WASHINGTON – Congress on Friday attached unprecedented strings to legislation that would provide $750 million in federal loans for hurricane-damaged cities, reflecting a sharp change in the mood on Capitol Hill about the reconstruction effort.
The action by the House and Senate came just weeks after President Bush pledged to spend whatever it takes to rebuild the Gulf Coast. The fight underscored growing concerns about the costs of rebuilding.
Louisiana lawmakers were seeking direct financial aid to cities, such as New Orleans, to pay their municipal workers. But they ran into a wall of resistance.
Eventually, the delegation was forced to accept a measure that, for the first time, explicitly forbids the federal government from forgiving loans if state or municipal governments fail to repay them. In the past, the federal government often has forgiven all or part of such disaster relief, offered under the 1974 Stafford Act.
Louisiana Gov. Kathleen Babineaux Blanco called the passage of the $750 million loan package “a bittersweet action.”
Referring to the repayment requirement, Blanco said, “In our time of greatest need, the Congress has added discriminatory language, singling out the victims of Hurricanes Katrina and Rita, for unfair treatment. Unfortunately, I do not believe enough members of Congress fully understand the desperate situation Louisiana governments face.”
After initially acting quickly in the hurricane’s aftermath to provide about $71 billion in relief through a combination of money to various federal agencies and tax breaks to businesses and individuals, the Republican congressional leadership wants to clamp down on costs. It intends to offset spending with budget cuts and by requiring the Gulf Coast states to contribute to the rebuilding effort.
Republicans said they meant for the restrictions in the loan bill to send a message to the Louisiana congressional delegation and Blanco, who have asked the federal government to spend $250 billion over the next 10 to 20 years in rebuilding efforts.
Associated Press
Debris from homes destroyed by Hurricane Katrina sits in high piles Friday in Kenner, La., a suburb of New Orleans, as an airplane approaches Louis Armstrong International Airport.
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