[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]



                           FINAL BREAKTHROUGH
                         ON THE BILLION DOLLAR
                         KATRINA INFRASTRUCTURE
                       LOGJAM: HOW IS IT WORKING?

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

                                (111-63)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
    ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 29, 2009

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure







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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                 JAMES L. OBERSTAR, Minnesota, Chairman

NICK J. RAHALL, II, West Virginia,   JOHN L. MICA, Florida
Vice Chair                           DON YOUNG, Alaska
PETER A. DeFAZIO, Oregon             THOMAS E. PETRI, Wisconsin
JERRY F. COSTELLO, Illinois          HOWARD COBLE, North Carolina
ELEANOR HOLMES NORTON, District of   JOHN J. DUNCAN, Jr., Tennessee
Columbia                             VERNON J. EHLERS, Michigan
JERROLD NADLER, New York             FRANK A. LoBIONDO, New Jersey
CORRINE BROWN, Florida               JERRY MORAN, Kansas
BOB FILNER, California               GARY G. MILLER, California
EDDIE BERNICE JOHNSON, Texas         HENRY E. BROWN, Jr., South 
GENE TAYLOR, Mississippi             Carolina
ELIJAH E. CUMMINGS, Maryland         TIMOTHY V. JOHNSON, Illinois
LEONARD L. BOSWELL, Iowa             TODD RUSSELL PLATTS, Pennsylvania
TIM HOLDEN, Pennsylvania             SAM GRAVES, Missouri
BRIAN BAIRD, Washington              BILL SHUSTER, Pennsylvania
RICK LARSEN, Washington              JOHN BOOZMAN, Arkansas
MICHAEL E. CAPUANO, Massachusetts    SHELLEY MOORE CAPITO, West 
TIMOTHY H. BISHOP, New York          Virginia
MICHAEL H. MICHAUD, Maine            JIM GERLACH, Pennsylvania
RUSS CARNAHAN, Missouri              MARIO DIAZ-BALART, Florida
GRACE F. NAPOLITANO, California      CHARLES W. DENT, Pennsylvania
DANIEL LIPINSKI, Illinois            CONNIE MACK, Florida
MAZIE K. HIRONO, Hawaii              LYNN A WESTMORELAND, Georgia
JASON ALTMIRE, Pennsylvania          JEAN SCHMIDT, Ohio
TIMOTHY J. WALZ, Minnesota           CANDICE S. MILLER, Michigan
HEATH SHULER, North Carolina         MARY FALLIN, Oklahoma
MICHAEL A. ARCURI, New York          VERN BUCHANAN, Florida
HARRY E. MITCHELL, Arizona           ROBERT E. LATTA, Ohio
CHRISTOPHER P. CARNEY, Pennsylvania  BRETT GUTHRIE, Kentucky
JOHN J. HALL, New York               ANH ``JOSEPH'' CAO, Louisiana
STEVE KAGEN, Wisconsin               AARON SCHOCK, Illinois
STEVE COHEN, Tennessee               PETE OLSON, Texas
LAURA A. RICHARDSON, California
ALBIO SIRES, New Jersey
DONNA F. EDWARDS, Maryland
SOLOMON P. ORTIZ, Texas
PHIL HARE, Illinois
JOHN A. BOCCIERI, Ohio
MARK H. SCHAUER, Michigan
BETSY MARKEY, Colorado
PARKER GRIFFITH, Alabama
MICHAEL E. McMAHON, New York
THOMAS S. P. PERRIELLO, Virginia
DINA TITUS, Nevada
HARRY TEAGUE, New Mexico
VACANCY

                                  (ii)




 Subcommittee on Economic Development, Public Buildings, and Emergency 
                               Management

           ELEANOR HOLMES NORTON, District of Columbia, Chair

BETSY MARKEY, Colorado               MARIO DIAZ-BALART, Florida
MICHAEL H. MICHAUD, Maine            TIMOTHY V. JOHNSON, Illinois
HEATH SHULER, North Carolina         SAM GRAVES, Missouri
PARKER GRIFFITH, Alabama             SHELLEY MOORE CAPITO, West 
RUSS CARNAHAN, Missouri              Virginia
TIMOTHY J. WALZ, Minnesota           MARY FALLIN, Oklahoma
MICHAEL A. ARCURI, New York          BRETT GUTHRIE, Kentucky
CHRISTOPHER P. CARNEY,               ANH ``JOSEPH'' CAO, Louisiana
Pennsylvania, Vice Chair             PETE OLSON, Texas
DONNA F. EDWARDS, Maryland
THOMAS S. P. PERRIELLO, Virginia
JAMES L. OBERSTAR, Minnesota
  (Ex Officio)

                                 (iii)









                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    vi

                               TESTIMONY

Daniels, Stephen, Chairman, Civilian Board of Contract Appeals...     7
Garratt, David, Acting Deputy Administrator, Federal Emergency 
  Management Agency, accompanied by Charles R. Axton, FEMA Lead, 
  Unified Public Assistance Project Decision Team, Gulf Coast 
  Recovery Office, Federal Emergency Management Agency...........     7
Rainwater, Paul, Executive Director, Louisiana Recovery Authority     7
Taffaro, Craig, President, St. Bernard Parish, Louisiana.........     7

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Carnahan, Hon. Russ, of Missouri.................................    58
Norton, Hon. Eleanor Holmes, of the District of Columbia.........    59
Oberstar, Hon. James L., of Minnesota............................    61

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Daniels, Stephen.................................................    65
Garratt, David...................................................    71
Rainwater, Paul..................................................   106
Taffaro, Craig...................................................   114

                       SUBMISSIONS FOR THE RECORD

Daniels, Stephen, Chairman, Civilian Board of Contract Appeals, 
  responses to questions from the Subcommittee...................    70
Diaz-Balart, Rep. Mario, a Representative in Congress from the 
  State of Florida, written testimony from Rep. Steve Scalise, a 
  Representative in Congress from the State of Louisiana.........     4
Garratt, David, Acting Deputy Administrator, Federal Emergency 
  Management Agency, accompanied by Charles R. Axton, FEMA Lead, 
  Unified Public Assistance Project Decision Team, Gulf Coast 
  Recovery Office, Federal Emergency Management Agency, responses 
  to questions and requests for information from the Subcommittee    80
Rainwater, Paul, Executive Director, Louisiana Recovery 
  Authority, responses to questions from the Subcommittee........   112




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FINAL BREAKTHROUGH ON THE BILLION-DOLLAR KATRINA INFRASTRUCTURE LOGJAM: 
                           HOW IS IT WORKING?

                              ----------                              


                      Tuesday, September 29, 2009

                  House of Representatives,
      Subcommittee on Economic Development, Public 
                Buildings and Emergency Management,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 2:00 p.m., in 
Room 2167, Rayburn House Office Building, Hon. Eleanor Holmes 
Norton [Chair of the Subcommittee] presiding.
    Ms. Norton. The Ranking Member is on his way, but has asked 
that I start, so I am pleased to open this hearing and to 
welcome our witnesses to another in a series of hearings our 
Subcommittee is holding to oversee and evaluate the efforts of 
the Federal Emergency Management Agency, or FEMA, as well as 
the effect of State and local governments to proceed more 
rapidly with their work on the long 4-year recovery from 
Hurricanes Katrina and Rita.
    Today we will hear specifically how the new arbitration 
program mandated in the American Recovery and Reinvestment Act, 
as well as hear about how that program operates, as well as 
about other steps that the new leadership at FEMA and at the 
Department of Homeland Security are taking to improve the pace 
and the quality of the recovery efforts in the Gulf Coast.
    At a hearing earlier this year, we were astonished to 
uncover almost $3.5 billion caught in a stalemate between FEMA 
and the State of Louisiana from which neither could extricate 
themselves. Based on today's testimony, as well as on numerous 
meetings and discussions that Members and staff have had with 
officials at all levels of government in the Gulf Coast, it 
appears that progress may have begun since President Obama, 
Secretary Napolitano and Administrator Fugate took office. 
However, it is exasperating to this Subcommittee to have to 
note that many of the improvements now being implemented are 
not new ideas. Some that have been proposed by this 
Subcommittee for 2-1/2 years are just now coming on line.
    During the last administration, FEMA resisted efforts to 
break the logjam, preferring its own traditional devices. 
Seeing little progress 2 years ago, this committee reported 
H.R. 3247, which the House passed in October of 2007, 
encouraging the use of third parties to review and expedite 
public assistance appeals, as well as to simplify procedures 
under which small projects would be permitted to proceed on 
estimates for projects up to $100,000. We passed this bill, 
which also raised the Federal contribution for certain projects 
from 75 percent to 90 percent, not once but twice, as well as a 
similar bill in September 2008. It is unfortunate that the 
Senate was never able to pass this legislation or, for that 
matter, that FEMA did not take from this legislation what 
needed to be done after the House had spoken.
    However, even if the H.R. 3247 procedures permitting third-
party review had been enacted, FEMA appeared unwilling to 
choose an effective third-party process. The past FEMA 
leadership never faced the structural impediments that 
obstructed agreements for the unprecedented Gulf Coast 
disasters.
    Given the huge funding amounts at stake, each State has 
built-in impulses, FEMA to resist approving more than it 
theoretically should and, therefore, to parse its analysis to 
require State responsibility; and the State of Louisiana to 
insist on more funds and urge Federal responsibility in light 
of the State's devastation. Neither side has had much incentive 
or leadership to negotiate with any efficiency or goals except 
for its own caged views. Considering the unprecedented 
challenge of enormous amounts of money and complexity, it 
should have been clear that, without deadlines, the State and 
FEMA would continue to engage in negotiations at will for as 
long as they desired. Now all involved have exhausted the 
available alternatives and are left with a record of 
unnecessarily delayed recovery in Louisiana.
    The residents of that State are suffering through the 
greatest economic crisis most have experienced, an add-on 
crisis because of the so-called "Great Recession," while 
billions of dollars have been left on the proverbial table for 
years, waiting to be spent on the construction of the new 
Charity Hospital and other vital infrastructure. The 
accumulated hardship on Louisiana residents demands immediate 
attention. It is hard to overestimate the hardship that has 
accumulated. Only mandated third-party intervention or 
negotiations on a timeline are left as acceptable.
    As a result of the new arbitration program authorized by 
the Congress in the Recovery Act, FEMA has entered into an 
agreement with the Civilian Board of Contract Appeals, or the 
CBCA, a part of the General Services Administration, which also 
comes under this Subcommittee's jurisdiction. The CBCA's 
expertise in resolving disputes in Federal construction 
contracts should prove invaluable, if fully used, with 
determined leadership and without delay.
    It is unfortunate, indeed, that new legislative language 
has been necessary to get action, particularly since it has 
been clear to the Subcommittee that FEMA had sufficient 
existing authority without new law to implement this or similar 
programs using third-party dispute resolution even before the 
Subcommittee put FEMA-specific dispute resolution into law.
    Even today while the arbitration provision of the Recovery 
Act is mandated for projects exceeding $500,000, nothing 
prohibits FEMA from offering arbitration for smaller projects, 
nor does legislation prevent FEMA from using other types of 
alternative dispute resolution.
    If efficient and timely results are not produced, 
resistance to using time-limited alternative resolution on Gulf 
Coast recovery will not be tolerated by this Subcommittee. For 
example, should simplified procedures permitting small projects 
from $55,000 to $100,000 or a possibly higher figure be 
permitted to proceed based on estimates? During this Great 
Recession, as it has been called, has the usual State match for 
infrastructure construction been affected by congressional 
failure to pass the provision of H.R. 3247 that would have 
raised the Federal match from 75 percent to 90 percent?
    Again, we thank our FEMA representatives, our witnesses 
from the Civilian Board of Contract Appeals, and witnesses from 
Louisiana for preparing testimony today to help the 
Subcommittee better understand how to ensure that the recovery 
efforts in the Gulf Coast continue to improve.
    I am very pleased to ask our Ranking Member Mr. Diaz-Balart 
if he has any opening statement.
    Mr. Diaz-Balart. Thank you very much, Madam Chairwoman. I 
want to thank you for holding this hearing today and for the 
progress made on FEMA's public assistance projects backlog 
related to Hurricanes Katrina and Rita.
    As the Chairwoman knows, as a Representative from a State 
that has, unfortunately, experienced a number of hurricanes and 
storms, I have experienced working with FEMA, have seen some 
great success and also, obviously, some of the delays that may 
have occurred in receiving assistance. We all know that 
addressing the delays in public assistance funding is critical 
in the recovery process following a major disaster like a 
hurricane. Unfortunately, the delays have plagued the recovery 
process in Louisiana and also in other States, frankly, that 
were impacted by Katrina and Rita.
    It has been now 4 years since Hurricane Katrina hit the 
Gulf Coast and devastated parts of Louisiana, Texas, Alabama 
and Mississippi. Since that time Congress has taken a number of 
important steps to strengthen FEMA and to try to ensure that 
Louisiana and particularly in other States impacted by that 
storm can recover. Some steps have been taken. Now, 
unfortunately, delays continue to persist, and obviously a lot 
of work is still undone.
    I want to recognize--and he is on his way here. I know that 
he is flying in now. I want to recognize the efforts of 
Congressman Cao of Louisiana, who has worked tirelessly on this 
important issue, as well as others on this committee.
    At his request the Ranking Member, Mr. Mica of Florida, 
hosted two roundtables involving Members of Congress, FEMA, 
State, and local officials to discuss and find ways in which 
the process, frankly, can hopefully move along much quicker.
    In response to the ongoing delays, FEMA established the 
Public Assistance Project Decision Team to work through many of 
those projects in Louisiana and to work with Louisiana on those 
projects. To date, $7.8 billion has been obligated for public 
assistance projects in Louisiana with over $1.2 billion 
provided since February of this year alone. A new arbitration 
process has been established pursuant to language included in 
the Recovery Act. It is something that the Chairwoman of this 
Subcommittee has been a great leader on and has been pushing 
for.
    The ability of FEMA and State and local officials to work 
through, frankly, issues like eligibility has clearly improved, 
and I think you are seeing that. I think we are all pleased 
with that.
    So, while progress has been made, there are still a number 
of outstanding projects that have yet to be resolved. Some of 
them are larger; some of them are smaller. This, obviously, is 
not an issue that is only important to Louisiana, but to all 
States, particularly to those that may see disasters. We are 
hoping that we never will, but we know that they will be coming 
in the future, disasters like Katrina, Florida being one of 
those, but any State on the coast is subject to those.
    The project-by-project process for public assistance 
funding may not provide the needed flexibility to expedite 
recovery from a disaster that would be to the scale of 
something like Katrina, so I believe it is important for this 
Subcommittee to examine this issue closely so that we can 
ensure that FEMA has the proper tools to address similar 
disasters in the future, disasters that we, unfortunately, know 
one day will come.
    We had a request also from Congressman Scalise to submit 
testimony for this hearing. If it would be appropriate, Madam 
Chairwoman, at this time, I ask unanimous consent for his 
statement to be entered into the record.
    Ms. Norton. So ordered.
    [The information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Mr. Diaz-Balart. Thank you, Madam Chairwoman.
    Again, I look forward to the hearing. I want to thank all 
of you for being here and for your service. I, once again, want 
to thank the Chairwoman for her leadership on this very 
important issue.
    Thank you, Madam Chairwoman.
    Ms. Norton. Thank you, Mr. Diaz-Balart.
    We have put all of the witnesses at the table in order to 
try to get the needed interaction so that we can understand and 
can learn something.
    Mr. Axton is here, I take it, with Mr. Garratt. It is Mr. 
Garratt who is offering the testimony. So I would like to hear 
from Mr. Garratt for the Federal Government; then to hear from 
Mr. Rainwater for the State of Louisiana; and from Mr. Taffaro 
from a subdivision of Louisiana; and finally to hear from Mr. 
Daniels, the Chairman of the Board of Contract Appeals at the 
GSA.
    Would you proceed, Mr. Garratt?

   TESTIMONY OF DAVID GARRATT, ACTING DEPUTY ADMINISTRATOR, 
FEDERAL EMERGENCY MANAGEMENT AGENCY, ACCOMPANIED BY CHARLES R. 
 AXTON, FEMA LEAD, UNIFIED PUBLIC ASSISTANCE PROJECT DECISION 
TEAM, GULF COAST RECOVERY OFFICE, FEDERAL EMERGENCY MANAGEMENT 
AGENCY; PAUL RAINWATER, EXECUTIVE DIRECTOR, LOUISIANA RECOVERY 
   AUTHORITY; CRAIG TAFFARO, PRESIDENT, ST. BERNARD PARISH, 
  LOUISIANA; AND STEPHEN DANIELS, CHAIRMAN, CIVILIAN BOARD OF 
                        CONTRACT APPEALS

