Foreign Aid Money for Katrina Relief Rejected or Unused

On Sunday, the Washington Post reported that $$$hundreds of millions of $$$ in hurricane relief after Katrina has gone unused.

Allies offered $854 million in cash and in oil that was to be sold for cash. But only $40 million has been used so far for disaster victims or reconstruction, according to U.S. officials and contractors. Most of the aid went uncollected, including $400 million worth of oil. Some offers were withdrawn or redirected to private groups such as the Red Cross. The rest has been delayed by red tape and bureaucratic limits on how it can be spent.

In addition, valuable supplies and services — such as cellphone systems, medicine and cruise ships — were delayed or declined because the government could not handle them. In some cases, supplies were wasted.

“Could not handle them” my ass. As we’ve shown time and again, the Bush Administration had no desire to “handle them”, no desire in fact to do anything that would help the refugees or bring them home. Tens (hundreds?) of thousands of Katrina refugees still languish in FEMA trailer parks from Louisiana to Texas to Arkansas, reconstruction of the poorer neighborhoods is all but at a standstill while HUD refuses to either spend appropriated money or release it to be spent by Gulf state govts and Bush refuses to sign the waiver that would let those state govts do it themselves, and now we find out that not only did the Bushies turn down help offered by Europe, but the help they deigned to accept has been rotting away in banks and warehouses while the Administration claims it “can’t afford” any more aid.

We have proved over and over again that this inaction on the part of the Bush Admin is deliberate. It can’t be an accident, an oversight, a mistake, or incompetence. It has to be policy. There is no other rational explanation.

After Katrina: What the Democrats Are Up Against

In his recent press conference, memorable for a series of hypocritical and borderline-false statements, King George the Clueless berated the Democratic Congress for stuffing his supplemental war funding bill with what he called “pork”. Some $1.2B of that “pork” was headed for New Orleans and the Gulf Coast, the majority of it targeted for housing construction and redevelopment. It was the first housing appropriation of any significance in the 12 years since the Republicans took over the House, and the first to directly address the devastation to housing when Katrina hit.

During the 12 years that Republicans ran the House, their leaders didn’t pay much attention to affordable-housing activists. Despite soaring rents and complaints of a deepening affordability crisis, House Majority Leader Tom DeLay (R-Tex.) told his conference that he didn’t want to see housing bills on the floor. He thought housing programs were unreformed welfare….

But now that Democrats took over the House in November, their leaders are affordable-housing activists. Liberals Barney Frank (Mass.) and Maxine Waters (Calif.) run the two panels overseeing housing policy after agitating for years, without success, for increased government rent assistance. They came to office promising to pass the first major housing legislation since the early 1990s.

Last month, the House passed their bill, a measure to address the housing shortages that have festered on the Gulf Coast since Hurricane Katrina hit in August 2005. After the storm wiped out 82,000 rental units in New Orleans, DeLay blocked a housing bill from Richard H. Baker (R-La.) because, sources said, the majority leader did not consider Baker a “team player.” But Nancy Pelosi (D-Calif.), now speaker of the House, campaigned on Katrina inaction — a prime example, she told audiences last fall, of the “do-nothing Congress” — and vowed a fast reversal. The resulting Democratic bill includes several bold precedents, including a “right to return” for all displaced hurricane victims and “one-for-one replacement” for all demolished public housing units.

So actually appropriating the money you promised so glibly while you posed for a photo-op in Jackson Square after the storm passed is your idea of “pork”, Mr President? It was easy to make promises you knew Tom DeLay was going to kill, wasn’t it? But Tommy is back killing bugs and fending off corruption and fraud charges while comparing himself to Christ (link via Digby). Now that Nancy Pelosi is Speaker and the bill has actually passed, it’s “pork”? But…it was your idea, Your Majesty. Remember?

Fine words backed up by…nothing. And now that the Democrats have done the work for you, you won’t sign it? Are you going to veto these, too?

Democratic leaders say the Katrina bill — which has yet to come up for a vote in the Senate — is just a beginning. They hope to create a huge affordable-housing trust fund, restrict predatory lending, expand rent subsidies and tax credits for low-income housing, and push the federal government back into apartment construction.

