What’s the Hold Up?

Jeffrey listed the highlights, or fireworks, of the 3rd WGNO debate, including this exchange between Nagin and Watson:

Watson also challenged Nagin's assertion that the state is "holding up" reconstruction funds and let fly at Nagin with all of the fire and brimstone he could muster here declaring, "Ray Nagin is the problem! Ray you are lying! You are a liar!" At one point in this exchange Watson actually used the words "I rebuke you." Nagin's response to all of this was even better. During the reverend's tirade Nagin affected to bless Watson making the sign of the cross and shouting, "Pastor! God bless you!"

The exchange came after Landrieu, addressing Nagin, gave an explanation of the legislative process reminiscent of “Schoolhouse Rocks” to show that the housing money hasn’t come because, well, that’s the process. It was very demeaning and I think I heard another candidate sarcastically thank Mitch for the civics lesson.

Nagin responded by citing that Mississippi already got its money and that Louisiana’s recovery will be six months behind Mississippi’s because the state is moving too slow.

Obviously, New Orleans, as well as the other hurricane ravaged parts of the state, would be better off with the funds already in the bank. So, who is holding up the funds? Nagin claims it’s the state government. The state says it’s the federal government.

It’s both.

The federal government set aside $6.2 billion dollars in CDBG funds for housing in Louisiana, to be released by HUD when the state presents a plan to use that money. However, the state (correctly) concluded that $6.2 billion, which was the most by law that one state could receive out of the original $11.5 billion allocated to the Gulf Coast, was not enough given the level of devastation in the state and convinced Bush to request an additional $4.2 billion. Therefore, the LRA did not present a plan to get the $6.2 billion that is waiting for us. Instead, it prepared a plan asking for that money plus the additional request, which is not waiting for us.

Basically, instead of going with the bird in our hand, we went for the two in the bush. This is not necessarily wrong because the bird in our hand was not big enough to feed our entire family. However, it could have held us over until the next bird in the hand.

Which is where Nagin’s frustration sets in. No plan was presented to get the money that the state knew we could get. In fact, as of today, no plan has been presented or even finalized:

The recovery authority is expected to vote next week on Gov. Kathleen Blanco's $7.5 billion proposal to assist homeowners, as well as another plan to foster the development of rental property in the areas hit by Hurricanes Katrina and Rita.

Also, notice that the plan asks for $7.5 billion just for housing, $1.3 billion more than the $6.2 billion we know we can get. And that lower number was to be used for both housing and infrastructure.

So, the state is holding up the money we can get *today* and the federal government, by originally not allocating Louisiana’s fair share of money based on levels of devastation and then taking its time on voting on the additional funds (which, as Mitch tells us, is the legislative process), is holding up *everything* because our plan will ask for all the money at once.

The real disappointment here is that the state did not have an interim plan to use the $6.2 billion when it was ready. Sure, we were shortchanged and HUD probably would not have approved any interim plan that relied on $4.2 billion that the state wasn’t sure it could get. However, some plan could have been formulated to address immediate needs and implemented with the expectation of future funds.

The state didn’t do that, and we wait on Congress’ approval and the President’s signature for our share of the community development block grants. And right now, it’s just a bill. Sitting there on Capitol Hill...