This is the story of a hurricane

By Ed Muir

As summer ended, the federal government was set to borrow $317 billion of the roughly $2.4 trillion it would spend this fiscal year. Louisiana was in better shape. Thanks to high oil prices and increased tourism, it had a surplus of $250 million over an almost $19 billion budget. Then came Katrina.

More than 1,200 people died. Tens of thousands were scattered. Words and statistics cannot do justice to this loss, but an accounting is necessary to properly evaluate our leaders’ response. About 250,000 homes were destroyed. Louisiana’s state government will lose $1.5 billion of its expected revenues this year.

Layoffs in state and local government are all but certain. Even with the influx of construction workers and carpet-bagging consultants, New Orleans will have 80,000 fewer jobs in 2005 than it did in 2004. And employment is not expected to get back to pre-hurricane levels until at least 2009, even with big help from the federal government.

In the face of a possible $250 billion price tag for rebuilding over the next few years, Congress has tentatively agreed to provide more than $60 billion for the first year. But this spending to help our neediest is more controversial in some Washington circles than was cutting taxes for the wealthiest. As a result, steps are being taken to make it more palatable to conservatives.

The first step is to reduce other federal spending. These proposed cuts have sometimes gotten at real fat in the budget, for example, a proposed $900 million bridge connecting Gravina Island, Alaska (population 50) to the town of Ketchikan (population 8,000). At this writing, the so-called “bridge to nowhere” is still safe.

Sadly, most proposed cuts are to programs like Medicaid and food stamps. The goal here, long after temporary assistance for Katrina relief had ended, is to shrink assistance to the very same people who have been most harmed by the storm.

Aid also is being sold to conservatives as an opportunity to remake Louisiana in their image. Within days of Hurricane Katrina, the Heritage Foundation, a leading conservative think tank, had issued a report saying:

“New Orleans and other ravaged cities will look different a decade from now, even though they will retain their individual essence … . The key is to encourage private-sector creativity—for example, by declaring New Orleans and other severely damaged areas ‘Opportunity Zones’ in which capital gains tax on investments is eliminated and regulations eliminated or simplified.”

The goal appears to be to make the rebuilding as safe as possible for big business. President Bush initially followed their lead in suspending Davis-Bacon, the law requiring federal contractors to pay prevailing regional wages on contracts in the reconstruction zone.

The goal was to lower wages, ostensibly saving money. But this did nothing to hold down CEO pay or corporate profits. Under pressure from organized labor and others, the president ultimately reversed his decision on Davis-Bacon.

Among the proposals to create conservative opportunities out of Louisianans’ misfortune is the privatization of the New Orleans school system through the creation of a federal voucher system and the conversion of those public schools that reopen into a union-free “charter district.” And Heritage suggests gutting all environmental regulations that might deter business activity. Many Republicans in Congress are listening.

The references in Heritage’s report are almost all to previous Heritage reports, making one think that the tragedy in New Orleans is simply the latest opportunity for these people to peddle one-size-fits-all solutions to all our problems. When the going got tough, the conservative establishment reached for their talking points, leaving one to wonder how much we will lose in this flood.