The Gulf Coast: A New Conservative Hell

After Katrina, Republicans
Back a Sea of Conservative Ideas
By JOHN R. WILKE and BRODY MULLINS
Staff Reporters of THE WALL STREET JOURNAL
September 15, 2005; Page B1

Congressional Republicans, backed by the White House, say they are using relief measures for the hurricane-ravaged Gulf coast to achieve a broad range of conservative economic and social policies, both in the storm zone and beyond.

Some new measures are already taking shape. In the past week, the Bush administration has suspended some union-friendly rules that require federal contractors pay prevailing wages, moved to ease tariffs on Canadian lumber, and allowed more foreign sugar imports to calm rising sugar prices. Just yesterday, it waived some affirmative-action rules for employers with federal contracts in the Gulf region.

Now, Republicans are working on legislation that would limit victims’ right to sue, offer vouchers for displaced school children, lift some environment restrictions on new refineries and create tax-advantaged enterprise zones to maximize private-sector participation in recovery and reconstruction. Yesterday, the House overwhelmingly passed a bill that would offer sweeping protection against lawsuits to any person or organization that helps Katrina victims without compensation.

“The desire to bring conservative, free-market ideas to the Gulf Coast is white hot,” says Rep. Mike Pence, the Indiana Republican who leads the Republican Study Group, an influential caucus of conservative House members. “We want to turn the Gulf Coast into a magnet for free enterprise. The last thing we want is a federal city where New Orleans once was.”

Many of the ideas under consideration have been pushed by the 40-member study group, which is circulating a list of “free-market solutions,” including proposals to eliminate regulatory barriers to awarding federal funds to religious groups housing hurricane victims, waiving the estate tax for deaths in the storm-affected states; and making the entire region a “flat-tax free-enterprise zone.”

Members of the group met in a closed session Tuesday night at the conservative Heritage Foundation headquarters here to map strategy. Edwin Meese, the former Reagan administration attorney general, has been actively involved.

Congress should avoid making any permanent commitment to the federal construction and ownership of housing units beyond those needed to house transient relief workers.

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As for public infrastructure such as roads, bridges, transit, school buildings and wastewater treatment systems, the President stated that “Federal funds will cover the great majority of costs.” Because these costs are likely to be substantial, this could very well be the most expensive component of the federal commitment, particularly if local officials see this as an opportunity to put forward an extensive wish list. The President should reconsider this commitment and foster, where feasible, the creation of public-private partnerships to fund, build, and operate the infrastructure under contract with the public sector.

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Look at this conclusion:

“The worst thing that the U.S. could do is try to run disaster response out of an office in Washington.”

Some of the proposals are attracting fire from Democrats. “They’re going back to the playbook on issues like tort reform, school vouchers and freeing business from environmental rules to achieve ideological objectives they haven’t been able to get in the normal legislative process,” said Rep. Rahm Emanuel (D., Ill.)

Some conservatives expressed concern about the growing reach of the reconstruction effort. “Everyone is attaching their own agenda to this,” said William A. Niskanen, a former Reagan White House economic adviser now at the libertarian Cato Institute. “It’s being seen as a test of the conservative agenda, from enterprise zones to school vouchers and the repeal of labor laws, and these ideas deserve careful thought,” he said. “But [the massive spending] could also create expectations that we can do this every time a disaster hits.”