Republican Senate leaders planned a vote to permanently repeal the estate tax the first week in September. Hurricane Katrina forced them to pull the tax break for the wealthiest 1% of Americans, but they are expected to bring back estate tax repeal as the crisis ebbs. The tax raises about $20 billion a year, which makes it especially difficult to waive in the face of a $333 billion federal deficit and hundreds of billions needed to rebuild Southeast Louisiana, Mississippi and Alabama. The vote hinged on centrists such as Mary Landrieu, D-La., Ron Wyden, D-Ore., Max Baucus, D-Mont., and Evan Bayh, D-Ind., as well as John McCain, R-Ariz., and George Voinovich, R-Ohio, USA Today noted before Katrina hit, but GOP senators along the Gulf Coast also might be forced to explain the loss of tax revenues at a time of critical need. The House voted to abolish the estate tax on 4/15/05. Ken Colburn of Techpolitics noted that 42 Democrats -- including four members of the Progressive Caucus and eight members of the Black Caucus -- joined 230 Republicans to finish off the tax. All seven Louisiana reps -- five Republicans and two Democrats -- voted for estate tax repeal, while the Mississippi delegation split, with two Republicans voting for it and two Democrats against.

SOCIAL SECURITY PRIVATIZATION ROLLS ON: Republicans are suggesting that Social Security privatization is needed to free up resources for Katrina recovery. White House Deputy Press Secretary Trent Duffy said the vast spending required to address the hurricane adds to the need to privatize Social Security, according to Congress Daily AM 9/7/05. However, the Institute for America's Future (ourfuture.org) noted that non-partisan analysts estimate that the president's privatization proposal would add $1.4 tln to the national debt in the first 10 years of the plan. "This privatization price tag would dwarf the costs of rescue and recovery efforts for Hurricane Katrina and the most comprehensive Hurricane protection measures COMBINED."

HOMELESSNESS NOT NEW: The exodus of hundreds of thousands of people from New Orleans and the Gulf Coast is a dislocation of a magnitude unknown in the US except for the Civil War or the forced resettlement of Native Americans in the 19th century, Sheila Crowley, president of the National Low Income Housing Coalition. But widespread homelessness has been part of the American experience for the last 25 years. She added, "we know how to end homelessness, even though we are not yet willing to pay for it ... We can do this easily with a rapid expansion of federal housing resources, specifically emergency housing vouchers." But she said low-income homeless advocates and shelter providers are alarmed that needy hurricane evacuees are being pitted against existing homeless.

Edgar Olsen, a researcher on housing at the University of Virginia, noted at MarginalRevolution.com (9/8/05) that the rental vacancy ate in the US is at a historically high level -- 10% for all metropolitan areas, including 15.6% in Houston, 14.4% in San Antonio, 12.8% in Dallas, 12.2% in Memphis, 13.1% in Birmingham and 18.5% in Atlanta. "In short, many rental units in the South Central region and throughout the country are available for immediate occupancy by people with the ability to pay the rent," he wrote. The US government could simply expand the Section 8 voucher Program that now serves about two million families.

BUSH CUTS REBUILDERS' WAGES: Crowley also noted that FEMA has entered into contracts with five companies in a no-bid process to rebuild housing in the affected area. "The amount and nature of the contracts are not publicly known, but we do know that President Bush issued an executive order exempting these contractors from paying prevailing wages to the trades people they hire. So much for tackling the income inequality that the hurricane so graphically revealed. Perhaps the CEOs and other executives of these companies will take a concomitant reduction in their salaries in patriotic solidarity with their workers."

Bush on 9/8/05 issued an executive order allowing federal contractors rebuilding from Hurricane Katrina to pay workers less than the area's prevailing wage. In a letter to Congress, Bush said that, because the Davis-Bacon Act of 1931 increases construction costs, the suspension "will result in greater assistance to these devastated communities and will permit the employment of thousands of additional individuals." Rep. George Miller (D-Calif.), ranking member of the House Labor Committee, said he will seek a vote to undo Bush's executive order. "America owes it to the victims of Hurricane Katrina to ensure that they can play a role in cleaning up and rebuilding their devastated communities at a wage that will allow them and their families to get back on their feet," Miller said. "But the Bush administration is playing politics with tragedy again, this time exploiting the disaster of Katrina to cut working people's wages."

