Louisiana Lawmaker Floats New KatrinaBailout Plan

Register now

WASHINGTON - (10/21/05) -- Legislation introduced in the HouseThursday would create a new tax-exempt agency that would buy upflood-damaged property in and around New Orleans and financereconstruction of the hurricane-wrecked city. The bill, introducedby New Orleans Congressman Richard Baker, would create a LouisianaRecovery Corp. that would be charged with buying up damagedproperty for renovation, repairing the Mississippi River levees andcleaning up pollution in the flood-damaged city. Creation of thenew agency would come at a time when bond ratings for New Orleansand Louisiana have plummeted to near junk-bond status as debtsrelated to Hurricane Katrina have overburdened the governments andmade it difficult to borrow funds for the massive renovation of NewOrleans, Baker said Thursday during a hearing before the HouseFinancial Services Committee. The new agency would have the backingof the federal government, so would be able to float tax-free bondsto finance the work, Baker said. "This relief plan will not beabout making the rich people richer, but the rehabilitation of NewOrleans," said Baker.

For reprint and licensing requests for this article, click here.