The President's Request for Additional Resources to Assist the Gulf Coast Region in its Recovery from Hurricanes in 2005

Good morning, Chairman Cochran, Ranking Member Byrd, and distinguished members of the Committee.

I sit before you today to outline the reasons the Bush Administration is requesting additional funding for the State of Louisiana.

This funding request, along with all past and future funding requests, is aimed at fulfilling the promise that President Bush made to the people of Louisiana when he said: "We will do what it takes, we will stay as long as it takes, to help citizens rebuild their communities and their lives."

As the Secretary of the Department of Housing and Urban Development, it is my responsibility to carry out the Administration's housing policies.

Because of our mission, our expertise, and our resources, HUD will continue to play a central role in the relief effort.

Nearly 8,000 public housing units in Louisiana were affected by the hurricane. In New Orleans alone, Hurricane Katrina displaced nearly 8,000 Section 8 voucher holders. Without a doubt, this storm took a terrible toll on the communities that HUD serves. The additional funds the Bush Administration is requesting would help rebuild the lives of the people that choose to remain in or return to New Orleans.

The funds would also go to helping the thousands of families who were not receiving HUD assistance before the storm, but need temporary assistance to rebuild their lives.

We have been having an ongoing dialogue with the elected representatives in Louisiana. They have described their needs to us.

Thousands of people want to return to Louisiana but can't because they have no homes. They want to get back to work. They want to put their children back in school.

The funding the Bush Administration is requesting would not only help rebuild the lives of the families that HUD already serves.

It would also help to rebuild more than 100,000 homes across Southern Louisiana. The money would be used strictly for flood mitigation activities, such as buyouts, relocation, and rebuilding of residential properties and related infrastructure.

The Bush Administration is requesting $4.2 billion. And it is asking that the money be put into the Community Development Block Grant fund because of this program's great flexibility.

CDBG is the right program for these funds for two main reasons: First, CDBG would allow local leaders to fashion their community strategies -- the people of Louisiana know how to rebuild their communities better than we do in Washington. Second, because HUD's broad experience with housing gives us the expertise to review Louisiana's plans to ensure that the plan minimizes future risks to property and life.

We expect Louisiana to develop a comprehensive and expert plan for using the funds. But we also want to retain the ability to distribute those funds based on sound, smart proposals.

By transmitting the funds through our CDBG program, the people of Louisiana will have the flexibility to provide mortgage assistance to those who need it, to make repairs to existing homes, and to elevate houses that are at risk of future flooding.

The Bush Administration developed this request in light of three factors.

• The First is the need to mitigate Louisiana's current damages
• The Second is the need to mitigate Louisiana's future risk of flooding
• And the Third is that Louisiana's mitigation needs are unique

First, Mr. Chairman, Louisiana faces a unique need for mitigation of its current housing and infrastructure damages.

Governor Blanco has told the Louisiana legislature that $5.6 billion of the $6.2 billion dollars in CDBG funding already allocated to the State will be directed to assist homeowners and to develop affordable housing.

But that still leaves a significant need to repair and/or replace infrastructure.

Second, Mr. Chairman, Louisiana faces a unique need for mitigation of its future risk of flooding.

It would not make sense to rebuild Louisiana just as it was.

This could involve moving public facilities, or buying out property owners and not rebuilding in certain areas. It could also involve rebuilding houses on stilts or to meet more stringent building code standards.

It will be left to State and local governments to decide which mitigation measures are best suited to their situation, e.g., what areas to buy out and leave open, whether to use funds to rebuild "on stilts,"and so on. The CDBG program provides the local flexibility needed to make these decisions wisely."

Third, Mr. Chairman, the concentration of the damage is unique in Louisiana.

If damage is spread out, even if there is a lot of it, then infrastructure remains and people remain to build back the damaged areas.

But in Louisiana, the damage is often concentrated so much in some areas that there is simply no infrastructure left to support the rebuilding process. This makes the challenge much more difficult.

Let me give you just one example of that: Even in Louisiana, 75% of the public housing units that were damaged were in the City of New Orleans. That's a 7,100 out of 9,500 damaged public housing units in Louisiana.

Mr. Chairman, if you count damage to all types of housing statewide, nearly 90% of it occurred in the Metro New Orleans area.

That puts Louisiana at a special disadvantage, because private investors are not likely to go into an area with that kind of intense infrastructure damage unless they know that other resources will be available to leverage their own investments.

The $6.2 billion dollar expenditure already allocated to Louisiana still leaves another estimated $5.9 billion in total mitigation needs for Louisiana: $4.8 billion for housing that was severely damaged or destroyed, and $1.1 billion for other infrastructure. We estimate FEMA can provide about $1.7 billion in mitigation funds to Louisiana.

Thus, Louisiana still needs $4.2 billion dollars for mitigation, and that is why the President is requesting $4.2 billion dollars.

We are confident that Louisiana is developing a sound plan for using these funds.

Chairman Don Powell has worked closely with Louisiana and New Orleans' officials to assist them in developing a proposal that will meet the State and City needs, and target rebuilding efforts to support flood mitigation.

Subject to the proposed appropriation, the State of Louisiana will submit a plan for the use of the $4.2 billion for flood mitigation activities

In addition to the $4.2 billion I have already mentioned, we are requesting an additional $202 million dollars to continue the Disaster Voucher Program, or DVP.

That $202 million will help hurricane evacuees, not just from Louisiana, but also from the other states damaged by the hurricanes.

These funds would be added to the $390 million already provided for DVP by Congress in December, and enable assistance for 18 months.

But our request does more than add funding:

First, it would also broaden the language of the law so that HUD-assisted families not covered under the initial $390 million would be covered.

Second, the request would also provide that after the first right of return has been given to all households in any HUD-assisted development located in the City of New Orleans, an owner may then offer any remaining vacant dwelling units to city employees for a period not to exceed 12 months. This would allow an owner to assist in housing the city's first responders regardless of income, age, or evacuee status.

In conclusion, Mr. Chairman, Mr. Ranking Member, and distinguished Members:

The request that I bring before you today reflects the findings of the people who are in the best position to evaluate the housing needs in Louisiana, but more specifically, Southern Louisiana. Six months after our initial evaluations of the damage, the real extent of the devastation has become clearer.

President Bush made a promise to the people of the Gulf Coast that he would do whatever it took to help them rebuild their lives. This request represents the Administration's best efforts to make good on that pledge.

Thank you for your time. I will be happy to answer any questions you may have.