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For Immediate Release
Office of the Press Secretary
September 16, 2005

Press Briefing by Scott McClellan; Claude Allen, Assistant to the President for Domestic Policy; and Al Hubbard, Assistant to the President for Economic Policy and Director, National Economic Council
The James S. Brady Briefing Room

9:38 A.M. EDT

MR. MCCLELLAN: Good morning, everybody. Let me just go over the President's schedule and then turn it over to the guest briefers for the morning.

The President taped his radio address this morning and --

Q Subject?

MR. McCLELLAN: Last night's remarks, it will be kind of a short version of last night's remarks. Then he had his usual briefing, participated in his hurricane briefing. Deputy Secretary Jackson was there, Claude Allen, other White House staff, for that. Then he's going to be going over to the National Cathedral shortly, for the National Day of Prayer and Remembrance Service. And this afternoon he looks forward to welcoming President Putin back to the White House. He'll have his meetings with President Putin and then we'll have the joint press availability at 3:00 p.m. in the East Room, open press. Then he departs for Camp David following that, for the weekend.

I do want to mention that Mrs. Bush, this morning, prior to the National Prayer Service, has been visiting the National Center for Missing and Exploited Children in Alexandria, Virginia. She's there to thank volunteers for their efforts in the aftermath of Hurricane Katrina, and highlight the ways parents and children can find each other through the Center's website, at To date, they have matched more than 700 children with their parents or guardians.

And please remind me at the end, I'll do the week ahead -- is Bob Hillman here? Or Ken Herman will do it -- there's Bob Hillman -- after we get through this briefing.

I have Claude Allen here and Al Hubbard. Claude is the head of our Domestic Policy Council and the President's Domestic Policy Advisor. And Al is the National Economic Advisor. They're here to brief you all on the new initiatives that were announced in the speech last night. That's their focus. Obviously, if you have other questions, I'll be here for that after that, as well.

So with that, I'm going to turn it over to Claude and he'll begin.

MR. ALLEN: Thanks, Scott. Good morning. Last evening the President spoke about three initiatives that I want to address with you this morning.

The first is the worker recovery accounts. These accounts are designed to assist the hardest to employ, who will be determined by the regional authorities or city authorities when they return back to their locations. The worker recovery accounts provide up to $5,000 for employment-related and support services for returning individuals, including employment counseling, job training, child care, other ancillary benefits such as transportation or relocation, and even some housing assistance.

The idea is that after -- each of these individuals will be already qualifying for unemployment insurance for 26 weeks, but there may be individuals from the region who find it difficult to find a job. So these worker recovery accounts will provide that additional assistance for them, for an additional 26 weeks.

For an individual who has a worker recovery account, if they find a job within the first 13 weeks, the balance of that account will go to them in terms of an employment bonus. About 60 percent of the balance will be provided to them immediately as a bonus, and then the 40 percent remaining will be provided to them about 60 days after -- six months after they have been in a job retained.

Secondly, the President spoke about the Homesteading Act. He proposed an urban homesteading act, working with Congress to get that to provide an opportunity for these individuals, again, many of whom he identified as those who oftentimes have not had an opportunity to benefit from the ownership society, to own their own piece of real estate. Under the idea, the practice is allowing persons or families to occupy a government-owned home at favorable or even no mortgage, in exchange for their personal investment of sweat equity in improving the property over a set period of time.

The plan is looking first at available HUD housing, foreclosed units that are in an area -- in the region of Alabama, Louisiana, Mississippi. There are some 4,000 units available, of which about 25 percent of those are in the New Orleans area. The Secretary of HUD will be reaching out to other agencies, including the Veterans Administration, Agriculture Department, to see what they may have in foreclosures and housings that may also be available. And we also will be working with state and local governments to identify other public-owned property for this area, as well.

The last area I'll mention is in the education area. From the very beginning -- Hurricane Katrina hit at the beginning of the school year for many of these children. And Secretary Spellings, Department of Education, were very much on top of this from the very beginning. One of the areas that we wanted to make sure of -- the President had said that he wants to make sure that we work with the school systems that have been willing to take in families of the evacuees and children in school, to make sure that they are held harmless. And so under the proposal, the Department of Education will be providing assistance to local school districts to provide about 90 percent of the average per-pupil expenditure, or up to $7,500 to reimburse for students that go to these schools, whether they be public, private or parochial, as well.

The money will go through the local education authority, and thereby be used for these students. That money will be distributed in three tranches, so that we can keep account of those students that are in the area that may relocate to other schools.

I'll stop there and just wait for Al to finish, and then be glad to answer any questions.

DIRECTOR HUBBARD: Thanks, Claude. Let me just first start by talking about health care. And the President has made it very clear that the whole country appreciates what the various states around the country are doing with respect to the evacuees. With respect to health care, the President's intent is for us to reimburse for the costs of Medicaid completely, and also for uncompensated care to reimburse completely.

