New Orleans is Ground Zero in New War on Poverty

This USA Today article examines the federal government's challeges in fighting poverty in New Orleans more than a year after Hurricane Katrina. Washington's social policy efforts there are being seen as a "Ground Zero" in a new war on poverty:

Fifteen months ago, President Bush stood in Jackson Square, in this city's fashionable French Quarter, and pledged to confront poverty, racial discrimination and a "legacy of inequality."

Now, as Democrats prepare to take charge of Congress, advocates for the poor say New Orleans symbolizes the government's fits and starts in addressing poverty. They want lawmakers to increase the minimum wage, cut interest rates on college loans and expand health insurance to more poor children.

Democrats say they intend to raise the profile of anti-poverty issues. Rep. Maxine Waters, D-Calif., who will take over a key housing subcommittee, plans hearings here next month. Rep. Charles Rangel, D-N.Y., incoming chairman of the House Ways and Means Committee, plans to examine how poverty negatively affects economic growth, sprawl, crime, health care, even national security. "We can't afford poor folks," he says.

Any broader war on poverty will have to wait. The annual budget deficit is nearly $300 billion. "It's a reflection of the political realities," says Rep. Mel Watt, D-N.C., outgoing chairman of the Congressional Black Caucus. "The public is fed up with these growing deficits."

Politics, too, presents a problem. Conservatives led by Rep. Mike Pence, R-Ind., don't want to spend heavily on social programs. Even liberals such as Rangel don't want to raise taxes. Senate Republicans can block almost anything from passing. "I don't see a concentrated war on poverty by Democrats," says Jared Bernstein of the liberal Economic Policy Institute. "But you are going to see a couple of well-chosen battles."

Like many, Tracie Washington remembers the Bush speech.

"I bought it," says Washington, director of the NAACP's Gulf Coast Advocacy Center. Today, she says, "It's like that old Wendy's commercial — 'Where's the beef?' "

"There's been very little done for health care, very little done for mental health services, virtually nothing done to shore up and support the criminal justice system," says Sen. Mary Landrieu, D-La. "For all the president saying 'We'll do whatever it takes,' it hasn't quite happened that way."

The majority of New Orleans' poorest residents remain outside the city, unable to return because of a shortage of habitable housing and soaring prices. More than 200,000 former residents are in the nationwide diaspora that Katrina created, about 80% of them black.

Tenants have yet to receive anything from a federally financed program intended to help people get back into their homes, even though more than 50,000 units of rental housing were destroyed. The federal government plans to replace many of those with private, mixed-income developments.

Making the immediate shortage worse is the Department of Housing and Urban Development's plan to tear down more than 4,000 units of public housing. HUD says it would cost $130 million to rehabilitate the run-down projects. Low-income-housing advocates have gone to court to block the move. HUD now says it will be phased in.

It has been left to groups such as Catholic Charities USA and ACORN, which represents low-income families, to gut flooded houses. "The joke here is that we need a New Orleans Study Group," ACORN founder Wade Rathke says.

The federal government has invested billions into housing, health care and education, but red tape and a fear of fraud have slowed the flow of funds. The administration wants to change systems that were failing before Katrina struck:

•Housing. It's trying to turn renters into homeowners with jobs and rent-to-own programs. The state is readying $1.5 billion in rental aid to landlords and $1.7 billion in low-income tax credits.

•Health care. It wants to replace the old two-tiered system, in which the poor were relegated to Charity Hospital, by having the Department of Veterans Affairs join Louisiana State University in building a modern medical complex.

•Education. It's investing in charter schools, where parents play a direct role, rather than rebuilding the old public school system that was one of the nation's worst.

Donald Powell, the federal coordinator of Gulf Coast rebuilding, is frustrated with the delays. "We need to be very resourceful about finding ways to speed up the process," he says.

Andy Kopplin, executive director of the Louisiana Recovery Authority, says aid was slow to arrive and tied with red tape. "We asked for significantly more than we got in lots of categories," he says.

Despite Bush's speech on poverty Sept. 15, 2005, little has been done to address it nationally.

The need is clear: Census Bureau figures show that about 37 million Americans, or 12.6%, lived in poverty in 2005 (annual income of $19,971 or less for a family of four). The poverty rate has been rising since 2000. About 8.8 million families have severe housing-cost problems, up 33% since 2000.

New Orleans had the eighth-lowest median income in the nation among big cities in 2005 — $30,771 — before Katrina. Orleans Parish had the sixth-highest poverty rate among counties, 24.5%.

Some experts say that if disaster struck elsewhere, poor city dwellers would fare worst. "We're under-investing in our urban core," says John Powell, executive director of the Kirwan Institute for the Study of Race and Ethnicity at Ohio State University.

Democratic leaders in the House and Senate have pledged to vote early next year to raise the federal minimum wage, stagnant since 1997, to $7.25 an hour over two years from $5.15. That would have an immediate impact in states such as Louisiana that have no minimum wage laws.

The leaders also will try to reduce interest rates on student loans and expand the Children's Health Insurance Program to some of the 9 million children still uninsured.

The piece concludes with mention of former North Carolina Senator John Edwards, who plans to focus on equality and poverty in his upcoming bid for the 2008 Democratic presidential nomination. A new anti-poverty effort cannot be a rehash of the Great Society social programs, where billions of dollars spent on anti-poverty relief contributed to the weakening of individual initiative and self-sufficiency. New anti-poverty efforts need to focus on fostering education, employment, and mobility. The working poor need to know they'll have support, such as housing subsidies, health care, and child care tuition assistance.