    Mr. Garratt. Thank you, Chairwoman Norton and Ranking 
Member Diaz-Balart. It is our privilege to appear before you 
today.
    Joining me at the witness table, as you indicated, is Mr. 
Charlie Axton. Mr. Axton, day to day, is the Director of the 
Disaster Assistance Division in FEMA Region 10. He is currently 
detailed to FEMA headquarters as the Acting Deputy Assistant 
Administrator for Disaster Assistance. Mr. Axton is one of our 
brightest and most forward-thinking disaster assistance 
employees. He has a great mind for public assistance, and it is 
one of the reasons that Mr. Axton was sent down to the Gulf 
Coast and to the State of Louisiana to lead the Unified Public 
Assistance Decision Team that Congressman Diaz-Balart just 
referred to. That is one of the innovations that was announced 
by Secretary Napolitano a number of months ago, along with the 
Joint Expediting Review Team. These are two innovations that 
FEMA, in conjunction with our partners at the State, have 
jointly initiated to help deal with disputes that exist within 
the public assistance arena.
    We have enjoyed some success in that regard. As Congressman 
Diaz-Balart indicated, since we appeared before you in late 
February, over 2,117 project worksheets and revisions to 
project worksheets have been processed and obligated, amounting 
to over $1.2 billion. That is quite an uptick in terms of the 
numbers and pace of public assistance approvals, and we are 
proud of that success.
    That said, we are by no means at the point where we can 
say, "Mission accomplished." We recognize that there is still 
much to do, and we intend to continue to work with our partners 
to make that happen.
    I am very happy that you have asked the State of Louisiana 
and a parish representative to appear at this table today. Not 
only do we need to hear from them, but it helps reinforce what 
we believe is very important, and that is the teamwork which 
moves us forward and enables us to make progress.
    Since Tony Russell was appointed the Director of the 
Transitional Recovery Office, we have seen a remarkable 
turnaround in our partnership with the State and with the local 
parish representatives. We have made a great deal of progress 
in restoring and reforging that relationship, and we are very 
proud of the partnership that we now have with our colleagues 
and partners from the State.
    Again, I would like to personally thank the leadership of 
Mr. Paul Rainwater and the gentleman sitting behind him, Mr. 
Mark Riley. They have been excellent partners with us in 
helping improve how we do business in the State of Louisiana 
and, again, in helping us improve the pace of obligations.
    At the end of the table is Mr. Craig Taffaro from the St. 
Bernard Parish. He has also been an excellent partner. We are 
continuing to work with Mr. Taffaro, with his parish and with 
the other parishes to further empower and improve how we do 
business with those parishes and to become more customer-
focused.
    Again, while we are not at the point where we can say 
"mission accomplished" with any of the parishes, we have made a 
considerable amount of progress, and we respect and appreciate 
the partnership that we, with the State, have been able to 
forge with our parish leaders.
    So thank you for having us all here. We look forward to 
discussing the issues that you have been talking about, Madam 
Chair.
    Ms. Norton. Thank you very much, Mr. Garratt.
    Mr. Rainwater. Now, Mr. Rainwater, let me just identify 
you: Paul Rainwater, executive director of the Louisiana 
Recovery Authority.
    Mr. Rainwater. Thank you, Madam Chairwoman and Ranking 
Member Diaz-Balart. We appreciate the opportunity to come to 
you in this forum, and it has been very helpful and 
constructive as we work through recovering from Hurricanes 
Katrina and Rita.
    I serve as Governor Jindal's chief hurricane and recovery 
adviser. The Governor has given me broad oversight for more 
than $20 billion worth of Federal recovery funds, including 
more than $8.5 billion in public assistance funding obligated 
to the State of Louisiana. Currently we have reimbursed more 
than $5 billion to recovering communities. It takes our staff 
somewhere between 5 to 10 days to pay that request for 
reimbursement to applicants or to have the express pay process 
that we started back in 2008 to speed up the recovery.
    We have made a lot of progress since February. There is no 
doubt about it. We have seen an increase in the amount of funds 
obligated for projects, including several high-profile projects 
that often were used to exemplify the disagreements between 
FEMA and the State of Louisiana, but we were able to work 
through that.
    I want to give credit where credit is due. Since President 
Obama took office, and under the new FEMA leadership, FEMA has 
obligated more than $1 billion in additional funding to 
Louisiana projects. That credit goes to Charlie Axton, to Tony 
Russell and to Bill Vogel, who came down as part of the 
decision teams, which was a very creative process to get down 
and to work with our staff--and the gentleman sitting behind 
me, Mark Riley--who have literally just gutted through, you 
know, thousands of projects worksheets.
    Several of those large projects that come to mind and that 
we actually used in testimony to you, Madam Chairwoman, 
included about $16 million that recently got obligated to 
Tulane University. We fought for over 3 years over that 
project, which basically was a library that housed Federal 
documents. Those documents have been housed in trailers with 
temporary HVAC systems, which is not a very efficient way to 
House Federal documents. This is in addition to another $32 
million obligated just weeks before to reconcile for Katrina-
related repair work across the campus at Tulane.
    In August, Secretary Napolitano and FEMA Administrator 
Craig Fugate visited the campus of the Southern University at 
New Orleans to announce an additional $32 million of recovery 
money for the campus. In total, it took 4 years to get to $92 
million, but I will tell you that Chancellor Ukpolo, who was at 
that ceremony, was amazingly happy and pleased about the future 
of his campus because it had been called into question because 
of the delays in coming up with the dollars and the arguments 
between State and FEMA and SUNO. But Tony Russell and Charlie 
Axton sat down with us at a table, and we worked it out. That 
is the way it should be.
    There are additional issues, though, as we have stated. We 
have still got about 4,000 project worksheets that are in some 
process of being reversioned. We have been talking to FEMA 
about how to make that process much more efficient, and we are 
committed to being partners with the Federal Emergency 
Management Agency to do that.
    The only complaint that I have about FEMA is that we do not 
have more Tony Russells, Charlie Axtons and Bill Vogels to 
spread around the country. The reality of it is Tony and 
Charlie are very busy because of the lingering disputes that 
have been out there for quite some time. They work many long 
hours. Obviously, the more we can grow the pipe, the better, 
and the easier it will be to push those dollars through that 
pipe.
    There are two important things that the State of Louisiana 
needs from FEMA to speed up its recovery: more experienced FEMA 
staff and a streamlined versioning process.
    Now, there are things that FEMA needs from the State as 
well. You know, we started our express pay program, and we knew 
going forward we would need to tweak it, and we are committed 
to doing that. We are adding an additional 55 personnel to the 
Governor's Office of Homeland Security and Emergency 
Preparedness to work that process, to get more efficient with 
that process, and to send more folks out into the field to work 
those project worksheets and to work that reversioning piece.
    We are also providing ideas to FEMA about how we can 
organize jointly in a more efficient manner. As I said in our 
first hearing, we will continue to be partners and will 
synchronize as efficiently as possible between local, State and 
the Federal Government to kind of take that veil down as best 
we possibly can. Obviously, as you have said, Madam Chairwoman, 
we all have our roles to play here, but we want to do it in a 
way that is productive and constructive.
    Thank you.
    Ms. Norton. Thank you, Mr. Rainwater.
    Next, Craig Taffaro, the president of St. Bernard Parish, 
Louisiana.
    Mr. Taffaro. Thank you, Madam Chairwoman and Ranking Member 
Diaz-Balart. We appreciate the opportunity to be here.
    We believe that we present a unique perspective, having 
been involved in the aftermath of Hurricane Katrina from day 1 
from the local level. Oftentimes the day-to-day struggles and 
challenges and obstacles that we face on the local level 
sometimes get lost in the larger system of FEMA bureaucracy or 
in the coordination between the Federal and State levels.
    We have enjoyed, however, the transition from being a 
council member at the local level and beginning an 
administrative post in January of 2008. We are committed to 
revamping the relationship between St. Bernard Parish, the 
State of Louisiana and the FEMA office, both in the local and 
the Federal offices.
    We believe that that was a major, important step because 
what we saw was that the relationships that existed at the 
local level with the other agencies had fallen aside, and the 
needs and concerns of those people representing the 68,000 
residents who lost their livelihoods and their properties as a 
result of Katrina, Hurricane Katrina, were left basically 
unrepresented.
    Over the last 20 months, we have made significant progress. 
St. Bernard Parish stands as the first- or second-ranked 
municipality in the Gulf Coast region in virtually every 
category of recovery, so we believe we stand as a unique member 
of the recovery effort not so much because we have done this on 
our own, but because we have basically pushed the model that 
recovery could no longer wait. As you know, we were ground 
zero, which meant that every business, every church, every 
school; and single-digit homes were spared from the wrath of 
Hurricane Katrina.
    What we have found over the last 20 months in particular, 
which has worked most effectively--we have to give credit to 
the express pay system that has released dollars to the local 
municipalities as we have pushed forward the recovery. St. 
Bernard Parish, being as devastated as we were, was left 
without a great deal of our tax revenue, both in terms of sales 
tax and ad valorem support. So we were in a position where 
either we had to wait and allow the system to catch up with us 
or to guide us, or we had to take it on as a mission of our own 
to push our recovery. We were fortunate to have a bond issue at 
the local level, and we have used that basically to 
substantiate and pay for the services of the vendors in our 
recovery.
    Unfortunately, that well has run dry, and we are faced with 
a situation that without changes to expedite the versioning 
process so that the projects that are identified as "eligible" 
and "noncontroversial" can move through the FEMA approval 
system much more readily, making the State ready to disburse 
those funds to St. Bernard Parish as well as to other local 
municipalities.
    To put it in perspective, as we speak today, we have 29 
project worksheets pending. Those 29 project worksheets roughly 
equate to $100 million to $108 million of work. We have 166 
versions to project worksheets that are also pending, and that 
number changes daily. We changed from 131 on Friday to 166 as 
of yesterday. Those project worksheet version requests amount 
to another $114 million. Based on our roll-ups and our 
anticipated continued work, we anticipate another 300 to 500 
version requests being submitted in the near term, which will 
account for nearly another $220 million.
    So, by the way, just in St. Bernard, the magnitude of our 
destruction and devastation would constitute a major disaster 
in and of itself for just the Parish of St. Bernard, so we are 
looking at nearly $440 million of remaining recovery money. 
Now, keep in mind that these figures only refer to permanent 
work and not to debris work.
    So what we are asking for is a continued partnership with 
FEMA and increased manpower to provide the support for the 
people on the ground, who are doing an absolutely wonderful 
job, so that that money can be freed up in an expedited manner.
    Thank you.
    Ms. Norton. Thank you very much, Mr. Taffaro.
    Now, Mr. Daniels, you have heard all of this. We put you 
last on purpose.
    So we are going to ask Stephen Daniels, who is the Chair of 
the Civilian Board of Contract Appeals, to testify at this 
time.
    Mr. Daniels. Thank you very much, Madam Chair and Members 
of the Subcommittee.
    As you have explained, the Civilian Board of Contract 
Appeals is a quasi-judicial tribunal, which is housed within 
the General Services Administration but functions entirely 
independently of that agency. The Board currently consists of 
15 administrative judges. Our principal mission is to resolve 
contract disputes between civilian agencies of the government 
and their contractors.
    The members of the board and I are honored to take on the 
responsibility of arbitrating disputes regarding FEMA public 
assistance grants stemming from damage caused by Hurricanes 
Katrina and Rita. The assignment constitutes an extension of 
our work in arbitrating disputes between government agencies 
and the entities with which they do business. We understand the 
need for resolving the disputes fully and promptly so that the 
people of the Gulf Coast region can complete their recovery 
efforts and can get back to the normal routines of their lives.
    We pledge to the Secretary of Homeland Security and we 
pledge to the Congress, to do our utmost to resolve these 
disputes in the same way we approach our contract cases, as 
fairly and at the same time as informally, expeditiously and 
inexpensively as possible.
    On August 31, FEMA published in the Federal Register 
regulations which govern our arbitration of these disputes. 
FEMA consulted with the Board in drafting these regulations, 
and the rules appear fair to us. Applicants seeking grants of 
$500,000 or more-- State or local governments or eligible 
private nonprofit agencies-- may now choose arbitrations by 
three-judge panels of the Board as an alternative to the 
standard FEMA appeals process.
    Under FEMA's regulations, if an applicant's appeal was 
pending with FEMA on August 31, or if FEMA had issued a 
determination on or after February 17, 2009, an applicant could 
elect the arbitration process no later than October 30. 
Otherwise, an applicant can elect this process within 30 
calendar days after it receives FEMA's determination. Election 
is made by sending a request to the Board's clerk along with 
supporting documentation.
    Let me take just a minute to outline the process under 
which we will hear these cases. When the clerk receives a 
request for arbitration, she will assign it a docket number. 
She will select one of our judges in rotational order to 
coordinate activities regarding the matter and two other judges 
at random to work with the coordinating judge on the panel. She 
will also inform the relevant State government that it may 
within 15 calendar days submit comments on the merits of the 
application. At the same time, she will inform FEMA that it 
shall within 30 calendar days submit its own comments along 
with supporting documentation.
    Within 10 business days of receiving FEMA's comments, the 
coordinating judge will convene a telephone conference with the 
parties to address preliminary matters such as a clarification 
of the issues and to schedule further proceedings. An applicant 
can choose to have the panel decide the case on the basis of 
the written record or on the basis of that record plus an 
informal hearing.
    If the applicant chooses a decision on the basis of the 
written record, the panel will make every effort to issue its 
decision within 60 calendar days of the date on which we 
receive FEMA's comments. If the applicant chooses a hearing, 
the panel will conduct such a proceeding without a court 
reporter. It will, if at all possible, conduct the hearing 
within 60 calendar days of the date of the conference, and it 
will make every effort to issue the decision within 60 calendar 
days of the end of the hearing. Decisions will be in writing, 
but they will also be short. They will announce a result and 
explain its basis, but it will not contain expositions of legal 
reasoning.
    Madam Chair, the Board has not yet received any requests 
for arbitration of FEMA determinations, but I can assure you 
that, when cases arrive, we will look forward to working with 
the parties to resolve the disputes as quickly and as fairly as 
we possibly can.
    Ms. Norton. Thank you, Mr. Daniels. I think the very 
presence of the Board may have already had some effect. We will 
see.
    I think it is an indication of the importance of this 
hearing and the impatience of the Full Committee as well as of 
the Subcommittee. The word "progress" simply cannot be written 
yet until we are through with this hearing and are satisfied of 
the progress. With the 4-year journey, frustrating journey, of 
little or no process until recently, frankly, for the larger 
projects, nothing could indicate, I think, the importance--that 
being yesterday and this being tomorrow--of the presence of our 
Full Committee Chairman, who has dropped by despite being in 
one of the busiest periods of the life of the committee as I 
speak.
    I will ask him, Chairman Oberstar, Chairman Jim Oberstar, 
if he has any opening remarks for us.
    Mr. Oberstar. Well, thank you, Madam Chair. I greatly 
appreciate your persistence in following through on the after 
effects of Hurricane Katrina, which are a lesson for all of 
America--for all areas that have been stricken by disaster. The 
continued follow-through that you are doing, along with Mr. 
Mario Diaz-Balart, is important to the future of our promise.
    There are a great many lessons to be learned and some, I 
know, even in my district that have not yet been fully learned, 
such as the interoperability of communications in the aftermath 
of a huge forest fire on the eastern edge of the boundary 
waters/canoe area of the Superior National Forest. The 
firefighters could not communicate with the Forest Service. 
They could not communicate with the county sheriff because they 
had not received the adequate funding for the equipment they 
needed. This was one of the great lessons of September 11, a 
lesson further learned in Katrina--just one of many.
    So, as I am sure you have pointed out in your opening 
remarks, Katrina is our costliest natural disaster in history. 
We want to continue these oversight hearings, and want to make 
sure that no others approach this cost in whatever way that we 
can accomplish. So I look forward to continuing the testimony 
of the panel.
    Thank you.
    Ms. Norton. Thank you very much, Chairman Oberstar.
    Mr. Cao, who represents a district in Louisiana, have you 
any opening remarks, sir?
    Mr. Cao. Thank you, Madam Chair, and thank you very much 
for holding this hearing. I appreciate your continuing effort 
to be focused in the district and that you push the recovery 
process.
    I would like to thank Chairman Oberstar for his willingness 
and openness to look at all of the issues that we are facing 
down at the district and to somehow revise the Stafford Act to 
allow the State, city as well as other agencies the flexibility 
to better recover from Katrina. I also would like to thank the 
Chairman for his emphasis on the recovery process after a 
disaster or something similar to Katrina. So, again, thank you, 
Mr. Chairman, for your continuing efforts in our recovery 
process.
    I missed some of the statements from the panelists, but I 
am very familiar with all of the issues that you presented, and 
I hope to question you a little bit later on some of the 
questions that I still have. Thank you very much.
    Mr. Oberstar. Will the gentleman yield?
    Mr. Cao. Yes, sir.
    Mr. Oberstar. I would like to express my respect for the 
gentleman's persistence on this issue. He has brought to me, to 
the Chair and to the Ranking Member numerous issues of concern 
to the people of his district and of New Orleans, and I do have 
to confess to a particular interest: My wife is from New 
Orleans. Some of her family still lives there, her extended 
family. Everybody in New Orleans, I think, is related in some 
way. They are still there.
    I have traveled several times to various points of the 
stricken city, in particular to St. Bernard Parish, which was 
affected in a way no one could imagine. Homes were overtopped 
with the floodwaters. Whole structures were floated away from 
their moorings, and one in particular stopped only when it ran 
into another house that did not move.
    I remember talking to that homeowner. He had sued for 
collision damage. I said, Why did you bring suit for collision 
damage? He said, Well, no one else was helping. The Corps was 
not doing anything. FEMA was not doing anything. What else are 
we supposed to do 6 months into this tragedy? So we brought a 
lawsuit.
    Well, that is the ultimate in despair and should not 
happen, and I will always be haunted by the signs that read: 
Hold the Corps accountable.
    Well, it is not just the Corps; it is FEMA and everyone 
else that is associated with it. So the gentleman is doing his 
role, and the Chair is doing her role. We want to hear what 
lessons are learned and how we can prevent mistakes from 
happening in the future.
    Thank you.
    Ms. Norton. The gentleman closes. The gentleman has 
yielded.
    Now, you will find this Chair impatient with the ABCs of 
the Federal bureaucracy, so maybe, if I get to know what they 
are and what the differences among them are, I can rest 
assured.
    Now let me go to Mr. Axton since he has been the man on the 
