement, this board has made its intentions 
clear that it would use a portion of that additional funding to 
increase the allocations to the separate regional investment 
pools.
    There are three areas where you can make this happen, if I 
could go very quickly and give you those, Senator Landrieu.
    First, Congress needs to waive that 10-percent match in 
FEMA's Public Assistance. This process is choking us with red 
tape associated with the monitoring and oversight required by 
two Federal agencies--FEMA and HUD--for 20,000 separate 
construction projects. If nothing changes, we are forced to 
produce nearly 2.6 million documents--that is documents, not 
pages--in order to comply with dual Federal paperwork 
requirements. We offer a solution to this problem in a global 
match, but so far our recommendations have not been heeded. A 
Federal waiver could cut the red tape in half and allow our 
State to invest some $700 million in CDBG funds and other 
critically needed recovery programs.
    Second, Congress needs to direct FEMA to approve our use of 
hazard mitigation funds in support of the Road Home Program 
that was required by Chairman Powell or transfer the funds to 
HUD where they can be directly used. The State did not want to 
use these monies in this way, but we were told that because of 
the law, because of the regulations, this was the only way that 
we could use that funding. As of today, FEMA, after exhaustive 
negotiation, has been unwilling to approve nearly $1.2 billion 
of funding that is desperately needed for the Road Home 
Program. If we cannot reach an appropriate agreement on this 
funding, there will be a tremendous shortfall.
    Finally--and I do mean finally--I would like to request 
that Congress take immediate action to address the 
disproportionate distribution of recovery aid. Our State 
received almost 80 percent of the damage, yet time and again, 
we have received less than our proportional allowance, and 
examples are numerous. They are in the written testimony. I can 
go through the numbers of colleges, schools, hospitals that 
were impacted because of the massive amount of space that we 
are dealing with, geographic region we are dealing with, and 
population. And that is why there is a difference between 
Louisiana and Mississippi. These are, as Chairman Powell said, 
very different storms that affected--the same storms affected 
different places in different ways. We have 64,000 people in 
the State of Louisiana still calling FEMA trailers ``home'' 
every night, yet FEMA has denied our repeated requests to take 
this into account.
    Louisiana must pay 10 percent of its cost share. We talked 
about the fact that in every other disaster it has been waived, 
including September 11, 2001.
    So, in closing, in order to truly realize and implement 
these citizen-driven long-term plans, we cannot afford letting 
bureaucratic road blocks stand in the way. We must identify 
these problems. We must address them immediately. And I ask you 
to seriously consider the solutions we have proposed to this 
Subcommittee today.
    Thank you so very much.
    Senator Landrieu. Thank you very much. Mayor Longo.

    TESTIMONY OF HON. JOHN THOMAS LONGO,\1\ MAYOR, CITY OF 
                     WAVELAND, MISSISSIPPI

    Mr. Longo. Thank you very much. I want to thank you for 
this opportunity to speak to this Subcommittee. I also want to 
take this opportunity to thank the House and the Senate as a 
whole for their support since Hurricane Katrina. Also, in all 
of your areas, the tremendous support we have received from 
faith-based foundations and groups from around this country. I 
don't know what we would have done in Waveland and on the 
Mississippi Gulf Coast if it would not have been for the help, 
and we still to this day need their continued help.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Longo appears in the Appendix on 
page 104.
---------------------------------------------------------------------------
    We had a coastwide charette that the governor sponsored to 
come up with a plan, and we had world-renowned architects and 
engineers that came to the coast. Waveland participated in that 
early on. We also brought those world-renowned architects and 
engineers and matched them with our own local architects and 
engineers and came up with our own local plan in Waveland. We 
brought them there for a week-long, intensive workshop with our 
community that was very well attended by our citizens that had 
returned home by that time.
    There have been many positives across the State because of 
the Federal support that we have received, but there are many 
areas such as Waveland, Bay St. Louis, Pass Christian, and 
Hancock County that are still critical, critical areas and 
still emergency disaster zones. We continue to need that 
declaration of emergency.