Now I'd like to talk about economic development. The good news is that this is a very important part of the country, very important to our economy. And this part of the country has some significant advantages: Number one, great people; two, important ports; three, it's where much of our energy supply is; and, four, it's a place that all Americans and many people around the world like to go be tourists, to visit and vacation.

We believe very strongly that the most important thing is to get the infrastructure rebuilt, and once that infrastructure is rebuilt, this economy will flourish again, even more strongly than it has in the past. And the President made it clear last night that the federal government is going to be picking up the majority of the cost of rebuilding that infrastructure. And I can tell you his commitment and our commitment is to do that as quickly, as expeditiously as possible, but doing it in a prudent manner to protect the American taxpayer.

As you know, he announced last night the government opportunity zones, what we're calling GO Zones, to encourage economic development. And we're especially focusing on economic development in the short-run because we want this area rebuilt as quickly as possible. And there are basically three components of this. There's the incentive for investment, where we're going to allow a 50-percent write-off for investment in either equipment or structures. This is similar to what we did in '02 and '03, with the deadline of the end of '04, to get the economy back on its feet after the recession of '01. It worked extremely well; we think it will work extremely well here. The unusual part of this is we're going to provide this incentive for buildings and structures, as well as equipment. And we think it will have a major impact.

In addition, we've got additional write-offs for small business that will expand the 100 percent write-off from $100,000 to $200,000. And then, thirdly, is we're going to be working with the SBA to expand the air programs, both in terms of direct lending as well as -- and their loan guarantee program. And for example, in the direct lending, we're going to expand the ceiling from $1.5 million to $10 million, and we're also going to be providing additional subsidies on interest rates.

The President believes very strongly that this is going to have a major, major impact on economic growth and economic growth in the short-run, which is so important to creating those jobs where people will come back to New Orleans, Southern Mississippi and Southern Alabama.

Q Al, where's the money coming from for this?

DIRECTOR HUBBARD: Where's the money coming from? It's coming from the American taxpayer.

Q Right, but you're already spending more than you take in, so how much more is there to --

DIRECTOR HUBBARD: Well, if you want to know the --

Q Are we going to have to borrow it, or are you going to raise taxes? I mean, if it's coming from the taxpayer that suggests maybe you're going to have to raise taxes.

DIRECTOR HUBBARD: The most important thing that we need to do is make sure that this economy remains very, very strong. A strong economy is what will provide the resources for the rebuilding for the disaster as a result of the Katrina storm. We're fortunate that the economy is very, very strong now; it will continue to be strong. But the last thing in the world we need to do is raise taxes and retard economic growth.

Q So where does the money come from? Obviously, you've got to borrow it or offsets in the budget, what?

DIRECTOR HUBBARD: Well, again, the money is going to come from the federal government, it's going to come from the federal taxpayer. This President is committed to, as you know, cutting the deficit in half. This in no way will adversely impact his commitment to cut the deficit in half by 2009. At the same time, unfortunately, because of the biggest national disaster I think we've ever faced, we're going to have to spend significant amounts of money on a one-time basis. And that's what's important: it's one time, it's not recurring. But the President is committed, and I know the American people are committed to doing everything that's necessary, but no more than is necessary, and doing it in a very prudent way.

Q -- significant amount? How much?


Q How much? Do you have a ballpark figure for how much this is all going to cost the American taxpayer?

MR. McCLELLAN: Are you talking about the overall costs?

Q Yes.

MR. McCLELLAN: Well, one, I think -- and we talked about it the last couple of days, in terms of the longer-term recovery and reconstruction efforts, and the President made very clear last night that we're going to do what it takes to meet the needs of the people who have been affected by this and to meet the needs of the region. But as we do, we need to work with state and local officials to make sure it's done in a well thought out, well planned way. And that's why he emphasized we're going to make sure that the money is spent wisely and it's going to what it's supposed to go for.

But in terms of the longer-term reconstruction needs, I think that we're still assessing what those needs are. It's not clear exactly what those longer-term needs are going to be. And so it would be speculating at this point and we're not going to get into speculating about it.

Q Is the $200 billion figure --

MR. McCLELLAN: I mean, it's speculating about it, and we're not going to get into speculating about it. What we are going to do is make sure that the needs of the people are met.

Q So there were no internal initial investments for how much this will cost? None?

MR. McCLELLAN: For the longer-term? I think that's something that's still being assessed --

DIRECTOR HUBBARD: Right. I mean, you know, you've got --

MR. McCLELLAN: -- as our OMB Director has said over the last couple weeks, too.

Q Allan, can I just clear this up? So the money will be borrowed, so it will add to the deficit, right?

