TCS Daily

Cataloguing the Federal and State Response to Katrina

By Veronique de Rugy - September 23, 2005 12:00 AM

Many columns have been written on this site in the last few weeks about what the federal government should do in response to Katrina (see here and here for example). Unfortunately, given the nature of political responses to disaster, many of the policy suggestions they contain will likely be ignored by the administration and Congress.

The next best thing to do now is to follow and review what the federal government is doing to respond to the Gulf Coast devastation in order to best assess the adequacy and cost-effectiveness of the response. As such, we thought that a list of what has been done so far would be a useful resource.


- 122,000 people are currently housed in shelters throughout all 50 states and D.C.

- President Bush proposed an Urban Homestead Initiative: allow evacuees to occupy a government-owned home at a favorable mortgage rate, in exchange for their personal investment of sweat equity in the property. Identify property in the region owned by the Federal government, and provide building sites to low-income citizens free of charge, through a lottery. In return, they would pledge to build on the lot, with either a mortgage or help from a charitable organization like Habitat for Humanity.

- $5 billion spent on 300,000 mobile homes.

- 34,000 public housing units around the country available for evacuees.

- Vouchers for replacement units for displaced public housing families or displaced residents living in other HUD multifamily projects ($50 million available).

- HUD loan program: to finance both the purchase and/or refinancing of a house and the cost of its rehabilitation through a single mortgage. Also loans for owners to finance the rehabilitation of damaged homes. Encourages lenders to make mortgages available to borrowers who would not otherwise qualify for conventional loans on affordable terms and to residents of disadvantaged neighborhoods.

- Grants for Public Housing Agencies on a first come, first serve basis ($29 million available).

- Senate passed an amendment offered by Sen. Sarbanes (D-MD)-attached to Commerce Appropriations-to create a $3.5 billion emergency housing voucher program. The temporary rental vouchers would be available to all displaced families and could be used anywhere in the country.

- Small Business Administration loans: homeowners may borrow up to $200,000 to repair or replace the primary residence. Loans of up to $40,000 available to renters and homeowners to cover losses to personal property like clothing, appliances and furniture. The interest rate is 2.68 percent with 30 year terms and the loans are aimed at covering losses not fully covered by insurance.

- Waived eligibility requirements associated with the rural housing program. USDA Rural Development program has made available 30,000 housing units across the country.

State responses:

- Governor Blanco of Louisiana has asked the federal government to cover "100 percent" of what the state spends on the disaster.

- Louisiana Economic Development (LED) and the SBA have teamed up to aid businesses, individuals, and others with low-interest and extended-term loans. One of these loans is Home Disaster Loans - for homeowners or renters to repair or replace disaster damages including personal property losses.

- Miss. Dept. of Insurance states that insurance companies must be able to prove to the Dept. and the insured that the damage was caused by water and not by wind before a claim is denied.

- Miss. Insurance Commissioner called on all insurance companies doing business in Miss. to grant a 60-day grace period for collection of insurance policy premiums owed by residents of the state impacted by Hurricane Katrina.

- TX: FEMA has authorized cities and counties to pay for temporary housing assistance for evacuees from 12-18 months (i.e. apartments, hotels).

- TX: Gov. Perry has issued an Executive Order suspending both the state and local hotel/motel taxes for the next 60 days for Louisiana evacuees. In some cities, that could mean as much as a 17 percent reduction in the costs.

- TX: The IRS has approved the waiver request submitted by Gov. Perry that will allow an estimated 18,000 vacant income eligible housing units to be used by Louisianans displaced by Hurricane Katrina.


- HHS sent in more than 1,500 health professionals, over 50 tons of medical supplies.

- Federal waivers to reimburse states with large numbers of evacuees for extra Medicaid and uncompensated care expenses through Jan. 31, 2006.

- All children from birth to 18 years old displaced by Katrina are eligible to receive free vaccines through the federally-run Vaccines for Children program.