    A little over 50 percent of our population has been able to 
return home. Fifty percent of those individuals, those 
families, are still living in FEMA trailers. That creates 
problems in itself. We all know that those FEMA trailers were 
not meant to be called ``home'' for long. Being in there for 
going on 2 years has caused great problems and overloads for 
our law enforcement, our cities, our mental health 
infrastructure, our schools, our churches, and our families. It 
has just continued to cause problems, as it has been prolonged, 
and it is going to continue to build, and the problems are 
going to get worse before they get better, I am afraid.
    It was such a catastrophic event, and there is such total 
destruction. Everything seems to be tied together. We had such 
total loss in Waveland. The first 5 miles coming inland was 
just basically wiped off the map. We had 100 percent of our 
water and sewer infrastructure destroyed, 100 percent of our 
buildings were destroyed. In order to even bring families back 
to live in FEMA trailers, you had to have water, sewer, and 
power there. So we needed help just to be able to piece those 
systems together until we could come up with the Project 
Worksheets for the long term and get those done. Even the FEMA 
engineers in the field said that we would be lucky if we could 
piece those sewer and water systems together for 3 months. That 
was back in September 2005. We just got the first phase 
approved by FEMA to begin with the replacement of the 100-
percent destroyed sewer system this month. And they have had it 
for almost 5 months. They already have the second phase in 
their hands to get that approved.
    It has been a problem that we have run into with the 
Project Worksheets. We have over 151 to date in the city of 
Waveland. We have close to $200 million worth of Project 
Worksheets. And with the continued rotation of personnel every 
3 months or so and there being nobody on the ground, as Mr. 
Powell mentioned earlier, that can make decisions, and we found 
out, unfortunately, in doing the Project Worksheets and asking 
questions or getting variances in those worksheets and having 
it signed off on paper, being told 6 months later that we had 
to pay back the money we had received because it was not worth 
the paper it was written on, yet this was a person that was 
being called a specialist. So who do we--we have to listen to 
someone, and so we have been told time and time again to follow 
the CFR. We certainly do not have a problem with that. We 
understand the CFR very well, except that there are problems 
with the CFR that just do not match or do not meet a 
catastrophic event of this size.
    Senator Landrieu. Mayor, one more minute.
    Mr. Longo. One of them has already been mentioned, the 10-
percent match that we have to come up with. Ninety-eight 
percent of our residential structures and our commercial 
structures were substantially destroyed. We have no economy, so 
we had to build back an economy. In order to build back the 
economy, we needed to get the infrastructure in place. In order 
to do that, we needed to have labor and personnel come back. 
So, again, it is all tied together. So a waiver of that 10 
percent.
    Senator Landrieu. Mr. Mayor, can you wrap up in 30 seconds?
    Mr. Longo. Yes, ma'am. Also, on the mitigation grants, 
there is a 25-percent match that is needed there. All of the 
buildings--and we lost 100 percent of our buildings--need that 
25-percent match so that there can be some help there.
    Finally, one of the areas that's holding back the 
rebuilding, residents coming back and rebuilding, of course, is 
insurance and getting the CDBG grants into the hands of the 
personnel, the people that need it, the end users, the cities 
at the end. And there are numerous areas where we could use 
help.
    The community disaster loans, I know you have talked about 
that, the possibility of Federal forgiveness in that area, 
those are going to begin to come due for all the cities and 
communities in Mississippi and Louisiana.
    So I will go ahead and wrap up there. Thank you.
    Senator Landrieu. Thank you, Mr. Mayor. Thank you very 
much.
    And let me remind everyone that we are going to have a 
round of questions, so we will get to come back to some of 
these points and go over them. Dr. Blakely.