DIRECTOR HUBBARD: Well, there's no question that this -- the recovery will be paid for by the federal taxpayer and it will add to the deficit. That's right.

Q Do you have scores for these --

MR. McCLELLAN: But as he emphasized, it's a one-time cost here that you're talking about.


Q Do you have scores for the initiative you announced last night?


Q Can we --

DIRECTOR HUBBARD: Sure. For the incentives, the faster write-offs, et cetera -- again, these are approximate costs -- and, by the way, I hope that we're understating them, because if business responds even more quickly than we anticipate, it will cost a little more. But we're talking about around $2 billion for those initiatives.

Q Over what period?

Q Is that --

DIRECTOR HUBBARD: Yes, that's that for the Gulf opportunity zone.

MR. ALLEN: And about $2 billion for the education initiative, that's the focus of that one. The Homesteading Act, we are analyzing that, because this is housing stock that already exists in HUD and other agencies, we don't have a number that I can give you on that definitively at this point.

Q Claude, what is the percentage of housing stock in the New Orleans area?

MR. ALLEN: We found of about 4,000 units that are available throughout the region, about a thousand of them -- just HUD stock -- are in the New Orleans area alone. There are other -- we've done an inventory of vacant buildings, vacant lots, vacant facilities, and that does not include the additional vacancies that exist.

Q Who is going to measure sweat equity?

MR. ALLEN: Well, that is something we work with the state and local government about. Certainly, in partnership with organizations, as the President mentioned last night, like Habitat for Humanity, they have standards that they use to work with individuals who are trying to get home ownership. We will work with organizations, hope to partner additionally with organizations like that, that are willing to go in and help provide the assistance.

We're also looking to work with nonprofit organizations other than Habitat that currently help provide, whether there's low income mortgages and other assistance. So it will be a public/private partnership that we're seeking to work in this area.

Q Claude, do you -- can you name any specific programs that will be cut or eliminated already in order to make room without adding too much to the deficit in order to pay for Katrina relief?

MR. ALLEN: No, I cannot name any programs that will be cut. In fact, we did not focus on that. Again, the President's focus was on the immediate need of the evacuees. We focus on providing that, and then in the mid-term and longer-term range is identifying, again, programs that would help get families back on their feet, get the kids back in school, and get people back to work. That's what we were focusing on.

MR. McCLELLAN: But it's important to do what the President has always done, which is set the clear priorities, and we have, and then to exercise spending restraint elsewhere in the budget, and that's what we'll do going forward.

Q But I'm talking about cuts in particular, or making -- getting rid of a program to make available the cash for the relief without too much deficit --

MR. ALLEN: We have not done an exercise to look at programs to cut. Again, the focus was on the immediate need for the Gulf region, to provide them with the assistance, and that's what we've done. Many of these programs, again, were -- many of the individuals, for example, who will qualify for education, these kids were already in school somewhere. And so, therefore, it may be shifting within the budget where that money is coming from to go to the other schools, but, no we have not done --

MR. McCLELLAN: Alexis.

Q Claude, just to follow through on the estimates, do you have one for the Medicaid and health care costs?

MR. ALLEN: I will turn that over to --

DIRECTOR HUBBARD: And, again, this is very much ballpark, but we think it's around $350 million.

Q And can I also ask you a question about insurance. This is a topic that keeps coming up among the affected region. Is the federal government working on -- with industry, the insurance industry -- to think of the proper way that the federal government can do write-offs of insurance or subsidies, or how, in any way, on the insurance problem, flood versus --

DIRECTOR HUBBARD: Well, as you know, through FEMA, there's the flood insurance that's provided through the federal government. And you can rest assured that we will be fulfilling our obligations there as quickly as possible. With respect to other insurance matters, that I think is from a 1945 and 1946 law, McCarran-Ferguson or -- I can't remember the name of the law. That is regulated by the states, and that's an issue that the states are going to have to deal with, with the insurance companies and with the homeowners, with respect to insurance issues.

MR. McCLELLAN: Let me add to that. This is one of the issues that comes up in the meetings the President has been having in the region. I mean, clean up of debris is a high priority right now. The insurance concerns -- the President understands those concerns fully. It's the state insurance commissioner that is charged with making those decisions. And those are concerns that are on the minds of the people in the region. The President has had good discussions with him about that.

Q But just to clarify, does the message from the White House to those victims -- is the message, the federal government will have no role in your insurance debate with the state insurance commissioner?

MR. McCLELLAN: Well, these are matters that the President has discussed with local officials. He discussed it with the mayors and county supervisors yesterday. It is a decision that, as Al pointed out, goes to the state insurance commissioners. It's a concern that we share with them, and we understand why they have those concerns.