BUSH-CHENEY-TIED FIRMS GET KATRINA RELIEF WORK: Companies with ties to the Bush White House and the former head of FEMA clinched some of the administration's first disaster relief and reconstruction contracts in the aftermath of Hurricane Katrina, Reuters and USA Today reported 9/1/05. At least two major corporate clients of lobbyist Joe Allbaugh, President Bush's former campaign manager and a former head of the Federal Emergency Management Agency, have already been tapped to start recovery work along the battered Gulf Coast. One is Shaw Group Inc. and the other is Halliburton Co. subsidiary Kellogg Brown and Root. Vice President Dick Cheney is a former head of Halliburton. Bechtel National Inc., a unit of San Francisco-based Bechtel Corp., has also been selected by FEMA to provide short-term housing for people displaced by the hurricane. Bush named Bechtel's CEO to his Export Council and put the former CEO of Bechtel Energy in charge of the Overseas Private Investment Corporation.

Halliburton alone has received more than $9 billion for work in Iraq, though Pentagon audits questioned $1.03 billion in costs and $422 million in "unsupported" costs. Congress has already appropriated more than $60 billion in emergency funding as a down payment on recovery efforts projected to cost well over $100 billion.

CLIMATE CHANGE HITS HOME: To New Orleans residents, Hurricane Katrina must seem like an incredibly bad piece of meteorological luck that could only happen once in a lifetime. But David Stipp wrote in Fortune (9/2/05) that to many climate researchers, it looks like a harbinger of things to come -- with catastrophic regularity -- as the world's atmosphere heats up. Less than a month before Katrina hit the Gulf Coast, Massachusetts Institute of Technology researcher Kerry Emanuel published a paper in the journal Nature that illustrated how hurricanes' destructive potential has risen dramatically over the past few decades, in tandem with global warming. A few weeks before Emanuel's paper, the Association of British Insurers issued an equally ominous report on the growing financial risks posed by extreme weather events due to global warming. It predicted that the US may suffer losses from single hurricanes of up to $150 billion. (To put that in perspective, Hurricane Andrew racked up losses of about $30 billion when it slammed Florida and Louisiana in 1992.)

Bill McKibben, in an essay 9/7/05 at TomDispatch.com, agreed that Katrina brings a foretaste of environmental disasters to come. A decade ago, environmental researcher Norman Myers began adding up the number of humans at risk of losing their homes from global warming and predicted that by 2050 it was entirely possible that 150 million people could be "environmental refugees," forced from their homes by rising waters. But the US is emitting more carbon than we were in 1988, when scientists issued their first global-warming warnings. "Katrina marks Year One of our new calendar, the start of an age in which the physical world has flipped from sure and secure to volatile and unhinged. New Orleans doesn't look like the America we've lived in. But it very much resembles the planet we will inhabit the rest of our lives."

TAX AUDITS URGED FOR LABOR SCOFFLAWS: Labor law enforcement has become so week that it has become an enabler of tax evasion, Agenda for Justice (agendaforjustice.org) reports. The US Labor Department estimates that as many as two-thirds of employers in industries like the garment trade and agriculture violate minimum wage or overtime laws, suggesting that the problem is chronic. Under a bill the California Assembly passed 9/6/05, violations of the state Labor Code would trigger an investigation of the employer by state tax authorities. Assemblyman Paul Koretz, D-West Hollywood, said the bill would level the playing field for law-abiding employers. "If an unscrupulous employer is cheating their employees out of wages, they're very likely cheating the state out of employment taxes and tax revenue as well," said Koretz, according to Agenda for Justice. "We should aggressively pursue these bad actors. The underground economy harms everyone &endash; the worker, the state, and the legitimate employers who cannot compete against unlawful businesses," he said.

HURRICANE REDRAWS POLITICAL LANDSCAPE: The migration of hundreds of thousands of people -- many of them poor and black -- from New Orleans could have a dramatic effect on the makeup of a swing state, Johanna Neuman and Richard B. Schmitt wrote in the Los Angeles Times 9/11/05. If most of those evacuees choose not to return, Katrina's political legacy could make Louisiana a more Republican state. After voting twice for President Clinton, the state voted twice for President George W. Bush. It recently elected its first Republican US senator since Reconstruction -- David Vitter. But statewide Democrats depend on a strong turnout in New Orleans and much of the population of Rep. William Jefferson's 2nd District, which includes New Orleans, has relocated as far away as Utah and Massachusetts.

In a briefing Thursday, 9/8/05, to a Senate oversight committee, a FEMA official said the agency thought it would need to find at least temporary housing for 450,000 families. More than half of the New Orleans evacuees initially landed in solidly Republican Texas. Their presence is expected to trigger no immediate political change in that Republican stronghold. But they could accelerate the growing minority influence in the state, where whites recently lost their majority status, Charlie Cook, an independent political analyst and Shreveport native, told the L.A. Times. And political analyst John Maginnis told the Wall Street Journal Louisiana could lose one of its seven congressional seats in the next redistricting.

