Rebuilding the Gulf Region

Two years after Hurricanes Katrina and Rita pummeled the Gulf Coast, US Senator Mary L. Landrieu and Mississippi Governor Haley Barbour discuss the progress that has been made to renew and restore Louisiana and Mississippi. They also examine remaining challenges and suggest ways policy makers can help address them for a promising future for their citizens.

Q: What do you believe are the most significant issues that the hurricanes of 2005 exposed in the Gulf region?

Senator Landrieu: Hurricanes Katrina and Rita, the first and third worst natural disasters in our history, devastated the Gulf Coast and Louisiana in particular. To put it in perspective, 1071 people in Louisiana were killed, and more than 200,000 homes and 18,000 businesses were destroyed. This disaster was unprecedented, and not only was the government not prepared in its initial response, but the federal bureaucracy has also tied up the long-term recovery of the region. The Stafford Act, the law that directs government response to domestic disasters, has proven to be an inadequate and inflexible tool.

We must also remember that it was not the hurricane that caused most of the damage to the New Orleans region – it was the breaks in the federal levee system, built to protect Gulf Coast communities from storm surges that caused the horrific flooding of a great city. As a percentage of GDP, we spend one-tenth as much on infrastructure as we did 70 years ago. This is why we need to enact the Water Resources Development Act (WRDA) – a key national infrastructure bill that includes hurricane protection projects for the Gulf Coast.

As Chairman of the Senate Homeland Security and Governmental Affairs Disaster Recovery Subcommittee, I am working to reform how the government responds to disasters, be they natural or manmade. As a Senate Appropriations Committee member, I am working to make sure the worthwhile projects that will keep Louisiana communities and energy infrastructure safe are responsibly funded.

The hurricanes also revealed success stories of volunteerism, and for that, the people of the Gulf Coast are forever grateful. Freddie Mac, for instance, has been a leader in both volunteerism and financing for numerous projects in the hurricane-affected region.

Governor Barbour: Hurricane Katrina taught us many lessons, one of which was the need for increased storm preparedness and safety among our local governments, businesses, and citizens. Consequently, last year my office in conjunction with the Mississippi Emergency Management Agency kicked off an 8-week hurricane awareness campaign called "Stay Alert. Stay Alive," which addressed issues such as family disaster plans, businesses, travel trailers, evacuation routes, volunteer efforts, insurance, health issues and mental health needs. The purpose of this campaign was to urge citizens to be prepared and designed to give people the information they need to make good decisions – in advance – so they can be prepared to successfully face whatever nature has in store for our state. After Katrina, I think most people realized that even with all the information and assistance that is available, there really is no substitute for awareness and self-help – especially in the days before a hurricane is predicted to hit.

Q: What are the roadblocks that are preventing people from rebuilding?

Senator Landrieu: Major roadblocks to rebuilding remain along the Gulf Coast, including the funding shortfall for the Road Home program, the lack of affordable housing, the increased cost of insurance, and the remaining funding and authorizations we need to secure our communities and energy infrastructure from future storms.

I am working to secure more funding this Congress for the Road Home program, which gives grants to Louisiana homeowners, through an individual appropriations bill or other appropriate legislative vehicle. I am also committed to freeing up $1.2 billion in Hazard Mitigation money that the Federal Emergency Management Agency has prevented from being used as part of the program. A bill I sponsored to release the money was passed by the Senate Homeland Security and Governmental Affairs Committee, and I am working to get it through the legislative process.

Congress also must pass the Gulf Coast Housing Recovery Act, which I cosponsored along with Senate Banking Chairman Chris Dodd (D-CT). The bill provides sufficient affordable housing in the form of mixed-income communities, smartly built, to New Orleans-area residents who lived in public housing units before the storms.

We have an insurance crisis in the Gulf Coast and, without reasonably priced insurance, home and business owners will not be able to get bank loans to rebuild. We will not see any new construction if financing is unavailable because developers cannot obtain insurance. I have cosponsored the Commission on Catastrophic Disaster Risk and Insurance Act of 2007. This will establish a bipartisan commission to assess the property and casualty insurance and reinsurance markets in the aftermath of hurricanes Katrina, Rita and Wilma in 2005, and the four major hurricanes in 2004. I have also cosponsored the Insurance Industry Competition Act of 2007, which would eliminate the antitrust exemption the insurance industry has enjoyed since the passage of the McCarran-Ferguson Act of 1945. Any federal solution, however, will need a great deal of input from the states.

Governor Barbour: Right now, the most significant barrier to rebuilding the Gulf Coast and South Mississippi is the cost of insurance; however, we are continuing to make progress and insurance costs are coming down in many areas. Through a ratepayer mitigation program and the reforms to the state-sponsored wind pool, $160 million is being used to stabilize the insurance market statewide. I am also supporting Congressional authorization of an all-perils insurance policy and a federal catastrophic disaster reinsurance program, as well as the continuing efforts of the wind pool board to reduce property insurance rates. Ultimately, I have great confidence in the people of Mississippi, who displayed their self-reliance, resiliency, and selflessness in the wake of Hurricane Katrina, and look forward to continuing to rebuild South Mississippi bigger and better than ever.

Q: To further recovery in the Gulf, what is the single largest challenge you face and what should policy makers do to address it?

Senator Landrieu: The single largest roadblock to our recovery is the difficulty in securing additional federal funds when there are many strains on the federal budget. But additional federal funds are still needed on an emergency basis – to shore up the Road Home program and provide sufficient funding for levees and other hurricane protection infrastructure. But our recovery is multi-pronged, and also includes reducing government red tape, ensuring affordable housing for our returning workforce, providing affordable insurance for homeowners and business owners and enacting the WRDA bill.

Governor Barbour: During Katrina, our state bore the brunt of the worst natural disaster in American history; and yet, our Gulf Coast and South Mississippi have made tremendous progress since the storm. Even at a record pace, it is never fast enough to suit me. Since the first week after the storm, it was clear the most urgent need along the Gulf Coast was, and continues to be, housing. As policy makers, we must continue to implement the comprehensive housing recovery programs that have already assisted nearly 16,000 Mississippi families, including low-to-moderate income families, and are financing the construction of 16,000 units of affordable rental housing. Programs like the Homeowners Assistance Grant program; Mortgage Revenue Bonds; Public Housing Authorities; Gulf Opportunity (GO) Zone Low-Income Housing Tax Credits; Small Rental Assistance program; and Long-Term Workforce Plan are assisting families in rebuilding their homes and realizing their dreams of homeownership. It is vital that we continue supporting these and other assistance programs to ensure all Mississippians have the opportunity and means to start anew after the devastation of Katrina.

A key ingredient to the recovery of South Mississippi is job creation and community revitalization. Since the storm, I have directed more than $300 million to assist local governments in improving infrastructure and rebuilding downtown areas for economic development and job creation. It is important that lawmakers continue to support other job creation opportunities that will help transform the South Mississippi economy, such as the redevelopment of the State Port at Gulfport. We must also focus on the rebuilding of South Mississippi’s infrastructure and public buildings – until the job is done.

The views expressed by the interviewees are their own and do not necessarily represent the views of Freddie Mac or its Board of Directors.

October 31, 2007