Q Back on the insurance somewhat, and another subject -- how can the White House be concerned, particularly for the low-income Americans who were affected, and many of those did not have insurance, especially flooding insurance. They were renters, some of them maybe purchased homes and didn't add that onto their insurance. So how can you offset that for those people that you're talking about, your concern for those low-income Americans?

MR. ALLEN: Well, I think the initial answer is the immediate relief that they receive. Many of these individuals are now receiving not only the $2,000 benefit that they got to cover clothing, shelter, food, but there is part of the -- up to $26,000 that if they were in a home, that they will receive assistance to help them in terms of mid- to long-term housing needs. So that is the first place I point out that we're working with them.

Additionally, as the President announced last night, the Homesteading Act is another way to look at the longer-term issues. Some of these families may desire to be homeowners, to move from being renters to homeowners. And that has always been a part of the President's vision of an ownership society that focuses on this -- much of this exact population that heretofore have not had an opportunity to participate in the American Dream.

Q Follow up real quick. Also, a coalition of black organizations are saying that the President's speech last night was hopeful, but it falls short on some things, to include the fact that there was a prohibition in the first wave of bids that did not include small businesses. And the President was talking about small business and minority business, and what's going to happen in the second phase?

MR. ALLEN: Well, actually that's incorrect, because in the first phase what the waivers of Davis-Bacon and other regulations were designed to do was not to prevent people from participating, but actually to open up the opportunities for small businesses, women-owned businesses and minority businesses that do not historically contract with the federal government, to be a part of this process.

So contrary to what has been said, that is not actually the case. In fact, it is our expectation, one, that many of these businesses that heretofore do not contract with the federal government may choose to do so in this activity, because they don't have the additional paperwork and red tape to go through.

But having said that, it's also important to recognize that this administration is committed to equal opportunity, and we'll continue to stress that. So while there may have been waivers granted in terms of the procurement process, that does not relax the requirements of meeting the obligation to make sure that all have an opportunity to participate in the recovery effort.

DIRECTOR HUBBARD: And, by the way, part of the proposal, with respect to the SBA, is to increase the surety bond from $2 million to $5 million, that's provided by the SBA in order to make it possible for these undercapitalized or smaller businesses to participate in all these --

Q Excuse me, million or billion?

DIRECTOR HUBBARD: It's million per event, per contract.

Q The initial estimates you just provided for the new initiatives announced by the President add up to just a few billion dollars, out of a total cost that some are saying could reach $200 billion. Where is the bulk of the money going?

DIRECTOR HUBBARD: Well, the bulk of the money is going for the evacuees, for taking care of them, for providing them with housing, providing with the $2,000 and then the $26,000; it's going to rebuild these cities and areas of the country that were devastated. The infrastructure rebuild is going to be extremely expensive. But we're going to do it in the right way. You know, there's just an enormous amount of cost involved in dealing with the million-plus people who have been displaced.

Q Two questions. The fact sheet you put out last night said we've got to do everything we can to help people get into homes. And I took that to mean, you know, permanent dwellings. But, yet, I don't really hear a specific proposal for helping people rebuild their homes, or rebuild -- so what are you going to do about that? The second question is, the history of enterprise zones is sort of up and down. I mean, people have had different reactions to them in the past. Can you just talk about what kind of precautions you're trying to take with your GO Zones here that are going to make those work?

DIRECTOR HUBBARD: You do the first and I'll do the second. You do housing.

MR. ALLEN: Again, the President's speech last night focused on a forward-looking vision of what the region would look like, by having, for example, the Homesteading Act. That is only a piece of the housing needs that are being addressed. FEMA has purchased, or has under contract, hundreds of thousands of housing units to provide for temporary and longer-term housing. But the real solution to the housing need is to provide the individuals with opportunities, wherever they choose to be, to make sure that they're able to -- those that are in the Houston area, the Dallas area, that want to be there, we're working to provide assistance for them to get into rental housing stock.

Back in the devastated region, for those that are private land owners, that will have an opportunity to have a temporary house set up while they reconstruct their homes. For those who may be on public housing or public assistance, we will be working with the public authorities, local authorities and state authorities to determine what is the best situs and the best circumstance and best situation for them in terms of housing.

We will do that, from the federal perspective, in terms of providing resources, but also looking at the environmental, the health, what is the optimal community density, working with them to share that information, so that as the local communities are working on those issues, we'll be in partnership with them. So housing is a high priority and one that is actually ongoing, that we're working with.

DIRECTOR HUBBARD: With respect to the enterprise zone concept, which we're calling the GO Zone, I can tell you as a business guy who participated -- who was a business guy during the '03-'04, when the accelerated depreciation existed, and then expired at the end of '04, every business person in America was paying attention to that expiration and making sure they got their investments in before the expiration of '04.

