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Release Date: 02/02/06 00:00:00
For Immediate Release
Office of the Press Secretary
Contact 202-282-8010
Washington, D.C.
February 2, 2006
Chairman Donald E. Powell: Good afternoon. Thank you for being here this afternoon and welcome to the Office of the Coordinator for Gulf Coast recovery.
Let me share with you a little, two or three things as it relates to our office.
When I first sat down and visited with the administration, the president, there were three charges that the president made very clear to me about the duties and mission of this particular office.
One was that the plans for rebuilding the Gulf Coast area should come from the local people, people in the counties, people i n the parishes, folks in the towns, cities, and the state government, should be their plan, I should understand the plan, understand the strategies necessary to develop that plan and the costs associated with that plan, and bring it back to the administration, the members of Congress, and communicate the locals' plans; very important.
The second thing he said to me is that I also am a steward of the taxpayers money, that I'm in a fiduciary role, and that there will be lots of money spent and directed toward rebuilding the Gulf Coast and those monies should be spent wisely, they should be spent very prudently, and I should represent the taxpayers when I'm doing my job.
The third thing he said is that it's important that the private sector play a role in rebuilding the Gulf Coast. The Federal Government cannot do everything. The state government cannot do everything. It's important that the free enterprise system, the private sector of our society play and important role in rebuilding the Gulf Coast.
So with that in mind, we began our job, and after going to the Gulf Coast, it became very apparent to me that in Louisiana there were certain issues, in Mississippi there were certain issues, but the common interest and the most important issue at the very beginning was safety.
It was important that the people in Louisiana would feel safe going back to New Orleans. It was important that the people in Mississippi felt safe when they were rebuilding their residence and their businesses in the Gulf Coast area.
So obviously, the levee announcement that was made about the middle of December was an important step toward that safety issue for the folks in Louisiana. It was important that Mississippi understand the building codes [inaudible], so forth, as relates to that, to their rebuilding.
The second issue that we began to focus on as it relates to the rebuilding of the Gulf Coast was housing. Housing was a very important issue; a very important issue. I'm going to talk a little bit about that in a moment.
But as you know, there has been something like $85 billion committed to rebuilding the Gulf Coast. Yesterday, there was another $2 billion allocated for health issues. Today, our announcement is that in the 07 budget that will be presented next week, there will be a supplemental of $18 billion requested for rebuilding the Gulf Coast area.
That monies will be used in various areas. As you know, to date, we've spent something like $31 billion that's been allocated for individual assistance, $41 billion for housing, which includes flood reimbursement for people that had flood insurance, and $15 billion for infrastructure.
With this $18 billion, that will bring it in excess of $100 billion. Of the $18 billion supplemental that we're announcing today, details will be forthcoming, hopefully within the next ten days to thirty days. The work is being done on that today. That's in excess of 18--excuse me--in excess of $100 billion that's been allocated to rebuilding the Gulf Coast. That's a lot of money.
Housing. As you know, part of the announcement that was made about 10 days ago, $11.5 billion for CDBG monies. Those grant monies was allocated, $6.2 billion, to Louisiana and $5 billion, a little bit more than $5 billion to Mississippi, and other monies went to the state of Alabama, Florida and Texas.
It's a common objective and a common goal that somehow, we meet the needs of those people, those homeowners that were outside the flood plain whose homes were destroyed. Homeowners outside the flood plain whose homeowners--whose homes were destroyed.
There was legislation introduced by Congressman Baker, some 60 days ago, about how to meet those particular needs. We have a common objective with Congressman Baker. We have a common destination. The debate is about how to reach that destination.
We believe that the CDBG grant money in Louisiana is more than enough money to meet the needs of the homeowners outside the flood plain. we believe that number is somewhere in the neighborhood of a billion dollars, so there would be excess of $5 billion to meet other states within the state. Again, that's meeting the needs of homeowners outside the flood plain whose homes were destroyed.
It's important that that money be spent in a wise and prudent way. It's important that there not be another level of bureaucracy that's established.
The CDBG money, as you know, has been in existence for about 32 years and it's proven to be a good vehicle to get to the people's needs in the quickest and fastest and most efficient way, rather than going through another level of bureaucracy.
I think it's important also that our, again, desired vehicle, being the CDBG, versus the other legislation that's been introduced, does not compete with the private sector.
We don't believe that government's role should be competing with private sector in owning property, managing property, dispersing property. I remember the days when I was in the banking business, and the Resolution Trust Corporation was in existence, and they were competing with us in the banking business.