- $600,000 in emergency mental health grants to LA, AL, TX and MS

- Accelerated funding to establish 26 new health center sites in areas impacted by Hurricane Katrina--$2.3 million that was originally awarded in April.

State responses:

- Louisiana Dept. of Health and Hospitals, in conjunction with EPA, is offering public free bacteriological testing (for coliforms and E. coli) for private drinking water wells and systems.

- More than $107.6 million in Disaster Food Stamp Benefits has been issued to nearly 295,000 households in Louisiana.

- TX: Provided more than 75,000 Louisiana families with emergency food stamps. Implemented new rapid application process.

- TX: Providing more than 800 WIC (Women, Infants and Children Program) clients access to food and nutrition benefits in Texas.

- TX: Waived normal immunization requirements for children displaced by Hurricane Katrina to attend school or child-care facilities.

- TX: Evacuees in Houston are able to get prescription drugs-if they do not have a doctor's prescription, they will be able to get medications based upon the pharmacist's best judgment. If they cannot pay for the drugs, they will be able to receive them free of charge.


- Labor Dept. has created the Katrina Recovery Job Connection, a website to connect job seekers with employers interested in hiring them for either new permanent employment or for jobs related to the cleanup, recovery and rebuilding process in hurricane-impacted areas.

- Bush proposed creating a Gulf Opportunity Zone (GO Zone) to help local economies in Louisiana, Mississippi, and Alabama. Benefits through 2007: double small business expensing from $100,000 to $200,000 for investments in new equipment; provide a 50% bonus depreciation for all businesses; extend tax relief to the building of new structures; make available loans and loan guarantees for small businesses.

- Bush proposed Worker Recovery Accounts. States will have the flexibility to design the accounts. Up to $5,000 to certain job seekers to allow them to purchase training or supportive services. If they find a job within 13 weeks after starting Unemployment Insurance benefits or Disaster Unemployment Assistance, they may keep the money remaining in their account as an employment bonus.

        o Federal-State Unemployment Insurance program provides unemployment 
        benefits to eligible workers who are unemployed through no fault of their 

o Federal-State Disaster Unemployment Assistance provides financial assistance to individuals unemployed as a direct result of a declared major disaster. For individuals who not eligible for regular unemployment insurance benefits (under any state or federal law).

- High Growth Job Training Initiative: $12 million in grants to AL, LA, MS and TX to train workers for jobs critical to the economic recovery of the region.

- Affected states can apply for National Emergency Grant funds to temporarily employ dislocated workers. These funds can be used to employ workers on projects that provide food, clothing, shelter and other humanitarian assistance for disaster victims

- Small Business Administration loans: Businesses of all sizes may apply for an SBA disaster loan of up to $1.5 million to cover damages to the property, machinery, inventory, etc. Economic injury disaster loans may be used to pay bills or meet operating expenses. The interest rate on both the SBA business disaster loans is 4 percent, with up to 30 year terms.

State responses:

- Louisiana Economic Development (LED) and the SBA have teamed up to aid businesses, individuals, and others with low-interest and extended-term loans. Two of these loan programs include: Business Physical Disaster Loans - to repair or replace disaster damages to property owned by businesses of all sizes; Economic Injury Disaster Loans - for working capital to small businesses and cooperatives to assist them through the recovery period.

- Governor Blanco of LA has requested that Louisiana businesses, able to provide relief efforts to the State, be given contracting priority by the federal government.

- Alabamians and displaces evacuees temporarily residing in the state who have lost their source of income due to Hurricane Katrina may be able to claim disaster-related unemployment benefits even if they would not normally be eligible for state unemployment compensation.


- Bush proposed federal funds for districts enrolling significant numbers of displaced kids.

- Bush proposed federal compensation to displaced families for enrollment in private, including parochial, schools.

