Bush uses Katrina to Hurt the
Poor
LA Times
Limiting Government's Role
Bush favors one-time fixes over boosting existing programs to help Katrina
victims.
By Peter G. Gosselin and Ricardo Alonso-Zaldivar
Times Staff Writers September 23, 2005
WASHINGTON — Two days after Hurricane Katrina slammed into the Gulf
Coast, the Department of Housing and Urban Development announced plans to issue
emergency vouchers aimed at helping poor storm victims find new housing quickly
by covering as much as $10,000 of their rent.
But the department suddenly backed away from the idea after White House
aides met with senior HUD officials. Although emergency vouchers had been
successfully used after the 1994 Northridge earthquake, the administration
focused instead on a plan for government-built trailer parks, an approach that
even many Republicans say would concentrate poverty in the very fashion the
government has long sought to avoid.
A similar struggle has occurred over how to provide healthcare to storm
victims. White House officials are quietly working to derail a proposal by
leading Republican and Democratic senators to temporarily expand Medicaid.
Instead, the administration is pushing a narrower plan that would not commit
the government to covering certain groups of evacuees.
As President Bush tackles the monumental task of easing the social problems
wrought by Katrina, he is proving deeply reluctant to use some of the
big-government tools at his disposal, apparently out of fear of permanently
enlarging programs that he opposes or has sought to cut.
Instead of depending on long-running programs for such services as housing
and healthcare, the president has generally tried to create new, one-shot
efforts that the administration apparently hopes will more easily disappear
after the crisis passes. That has meant relying on the Federal Emergency
Management Agency, which has run virtually all of the recovery effort.
"FEMA can help fill some immediate needs after a disaster, like giving
grants to help people repair their roofs or pay for temporary housing," said
John P. Sucich, a former senior FEMA official who oversaw the recovery from the
1989 Loma Prieta earthquake. "But it is not the agency to turn to to ensure the
kinds of continuing help that families need to begin putting their lives back
together.
"That's what the rest of government is for," Sucich said.
At least in the case of housing, critics say that the president's
unwillingness to rely on existing programs could raise costs. Instead of
offering $10,000 vouchers, FEMA is paying an average of $16,000 for each
trailer in the new parks it is contemplating. Even many Republicans wonder why
the government would want to build trailer parks when many evacuees are now
living in communities with plenty of vacant, privately owned apartments.
"The idea that — in a community where we could place people in the
private housing market to reintegrate them into society — we would put
them in [trailer] ghettos with no jobs, no community, no future, strikes me as
extraordinarily bad public policy, and violates every conservative principle
that I'm aware of," said former House Speaker Newt Gingrich, a Republican.
"If they do it," Gingrich said of administration officials, "they will look
back on it six months from now as the greatest disaster of this
administration."
Defenders of the president's approach say it will help Katrina's victims
without sticking taxpayers indefinitely with higher costs for social
programs.
"Once you begin to expand any entitlement, it's very hard to pull back,"
said Grace-Marie Turner, a health policy analyst and president of the
conservative Galen Institute.
Turner raised particular concerns about the bipartisan Senate Medicaid plan,
which would expand who could get coverage and require Washington to pay the
full cost of the program, including amounts normally covered by states, for up
to 10 months. If the plan were adopted, she said, "then every state that has
reason to declare an emergency will want full federal funding for Medicaid as
well…. It would be very hard to say no."
The administration's hesitancy to rely on well-established social programs
goes beyond housing and healthcare.
When White House officials realized the full dimensions of the hurricane
disaster, one of the first actions they took was to announce that FEMA would
give storm victims $2,000 cash grants. Originally, the money was supposed to
have come in the form of debit cards, but when the agency was unable to
smoothly issue these, it switched to checks. But there has still been trouble,
which some experts trace to the agency's — and the administration's
— unwillingness to turn to the government's existing system for giving
out aid.
"If FEMA had used the … state welfare offices and unemployment
agencies, they'd have been a lot better off," said William L. Waugh Jr., a
disaster specialist at Georgia State University and a board member of the
national accreditation group for emergency managers.
"The agency was not designed, and has never been very good at anything but
immediate emergency services," Waugh said. "It's been particularly bad at
delivering continuing social services like cash assistance."
Some critics of the administration are calling on it to substantially expand
the existing system of unemployment assistance to funnel money to people
uprooted by the storm. In the past, extensions of unemployment benefits, once
signed into law, have been difficult to end.