“It’s night and day,” said Michael Kane, an affordable-housing advocate in Boston. “The atmosphere has totally changed.”

Housing has been a major problem for a decade, not just in New Orleans but all over the country. Rents have shot through the stratosphere while wages have remained stagnant for 20 years, the affordable housing market has shrunk beyond belief, the subprime mortgage market is imploding due to high-risk mortgage practices loaded with small-print clauses, tricks, and hidden charges (that’s deregulation for you), and you installed a HUD Sec who thinks it’s his job not to do his job. Marvelous.

Meanwhile, the crisis deepens.

WaPo Slams Bush for Holding Up Katrina Funds

Fred Hiatt, WaPo editorial writer, must be reading this blog.

LOUISIANA IS in a bind. Nineteen months after hurricanes Katrina and Rita decimated its economy, slashed its tax base and hobbled its workforce, the state is struggling to get back on its feet. Every dollar of redevelopment money is vital. That’s why there have been consistent calls on President Bush to waive the 10 percent local match requirement on projects using money from the Federal Emergency Management Agency. And just as consistently, he has refused. Why is this 10 percent match, which local governments have to pay upfront, so important? Let us explain.

When disaster strikes, FEMA stands ready with financial aid. The agency is absolutely right to demand that states share in the expense of cleanup and recovery. Under circumstances deemed “extraordinary” and with damage assessments above $110 per capita, FEMA can shrink that burden from the customary 25 percent to 10 percent. But the president has the authority to waive even that requirement in the event of major catastrophes. Mr. Bush did this for New York after the horrific Sept. 11, 2001, terrorist attacks (damage: $390 per capita).

Although Fred seems to have allowed his sense of humanity and justice to over-ride his usually-reliable loyalty to Bush for this one time, he still can’t bring himself to admit that Junior also waived the requirement for Florida after Hurricane Andrew when his brother Jeb was Gov.

Come on, Freddie. As long as you’re out on a rare truth-limb anyway, you might just as well tell it all.

Bush Deliberately Stalling Katrina Money

A year-and-a-half after Katrina hundreds of thousands of ex-New Orleans and Gulf Coast residents are stuck in FEMA trailer parks from Alabama to Arkansas, dumped there and forgotten by the Bush Administration. The Emperor got his photo op, made his empty promises, and promptly forgot both the promises and the people he made them to. I realize that eight fired US Attorneys is important and that the scandals are coming thicker and faster than anybody can keep up with them now that the Republics can’t use the Congress to give him cover, but why isn’t somebody – just one person, I don’t care who, asking about the unconscionable abandonment of Katrina survivors?

New Orleans is still mostly a wasteland, and the hardest-hit towns along the Gulf Coast aren’t much better off. Yet, despite a recent dust-up on the House floor over the mess in Mississippi that got some attention, not one reporter questioned Bush at his press conference about the plight of the Gulf Coast or the difference between the flood of money he promised and the trickle he delivered.

Not one.

The supposed “pork” in the supplemental Bush is threatening to veto includes $1.6B for Gulf Coast relief – a significant number (though not nearly sufficient) compared to the mere millions allowed to filter through his cost-cutting net, most of which wound up in the pockets of politically-connected Bush Buddies. Meanwhile, public works are stymied.

Nineteen months after the storm sent nine feet of water through it, [St. Bernard Parish Fire Station No. 6] remains unusable. One wall is missing; the ceiling has fallen in; a uniform still on its hanger lies crumpled amid the dried mud and tumbled furniture.

None of St. Bernard Parish’s 10 fire houses have been rebuilt, even though local officials estimate that 26,000 people have returned to the area, just east of New Orleans. In fact, across southern Louisiana and Mississippi, many school buildings remain closed, public water systems leak, roads crumble and libraries molder. Local governments cannot afford to fix them, and billions of dollars in recovery assistance promised by the federal government have only started to trickle to the region.

