The aftermath of Hurricane Katrina raises urgent policy challenges, for both the immediate future and the long term. Tragically, there is no sign that the administration is rising to either of them.
It is now painfully clear that both prevention and relief in the case of disasters like Katrina requires something that conservatives reject -- government planning. In the absence of competent planning, levies are not maintained, development proceeds helter-skelter, public investment flows on the basis of pork-barrel politics, and rescue efforts resemble biblical catastrophes.
Fully four years after September 11, and three years after a Homeland Security Department was cobbled together, the federal government has failed to help cities and states develop effective emergency plans for large-scale disasters, whether from terrorist actions or natural shocks. Some cities are better prepared than others, but the process of contingency planning for maintaining civil order, getting food, water, and shelter to refugees, and devising orderly evacuation plans has lagged far behind the risk and the need. Cities cannot deal with such large-scale disasters without federal help, but burying FEMA inside the Homeland Security Department actually weakened its resources and response capacity.
In the absence of serious, federally assisted recovery and development planning, of the sort pioneered by the Tennessee Valley Authority, we are seeing housing provided catch-as-catch-can, new tax incentives as the main strategy of economic redevelopment, and a rash of no-bid contracts to cronies. There are no plans to dramatically upgrade New Orleans' flood defenses to withstand another Katrina as the city is rebuilt, and no overall planning process at all.
The second immediate challenge is fiscal. With federal deficits already at unsustainable levels, the rebuilding after Katrina will require upwards of $200 billion in unanticipated federal outlays, just in the first year. President Bush's support for this spending is his grudging acknowledgement that government has a necessary role to play, after all.
On top of a deficit already projected at over $300 billion this year, the projected additional Katrina outlays have already given the Federal Reserve a pretext to keep hiking interest rates, despite a softening economy. That will increase our dependence on foreign borrowing.
Amazingly, Bush is pressing Congress to deepen the deficit by making his tax cuts for the wealthiest permanent. He hopes to recoup that loss and the Katrina costs with even deeper cuts in other social outlays.
But there are far better ways. For starters, let's roll back tax cuts on the wealthiest 2 percent of taxpayers. We also need an excess profits tax on the oil companies, who are reaping the benefits of tight oil supplies due to a natural disaster. We could use the proceeds for emergency energy subsidies.
And as a counterweight to the windfall profits of the no-bid Katrina contracts (and the Iraq no-bid contracts, too), let's revive a fine World War II–era institution, the Renegotiation Board. When that war required hundreds of billions in quick-turnaround, production contracts, Congress sensibly legislated an audit process. Once the production work was completed, the Renegotiation Board's audit determined whether profits had been excessive. If so, the contractor had to give the excess back to the Treasury.
The Board saved taxpayers hundreds of billions of dollars. It persisted until the mid-1970s, until lobbying by defense contractors killed it. With corruption rising like the ooze of Lake Pontchartrain, this would be a good time to save taxpayers money by insisting that nobody reaps exorbitant profits on human suffering.
There is also an ominous silence on the longer-term challenge that Katrina signals -- the menace of global warming. The oil, gas, and coal industries, following the playbook of the tobacco companies before them, have underwritten bogus "research" leading the public to wonder whether global warning is real. But as former Vice President Al Gore told an environmental conference this week, of more than 500 recent scientific articles, not one article in a peer-reviewed scientific journal disputed that global warming is a serious problem whose prime cause is carbon emissions from burning fossil fuels.
If we don't want our children and grandchildren spending trillions of dollars building dikes around cities as waters rise, spending trillions more to resist new climate-driven diseases, and having a far lower standard of living than ours, the United States should be leading the way to a post-petroleum energy economy. Instead, it is business as usual, with tax credits for deeper drilling, massive denial of the problem, and price gouging when inevitable shortages occur.
Short term and long term, Katrina cries out for leadership -- and we're just not getting it.
Robert Kuttner is co-editor of The American Prospect. A version of this column appeared in the Boston Globe.
