Louisiana Recovery Fund Short Due to Wind vs Water Questions

Seen in the Washington Post:

The massive federally funded program for rebuilding hurricane-damaged Louisiana homes is short nearly $3 billion largely because Louisiana officials are compensating thousands of homeowners who were not originally supposed to benefit, according to an analysis by the Bush administration.

The money was supposed to pay for rebuilding flooded homes but not those damaged by wind, said federal officials familiar with the negotiations between the administration and the state officials who designed the program.

The Louisiana administrators of the program, however, are on track to dole out an estimated $2.6 billion to cover damage in homes that were not flooded, federal officials said, and that policy explains why the $6.9 billion program for homeowners is short by nearly half.

The article goes on to mention that there’s a difference of recollections as to the outcome of the negotiations establishing the fund. The following point would have me believe the federal interpretation:

Moreover, many noted that the federal government bore a special responsibility to pay for flood damage in New Orleans because the flooding there was caused by failures of federal levees and flood walls.

And along the same line, there’s a belief that the federal government shouldn’t be bailing out folks who chose not to have wind coverage on their homes.

The usual noises about inappropriate denials of wind damage claims by insurers are being made, as well as Louisiana officials observing that “it’s not fair” that the federal funds should benefit only some of the storm victims.

I suppose that it would be just wrong of me to point out that they could have handled some of the wind issues by offering Dickie Scruggs a position in the Louisiana bar.