TESTIMONY OF EDWARD J. BLAKELY,\1\ EXECUTIVE DIRECTOR, RECOVERY 
                MANAGEMENT, CITY OF NEW ORLEANS

    Mr. Blakely. Thank you, Senator Landrieu and Senator 
Stevens. It is really a pleasure to be here. It is unfortunate 
I have been in four such disasters, including riots, 
earthquakes, and fires, and terrorist attack. So I have seen it 
all, basically, and I think what I would like to focus on is 
some of the things Senator Stevens talked about: How do we 
prepared in advance rather than try to deal with it afterward? 
My testimony is fairly complete on what we have experienced.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Blakely appears in the Appendix 
on page 106.
---------------------------------------------------------------------------
    I think we have to understand here that we are not dealing 
with a disaster in a city. We are dealing with the total 
destruction of a city. We have not had to deal with that in 
this country. We certainly dealt with it in the Second World 
War overseas, and we used a very different process.
    It is important to understand that the rebuilding process 
is a rebuilding process and not a reconstruction process. It 
means you have to start over. And Donna Fraiche has already 
mentioned the fact that we have engaged in a planning process 
that has very different ways of doing business. And without the 
resources to do that, we cannot complete that task.
    We need the Stafford Act to understand that there is a 
difference between a disaster and a catastrophe, and I think 
you have mentioned that yourself, Senator. A catastrophic 
requires the restoration of all services, the redesign of your 
entire emergency network, and the development of different 
public assistance programs. These things should be thought of 
in advance, not at the time of the disaster, or your chances of 
recovery are much less.
    So I applaud Senator Stevens for having thought about this, 
and I think the States would be prepared to engage in that, but 
that will require some critical front-end funding.
    In addition to that, we have to look at what has been done 
and what lessons we can learn from that. In the case of the 
Corps of Engineers, we have to start looking at providing them 
with enough data, information, and dollars so they can do 
projections better than they have done in the past, and the 
systems have to be designed so they can meet those projections.
    We have to think about reforming, altering, or changing 
FEMA's mission for rebuilding and perhaps even a different 
agency that might operate out of HUD, which is a building 
agency versus a disaster agency.
    The 10 percent, I will echo with everyone else, should be 
forgiven, but even waiving the 10 percent does not give you any 
money for a reimbursement program. A reimbursement program 
assumes you have an economy to reimburse something from. So in 
the cases of the two previous witnesses, I agree with them on 
the 10 percent, but there should be a forward-funding program 
so that people can begin the process, rebuild their economy, 
and then be reimbursed.
    Finally, CDBG should be made far more flexible that 
programs should be funded and not projects, programs for 
rebuilding. A patchwork of projects will never lead to a full-
fledged rebuilding. So there has to be flexibility, there has 
to be strong will, and there has to be cooperation, and I 
applaud Don Powell for his attempts to bring those things, but 
legislation will be required so they happen.
    Thank you.
    Senator Landrieu. Thank you, Dr. Blakely. Mr. Broussard.

  STATEMENT OF ERNEST BROUSSARD, JR., AICP/CEcD,\1\ EXECUTIVE 
  DIRECTOR, CAMERON PARISH PLANNING AND DEVELOPMENT AUTHORITY

    Mr. Broussard. Madam Chairman, Senator Stevens, it gives me 
great pleasure to be here and to speak on behalf of the general 
citizenry of Cameron Parish in southwest Louisiana. What we had 
prepared for you chronicles a somewhat stellar list of 
responses to your inquiries for our presentation today. I want 
to surmise, however, that in the spirit of time and brevity, 
you have heard our discussions on the 10-percent match. You 
have heard our discussions on the insurance, and on the 
inflexibility of some of our Federal agencies.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Broussard appears in the Appendix 
on page 113.
---------------------------------------------------------------------------
    I want to thank Senator Landrieu for a Herculean effort for 
keeping Rita on the agenda. We do not want to downplay the 
importance or the magnitude of Hurricane Katrina and what 
happened in southeast Louisiana. However, we had another 
Category 5 event that will ultimately be surmised as magnitude 
in the history of the parish. Eighty percent of our industrial 
tax base, three-quarters of the population, not to mention 
25,000 head of livestock perished in that event.