ground.
    Maybe you could help me understand. You know, the last 
thing we are about is creating new "theres" in the over-layered 
Federal Government, and watch out for Federal officials. Better 
than anything else, they know how to name what they are doing. 
If two people are doing it, they have a name for it. If 1,000 
people are doing it, they have a name for it. Pretty soon they 
will have a name for it if only one person is doing it. So, 
before I understand all of these things which I hope are not 
layers, the first thing I have got to understand is the 
difference between something called the Joint Expediting Team 
and the Unified Public Assistance Project Decision Team.
    Why aren't they all on the same team? How many teams does 
it take to get something done on the Gulf Coast?
    Mr. Axton. Chairwoman Norton, that is a very good question. 
I think, when I first arrived down there at the end of February 
or at the beginning of March, on the first day, I had a meeting 
with Mark Riley and some of his team. The original vision for 
the decision team was to review the final field-level disputes 
and to make decisions on them in essentially a binary fashion.
    What I found very quickly is that the efforts of the State 
and that the efforts of FEMA, whether it be an expediting team 
or a project decision team--was that the real need back in 
those days was to just improve our ability to work together and 
to work efficiently towards a common goal, and so our focus 
collectively has been toward that, and a lot of those efforts--
--
    Ms. Norton. Excuse me. There are different players on these 
teams or the same players? I still don't understand. The Joint 
Expediting Team, did it have different players than the Unified 
Public Assistance Project Team?
    Mr. Axton. Yes. Yes.
    Ms. Norton. What is the difference in the players?
    Mr. Axton. The decision team was a small group of people 
from FEMA, which I was the lead of, and a small group from the 
State, the State's leadership.
    The expediting team was kind of a broader team that existed 
of FEMA officials who were working in the existing Transitional 
Recovery Office with the existing partnerships they had with 
their State counterparts. The theory was if those teams were 
not able to resolve issues on the ground, then they would have 
one final field-level review by the decision team.
    Ms. Norton. How does it work? Does it work that way still?
    Mr. Axton. In the past 7 or 8 months since we stood this 
effort up, what we have concluded collectively, really between 
the FEMA officials and the State officials, is that overall we 
have done a lot to improve our partnership, to improve our 
ability to work together, to improve the timeliness of our 
decisions, and a unity of effort--setting goals together, 
setting priorities together. So many of those efforts that we 
are seeing are becoming complementary and have merged again 
towards that common goal that has been set by Mr. Russell--the 
FEMA Director of the Transitional Recovery Office--and the 
senior State officials. So we have seen an evolution of all of 
those efforts in the past 6 to 8 months.
    Ms. Norton. It is still two teams. Will they work more 
together? It sounds to me like you always have to have some 
people on the ground. Is there a time frame if they do not 
reach a decision that it goes to somebody else--zap? What is 
the purpose of having two teams, one at a higher level? It 
sounds to me as though, you know, if one court does not do it, 
let us have another court in between.
    So all I am trying to find out is how long does that team 
have to play with the issue before some team which can make a 
decision gets the issue? That is really what we are after, Mr. 
Axton.
    Mr. Axton. No. I understand, and it is a great question, 
Chairwoman Norton.
    It really boils down to the complexity of the issue that is 
being faced. In some of the cases, it was a single situation 
where a local official was proposing a mitigation, which is an 
investment that could be made to avoid future losses that was 
deemed ineligible. That was a very clear case that was made, 
and we were able to rule on whether it, in fact, could be 
deemed eligible.
    In other cases it was a series of buildings that had a 
whole series of unknowns that were related to what were the 
damages? What were the impacts? What are the future design 
requirements? So it just really depended on the nature of the 
issue.
    Ms. Norton. I do not mean at all to simplify what I 
understand to be a complex process. All I know is what we have 
seen.
    Mr. Axton. Right.
    Ms. Norton. Today FEMA and Louisiana would still be at the 
table, fiddling with each other, if the Congress had not forced 
a new strategy on them. I use the word "forced" because it took 
statutes, statutory authority, to do what they already could 
do.
    Mr. Taffaro, do you see the streamlined effect? You are at 
the level of where there would be the felt need.
    Mr. Taffaro. Madam Chair, when Mr. Axton first arrived on 
the ground, he arrived in a different role, and the role was, 
if we were not able to resolve our issues with our local FEMA 
department at the TRO, that Mr. Axton would step in and 
basically resolve that conflict. That quickly changed, but what 
you are hearing is the crux of the matter.
    The Stafford Act makes projects eligible or ineligible. The 
problem is getting something from eligible to ineligible 
sometimes depends on who is looking at it and is not based on 
some objective criteria.
    As you heard, and as Chairman Oberstar--thank you for your 
visit to St. Bernard. I remember when you came.
    The fact of the matter is when you deal with a community in 
the Gulf Coast region where we had nearly 20 feet of water 
across our entire parish and 3 feet of gulf sludge, there are 
very few things that would be ineligible to be repaired. Yet we 
still, after 4 years, on the ground have to prove that there 
was damage created by such an event, because once it is 
eligible, there should be no more obstacles. It is eligible. 
Make the project worksheet fit the work that is required. 
Release the funds. The State now can disburse those funds, and 
it is a simple process.
    Ma'am, you are not oversimplifying it. You are hitting it 
on the head.
    Ms. Norton. Mr. Taffaro, we have heard these brain-numbing 
notions that something was already in disrepair. Now, quote, 
how much of the disrepair was the storm responsible for?
    It is mind-numbing because it is clear that neither Mr. 
Daniels, nor any other administrative law judge, unless he has 
word from on high, can make that kind of separation. It would 
take commonsense notions that you could put on paper when you 
reach such issues, because it is going to be the case with lots 
of things. Nothing was brand new when the storm hit. So 
therefore, since it just went up, we now know how much it 
should cost.
    Mr. Axton, you hear Mr. Taffaro not being entirely 
satisfied that there is a decisionmaker in the process. Even 
given the fact that I say and that Mr. Taffaro says, no, I 
should not factor in the complexity that I know about--and I do 
know about the complexity--I am, among others on this panel, 
the guardian of Federal funds. I also know it is not beyond 
human intelligence to figure ways within certain parameters to 
help decisionmakers say yea or nay, and I do not hear that 
those ways have yet been transcribed so that Mr. Taffaro would 
know whether he is in or out without several appeals going up--
and I call them "appeals"--several decision levels.
    If you streamline the process, why not describe to me how 
you have streamlined the process. Then I will ask Mr. Taffaro 
if he has felt it. If you streamline the process, you ought to 
be able to say--I have some evidence that you have. You have 
moved $1.3 billion since January, you say.
    Who said that?
    Mr. Garratt. Yes, ma'am, since February.
    Ms. Norton. How much is left in the pipeline, Mr. Garratt?
    Mr. Garratt. Oh, let us see.
    Ms. Norton. Because $1.2 billion or $3 billion since 
January does say to me there has been movement.
    Now, if you will just tell the Subcommittee how the 
movement takes place, I will grant you the complexity, because 
I have been sitting with this issue as long as you have been in 
recovery, but if we cannot speak in any definitive terms about 
how the streamlining has occurred, how one gets to go within 
that complexity and recognizing that complexity, then we are 
not yet convinced that, one, streamlining has occurred and, 
two, that the timeline which has been speeded up will continue.
    What has been streamlined?
    There are still two of these teams. Mr. Taffaro still 
complains that it is not clear, after you are eligible, whether 
you can still go forward. Therefore, the Subcommittee, or at 
least this Member, does not understand.
    You or Mr. Rainwater or anybody may answer who thinks he 
can clarify this issue for us.
    Mr. Rainwater. Yes, Chairwoman. I think I can a little bit.
    They talked about the expediting team basically as a team 
that works, you know, with the applicants. A project will go to 
this team. We will give them a time period to work through it.
    Ms. Norton. For example?
    Mr. Rainwater. Yes, ma'am.
    Ms. Norton. Give me some successes.
    Mr. Rainwater. The Southern University at New Orleans,let 
us use that. We were $32 million off. We gave it to the team. 
We said, you know, you have got about--you know, it is just 
depending on--you know, it was building to building. It was a 
pretty large project, so they had about 90 days to work through 
it. We actually got together as--what happened is once the team 
submitted its progress report, we got together as a leadership 
team--myself, Charlie Axton, Mark Riley, and Tony Russell--a 
State joint and Federal team, and we went through the process. 
Now, I will tell you----
    Ms. Norton. Wait a minute. That is a joint expediting----
    Mr. Rainwater. The expediting team is made up of engineers 
on both sides.
    Ms. Norton. And the unified public, they all got together 
on this one?
    Mr. Rainwater. Yes, ma'am.
    So the engineers and the architects get together this Joint 
Expediting Team. They get together and work through the 
process. They go into the buildings,you know. You know, you hit 
it just right. The mind-numbing process of looking at windows, 
you know, the ceiling tiles, the floors, the whole 9 yards. 
Then they bring to us the report. Literally, we get the 
expediting team together and the decision team. We have a 
conversation, and then the expediting team leaves, and then the 
leadership team debates about what the number is. In this 
particular case, we submitted evidence that we thought that one 
of the buildings was over 51 percent, and they accepted that. 
So it helped move the process forward.
    Ms. Norton. Okay. This is good to have this example.
    Was that project above $500,000?
    Mr. Rainwater. The total was $92 million. When you add up 
what we worked out at the end of the day, the $32 million that 
Secretary Napolitano announced in August, the total was $92 
million for the whole campus. So it was a very large project, a 
very complex project that had been, you know, in the 
conversation.
    Ms. Norton. Based on the size of the project, it looks like 
the Joint Expediting Team and the Unified Public Assistance 
Project Team--forgive my laughter, but I wish you all would 
call yourselves something simpler to kind of send the message 
that it is not as complicated as their names.
    It looks like, based on certain kinds of either complicated 
projects or high-cost projects, that the earlier the two teams 
get together, the more likely a final decision will be made. Is 
that true, sir?
    Mr. Rainwater. Yes, ma'am, that is what we have seen.
    Ms. Norton. Is there somebody in charge of picking those 
projects out and saying, look, these projects take a virtual 
joint decisionmaking, and they are high-cost. Let us go with 
those first. Have you any priorities like that?
    Mr. Taffaro. Madam Chair, in our experience, they are the 
projects that the local municipality pushes forward.
    In Mr. Axton's short tenure, in his arrival, again, the 
system is if we cannot resolve it, he will take care of it or 
find a way to resolve it. He did that on two of our major 
issues before he moved on. To his credit, Mr. Axton was 
responsible for helping free up $110 million worth of work, 
both of which were 12 months in the waiting of resolution in 
that time frame.
    Ms. Norton. So that means that you skipped over somebody in 
order to get to Mr. Axton.
    Mr. Taffaro. Well, no. We could not resolve it within the 
TRO structure. What happened was Mr. Axton----
    Ms. Norton. The what structure?
    Mr. Taffaro. In the local structure at the TRO, the 
Transitional Recovery Office.
    Ms. Norton. And you went to Mr. Axton?
    Mr. Taffaro. Mr. Axton was able to----
    Ms. Norton. Oh, is that all the teams together?
    Mr. Taffaro. He was responsible as the Joint Expediting 
Team member that we initially----
    Ms. Norton. So why do you need this other team, whatever it 
is called?
    Mr. Taffaro. The unified.
    Ms. Norton. Yes.
    Mr. Rainwater. Yes, ma'am.
    Madam Chairwoman, we meet on Tuesday morning as a unified 
public assistance team, a leadership team, and we go through 
projects and we set priorities on what needs to happen that 
week with the expediting team so that they can get out there 
and get the architects and the engineers.
    I mean, this was not happening before. Although the 
challenge--and I think one of the reasons you don't see larger 
numbers and greater progress is you need more teams; to be very 
frank with you, you need more architects and engineers.
    Ms. Norton. That is what Mr. Taffaro, I think, says in his 
testimony.
    Given the enormous misery--it is the only word for it--on 
the Gulf Coast, what could be of greater priority than to put 
as many folks down there as you can spare?
    Whose testimony said you need three times as many people? 
Was that you, Mr. Taffaro.
    Mr. Taffaro. Yes, Madam Chair.
    Ms. Norton. Do you disagree with that, Mr. Garrett, that 
you need three times as many people on the ground if you really 
are going to make progress on getting this money out in the 
middle of the Great Depression when people are looking for work 
and there is money lying on the table, waiting to be spent?
    Why don't you have more people down there getting the work 
out?
    Mr. Garratt. Madam Chair, I can't speak specifically to Mr. 
Taffaro's contention that he needs three times as many people 
to help him in that----
    Ms. Norton. Do you need any more people, sir?
    Mr. Garratt. I would have to refer that question to Tony 
Russell, but Mr. Russell knows that he can get as many people 
as he needs to get the job done.
    Ms. Norton. Well, Mr. Axton, I want to ask you to answer. 
Do you think if you had a few more people you could do a better 
job?
    Mr. Axton. I think the first step to answer that question 
is really about taking the existing resources that we have and 
making sure that we are using them the most effectively.
    Ms. Norton. So you are not convinced that you are using the 
resources that are on the ground sufficiently to help Mr. 
Taffaro? You think there is more efficiency and work to be 
pulled out of the people on the ground before you get more 
personnel?
    Mr. Axton. Madam Chairwoman----
    Ms. Norton. Mr. Axton, where do you live? Are you from 
Louisiana?
    Mr. Axton. I am a resident of the city of Seattle, 
Washington.
    Ms. Norton. Well, what I am thinking about is: I am in 
Louisiana. The presence of this money waiting to be spent has 
an effect upon the stimulus funds. Why should we give any 
stimulus funds to Louisiana if the Federal Government and the 
State can't agree on money that is on the table, and FEMA 
testifies it doesn't need any more money to get money on the 
ground so that people can get work and Louisiana can get fixed?
    Why should the Federal Government come up with one more 
cent for the State when you have got money on the table and you 
tell me you don't need any more people because you are not 
convinced that you are getting all the work and all the 
efficiency out of the people you have?
    Mr. Rainwater?
    Mr. Rainwater. Madam Chairwoman, at the State level, we are 
adding an additional 55 personnel to our ranks to help speed up 
that process.
    Ms. Norton. So the State has added people?
    Mr. Rainwater. Yes, ma'am.
    There is another factor I think that Mr. Axton is sort of 
trying to get to, and that is, we think that--one of the things 
we have been talking about, for example, is you streamline this 
process by being smart and allowing local governments to submit 
architectural and engineering documents to FEMA and the State, 
and we accept those documents as----
    Ms. Norton. Well, Mr. Taffaro, do you do that?
    Mr. Taffaro. Every project is confirmed by an architectural 
and engineering firm.
    Ms. Norton. So they are doing that, Mr. Rainwater, they are 
doing that? Are you doing that?
    Mr. Rainwater. Yes, ma'am. The challenge is, those aren't 
always accepted and sometimes work is done twice. And that is 
one of the things that----
    Ms. Norton. And why is work done twice, Mr. Rainwater?
    Mr. Rainwater. Because a local or State will submit a 
document to FEMA, and FEMA will hire their architects and 
engineers to look at the document to make sure that the 
document is fair and it is the right disbursement.
    One of the things that we have talked about----
    Ms. Norton. Wait a minute. Excuse me.
    Mr. Taffaro, look, we are going to get down to what 
actually happens: people. Mr. Taffaro has his engineers 
working. You have separate engineers working?
    Mr. Rainwater. No, ma'am.
    Ms. Norton. Okay. Mr. Taffaro's engineers work. Mr. Taffaro 
gives it to Mr. Axton. Mr. Axton's people look at it. Where 
does the twice come in?
    Mr. Rainwater. When there is a dispute between what either 
the State--the State and locals, we work out our problems ahead 
of time.
    Ms. Norton. Truly?
    Mr. Rainwater. Yes, ma'am. We take it to FEMA. We say, this 
is what the State and local government believes is the money 
due to the project. And then FEMA will, many times, hire their 
own architects and engineers to review the documents.
    Ms. Norton. Okay.
    Mr. Axton, I can understand everybody has to check this 
work now--you are dealing with our money--but respond to the 
notion that there is double work going on here.
    Mr. Axton. Chairwoman Norton, I think when there are 
engineers who work on behalf of the local governments and then 
on behalf of FEMA, the goal on having an efficient partnership 
is to ensure that the engineers that are working for the locals 
are looking at the design, looking at how the parish or the 
city or the community has to rebuild that structure--what are 
the various design requirements and the costs, and then putting 
it out to bid--all the things that are required, irrespective 
of Federal funding; and then our team taking that and looking 
at it for the purposes of determining eligibility.
    Ms. Norton. Are you looking again at the design, for 
example?
    Mr. Axton. We look at the design----
    Ms. Norton. So you are looking at the whole project? They 
look at the whole project?
    Mr. Axton. And when things work as efficiently as they 
can----
    Ms. Norton. So you may decide that the project ought to be 
smaller, ought to be designed differently, and so forth; is 
that right?
    Mr. Axton. FEMA should not be making those kinds of 
decisions. We should.
    Ms. Norton. So why are you hiring your own folks then?
    Mr. Axton. The purpose of hiring the professional 
engineers--or architects or accountants, but on the engineering 
side is primarily to look at the design work that was performed 
by the applicant or by their hired engineering firm simply for 
the purposes of determining eligibility----
    Ms. Norton. Okay.
    Then, Mr. Taffaro, that might put you back to ground zero, 
wouldn't it? I mean, they have looked at it, they disagree--
"they," FEMA--with the State, which means you--
    Mr. Taffaro. Correct.
    Ms. Norton. Does that mean you have to redesign? What does 
that mean you have to do?
    Mr. Taffaro. Oftentimes what it means is, there is a 
dispute that then a second team will have to come and reexamine 
the initial project.
    For example, we have had this with our fire stations, we 
have had this with our roadways, we have had this----
    Ms. Norton. A second team from where?
    Mr. Taffaro. From FEMA, FEMA will send out. And oftentimes 
it is different numbers.
    Ms. Norton. A second team after the first team has found an 
issue with what the State has introduced. And no streamlining 
has occurred in what Mr. Axton has given me.
    You know, I don't know whether to cry now or after this 
hearing. It seems to me the dispute exists right then, Mr. 
Daniels--a dispute exists right then for FEMA to respond. The 
notion that they are going to respond other than in their own 
"best interests" has already been seen through 4 years of 
nonaction.
    The reason that this Subcommittee said "as disputes occur, 
then--then let's get to it."
    What is about to happen here is that we are going to have 
more or at least as much--unless you intervene all the time, 
Mr. Axton--as much play of expert on expert as we have had 
before.
    How many experts does it take to know that FEMA has a 
structural reason not to agree and the State has a structural--
I am not blaming any of you; I am just blaming you for not 
streamlining the process once a dispute exists. Yes--if you 
keep negotiating for another year, yes, you will come to a 
resolution.
    What are the people who can't get jobs in Louisiana 
supposed to do while you keep negotiating for another year or, 
for that matter, another 3 months? When does somebody declare, 
Dispute exists; let's go on to the next stop instead of getting 
to another set of experts who will not--who have a structural 
