Bill Berkowitz
September 14, 2005

Heritage Foundation Capitalizes on Katrina

Washington, DC's premier right wing think tank puts forward a laundry list of conservative proposals to rebuild the Gulf Coast

Drill the Arctic National Wildlife Refuge, suspend environmental regulations including the Clean Water Act and the Clean Air Act, suspend prevailing wage labor laws, promote vouchers and school choice, repeal the estate tax and copiously fund faith-based organizations. These are just some of the recommendations a trio of hearty Heritage Foundation senior management officials are making to best facilitate the rebuilding of the Gulf Coast.

Just as the Iraq War has been a Petri Dish for the neoconservative foreign policy agenda, rebuilding the Gulf Coast in the wake of Hurricane Katrina could prove to be the mother of all testing grounds for a passel of active Heritage Foundation's domestic policy initiatives.

Washington, DC's most prestigious and influential right wing think tank has been rocking and rolling since Hurricane Katrina devastated New Orleans and the Gulf Coast.

In a WebMemo entitled "President's Bold Action on Davis-Bacon Will Aid the Relief Effort," Senior Research Fellow Ronald D. Utt applauded Bush for suspending provisions of the Davis-Bacon Act applying "to federally funded construction projects in the Gulf Coast areas hit by Hurricane Katrina."

Utt wrote that the president "is to be commended for showing the courage to take this important but controversial stand... eliminating the 'prevailing wage' clause [which] should lead to a more efficient and lower cost recovery." Finally, without a hint of irony as to which entities will actually capitalize on the disaster, Utt praises the president for showing courage "in denying the politically powerful labor unions the unfair benefits they would otherwise have reaped from others' misfortune."

Two Heritage Press Room commentaries warned against playing the "blame game":

In her September 9, commentary entitled "Preventing future catastrophes," Helle Dale, the director of the Douglas and Sarah Allison Center for Foreign Policy Studies at the foundation, deflects blame from President Bush while praising him for "the creation of an investigatory committee to look into 'what went right and what went wrong,' as the president put it."

James Carafano's September 13, Press Room commentary entitled "The Limits of Relief," provides a litany of so-called reasonable hypotheses as to why it took so long for the government to provide relief for the victims of Hurricane Katrina.

It will be interesting to see how the foundation's commentators spin President Bush's remarks on Tuesday, September 13, when he said that he "take[s] responsibility" for failures in dealing with Hurricane Katrina.

A far more impressive Heritage Foundation document, however, says it all: An expansive Special Report written by Ed Meese, Stuart Butler, and Kim Holmes, lay out the foundation's cross-pollinated all-encompassing plan for rebuilding the Gulf Coast. Entitled "From Tragedy to Triumph: Principled Solutions for Rebuilding Lives and Communities," the Special Report provides a set of guidelines and recommendations which come from the foundation's two-plus decade playbook.

Meese and comrades maintain that it is imperative "that taking action swiftly does not lead to steps that cause dollars to be used inefficiently or unwise decisions that will frustrate rather than achieve long term success."

The Heritage Foundation's "Guidelines" for rebuilding the Gulf Coast include:

The federal government should provide support and assistance only in those situations that are beyond the capabilities of state and local governments and the private sector. State and local governments must retain their primary role as first responders to disasters. The federal government should avoid federalizing state and local first response agencies and activities.
Federal financial aid, when necessary, should be provided in a manner that promotes accountability, flexibility, and creativity. In general, tools such as tax credits and voucher programs, which allow individuals and families to direct funds, should be utilized to encourage private-sector innovation and sensitivity to individual needs and preferences.
Consistent with genuine health and safety needs, red tape should be reduced or eliminated to speed up private-sector investment and initiative in the rebuilding of facilities and the restoration of businesses. Regulations that are barriers to putting people back to work should be suspended or, at a minimum, streamlined.
Congress should reorder its spending priorities, not just add new money while other money is being wasted. Now is the time to shift resources to their most important uses and away from lower-priority uses to use taxpayer dollars more effectively. It is critical that America focus on building capabilities for responding to a catastrophic disaster, not on catering to the wish lists of cities, parishes or counties, states, and stakeholders.
Private entrepreneurial activity and vision, not bureaucratic government, must be the engine to rebuild. New approaches to public policy issues such as enhanced choice in public school education should be the norm, not the exception...The critical need now is to encourage investors and entrepreneurs to seek new opportunities within these cities...The key is to encourage private-sector creativity -- for example, by declaring New Orleans and other severely damaged areas "Opportunity Zones" in which capital gains tax on investments is eliminated and regulations eliminated or simplified.
Funding from the federal government for homeland security and disaster response and relief activities should focus on national priorities, better regional coordination and communication, and capitalizing federal assets.
Catastrophic disasters will require a large-scale and rapid military response that only the National Guard can provide. The National Guard needs to be restructured to make it both more effective and quicker to take action.

