Obama signs transportation bill heralded as 'triple win' for Louisiana

07 06, 2012 by The Times-Picayune

President Barack Obama on Friday signed into law a transportation bill that is expected to funnel billions of dollars in fines from the 2010 BP oil spill to Louisiana and four other Gulf states. The bill is the most significant for Louisiana adopted by the current Congress, which has been best known for bitter partisan battles.

The transportation portion of the bill allocates $679.8 million in the current fiscal year and $685.6 million next year in highway financing for Louisiana. For mass transit, Louisiana's share is $51.8 million in the current fiscal year and $57.9 million in 2013.

The bill also extends the National Flood Insurance Program for five years, though it allows premiums increases of up to 20 percent a year for some of the state's 500,000 policyholders, particularly those with repetitive claims or owners of second homes.

The bill also delays for one year a doubling of interest rates -- from 3.4 percent to 6.8 percent -- for subsidized Stafford College Loans.

But there's a substantial downside.

To help pay for everything, the law cuts $651 million in federal Medicaid assistance to Louisiana. The Jindal administration announced the cut will force elimination of "uncompensated care" financing for the LSU system medical facilities and elimination of programs that provide care for women with breast cancer and cervical cancer, as well as Medicaid support for foster children.

Also slated to be eliminated is Medicaid's hospice program and adult denture program.

Louisiana lawmakers objected to the cuts. But GOP members of the House Energy and Commerce Committee, who pushed for the cuts, said the $651 million slashed from the state's Medicaid program represents only a portion of remaining overpayments that resulted from a drafting error with 2010 legislation designed to protect Louisiana from lower federal reimbursement rates that state officials considered unfair.

The Restore Act funnels 80 percent of Clean Water Act fines from the 2010 BP spill to Louisiana and the four other Gulf States. The fines are expected to generate anywhere from $5 billion to $20 billion, based on the degree of negligence determined for BP and other parties responsible for the massive 2010 environmental disaster.

"The signing of the Restore Act into law is without a doubt the single most significant action taken to restore our coast in Louisiana's history," said Rep. Steve Scalise, R-Jefferson.

David Yarnold, president and CEO of Audubon, an environmental group, called the bill "the biggest conservation funding victory Congress has ever delivered." He said the benefits are substantial:

Each of the five Gulf Coast states will have the financial capacity to begin and complete restoration projects that have long been planned but underfunded.

Thousands of acres of lost habitat for birds and other wildlife in the region will be restored, repaired or replaced.

Much-needed re-engineering of the Mississippi River Basin will get a kick start, allowing that ecosystem to begin to rebuild itself and helping to reverse the disappearance of Mississippi River Delta wetlands.

Michael Hecht, president and CEO of New Orleans Inc., a business group, said it took an unusually diverse coalition to get the Restore Act enacted. He specifically mentioned Sen. Barbara Boxer, D-Calif., and House Majority Leader Eric Cantor, R-Va., for their support.

"We enjoyed support from important leaders in Congress," Hecht said. "And with over 100 organizations from Texas to Florida signing on with their approval, we also enjoyed unprecedented regional cooperation, as well."

Two weeks ago, Interior Secretary Ken Salazar said the Restore Act was a top priority for the Obama administration.

Sen. David Vitter, R-La., called the transportation bill and its Louisiana provisions a "real triple win for Louisiana -- the Restore Act; a very pro-Louisiana highway funding formula; and stable, long-term flood insurance."

Sen. Mary Landrieu, D-La., said: "This is a historic moment for our region. The Restore Act directs that 80 percent of the penalty money be invested along the Gulf Coast where the injury occurred when the Deepwater Horizon blew up more than two years ago. These funds will help jump-start, in a significant way, coastal restoration in Louisiana."