reason to say to you, No, go back and make them do this, that 
or the other. And Mr. Rainwater and Mr. Taffaro have this 
built-in structural reason.
    The impatience of the Subcommittee comes with not 
understanding that structural, that built-in way in which each 
party must operate. When each party must operate that way, when 
the demonstrated record is that they will operate that way, why 
do we go hire another set of experts to try to go at the 
experts that have just been heard from? Who does that aid and 
why is that not simply repeating what has exasperated this 
Subcommittee?
    Why isn't that streamlined? Why shouldn't that go right now 
to appeal or to Mr. Daniels and his group?
    Mr. Garratt. Madam Chair, I need to go back, I think, and 
explain that the joint expediting team is in fact designed to 
be a streamlining enterprise. It is designed to----
    Ms. Norton. But you haven't told me how it streamlines, 
because the other experts are still going to--you are going to 
go out and hire another expert to refute what has just been 
found. We have had testimony here that there will be two sets 
of experts now involved on this project.
    Mr. Garratt. Madam Chair, I think you would agree with us 
that we do, as an organization, have a due diligence 
requirement, and there is a multilevel----
    Ms. Norton. You have already hired one set of experts. He 
has come to a different conclusion than the State's expert. Why 
isn't that the point that dispute resolution is necessary, 
either by appeal or in some other commonsense way to solve 
this? Why are you spending the government's money on another 
set of engineers and architects?
    Mr. Garratt. It may depend entirely on the characteristics 
and complexities of that particular project. But the bottom 
line is, if in fact as part of that review and reversioning 
process, they reach an impasse, it can go to the joint 
expediting team and that joint expediting team will attempt to 
push that thing through. And if they are unsuccessful, it will 
go to the unified decision team to make a final determination 
on that.
    At that point, if the decision is unfavorable, it is now up 
to them, it is their opportunity to enter that into the appeal 
process or, now, the arbitration process.
    Ms. Norton. How many times can you get to do that before 
declaring a dispute exists? I mean, how successful has this 
been?
    Is this how you got the $1.3 million reduction? Is that how 
you did it?
    Mr. Rainwater. Yes, ma'am, that is how we did it.
    Ms. Norton. Mr. Taffaro says you still need three times as 
many people on the ground.
    Mr. Rainwater. Yes, ma'am, there is no doubt we do.
    But as Mr. Axton--one of the things I wanted to get to, one 
of the things we have been talking about and putting on the 
table is that one of the things we could do is just allow--and 
the State would be very supportive of because there is risk 
involved in this, and we are at this point where we think it is 
time to take some more risk--and that is, you allow applicants 
to provide--the Federal Government is paying for the architect 
and the engineer at the local level--I know you already know 
that, Madam Chairwoman.
    Ms. Norton. That is why I said, why are you spending our 
money on multiple----
    Mr. Rainwater. So let's set an amount, let's say $1 
million. We have got 3,500 project worksheets that are valued 
at about $1 million or less, 3,500 that need to be reversioned 
in some sense. Why not go ahead and set an amount and allow the 
local governments to submit the A&E, the architect and 
engineering, documents, and let's accept those. And then the 
State has the risk, if for some reason during the closeout the 
Federal Government could come back and say, We are the ones 
that messed up and we are willing to accept that, and we are 
willing to accept the responsibility----
    Ms. Norton. But why not transfer the risk, Mr. Axton--you 
know, as to this committee, spending the money on multiple 
experts or spending it on people on the ground--putting up 
Charity Hospital, no contest.
    So we want to know why they are willing to accept the risk, 
you are not willing to give them the risk.
    Mr. Axton. Chairwoman Norton, I think the best solution on 
this, based on my experience, is to really take the various 
experts and have their efforts become complimentary.
    Clearly, when the parish hires a professional engineer to 
design a facility in its reconstruction and its repair and 
replacement, we need to be working in concert with those 
professionals so that we can determine how the grant is 
written, the State can be involved in how the grant will be 
administered, and the applicant will be focused simply on the 
reconstruction and not so much on the program.
    And so, if it works the way it can, it is a complimentary 
effort of professionals.
    Ms. Norton. It is complimentary, and something has happened 
to make it work, probably a new administration and a lot of 
pressure put on people on the ground, but I want to make sure 
it continues.
    Mr. Rainwater, as I understand it, it is the local 
government's or the State government's--Mr. Taffaro, I don't 
know which decision it is as to when to stop the process and go 
to the next step. Why don't you just stop it?
    Mr. Rainwater. Typically, Madam Chairwoman, we do that in 
conjunction with local government. I mean, I talk to the parish 
presidents and the mayors quite often. When they have issues 
that come up or when a project has been stuck for quite some 
time, we do these Tuesday meetings, and----
    Ms. Norton. Look, it is in your court, sir. If it is in 
your court, you from your own folks.
    Mr. Taffaro, would you call the question earlier, if it 
were your question to call, and get to some kind of appeal or 
arbitration to resolve the matter?
    Mr. Taffaro. Madam Chair, the issue of timing, of when we 
take it to an appeal process, is our call if and when we have a 
definitive decision made. If we do not have a definitive 
decision----
    Ms. Norton. From FEMA?
    Mr. Taffaro. From FEMA.
    Ms. Norton. So FEMA can make it impossible for you to go to 
the next step?
    Mr. Taffaro. By delaying a definitive position on 
eligibility or amount, that puts us in a situation of limbo.
    Now, what Mr. Axton and Mr. Garratt have referred to in 
terms of a complimentary position, the additional personnel 
that I continue to refer to is not more people on the joint 
expediting team, but the actual people on the ground writing 
project worksheets, writing versions, so that that process can 
move forward at the very start. That is what holds us up. Even 
after we get an eligibility determination, a project worksheet 
or a version has to be written in order for that money to be 
obligated.
    Ms. Norton. Now, I am going to go to Mr. Cao, especially 
since Mr. Cao has indicated to me that far from expanding the 
number of people on the ground----
    Mr. Garratt. Chairwoman Norton, I am sorry to interrupt. We 
have just been notified that there has been a major, 7.9, 
earthquake near American Samoa and they have just been hit with 
a tsunami.
    I need to go make a call. Would you excuse me?
    Ms. Norton. Well, certainly you are excused to do that, 
sir; that is your job. I am sure Mr. Axton can answer the 
question.
    But as I give it to Mr. Cao, who has notified me that not 
only is FEMA not increasing, but it is reducing the number of 
people that would be available to Mr. Taffaro and Mr. 
Rainwater.
    I will leave you to ask that question.
    Mr. Cao. Thank you, Madam Chair.
    And, Madam Chair, I can sense your frustration just sitting 
up here talking to the different agencies. Just imagine what 
kind of frustrations the people who are living in New Orleans 
have suffered for the past 4 years.
    But with that being said, Madam Chair, I am very glad to 
hear that they have pushed out $1.3 billion since February, 
because if you were to look at their progress the 2 prior 
years, it was much, much, much, much slower. So being on the 
ground, I must say that they have made tremendous, tremendous 
progress.
    And I applaud the work of Mr. Tony Russell, the director of 
TRO, down there. He has worked extremely hard. He has been very 
cooperative to push all the recovery processes forward.
    But at the same time, I amalso concerned, if the 
information I have received is correct, that FEMA has started 
to reduce the number of people down at the district offices. Is 
that correct, Mr. Axton?
    Mr. Axton. My understanding of any sort of staff reductions 
is related to other areas outside of the public assistance 
program specifically. We have a number of functional areas that 
work inside of our field offices, and I believe that each of 
those, when it relates to reductions, is in other areas.
    And I can speak specifically. I know--President Taffaro and 
I spoke just yesterday, and there was actually some 
programmatic staff that are being assigned out there. And I 
think we are even increasing in certain specific areas.
    So let me double-check on that, and we will confirm the 
staffing levels that are in place currently. But I believe any 
sort of reductions are outside of the program.
    Mr. Cao. My main concern here is with the status of the 
CDL. I know that the period to submit inputs expired since 
June. We were expecting the regulations to be released sometime 
in September, or it might have been August.
    What we are hearing now is that it might not be available 
until next year.
    This is the problem that we have, Mr. Axton: that you have 
city governments, you have agencies, you have people like the 
Orleans School Board who are waiting for these criteria to see 
whether or not they will be qualified for these CDL waivers 
because they have to work out their budgets.
    I spoke with the Orleans Parish School Board, for instance, 
a couple weeks ago. They are having a problem with respect to 
their 700 or so retirees. The retirees--right now, they are 
receiving approximately--I am not sure the amount of money, but 
at this point they are spending more than half of their income 
on medical insurance expenses; and the only way for Orleans 
Parish School Board to help these 700 retirees is to use the 
amount of CDL money that they have still in limbo. They don't 
know what to do with it because they are fearful that 
eventually they will have to repay it; but at the same time, 
you have 700 or 800 or so Orleans school teachers who have 
retired, waiting to receive benefits from the Orleans School 
Board, and that is the only money that it can use.
    So you have the Orleans School Parish, you have other 
municipalities. I am sure, Mr .Taffaro, you are having the same 
problem; is that correct?
    Mr. Taffaro. That is correct, Mr. Congressman.
    Mr. Cao. So you have all these city governments, you have 
the Orleans Parish police superintendent, you have the Orleans 
sheriff, who are waiting for these criteria to be released.
    I would like to know, what is the cause of the delay? Why 
is there a 3-, 4-, 5-month delay on the release of these 
regulations?
    Mr. Garratt. Congressman Cao, I am sorry for coming back in 
late for this, and I apologize for being a little distracted.
    In terms of the CDLs, the regulations, unfortunately there 
is a rather protracted process that any regulatory effort has 
to undergo before those regulations are finalized. We are 
proceeding at pace with those, and we certainly wish we could 
tell you it could move faster and has moved faster through that 
process.
    It has not, but it is not through lack of effort. You will 
see those regulations. If you would like, we will get back to 
you with some more specifics on exactly when we think those 
regulations will be promulgated.
    Ms. Norton. Within 30 days, sir. Within 30 days, submit to 
this committee the timeline for getting those regulations out, 
so we can inform the entire Subcommittee.
    Mr. Garratt. Ma'am, I think I can commit to you much faster 
than 30 days those timelines.
    Ms. Norton. Excellent.
    Go ahead, sir.
    Mr. Cao. Thank you, Madam Chair.
    Mr. Garratt, I know that traditionally when you have 
disasters like this, CDLs are generally forgiven, so I don't 
know how you have a devastation that is the biggest in the 
history of the United States--a natural disaster that 
devastated 80 percent of the city of New Orleans and basically 
put the city out of commission for almost a year, I don't see 
why there is such a difficult decision in forgiving these 
loans. And I just want to know the reason for these different--
or at least the discrepancies with respect to some of these 
decisions, where you have a smaller devastation where the loan 
is forgiven, but then you have a devastation like Katrina and 
the loans might not be forgiven.
    So what is the rationale behind this?
    Mr. Garratt. There are actually two forms of community 
disaster loans. There is the form that has existed in the 
Stafford Act for some period of time, and then there is the 
special CDL loan program that was enacted after Hurricane 
Katrina.
    The CDL loan program that exists in the Stafford Act does 
have a forgiveness provision. That provision does not 
automatically kick in, but is in fact determined at some point 
following the loan, several years after, and it is based on the 
recovery of the jurisdiction that received that loan.
    The special CDL provision did not authorize forgiveness, 
the legislation doesn't authorize forgiveness, and therefore, 
we were prevented, when that legislation was initially enacted, 
from forgiving those loans.
    Mr. Cao. I just received information from my counsel that 
the law was changed later on to allow forgiveness.
    Mr. Garratt. Indeed. Initially, though--when that special 
CDL program was initially passed, that was the case; but that 
new process, or the special CDL program, in those loans is 
still evaluated, using basically the very same process that we 
use to evaluate the regular CDL program. And that is, based on 
some number of years after they have received that loan, if 
they have recovered to a sufficient point, then they are not 
eligible for loan forgiveness.
    If they have not recovered to a specific point, then they 
are eligible for loan forgiveness. But it is going to depend 
on--the level and extent of their recovery will determine their 
eligibility for forgiveness under that program.
    Mr. Cao. And, Mr. Garrett, if you don't mind my sharing the 
Chairwoman's frustration, it has been over 4 years. And if you 
look at the city of New Orleans, which has made great strides 
under the leadership of Mr. Taffaro--St. Bernard Parish has 
made great strides, as well as other areas.
    Mr. Taffaro, can you please provide us with your input with 
respect to how critical it is for this loan to be forgiven and 
the pace that needs to be addressed in regard to this issue?
    Mr. Taffaro. Congressman, the obvious nature of our 
situation can be summed up in our current budgetary process 
where we are a small community operating on a $40 million 
annual operational budget, and we are facing a $7.4 million 
shortfall going into 2010.
    The amount of CDL funds that we received from Hurricane 
Katrina is in the neighborhood of $18 million. To have to begin 
to repay that would basically put us near bankruptcy.
    Mr. Cao. So, basically, city governments like yours, a 
parish government like yours, they are pretty much in dire 
straits, and without some of these loans forgiven in a very 
expedient way, then there would be a tremendous burden for the 
people of your parish; is that correct?
    Mr. Taffaro. It would result in direct services being cut 
from the residents who suffered the most damage, yes.
    Mr. Cao. So, Mr. Garratt, my question to you here is: How 
long does FEMA have to wait in order to decide whether or not a 
district has fully recovered to allow loans to be forgiven? I 
really don't understand. Is it 4 years, 5, 6, 7, 8, 9, 10 
years?
    Mr. Garratt. I hesitate to guess. I believe that it is at 
the 3-year point that we start evaluating the return of revenue 
to the affected jurisdiction, or to the jurisdiction in which 
the applicant for that CDL resides.
    But my preference would be, Congressman Cao, to allow us to 
provide a more fulsome and thorough answer to you following 
this hearing.
    Mr. Cao. Now, let me read to you this----
    Ms. Norton. Within 30 days, please provide that answer to 
the Chair, and I will share it with the Subcommittee.
    Mr. Cao. Madam Chair, if you will allow me to quickly read 
this provision belief quickly. It says here, under section 417 
of 42 U.S.C. 5184, "Cancellation: Repayment of all or any part 
of such loan, to the extent that revenues of the local 
government during the three full fiscal year period following 
the major disaster are insufficient to meet the operating 
budget of the local government, including additional disaster-
related expenses of a municipal operation character shall be 
canceled."
    Now, this sounds very clear to me; it requires you to look 
at the local government's 3-full-fiscal-year period following 
the major disaster. So my assumption is that it would begin 
immediately after the disaster happened and that it would 
extend for 3 years.
    Well, the question that I have here now is, it has been 
over 4 years, so the time period that you have used in order to 
assess the situation has already expired over 1 year. So how 
much longer do you need in order to make this determination?
    Mr. Garratt. Congressman Cao, based on history, in fact, we 
have been able to make determinations about CDL forgiveness and 
whether jurisdictions that have previously received those have 
reached that revenue stream, that revenue capability to which 
you refer.
    And you are exactly correct; this is a pretty objective 
determination, but it does require that the applicant of that 
CDL provide a substantial amount of documentation outlining 
exactly what the revenue capabilities are at that point.
    I don't know the specifics of each the CDL applicants, but 
for each one of the applicants that believes that we have taken 
an undue amount of time to address that particular issue, I am 
happy to tackle that.
    Mr. Cao. Mr. Taffaro, do you have documents to show to FEMA 
that after 3 years you are insufficient to meet the operating 
budget of your government?
    Mr. Taffaro. Congressman, we have documentation from 2006, 
2007 and 2008 that would clearly indicate our revenue 
shortfalls for those periods.
    Mr. Cao. So based on what the law states, Mr. Garratt, it 
says that the "character shall be canceled." There is the word 
"shall" in there that mandates the cancellation of a loan 
similar to what St. Bernard Parish is basically receiving; is 
that correct?
    Mr. Taffaro. That is correct.
    Mr. Cao. It seems to me pretty clear, so I don't understand 
this process of reviewing the regulations and to release the 
regulations, and then have them to apply for a waiver or 
forgiveness which might--given FEMA and the pace that FEMA is 
moving, might take another 1, 2, 3, 4 years until you all 
decide whether or not to forgive these loans.
    The law, it looks very clear to me; it says after 3 years 
if they can show you that they do not have sufficient money 
available, that the loans shall be canceled. It cannot get any 
more clear to me than that. Can you explain this whole 
discrepancy?
    Mr. Garratt. What I can tell you, Congressman Cao, is that 
if, in fact, any jurisdiction meets that criteria, that their 
loan will be forgiven. That will happen.
    Again, there is a process that this has to go through. They 
have to assemble their information; they provide it. And then 
that criteria is looked at the very same as any jurisdiction 
that has ever applied for one of these loans. Their criteria is 
looked at; it is a validation process.
    I am not sure where these particular CDL forgiveness 
requests are in the queue, but as I indicated to Madam 
Chairman, we will follow up with you and provide you a status 
report on every single one of those and let you know when we 
expect them to be resolved.
    Mr. Cao. Thank you very much.
    I was speaking to Chairman Oberstar just last week about 
recovery, and his statement was that FEMA spends more money in 
recovery than it does preparation, and there needs to be a plan 
to help an area to recover after a devastation similar to 
Katrina.
    My question to you here, Mr. Garratt, is this: After--4 
years after Katrina, after all the lessons that we have learned 
from Katrina, does FEMA have a plan in place to help an area to 
recover? Or do we still have the agencies come in there, the 
Federal agencies, the different agencies go in there and just 
haphazardly do things without much coordination, without much 
assistance, or without much conversation with State and 
municipal governments?
    Mr. Garratt. Congressman Cao, I think it is important to 
reinforce the fact that the response to any disaster anywhere 
in the United States is in fact--the quality of that response 
is going to be directly proportional to the teamwork of all of 
the levels of government that are involved in that response. 
And the way to achieve teamwork is to set up and operate from a 
unified command perspective.
    Mr. Cao. Do you have that plan in place, Mr. Garratt?
    Mr. Garratt. Absolutely.
    Mr. Cao. Because a disaster can strike any day, and we want 
to know whether or not there is a plan in place to quickly 
implement, to help an area to recover. Because if those areas 
have to wait like the people of New Orleans, of Louisiana, have 
to wait after Katrina, after Texas had to wait after Hurricane 
Ike, then we have a problem. We have a problem that needs to be 
solved very, very quickly.
    Mr. Garratt. I agree, Congressman Cao. And I would suggest 
that the disasters that we have responded to, whether they are 
in North Dakota or Georgia, since Hurricane Katrina, have 
demonstrated that the Agency has come a long way in terms of 
reforging and reunderstanding and reachieving the kind of 
unified Federal, State, and local level approach to disaster 
