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September 13, 2005

Heritage Foundation Releases Katrina Rebuilding Recommendations

WASHINGTON, SEPT. 13, 2005 - Congress must respond to the suffering and devastation in New Orleans. But in the rush to provide immediate aid and then to rebuild, lawmakers must take the time to ensure that federal dollars go only to appropriate uses and that they be used efficiently and wisely, according to "From Tragedy to Triumph: Principled Solutions for Rebuilding Lives and Communities," a new report from The Heritage Foundation.

Authored by former Attorney General Edwin Meese, III, and Heritage Vice Presidents Stuart M. Butler and Kim R. Holmes, the report cautions lawmakers to resist the temptation to overreach. Disaster recovery remains a predominantly local function, they caution, and the private sector is better suited than the bureaucracy to spearhead the rebuilding effort.

The federal government should provide support only in situations that are beyond the capabilities of state and local government, says the report. Federal financial aid must come with accountability, flexibility and creativity. Rather than government-provided services, where possible, Congress should use tools such as vouchers programs that deliver assistance directly to disaster victims, be they individuals, families or businesses. This "direct aid" approach lets individuals determine how aid dollars can best be used to meet their most pressing needs such as housing, education and health care.

Red tape that prevents or slows private investment to rebuild facilities and restore businesses should be reduced, suspended or, at the least, streamlined. Rather than try to find new money to solve these problems, Congress should redirect funds previously appropriated for pork-barrel projects in the recent highway bill. All discretionary spending should be frozen for the remainder of the fiscal year, forcing Congress to reassess priorities, according to the experts.

The report recommends that hard-hit areas be declared "Opportunity Zones," in which investment-inhibiting taxes (such as those on capital gains) are eliminated and regulations that needlessly impede recovery and rebuilding are eliminated or simplified. This focus on the locale guarantees that private capital can flow into neighborhoods and communities from across the nation.

The report also recommends that Congress focus on reforming federal government operations to eliminate weaknesses revealed by Katrina. It suggests, for example, concentrating on improving regional coordination and communication in the disaster response network and reshaping the National Guard and FEMA so they can more effectively respond to such disasters.

The report also recommends ways Congress can improve access to affordable energy in the wake of damage to refineries, oilrigs and other energy infrastructure along the Gulf Coast. Among these suggestions: Waive or repeal Clean Air Act regulations that hamper refinery rebuilding and expansion; waive or repeal special gasoline formulation requirements, allow gasoline markets to work more flexibly and efficiently, and increase domestic oil production-in part by opening up the Arctic National Wildlife Refuge in Alaska.

The Heritage experts also recommend that Congress let Katrina victims postpone payment of individual and business income taxes and waive penalties for withdrawals from tax-advantaged savings such as IRAs and 401 (k) plans-just as it did for victims of the 9/11 attacks.

The report is available at the Heritage web site, heritage.org.

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