Rep. Richard H. Baker (R-Baton Rouge) has proposed the "Louisiana Recovery Corporation" which would spend up to $80 billion to buy up property, pay off the banks, and the like: "A Big Government Fix-It Plan for New Orleans". It was passed over late last year, but Baker's hopeful it will be approved this year. Join the NYT as they spot conservatives in the mist:
...The passage of the bill has become increasingly important to Louisiana because the state lost out to the greater political power of Mississippi last month when Congress passed a $29 billion aid package for the Gulf states region. The package gave Mississippi about five times as much per household in housing aid as Louisiana received - a testimony to the clout of Gov. Haley Barbour of Mississippi, a former Republican National Committee chairman, and Senator Thad Cochran, chairman of the Appropriations Committee.
Louisiana officials say they were forced to go along with the appropriation, because they may not have received an aid package at all otherwise. But now they are focused even more intently on Mr. Baker's buyout bill; many economists here say there may be no alternative to buyouts for homeowners who cannot make mortgage payments on ruined properties...
Under his plan, the Louisiana Recovery Corporation would step in to prevent defaults, similar in general nature to the Resolution Trust Corporation set up by Congress in 1989 to bail out the savings and loan industry. It would offer to buy out homeowners, at no less than 60 percent of their equity before Hurricane Katrina. Lenders would be offered up to 60 percent of what they are owed.
To finance these expenditures, the government would sell bonds and pay them off in part with the proceeds from the sale of land to developers.
Property owners would not have to sell, but those who did would have an option to buy property back from the corporation. The federal corporation would have nothing to do with the redevelopment of the land; those plans would be drawn up by local authorities and developers...
Bush is interested, but his rebuilding czar Donald E. Powell isn't so convinced. However, Walter Isaacson's Louisiana Recovery Authority supports it, as do many... Democratic politicians. On the other hand, it was "shunned by many conservatives" in the House.