What the President has proposed by including also buildings and structures, you're going to see an enormous response by the business community to investing quickly in New Orleans. And the key to that is, in addition to providing that incentive, is rebuilding the infrastructure as quickly as possible. But given all the natural advantages of not only New Orleans but southern Mississippi, southern Alabama, you're going to see, I'm confident, a very, very quick response to these incentives that the President is offering.

Q The President said last night that one of the problems that has to be addressed is poverty that is steeped in racial discrimination. Where's the bold action that he said is going to be required to address that?

MR. ALLEN: Well, the bold action comes in both the proposals that the President has laid before us, in terms of education opportunity, in terms of home ownership. These are all issues that go to the heart of what divides us, in terms of the communities. Again, when we look at the region, we need only look at New Orleans and see that many of those who were impacted came out of public housing units where you don't have jobs, where you don't have business investing, where they don't have a choice in where their kids go to school. And so these proposals focus on that and provide that opportunity there, as well.

Additionally, the President's proposal calling for organizations, national organizations such as the Boy Scouts and Girl Scouts, to reach into the region to sister and brother organizations to do that, that's one way that we're looking through a person-to-person contact, organization-to-organization contact, to build those relationships that also go into helping to break down some of those barriers.

However, the biggest initiative I would say is, is what the President has spoken about for his tenure as President, and that is the ownership society, whether it be ownership in terms of housing, ownership in terms of your choice and where you want to educate your children, ownership in terms of opportunity for jobs. These are what we believe are very critical to helping to break down those barriers that the President spoke about last night.

Q Well, in four years -- you know, he's had four years in office, and it obviously hasn't had a big impact on the people that were displaced in New Orleans.

MR. ALLEN: Well, I would disagree with that, and in this area, let's look at education around the nation. And we're seeing throughout the country in education the President's initiatives and No Child Left Behind have helped improve. In New Orleans, as well, we see educational scores are important to these kids having opportunity in the future. So that's very important.

But, again, in New Orleans, the President is focused on that issue, and that's why he's raised these issues in terms of the Homesteading Act. Giving people a stake in their community through ownership allows them to also benefit. Giving them a stake through small businesses, through the GO Zones, and those opportunities, giving them an opportunity by having a worker account, a personal worker's account is important to that person getting the skills that allow him or her to improve their personal lives and have choices before them.

So this President has been very focused on it, and these proposals are very much part of a heart of that as far as this region is concerned.

Q Scott, two areas, if I may, please. The President last night mentioned briefly the cruise ships and mobile homes. How many cruise ships are being chartered, how long will they be available? And, two, the mobile homes. Where are you getting them, where are you going to park them, and do those also come under the homesteading situation? Can people buy those instead of fixed pieces of real estate?

MR. ALLEN: That's a great question, in terms of homesteading. Where the cruise ships -- currently there is a cruise ship that is in the Port of New Orleans there. There is a second one that has arrived within the last couple of days that is near St. Bernard Parish. Those are primarily being used for people who are working and participating in the reconstruction immediately thereafter. So those are not long-term solutions. The mobile --

Q That's for the first responders, the firefighters --

MR. ALLEN: It's for the first responders, firefighters, but also other workers for getting business back on -- started up.

In terms of the trailers and other temporary mobile homes and housing, there are several places that they're being sited. First of all, they're being sited again for longer-term law enforcement, firefighters and responders; secondly, for those who are participating in the recovery effort outside of that primary law enforcement group; and then, thirdly, for individuals who, for example, had their private homes destroyed, have a lot, needs to be cleaned off. Some of those will go there. We're working with state and local officials about the situs of other -- of the trailers that will be coming in, and these were purchased by FEMA from all over the country under their contract authority. Many come from the region, itself; others will be coming from around the nation.

Q In addition to the Davis-Bacon waiver, did the administration also suspend or provide a waiver for affirmative action rules under, I believe, the Office of Federal --

MR. ALLEN: No. In fact, what was suspended is the requirement for a written affirmative action plan. That is what was suspended as a part of the procurement policy. And what that did is it simply says that a company that is choosing to do business in this area does not have to have a written plan. It does not relieve anyone from the requirements of equal opportunity. For example, federal contractors will continue to be subject to non-discrimination requirements and will be required to post the "Equal Opportunity Is The Law" notices. They will have to still keep and retain records.

The purpose for the waiver of Davis-Bacon and other regulations was to remove red tape so that we could get at more small businesses, medium-size businesses that do not currently contract with the federal government, to get them involved in this activity. And that includes minority and women-owned businesses, small disadvantaged businesses.

Q What is the response to the concern, though, that this could open the door for a broader application of the suspensions and waivers down the road?

MR. ALLEN: During the hurricanes of '92 under President Bush 41, President Bush -- we had waived the Davis-Bacon at that time, both for Andrew and -- I forget the other hurricane that we had -- Iniki -- that's right, Hurricane Iniki. And so this is something that is done to get the recovery effort going quickly. We have not seen evidence of abuse of that, in fact, we've seen just the opposite. We see opportunity opened up for many who otherwise would not participate in the federal contracting process.

