After Katrina, Republicans Back a Sea of Conservative Ideas
By JOHN R. WILKE and BRODY MULLINS Staff Reporters of THE WALL STREET JOURNAL
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.
Rep. Todd Tiahrt (R., Kan.) said that the plans under development "are all part of a philosophy of lowering costs for doing business." He said southern Louisiana, Mississippi and Alabama offer a "microcosm" where new ideas can be applied to speed the rebuilding.
The proposals to cut taxes and waive regulations come after Congress quickly approved $62.8 billion in federal spending for the Gulf Coast, and is expected to approve further spending that will push the price tag above $100 billion.
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.)
In response, Democrats are pressing for other proposals that suit their ideology. Sen. Richard Durbin of Illinois has suggested creating a national emergency airlift program so that U.S. airlines can help evacuate Americans from areas before a natural disaster strike. Senate Minority Leader Harry Reid of Nevada and Louisiana Democrat Sen. Mary Landrieu unveiled a plan that would, among other things, preserve victims' Medicaid health coverage, provide $2,500 education grants to displaced students and give victims a 180-day extension on outstanding loan payments.
Trial lawyers were quick to attack the bill the House passed yesterday on a voice vote to limit lawsuits against volunteers saying it prevents airlines, hospitals, stadiums, and bus companies from being held accountable for misconduct or negligence. In a statement, the Association of Trial Lawyers of America said, "If a nursing home resident evacuated from New Orleans to a nursing home in a neighboring state dies of untreated, infected pressure sores, the out-of-state home would be protected."
The bill's chief sponsor, Judiciary Committee Chairman James Sensenbrenner of Wisconsin, said in a statement that the legislation removes the "threat of legal fear that stands between many willing and able Good Samaritans and the victims of Hurricane Katrina." The bill does permit lawsuits for injuries that were caused "by willful, wanton, reckless, or criminal conduct."
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."
Some of the proposals are unlikely to win quick passage. But congressional tax-writing committees hope to approve legislation within days to offer $5 billion in tax relief and other aid to residents of areas hit by the storm. The legislation would, among other things, let victims withdraw money from retirement accounts without penalty, give tax incentives to those who house evacuees and give companies incentives to hire displaced workers.
Republicans, meanwhile, say they will also press for a new round of energy concessions, including incentives to rebuild and expand offshore drilling and clear the way for new refineries that were dropped from a 500-page energy bill that passed last month.
House Energy and Commerce Chairman Joe Barton of Texas and Senate Environment and Public Works Chairman James Inhofe are working on bills that would encourage refineries to build new plants and expand existing ones by rolling back environmental rules and making it easier for refineries to navigate regulatory channels in Washington.
Republicans hope Hurricane Katrina prods Congress to approve a second energy bill this fall that includes several provisions that were dropped from the first bill. The National Petrochemical & Refineries Association would like lawmakers to reduce the depreciation period from 10 years to five years in order to stimulate investment. Some refineries are talking about reviving an effort to get liability protection for producing the fuel additive methyl tertiary butyl ether, or MTBE. Both were dropped from the earlier energy bill at the insistence of Democrats.