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Most of the major Katrina contracts doled out so far have been for temporary housing, and they have gone, by and large, to companies with strong ties to the Bush Administration, including Bechtel, Fluor and the Shaw Group, which recently built a helicopter pad for Vice President Dick Cheney's home in Washington. A $3 billion engineering-and-consulting behemoth that has equally close connections to the Louisiana Democratic Party, the Shaw Group, based in Baton Rouge, La., counts former Bush campaign manager Joe Allbaugh as one of its lobbyists in Washington and has scored two separate $100 million Katrina-related contracts--one to help the Army Corps of Engineers pump water out of New Orleans and another to help FEMA provide temporary housing. Soon after the deals were announced, Shaw's struggling stock soared from $16 to $24 a share.
Congress has allocated enough money to purchase almost 300,000 trailers, 18,000 of which have already been delivered to victims of the storm. Still, few people in the industry think it can come up with anywhere near that many units in the next few months. Ed Unger, director of operations at Tom Raper RVs in Richmond, Ind., says it took about a week on e-mail to complete a $15 million to $20 million contract to provide from 1,000 to 2,000 trailers. Under FEMA guidelines, he'll have to wait until all the trailers are delivered down South before he gets his check. The only real snag was that after the dealership had come up with the idea of filling each trailer with donations of food and clothing, FEMA informed Unger that rules stipulated that each trailer had to arrive empty. Instead, Unger is sending the supplies down by tractor trailers to church groups doing relief work in the area.
The very idea of using trailers and other mobile homes to house so many evacuees has also come under attack. House Democrats have complained that the approach could "result in segregating poor people into unsustainable, artificial communities." A more sensible plan, many of them insist, would be to expand the government's Section 8 housing-voucher program. Meanwhile, President Bush's "urban homesteading" plan has received a lukewarm reception. "You're asking people who make less than $10,000 to build their own homes?" says Bruce Katz, a housing-policy expert at the Brookings Institution in Washington.
How the crucial housing issue is ultimately handled--much like the final bill for rebuilding the Gulf--is anybody's guess. For all the imposing dollar figures and bold proposals being bandied about, it's clear that Washington is making this up as it goes along. "It's going to cost whatever it costs," is how the President put it last week. Given the battering his reputation has taken in the past few weeks, that open-ended approach makes perfect sense. After all, no matter what it ends up costing, the White House has learned that the price of inaction is much, much higher. --Reported by Mike Allen, Perry Bacon Jr., Brian Bennett, Timothy J. Burger, Massimo Calabresi and Matthew Cooper/ Washington, Michael Peltier/ New Orleans and Cathy Booth Thomas/Baton Rouge