TYRO BUSH SCARES AIDES: Dan Froomkin of WashingtonPost.com noted 9/12/05 that blistering analyses in Time, Newsweek and other publications in the week following the hurricane reported that instead of the commanding, decisive, jovial president you've been hearing about for years in the mainstream press, it turns out that Bush is in fact fidgety, cold and snappish in private. "He yells at those who dare give him bad news and is therefore not surprisingly surrounded by an echo chamber of terrified sycophants. He is slow to comprehend concepts that don't emerge from his gut. He is uncomprehending of the speeches that he is given to read. And oh yes, one of his most significant legacies -- the immense post-Sept. 11 reorganization of the federal government which created the Homeland Security Department -- has failed a big test."

Evan Thomas of Newsweek, in "How Bush Blew It," writes: "It's a standing joke among the president's top aides: who gets to deliver the bad news? Warm and hearty in public, Bush can be cold and snappish in private, and aides sometimes cringe before the displeasure of the president of the United States." So Bush apparently didn't fathom the extent of the catastrophe in the Gulf Coast for more than three days after the levees of New Orleans were breached. Finally, four days after the levees were breached, White House staffers made a DVD of newscasts so the president could see the horrific reports coming out of New Orleans as he flew down to the Gulf Coast on Air Force One.

Mike Allen of Time writes: "Bush's bubble has grown more hermetic in the second term ... with fewer people willing or able to bring him bad news -- or tell him when he's wrong. ... A youngish aide who is a Bush favorite described the perils of correcting the boss. 'The first time I told him he was wrong, he started yelling at me,' the aide recalled about a session during the first term. 'Then I showed him where he was wrong, and he said, "All right. I understand. Good job." He patted me on the shoulder. I went and had dry heaves in the bathroom.' ..." Allen wrote that four days after Katrina struck, Bush briefed his father and former President Clinton in a way that left too rosy an impression of the progress made. "It bore no resemblance to what was actually happening," a source told Allen. The administration's "three-part comeback plan," Allen writes, include 1) "Spend freely, and worry about the tab and the consequences later;" 2) "Don't look back;" and 3) "Develop a new set of goals to announce after Katrina fades. Advisers are proceeding with plans to gin up base-conservative voters for next year's congressional midterm elections with a platform that probably will be focused around tax reform."

Even before Katrina hit, Doug Thompson of CapitolHillBlue.com reported 8/25/05 that White House aides were scrambling behind the scenes to hide the dark mood of an increasingly angry leader who unleashes obscenity-filled outbursts at anyone who disagrees with him. "I'm not meeting again with that g*dd**ned bitch," Bush reportedly screamed at aides who suggested he meet again with Cindy Sheehan, the war-protesting mother whose son died in Iraq.

GUARD'S IRAQ DEPLOYMENT HURT GULF RESPONSE: Deployment of thousands of National Guard troops from Mississippi and Louisiana in Iraq hindered those states' initial storm response when Hurricane Katrina struck, military and civilian officials said 9/9/05. According to the Associated Press, to replace Mississippi's 155th Infantry Brigade and Louisiana's 256th Infantry Brigade, each with thousands of troops in Iraq, Lt. Gen. Steven Blum, chief of the National Guard Bureau, dispatched personnel from Guard divisions in Kansas and Minnesota shortly after the storm struck. But US Rep. Gene Taylor, D-Miss., told reporters deployment of the Mississippi Guard units made it harder for local officials to coordinate their initial response. "What you lost was a lot of local knowledge," Taylor said, as well as equipment that could have been used in recovery operations. "The best equipment went with them, for obvious reasons," especially communications equipment, he added.

The New York Times reported 9/9/05 that US military assistance to New Orleans was delayed by a debate between the Justice Department and the Pentagon over whether the president should take command of the hurricane relief effort by declaring that Louisiana was in an insurrection before sending active-duty troops. A senior Army officer told the Times that 82nd Airborne troops were ready to move out from Fort Bragg, N.C., on Sunday, the day before the hurricane hit. The call never came, administration officials said, in part because military officials believed Guard troops would get to the stricken region faster and because administration civilians worried that there could be political fallout if federal troops were forced to shoot looters.

Louisiana officials were furious that there was not more of a show of force, in terms of relief supplies and troops, from the federal government in the middle of last week. "We needed equipment," Gov. Blanco told the Times. "Helicopters. We got isolated." Five days after the storm, 7,200 active-duty soldiers and marines finally arrived on the scene.

BUSH RATINGS TANK: The week after Hurricane Katrina devastated the Gulf Coast, 38% said they approved of Bush's handling of the response to the storm while 58% disapproved, according to a CBS News poll. Just 48% said Bush has strong qualities of leadership -- the lowest number ever for the president. And just 32% expressed "a lot" of confidence in Bush's ability to handle a crisis. His job approval rating was 42% approval and 52% disapproval.