    However, our parish is recovering. We are clean. We have 
removed debris, and we are energizing and re-gentrifying our 
parish, platform by platform, structure by structure. But we 
are, however, having significant challenges.
    Now, Cameron Parish has elected to engage in a strategic 
planning effort that is more deliberate and probably more 
profound than the recovery of the US-14 that envisioned. That 
is our challenge, Senator. We can ill afford to talk about 
recovery without looking at remodeling. The problem with our 
FEMA standards, the problem with working with CDBG--and I do 
not want to undermine the importance of having that money 
available to us. But the models that are necessary for full 
recovery, when you have a disenfranchised population, a 
disenfranchised socioeconomic structure, does not work in a 
typical application. Those are the things that we need to do, 
and we will chronicle those issues under the governance of our 
master plan, for Cameron Parish, Cameron Square, Calcasieu 
Pass, related bridgeworks, of course, re-gentrification of our 
housing, are being met first by the local community where we 
feel that tax increment financing packages, the restructuring 
of our budget, not to mention some advanced tax payment by 
local industry is what we are doing to help ourselves first, 
and I think Secretary Powell mentioned that is the first 
cornerstone in recovery when a community is willing to come up 
and commit itself.
    However, to partner with my colleagues at the podium, the 
current situation involving the design and implementation of a 
public assistance program and the PWs foundered miserably for 
us, whereas each PW represents anywhere from 30 to 50 percent 
below what it would have been to replace the structure as is. 
Most of us involved with recovery--and I think Dr. Blakely 
touched on that--you did not rebuild as you were. You have to 
come up to current-day standards. You have to come up with 
present-day techniques.
    Our challenge is to encourage repopulation of our 
communities with the advent of increased elevations, increased 
insurance, some of which insurance claims have not been 
completed to date; increased building codes, and knowing full 
well that with the completion of that construction we will be 
looking at a 30-percent higher building cost as well as 
insurance premiums.
    Overall, we want to thank the Federal Government and, 
Senator, your involvement in our recovery. But knowing now that 
the mission of southwest Louisiana is very prominent in energy, 
homeland security, defense, and, of course, coastal 
restoration, we feel that modifications that we have chronicled 
in our written statements are going to be paramount to you in 
that regard.
    In closing, I would like to just remind everyone that 
Cameron Parish is still very much critical to southwest 
Louisiana. We are crucial to Louisiana, but we are essential to 
America because we represent significant energy, homeland 
security, and environmental status. Thank you, Senator.
    Senator Landrieu. Thank you, Mr. Broussard.
    Let me add to that testimony. I have recently visited 
Cameron Parish, Senator Stevens, and you will be particularly 
happy to know, because you are a leader on energy, that 
literally within about a 50-mile radius of Cameron, there are 
the largest liquefied natural gas facilities in the Nation, 
which would be in southeast Texas and southwest Louisiana, for 
a number of reasons. These parishes and counties are the only 
ones giving permits. People have the technology and the 
information to build them and the willingness to build them. So 
while this is a rural parish, it is not a non-important parish 
for our State or for the country.
    Mr. Broussard. Exactly, Senator. I would like to just close 
that statement. At the end of the day, when the water recedes, 
Cameron Parish will represent 25 percent of the Nation's daily 
demand in liquefied natural gas. Between its four major LNG 
plants and the nine processors, pipeline processors that are 
there, clearly we have a platform in the energy theater of this 
Nation as well as we are the portal to a $300 billion 
petrochemical industry, and the barrier island to three major 
watersheds--the Mermentau, Sabine, and the Calcasieu.
    Thank you for your comments on that, Senator.
    Senator Landrieu. OK. And I have a few questions, and then 
I am going to turn to Senator Stevens, and then we will wrap up 
in just a few minutes.
