One Year after Katrina: Where did the money go?

One year after Katrina, one of the first questions asked is: where did all the money go? Across the country, people gave billions in dollars to the Red Cross and other relief agencies. The federal government has spent $109 billion dollars in Gulf recovery.

Then why, as we conclude in our 96-page report "One Year after Katrina" (pdf) released this week, is the recovery failing, and tens of thousands of lives still in limbo?

The answer goes all the way up to Washington, where lack of leadership, misplaced priorities, and sheer bureaucratic incompetence have conspired to leave the Gulf Coast and its people behind.

Take the example of housing. Of the $109 billion President Bush repeatedly points to (pdf) in federal spending, over $16 billion was in Community Development Block Grants, and another $2.6 billion in special loan programs to help homeowners. But this money came only after months of foot-dragging by the White House and Congress; the money wasn't authorized until the end of December 2005, and the next package until this past summer.

That's why, as of this month, homeowners have not received one dime from the "Road Home" program in Louisiana and its counterpart in Mississippi. Many have given up waiting and have been forced to foreclose, a boon to the real estate interests seeking to snap up prime tourist real estate.

Only federal leadership and a "can do" attitude at the highest levels of government could have changed this situation. Now, instead, over 200,000 people remain displaced from New Orleans alone, with no clear road home.