House Dems unveil post-Katrina wish list

As Facing South contributor R. Neal noted earlier this week, politicians have been slow in bringing Hurricane Katrina reconstruction matters into the debate over next month's elections.

Better late than never, I suppose.

Democrats on the House Katrina Task Force yesterday released a report summarizing their recommendations for improving the sluggish-at-best recovery effort along the U.S. Gulf Coast. Titled "Response, Relief, and Recovery: Katrina and Beyond," the report offers legislative proposals that task force members intend to champion once Congress returns to work after the Nov. 7 election, when Democrats need to pick up 15 seats to regain control of the House and set the agenda for Gulf recovery.

"This report is a detailed plan of action for how we in Congress can better help Louisiana and the entire Gulf Coast recover from Katrina and Rita," said U.S. Rep. Charlie Melancon (D-La.), who spearheaded the effort along with Rep. Gene Taylor (D-Miss.). "Better levees, reforming FEMA, and fast-tracking coastal restoration and comprehensive hurricane protection projects are all included. This report is also a blueprint for how we can better respond to disasters in the future, wherever they may strike."

The report is based on months of research by the task force that culminated in a four-day trip to the Gulf Coast in August. During the visit, Melancon held a Hurricane Recovery Policy Forum to connect members of Congress with almost 100 local experts and leaders, whose suggestions formed the basis for the report.

One of the biggest items on the list would be building levee protection for the New Orleans metro area that could withstand a Category 5 hurricane. Cost estimates for that work run into the tens of billions of dollars. That's much different than what the Republicans have planned for the area's protection, the New Orleans Times-Picayune reports:

Despite a promise to rebuild the area higher and safer, the Bush administration has avoided committing to hurricane protection much beyond what was in place when Katrina, a Category 3 storm, shredded New Orleans' levees and floodwalls. But Democrats say the substantial investment would be worth it to avoid a replay of what turned out to be the costliest natural disaster in U.S. history.

"The cost is far outweighed by the maybe $300 billion in losses from Hurricane Katrina," Melancon said.

Other items on the Democrats' wish list include taking responsibility for disaster recovery away from the Federal Emergency Management Agency, preventing the agency from awarding no-bid contracts and allowing flood victims to sue the Army Corps of Engineers over failed levees.

The Democrats also call for investigating the claims practices of companies that contract with the National Flood Insurance Program. Observes the report:

The National Flood Insurance Program (NFIP) allows insurance companies to sell flood policies and adjust flood claims that are financially backed by federal taxpayer dollars. Insurance company adjusters have an obvious conflict of interest when deciding whether claims should be billed to the federal flood insurance program or to the insurance companies that employ them, train them, and advise them on the interpretation of their policies.

State Farm, Nationwide, Allstate, and other insurers paid hundreds of thousands of wind claims inland, where they could not possibly blame the storm surge, but denied wind claims near the coastline, where winds were stronger and water also was present.

Cori and Kerri Rigsby, who adjusted claims under a contract with State Farm, have revealed that they were instructed to pay NFIP claims as quickly as possible, while refusing to acknowledge any evidence of wind damage. The sisters also claim that State Farm and its contractors revised engineering reports and coerced engineering firms to assign all damages to flooding, despite hours of hurricane winds before the storm surge.

The Democrats also want to eliminate the antitrust exemption enjoyed by the insurance industry; require insurers to sell policies that cover all hazards, including floods; and create federal oversight of the industry, which is now regulated by the states.

Not surprisingly, the insurance industry is less than happy with the report, with Eric Goldberg, assistant general counsel to the American Insurance Association, telling the Times-Picayune that it found some aspects of the report "troubling":

Goldberg said that if insurers could afford to cover all hazards and consumers were able to afford the premiums, "We would be doing it." He said Taylor is "misconstruing" the industry's antitrust exemption and took issue with the suggestion that companies huddled after the storm and decided to limit their exposure by covering only wind-damage claims.

"That is absolutely prohibited by state and federal law," he said.

The Times-Picayune points out that the industry contributed $36 million to politicians during the last election cycle, according to the Center for Responsive Politics. Of that amount, the paper reports, 68 percent went to Republicans.