    Each of you mentioned in your testimony these Project 
Worksheets. Would you each take 30 to 45 seconds, and talk 
about the weaknesses of this Project Worksheet relative to what 
you are each doing? One of you is rebuilding a small city, one 
of you is rebuilding a big one, one of you is rebuilding a 
parish. And, Ms. Fraiche, you are trying to rebuild the whole 
southern part of the State.
    So could you just give 45 seconds to these 23,000 Project 
Worksheets that we have?
    Ms. Fraiche. Thank you so much. Well, without the global 
match, I can tell you, without the waiver of the FEMA matching 
cost, that paper keeps piling up, because with the Project 
Worksheets, there is a requirement from FEMA--and these have to 
be FEMA related projects, but with CDBG it is a different set 
of worksheets. So you have to decide which projects you are 
going to submit under the Project Worksheets, which projects 
you are going to submit under the CDBG project.
    The CDBG projects, it is at least 2,680 required documents 
that are needed for each specific project.
    Senator Landrieu. Would you repeat that?
    Ms. Fraiche. It is 2,680 required documents. These are not 
just pages.
    Senator Landrieu. Documents for each?
    Ms. Fraiche. Of 20 CDBG projects, which are Community 
Development Block Grant projects, like infrastructure projects. 
But if you are doing it on an individual project basis, a 
school or a utility system or a particular fire hydrant, as it 
were, it could take 2,680,000 documents, not pages. So it is 
two separate submissions for the same project, just the 
paperwork.
    Senator Landrieu. Now, with that testimony, I would just 
like the audience to get in their mind trying to rebuild Europe 
with this system. I guess in our lifetime, rebuilding Europe 
after the Second World War comes closer to what we are tasked 
to do here. It might not be exact, and I realize it was a war, 
not a catastrophe. And it was international; this is one area. 
But it just gets us to really think beyond where we are.
    Mr. Mayor, your 45 seconds?
    Mr. Longo. Yes, ma'am. There is also different breakdowns 
in the Project Worksheets. There are small projects; there are 
large projects. The large projects like for buildings tend not 
to be real close to what the real cost is. As a matter of fact, 
one of the other panelists alluded to that. Say it is a 
building that is going to cost $400,000, but the worksheet, 
they kind of figure that because we are dealing with slabs, 
figure it at $300,000. And the gentleman that we were working 
with that was overseeing it, the Public Assistance gentleman, 
did not understand why we wanted to be so--why we were so 
insistent that they get us close to the real cost, because when 
that building is truly built, as they were mentioning earlier, 
it is 30 percent more. We are going to have to float that 
money. Somebody has got to pay the cost or the contractor is 
going to have to cover it or carry it over. But what is going 
to truly end up happening is the city is going to have to carry 
that difference.
    We do not have that difference to carry. We are already 
having a problem coming up with the 10 percent. To add another 
$100,000 or $200,000 or $300,000, and then there is the PWs, 
and I will finish with this. The PWs for equipment, we lost 
every piece of equipment, and there is no benefit or anything 
to where if you maintained equipment very well, if you had a 
motor grader, that may cost $100,000 on the market today, but 
it was 5 years old, as an example that I have, and it was well 
maintained, it was well running. So you continue to use it, 
continue to get the best use out of taxpayer dollars. You 
probably are only going to get a couple hundred dollars for 
that piece of equipment. So we cannot replace equipment based 
on the Project Worksheet.
    Senator Landrieu. The cities cannot even re-buy work 
trucks, pick-up trucks, or tractors.
    Mr. Longo. Fire trucks.
    Senator Landrieu. To start building their cities if they 
wanted to. Dr. Blakely.
    Mr. Blakely. Well, I just wanted to comment on that, that 
if a piece of equipment is old, it has been depreciated to 
almost nothing, but it is still in a working state. So you have 
really got a problem if you get $25 for an automobile. What can 
you buy?
    I just want to mention some other things here. One of them 
is the turnover of FEMA staff. Since I have been in the city, 
in 4 months we have had three turnovers of essential staff. So 
even though Don Powell helped us very much, some of the 
projects he helped us get in have been turned over, de-
obligated, by new people. So even his work is undermined by 
FEMA's turnover. I think it is very important that the person 
who starts the job finishes the job.