Q To go back to housing for a second. You had several categories of folks, but I'm still a little unclear. Do you envision that the federal government would ultimately pay for someone's house to be rebuilt if they didn't have insurance or the means to rebuild it themselves?

MR. ALLEN: Under the current law, FEMA provides assistance -- that's part of the up to $26,000, and a part of that is used for housing costs that otherwise would not be covered by insurance. And so for those who have insurance, that will take first, and the $26,000 will go for what it doesn't cover. For others, we will certainly have to have permanent housing solutions. But part of that is tied very closely to getting jobs. And that's why we're looking at this package of housing as a part of a recovery package for individuals.

Q How is it tied to getting a job? In other words, you have to get a job to be able to afford a house?

MR. ALLEN: Well, I think for most of us, in order to be in a house, whether it's rented or owned, we have to have some way to pay for it. And so it's critical that we get individuals who have been displaced back to work. And that's why the President focused on the personal worker -- the worker personal accounts, worker recovery accounts. That's why we focus on homesteading. But that's why we're also focused on making sure that where people are, that they get the assistance that they need for the immediate term so that they can get back on their feet and begin to make decisions for themselves.

MR. McCLELLAN: We'll have a few more. Kelly.

Q Two quick questions. You have repeatedly referenced this needs to be done quickly. Do you have a time frame for, kind of, a schedule of the infrastructure rebuilding? And to Claude, the extensive use of mobile homes in an area where we're still in a hurricane season and those are often the least defensible type structures -- how do you deal with those?

DIRECTOR HUBBARD: With respect to expediting the recovery, economically -- one, on the incentives that the President announced last night there's a 12/31/07 drop-dead date. So people, to receive those very generous benefits, are going to have to respond very, very quickly.

And then with respect to the infrastructure, everyone in government, FEMA, et cetera, and I know from talking to the Department of Transportation, all of the -- I shouldn't say "all," but the contracts about which I've spoken with them, the contracts that we've talked about, they've had significant incentives as a part of those contracts to encourage early completion. And this is on rebuilding homes and rebuilding other infrastructure.

Q Do you have a goal then for the --

DIRECTOR HUBBARD: As soon as possible.

Q Can you just clarify that? When you say 12/31/07 is drop dead, is that for people to apply, or is that when the programs end?

DIRECTOR HUBBARD: That's when you must have your equipment operating, your structures built, et cetera.

MR. ALLEN: And in terms of housing, the federal government will be in support of the state and local government in terms of decision-making. But there are some factors that we think that state and that local government needs to consider, including the fact that high concentration and high -- densely populated areas with mobile homes can not only be a challenge in terms of it's still the hurricane season, but also environmental issues, social issues in terms of making sure that you have access to law enforcement, fire -- all of these issues have to be weighed in. So we have our folks working through the various agencies -- Housing and Urban Development, with Secretary Jackson, HHS on some of the health issues, Environmental Protection Agency looking at other environmental issues -- we'll be working very closely with them to do that.

However, let me make it very clear; we believe that it is important that people -- these trailers, wherever they're located, need to be available to jobs, they need to be available to other important services, and they should not repeat what we've seen has been a problem in this region, and that is, is people isolated from those opportunities that give them the opportunity for a bright future -- a brighter future. And so we would not want to see high volumes of trailers concentrated together that once again creates an isolation that has in many ways led to the social problems that we've seen in this region.

Q I believe the three major initiatives -- the Go Zones, the homesteading, et al, require congressional approval, right?

DIRECTOR HUBBARD: That's correct.

Q When will that be going to the Hill, and what are the prospects, and when might there be a timetable for action?

DIRECTOR HUBBARD: Well, I know the President wants this done as quickly as possible.

MR. ALLEN: In the education area, Secretary Spellings, again, from the very beginning, has been working with Congress to address these issues. And so we also would hope to see very quick action in the Congress on these issues.

Q Is there any feedback from the congressional leaders about, you know, when they might move on this stuff?

DIRECTOR HUBBARD: Well, I've spoken with --

Q "As quickly as possible" doesn't necessarily mean that on Capitol Hill.

DIRECTOR HUBBARD: You know Congress better than I do. I've spoken with Chairman Thomas, Chairman Grassley about these proposals. They're very supportive. And, again, we're very hopeful that Congress will move very quickly.

Q Al, when you say that rebuilding the cities will be extremely expensive, doesn't that sound to you or to us like hundreds of billions of dollars?

