Washington: The Next Storms

The president's aides thought they had a lock on the headlines. George W. Bush had just embarked on his Asian tour with a surprise visit to Kabul. Within hours he would announce a breakthrough nuclear deal with India. But as they watched reporters scurrying around their New Delhi hotel last week, White House staffers grew anxious. News was breaking about some grainy footage of Bush at an August video briefing on Hurricane Katrina and its threat to the New Orleans levees. "What does it say?" one nervous aide asked a group of reporters gossiping about the wire story. Another simply shook his head. "I guess we know what you'll be focusing on," he said.

Some storms never seem to blow over. Bush's senior staff thought they'd made it through the worst political fallout from Katrina. They had admitted their failings, pieced together a huge package to rebuild the gulf region, and were ready to move on. But the old video served as an excuse to replay Bush's post-hurricane interview with ABC's Diane Sawyer, and his perplexing defense for the delayed rescue effort: "I don't think anyone anticipated the breach of the levees." Meanwhile, former FEMA chief Mike Brown just wouldn't let the subject die, breaking the Bush code of omerta to finger his old bosses in a seemingly endless round of TV interviews. Even the White House acknowledged the trouble. "The real damage of all this finger-pointing is... that it threatens to unravel what we've tried to knit back together," said White House Deputy Press Secretary Trent Duffy.

As his poll numbers sank back to their post-Katrina lows last week, Bush prepared to refocus attention on the billions of dollars he plans to spend on the Big Easy. This week he flies down to the gulf for his 10th visit, trying once more to woo the fractious locals in a region still buried in debris. This time he has something to shout about. After weeks of intense talks, his Gulf Coast coordinator Donald Powell dug up an extra $4.2 billion for housing, giving Louisiana homeowners up to $150,000 apiece to repair or rebuild. Powell, like Mississippi Gov. Haley Barbour, is a close friend of Karl Rove's, who has been deeply involved in all phases of the Katrina salvage operation.

But the new housing money won't be enough to restore smiles in the Crescent City. Republicans and Democrats in Congress are frustrated by the lack of progress on the ground, saying there are continued delays in producing FEMA flood maps. The maps will effectively dictate which blocks can survive, especially in poorer, black neighborhoods such as the Lower Ninth Ward. "Every day that goes by is another day that a homeowner can't rebuild their home... can't decide whether to take their kids out of school," says GOP Rep. Bobby Jindal. And New Orleans still lacks hospitals for its poorest residents, so doctors have set up clinics under tents. Last month thousands of residents got free treatment amid the animal houses of the Audubon Zoo, the only site big enough to cope.

Back in Washington, the Feds are still swamped by the scale of the disaster. At the Small Business Administration, officials cannot keep pace with the volume of loan applications from desperate owners. A healthy $5.6 billion in loans has been approved, but as of the end of last week, officials had paid out only $473,410. Some critics are questioning the qualifications of SBA chief Hector Barreto, who helped his father set up the U.S. Hispanic Chamber of Commerce. But the SBA says many approved applicants haven't collected loan money because they lack flood insurance or building permits.

Then there's FEMA itself. The administration is struggling to recruit someone to replace Brown, while members of Congress are complaining about the high turnover of staff in general. Brown himself accuses the administration of wanting to abolish FEMA entirely. Bush officials deny that, but say they want FEMA to know its place--under the control of Homeland Security. They had better sort it all out swiftly. Hurricane season begins in just three months.