    Second, we have many FEMA worksheets prepared on four 
stories of a five-story building. The first story was 
underwater when the worksheet was prepared. As a consequence, 
we have underestimated--not just underestimated. We have 
underestimated the essential infrastructure.
    Finally, sometimes the power system was in the basement. 
FEMA will pay to put it back in the basement, but not on the 
roof. It does not make much sense, does it?
    Senator Landrieu. No, it does not. Mr. Broussard.
    Mr. Broussard. Madam Chairman, I want to thank you for 
giving me 45 seconds that I could speak the rest of the 
afternoon on. [Laughter.]
    But I would like to tell you, out of our 434 Project 
Worksheets that are active today--and that is for equipment, 
infrastructure, and, of course, buildings--our PWs are running 
anywhere from 30 to 40 to even sometimes 50 percent 
underwritten by the original FEMA staff. Regrettably, there is 
no one to hold accountable because of the changeover that Dr. 
Blakely mentioned.
    Now, you take a facility that already has a PW that is 
underwritten, then you add the insurance penalties and the 
increased construction costs, which in an area of recovery runs 
anywhere from 25 to 40 percent because of the difficulty to get 
materials and contractors. Then to add to the 10 percent that 
you have to find to augment that, it puts communities that are 
already distressed in a foundered position. And until we are 
able to monitor that and change some of the socioeconomic 
standards that are identified in both HUD and FEMA regulations, 
cities will continue to founder as they try to recover.
    Senator Landrieu. Senator Stevens, do you have some final 
questions?
    Senator Stevens. Madam Chairman, I was just sitting here 
thinking about some of the things that we have done, and I 
appreciate your comments, Dr. Blakely. When we had a gigantic 
flood in the central part of Alaska, Fairbanks, about 50 square 
miles flooded. We and the State Legislature had to figure out 
what to do, and we decided we would pay the community the taxes 
for every facility that had been harmed, they were 
substantially destroyed. And they used that money to start the 
restoration of the streets and the sewers and waterways. And we 
agreed that anyone that would sign their contracts to start 
rebuilding their place before a specific date, the money the 
State paid would be equivalent of them paying their taxes 2 
years in advance.
    The net result was that the infrastructure for rebuilding 
the local community, the streets, the highways, streets and 
sidewalks and sewers and whatnot, that equipment came in to 
meet those contracts, and with the local people it enabled 
them, through loans to buy that equipment, and it all started 
rolling because one thing started working.
    I get the feeling that the area I saw, as I said, which is 
more damage than anything I have ever seen, except for China 
during World War II, the impact of what I am hearing is there 
has not been any starter dollars.
    Mr. Blakely. That is right.
    Senator Stevens. You have not had the ability to start 
somewhere.
    Mr. Blakely. We have not had start-up dollars.
    Senator Stevens. To restore the private enterprise, get the 
local contractors, get the housing people, get the money for 
the people to start bringing in building material, etc., but do 
it in on a private sector basis and find a way to stimulate the 
restoration of the private sector in order to start the 
rebuilding process from within your own community.
    I am worried about the 10 percent match. That obviously 
should have been waived a long time ago. And it should be 
waived. But it should be waived conditioned upon some 
commitment of the people who are going to have their homes and 
buildings, etc., restored entering into some agreement to pay 
back something. That does not seem to be a key here in terms of 
getting these things going, and I do not know whether it is a 
failure of our Federal system or a failure of the process we 
are dealing with. But the New Orleans I saw was really a series 
of associated small areas that were united into New Orleans. 
They were just like Los Angeles, several different cities just 
absorbed by the metropolis that continued to expand.