The administration has been planning to give assistance almost exclusively
through FEMA, which has the authority to distribute $26,200 per household in
cash, rental assistance and home repairs. If even half of families displaced by
the storm collect, the agency could end up paying out tens of billions of
dollars. But once the amounts were paid, that would be the end of the
government's obligation.
With Medicaid, the White House is negotiating state-by-state deals to cover
storm victims rather than agreeing to uniform rules for covering them —
another effort to avoid setting a precedent that might permanently expand a
program.
The administration is advancing the state-by-state approach as an
alternative to a bipartisan proposal drawn up by Sens. Charles E. Grassley
(R-Iowa) and Max Baucus (D-Mont.), which has been endorsed by prominent
Republicans and Senate leaders of both parties.
That plan would expand Medicaid for poor storm victims uniformly in all
states where they are now located, at a cost of as much as $8 billion over the
next five months. It would open the program to some people not normally
covered, such as childless adults of working age, and would require Washington
to pay for all of the care instead of splitting the costs with states, as it
normally does. In addition, the government would provide subsidies for
privately insured people meeting certain requirements.
By contrast, the administration approach generally would not expand coverage
beyond people who were already eligible for Medicaid.
Administration officials say that some victims without other forms of health
insurance would have to seek free care at hospital emergency rooms, a practice
the government normally discourages because of the cost. The administration has
promised to obtain more funding to compensate hospitals that provide the free
care.
In addition, the administration approach would not increase the share of
costs that the federal government would pay for Medicaid, even temporarily.
The administration position has opened a growing fissure between Bush and
other Republicans. On Wednesday, Mississippi Gov. Haley Barbour, a Republican
who is usually supportive of the White House, said the Senate Medicaid plan was
"what we need." Sen. Trent Lott (R-Miss.) has also sided with the Senate
plan.
Mark B. McClellan, director of the Centers for Medicare and Medicaid
Services, the federal agency that runs the two huge government health insurance
programs, defended the administration stand. He said the Senate plan could
prove cumbersome to implement.
"All that would take a lot of time," he said. "What we are talking about
here works off the existing system they have in place, so it doesn't face those
kinds of new delays and uncertainties."
In the case of housing, experts said that Washington could have relied on an
existing model for how to house people after a disaster: its response to the
1994 Northridge earthquake.
The earthquake significantly damaged 55,000 residential structures and left
20,000 people homeless. But within days, Congress had approved more than $200
million in Section 8 emergency housing vouchers. HUD used these especially to
help low-income displaced people pay market-rate rents for nearby
apartments.
Within months, virtually all of those affected by the disaster had
housing.
"We were learning a lot about how to help families use vouchers to move out
of bad neighborhoods when the earthquake occurred, and we applied those lessons
quite successfully to people displaced by the earthquake," said Margery Austin
Turner, a senior HUD official during the Clinton administration who is now with
the Urban Institute, a centrist Washington think tank.
HUD appeared to be heading in the direction of emergency vouchers in the
first days after Katrina. It posted a "recovery plan" on its website that led
off with a call for a new voucher program. But after a White House meeting two
days after the hurricane struck, HUD officials replaced that plan with one that
said the agency's first job was to reopen HUD field offices in the region.
Despite the fact that vouchers are generally favored by conservatives, the
Bush administration has repeatedly sought to cut or limit the regular Section 8
voucher program. Unlike other vouchers, which generally act as a cap on what
the government is required to provide, the value of housing vouchers rises with
increases in the rental market. Under the program, qualifying tenants pay 30%
of their income in rent, with the government paying the difference between that
sum and market-rate rents.
"With so many other resources out there, we believe we have enough to
respond to the needs right now," HUD Deputy Chief of Staff Scott Keller said
last week. Asked what resources he was referring to, Keller said FEMA
trailers.
The federal government may yet provide emergency vouchers. The Senate has
approved a $3.5-billion proposal that would provide one-year, $10,000 vouchers
to more than 350,000 families. A House committee is working on a similar but
narrower plan to help 50,000. Administration officials promise an announcement
on disaster housing soon.
Draft documents circulating Thursday on Capitol Hill suggested that money
for vouchers in the administration plan would come from HUD's existing budget,
rather than through a request for new funds. That would mean, in effect, that
poor residents elsewhere in the country would be subsidizing the housing of
those from the disaster area.
FEMA has continued to order trailers to house storm victims. FEMA press
secretary Eugene Kinerney provided a list of what he described as "firm orders"
for more than 100,000 units and said that the agency was in the midst of
negotiating deals for about 100,000 more.
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