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GOP rift grows over role of U.S. in Katrina recovery


WASHINGTON -- Senate Finance Committee members accused the White House yesterday of blocking a bipartisan, $9 billion health care package for Hurricane Katrina victims.

The public display of the deepening dispute among Republicans over the federal government's role in the recovery effort came at a hearing where the governors of Alabama, Mississippi and Louisiana, the three states hardest hit by Katrina, pleaded for more federal help.

Louisiana Gov. Kathleen Babineaux Blanco told the panel that 41 percent of her state's businesses had been destroyed or forced to close. "To bring our folks home, we need jobs, housing and rebuilt communities," she said.

Committee members promised to consider additional tax breaks and other measures to spur reconstruction, but they spent much of their time fuming about the administration's opposition to the health care package introduced last week by Sens. Charles E. Grassley, an Iowa Republican, and Max Baucus, a Montana Democrat, the panel's chairman and vice chairman.

The debate over the legislation is a piece of the larger fight raging on Capitol Hill over the price of reconstruction and ways the federal government could offset some of the costs. The dispute has fractured Republicans, with House conservatives insisting on deep budget cuts to help pay for what is expected to be at least a $100 billion rebuilding effort.

Grassley's legislation represents a clear threat to conservatives' efforts to rein in costs and limit the federal government's role.

The legislation would temporarily extend Medicaid coverage to thousands of adult victims of the hurricane who would otherwise have no health insurance. Under the bill, the uninsured would get five months of coverage, and President Bush would have the option of extending the program an additional five months. It would also require the federal government to pick up the entire tab for Medicaid costs in Louisiana, Alabama and Mississippi for 2006.

Grassley and Baucus expected the bill to pass by a voice vote Monday, but it was blocked by two conservative senators, John E. Sununu, a New Hampshire Republican, and John Ensign, a Nevada Republican. In a speech on the Senate floor, Sununu said the time had come for senators to exercise greater caution in the relief effort.

"We need to do much more to try to find ways to cover this additional spending so we do not increase the deficit and leave an unfortunate financial legacy for future generations," he said.

Baucus warned Blanco yesterday that such opposition to the health care package was fueled by growing concerns in the Senate about how the $62 billion appropriated for hurricane relief has been spent.

Michael O. Leavitt, secretary of Health and Human Services, outlined the administration's opposition to Grassley's health care proposal in a letter sent to Senate leaders yesterday, calling it unnecessary and "inadvisable."

Leavitt's criticism triggered an unusual outburst and a rare threat from the normally taciturn Iowa senator at yesterday's hearing.

"I would suggest that people at the White House need to know that the chances of our getting a reconciliation bill moving out of my committee are very difficult if we don't get this behind us," Grassley said, referring to a key spending measure for the 2006 budget that his panel is supposed to finish by Oct. 19.

The threat elicited gasps of surprise from the packed hearing room. Normally one of the administration's staunchest supporters, Grassley had previously urged his Senate colleagues to quickly move the spending bill, which includes a recommended $10 billion in cuts to Medicaid over five years.

In other Gulf Coast developments:

More areas of New Orleans that escaped flooding from Hurricanes Katrina and Rita will be formally reopened starting today, Mayor Ray Nagin said.

The areas include the French Quarter, the central business district, and uptown with its historic Garden District. Business owners will be allowed in today, and residents tomorrow.

Saying they were caught off-guard by the number of people in need, FEMA officials closed a relief center early yesterday after some of the hundreds of hurricane victims in line began fainting in triple-digit heat.

The midday closing of the Houston disaster relief center came as officials in areas hit hardest by Hurricane Rita criticized FEMA's response to the storm, with one calling for a commission to examine the emergency response.

Former FEMA Director Michael Brown was warned weeks before Hurricane Katrina hit that his agency's backlogged computer systems could delay supplies and put personnel at risk during an emergency, according to an audit released yesterday.

Mary Curtius writes for the Los Angeles Times.

The Associated Press contributed to this article.

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