(Photo by Cheryl Gerber/NYT)

Why, given the amounts (some $5Bil) even the Republic Congress allocated in the immediate aftermath? Because the Bush Administration is using a bureaucratic technicality to prevent relief money from being released.

After Katrina: Why Isn’t HUD Building Housing?

Katrina + 10 months

(Video from truthout.com)

An editorial in today’s NYT finally does what, so far as I know, no newspaper has done since Katrina hit New Orleans: connect a few dots in the aftermath.

The Bush administration’s mishandling of the Hurricane Katrina housing crisis has often looked like an attempt to discourage survivors from applying for help. The House has taken an important step toward reversing this policy with a bill that would require the Department of Housing and Urban Development to issue tens of thousands of new housing vouchers under the Section 8 program, which allows low-income families to seek homes in the private real estate market.

Many of these families would have long since found permanent homes and settled into new lives had the Bush administration brought HUD — which was created to deal with these kinds of situations — into the picture at the very start. But Hurricane Katrina arrived just as the administration had made up its mind to cripple HUD and the successful Section 8 program, partly as a way of offsetting tax cuts for the wealthy.

The administration instead rigged up a confusing and inflexible housing program and put the Federal Emergency Management Agency in charge. FEMA frustrated landlords and Katrina’s victims alike. Last year, one federal judge likened the convoluted application process — which too often led vulnerable families to lose aid without knowing why or having reasonable recourse to appeal — to something out of a horror story by Kafka.

With thousands of families scheduled to lose their temporary aid by September, the Senate should move quickly to pass this much-needed legislation. Hurricane Katrina’s victims should not have to keep paying the price for the administration’s misplaced animosity toward low-income housing.

It doesn’t go far enough, of course. It has become painfully clear in the year-and-a-half since Katrina that the Bush Administration sees the new New Orleans largely as a predominantly white corporate theme park. It has scattered hundreds of thousands of homeless black Orleanians to the four winds and targeted Federal money to reconstruction efforts downtown and to upscale white neighborhoods. The touchy racist aspect of the BA’s response is apparently not something the NYT is yet prepared to deal with.

HUD Clean, Says GAO, But Is It?

For the first time in 13 years, the Government Accounting Office has taken the Dept of Housing and Urban Development off their “high-risk” list. Corruption and mismanagement charges have been flying thick and fast for a decade, and if this report can be believed the clean-up at HUD should be cause for celebration.

For much of the 1980s, HUD was buffeted by allegations of corruption and influence-peddling that often masked systemic problems caused by poor financial management, inadequate record-keeping and staff shortages.

HUD worked through its problems, and, by 2001, had only two programs left on the GAO list — single-family-housing mortgage insurance and rental-housing assistance. The GAO said the department has significantly improved its oversight of lenders, appraisers and property management contractors and does a better job of estimating subsidy costs and defaults by borrowers.

But is it believable? If this were any administration other than Bush’s I wouldn’t hesitate to extend kudos where they were due, but it isn’t. Long years of lies and misdirection, misinformation and manipulation, have made me properly suspicious. Coming from the BA, this just doesn’t make sense.

HUD Refuses to Disperse Allocated Housing Assistance Funds

The Center on Budget and Policy Priorities reports that Housing and Urban Development Secretary Alfonso Jackson is instituting policies that will effectively cut the Housing Assistance funds Congress has already allocated by simply preventing agencies from dispersing them.

HUD’s new fiscal year 2004 funding policy (which is distinct from an Administration budget proposal to cut voucher funding sharply in fiscal year 2005 and to convert the program to a block grant) is compelling state and local housing agencies to institute cuts in assistance that will cause significant hardship among low-income families. The actions that Secretary Jackson announced on May 20 — correcting an error in the method that HUD initially used to calculate funding levels for some agencies and providing added funds for reserve accounts that agencies can use to cover shortfalls — reduced the magnitude of the required reductions, but has not eliminated the need for harsh cuts in some areas.

