New Orleans symbolizes U.S. war on poverty

from USA Today

By Richard Wolf, USA TODAY

NEW ORLEANS — If this is Ground Zero for the federal government's war on poverty, it's hard to find the front lines.

Since Hurricane Katrina struck on Aug. 29, 2005, only 94 homeowners — and no tenants — have received federal aid to rebuild. The poor have been treated at walk-in health clinics while a federal-state partnership struggles to finance a new medical complex.

"I thought they would do a lot for us, but so far they haven't given us anything," says Albert Walker, 75, who's using insurance to rebuild a one-story home in the devastated Lower 9th Ward, which nearly disappeared under 11 feet of water. "Most of the people down here are waiting on the road to recovery."

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.

Lawmakers take on issues

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.

Program funding sought

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.

Anti-poverty advocates such as Mark Greenberg of the liberal Center for American Progress say more money is needed for programs set to expire in coming years: food stamps, child care, Head Start, job training. They want changes in the tax code that would benefit the poor, such as an expansion of the earned income tax credit.

Democratic lawmakers caution against high expectations. They point to the budget deficit, the future insolvency of Medicare and Social Security and their own promises to pay for new spending.

"The body politic does not want to mention the word 'poverty.' All you're going to hear about is the middle class," Waters says. "We've got to talk about poverty, not only in Louisiana but in America."

As the 2008 presidential campaign heats up, experts say, the issues of poverty and inequality will be given voice by Democratic candidates such as former North Carolina senator John Edwards, who plans to announce his quest in New Orleans next week. "This is going to be a reference point for the debates nationally about equality and poverty," Rathke says.