Levee Repair Costs Triple

New Orleans May Lack Full Protection

The Bush administration said yesterday that the cost of rebuilding New Orleans's levees to federal standards has nearly tripled to $10 billion and that there may not be enough money to fully protect the entire region.

Donald E. Powell, the administration's rebuilding coordinator, said some areas may be left without the protection of levees strong enough to meet requirements of the national flood insurance program. Those areas probably would face enormous obstacles in attracting home buyers and investors willing to build there.

The news represents a shift for the administration; President Bush had pledged in the weeks after Hurricane Katrina to rebuild New Orleans "higher and better." Now, some areas may lose out as they compete for levee protection. Powell's announcement, in a conference call with reporters, prompted denunciations from state and local officials who said the federal government is reneging on promises to rebuild the entire region.

"This monumental miscalculation is an outrage," said Gov. Kathleen Babineaux Blanco (D). "This means that, just two months before hurricane season, the Corps of Engineers informs us they cannot ensure even the minimum safety of southeastern Louisiana. This is totally unacceptable."

The change followed a surprise announcement from the Army Corps of Engineers that the levee reconstruction project, most recently estimated at $3.5 billion, would now cost $9.5 billion if insurance-certified levees were extended throughout the region.

Powell had said in December when the administration announced a $3.1 billion levee plan that Bush's commitment to rebuild the Gulf Coast "would be satisfied as it relates to the safety and security of the people." In February, after Congress approved $2 billion for the project, Bush said an additional $1.5 billion would be needed. The Senate will consider the request next week.

Yesterday, Powell acknowledged that now "we are faced with some new and tough policy decisions."

The news shattered the fragile relationship between Washington officials and Louisiana leaders, who have assumed that the rebuilding effort would cover the entire New Orleans area.

State and local leaders said the U.S. government had broken a trust and appeared to backing away from commitments to rebuild. Louisiana officials also questioned why federal engineers are just now announcing that the task would cost $6 billion more.

"Every time we turn around, there's a new obstacle," said Rep. Charlie Melancon (D-La.). "The estimates were done for rebuilding the levees, and a number was given to the administration and to the Congress. Now all of a sudden they say they made a $6 billion mistake?"

Melancon said he wondered whether the changes reflected the comments made by officials such as House Speaker J. Dennis Hastert (R-Ill.) after the storm questioning the wisdom of rebuilding the low-lying city.

"I have been concerned since November that people here in Washington didn't really want to help. . . . I think the people are starting to see where the problems are," Melancon said.