For example, some agencies are raising rent burdens on low-income families that receive vouchers by reducing the maximum amount of rent a voucher can cover. Other agencies are reducing the number of families assisted, by rescinding vouchers provided to families that are searching for housing but have not yet found a unit to rent with their voucher, and by “shelving” vouchers that become available when current voucher holders leave the program (rather than reissuing the vouchers to needy families on waiting lists as is the normal practice). For some agencies, the shortfalls created by the new HUD policy are so severe that the agencies may have no alternative but to terminate assistance to some low-income families that currently rely on vouchers to help pay the rent.

Under the fiscal year 2004 appropriations law enacted in January, HUD could have taken — and still can take — stronger steps that would largely avert housing assistance cuts. HUD has acknowledged that it has $190 million in funds that could be used to cover shortfalls under its new policy, but has failed to institute measures to distribute these funds to many of the housing agencies that otherwise will be forced to reduce assistance to needy families.

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Under the new system, HUD will limit the average amount of funding that a state or local agency receives for each voucher in use to the agency’s average cost per-voucher in May-July 2003, plus an adjustment for rent inflation that has occurred since that time in the agency’s region of the country, as determined in accordance with a rent inflation formula HUD has devised.Voucher costs at many housing agencies have risen since July 2003 at a faster or slower rate than the regional rent inflation factor that the HUD formula uses (which is often based on inflation in a region encompassing several states), and generally have done so for legitimate reasons. If an agency’s average voucher costs have risen faster than HUD’s rent inflation factor, however, the agency will not receive sufficient funds to pay landlords for all vouchers now in use. In such cases, housing agencies will be able to receive additional funds to address the shortfalls the new HUD policy creates only if they are successful in an appeal to HUD for a larger cost adjustment. Based on the information that HUD has provided about the timeline of the appeals process and the permitted grounds for appeal, it appears unlikely that this process will provide adequate or timely relief to local agencies that will be underfunded as a result of HUD’s new policy.

Some agencies have access to “program reserve” funds that can be used to make up for a shortfall in HUD funding. But despite the distribution of $152 million in additional reserve funds to local agencies, announced by Secretary Jackson on May 20, HUD has fallen short of providing many agencies with reserve funding that brings the reserves to their traditional levels. As a result, many agencies’ reserves are too small to make up for the under-funding that is resulting from HUD’s new policy. Furthermore, as discussed below, other measures that HUD has instituted may deter even agencies that have adequate reserves from using those reserves to cover the gap between their actual voucher costs and the funding levels they are now receiving from HUD; such agencies may thus feel compelled to institute cuts anyway.[1]

The adverse effects of the new HUD policy are intensified by the late date on which the policy was announced. The delay in announcing the policy reduced the amount of time available to housing agencies to plan for and respond to it, and is forcing agencies to impose deeper cuts than otherwise would have been necessary to adapt to the reduced levels of funding. While some housing agencies received advance information, most were not informed by HUD about the policy until the April 22 notice was released more than three months after Congress passed the fiscal year 2004 appropriations legislation. Moreover, agencies were not told the specific amount of funding they would receive (which could not be calculated from the information in the April 22 notice) until the third week in May, and some important details of the policy remain unclear even now.

Section 8 funds have been under attack by conservatives for 20 years, and the tricks the CBPP is describing are the same ones Stockman used in the 80’s to starve all kinds of welfare and poverty programs. It works like this: when an agency like HUD doesn’t disperse all its money, that money has to go back to the Congress at the end of the fiscal year. The returned money will then be used by influential think-tanks like the Heritage Foundation or the American Enterprise Institute to ‘prove’ in carefully crafted and entirely bogus reports that Section 8 is over-funded. Those influential reports will then be used by conservative Congressman to justify further cuts in HUD’s Section 8 Housing Assistance–“They didn’t use what we gave them last year! Why should we give them more this year?”–but more importantly they will help to lay the groundwork for the claim that the housing crisis has been overblown and that Federal funds aren’t needed to help people cope with it–an argument that will result in…more budget cuts, of course.

It’s also a way for politicians to have it both ways: they can say–correctly–that they voted for housing assistance for the poor and when the money isn’t spent, they can call themselves ‘budget-cutters’. Whenever a politician says s/he voted for poverty programs, the next question should always be: “Did they disburse the money?”