And I can promise you, as a banker, during those days, that competition we thought was not good. It would impede [?] some of our assets at a lower level than what they should be. So no bureaucracy. Oversight is another issue. Adequate oversight we believe is very important. In the Baker bill, oversight will be limited.
There will be oversight, again, by the state, with funds being administered by the state as they see fit.
It also puts control of those monies in the state and they develop the plans about how that money would be administered, how the money will be distributed to the local people.
So it's, we believe, a superior vehicle to meet the needs of those homeowners.
I'll pause here and we will be happy to take any questions.
Question: Mr. Chairman, could you talk a little bit about what the 18 billion supplement will go for.
Chairman Powell: The $18 billion supplemental, those plans are being developed, the work is being done now, and hopefully the work will be done in a relatively short period of time. But it will meet the needs of rebuilding, in general, through the Gulf Coast area, such as individual infrastructure, housing needs, all of those; all of those.
Question: Do you anticipate--
Chairman Powell: Levees.
Question: Okay. So do you anticipate that more of it will go for housing as opposed to other infrastructure like berms or levees or--
Chairman Powell: Yeah. I think, obviously, summer will speak to enhancing the levee system and, again, the specifics of that will be available, hopefully within the next 30 days, and will address all those, to answer your question.
Question: Any chance that the money will be used to rebuild levees to a category 5 storm level?
Chairman Powell: Again, let's wait till-we'll specifically address the levee situation here in our office in the next ten days.
Yes?
Question: Mr. Powell, are you suggesting that the Baker bill, it just can't be fixed, or do you think that there are changes that could be made to it, that you think may be acceptable to the administration?
Chairman Powell: We believe that the CDBG money meets the needs of the uninsured homeowner outside the flood plain. We believe it's a better vehicle. We believe it's more direct and it doesn't have the bureaucracy, it doesn't compete with the private sector, and it's more accountable.
And the fifth reason is that it fits the plans and puts the administration of that money in the hands of the local folks, and they can administer that money in both plans, that will meet the needs--
Question: Mr. Powell.
Question: What about non-homeowners who are inside the flood plain? Are you suggesting that the Federal Government doesn't have a role in assisting them, which is, I think, the goal of the Baker plan?
Chairman Powell: Yeah. People inside the flood plain, obviously insurance was available to those folks, and most of those people either had--a lot of those people had hazard insurance or in fact did have flood insurance; a lot of them did.
Question: Mr. Powell.
Chairman Powell: Yes?
Question: How did you come up with the figure and why aren't there more details as to how you came up with it as to how--
Chairman Powell: You're talking about the housing numbers?
Question: No; the 18 billion.
Chairman Powell: Oh, the $18 billion? That was developed by the administration with a lot of input from lots of folks, and I'm sure there will be, as I mentioned, details forthcoming.
Question: But the thing is you've come up with a price tag. You've got the 18 billion in mind. Can't you share with us how you arrived at it as far as what it'll pay for?
Chairman Powell: Well, I'm sure there were lots of input from various agencies, from various stakeholders about that--
Question: Examples?
Chairman Powell: But an example would be from our office.
Question: What'd you say?
Chairman Powell: Well, again, we're talking about priorities. We talk about, a lot about safety. We talk about making sure that the folks in the area are very safe. We talk about housing. We talk about infrastructure. We talk about education, health issues.
Question: Mr. Powell--
Chairman Powell: Yes?
Question: --what is your response to Governor Blanco's proposal that the state of Louisiana spend [inaudible] revenues from the offshore drilling to use for restoration [inaudible]?
Chairman Powell: Yeah. We've had discussions with her and other members of the Louisiana delegation about those issues. I'll listen a lot. There's not any specific plans about how that would be done, specifically what percentage would be, what monies would be used for, and so forth. But I've been, I've had conversations with not only the governor but other members of the delegation [inaudible].
Question: Well, do you generally think that it would be--it's a good idea, or a potential idea?
Chairman Powell: I have not focused on it specifically. I think there are monies available today to meet the needs of the Gulf Coast, either through monies that have been allocated, or monies within this $100 billion, to meet the needs of the people of the government.
Question: Chairman Powell--
Chairman Powell: Yes?
Question: --getting back to the issue of building, I know you can't give any details today, but is it going to be much like the last supplement, the 17 billion, where [inaudible] is basically federal obligations, military bases, infrastructure rebuilding? And you said something about housing. Is that once again temporary housing, [inaudible] housing, not any new housing?
Chairman Powell: Yeah. Again, I'd rather wait and give you the details of specifically what that money will be used for when it's finalized.
Question: Mr. Powell, let me put it this way, because we've got to get a handle on where the money's gonna go.
Chairman Powell: Okay.