response and recovery that is necessary to begin that process 
right from the very beginning.
    So, yes, sir, I think we have got a plan, and I think we 
are ready to go.
    Mr. Cao. What is the status of this national recovery 
strategy?
    Mr. Garratt. The national disaster recovery----
    Mr. Cao. You were saying that you, if I were to follow your 
last statement, that you have all these steps ready, you have 
all this great plan together. I need to know the status of it.
    Mr. Garratt. No. I was referring to the architecture that 
we have in place, by which we operate and respond to disasters 
whenever they occur, and that is called the National Response 
Framework. And that National Response Framework is not just 
limited to response----
    Mr. Cao. Basically, you don't have one right now; is that 
correct?
    Mr. Garratt. No, sir, that is not correct. We do have a 
plan to respond to disasters.
    Mr. Cao. What about a plan to help an area recover after a 
disaster? I was talking about a plan to help an area recover.
    Mr. Garratt. If what you are talking about is the National 
Disaster Recovery Strategy that was mandated by Congress, that 
effort is under way.
    Mr. Cao. What is the status of that, Mr. Garratt?
    Mr. Garratt. Status in terms of?
    Mr. Cao. The National Recovery Strategy.
    Mr. Garratt. The status is that it is under development, 
sir.
    Mr. Cao. How far into this development is this plan, is 
this strategy? Would it be ready, if a hurricane were to come 
down into the Gulf in the next week or so, would it be ready to 
be implemented then and there?
    Mr. Garratt. No, sir. The plan will not be completed within 
the next couple of weeks; in fact, I would not expect the plan 
to be completed for a number of months. But that does not mean 
that the Federal Emergency Management Agency and our partners 
do not understand what is necessary to respond to and recover 
from a disaster.
    For example, Emergency Support Function 14, the long-term 
community recovery function, is a key part of the national 
response framework, and that has been extremely successful in 
helping us----
    Mr. Cao. Mr. Garratt, it has been 4 years for you all to 
devise a National Recovery Strategy. I don't understand how 
much longer you need in order to come up with a plan.
    Madam Chair, it just baffles me that 4 years after Katrina, 
after that devastation, we still don't have a plan of recovery. 
So I don't really know what else we have to do in order to 
encourage FEMA to come up with a strategy.
    Mr. Garratt. One point I would like to make, Congressman, 
if you don't mind, is that a national strategy is one thing; 
but all disasters are unique and all disasters are different, 
and the real strategy that is going to support a fast and rapid 
recovery of any particular geographical area is going to be the 
strategy that is developed between the Federal Government, 
between the affected State, and between those jurisdictions 
within that State.
    They need to come together. They need to figure out the 
unique characteristics of that disaster and their recovery. And 
they need to forge together a tailored recovery plan for that 
affected area.
    That is the purpose of the SF-14, the Long-Term Community 
Recovery Annex. And they have been unusually successful in 
helping forge those sorts of planning activities in States 
throughout this Nation.
    Mr. Cao. If you can provide us with the status of this 
National Recovery Strategy, we would really appreciate it. 
Within the next week or so, or maybe 2 weeks, we just want the 
status. We just want to know where in this planning strategy 
you all are right at this present moment.
    Now, there was a statement that was said a couple of months 
ago by----
    Ms. Norton. If the gentleman would yield, the National 
Disaster Strategy, Mr. Garratt, that you refer to for the 
Nation--which would include, of course, the Gulf Coast, is 2 
years overdue, so you needn't cite it in response to the 
gentleman from Louisiana.
    Go ahead, sir.
    Mr. Cao. Thank you very much, Madam Chairman.
    Basically it says that what the storm did not destroy, FEMA 
came later and destroyed it. And I am talking about some of 
this flood mapping that we have.
    I know that in Louisiana people are suffering from high 
insurance rates. Flood insurance, for example, can run from $2-
, up to $5-, $6,000 in flood insurance.
    I live in an area where I believe I pay, if I remember the 
numbers correctly, about $4,000 for flood insurance per year 
because of this velocity zone. I know that we have a firehouse 
out there that was obligated by FEMA and then deobligated by 
FEMA after the flood maps came out.
    Now, you have people that have homes, that have businesses 
that have been there for a number of years. And now, in order 
for them to get to the nearest firehouse, they have to travel 
20, 30 miles to get to the nearest firehouse.
    My question to you here is, sir, what is the rationale to 
obligate the repairs of these fire stations, and then 
deobligate them, based on these flood maps?
    Mr. Garratt. FEMA's obligation from a mitigation 
perspective is to identify risk and to reduce risk to citizens 
throughout this country. It is also to ensure that Federal 
funding does not go towards funding risky ventures. If, in 
fact, we are going to fund somebody building below flood level 
in an area that we have identified as a flood zone, in fact, we 
think----
    Mr. Cao. So my question is basically, based on your 
rationale, then if a community were to return and it happens to 
be in a high-velocity zone, and based on the rationale that you 
are saying, that, Well, we are not going to give you a 
firehouse so that we can encourage you to move out of your 
neighborhood; or if you decide to live there, we are just going 
to go ahead and let your house burn down? Is that correct?
    Mr. Garratt. No, sir, that is absolutely not correct.
    If you will allow me to finish, there are a couple of 
options available to that jurisdiction. One, if they are 
interested in building that firehouse and not elevating that 
above the flood risk, they are free to do so, but they won't 
get Federal funding to do that.
    On the other hand, if they want to mitigate that firehouse 
to whatever risk they face, Federal funding may be available to 
them.
    So the answer is that it is going to depend on what the 
jurisdiction and the applicant want to do. The Federal 
Government is interested in reducing risk to American citizens.
    Mr. Cao. Paul, do you mind clarifying that for me?
    Mr. Rainwater. Yes, Congressman.
    So there is no doubt that--the policy that FEMA sent down 
to the State and to the local governments basically said that 
we would look at it on a case-by-case basis, depending on what 
the damage to the facility was. There is no doubt that--we are 
in a dispute right now in Cameron Parish, for example, about a 
school, whether it will be rebuilt or not or whether the 
library will be rebuilt or not.
    And as you said earlier, Congressman, it is important 
that--I mean, these are working communities. There is a reason 
they live along the Gulf Coast. There is a reason that myself 
and the Governor have been advocates for allowing people to 
live on the Gulf Coast.
    Cameron Parish, just as an example, has two of the largest 
liquefied natural gas facilities in the country fueling the 
country. Twenty-five percent of fish and shrimp come from the 
Gulf Coast, as you know. So we are in dispute about some fire 
stations and some sheriff substations and some schools that are 
on the Gulf Coast, and also some roads in Grandolf, for 
example, and a fire station. So I don't think we have resolved 
it yet.
    Obviously, we want to be smart about the way we rebuild in 
Louisiana, but I think that we can figure that out. And again, 
it goes back to the State taking----
    Mr. Cao. But then by deobligating the project, basically it 
leaves you no recourse whatsoever; is that correct?
    Mr. Rainwater. Basically you either repair and take the 
risk that if it is damaged again--which I think most of us are 
willing to do that--we would get no Federal assistance, or you 
move the project outside of that area.
    Mr. Cao. Madam Chair, I do have more questions, but I yield 
the floor back to you so you can resume your questions.
    Ms. Norton. Well, I think you have asked--and we will come 
back to a second round, but you have asked questions that have 
been informed by being on the ground. And you began your 
questioning by giving FEMA and the State their due by saying on 
the ground you have seen significant process.
    And I do want to be understood to commend the State and 
FEMA for that progress. Any time I see that figure, $1.2 or 
$1.3 million in little more than 6 months, I know that 
something has been happening.
    The problem I am having is finding out how it happened. And 
I think the way to avoid circular questioning is to say to you, 
Mr. Axton, because you were given much of the credit, you and 
your superior, I need within 30 days, inasmuch as Mr. Garratt 
mentioned on page 3 of his testimony that FEMA has eliminated a 
number of bureaucratic impediments, I need to know specifically 
what were those impediments.
    Did the IG or any other oversight Committee concur with 
their elimination? What offices or procedures were 
consolidated? Were any employees affected?
    There is something about having to put something in writing 
that disciplines the mind. To the extent that you see this, it 
will, in fact, begin to be understood and, it seems to me, may 
even begin to happen in a way that it has been hard for this 
Subcommittee to figure out from your testimony--in part, 
because of the complexity of explaining it.
    For example, if I were to write this out, I would give 
specific examples. Mr. Garratt, on page 5, mentioned 32 
previously--see, that is the kind of concreteness that I 
commend FEMA and the State, Mr. Rainwater, for--32 previously 
stalled projects in regard, Mr. Taffaro, they say to 
eligibility.
    Within 30 days, I want the names of those 32 projects.
    Believe me, I am not engaged in a paperwork project, but I 
just think if one outlines what I am talking about, without a 
whole, big 50-page response, that you will do quite enough for 
this Committee: names of the 32 previously stalled projects 
with regard to eligibility.
    Underneath that, I would put in a paragraph--no less than 
that; it may take only a sentence--how the eligibility issue 
was resolved. If one sees that in black and white, one might 
then go to those procedures more readily.
    Ms. Norton. Mr. Daniels, as far as we are concerned, you 
are not a bystander to this project. The fact that FEMA and the 
State knew you were coming on board may have something to do 
with the progress that has already been made, and that is all 
right with us.
    I guess the fact that there is a Supreme Court of the 
United States means that people work a little harder. Although 
the last thing I want to do as a lawyer who has practiced 
before the Supreme Court is to cite the courts as any example 
of what we would like to see replicated here.
    How different, if at all, from the current practices do you 
see the Katrina arbitration process working? When should it 
click in in order for you to be useful at all?
    Mr. Daniels. Well, we would like to see it click in as soon 
as possible.
    Ms. Norton. So the more the parties can go back over one 
another, the less effective your process it is going to be. 
Because they see you there, if they can keep you out there, you 
know, better than not being there at all.
    Mr. Daniels. The process that I am most familiar with as 
far as dispute resolution is the Contract Disputes Act. And the 
triggering process in that act is the contractor submitting a 
claim to the contracting officer. If he doesn't get a decision 
within a certain period of time, he can file an appeal with the 
Board of Contract Appeals.
    So it is incumbent on----
    Ms. Norton. Within a certain period of time. I realize that 
the contracts you deal with are not as complicated, but what 
time--just to give us some idea of how such a mechanism works?
    Mr. Daniels. Sixty days for a claim below $100,000. For a 
claim above $100,000, the contracting officer must respond 
within 60 days to give a date by which he will make a decision, 
and it must be a reasonable date.
    Ms. Norton. That sounds so rational to me. You handle some 
of the biggest appeals.
    Now, do you handle some of these appeals from the Defense 
Department?
    Mr. Daniels. We do not do the Defense Department. That is 
the only Department we don't do.
    Ms. Norton. What is the biggest appeal you might handle?
    Mr. Daniels. We have had appeals up to $100 million on 
construction projects for major buildings.
    Ms. Norton. That is good enough for me.
    What is wrong with the process that Mr. Daniels has 
outlined? Mr. Rainwater, Mr. Axton, and Mr. Taffaro, what is 
missing here in terms of what you need in order to get to the 
point where you declare there is a dispute?
    You heard him say--it would look like the ball would be in 
your court, Mr. Rainwater; or possibly Mr. Taffaro, although 
Mr. Taffaro seems to be more willing to get to a response than 
you, Mr. Rainwater, who is in this unified team and seem to be 
willing to keep the government hiring experts. Because that is 
what they are doing; on your dime they are hiring experts to 
refute you, sir.
    Mr. Rainwater. The organization I run goes away July 2010, 
so I am not looking for employment. Our job has been from Day 
One to push as quickly as possible----
    Ms. Norton. Excuse me, you have got to explain. What 
happens in 2010?
    Mr. Rainwater. Yes, ma'am. The Louisiana Recovery 
Authority, this consolidated organization that I run, the 
Community Development Block Grant dollars and the FEMA public 
assistance dollars expire July 2010.
    Ms. Norton. And then what happens?
    Mr. Rainwater. Well, hopefully we will be done with 
disputes, Madam Chairwoman. That is one of the things we were 
very excited about, about getting Tony Russell.
    Ms. Norton. How much is left on the table now? How much is 
in the pipeline now?
    Mr. Rainwater. Yes, ma'am. There are $8 billion that have 
been obligated; we paid out about $4 billion. We think we are 
going to get another $3.5 to $4 billion, depending on the 
versioning process. Now, half a billion of that is Charity 
Hospital which--the State is preparing that arbitration case, 
and we will be sending it either tomorrow----
    Ms. Norton. But we have called the question on Charity 
Hospital.
    Mr. Rainwater. Yes, ma'am.
    Ms. Norton. And that is going to go to whom?
    Mr. Rainwater. The judge.
    Ms. Norton. Is the time running on that one?
    That would be the biggest news to come out of this hearing. 
Is the time running on Charity Hospital?
    Mr. Rainwater. We will send it no later than Friday, but 
possibly tomorrow. We did send our second appeal up just as a 
placeholder, made the decision to go with our arbitration 
panel. So we will send it to the arbitration panel, and 
hopefully we will get a decision within 60 days. That is the 
goal.
    Ms. Norton. Are you prepared for that, Mr. Daniels?
    Mr. Daniels. Yes, ma'am, we are.
    Ms. Norton. So Charity Hospital may be the biggest and the 
most desperate of the outstanding----
    Mr. Rainwater. Yes, ma'am. And then there are about 14 
projects that are over about $50 million, representing about 
$1.4 billion.
    Ms. Norton. So you do feel that you can handle projects 
well below $500,000 within this process that you have been 
using?
    Mr. Rainwater. Yes, ma'am, we believe we can.
    There are going to be some others. There are about 30 
projects that we have picked that will possibly go to 
arbitration.
    Ms. Norton. Before you run out of gas, how are you going to 
get all of that done, given the process of multiple--not 
appeals, interestingly--multiple steps with architects and 
engineers before you can get to the dispute stage?
    Mr. Rainwater. Well, ma'am, I think one of the things that 
we are trying to do--again, one of the things that we have 
created between the State and the Federal Emergency Management 
Agency is sort of this concept team to sit down, and if we can 
get to a point--for example, one of the ideas on the table is 
that FEMA would accept architectural and engineering reports at 
a certain amount.
    Ms. Norton. Let's remember, we are trying to make this a 
dispute resolution session in itself.
    You have heard Mr. Rainwater say that--say it again, Mr. 
Rainwater, if FEMA were to accept what?
    Mr. Rainwater. If we could decide on an amount and FEMA 
would accept architectural and engineering local, State project 
worksheets at a certain amount--for example, we have about 
3,000 that are under $1 million--we could work through that 
process very quickly.
    Ms. Norton. If they were to accept it.
    Does that relate to your earlier testimony about assuming 
the risk?
    Mr. Rainwater. Yes, ma'am, it does.
    Ms. Norton. If it costs more than that?
    Mr. Rainwater. Yes, ma'am.
    Ms. Norton. I have to ask, in light of the fact that, 
otherwise, the Federal Government would be spending money on 
more studies out of our own pocket and they are willing to 
assume the risk, why the Federal Government wouldn't just let 
them assume it, call it a day, sign off, and go on to the next 
project?
    Mr. Garratt or Mr. Axton, whichever one of you wishes to--I 
don't need "depending on," everything depends on. You heard him 
say "under a certain amount." Here is our bid. Of course, we 
can continue with the architectural stuff and continue to go 
through all these appeals, all of which we pay for, but he is 
saying, We will assume the risk, that is how desperate we are.
    You can imagine, Mr. Axton and Mr. Garratt, that the cost 
of labor, the cost of everything is much lower than it would 
have been 4 years ago. So I am not sure they are assuming so 
much risk. People are so anxious to work, small business and 
business in the State and throughout the region, so I am not 
sure that this isn't anything but a win-win unless there is 
some bureaucratic sense that the Federal Government doesn't 
operate that way. Although, if we had any private parties in 
the room, I know what the answer would be.
    Because I don't see where we lose. They may lose. Given my 
understanding of what it is like down there, I don't think they 
have much of a chance for losing; therefore, I see it as a win-
win.
    I want to know, Mr. Axton or Mr. Garratt, why that isn't a 
win-win for certain projects.
    Mr. Axton. I think the most important outcome that we are 
continually striving for with all the various local officials--
and certainly with the State--is to, again, have the various 
professionals that are involved in each----
    Ms. Norton. You cannot come before this Committee without 
answering my question. You see, I didn't ask you about the 
professionals. See, 4 years I have been sitting here with the 
professionals.
    I asked you a very specific question and, sir, I want a 
specific answer.
    Mr. Axton. Chairwoman Norton----
    Ms. Norton. I said, why isn't their willingness to assume 
the risk, holding the Federal Government liable for nothing 
further, given an estimate following the professionals having 
given that to you, based on their architects, engineers and the 
like, why isn't that a win for the government and, therefore, a 
win-win since they would agree to that?
    Mr. Garratt? It may be unfair to ask Mr. Axton since he is 
not in charge.
    I want to know why that ought to wind itself up before Mr. 
Daniels, who, I must tell you, being in touch with court suits, 
with settling court suits, having clerked for a Federal judge, 
I want to tell you that that is likely to be the outcome in the 
first place.
    You don't need to say so, Mr. Daniels, I know the matter is 
before you, but I know how things work when a dispute resolver 
gets into the act.
    Ms. Norton. So I have to ask you, with some sense that 
there is nothing to lose here because you are able to sign off 
and report to this Subcommittee one last project due, with Mr. 
Rainwater saying it has been so long we are willing to accept 
the risk, why should that not be put into operation now with 
respect to certain projects?
    Mr. Garratt. It may very well be an outstanding idea, Madam 
Chair. I, personally, would like to know a little bit more 
about exactly what is being proposed here, but, conceptually, I 
think it sounds like a worthwhile idea.
    Ms. Norton. That is all I need to hear, because we cannot 
ask you to negotiate. I am sure this is not the first time it 
has ever come up.
    Let me ask you this, Mr. Rainwater. I want you to set out 
what you just said you would propose--projects under what 
amount. I want you to get it to him quick enough so, within 30 
days, we can see whether or not Mr. Garratt accepts that as a 
possible way to respond.
    Mr. Rainwater. Yes, ma'am.
    Ms. Norton. Let me say something about Mr. Cao's question.
    You are not paying back this money that has been borrowed 
from FEMA, but let me tell you what is happening to Mr. Taffaro 
and to the State of Louisiana. If they are holding up to 25 
percent of their budget in outstanding debts, that means that 
that has affected their bond rating, their ability to borrow on 
Wall Street. To the extent that it has affected their bond 
rating, do you know what that means? It means, as a result of 
no decision having been made on the borrowings that Mr. Cao 
indicated, that the people of Louisiana, 4 years after Katrina, 
are paying more to borrow money in the middle of a recession 
than they were paying 4 years ago in what were good times.
    This is an additional outrage. You have got to borrow 
money, you are paying more to borrow money, and the Federal 
Government, because of the tardiness in dealing with these 
regulations, as Mr. Cao has pressed on, is responsible for 
lowering the bond ratings of the parishes and of the State 
