Hurricanes Katrina and Rita wrought a humanitarian crisis of a magnitude unseen in the U.S. since the Great Depression. And it was obvious from the outset our government was ill-prepared for a catastrophe on the order of Katrina, let alone devastating back-to-back hurricanes. But by now, measures have been put in place to help in the recovery process.
Plugging the hole
By the time the federal government is finished, there will have been multiple rounds of relief. At press time, Congress is shifting its focus from immediate relief needs to structuring a comprehensive recovery package that incorporates initiatives for taxes, bonds and spending.
Congress has appropriated more than $62 billion in two emergency spending bills to fund immediate requirements. The first package totaled $10.5 billion. The second, providing $51.8 billion, was the largest nonwar supplemental spending package in U.S. history.
While Congress appropriated, the Bush administration put forth a broad portfolio of temporary solutions. Energy was an immediate concern, so Bush opened up the Strategic Petroleum Reserve and directed agencies and departments to conserve energy. On a similar front, the Internal Revenue Service waived a diesel fuel penalty to expedite deliveries of aid and increased the standard business mileage reimbursement rate to 48.5 cents (an increase of 8 cents) for the remainder of 2005.
Other tax relief included the following:
Other avenues
In addition, the U.S. Small Business Administration operates an extensive disaster-recovery program to aid affected businesses and residents. Homeowners may borrow up to $200,000 to cover residential losses not fully covered by insurance. Homeowners and renters may borrow up to $40,000 to replace damaged personal property. Nonfarm businesses of any size and nonprofit organizations can borrow up to $1.5 million to repair and replace damaged business assets, and the loans are offered at a 4 percent rate for up to 30 years. Economic Injury Disaster Loans also are available for small-business owners unable to meet operating expenses or pay bills.
Relief has come on the labor front, as well. On Sept. 6, the Department of Homeland Security announced a temporary waiver of I-9 sanctions, stating it will not sanction employers for hiring victims of Hurricane Katrina who are unable to provide documentation typically required under Section 274A of the Immigration and Nationality Act. Also, the U.S. Department of Labor created its online Katrina Recovery Job Connection to connect displaced workers with employers. And on Sept. 8, President Bush sent a letter to Congress suspending application of the Davis-Bacon Act for the affected Gulf Coast areas.
The next step
The early response was driven by the administration and largely consisted of stopgap measures to soften the immediate blow of the hurricanes. Congress now is tasked with mapping the long-term effort, and it's imperative Congress gets it right. Congress must ensure its chart for recovery serves as a model for responding to future natural disasters.
R. Craig Silvertooth is NRCA's director of federal affairs.
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