- Dept. of Education proposed up to $2.6 billion in relief:

o Up to $1.9 billion to school districts, including charter schools, that have enrolled at least 10 displaced children. Based on state's average per-pupil expenditure, up to $7,500 per student. For LA and MS, money will go to state, not districts.

o The affected communities in LA had a private school enrollment much higher than the national average-32% vs. 11%. Up to $488 million to compensate Louisiana families who have enrolled their kids in private schools. Based on state's average per-pupil expenditure, up to $7,500 per student.

o Up to $227 million for higher education-forgive six months of interest on student loans for all borrowers in severely impacted areas in LA, MS, and AL; $1,000 payment to colleges and universities for each displaced student they enroll; and temporarily closed colleges and universities can keep the federal aid they have received so far this year and their students won't have to repay the aid they received for the current term.

o On a case by case basis, Secretary will waive or modify certain provisions of education law to help states, school districts, and colleges. [NCLB]

- $15 million in emergency funding to assist Head Start and Early Head Start grantees in providing services to displaced children and families.

- Schools are allowed to provide free meals to evacuee children.

- Dept. of Education launched a website to help match schools with displaced students in need with companies, organizations, other schools and individuals willing to donate.

- Katrina's Kids, an effort being organized by the USA Freedom Corps, is coordinating voluntary agency services in communities where evacuee children are concentrated.

State responses:

- Louisiana Dept. of Education is sending all operating school districts a database containing Student Information System (SIS) and Student Transcript System (STS) data. These databases include basic statistics including demographics, enrollment, discipline, high school transcripts, and schedule information for public school students in affected parishes.

- The Louisiana Dept. of Education reported that districts have enrolled 20,000 students across the state.

- TX: Public schools have enrolled at least 21,115 school-age evacuees in classes.

- TX: One-year emergency teaching certificate

- TX: Displaced college students are eligible for in-state tuition rates at Texas colleges and universities.


- Airports in New Orleans and Gulfport are open.

- All major gasoline pipelines are operating.

- Federal Transit Administration will temporarily defer the use of local matching funds when transit agencies affected by Hurricane Katrina use federal funds to buy supplies, repair buses or equipment, or begin reconstruction.

- The President has waived the Davis-Bacon Act, permitting lower pay rates on construction rehabilitation projects.

- On a case-by-case basis, the Federal Highway Administration has waived the competitive bidding process for procurement of supplies and services on an emergency basis to facilitate debris removal, repair, and reconstruction of roads and bridges.

- $15.2 million grant to repair New Orleans airport. $5 million down payment to help repair I-10 bridge between Slidell and New Orleans. $6.1 million to MS Dept. of Transportation for bus system. MS received $5 million to MS as first installment for the repair or replacement of damaged roads and bridges throughout the state.


- Bush granted "evacuee" status to individuals affected by Katrina, which will simplify their enrollment process for benefits such as Medicaid, TANF, Head Start, etc. For example, states have the flexibility to enroll evacuees without requiring documents such as tax returns or proof of residency.

- $27.25 million in emergency energy assistance to states.

- More than $170 million in emergency assistance available for agricultural producers.

- USDA has authorized and continues to encourage states to pre-load electronic food benefit (EBT) cards with $50 worth of assistance, which will enable displaced residents to immediately purchase food even before their application has been processed to receive complete benefits.

- Taxpayers in affected areas will have until October 31, rather than September 15th, to make required tax payments, and all penalties and interest are abated.

- Special relief to allow employers to adopt leave-based donation programs under which employees could forego vacation, sick or personal leave, and in turn their employers would make cash contributions to charitable organizations involved in relief efforts.

- On a case-by-case basis, EPA has temporarily waived gasoline regulations in some areas. August 31 through September 15, allowed supply of fuels that did not meet emissions standards.

- SSA issued 30,000 checks to evacuees who are not able to receive their monthly benefits. Beneficiaries can go to any open Social Security office and receive an immediate payment by check that replaces the full amount of their Social Security or SSI payment.

