September 15, 2005

Public, private roles fuel Katrina rebuild debate

By Joanne Kenen

WASHINGTON (Reuters) - U.S. lawmakers face an ideological
debate over rebuilding the Gulf Coast after Hurricane Katrina,
with Republicans emphasizing market-oriented solutions and
Democrats seeking a greater government role.

U.S. President George W. Bush was to outline reconstruction
ideas on Thursday. Aides said Bush would discuss initiatives on
education, job training, housing and small businesses.

Lawmakers and academics said they believe the unprecedented
task will require a mix of government, business and charities
and will take some time to hammer out responsibilities.

But Republicans controlling the White House and Congress
tend to favor solutions relying on the free market, tax
incentives, and private contractors, while Democrats look
toward government.

Some members of Congress have estimated the ultimate
federal cost of the recovery could approach $200 billion.
Congress has already approved $62.3 billion.

Various rebuilding models are being discussed in Congress
and think tanks, ranging from Depression-era style public-works
programs to new "mega-enterprise zones" for private investors.

"Given the huge engineering and other challenges, much of
the reconstruction would have to be done by private companies
... there is no government capacity for doing such things,"
historian Alan Brinkley said. But government would need to play
a large planning role, he said.

Former North Carolina Sen. John Edwards, a potential 2008
Democratic presidential contender, reached back to the New Deal
and suggested combining job-training, employment and rebuilding
efforts in a modern version of the Works Progress
Administration, a national public-works project.

"Take these displaced folks, put them to work in New
Orleans," Edwards told CNN last weekend. "Pay them a good wage.
Pay them decent benefits so that they can not only reconstruct
their city, they can reconstruct their lives and have the
dignity that comes from having a good job and being able to
support your family."

Historians say, however, that WPA never tackled anything as
complex as reconstructing a disaster area about as big as
Britain and a sludge-coated major city.

Democrats have begun discussing a quasi-governmental agency
such as the Tennessee Valley Authority, which by controlling
floods and developing power helped drive that region's economic

But a Tennessee political scientist who wrote a book on the
TVA said it might not be a good model for Katrina.

"The TVA was created with a long-term mission and this
would be temporary," said Erwin Hargrove. The TVA was
independent, with scant coordination or accountability to local
authorities. "I don't think that would wash today," he said.

Conservatives say a private sector unfettered by
regulations is the best path toward efficient and innovative

"Private entrepreneurial activity and vision, not
bureaucratic government, must be the engine to rebuild," the
conservative Heritage Foundation said. "The critical need now
is to encourage investors and entrepreneurs to seek new
opportunities within these cities. Bureaucrats cannot do that."

Some scholars wonder whether businesses can raise enough
capital or have the necessary social vision.

New York University government expert Paul Light said that
with the right incentives, "there are places where the private
sector will do a great job."

"But I'm not sure they can plan a new city," he added. He
said there were major socioeconomic challenges in reviving an
area that even before Katrina endured high crime and poverty.

Senate Republican leaders urged Bush to create a "Marshall
Plan," modeled after the government-led post-World War II
program to rebuild western Europe. Pennsylvania Republican Sen.
Rick Santorum said such a plan should involve faith-based
groups and business.

Hargrove said private companies lack public accountability
and the "intellectual underpinning" in community building.

But neither has the government proven adept at large-scale,
long-term regional planning. "I wouldn't rely too much on the
Army Corps of Engineers, either," he added. "They just like to