Question: People on the Gulf Coast hear today from your news conference, that an extra $18 billion has been found. How will they see it at their end?
Chairman Powell: I think they'll--I would welcome that answer. I'd say here's another $18 billion that the administration is asking for, that's going to meet the needs of the Gulf Coast. I would be excited by it.
Question: But these folks are real practically based. Are you going to get more humvees for security details? cause you mentioned safety. Or are they gonna get something that they can practically use to improve their lifestyle there in the devastated neighborhoods?
Chairman Powell: I think everything will be directed toward making their life better, all of those issues, rebuilding the Gulf Coast.
Question: And this is 2006. Even though it's in the 2007 budget, it's--
Chairman Powell: Yes. That's the way I understand it. That's true; yes. Yes, ma'am?
Question: Do we anticipate that this will be the last federal corporation, or supplemental that we see for some time, or do we expect that the Congress will continue to provide money on a monthly or bimonthly basis?
Chairman Powell: I don't know what Congress will do but I doubt--I think you can anticipate this would be the last supplemental.
Question: Do you know for how long?
Chairman Powell: For the balance of the year.
Question: For the balance of fiscal 06 or--
Chairman Powell: Yes.
Question: Would there be any beyond that?
Chairman Powell: I'm sorry?
Question: Would there be any beyond that?
Chairman Powell: Beyond...?
Question: This is 06 you're talking--
Chairman Powell: Yeah; 06.
Question: What about 07? I mean, are you saying this is the end of it?
Chairman Powell: I'm saying this would be all for 06.
Question: Right.
Chairman Powell: There may be. I mean, it depends upon what happens--
Question: You're open for additional supplement--or additional monies, later on, [inaudible]?
Chairman Powell: I think, again it depends upon the needs more [inaudible]--
Question: Was there anything in the 07 budget, in the president's budget for 07, is there going to be any additional money for rebuilding?
Chairman Powell: No.
Question: Mr. Powell.
Chairman Powell: Yes?
Question: In your op-ed today in the Washington Post, you said that $24.5 billion has already been directed to Louisiana for housing.
Could you tell me, is that temporary housing, or is that directly for permanent rebuilding?
Chairman Powell: Part of that's insurance proceeds and part of it's direct assistance to renters, direct assistance to homeowners.
Question: So mostly for temporary [inaudible]?
Chairman Powell: Temporary. Temporary homes, and assistance--
Mr. : There's some SBA monies in there--
Chairman Powell: Yeah. SBA's.
Mr. : --for homes--
Chairman Powell: Grants.
Mr. : --[inaudible].
Question: Chairman Powell, is there any thought to extending the rental assistance program? And my second question is you keep saying that CDBG money is enough to cover all the uninsured outside the flood plain. But in Louisiana they say no.
Mississippi, it may cover, but Louisiana says no, this is not enough money, this will only cover 20,000 people and we have 180,000 outside the flood plain.
So can you respond to that, please.
Chairman Powell: Well, our numbers, the numbers we have, we've--well, we'd be happy to share those numbers with you. The numbers are accumulated by FEMA and by HUD, and we think they're accurate numbers.
Question: How many numbers--how much is that? How many households--
Chairman Powell: In Louisiana, it's roughly 20,000 outside the flood plain, outside the flood plain of homeowners.
Question: And in Mississippi they say they have 35,000 that they're gonna help with the money.
Chairman Powell: Mississippi--excuse me. Louisiana, as I mentioned, is approximately 20,000 [inaudible] and visiting with the governor of Mississippi, I think his plan will call for assisting between 30- and 35,000 [inaudible].
Question: How come we have more people being helped in Mississippi, where there were a lot fewer left homeless, than in Louisiana?
And how can you say that that's enough?
Chairman Powell: Well, our focus is on housing, as I mentioned to you. I'm talking about homeowners outside the flood plain.
Mr. : Let me add to that and give you some perspective.
Question: Can you come to the camera, please, or it won't do us any good.
Mr. : I'd rather just give you the data here, that the chairman can't be expected to know all the data off the top of his head.
But we're talking about numbers that have been projected for folks, from the state, of 77,000 outside of the flood plain. We're talking about numbers of uninsured outside the flood plain of close to 15,000. So you're talking about 77,000 to 15,000.
So our numbers suggest that the CDBG monies will go much further than what people have anticipated, given the 77,000.
Question: But I think the question is trying to get at the issue, is there enough? As you pointed out, there is private flood insurance inside the flood plain, but I think Louisiana would make the case that that is not going to be enough and that they didn't "buy it" for whatever reason. You know, the assessments will be too low and at some--there's a boost needed there.