- Postal Service has registered 98,000 new addresses from displaced residents.

- Bush asked USA Freedom Corps to create an information clearinghouse for relief efforts.

- Bush ordered DHS to review preparedness in every major city, ordered every Cabinet secretary to conduct a review of the response.

- Debit cards: $2,000 each to families displaced by Hurricane Katrina, to be spent within 24 hours. Administered by FEMA. Hoped to get people to leave shelters voluntarily. Major organizational problems when distributing the cards in Houston, scrapped the concept two days after it started. Hurricane victims will have to apply for expedited aid through the agency's traditional route - filling out information on FEMA's Web site to receive direct bank deposits.

State responses:

- State governments are legally sharing fire trucks, helicopters, employees and other resources through the Emergency Management Assistance Compact (EMAC). New York sent 100 buses and 28 National Guard aircraft. Oklahoma foresters are helping with debris removal. Florida sent four Black Hawk helicopters, about 100 vehicles and 1847 workers to the affected states, totaling about $71 million in aid.

- The Alabama Emergency Management Agency (AEMA) is working with the Alabama Mutual Assistance Advisory Committee to establish an overall mutual aid system in Alabama. The statewide mutual aid system will enable state and local agencies to respond to emergency and disaster events sooner and with necessary resources.

- FEMA approved $41.1 million in disaster aid to Alabama (20,868 households in 10 disaster-related counties). Of the $41 million, more than $33 million is for housing assistance. Other Needs Assistance totals more than $8.12 million for necessary expenses not covered by other programs.

- Federal Public Assistance will reimburse local governments 100 percent of their approved costs for debris removal and emergency protective measures costs incurred for the 60-day period following the Emergency Declaration by Pres. Bush for Alabama. All other categories will be reimbursed on a 75 percent federal, 25 percent non-federal cost share basis.

- TX: The Public Utility Commission of Texas ordered a waiver on deposits for connecting telephone and electric service throughout Texas to Hurricane Katrina victims. The order is effective through the end of September.

- Steve Moore in today's WSJ: "When President Bush announced last Thursday that the feds would take a lead role in the reconstruction of New Orleans, he in effect established a new $200 billion federal line of credit. To put that $200 billion in perspective, we could give every one of the 500,000 families displaced by Katrina a check for $400,000, and they could each build a beach front home virtually anywhere in America."

Investigation Committee. The House passed a resolution establishing the Select Bipartisan Committee to Investigate the Preparation for and Response to Hurricane Katrina. (H.Res. 437)

Expressing Condolences. The House passed a resolution expressing "the condolences of the Nation to the victims of Hurricane Katrina;" commending "the resiliency and courage of the people of the States of Louisiana, Mississippi, and Alabama;" and committing "to provide the necessary resources and to stand by the people of the States of Louisiana, Mississippi, and Alabama in the relief, recovery, and rebuilding efforts." (H.Res. 425)

Thanking Foreigners. The House passed a resolution "[expressing] its sincere gratitude to the foreign individuals, organizations, and governments that have offered material assistance and other forms of support to those who have been affected by Hurricane Katrina." (H.Res. 428)

National Day of Remembrance. The House passed a resolution supporting the goals and ideals of a national day of prayer and remembrance for the victims of Hurricane Katrina and encouraging all Americans to observe that day. (H.Con.Res. 240)

Proposed Legislation

- TANF Emergency Response and Recovery Act of 2005 (House passed on 9/8 - senate received on 9/8)

o gives advances payment of TANF block grants for the first quarter of year 2006

o government will reimburse states that provide TANF benefits to other states that were affected by Katrina with no state match requirement

o LA, MS, and AL are all loan eligible; don't have to pay interest or repay it

o work requirements and time limits under TANF program are not enacted; waiver of TANF penalties for Hurricane damaged states

- To establish the Select Bipartisan Committee to Investigate the Preparation for and Response to Hurricane Katrina (9/14/2005-Introduced in house)

o full investigation, study, and report to the House on: (1) the development, coordination, and execution by local, state, and federal authorities of emergency response plans and other activities in preparation for Hurricane Katrina; and (2) the actual local, state, and federal government response to the Hurricane.