itself. I mean, that is a shame and an outrage; and the 
timelines that we have indicated, particularly in light of the 
borrowings or the effect on borrowing that we are going to have 
to emphasize, we will hold you accountable for. We wanted to 
put on the record the effect it is having on a State that was 
already in worse state, given Katrina, than any other State.
    Now, some of this I am just going to ask to be put in 
writing.
    I want to deal with this question of applying people within 
FEMA to help the parishes get to the point that Mr. Taffaro 
indicated is a huge part of the problem. You have got to have a 
determination of eligibility which affects the pace of recovery 
in the first place.
    Mr. Taffaro, you mentioned--I think it is on page 8--that 
FEMA has agreed to embed staff at St. Bernard Parish. Have they 
done this? Would they have sufficient authority to make the 
decisions necessary to speed recovery?
    Mr. Taffaro. Madam Chair, the information that we have 
received, in fact, as we were approaching the hearing today, is 
that there is a shift in personnel.
    Ms. Norton. You say you were hearing that today?
    Mr. Taffaro. Yes, Madam Chair. As of this morning, we were 
hearing confirmation that there would be personnel shifted to 
embed with St. Bernard Parish.
    Ms. Norton. Excellent. How many people do you expect to 
embed, Mr. Axton?
    Mr. Taffaro. Well, according to Mr. Russell, the director 
of the TRO, he indicated that there would be one lead and four 
additional personnel who would work out of the St. Bernard 
Parish government's office.
    Ms. Norton. So five people----
    Mr. Taffaro. Five.
    Ms. Norton. --embedded there?
    Mr. Taffaro. Correct.
    Ms. Norton. Mr. Garratt or Mr. Axton, how many people does 
FEMA have on the ground in Louisiana dedicated to the recovery 
effort right now, as I speak?
    Mr. Garratt. In the State of Louisiana as opposed to St. 
Bernard Parish?
    Ms. Norton. Yes, dedicated to recovery.
    Mr. Garratt. I do not have specific figures. Between 600 
and 800.
    Ms. Norton. Within 30 days, the exact number and to what 
functions and where they are doing their work, please.
    In preparing, Mr. Axton, your work, we asked you to do 
examples. For example, Mr. Rainwater points at the examples of 
resolution. I was very pleased to hear about the Tulane library 
and that it was not an easy project. You learn things not only 
by bold language about what we did but by example. Perhaps you 
could use Tulane as an example of how some breakthrough 
occurred. I need to know where these layers are, though.
    How about appeal? Is that still in the process? I mean, the 
arbitration is pretty quick if we get to the point where you 
have no dispute, but we had this other appeal process. Whatever 
happened to it? Is it still in the picture? Why is it in the 
picture if there is an arbitration process?
    Mr. Garratt. Yes, ma'am. The appeal process still does 
exist. For those projects that were in appeal when the 
legislation implementing the arbitration process was 
promulgated, we suspended any unfavorable action on any of 
those appeals. We continue to review the appeals. In fact, if 
we found in favor of any of those, we notified and continue to 
notify----
    Ms. Norton. Is that still in use only for those projects 
that were in process then?
    Mr. Garratt. No, ma'am. The process is also available for 
new issues that arise. It is going to be up to the applicant to 
make the determination.
    Ms. Norton. All right. That is something you are going to 
have to tell this Subcommittee. We did not mean to impose 
another layer. Please forgive us. The process that we had 
concern about was not so much the appeals; it was getting to 
the point where a dispute was declared. Now I am all mixed up. 
We still have the appeal. Whereas, I thought, once we got to 
dispute and got to Mr. Daniels, we could solve the matter, and 
that is it. So what in the world is the appeal process there 
for in the first place, an old-fashioned traditional process 
for new matters?
    Mr. Garratt. The appeal process is what it is--these are 
complementary avenues for an applicant.
    Ms. Norton. So it is one or the other?
    Mr. Garratt. That is correct.
    Ms. Norton. Now, Mr. Rainwater and Mr. Taffaro, why do you 
need two processes that you can go to? Let me ask you this: 
After you go to appeal, can you still go to arbitration?
    Mr. Rainwater. No, ma'am, not as I understand it. I think 
you have to pick.
    Ms. Norton. Which process is quicker?
    Mr. Rainwater. Chairwoman, I think it depends on the 
complexity of it. I mean, when you look at Charity Hospital, it 
is just so complex----
    Ms. Norton. So you would prefer which process?
    Mr. Rainwater. Arbitration. Yes, ma'am.
    I mean, one of the things that we have sort of been 
fighting for is this whole ideal of--you know, when we just hit 
heads to a point where folks were bleeding in the room, it was 
time to bring in an independent panel.
    Ms. Norton. How does the appeal process work? Suppose you 
chose appeal, not for Charity but for some lesser project. What 
would that entail?
    Mr. Garratt. The applicant who is appealing the dispute 
would submit an appeal to the region that oversees that State. 
In this case, for Louisiana, it would be FEMA region 6. The 
regional administrator would review that appeal and render a 
decision. If it is unfavorable, then the appellant can re-
appeal to FEMA headquarters. So they have two levels of appeal 
within that process.
    Ms. Norton. Now, Mr. Rainwater, with that process of appeal 
within appeal and then re-appeal, why would anybody choose that 
process, even for someone smaller than Charity Hospital's 
processes, if he simply wanted to get something done?
    Mr. Rainwater. Yes, ma'am.
    Ms. Norton. What is the difference between an ALJ's ability 
to solve a complex matter involving multimillions of dollars 
that they do every day and solving smaller projects of the kind 
you have indicated? Why would you rather go through these 
cumbersome appeals? Why would you ever choose that one?
    Mr. Rainwater. Well, why would we choose an appeals 
process?
    Ms. Norton. Yes.
    Mr. Rainwater. Well, simpler projects that either the 
applicant or the State just does not agree with. You know, 
FEMA's perspective at the transitional recovery----
    Ms. Norton. Wait a minute.
    Mr. Garratt, what are the timelines on those multiple 
appeals and re-appeals? You heard what Mr. Daniels said. That 
is a pretty straightforward process. Even I can understand it 
in one telling. What are the timelines to appeal? Give me 
something comparable to what he said.
    Mr. Garratt. Both appeal levels have 90 days to render an 
appeal determination once they receive that appeal.
    Ms. Norton. Then, of course, there is another appeal.
    Mr. Garratt. That would be at either level. So, whether it 
is the first appeal or second appeal, they have 90 days to 
render a determination.
    Ms. Norton. Has FEMA ever met such a timeline? Is it 
meeting these timelines now?
    Mr. Garratt. We are not meeting the timelines universally, 
no, ma'am. Yes, we have. We meet a lot of timelines, but we are 
not meeting all of the timelines.
    Ms. Norton. Of course not, and you are overworked, and you 
have too few people even on the ground.
    Mr. Daniels, are you meeting your timelines?
    Mr. Daniels. I cannot really say yet because----
    Ms. Norton. I am not talking about this project, sir. You 
have not got any for this project. I am talking about the 
timelines that you discussed for other projects.
    Mr. Daniels. Generally speaking, once a case gets to the 
board and it is ready for decision, we get that decision out 
within somewhere between 2 and 4 months.
    Ms. Norton. Having heard that, Mr. Rainwater, do you still 
prefer appeals up here to Washington?
    Mr. Rainwater. No, ma'am. I would rather resolve them down 
in the State.
    What occurs, though, is that, eventually, you know, an 
applicant gets frustrated enough or especially early on. There 
are not any now, but there was a lot of distrust in the 
beginning to some of the issues that were occurring down at the 
Transitional Recovery Office, so applicants wanted the appeals 
to come to Washington, D.C. We actually worked it out with Mr. 
Garratt. In Mr. Garratt's work with us, we created an 
opportunity for applicants actually to come to Washington, 
D.C., and to do an oral presentation so that----
    Ms. Norton. So, Mr. Garratt, if they would ask for a 
hearing in Louisiana, would FEMA agree?
    Mr. Garratt. I think we have agreed in the past. I think 
our preference is, if they want a hearing, that we would agree 
to do that via video teleconference with them.
    Ms. Norton. Mr. Rainwater, I am having a hard time 
understanding, except that it is the way it has always been, 
why you would not go to arbitration. Do you really think that 
the bureaucrats in Washington are going to be more friendly to 
the States since you are choosing the forum?
    Mr. Rainwater. No, ma'am. That is why we fought for 
arbitration. That is why we supported it. We have 30 appeals 
right now that we are going to make a decision on whether or 
not--and we need to coordinate with the local----
    Ms. Norton. How long does an appeal take then, the next 
appeal?
    Mr. Taffaro, some of these have been from the parish. What 
has been your experience with the appeal process, just the 
appeal process? You have finally got a decision. Now you have 
got to come to Washington with multiple appeals. You don't like 
that process?
    Mr. Taffaro. Madam Chair, I think it is important to note, 
from our standpoint, when the arbitration legislation was 
passed, that is what has now triggered the appeal to the 
region. Prior to that, the appeal was not heard at the regional 
level. So we had a direct appeal within the TRO and then to 
Washington. It is important----
    Ms. Norton. So you would prefer the appeal to the regional 
level?
    Mr. Taffaro. Well, let me put it in the context.
    One of the things at the present local level we attempt to 
do is to resolve it. That trigger point of when we get to an 
appeal or move to arbitration is similar to being in a bad 
relationship. How long do you go before you break it up? That 
is what happens.
    Ms. Norton. I can understand, if you look at when 
arbitration occurs in labor disputes, that that would be the 
case. I want you to know that that was not the intent of this 
legislation. The intent of this legislation was to get a 
decision and to put it in the hands of somebody who was not 
caged in his own interest, because we did not see any reason 
here--we did not blame the State or FEMA, and that is why, in 
my opening statement, I said there are structural reasons why 
they cannot be expected to easily come to a decision. So we did 
not see this as patterned on the labor union process. We saw it 
much more patterned on negotiation processes where people come 
together.
    If I could just give you an example from my own experience: 
When I was appointed to Chair the Equal Employment Opportunity 
Commission back in the day in the Carter administration, I came 
to an agency that had a 100,000-person backlog. I decided that 
I was not going to allow them to continue to go to court or to 
somehow take all of these things through some very formal 
procedure.
    So we did something that we call "rapid charge processing," 
which essentially was a negotiated process. Except the way we 
did it was, instead of using the investigator only to 
investigate the cases and then come back and say late in the 
process "we found this reason why you might be found liable" 
and to let us say to the complainant "this reason why you might 
not prevail up front," they would go into a room with the 
employer.
    Let's take a discrimination complaint where a woman says, I 
was late 10 minutes, maybe, four or five times in the last 6 
months, and I was dismissed, and I think they dismissed me 
because I was a woman.
    We inform her, you know that they are going to put into 
evidence all of the people they have dismissed, and if we find 
some men have been dismissed in that amount of time, you are 
going to be out of luck because then you have not shown 
discrimination, and the burden is on you.
    Now, he is going to say, we dismissed her because she was 
late--the other side does not even hear this--and we believed 
that it was time for her to go.
    We are going to say, you know what? We are going to, as a 
matter of law, require you to show us what the late records 
were for men and for women during this 6-month time period.
    Then, Mr. Rainwater, each is understanding that they have 
got a chance they are going to take. Are they going to spend 
their money hoping that they will come out on top once these 
records are produced, as a matter of due process, or are they 
going to cut their losses?
    Let me tell you what. The employee who is mad and has 
alleged discrimination is ready to accept a settlement from the 
employer, which may be any kind of settlement. It may mean that 
she has been fired, and she does not come back. It may mean she 
got a little recovery. It may mean that, if she promises not to 
be tardy, she would be up for rehiring. Whatever it is, we are 
able then to negotiate the matter, because each feels some 
jeopardy in just waiting it out.
    This is an example to say that I see the present process, 
especially with the appeals, putting jeopardy on both sides 
when I am interested on a win-win on both sides. Yet, to a 
certain degree, all of you seem locked into, well, we have done 
a little better in the appeals process now, and maybe we do not 
know what would happen in the arbitration process. You know, 
maybe the arbitrator comes out with a decision we do not like 
and is willing to accept Mr. Rainwater's notion: Just cut your 
losses right now and have FEMA accept the estimate.
    I just want to get to a decision. That is why I told you 
that anecdote, to indicate that the appeal process carries that 
risk. I would like to eliminate the risk, which I regard as 
structural on each side, and would like to just get to a 
decision one way or the other, preferably through real 
shortcuts like Mr. Rainwater's.
    I take it you endorse that kind of shortcut, the estimate.
    Mr. Rainwater. I do, Madam Chair.
    Ms. Norton. If not, I am amazed at anybody wanting to come 
to Washington, re-appeal and all the rest of it until you get 
the right answer, hoping you will get the right answer, rather 
than going to an arbitrator who would have to go through 
something like the process that I am going through. He would 
have to explain to each side what their jeopardy was, and their 
lawyers and the people who would be accompanying them would 
then, grownups that they are, decide if they are going to cut 
their losses or not, and the arbitrator may end up making no 
decision whatsoever, because it would be decided by the 
parties, in effect.
    Mr. Rainwater. Madam Chairwoman, if I could, there are some 
constricts with regards to the arbitration panel. As I 
understand it, it only will look at issues of construction and 
cost estimates, not policy. So there is a reason to still have 
the appeal processes, especially if we conflict on policy.
    Ms. Norton. Wait a minute. Excuse me. Oh, just a moment. 
Are you suggesting that the arbitrator could not decide the 
policy issue?
    Mr. Rainwater. As I understand it, unless I am mistaken, 
but that is as I understood it.
    Ms. Norton. Excuse me. I did not think we had a policy 
issue by that point. Really, if we can get all the way to the 
point where the architects and the engineers are down to what 
the amount should be and how it should be configured and a 
question of policy is raised, I do not know what this is all 
about or why the arbitrator, who is a lawyer and who must 
decide within the bounds of the law, the same law that the 
administrators who may or may not be lawyers and who therefore 
are giving it to people like the arbitrators to decide for 
them--I do not understand why--and if that is the case, then 
count on us to clarify that matter.
    I want to know, Mr. Garratt, do you believe the arbitrator 
has no ability under the statute we pass to decide the question 
within the law, the full law, as it applies to FEMA and its 
regulations? Do you believe that is an impediment here?
    Mr. Garratt. I believe some clarification is in order, 
Madam Chair.
    Certainly, the arbitration panel can decide issues affected 
by policy. In other words, policy says this is not eligible. We 
do not think it is eligible. The applicant does think it is 
eligible. Under that policy, the arbitration panel can render a 
decision on that. What the arbitration panel cannot do is make 
policy as part of that process. They are not charged with doing 
that. They are charged with interpreting existing policy.
    Ms. Norton. That is an important point.
    My understanding is that, by the time we reach a dispute, 
call to question that it is a dispute, that the policy issues 
writ large--that word has to be reserved for matters where the 
statutory intent is involved--should not be involved, and if 
they are, I need you all to tell me that right now.
    Has this been a matter of law? That is what policy is, not 
discretion, but now a major policy matter is implicated. How 
much of this is due to that? How many projects on the ground, 
Mr. Taffaro, do you think have been because of policy matters 
that go to the law itself, to the ability of FEMA to make the 
decision? That is what a policy matter is. Otherwise, FEMA has 
enormous discretion, Mr. Rainwater.
    Mr. Taffaro. Madam Chair, our experience is that FEMA has 
had enormous discretion and that it has been a common 
discussion that ineligibility or eligibility determinations are 
often differentiated between statutory authority versus policy 
decisions. Oftentimes, it falls on the side that the FEMA 
policy would make something ineligible versus the statutory 
regulations allowing it.
    Ms. Norton. Mr. Rainwater is going to have to computize for 
me, by example, a policy matter that should not go to the 
arbitrator. Give me an example--or you, Mr. Axton. Somebody 
give me an example of that so I will know what you are talking 
about.
    Mr. Rainwater. One example would be the demolition of homes 
for economic recovery. This is a policy.
    Mr. Taffaro. That is a perfect example, Madam Chair.
    Mr. Rainwater. That is a policy. We asked the Federal 
Emergency Management Agency to demolish houses that were 
actually boarded up and that met the local codes. Under FEMA 
policy, you can demolish those homes for health and safety or 
for economic recovery. The decision was made, if a home were 
not considered a health and safety risk, that we could not 
demolish homes and get FEMA reimbursement under the economic 
recovery policy.
    Ms. Norton. Mr. Garratt, that is a matter for you to 
decide. Who decides that, if not FEMA?
    Mr. Garratt. That is correct, ma'am.
    Ms. Norton. But you are saying the arbitrator could not 
decide that matter. Are you saying that, Mr. Garratt? Is that a 
new issue? Would that be a new issue, for example?
    Mr. Rainwater. That has been an issue that we have been 
fighting--or pushing back on for quite some time. It affects 
President Taffaro's parish immensely.
    Ms. Norton. Well, Mr. Garratt, if there is a new issue--
now, I accept that Mr. Taffaro and Mr. Rainwater will run into 
new issues because of the unique nature of Katrina. If there is 
a new policy issue like that, why isn't that matter separated 
out simply to get the policy determination so that the matter 
can go forward without being mixed in with the particular 
amount or with the particular parish, et cetera? Can you or can 
you not demolish homes? Have you made that decision?
    Mr. Garratt. We have made that decision, and we have 
demolished homes. So the determination has been made that those 
abandoned or damaged structures present an immediate threat to 
health and safety.
    Ms. Norton. So what is the policy issue, Mr. Rainwater?
    Mr. Rainwater. The policy is not to demolish homes under 
economic recovery.
    Ms. Norton. You said what?
    Mr. Rainwater. Not to demolish homes for economic recovery. 
That is blight. That is, we have blighted homes that people--
you know, the parish government. You know, folks received their 
insurance and left the parish. So what we asked is that FEMA 
demolish those homes so that we would not have blight. We felt, 
in the Stafford Act, there is a provision to do this under 
economic recovery, and we asked for that.
    Ms. Norton. Okay. Let me read to you the law.
    I am sorry. I have general, very broad language, but he is 
finding even the regulatory language. It is section 206-224 
under Debris Removal and under Public Interest.
    You know what? All it means is that somebody has got to 
bite the bullet.
    Mr. Daniels, were you in the practice of law?
    Mr. Daniels. I was in the practice of advising Congressmen, 
just like your counsel there, before I became a judge.
    Ms. Norton. How long have you been an ALJ, please?
    Mr. Daniels. Twenty-two years.
    Ms. Norton. You spent part of your career in the Congress 
of the United States, advising the Congress on or doing what, 
sir?
    Mr. Daniels. Advising the Congress on laws and 
investigations.
    Ms. Norton. And then you became an administrative law 
judge. You have been an administrative law judge for how long, 
sir?
    Mr. Daniels. Twenty-two years.
    Ms. Norton. During that time, you have had to construe the 
laws of which agencies?
    Mr. Daniels. For most of that period, the General Services 
Administration and about 20 other agencies and, for the last 
almost 3 years, all the agencies of the government other than 
the Defense Department, NASA, and the Postal Service.
    Ms. Norton. I lay that on the record, because section A of 
Public Interest clearly leaves FEMA extraordinarily broad 
discretion, all of that discretion, ultimately to ensure 