DIRECTOR HUBBARD: Again, it's going to -- it will be significant. There's no way for us to estimate exactly what it's going to be. We can't speculate, but we know it's going to be expensive. We've already spent -- committed $62 billion, and that's a lot of money. And this President wants to make sure that every penny that -- he wants to spend every penny that's necessary, but no more than is necessary. And that's his commitment.

Q If you're unable to say what the price tag is, why shouldn't that be seen as the President promising a blank check?

DIRECTOR HUBBARD: Well, again, the President is committed to -- as he said last night, the federal government is responsible, and he's committed to paying for a large proportion of the rebuilding of the infrastructure.

MR. McCLELLAN: And a couple things --

Q What --

MR. McCLELLAN: Hang on, April.

This will take more assessment to determine what the longer-term reconstruction is. This is going to be, as the President said last night, one of the largest reconstruction efforts ever. We're going to make sure that we meet the needs of the region and the needs of the people. But the President also talked about how we're going to spend that money wisely, and that's why he talked about the IG teams that have been dispatched to the region, to look after that.

Q Can I ask, beyond these IG teams, will there be a White House involvement in deciding who gets the contracts for rebuilding the cities?


Q So who makes the decision who gets those contracts?

MR. ALLEN: The contracting officers.

Q There will be no role here?


Q Okay. And my other question is -- education is -- on the education question. The Department of Education has already asked for a waiver that will allow shelter evacuees to be educated isolated from the communities they're in, and we're talking about this issue of racial separation. My question to you is, how long would you allow funding to go to states that allow kids to be educated separately?

MR. ALLEN: I think the idea that was envisioned there is that in some of these circumstances you'll have to create temporary school systems, temporary school locations. And so the envisioned -- not long-term. For example, under the proposal, the Department of Education will dispense money three times throughout the year. The goal is, is to look at it at each semester or interim, and many of these kids will move into -- very likely move into other schools or return back to the place from which they evacuated. So the idea is that we will look at this very closely.

The purpose is, again, that schools will provide education. We're not relaxing the No Child Left Behind laws and requirements for annual performance, nor will we allow for the type of desegregation I think that you're raising as an issue. But, again, in this emergency situation, we're working with the school systems that have been willing to take them in.

Q Are they making charter, sort of, schools, these evacuee schools? Or will they be educated by the state school systems?

MR. ALLEN: The funding is provided to the local system that allows for public schools, charter schools and parochial schools to be reimbursed. So if a school district or a group decides to go in and create a charter school, that the local education authority will then have funding to fund for that activity. So it does envision the choice of all three types.

MR. McCLELLAN: I'll make this the last one, and then we need to do the week ahead. Then you've got the prayer service coming up.

Q On the Hill this whole issue is provoking a debate over whether to delay the tax cut extension that had been discussed. And there's some people that want to press ahead and have the tax cut extensions that are in consideration. I wanted to see where the White House is going to come down on this debate. Are you willing to forgo extension of the tax cuts in order to speed action on this proposal?

DIRECTOR HUBBARD: The important thing, as I mentioned earlier, is that we do everything we can to support this great economy that we currently have, with 4.9 percent unemployment, over 2 million jobs created in the last 12 months, I think 3.7 million since May of '03. And the last thing in the world we need to be even thinking about is raising taxes. A strong economy is what is going to pay for rebuilding the affected areas. And this President is committed to ensuring that this economy continues to grow in a robust manner.

Q Will Katrina have a fallout, a ripple effect on the economy?

MR. McCLELLAN: Thank you all.

Q Scott, I've got one for you. I thought that one of the more significant things the President said last night was that in a future disaster he wants to see greater federal authority and a broader role for the military.

MR. McCLELLAN: That's an important issue that needs to be looked at.

Q How do you do that?

MR. McCLELLAN: Well, that's one of the issues that we will be looking at as we move forward. I think it's an issue that Congress will be looking at as part of their joint bipartisan committee investigation, or their joint investigation. And, certainly, one of the things the President announced last night was that we're going to -- we're doing a comprehensive review. All the Cabinet departments have been directed to do a comprehensive review of their actions. And we'll be looking at the coordination between federal, state and local level -- Congress will be.

That's a really important question, an issue to address as we move forward, because, as you know, there are questions about the coordination efforts and the responsibility and the communication problems that came with it. And the President talked about how the military brings with it the logistics and the communications capabilities and everything else to be able

to --

Q But how do you supercede the state authority?

MR. McCLELLAN: Well, like I said, these are all issues that you will look at as you assess and learn lessons from this disaster. So that's one of the -- that's a fundamental question that needs to be looked at for a storm that is not your normal storm, as he put it. This is one like we've never --

Q It was a perfectly normal storm.

MR. McCLELLAN: -- one like we've never seen before. John, I think if you talk to the people in the region like the President has and we have on our visits, he's talked with the mayors and the county supervisors yesterday. They said -- they, themselves, were expressing this is something like we've never seen before. And this is a storm that is unprecedented.

