New Orleans mayor: Where is the promised money?

Story Highlights

• Nagin says he doesn't want more money, just the money "already allocated"
• Mayor Nagin tells Senate panel: Hurricane showed "ugly underbelly" of poverty
• Red tape, race issues, funding for Iraq war complicating efforts, Nagin says
• President Bush insists reconstruction effort is "very robust"

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NEW ORLEANS (CNN) -- About half of New Orleans' residents have returned since Hurricane Katrina, but red tape and race and class issues have held up recovery efforts, Mayor Ray Nagin said Monday.

"I'm not asking for more money," Nagin told a Senate panel. "I just want the money you've already allocated to my citizens to help them."

He and other officials involved in reconstruction efforts appeared before a Senate "field hearing" on Gulf Coast reconstruction efforts, 17 months after Katrina devastated coastal Louisiana and Mississippi.

He said analysts at the University of New Orleans and a private research firm estimate the storm-ravaged city's population at between 230,000 and 250,000 -- little more than half its pre-Katrina population of about 455,000.

Those who have come back face a shortage of inhabitable homes and a spike in violent crime, which Nagin said police are working to address.

He said Katrina exposed "an ugly underbelly" of poverty, particularly among the area's black population, and he questioned whether the country had "the will to fix it."

"I think it's more class than anything, but there are racial issues associated with it also," Nagin said.

Billions have been allocated to rebuild region

Congress has allocated more than $110 billion to rebuild the region, but state and local officials have complained that the funds are not reaching residents who are trying to rebuild homes and businesses.

Nagin said more money would likely be needed, "but what I am more interested in is getting this money flowing quicker."

"This recovery is not moving as fast as it needs to move, and you are going to hear lots of justifications as to why it's not happening," he said. "But from my perspective, not having resources at the local level is the absolute killer of this recovery."

The August 2005 storm flattened beachfront towns and breached the protective levees around New Orleans, leaving more than three-quarters of the city under water. More than 1,500 people were killed across the region, about 1,300 of them in Louisiana, and hundreds of thousands lost their homes.

Don Powell, the Bush administration's reconstruction coordinator, told the three-senator panel that President Bush was committed to rebuilding the stricken region, as he promised in a nationally address after Katrina.

"I have spent countless hours with the good people of the Gulf Coast, and I have to say that this has been one of the most challenging, mind-boggling and frustrating times of my life," Powell said.

He added he was "humbled and inspired" by residents' persistence, and said his own frustrations "pale in comparison" to theirs.

The panel of three senators -- Connecticut independent Joseph Lieberman, the chairman of the Senate Homeland Security and Governmental Affairs Committee; Barack Obama, D-Illinois, a 2008 presidential hopeful; and Louisiana Democrat Mary Landrieu -- criticized Bush for failing to even mention recovery efforts during his State of the Union speech last week.

"I think it made a lot of people in New Orleans and Louisiana and those that are concerned all across the country wonder whether we're in danger of actually forgetting New Orleans," Obama said. "That's shameful. We should be ashamed if we forget."

Iraq war drawing funds away from New Orleans

Nagin suggested the war in Iraq, which has now cost about $400 billion, has drawn money and attention away from hurricane relief.

"I hear all these numbers, the hundreds of billions of dollars that are flowing. I hear the arguments about why they're not flowing, and then I look what we're doing in Iraq and how we can spend money at an unprecedented level there," he said.

Landrieu, who has been appointed to lead a subcommittee that will oversee the pace of reconstruction work, said that when the administration submits an expected supplemental spending bill to pay for the nearly 4-year-old Iraq war, "there better be funding to rebuild Louisiana and Mississippi."

Bush defended reconstruction efforts -- and their absence from his annual address -- in a Monday interview with National Public Radio, saying his administration has had a "very robust" response to the storm.

"I gave a speech that I thought was necessary to give," he said. "On the other hand, I have been talking a lot about Katrina and about the fact that I worked with the Congress to get about $110 billion sent down to both Mississippi and Louisiana to help them on their reconstruction efforts."

Concern over public housing

Obama also questioned when residents of the city's public housing projects can come home. Several buildings have been razed, and former residents have complained that few people have been allowed back to the units that remain.

Assistant Housing Secretary Pamela Patenaude said about 1,000 of the roughly 5,000 families who lived in public housing have returned to New Orleans, but Obama said said he was "dissatisfied" with the Department of Housing and Urban Development's response.

"There doesn't seem to be any assurance that there are sufficient affordable housing units being rebuilt for them to live," he said.

The hearing was interrupted at one point by a protester with a petition that demanded Lieberman do more to probe the White House's response to the hurricane, which was widely criticized as slow and inadequate. "We want somebody to stand up for justice," he yelled before being removed.

Lieberman said the committee delivered a "very strong indictment" of the federal response to the storm, even though the Bush administration resisted calls by Congress to turn over documents related to the hurricane.

"I think we understand what happened and didn't happen," Lieberman said.

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He said Landrieu's subcommittee could pursue the matter further and added that he does not rule out the use of subpoenas to obtain records from the White House.