According to Meese, Butler and Holmes the key to successfully rebuilding the Gulf Coast is to "encourage creative and rapid private investment through incentives and reduced regulation, and to channel long-term education, health, and other assistance directly to the people and areas affected so that they can control their future."

The report suggests that, "New Orleans and other affected areas" be declared "Opportunity Zones." In these areas, "the President should direct an Emergency Board, drawn from federal, state, and local agencies and the private sector, to identify regulations at all levels that impede recovery and should propose temporary suspension or modification of these rules."

Suspending Davis-Bacon "would significantly reduce the cost of reconstruction and provide more opportunities for displaced Americans who are without jobs to work on federal projects to restore their neighborhoods." They do not detail the putting in place of any mechanisms aimed at preventing the reconstruction of the Gulf Coast from turning into an Iraq-like rip off. In addition, they do not explain how workers, many of whom have lost everything, can possibly afford to rebuild their homes and their lives by working for wages at, or close to, the minimum wage.

They recommend "repeal[ing] or waiv[ing] restrictive environmental regulations that hamper rebuilding a broad array of infrastructure from refineries to roads and stadiums." They also advocate "substantial changes in environmental laws such as the National Environmental Policy Act (NEPA) and the Clean Water Act" which they charge "have contributed to Katrina's damage,"

They believe the best way to get the energy infrastructure up and running is to "waive or repeal Clean Air Act (CAA) regulations that hamper refinery rebuilding and expansion," "waive or repeal gasoline formulation requirements under the Clean Air Act so as to allow gasoline markets to work more flexibly and efficiently and reduce costs to the American consumer," and "increase the production of oil in the United States" by drilling for oil in the Arctic National Wildlife Refuge (ANWR).

As an indication of how out of touch the Heritage Foundation is with the vast majority of the victims of Hurricane Katrina, they are offering a so-called tax relief package that will have little to no effect on most of the victims' lives. Front and center are recommendations to: "streamline or suspend" parts of the federal tax code in the so-called Opportunity Zones; repeal the estate tax in order to prevent the victims of the disaster from being "hounded by the IRS"; "postpone payment of 2004 and 2005 individual and business income taxes for Katrina's victims," and "waive penalties for withdrawals from tax-advantaged savings such as IRAs and 401(k) plans."

How many of the folks that you saw on the roofs of their houses and stuffed into the crumbling Superdome have IRAs and 401(k) plans, Mr. Meese?

The report goes on to propose "refundable tax credits for the purchase of the kind of health insurance that best meets their personal needs," voucherizing public school education, and encouraging public/private partnerships "through leasing" instead of constructing new public schools.

Finally, the report advocates the elimination of any-and-all barriers that prevent "charitable and faith-based groups, as well as uncertified or non-union individuals," from participating fully in the reconstruction.

Reader Comments

Knowing the modus operandi of the Heritage Foundation, the bulk of opportunity will occur for its constituency of narrow political ideologues. "Opportunity Zones" sounds like an Orwellian code word employed to obscure the Foundation's true intent in reconstruction of the Gulf Coast, namely to make the Gulf Coast the "poster child" for the radical right's autocratic ideology. If conservative think tanks are given free rein, this catastrophe will benefit the corporate oligarchy at the expense of the people of the Gulf Coast. This type of politically motivated recovery will most certainly increase the divisions between people instead of encouraging them to solve problems through consensus and cooperation. The emphasis in reconstruction should be on meeting needs of all the people not on the self -interest of narrow political agendas. Let's not "stack the deck" by prejudicing the recovery with radical agendas. As Franklin D. Roosevelt said, "America does not let its needy citizens fend for themselves."

--- KenDG | 9-22-2005 | 12:57 am