    I do hope there is some way to divide this and get some 
areas going so that the basic systems can start rebuilding, and 
from that will flow a lot more cooperation with the Federal 
assistance if it can be done. But we do have to do a lot to 
find some way to get a key to this area and have it rejuvenate 
much faster than previously from the testimony we heard this 
afternoon it is going to happen. I do not know what it is. I do 
think we ought to have some sort of a meeting sitting around a 
table here with some of these people from the area and the 
Federal assistance to see if we cannot find some ways to start 
the process working again.
    I hope that we can work together.
    Mr. Blakely. Could I just mention two keys to what you just 
suggested? Because I think it is important. I was in two rich 
States--California and New York--where the money was available 
to kick-start the process. And Alaska is a relatively rich 
State. Louisiana is not. And let's just be frank. We did not 
have that kind of money available to kick-start our own 
recovery.
    It could be that we did much like the disaster loans, make 
a loan to the State, a significant loan to the State, requiring 
us to pay it back over some period of time to kick-start our 
recovery rather than a reimbursement program, which depresses 
our economy.
    Senator Landrieu. That is an excellent idea, and, 
unfortunately, our time is short because, as Mr. Broussard 
said, we could spend all afternoon on these and hundreds--go 
ahead. Senator Stevens is going to run. We thank him very much.
    As we conclude this first hearing, please rest assured that 
this Subcommittee is committed to work week after week after 
week, month after month, year after year, until we get this 
right. It is not working in Waveland, it is not working in New 
Orleans, it is not working in Cameron--and not because the 
people at this table are not putting their best foot forward, 
and it is not because some people up here are not putting their 
best foot forward. It is the system that we are operating under 
is not flexible, bold, strong, or large enough to get the job 
done. And despite all of the good work of individuals, of the 
faith-based community, and of the government acting within 
these constraints, obviously we have a problem if 18 months 
after a storm in the city of Waveland, which is not a big place 
but it is an important place--it is your place, Mr. Mayor. It 
is a place a lot of us know well--cannot get their sewage 
system established 18 months after a storm.
    So I ask you, if you do not have a sewer and water system, 
how do you have houses, schools, hospitals, businesses--large, 
small--or manufacturers? Now, this is America in 2007. I think 
we need to think about how we get a sewer system up faster than 
18 months after one is destroyed. And if we can do that, then 
maybe we can rebuild New Orleans, Cameron, America's energy 
coast.
    But I challenge those listening to this hearing and the 
staff here. We can pat ourselves on the back all day long, talk 
about what great work we do. But the system is not working for 
the people that we are elected and appointed to serve. And we 
have got to change it. This Chairman is committed to that 
reform and change.
    I thank you all for joining me today, and the meeting is 
adjourned--oh, I am sorry. Ernie, you wanted to--Ernie wants to 
make a presentation. We will stop for one minute. Ernie, come 
on. You can make a presentation to me. You all better hold on 
because you want to see this.
    Mr. Broussard. Senator, can they hear us?
    Senator Landrieu. They can hear us, I think.
    Mr. Broussard. Ladies and gentlemen, in the spirit of 
southwest Louisiana and our recovery efforts, we have a very 
unique and very embryonic community. We are very heavy in 
coastal restoration, marsh recovery, and, of course, wetland 
maritime. But to commemorate the return of our citizenry back 
to southwest Louisiana, we put on an inaugural cattle drive. We 
lost about 20,000 head of cattle throughout the storm, but we 
brought them back. And with the cattle we brought back our 
leaders in both Washington and Baton Rouge. Our governor was 
there. Quite frankly, our Senator is a very accomplished rider.
    Senator Landrieu. Thank you. I did not fall off.
    Mr. Broussard. To assist her in not only dealing with FEMA, 
Homeland Security, and our other legislators, we wanted to 
install a memorial set of spurs for the Senator.
    [Applause.]
    Senator Landrieu. For FEMA, right. We are going to spur 
them on to better work. Thank you all very much.
    Mr. Broussard. Thank you, Senator.
    Senator Landrieu. The hearing is adjourned.
    [Whereupon, at 3:54 p.m., the Subcommittee was adjourned.]



























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