Q I mean, the storm -- the storm, itself, was a perfectly normal storm. It's just that it hit exactly where all the worst case scenarios -- it actually didn't hit quite --

MR. McCLELLAN: So it was not your normal disaster, natural disaster.

Q Well, but Scott, it was all -- it had all been gamed out for decades.

MR. McCLELLAN: Well, you can have a different opinion, but I think most people disagree.

Q Scott.

MR. McCLELLAN: Go ahead.

Q Follow-up on that. Would the President favor repealing the Posse Comitatus Act, which prohibits the use of active duty forces --

MR. McCLELLAN: I mean, that's -- that's an issue that you raise, which prohibits the military from engaging in law enforcement actions. And that's an issue that -- when you're talking about the response that's needed for a storm of this magnitude and this scope, it's certainly something that came into play during all the discussions when you're looking at the response from the federal government.

And when the state and local people are overwhelmed in many ways, yet they're the ones tasked with the responsibility for being the first responders, then what do you do? And so that's an issue that needs to be looked at. That's one of the issues that comes within that context.

Q Follow-up question --

Q -- or do we need congressional action?

MR. McCLELLAN: I'm sorry?

Q The Commander-in-Chief can't issue a waiver?

MR. McCLELLAN: Oh, I don't know about that. Go ahead, John.

Q What's the week ahead?

Q Follow-up question with --

MR. McCLELLAN: Hang on. Hang on. John and then --

Q You're talking about troops coming in the area. Mexico's army, for the first time since the fall of the Alamo, was recently in Texas to help with the mopping-up operation and helping the people get resettled and help the evacuees. The President thanked them in the Spanish language. Are any other countries sending --

MR. McCLELLAN: In Mississippi, he met with some Mexican naval personnel that were there helping clean up around one of the schools and thanked them. He was with the governor and congressmen from the region. That was just last week. What's your question?

Q My question is, are military or naval personnel from any other countries -- and by the way, it's been reported as army personnel in certain --

MR. McCLELLAN: Well, the one in Mississippi that he met with, they were naval personnel.

Q Right.

MR. McCLELLAN: But yes, I know, I think that there's probably others, as well.

Q Other countries are sending their troops over here?

MR. McCLELLAN: Oh, John, I think you'd have to check with State Department. I can do that -- I can do that, as well. I mean, there have been -- there's been enormous offers of assistance from around the world. I don't know -- I don't personally know of other instances, but -- well, let me take that back, because Canada, I think, provided some helicopters and maybe another country. So I'd have to double check all that.

Go ahead.

Q Scott, can you go --

Q How about Venezuela and Cuba?

MR. McCLELLAN: I answered Cuba a few times last week.

Q Scott, can you talk a little bit about the Putin visit and the meeting and what the President expects from the meeting and how he views Russia these days, and all that sort of thing?

MR. McCLELLAN: Yes, I mean, the President has a good relationship with President Putin. It's one where they have had constructive discussions on issues of importance to both of us. I think they've also been able to speak candidly with each other because they do have a good relationship. I imagine they'll be talking about the war on terrorism. That is something that is high on both of our lists. I imagine Iran will come up in the talks. Certainly, they'll be talking about how we can strengthen our relationship. And let's let the meeting take place, and you'll hear more from them at the press availability, and then have an opportunity to ask some questions, as well.

Q What about next week?

MR. McCLELLAN: Week ahead.

Q Is that the whole week?

MR. McCLELLAN: I've got Monday through Friday, with the exception of a little bit of a hold on Tuesday. (Laughter.) So I think that's pretty good.

On Monday, the President will participate in a Homeland Security Council meeting. Then he will meet with the Prime Minister of Thailand, Prime Minister Thaksin. We're putting out a statement on that momentarily.

On Tuesday we'll be traveling back to the region. No more information than that at this point.

On Wednesday the President will be here to make remarks to the Republican Jewish Coalition's Anniversary Luncheon. Then he will meet with the -- with his Commission to Strengthen Social Security.

Then on Thursday the President will be here in Washington, where he will make remarks on the war on terrorism. And he will also be meeting with King Abdullah of Jordan. We'll be putting out a statement on that, as well, momentarily.

On Friday the President will participate in the participation of the Medal of Honor, and then he will participate in the 2005 National Book Festival Gala Performance here in Washington.

That's what I've got. We will see you all a little bit later today.

Q How about the weekend, this weekend? When is he back, Sunday?

MR. McCLELLAN: This weekend? I believe it's Sunday.

Q -- speech today?

MR. McCLELLAN: I'm sorry?

Q -- comments today?

MR. McCLELLAN: It's not long. I mean, it's -- I don't know the exact length. It's not something we timed. It's relatively brief.


END 10:24 A.M. EDT

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