economic recovery of the affected community, to the benefit of 
the community at large or to mitigate the risks of life, et 
cetera--you know, broad, broad.
    So I do not know why an administrator or multiple 
administrators in Washington are better equipped to interpret 
this language than are arbitrators who may have been 
interpreting even more difficult and complicated language for 
decades. So I do not understand that the fact that there is a 
policy matter makes who gets the appeal any different, given 
what Congress has mandated and this board has been mandated to 
make that decision.
    ALJs are there to interpret the law of the particular 
agency, and they are equipped to read Federal law way across 
agency bounds. And they are very well-equipped, I submit to you 
better equipped, than any administrative agency, because they 
will be comparing how they have made similar decisions 
regarding other agencies.
    So, right now, unless somebody at that table can tell me 
that there is a specific reason why--I am not indicating 
anything except that "multiple ways to go without any objective 
reason for knowing why" is not acceptable. I want to know why 
there should be multiple ways to go when one way involves 
multiple appeals and when the other way can get me an answer 
right away. Unless we have not disposed of the policy question, 
the notion that you have said that the arbitrator is not 
empowered to answer that is false. That is the only word for 
it: "false." Under mandate of law and under his oath, he is 
required to make a decision in the very same manner and perhaps 
even more objectively because he is not involved--it is not his 
agency's money--than multiple appeals up the chain of command. 
That, my friends, is what the Congress had in mind when it 
said, "Go do it".
    So the fact that you are playing off one against the other 
is a matter of huge concern to us. It violates the 
congressional intent. It says you cannot reach a decision. Go 
forward. Go to the arbitrator. Get it reached in the name of 
the people of Louisiana.
    Mr. Rainwater. Madam Chairwoman, if that is clear, I will 
send all of the appeals to arbitration. I want a quick process, 
but I was told that policy decisions could not be handled by 
the arbitrator.
    Ms. Norton. I want to correct that right now.
    Now, if your counsel has a different interpretation as a 
lawyer, I am very open to hearing a different interpretation.
    Hear me. I am reading from the statute. This is from the 
Congress of the United States, Public Law 111-5, February 17, 
2009: "Notwithstanding"--when Congress really wants you to do 
something, it begins with "notwithstanding".
    "Notwithstanding any other provision of law"--that would 
include multiple appeals to FEMA folks or to DHS folks----
    "notwithstanding any other provision of law, the President 
shall establish an arbitration panel under the Federal 
Emergency Management Agency program. To expedite the recovery 
efforts from Hurricanes Katrina and Rita within the Gulf Coast 
region, the arbitrator shall"--"shall"--we always use those 
words when we say leaving no doubt--"shall have sufficient 
authority regarding the award or denial of disputed public 
assistance applications for covered hurricane damage under 
section 403 of the Stafford Act," et cetera.
    I do not think we wrote the statute in any vague language. 
"Shall" have the authority. "Notwithstanding" whoever else is 
there. This after Congress was fed up with having pressed all 
kinds of discretionary dispute resolutions for which FEMA kept 
giving us the back of their hand.
    This is a mandate, gentlemen. Go to these folks and settle 
it. So why would anyone want to fool with multiple appeals this 
way? We do not know, but I will tell you that is contrary to 
the statutory intent and language as I have just read to you.
    If you disagree, I will hear your response.
    Mr. Garratt. Madam Chair, just to make this clear, anything 
that someone can appeal, they can submit for arbitration. 
Again, I want to repeat what I said----
    Ms. Norton. In other words, they can appeal and go to 
arbitration.
    Mr. Garratt. No, anything that they could appeal they can 
arbitrate or seek arbitration for.
    Ms. Norton. No, this said notwithstanding, Mr. Garratt. So 
why should they bother with appeals and going through a 
bureaucracy that is self-interested because it is within the 
agency?
    Mr. Garratt. They have an option, Madam Chair----
    Ms. Norton. I understand.
    Mr. Garratt. --as opposed to----
    Ms. Norton. No, you are right. They have an option, and Mr. 
Rainwater has still not clarified to me why he had you take 
that option except that you have said, if there is a policy 
matter, then it should go through this. I just read you the 
statute and asked you if you would disagree with the language I 
have just read that said, notwithstanding any other mechanism, 
they can go to an arbitrator.
    Mr. Garratt. I do not disagree with that. Notwithstanding 
any mechanism, they can go to an arbitrator. They may elect to 
go an arbitration route, rather than the formal appeal route.
    Ms. Norton. They may elect to do that. I understand that. I 
want to ask why you would want them to go through more of the 
administrative bureaucracy. They have been at the 
administrative bureaucracy at the lowest level. Why would you 
want them to continue through the administrative bureaucracy if 
you wanted to get something done? Why is that preferable ever 
than going to somebody who can decide the issue? If it is not 
policy, then what is it?
    I think I have just eliminated that it is policy. If you 
disagree with that, then tell me: What is the policy? If it is 
something other than policy, then tell me what other than 
policy would lead one to want to go through the appeal process.
    Mr. Garratt. Well, Madam Chair, for the Gulf Coast, 
approximately a third of the appeals are being found in favor 
of the appellant. So I would suggest, for example, that if an 
appellant has submitted several appeals and has been successful 
in that process, he may very well want to continue to use the 
appeal process rather than trying something----
    Ms. Norton. All right. Mr. Rainwater, apparently, a third 
is good enough for him. Do you regard this third as being the 
quickest, best avenue for the State?
    Mr. Rainwater. No, ma'am. That is why we wanted an 
arbitration panel.
    Again, Madam Chairwoman, as I understood it, the 
arbitration panel--and if I am wrong, I am wrong. I am fine 
with that. For example, could the demolition for economic 
recovery be decided by the arbitration panel? Is that something 
that the arbitration panel can overturn?
    Ms. Norton. Absolutely. I just read the language, and I 
heard nobody respond. If you want your lawyer to send me 
something, he has 10 days to get me a response to that, but I 
can read statutory language as well as he can, and there is no 
legislative history here except what we make in this process. I 
can tell you right now that anything in the legislative 
history, which was all the stuff you have tried, especially the 
appeal process, has been in the way. Get to a decision.
    Mr. Taffaro, would you take your chances on arbitration?
    Mr. Taffaro. With the new, clarified information, it 
certainly would make us much more ready to choose that option, 
yes.
    Ms. Norton. We are not eliminating--this is a special 
circumstance. The statute says Gulf Coast region. So we are not 
saying that the appeals process, if you all like it that way, 
forever is gone. We say recovery for Hurricane Katrina or Rita. 
For God's sake, we are only talking about one delayed 
circumstance in the middle of a recession with people unable to 
build even smaller projects and with us just getting to the 
legendary Charity Hospital.
    So if you cannot get me within 10 days a legal response to 
why--hear me--why--except for matters in the appeal process 
now--why matters should not go to the arbitrator who does have 
built-in timelines that he most of the time meets, unlike the 
process up here--unless you can get me a legal reason why, this 
Committee expects that you will for new matters go to the 
arbitration process.
    Mr. Garratt. We will respond to you within the 10 days that 
you requested, Madam Chair.
    I would like to state once again that our preference would 
be to give these applicants an option.
    Ms. Norton. You do not have a preference to help Mr. 
Rainwater out. You have a preference for your decision, as is 
the case two-thirds of the time, to be the decision of the 
administrator who actually is, of course, involved and who also 
has to be presumed to have some predisposition. You are not 
doing this as a favor to Mr. Rainwater, because he happens to 
prevail one-third of the time while you prevail two-thirds of 
the time. I mean, it is hard for me to accept that.
    You just heard Mr. Taffaro and Mr. Rainwater say that, if 
they had their druthers, but for this policy obstacle they 
would go straight to the arbitrator. Well, you have got 10 days 
for a legal response, and then you are going to have language. 
Guess what? We know how to read a legal response. We are going 
to render our view within the same 10 days that I am giving 
FEMA to get me their view.
    Mr. Cao.
    Mr. Cao. Thank you, Madam Chair.
    With your emphasis on the arbitration panel, Mr. Daniels, 
we do not want to overburden this arbitration process. It has 
just been established. How many cases will the arbitration 
panel be able to handle at one time?
    Mr. Daniels. That is a very good question, sir.
    We have been given quite widely varying estimates by the 
people we have talked to at FEMA as to how many cases we would 
have. The initial estimate was somewhere between 50 and 60 
cases. I think we would clearly have no problem handling that 
many cases. If the numbers start skyrocketing, we will have to 
look for ways of supplementing our numbers.
    Mr. Cao. How many cases do you have right now?
    Mr. Daniels. We have right now about 500 cases.
    Mr. Cao. And it was first----
    Ms. Norton. Will the gentleman yield for a moment?
    Now, you do not have the same people on 500 cases, do you?
    Mr. Daniels. Well, we have the same 15 judges.
    Ms. Norton. You have 15 judges with cases divided among 
them?
    Mr. Daniels. That is correct.
    Ms. Norton. I yield back.
    Mr. Cao. Thank you.
    Mr. Daniels. Those are not cases involving FEMA 
arbitrations. The FEMA arbitration cases will be additional. We 
will have no problem handling----
    Ms. Norton. Could I just clarify? The FEMA arbitration 
cases will be handled by how many judges?
    Mr. Daniels. By 15 administrative judges.
    Ms. Norton. Thank you.
    Mr. Cao. But then you have 500 cases that you are doing 
which are outside of the FEMA arbitration process; is that 
correct?
    Mr. Daniels. Correct.
    Mr. Cao. So your main focus is not solely on----
    Ms. Norton. Just a moment. Let's clarify that. Will these 
15 judges be dedicated to FEMA cases?
    Mr. Daniels. No. No, they will not.
    Ms. Norton. Well, he is asking specifically how those 
judges will operate, given the caseloads they have.
    Mr. Daniels. We should have no problem adding some number 
of FEMA cases to the number of cases we have right now, using 
the same number of judges that we have right now.
    Mr. Cao. So the intent of this arbitration process is to 
expedite the resolution of these disputes. It seems to me that 
you have 15 judges who are handling 500 cases that are outside 
of the FEMA dispute resolution process, and you have on top of 
that FEMA projects that you have to resolve. It seems to me 
that it just defeats the purpose of the arbitration panel.
    Mr. Daniels. Well, a difference between the cases we have 
now and the FEMA cases is that there is a considerable sense of 
urgency to the FEMA cases. Most of the other cases that we have 
right now proceed along at the pace that the lawyers wish to 
take the cases.
    Mr. Cao. So, if the lawyer were to take 3, 4, 5, 6 months 
to prepare a case, then----
    Mr. Daniels. They well might. Most of those cases will 
settle without a need for judicial intervention to the extent 
of writing a decision. With regard to the FEMA cases, we will 
approach them, as I say, with a sense of urgency; so we will 
give them priority.
    Mr. Cao. How many cases do you anticipate will go to 
arbitration?
    Mr. Rainwater. Somewhere possibly between 90 and 100, I 
suspect.
    Mr. Cao. Between 90 and 100?
    Mr. Rainwater. Yes, depending on how well our teams do.
    Mr. Cao. Now, you said previously, Paul, that there are 
about 3,000 cases that are under $1 million; is that correct?
    Mr. Rainwater. Yes. There are a little bit over 3,000 
project worksheets that represent about $1 billion; and they 
are all less than $1 million, actually.
    Mr. Cao. So what is the difference between your figures and 
the figures that FEMA is willing to pay?
    Mr. Rainwater. Well, sir, we did a survey of applicants to 
see what they thought the dispute was on the estimation 
process. Now, the survey, itself--and remember, you know, that 
is local government and other State applicants. It is somewhere 
between $3 billion to $5 billion. We do not think it is $5 
billion. We think it is lower than that, obviously, because 
some of it will not reach, you know, the level----
    Mr. Cao. We are just talking about the 3,000----
    Mr. Rainwater. I am sorry. $1 billion. I apologize.
    Mr. Cao. $1 billion?
    Mr. Rainwater. Yes, $1 billion.
    Mr. Cao. What is the figure that FEMA has proposed?
    Mr. Rainwater. That is just what--I do not know what--I 
would have to take a look at that, Congressman.
    Mr. Cao. If the difference is a few million dollars, why 
can't we just resolve those 3,000 PWs and get them done and 
over with instead of having to decide them case by case by 
case?
    Mr. Rainwater. Congressman, there are some examples where 
we have moved forward on--you know, with Charlie's help and 
Tony Russell's help, there was a dispute over $10,000. Our 
point was, let's just move forward. I mean, if for some reason 
during the closeout we are $10,000 off on that project, then 
the State will put up $10,000. I mean, that is not a lot money 
to keep, you know, a project moving forward.
    Mr. Cao. Based on my understanding then, the present law 
does not allow for these kinds of lump sum settlements--is that 
correct--or at least for FEMA's interpretation of the law.
    Mr. Rainwater. There is legislation that was passed with 
the help of Senator Landrieu and others, obviously, for the 
Recovery School District in New Orleans. We are actually in the 
process of preparing a lump sum settlement based off of--you 
know, for example, it costs about--we believe it costs about 
$56,000 per student to build an entire school system.
    Mr. Cao. But, at this point, the law only applies to the 
RSD?
    Mr. Rainwater. Yes, sir, that is right. That is correct.
    Mr. Cao. So we need a legislative fix in order to apply the 
same procedure to other categories of----
    Mr. Rainwater. Yes, Congressman. You talked about fire and 
police or primary and secondary education or higher education. 
You would need legislation.
    Well, now, I will say this: The rule does apply to the 
Recovery School District and to other primary and secondary 
education facilities in the impacted areas, but it does not 
apply to higher education universities, police and fire 
stations, public works, roads, and other things.
    Mr. Cao. Now, Mr. Garratt, I spoke with the Inspector 
General; and he told me that the present recommendation, as 
interpreted by FEMA, is actually too narrow, that you all can 
basically go back and revise your recommendations to allow for 
this lump sum settlement procedure quite quickly. Do you 
dispute that?
    Mr. Garratt. I cannot dispute it, but it would certainly 
require that I go talk to the same individual you talked to, 
and I would like to discuss their basis for that. If that is 
the case, we are certainly willing to look at that, but I 
cannot comment on it without talking to the very same person 
you talked to.
    Mr. Cao. Okay. I will get you both together in a room so 
you can talk out your differences.
    Just a couple more questions.
    With respect to H.R. 3247, which is the bill that got 
passed through the House and is now in the Senate, there is a 
provision that will provide alternative projects where the 
penalty, instead of 25 percent, is only 10 percent. How helpful 
do you see that provision is to the State?
    Mr. Rainwater. Very helpful.
    In the language that was passed to help us with the lump 
sum penalty for the Recovery School District--well, actually, 
there were three provisions. One was with a lump sum, one was 
waiving the alternative penalty, and then the other was waiving 
the insurance penalty. Instead of building by building, it was 
done by campuses. Those provisions in total saved the State 
about $600 million. The alternative project penalty saved about 
$247 million, as I remember. So it is extremely important to 
local communities, and I think President Taffaro would agree 
that that would be helpful.
    Mr. Taffaro. I would, Congressman. In fact, on the NFIP 
mandatory deduction, we have been seeking the same relief that 
the criminal justice and educational systems were granted for 
one-time relief, which would recover almost $5 million in 
eligible funding for St. Bernard Parish projects.
    Mr. Cao. Now, I know that there was a lack of clarity with 
respect to outstanding numbers of projects that were still not 
resolved in our last hearing which was held before Ranking 
Member Mica. Do you have that number? How many project 
worksheets are still outstanding?
    Mr. Rainwater. As I understand it, we believe there are 
about 4,000 project worksheets that are going through some sort 
of reversioning process based off of the Governor's Office of 
Homeland Security and Emergency Preparedness numbers that they 
provided to us last week.
    Mr. Cao. You said that the combined value would be between 
$5 billion and $6 billion.
    Mr. Rainwater. Between $3 billion and $5 billion, 
Congressman, although we all admit that we still have some work 
to do on our side to narrow that number and to get you a better 
number as well. That was based off of applicant surveys; and 
applicants were asked, are you satisfied with the versioning 
process? How many project worksheets do you have in dispute?
    That is what the local government gave us.
    Mr. Cao. So with these thousands of projects still 
outstanding, my question here is: Does Mr. Tony Russell have 
the resources to expediently resolve these issues? Because I 
have to say that he has done a wonderful job, and I hope that 
you can keep him there until this thing gets resolved, and I 
hope it will get resolved very, very quickly. So can you 
provide Mr. Russell with additional resources for him to do his 
job?
    Mr. Garratt. Thank you for the comments regarding Tony 
Russell. We share your view that he has done an outstanding job 
out there.
    As I indicated earlier, we will provide to Mr. Russell 
whatever resources he needs to be effective in his role; and if 
he needs more personnel, then he knows that those are available 
to him.
    Mr. Cao. I just have one last question. It concerns the 
Port of New Orleans.
    I know that there is a dispute at the Port of New Orleans 
in regards to how much money they received from insurance 
versus how much money that FEMA is willing to provide the 
ports. Can you provide me with a status of the Port of New 
Orleans maybe within a week or so?
    Mr. Axton. Yes. We met a few weeks ago--or probably 6, 7 
weeks ago now--and there were a number of disputes that they 
presented within that--the Port did.
    The two most significant disputes that I recollect were, 
one, the settlement amount that the Port negotiated with the 
insurance carrier, and I believe it was actually multiple 
carriers and that there was an ongoing disagreement. Really, I 
would say it was kind of a fundamental lack of good 
communication among the various folks about exactly how they 
came to that settlement and about how that related to the 
policy limits and all that.
    Their position was the settlement amount under the 
circumstances and per their existing policy was, in fact, 
reasonable and should become the basis for our deductions that 
are required per statute. Since that meeting, that issue has 
been resolved.
    Mr. Cao. I have two more questions. I am sorry, Madam 
Chair.
    One concerns the Sewerage and Water Board of Orleans 
Parish. I know that they came to me and said that, based on 
their estimate, around $800 million of damages was caused by 
Katrina. I am pretty sure that FEMA disputes that. What is the 
status with respect to the Sewerage and Water Board?
    My second question is: Do you all have a prioritized plan 
where you are looking at some of these disputes and are saying 
we need to address this issue first, and then you go from 
there, or is it first come-first serve? What is the procedure?
    So one is with respect to the Sewerage and Water Board. 
What is the status of that issue? Two, whether or not you have 
a plan of priority to address some of these needs.
    I know that, for example, the Sewerage and Water Board has 
come to me and said that the city of New Orleans might go 
without water any day now. When you have a city that is going 
to have no water and no sewage, you will have chaos on your 
hands, and that is what we do not need at this moment.
    Mr. Rainwater. Yes, Congressman. I met with the Sewage and 
Water Board. We have provided some emergency funding for them 
to help repair some of the water lines and sewer lines through 
our Disaster Community Development Block Grant program. I have 
met with Marcia St. Martin. What we have said is that we will 
take that straight to the arbitration panel. We won't wait. We 
will not send it to appeals, we will send it straight to the 
arbitration panel and see if we can get that overturned.
    Mr. Cao. How long will that take? How much longer will that 