In this case, Jackson’s ‘policy’ tricks are setting up the next revision: the Bush Administration wants Section 8 turned into a block grant–another recycled Reagan-era budget manipulation. Block grants are fixed sums paid to states for various programs. The amount of a block grant is determined by formulas that are heavily skewed toward cutting the allocation using every possible excuse, no matter how unrealistic or far-fetched. They’re generally cut 10-20% simply on the assumption that states are ‘more efficient’ than the ‘wasteful’ Federal government and therefore need less money to provide the same level of services. It gets worse from there. For instance, in the 80’s Massachusetts’ pre-school block grant was reduced by almost half in one year when the formula was changed fom an ‘area determination’–a formula that looked at whole regions to determine need–to a ‘local determination’–a formula that looked only at regional centers.

The reality on the ground was that waiting lists were longer, we were getting more kids with severe emotional and physical disabilities who needed special help, and a state budget crisis caused by the passage of Proposition 2 1/2–an anti-tax law that capped the amount of money the state could raise in taxes to 2 1/2% over the previous year, not even enough to cover inflation at the time–had already caused budget cuts so severe that many schools had closed their doors. It was a decade before pre-school services for poor kids were back up to their previous levels, and it took direct payments replacing block grants to do it.

It’s a shell game and a self-fulfilling prophecy: they find excuses not to disperse the money, no matter howm great the need, and then use the lack of dispersement to prove it wasn’t necessary in the first place. And all that has to happen to make it work is for a few tens of thousands of families to lose their vouchers and end up on the streets. They think that’s a price they can live with.

Playing Games With Housing

Congress and the Department of Housing and Urban Development have been playing a transparent game of “good cop, bad cop” since HUD set out to savage Section 8, the federal program that provides housing subsidies for the poor. Republicans in Congress say they budgeted enough money to underwrite the program, and they blame recalcitrant officials at HUD for the cutbacks — while the agency, in turn, maintains that it is doing what Congress told it to do.

Behind the game, however, both sides seem intent on squeezing money from the HUD budget to help pay for all those tax cuts for the rich, even if it means exposing thousands of poor families to the possibility of eviction.

Most of the families who receive subsidies under the 30-year-old Section 8 program live at or below the poverty level. They pay about 30 percent of their incomes toward rent and government vouchers pay the rest.

Conservative Republicans, who have long wanted to scale back the program, have usually been beaten back by their colleagues. This time around, the appropriators in Congress provided full financing for the program while quietly authorizing HUD to make cuts by administrative means. The department then announced that it would no longer pay the full cost of the vouchers, and it froze federal funds at the level of August 2003, plus an adjustment for inflation.

In addition, HUD’s new policy involves retroactive cuts, which only became clear at the end of May, long after local housing authorities had committed themselves to helping new families, including many who had waited for years to get decent housing through the voucher program. Obviously, if cuts have to be made, the only sensible way to make them is to do so gradually and well in advance, so the local housing agencies can adjust to the new reality while preserving housing for their most vulnerable tenants.

Faced with unexpected shortfalls, local public housing agencies have informed landlords that they can no longer pay agreed-upon rent subsidies, making it likely that many Section 8 tenants will soon be shown the door. A recent survey from the Center on Budget and Policy Priorities suggests that most agencies with shortfalls will go this route. The survey also shows that local authorities have revoked newly issued vouchers and have begun to withdraw from circulation the vouchers that become available when families get better jobs and move out of the subsidy program.

In addition, local agencies have begun to raise rents for the vulnerable families who can least afford to pay, something that is a sure way of destabilizing these families while driving them deeper into poverty.

The Bush administration is counting on Republicans at the state level to keep quiet in the interest of party solidarity. But given the disastrous nature of the new policies, governors, state legislators and mayors of both parties have both a moral and political obligation to speak out.

Affordable Housing in Crisis–Again

As we pointed out in the last post, costs that affect us most, like rent, and over which we have the least control have been skyrocketing while our wages remain stagnant or fall behind the inflation rate (which should tell you how little we make and how rarely we get raises–and how tiny they are when we do–because the inflation rate is so low). One of the few Federal programs to survive the Republicans’ relentless war on the poor is the Section 8 Housing Subsidy program. Well, now they’re going after it, too.