And what I'm hearing you say--correct me if I'm wrong--is that you feel that the money that's been allocated so far to Louisiana is enough to take care of those people.
Is that indeed what--
Chairman Powell: I think it's enough, it's more than enough money to take care of the uninsured homeowners outside the flood plain. And again, Louisiana can direct that money however they deem necessary, so they may want to--whatever plans they come up with, they may want to expand just what I said. That's their option. That's their option to do.
Question: Mr. Powell, what is--
Question: But is it your sense that the private insurance will be adequate to take care of the people of New Orleans, in particular?
Chairman Powell: It's my sense that there's enough CDBG money that will meet the needs of the uninsured outside the flood plain and, again, that's something around [inaudible] billion, and that the state of Louisiana can direct the balance of that money as they see fit, including administering and meeting some of the needs of other homeowners.
Question: So in other words, you expect the one billion to go to the people outside the flood plain who are uninsured, and then Louisiana can take the 5 billion and apply it to people who are living within the flood plain, like in the Lower Ninth or in other--
Chairman Powell: That's true.
Question: Okay.
Chairman Powell: They can do, they can develop whatever plan they want.
Question: But as you know, the Baker bill asks for 30 billion.
Chairman Powell: Right.
Question: This would only be 5 billion.
Chairman Powell: Right.
Question: Do you think that--you know, we're talking about a 25 billion last gasp here. I mean, is that going to be able to cover all the people who need--
Chairman Powell: Well, if you remember, the Baker plan also talked about commercial properties, and we're talking about housing, so it--the Baker plan is much broader than just housing.
Question: Do you think 5 billion will cover people who were within the flood plain?
Chairman Powell: Depends upon the percentage of damage and who had hazard insurance, who had flood insurance. But again, we believe that there's enough CDBG money to meet the needs of the uninsured outside the flood plain [inaudible].
Question: How much was that CDBG money again?
Chairman Powell: $6.2 billion.
Question: 6.2. That was allocated when?
Chairman Powell: That was done two weeks ago.
Question: [inaudible].
Chairman Powell: CDBG money. Two weeks ago. It was $11.5 billion, yeah, and Louisiana is part of the 6.2.
Question: And is there not a potential role for the Federal Government in helping the commercial property owners?
Chairman Powell: The commercial property owners indicate--we have indications most of those people were covered by private insurance. Most of those are sophisticated investors who understand the risk.
Mr. : And then there's SBA loans.
Chairman Powell: Yeah. These are SBA loans available to them, to business owners.
Yes, sir?
Question: [inaudible] small business owners [inaudible] small business program [inaudible]. Any move to [inaudible]?
Chairman Powell: Yeah. I think there's lots, been lots of suggestions by the SBA about how you can enhance that program. Obviously, there's bankers in the area. I think that the small business loan, the GO loans, I think they're working extremely well. That's $150,000, where the bank has the authority to grant those loans and SBA--they send the paperwork to SBA [inaudible] I think that's working very well in most parts of Louisiana.
I think the disaster loan, a billion 500,000 dollars, [inaudible] that needs to be extended. So a lot of that work, and a lot of ways to make that process much more efficient is--there's a lot of working being--but some of that, as you know, is directed [inaudible].
Question: [inaudible]?
Chairman Powell: There's been some discussion about bridge loans. Again, that's part of the overall lessons learned about what we can do better, as it was, to enhancing the SBA.
Ms. : Last question.
Chairman Powell: Yes, ma'am?
Question: Extending, any thoughts of extending the rental assistance?
Chairman Powell: I'm sorry?
Question: Any thoughts of extending the rental assistance? Will there be monies for that--
Chairman Powell: Yeah.
Question: --in the new appropriations?
Chairman Powell: Yeah. Very frankly, that's part of FEMA and it is part of the Homeland Security effort, and that's under discussion constantly, about those options.
Question: So it's under consideration?
Chairman Powell: I think it's been under consideration for some time. This the last one?
Ms. : The last one.
Question: Why is it taking up to 30 days to decide how to spend the 18 billion supplemental? Why is that?
Chairman Powell: I didn't say it'd take up to 30 days. I said hopefully it will be done within 30 days. It may be done in the next week. But as you might expect, that's a lotta money and it's important that it be done right. It just takes some time to do it.
Question: I'm just a little confused. Is it Congress or is it the administration that's providing [inaudible]?
Chairman Powell: This will be the recommendation of the administration. Congress will have to approve it.
Question: Can you give us any little [inaudible]?
Chairman Powell: I think that's it. Thank you all for coming.
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This page was last reviewed/modified on 02/02/06 00:00:00.