The Bush administration said yesterday that the cost of rebuilding New Orleans's levees to federal standards has nearly tripled to $10 billion and that there may not be enough money to fully protect the entire region.
Donald E. Powell, the administration's rebuilding coordinator, said some areas may be left without the protection of levees strong enough to meet requirements of the national flood insurance program. Those areas probably would face enormous obstacles in attracting home buyers and investors willing to build there.
The news represents a shift for the administration; President Bush had pledged in the weeks after Hurricane Katrina to rebuild New Orleans "higher and better." Now, some areas may lose out as they compete for levee protection. Powell's announcement, in a conference call with reporters, prompted denunciations from state and local officials who said the federal government is reneging on promises to rebuild the entire region.
"This monumental miscalculation is an outrage," said Gov. Kathleen Babineaux Blanco (D). "This means that, just two months before hurricane season, the Corps of Engineers informs us they cannot ensure even the minimum safety of southeastern Louisiana. This is totally unacceptable."
The change followed a surprise announcement from the Army Corps of Engineers that the levee reconstruction project, most recently estimated at $3.5 billion, would now cost $9.5 billion if insurance-certified levees were extended throughout the region.
Powell had said in December when the administration announced a $3.1 billion levee plan that Bush's commitment to rebuild the Gulf Coast "would be satisfied as it relates to the safety and security of the people." In February, after Congress approved $2 billion for the project, Bush said an additional $1.5 billion would be needed. The Senate will consider the request next week.
‘Tough policy decisions’
Yesterday, Powell acknowledged that now "we are faced with some new and tough policy decisions."
The news shattered the fragile relationship between Washington officials and Louisiana leaders, who have assumed that the rebuilding effort would cover the entire New Orleans area.
State and local leaders said the U.S. government had broken a trust and appeared to backing away from commitments to rebuild. Louisiana officials also questioned why federal engineers are just now announcing that the task would cost $6 billion more.
"Every time we turn around, there's a new obstacle," said Rep. Charlie Melancon (D-La.). "The estimates were done for rebuilding the levees, and a number was given to the administration and to the Congress. Now all of a sudden they say they made a $6 billion mistake?"
Melancon said he wondered whether the changes reflected the comments made by officials such as House Speaker J. Dennis Hastert (R-Ill.) after the storm questioning the wisdom of rebuilding the low-lying city.
"I have been concerned since November that people here in Washington didn't really want to help. . . . I think the people are starting to see where the problems are," Melancon said.
Sen. David Vitter (R-La.) said the announcement confirmed his warnings since November that Washington is "stonewalling" and seeking "way too little money" for levee repairs.
The new cost estimates, just as hurricane season is approaching, are "enormously frustrating," he said.
A spokesperson for New Orleans Mayor C. Ray Nagin (D) said he had no comment.
In the conference call yesterday, Powell reiterated the promise that the levees will be at least as strong as they were designed to be before Hurricane Katrina.
"If a hurricane such as Katrina hit the area, there would not be catastrophic flooding," he said. But, he said, there might be some "manageable" flooding.
Powell said that science, "not any bureaucracy, politics nor any member of the political branches," determined the cost revisions. Bush "is concerned with the well-being of the area's residents," he said, but "he wants to make sure we make the right rebuilding decisions, not just for the residents but for the American taxpayers."
Indicating that not all of the $6 billion will be forthcoming, Powell said he will be in discussions with state and local leaders about which portions of the region should be protected with insurance-certified levees, and also how much the state and local governments can pay.
"We're dialoguing with the state and local officials," he said, adding that if there is an agreement, maps clarifying where and how homeowners can rebuild could be released in 10 days. "We haven't decided what [amount] to ask for."
He played down the difference between the ordinary levees and those that meet the standards of the insurance program, saying the $6 billion in improvements is "an insurance issue, and not necessarily a safety issue."
Whether the levees meet the flood insurance standards is considered a key piece of the rebuilding puzzle, however.
In areas where the levees do not meet the standards, buildings may have to be constructed as many as 20 to 35 feet above ground, a Powell aide acknowledged. Also, in a city where there is a desperate need for housing investors, areas with less-than-optimal levees could scare off flood-wary developers.
To help state and local officials choose which areas might be protected by insurance-certified levees, Powell broke the four-parish New Orleans region into 10 areas and listed the populations and cost of building such levees.
In the analysis, three Plaquemines Parish sections, southeast of the city, look ripe for cost-cutting. Less than 2 percent of the area's population lives there, but it would cost nearly $2.9 billion to build certified levees.
By contrast, protecting Algiers, where 13 percent of the region's population lives, would cost $129 million.
The reason the cost estimates have risen so dramatically is that the science of hurricanes and hurricane protection is evolving, Maj. Gen. Don T. Riley, director of civil works for the Army Corps of Engineers, said yesterday.
Loss of coastal wetlands
The loss of coastal wetlands protecting New Orleans from storms, as well as the lowering of the ground level in the area, have reduced the city's natural safeguards from flooding -- and altered assumptions.
Moreover, new storm data from the past 20 years suggest that powerful storms are more likely to hit New Orleans than previously believed. The previous levee design was meant for less powerful storms, but the recent surge of activity has changed ideas about what kinds of storms the city should be prepared for.
"As we learn, we will adjust our methodology and our estimates," Riley said. "To do it properly takes time."
Staff writers Joby Warrick and Michael Grunwald contributed to this report.