House Republicans who authorized cuts in federal housing subsidies for the poor are now fuming over the bad publicity about the cuts. It’s strange that anyone was surprised at the negative reaction. The cuts place tenants in some cities at risk of losing subsidized housing, and financial institutions are beginning to express doubts about continuing to participate in the kinds of development projects that have built much of the nation’s affordable housing.

If the lawmakers really regret the damage they have done, there is still time for them to undo it. The recent promise by the Department of Housing and Urban Development to shovel an extra dollop of money into the current program won’t do the trick. HUD needs to rethink its hostile approach to paying for the critical Section 8 program, which furnishes rent subsidies for two million of the country’s most vulnerable families.

Section 8 has survived the generation-long assault on public housing because it is based partly in the private sector. Rather than building affordable housing itself, the government has guaranteed subsidies for rents in the private market. Families, most of them living at or below the poverty level, pay 30 percent of their incomes toward rent, and Section 8 vouchers pay the remainder. Developers used the Section 8 guarantees as backing when they raised money for low- or mixed-income developments.

But despite its theoretical commitment to the private market, HUD has gotten tired of meeting the fast-rising housing prices in some markets. It announced recently — with Congressional blessing — that it would no longer pay the full cost of the vouchers. It froze federal funds at the level of August 2003, plus an adjustment for inflation.

This is a tactic the Bush administration has used in other areas as it tries to halt open-ended commitments for federal funds in favor of set block grants. A “block grant,” however, is simply a cut by another name. Neither the poor nor the local housing authorities have the power to make rents conform to those dictates. In high-cost areas like New York and San Francisco, officials will have trouble finding landlords and builders who will accept Section 8 tenants because the vouchers will no longer provide a predictable level of support. Families who have been lucky enough to get Section 8 help may wind up having to pay more rent.

Perhaps worst of all, the financial community has begun to react. A New England bank has scrapped an innovative home mortgage program aimed at promoting home ownership through Section 8. Wall Street bond traders have warned that the cuts could cause the bond market to lose faith in Section 8-related programs, undermining the bonding process that makes it possible to build affordable housing.

The incomes of the poor do not expand just because real estate values do. If these ill-advised cuts are allowed to stand, a public-private partnership that has been producing affordable housing since the Nixon years will wither and die.

(emphasis added)

Killing Off Housing for the Poor

NY Times Editorial

Published: May 10, 2004

The Bush administration’s tax cuts for the well-to-do have taken a heavy toll on the nation’s most important social programs for the poor and working class. Prominent casualties include child care assistance for working mothers and federal aid for needy college students. The latest victim appears to be Section 8, the government’s main housing program for the poor. The program provides rent subsidies for two million of the country’s most vulnerable families and encourages private developers to build affordable housing.

Section 8 subsidies go primarily to families that live at or below the poverty level, in households that include children, disabled people or the elderly. These families pay 30 percent of their incomes toward rent and the Section 8 vouchers pay the rest. Some cities give priority to battered women, many of them with children, who have to find a new place to live to escape danger. The need is so great that families often wait years for vouchers, which become available when voucher holders die or become ineligible after getting better jobs.

Congress rejected an administration proposal that would have placed a financing cap on the program and turned the money over to the states. But the administration’s assault continues, through the appropriations process in the House and through administrative rulings at the Department of Housing and Urban Development, which has been trying to put the brakes on the voucher program. Last month, the department issued new guidelines to the country’s 2,500 public housing agencies declaring that it would no longer pay the full cost of the vouchers but would cap the federal contribution at the level of August 2003, adding an adjustment for inflation.

This has already caused some private builders and financiers to back away from projects that would have produced desperately needed affordable housing. In addition, public housing officials in many states have made it clear that the new policies will force them to raise rents or evict tenants. Having paid lip service to the goal of ending chronic homelessness, the Bush administration is now threatening to kill off the only program that could possibly achieve it