issue take?
    Mr. Rainwater. Well, the first side of the queue is Charity 
Hospital, then second will be Sewage and Water Board. So if we 
send Charity Hospital this week, we will start working on 
Sewage and Water Board immediately.
    Mr. Cao. And how long will that take?
    Mr. Rainwater. Fourteen days.
    Mr. Cao. Because I don't want people, 300,000, 400,000 
people, to be without water or sewage.
    Mr. Rainwater. Yes, sir, I understand that.
    And then from the prioritization perspective, we meet on 
Tuesdays. We had originally set our goals last year around fire 
and police were a priority, wanted to get those done, public 
facilities, higher education. And I think we have seen--and as 
we have kind of worked through the queue there, I think you can 
see where we have hit some of those priorities. In other cases, 
like the Sewage and Water Board, we haven't, so----
    Mr. Cao. That is all the questions I have, Madam Chair. 
Thank you very much.
    Ms. Norton. Thank you, Mr. Cao.
    Just for the record, Mr. Rainwater and Mr. Taffaro, what is 
the unemployment rate in Louisiana, and what is it in St. 
Bernard Parish, please?
    Mr. Rainwater. I am sorry, Madam Chairwoman?
    Ms. Norton. The unemployment rate.
    Mr. Rainwater. Unemployment rate in Louisiana. You know, I 
will tell you that the southeast region was written up in the 
Economist magazine as one of the places where you could ride 
out the recession based on we are getting out about $25 million 
a week in FEMA public assistance money and another $7 million a 
week in Community Development Block Grant money. I don't 
remember, it is just one of those things. And obviously for 
Louisiana, what has happened is our unemployment is regional, 
but there have been a lot of construction jobs created 
through--I think what we did last year, towards the end of last 
year and then this year, we have been able to push dollars off 
fairly quickly.
    There is some optimism, if we can get Charity settled, the 
Veterans Administration has committed to building a hospital. 
There is talk about a biomedical center in downtown New 
Orleans. We have been able to build about 12 large mixed-income 
communities in New Orleans, and so those have created jobs and 
optimism as well, although there are still areas that are 
hurting.
    I think what has happened in Louisiana is that--not to 
belabor that answer, but what we have seen is that we are 
starting to see large chemical complexes that are beginning to 
lay off construction workers. I will have to find out what the 
exact number is.
    Ms. Norton. Well, I am going to ask Mr. Taffaro, too.
    I am pleased to hear that the stimulus funds and the need 
to rebuild and the rebuilding that is going on has had an 
effect on the unemployment rate. By close of business tomorrow, 
which is, what, Wednesday, would you please submit to the 
Committee what the unemployment rate for the State of Louisiana 
is at the present time?
    Mr. Taffaro, do you have that rate with you?
    Mr. Taffaro. I will confirm, Madam Chair. At the last 
check, we were at around 8 percent in St. Bernard.
    Ms. Norton. Have the stimulus funds been of use to you, 
even given the holdup of these projects that would have gone 
forward?
    Mr. Taffaro. Absolutely. The stimulus funding we continue 
to actually seek and put into action for many of our projects.
    Ms. Norton. You have an extra balance of stimulus because 
of this outstanding amount, and therefore, we are particularly 
mindful of it.
    I have another question or so to get on the record. I 
understand you had a workshop on the arbitration process, is 
that right, in Louisiana?
    Mr. Rainwater. Yes, ma'am. There have been numerous 
workshops.
    Ms. Norton. Describe that. Who went to that? Mr. Daniels or 
Mr. Garrett, who knows about that?
    Mr. Garrett. We did conduct workshops in each of the States 
that had the opportunity to do this. We invited State and local 
leadership to attend those to answer their questions. So, yes, 
ma'am.
    Ms. Norton. So generally on the ground they understand how 
the arbitration process would operate if you came to that 
point; is that right, Mr. Axton?
    Mr. Axton. Yes. That was the purpose of the outreach 
efforts, and I believe it was last Thursday in Baton Rouge.
    Mr. Rainwater. We had about 50 applicants that attended the 
actual meeting.
    Ms. Norton. Well, I commend the State for proceeding on 
that.
    Now, let me ask you another legal question. We were so 
concerned about the larger projects, ones that were a half 
million dollars and so. We thought that was colossally 
outrageous to have great big projects there that are stimulus-
sized projects--beyond what most States could do with 
stimulus--outstanding. So we pressed for projects; we used the 
half-billion-dollar figure. One of the reasons we used that 
figure is because we believed it was already clear that you 
could have been using alternative dispute resolution all along, 
but it was in your discretion, and your discretion was not to 
use it. So I am going to look at what we were relying on, and I 
am going to ask you a question based on that, and on what it 
looks like you may already be considering or doing with 
projects under $500,000.
    Now, section--5 U.S.C., section 572 of the ADR Act, the 
Alternative Dispute Resolution Act of 1996, "An agency may use 
dispute resolution proceeding for the resolution of an issue in 
controversy that relates to an administrative program if the 
parties agree to such proceeding."
    Federal Government long ago has encouraged--we encouraged 
and moved to the mandatory process because encouragement didn't 
seem to work with FEMA. Now, it would appear that FEMA has 
sufficient authority, therefore, today to expand the present 
program, the arbitration program, to projects under $500,000.
    Do you agree that you have that authority, Mr. Garratt, at 
least that you have that authority under the language I just 
read?
    Mr. Garratt. I certainly agree with the legal citation that 
you just noted.
    Ms. Norton. Where is my statute? The most recent statute is 
not as permissive because it says, shall establish a panel, 
shall have the sufficient authority, and doesn't say anything 
about if both parties agree; it just says, do it.
    Now, the reason I ask this question is because I want to be 
plain. You had authority under--it would appear under 5 U.S.C. 
572 if parties agree to do over half-million-dollar projects, 
and certainly under that. Do you agree that the section I just 
read--I am asking Mr. Garratt, Mr. Axton, Mr. Rainwater, Mr. 
Taffaro. Do you agree that you could give matters under 
$500,000 to the arbitrator for a quick decision under the 
existing ADR Act if all parties agreed?
    Mr. Garratt. Speaking for FEMA, ma'am, I am not prepared to 
say I do necessarily agree with that.
    Ms. Norton. Within 10 days, Section 5 U.S.C. 572, I want to 
know whether counsel agrees that "if the parties agree to such 
proceeding," this section of the law authorizes any dispute 
resolution, including arbitration.
    Now, I am not even into this kind of stuff anymore. I am 
now considering--I will put you on notice--language that will 
put everything under it and would give guidance as to what 
kinds of things would go under it. We don't see any other way 
to proceed. We think that the fact that the State and the 
parish was told that they could go to either one really was a 
way of circumventing the intent of the statute, which was for 
quick decision. We don't have a dime in that dollar in terms of 
how the decision was made. Congress is past the point of 
deciding how we want the decision to come out.
    I want to ask Mr. Rainwater and Mr. Taffaro if they think 
projects under $500,000, if parties agree, understanding that I 
see problems in that; and then I want to ask Mr. Daniels if we 
were to put more projects, whether or not, in light of Mr. 
Cao's questions, that would just put more on their shoulders 
than they have the capacity to bear.
    So, first, Mr. Rainwater, Mr. Taffaro, would that be useful 
to be able to go for projects under $500,000? I mean, aren't 
most projects under $500,000?
    Mr. Rainwater. Chairwoman, the way the breakdown works, for 
example, we have about 14 projects over $50 million; about 81 
projects over 10-, but less than 50-; and then about 597 that 
range between $1 million and $10 million. And then, as I stated 
earlier, we have about 3,000 that are below the $1 million 
mark. So there are a number of projects that are below 
$500,000.
    Ms. Norton. So there are some that are too small to be 
worth it.
    Mr. Rainwater. Yes, ma'am. So we would support that.
    Ms. Norton. Because in your discretion, grown-up people who 
have been in this process for this long could, do you think, 
draw the line as to the kinds of projects we are talking about, 
given how broadly worded this ADR language is? You would agree 
that you wouldn't want to put every little thing before an 
arbitrator.
    Mr. Rainwater. Right.
    Ms. Norton. Mr. Garratt, you need to go to your counsel 
again to see what the plain language of the statute really 
means, whether it means what it says?
    Mr. Garratt. I do need to run that through our legal staff, 
yes, ma'am.
    Ms. Norton. Are you an attorney, sir?
    Mr. Garratt. I am not.
    Ms. Norton. Okay. We will give you a pass, then, on that. 
Tell the attorneys that they are dealing with an attorney as 
Chair, so if they are trying to circumvent, I don't need staff 
help. I will get it on reading the plain language of the 
statute. I am not saying that you have to do anything, I just 
want to know what is in your authority to do.
    Now, Mr. Daniels, clearly we are not trying to pile 
everything into arbitration. You and Mr. Rainwater indicate 
that there would have to be some--and it was good to hear him 
range just how small to large some of these are. You will 
understand why the Congress decided that over $500,000 we just 
couldn't live with anymore. But suppose they were to go to 
those numbers between $50 million and--what was that top 
number?
    Mr. Rainwater. Between $50 million and--well, the one 
project we have over $200 million is Charity Hospital, and that 
is going to be going this week.
    Ms. Norton. But there is only one project like that.
    Mr. Rainwater. Yes, ma'am, that is right. And then there 
are 14 that are right over the $50 million range.
    Ms. Norton. I am sorry, I said $500 million. Over $500,000.
    Mr. Rainwater. Yes, ma'am. So we have got about 3,000 that 
would be either--and I don't have the exact numbers, but there 
are about 3,000 that are less than $1 million; they are between 
that $1 million all the way down to--I think we have one that 
is $4,000, to be very honest with you. So if we took 3,000 of 
those----
    Ms. Norton. Mr. Daniels, you see how broad is the range. 
What do you think are the optimum cases that one would expect? 
Given the huge amounts you often are called upon to handle--and 
I suppose some smaller amounts as well--and given the range you 
have heard here, what do you think would be an optimum amount?
    Mr. Daniels. I think Congress was wise to start with the 
larger cases.
    Ms. Norton. Now, see, the larger ones, though, turn out to 
be, what is it, over $500,000? And how many? Fourteen like 
that?
    Mr. Rainwater. We have 14 projects that are over $50 
million, and then about 81 projects between 10- and $50 
million, and then 597 that are between $1 million and $10 
million, and then about 3,000 that are below $1 million.
    Ms. Norton. So you think the larger amounts first?
    Mr. Daniels. Yes, because the resources we have at the 
moment are finite. As we proceed, we can supplement those 
resources. We will do whatever it takes to make the process 
work.
    Ms. Norton. And you would supplement resources. We are not 
going to require the Board to take on more than it should, but 
you are prepared to supplement the resources?
    Mr. Daniels. We could do that by making arrangements with 
other administrative boards, other administrative judges, to 
bring them into the process.
    One thing I would say, though, about the numbers and the 
arbitration process is that, as we go along hearing evidence, 
issuing arbitration decisions, I think that the people in the 
State of Louisiana and the people at FEMA will be able to see 
how the cases are coming out, figure out which way the wind is 
blowing, and a lot of those disputes that have been brewing for 
a long time will begin to settle as parties take into 
consideration how the cases are being resolved.
    Ms. Norton. No question that is how it works. People get an 
idea of what it is likely to be. Much harder, I must tell you, 
in an appeal process, because you are dealing with two-thirds 
are against you, one-third are for you, and you didn't have any 
alternative but to go to that process in the first place. I am 
sure it results in some settlements as well.
    Mr. Daniels. So it may be that even though we are looking 
at very large numbers of potential cases right now, that as we 
proceed along issuing decisions, that total number will start 
shrinking.
    Ms. Norton. Because there is a precedent being set, in 
effect.
    Mr. Daniels. Exactly.
    Ms. Norton. Gentlemen, I didn't begin these hearings with 
any bias except that the present processes of FEMA had not, in 
fact, served the public well. Congress has made a decision for 
projects over $500,000, made a decision, mandated decision. It 
is a matter of law. So Congress is called to question on those 
projects, and we intend to have frequent hearings and to do 
whatever it takes to make the State and FEMA adhere to the law. 
That is what that is now.
    We also will be monitoring the Contract Appeals Board, 
which also comes under our GSA jurisdiction. We are prepared to 
have more frequent hearings, and we are prepared to add 
language, mandatory language, to existing bills or to the 
appropriation bills if we find matters like we found today, 
that policy matters were making people go to appeals when the 
mandated language was arbitration for matters over $500,000. I 
do not read that FEMA had the discretion to say, okay, if it is 
a policy matter, you go right up and do the same thing you have 
been doing for the last 4 years; and if not, then maybe you can 
go to the arbitrator. And by the way, we decide--we, who are 
involved in the appeal, decide if it is a policy matter. 
Outrageous.
    Mr. Garratt. Madam Chair, just one point of clarification, 
and that is FEMA does not decide who goes into appeal and who 
goes into arbitration. It is the applicant who decides which 
avenue they want to----
    Ms. Norton. Who decides if there is a policy matter 
involved, Mr. Garratt, at the moment?
    Mr. Garratt. Again, Madam Chair, as I have indicated, 
anything that they can appeal, they can seek arbitration for.
    Ms. Norton. All right. Just a moment. Right now--Mr. 
Rainwater, where did you get the idea that the policy matter 
had to be decided through the appeal process?
    Mr. Rainwater. In our conversations with our legal staff in 
our office that we would not--just in conversations with the 
Federal Emergency Management Agency that the arbitration panel 
would not be able to overturn FEMA policy.
    Ms. Norton. That was the view of your legal counsel in 
consultation with FEMA's legal counsel?
    Mr. Rainwater. Yes, ma'am. And indications from folks from 
both agencies that the arbitration panel would only look at 
construction and estimation-type disputes. But you have made it 
very clear, Madam Chairwoman, that that is not the case, and so 
we will send up some balloons.
    Ms. Norton. "Notwithstanding any other provision of law, 
the President shall establish"--for public assistance program--
"to expedite recovery efforts from hurricanes named"--Katrina 
and Rita are named--"place named within the Gulf Coast region. 
Arbitration panel shall have sufficient authority regarding the 
award or denial of disputed assistance applications for covered 
hurricane damage under section 403," et cetera.
    I do not believe one has to be a lawyer to read the plain 
language there, and I do not see any wiggle room. And I am 
saying to you that whatever policy pronouncements have come 
from FEMA have been in violation of the statute on its face and 
has been in violation of what this Committee long ago had said 
it wanted, which was third-party intervention in order to 
hasten recovery on the Gulf Coast. The only words I haven't 
read is for a project the total amount of which is more than 
$500,000.
    I still am a tenured professional of law, which was my 
full-time occupation before being elected to Congress, at 
Georgetown University Law Center. I retain my tenure by 
teaching a course called Law Making and Statutory 
Interpretation, inspired by my experience as an administrator 
when I was in the Carter administration, and now as a Member of 
Congress and seeing how laws can be interpreted very 
differently from administrative agencies, from the courts and 
from the Congress, much of it based on poor wording in the 
statute.
    This is optimal wording in the statute. Any court getting a 
matter of this kind--I don't suggest that this is the kind of 
matter that would go to court--would have no question, in my 
judgment, in my humble judgment, declaring that the plain words 
of the statute speak for themselves, and they don't even have 
to look to the legislative history, such as the hearings which 
produced this language.
    So be on notice, Mr. Garratt, Mr. Axton, Mr. Rainwater, Mr. 
Taffaro. And be prepared, Mr. Daniels. Unless this matter 
proceeds as the statutory language says, and unless counsel is 
able to convince the Subcommittee and the Committee to the 
contrary, we expect these matters to go to arbitration based on 
your good-sense, commonsense notion of whatever the level 
should be. If necessary, this Subcommittee is prepared to put 
into the appropriation language as to the amount and 
reaffirming mandatory arbitration. We leave that to your good 
offices, recognizing that that has not worked in the past, but 
believing that we have been clear enough for you to understand 
what our intention is today.
    Mr. Taffaro.
    Mr. Taffaro. Thank you, Madam Chair.
    In light of your clarifications, there are a couple of 
items. One, I am pleased that you have expressed an interest in 
addressing projects under the $500,000 mark since a community 
such as ours who would incur enormous amounts of operational 
budgetary obligations for those projects that would not be 
obligated.
    But likewise, in terms of the interpretation and the 
mandate that the arbitration legislation dictates, there are 
statutory regulations that we are following within the 
disaster. FEMA releases administrative policies that are 
nonstatutory regulations. Are those also the intent of this 
Committee to be eligible for arbitration?
    Ms. Norton. For items $500,000 and above at the moment? Or 
are you talking about----
    Mr. Taffaro. Well, obviously for the mandated legislation, 
but in the discussion under $500,000 as well. In other words, 
what I am asking is----
    Ms. Norton. Well, under $500,000, we are going by the ADR 
language where there would be agreement--I don't have any faith 
in that process whatsoever, so I am putting FEMA on notice 
right now. We said more than $500,000. We understand that would 
envelop still a large number--I take it a large number in 
your----
    Mr. Taffaro. There are several that would be over the 
$500,000. Many more would be under.
    Ms. Norton. Well, we are prepared, Mr. Taffaro, to receive 
advice from you and FEMA as to the application of such language 
for--give us the cutoff point, and to put language in law since 
we do not have confidence that you would get sign-off from 
FEMA, and the ADR language does require both parties to agree. 
We just don't think so. They were sending you through the 
appeal process in face of law to the contrary. So we have no 
doubt that if you took those under $500,000 and you asked for 
them to agree to go to the arbitration process--which they 
could, that would be covered--we have no confidence that you 
would ever get their agreement. They tried to keep you from 
going, with respect to matters of policy already, to the 
arbitration process, even if you were within the amounts.
    So we believe that more clarification is necessary, and we 
are prepared to do that. We are prepared to do it if we don't 
get answers that show us that we should not. And if we do, then 
we are going to put language in to clarify the law. We are not 
going to sit here and be outraged to hear--much as we 
appreciate that $1.2 million has proceeded, we expected a new 
administration to take a new view and not to have this tied on 
its back. And we believe that is the view of this 
administration, but if it needs clarification, because Mr. 
Garratt was there before, and Mr. Garratt is there now, and he 
is doing the same thing he was doing before, he is going to get 
clarification. But we are not going to have another hearing 
where it is recited to me that FEMA says that there is a policy 
matter, for example, that keeps it from going to what the plain 
language of the statute says you must do.
    That, it seems to me--and I will just say it to you 
straight out, Mr. Garratt, that is a violation on its face of 
the statute; not of the congressional intent, but of the plain 
words of the statute. It was designed to make sure that for 
certain projects, whichever you said were policy--and only you 
get to say that--would go up the same chain of command as they 
went up before. We think that is unfair. And if it is not 
unfair, it at least is inefficient, and it is contrary to the 
statute and contrary to our intention. I know I speak for the 
Senate as well when I say that I am sure any language we put in 
would get the cooperation of the two Senators from the State.
    Thank you very much. This hearing is adjourned.
    [Whereupon, at 5:30 p.m., the Subcommittee was adjourned.]

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