UN: PARTS OF US JOIN THIRD WORLD: At the same time the New Orleans floods laid bare a growing racial and economic divide, a UN report on global inequity offered statistical proof that parts of the US are as poor as the Third World. According to the London Independent (9/8/05), inequality in health care is a major problem cited in the 370-page report that found the infant mortality rate has been rising in the US for the past five years -- and is now the same as Malaysia. Black children in the US are twice as likely as whites to die before their first birthday.

STUDENT DEBT RISING: The average indebted graduating senior owed $17,600 in debt on graduation day last year, according to a study by the Center for Economic Policy and Research. Nearly two-thirds of students attending four-year college or university take on student loans, which comprise over half of financial packages, up from about one-fifth in the 1970s. The report, "Student Debt: Bigger and Bigger," found that expenses at public four-year universities have risen 59.4% since 1990, with private university expenses increasing 51.1% (adjusted for inflation). High levels of student debt are the result of rapidly increasing college costs and policy choices that have made more loans -- but not grant aid -- available to students. See www.cepr.net.

HUMAN REMAINS SUSPECTED IN MAD COWS: Mad cow disease may have originated from human remains mixed into cattle feed, a British researcher thinks. Professor Alan Colchester of from the University of Kent in Canterbury, a leading British expert on BSE, believes there is strong evidence for linking the brain disease to a grisly trade in carcass material that was prevalent in the 1960s and '70s, the London Daily Mail reported 9/2/05. Over those decades Britain imported hundreds of thousands of tons of ground-up animal parts for use as fertilizer and the manufacture of feed. Nearly half this meat-and-bone meal came from the Indian sub-continent, where corpses are disposed of in rivers in accordance with Hindu funeral custom. Collecting and selling bones and carcasses is a common local trade among peasants, who may not be too selective about what kind of remains they pick up, says Prof Colchester. "The inclusion of human remains in material delivered to processing mills has been clearly described," he wrote in The Lancet medical journal in a paper co-authored by his daughter, Nancy Colchester, from the University of Edinburgh.

LAST TIME US LOST A CITY: A poster to DailyKos noted that the last time an American city was destroyed -- San Francisco, April 18, 1906 -- the earthquake struck at 5:13 a.m.; by 7 a.m. federal troops had reported to the mayor. By 8 a.m. they were patrolling the downtown area and searching for survivors. A second quake struck at 8:14 a.m.; by 10:05 a.m. the USS Chicago was on its way from San Diego and the USS Preble had landed a medical team and set up an emergency hospital. At 8:40 p.m., General Frederick Funston requested emergency housing -- tents and shelters -- from the War Department in Washington, D.C.; all of the tents the US Army had were on their way to San Francisco by 4:55 a.m. the next morning. "Of course, the technology of the day was fairly primitive and the US was a much poorer country," the poster identified as SensibleShoes commented. "No doubt we could move more quickly today."

LOOTING AT THE PUMPS: For many Americans outside of the Gulf Coast, the most immediate impact of Hurricane Katrina wasn't looting in the streets, it was looting at the pumps, said Tony Dutzik, energy policy analyst of the National Association of State PIRGs. And while the supply crunch caused by Katrina may be the biggest driver of higher gasoline prices, there's little question who stands to benefit: Big Oil. In the week Katrina struck, stock prices of major US oil producers ExxonMobil, ChevronTexaco and Conoco-Phillips surged by 4%, 5% and 8%, respectively. Over the last year, their stock prices have increased by 31%, 26% and, for Conoco-Phillips, a whopping 80%. Major oil refiners have done even better, with Valero (20%), Marathon Oil (11%) and Sunoco (23%) posting double-digit percentage increases in stock prices between the opening of markets Friday, 8/26, and 9/2. Refineries were set to make huge profits, with the profit margin for refiners up to more than $23 per barrel -- more than four times higher than a year ago. "Americans have the right to ask whether such massive profits are appropriate at a time of national crisis," Dutzik said. "And they have a right to demand that government work to protect Americans from being held captive by Big Oil in the future by improving the energy efficiency of our cars and trucks and reducing our overall dependence on fossil fuels."

WAGES DOWN, POVERTY UP: Between 2003 and 2004, real median earnings among men dropped 2.3%, the Census Bureau reported. During the same period, women's earnings fell just 1%. In 2004, there were 1.1 mln more people living in poverty than in 2003. Scott Shields of MyDD.com noted that while the numbers didn't move in the Northeast, South or West, real median household income fell nearly 3% in the Midwest. "Interestingly, the only group for which the poverty rate increased was non-Hispanic whites. Asians were the only group for which poverty rates actually declined. "This data suggests that many of the people most likely to vote Republican -- Midwestern young and middle-aged white men -- are the ones hurt worst by the economic policies put in place by the Republican-run White House, Senate, and House," Shields noted.

From The Progressive Populist, Oct. 1, 2005

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