- A bill to provide for reimbursement for business revenue lost as a result of a facility being used as an emergency shelter for Katrina Survivors (on calendar in the senate)

o reimbursement will be a full 100%

- A bill to provide relief for students affected by Hurricane Katrina (on calendar in the senate)

o relief to pay any education expense related to students affected by Hurricane Katrina, if the Secretary of Education determines such expense appropriate

- A bill to promote the employment of workers displaced by Hurricane Katrina in connection with Hurricane Katrina reconstruction efforts. (S. 1644- introduced 9/8/2005).

o makes it a law that at least 25% of the rebuilding efforts are done by displaced workers

- Flexibility for Displaced Workers Act (introduced in house on 9/14)

o Allows national emergency grant funds to states under the Workforce Investment Act of 1998 (WIA) for addressing the effects of Hurricane Katrina to be used to provide disaster relief employment on projects that provide assistance in areas outside of the disaster area.

o Allows any state, with the Secretary's approval, to use available WIA national emergency grant funds to assist workers affected by the hurricane, including those who have relocated from states in the disaster area.

- Katrina Emergency Tax Relief Act of 2005 (H.R. 3768-engrossed as agreed to or passed)

o suspends the limitations on charitable contributions for relief efforts

o suspension of certain limitations on personal casualty loss

o additional exemption for housing displaced individuals

o Work Opportunity Tax Credits for employers who hire displaced persons

o penalty free use of retirement funds under federal declaration of natural disaster

Enacted Legislation

Emergency Supplemental Appropriations Act to Meet Immediate Needs Arising From the Consequences of Hurricane Katrina, (9/2/2005--Public Law)

- $10 billion to the Department of Homeland Security for disaster relief (for areas affected by Hurricane Katrina), to remain available until expended

- $500 million to the Department of Defense for ``Operation and Maintenance, Defense-Wide'' for emergency hurricane expenses, to support costs of evacuation, emergency repairs, deployment of personnel, and other costs resulting from immediate relief efforts, to remain available until September 30, 2006

- designates as emergency requirements, which shall not count for certain purposes of the Congressional Budget Act of 1974, the amounts appropriated by this Act.

Second Emergency Supplemental Appropriations Act to Meet Immediate Needs Arising From the Consequences of Hurricane Katrina (9/8/2005--Public Law)

- Appropriates $1.4 billion to the Department of Defense-Military for ``Operation and Maintenance, Defense-Wide." Allows the transfer of up to $6 million to the Armed Forces Retirement Home for emergency hurricane expenses.

- Appropriates to the Department of the Army, Corps of Engineers--Civil, an additional $200 million for "Operation and Maintenance," and an additional $200 million for "Flood Control and Coastal Emergencies."

- Appropriates an additional $50 billion to the Department of Homeland Security for disaster relief - up to $100 million may be transferred to and merged with "Emergency Preparedness and Response--Public Health Programs" for the National Disaster Medical System to support medical care as authorized by the Public Health Security and Bioterrorism Preparedness and Response Act of 2002.

- Requires the transfer of $15 million to, and merger with, "Departmental Management and Operations--Office of Inspector General" for necessary expenses of the Office of Inspector General for audits and investigations as authorized by law for Hurricane Katrina response and recovery activities.

- Emergency requirements shall not count for budget enforcement purposes for the Congressional Budget Act of 1974.

Vero de Rugy is a fellow at the American Enterprise Institute. Kathryn Newmark and Ro Malik are research assistants at AEI.

To see more of the extensive coverage of Hurricane Katrina from TCS, click here.


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