Costliest Part of Gulf Rebuilding Yet to Come

By Griff Witte
Washington Post Staff Writer
Monday, November 21, 2005

The federal government has spent or obligated through contracts more than $18 billion in Hurricane Katrina relief, meaning that in just over two months, storm recovery costs have already drawn even with the record spending package that the United States has been using to fund Iraq reconstruction for the past two years.

But local, state and federal officials say that number pales in comparison with the ultimate price tag for rebuilding the Gulf Coast. Until now, major expenses have come in the form of debris removal, temporary housing and direct assistance to those victimized by the storm. The real big-ticket items, they say, will not come until months and years down the line as the government attempts to recreate a public infrastructure network -- including roads, bridges, hospitals, schools, sewers, power lines, ports and levees -- that was all but destroyed when Katrina swept in at the end of August.

"I hate to use the term 'drop in the bucket,' but that's pretty much what it's been," said Arthur G. Jones, who heads Louisiana's disaster recovery division. "This is going to be expensive. My mental calculator doesn't go that high."

More than two months after the storm, no one else has come up with a definitive estimate, either. Guesses tend to range well above $100 billion but vary wildly from there.

On its own, rebuilding the levees in New Orleans to the level state and local leaders want is expected to cost $20 billion or more. Many roads -- including a bridge that forms part of Interstate 10 -- have to be rebuilt entirely. Labyrinths of underground cables, wires and pipes that spent weeks corroding amid the dank flood waters have to be ripped out and replaced. And thousands of buildings have to be leveled to make way for fresh construction.

"Things were just obliterated, so the majority of the money is going to be used to rebuild," said Pete Smith, press secretary for Mississippi Gov. Haley Barbour (R).

There is widespread agreement on who will end up receiving that money: the companies that make their living doing architecture, engineering and construction work for the government. Less clear is who will pay.

It is yet to be determined, for instance, just how much of a role the federal government will play in picking up the tab. "It depends on a threshold question: What are you going to rebuild? What is the federal responsibility for rebuilding a city, a metropolitan area or a region? This is where it gets really confused," said Bruce Katz, director of the metropolitan policy program at the Brookings Institution. "Federalism is a messy business."

Even the Federal Emergency Management Agency, which is ostensibly coordinating the reconstruction effort, is hedging on who will pay for the effort and who will make the critical decisions. "Since an effort like this has not been undertaken in the modern history of this country, I think we are about to learn how it will truly move forward," said FEMA spokeswoman Nicol Andrews. "Historically, local decision makers have been the lead, and the federal government picks up the tab where the law allows."

In the immediate aftermath of the storm, Congress rushed to approve more than $60 billion in aid. President Bush, meanwhile, offered assurances in a nationally televised address from New Orleans that the federal government would bear much of the financial burden.

Yet since then, fiscal conservatives in Congress have begun to question whether the United States can afford to take on such an enormous expense at a time of already mounting deficits. For instance, they were able to knock down legislation pushed by members of Louisiana's congressional delegation that would have authorized $250 billion in additional storm-related funding.

With the nation's attention shifting away from Katrina, the Bush administration has given indications that it is listening to conservatives' concerns. When the White House late last month wanted $17 billion primarily to rebuild federal facilities and highways in the Gulf Coast, it did not ask for more spending. Instead, it requested Congress take that money out of the existing reconstruction budget, meaning those funds could not be used for local projects such as hospitals and schools.

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