Administration moved with incredible speed. Within hours after Hurricane Katrina made landfall, the Bush Administration was hard at work, taking care of big business while cutting wages and safety rules for working people.
More profits for the food industry
One day after Katrina made landfall, on August 30, Bush took care of his friends in the packaged food industry by changing the rules to allow the early entry of 2006 foreign sugar and the import of an additional 110,000 tons of Mexican refined sugar.
Some of President Bush’s best campaign fund-raisers, people who raise $100,000 to $200,000 for the Republicans, are top executives of packaged food companies. The official announcement from the Department of Agriculture justified the action because of Katrina, a “catastrophic hurricane,” and predicted the “forced closure of two major sugar refineries . . . in the New Orleans area.” All of this was done days before anything was known about the real extent of Katrina’s damage.
More profits for oil companies
Two days after Katrina hit, on Wednesday, August 31, the Bush administration suspended hours-of-service safety rules for truck drivers transporting gasoline, diesel fuel, and jet fuel. The safety rules were also lifted for drivers delivering emergency relief supplies. The waiver has been extended to October 26.
The Federal Motor Carrier Safety Regulations limit the number of hours for drivers because of serious and fatal highway accidents caused by fatigue or falling asleep at the wheel. Accidents involving large trucks cause about 5,000 deaths and 110,000 injuries each year. An estimated 85 percent of these deaths and injuries are the drivers and occupants of other vehicles, not the truck drivers. Studies point to driver fatigue as the cause of 10-15 percent
of these accidents.
Suspending the rules allows oil and trucking companies to require their drivers to work longer then 11 hours a day with less than 10 hours rest between shifts, thus increasing the risk of serious accidents and endangering the lives of every other driver on the road.
The Environmental Protection Agency also suspended federal fuel standards which prohibit the sale of high ozone and sulfur emitting gas and diesel fuel in the areas affected by the hurricane. The reason for allowing the use of “dirtier” gas and diesel is to prevent shortages in the available fuel supply.
Still more profits for Big Oil
On day three, September 1, at the urging of oil and shipping companies, President Bush quickly waived the Jones Act for oil and petroleum products, claiming it was necessary “in the interest of national defense.” The Bush Administration said the action was necessary because the hurricane might cause shortages of commercial jet fuel and gasoline for consumers in some parts of the country and this “threatens the Nation’s economic and national
security.” And since there are not enough American ships, oil refineries and shippers should be allowed to use
foreign ships to move oil and gasoline.
The Jones Act works to protect our safety and security by prohibiting foreign ships with foreign crews from operating within US waters and between US ports. Only American owned and operated ships can move cargo between US ports. Waiving the Jones Act allowed oil companies to use cheaper foreign ships to transport their oil, but did nothing to lower the price of gas.
It turns out there was never any threat to the national defense nor any shortages of gasoline or jet fuel. Instead, oil companies took advantage of the disaster, saved money on shipping, and still hit American consumers with huge increases in the price of gasoline. Thanks to President Bush, his friends and supporters in the oil business can expect record high profits that could top $100 billion this year.
The Jones Act waiver has been extended to October 24.
More handouts to big business
On Aug. 29, 2005, the day Katrina hit, Kellogg Brown & Root (KBR), a subsidiary of the Halliburton Co., was awarded $12 million under a cost reimbursement, indefinite-delivery/ indefinite-quantity contract to repair hurricane damage at three naval bases in the Southeast Region. On September 3 and 4, 2005, KBR got another $17.8 million to repair buildings and clear debris from more Navy installations in the South. On September 9, 2005,
KBR was awarded $15 million to help the US Army Corp of Engineers pump water out of New Orleans. All four awards were made as “task orders” and modifications to an existing KBR contract.
Vice President Dick Cheney ran the Halliburton Company from 1995 to 2000 and receives deferred compensation from the company and retains stock options.Halliburton has nearly $11 billion in US government contracts to support troops and restore Iraqi oil. The company is also under investigation by government auditors for
overbilling, waste, and unnecessary expenses.
By September 8, companies with political connections to Bush and the Republican Party like the Shaw Group, the Halliburton Company, Bechtel, and the Fluor Corporation were each given no-bid $100 million deals to repair damaged flood levees, build temporary housing for the displaced, and rebuild New Orleans’ public
infrastructure. With $62 billion and more coming in federal funds for Katrina relief and reconstruction, the Bush Administration will have plenty of government money to dole out to friends and supporters.
These contracts are cost-plus deals where the companies bill the government for whatever it costs, then add one or two percent as their profit. Since these companies already had contracts for work in Iraq, the Bush Administration simply added money for Katrina work to the existing contracts. In this way, federal money can be handed out without competitive bidding.
The Rev. Jesse Jackson likened the handing out of no-bid FEMA contracts to “white-collar looting.”
Still more profits for business
As an added bonus to KBR/ Halliburton and other construction companies, President Bush suspended the Davis-Bacon law on September 9 on all federally financed construction in areas hit by Hurricane Katrina. The law requires
companies to pay the “prevailing wage” on government construction projects and can be suspended in “a national emergency.”
The prevailing wage is a kind of average based on the hourly wage and benefits paid to the majority of workers in the largest city of each county. The idea behind the Davis-Bacon law is that taxpayer money should not be used to lower wages in a community, which would happen if the government were allowed to hire companies
that paid the lowest wages. Instead, the federal government is required to use companies that pay the average
or prevailing wage.
By suspending the Davis Bacon law, Bush is allowing companies with government contracts to pay less than the prevailing wage. This will have the effect of lowering all wages in the area, as companies that pay higher wages will have to cut wages to compete for federal contracts.
Louisiana already has some of the lowest prevailing wages in the United States. For example, the prevailing wage for carpenters working on federal building projects in New Orleans is about $15.00 an hour including benefits and a construction laborer would be paid about $10.60 an hour including benefits. At these wages, a construction laborer in New Orleans earns a little more than the federal poverty level for a family of four (11% more).
By comparison, the same work on government funded projects in Hawaii would pay carpenters about $50 an hour including benefits and laborers would earn about $38 an hour including benefits.
In his proclamation, Bush stated: “Suspension of the [Davis-Bacon prevailing wage] . . . will result in greater assistance to these devastated communities and will permit the employment of thousands of additional individuals.” Bush wants us to believe that construction companies would hire more workers instead of pocketing the extra profit.
The suspension of Davis-Bacon applies to affected areas in Alabama, Florida, Mississippi, and Louisiana and will remain in place “until otherwise provided.” In the past, the suspension of Davis-Bacon lasted only as long as the national emergency and did not apply to longer term reconstruction contracts.
Bush wants a similar suspension to lower the wages of service workers who would be cleaning up after Katrina. ◆