Saturday, September 10, 2005

Vultures Descend on Carcass of New Orleans

September 10, 2005
G.O.P. Sees Opportunities Arising From Storm
HOUSTON, Sept. 9 - Republican leaders in Congress and some White House officials see opportunities in Hurricane Katrina to advance longstanding conservative goals like giving students vouchers to pay for private schools, paying churches to help with temporary housing and scaling back business regulation.

"There are about a thousand churches right here in Houston, and a lot of them are helping people with housing, but FEMA says they can't reimburse faith-based organizations," Representative Tom DeLay of Texas, the House majority leader, said, referring to the Federal Emergency Management Agency.

Mr. DeLay, who joined three of President Bush's top economic advisers on a tour of relief efforts near the Houston Astrodome, added that Congress should also allow students displaced by the hurricane to use vouchers to pay for tuition at private schools. Conservatives have championed school vouchers for decades.

Those are only some of the ideas being considered by Congressional leaders and White House officials that could serve the dual purpose of helping hurricane victims and pursuing broader social and economic changes that Republicans have long sought.

The Bush administration has already moved to relax a variety of regulations in areas damaged by the hurricane. Many of the changes are small, like letting people take bigger tax deductions for the miles they drive while doing charitable work. Another change, announced on Friday by Treasury Secretary John W. Snow, will give preference to investment groups from hurricane areas that are seeking tax credits for community development projects.

But other changes are more ideological and more controversial. On Thursday, Mr. Bush issued an order that exempts federal contractors working on disaster relief projects from a longstanding federal requirement that they pay workers "prevailing wages," which are usually pegged to union pay rates.

The exemption strikes at the heart of a requirement that labor unions and Democratic lawmakers have ferociously defended for years.

"There are a lot of opportunities to experiment," said Mr. Snow, who jointed Secretary of Labor Elaine Chao and Secretary of Commerce Carlos Gutierrez in a rapid trip to highlight the administration's hurricane-relief operations.

Jumping quickly through visits in Houston; Baton Rouge, La.; and Mobile, Ala., Mr. Bush's economic team emphasized the amount and speed of financial assistance being made available to hurricane victims. In Houston, at a tent outside the Astrodome where job-placement services were being offered, the number of job counselors and visitors from Washington greatly outnumbered the number of people seeking help. Thousands of evacuees are staying at the Astrodome, though the number is declining as more people are settled into apartments and other temporary housing. For the moment, administration officials said they were focusing on the immediate job of getting emergency assistance - shelter, medical care and cash assistance as well as unemployment insurance benefits and Social Security payments - to the hundreds of thousands of people who have been dislocated.

In Baton Rouge, officials said they had received 150,000 claims for unemployment benefits and predicted that the number would continue to soar. The Congressional Budget Office predicted this week that 400,000 people would be temporarily jobless as a result of the hurricane.

But beyond the immediate needs, Republican lawmakers and administration officials are contemplating tax cuts intended to draw companies and workers back to New Orleans, regulatory changes to speed the expansion of oil refineries and scores of smaller changes to improve the recovery.

Mr. Snow and other administration officials were noncommittal on Friday toward some of the ideas now circulating in Congress, like offering major tax breaks to companies that set up operations in damaged areas.

But Mr. Snow did announce a change to the Treasury Department's "new markets" program, which provides tax credits to selected investment funds involved in community development projects. About $3.5 billion in tax credits are available, and the investment funds are awarded them through a competitive process on the basis of their proposals.

Mr. Snow said the program would now give special preference to projects in areas affected by the hurricane.

Copyright 2005 The New York Times Company


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