Blanco Focuses on Economic Recovery

Despite pointed accusations on the slow response to Hurricane Katrina leveled against her, Louisiana Gov. Kathleen Blanco (search) focused instead on economic recovery during a Senate hearing Wednesday.

Blanco was joined by other Gulf Coast governors in the Senate Finance Committee hearing as she called for tax relief, incentive packages and other programs to boost the region’s recovery. And Senate panel members made it clear they want to pass a health care relief package facing White House opposition.

"I am here because the proposals you are considering are about creating jobs. And that is what we need … jobs," the governor said during her opening statement. "We need jobs to bring our people home and restore our economy."

A day earlier, former FEMA chief Michael Brown (search) laid much of the blame at the feet of Blanco and New Orleans Mayor Ray Nagin (search) for the lethargic response by the government in dealing with Katrina.

Blanco and Nagin refuted Brown's claims Tuesday. But on Wednesday, given the opportunity to again respond to Brown's scathing statements from a day earlier, Blanco declined.

"Today, I came really to talk about job creation," she told Sen. Kent Conrad, D-N.D. Mississippi Gov. Haley Barbour (search) and Alabama Gov. Bob Riley (search) also testified via video conference before the committee.

Asked by Sen. James Jeffords, I-Vt., about FEMA's management of hurricane relief, Blanco replied that an independent commission should be formed to investigate, and "there are lessons to be learned. ... We can all work hard."

Blanco also outlined a number of initiatives she hoped Congress would support, including billions of dollars for recovery efforts, largely aimed at helping small businesses get back on their feet. Building better homes and neighborhoods is also imperative for a successful recovery of the Crescent City, she said.

"Katrina and Rita brought our economy to its knees," Blanco said.

While Barbour requested help for industries pummeled by the storm, including logging and oil production sectors, Riley waded briefly into the more controversial waters of federal power expansion but did not mention FEMA or Brown.

Although talk has been made of increasing federal powers, for instance, by letting the military take control after a natural disaster, “immediate response is always going to have to remain within the states,” Riley said. “Federal government brings a lot to the table in a lot of different ways, but the immediate 24- [to] 48-hour response period is going to have to be handled here” by the state, he added.

Riley requested the ability to have emergency assets in place in the state before storms instead of after, “rather than having to pick up the pieces later.”

When it came to health care relief, the governors said they were in favor of the Grassley-Baucus bill under consideration that would waive application restrictions for Medicaid coverage for all displaced Katrina victims and remove state limits for administering benefits.

Sen. Charles Grassley, R-Iowa, chairman of the finance committee, said a handful of senators have been blocking action on the bill. The Bush administration has objected to language that would extend Medicaid coverage to thousands in the Gulf Coast who otherwise would be uninsured.

Administration officials contend the Medicaid extensions are not needed because a newly created fund could be tapped whenever health care providers care for uninsured victims of Katrina between Aug. 24 and Jan. 31, 2006.

Sen. Trent Lott said he would do his best to try to move the bill forward.

"We can work with everybody, including the administration, or against them, and I'm prepared to go either way," Lott, R-Miss., said. "But I'm going to look after our people first."

But the administration has not revealed how much money will be in the fund, and senators questioned both the funding commitment and whether the administration has the authority to establish such a fund.

The easygoing hearing on Wednesday followed Tuesday's contentious action on Capitol Hill, in which a combative Brown laid blame — including against the White House that appointed him — for the dismal response to Hurricane Katrina.

Brown said the Federal Emergency Management Agency (search) worked well with Mississippi and Alabama in responding to Katrina, but that the leadership in Louisiana posed a problem because it was never clear who was in charge of the Bayou State.

"My biggest mistake was not recognizing by Saturday that Louisiana was dysfunctional." Brown said.

To that, Blanco defended herself on Tuesday, saying she was not negligent in her oversight of Louisiana's response to Hurricane Katrina as it roared ashore more than one month ago.

Brown resigned Sept. 12 after being relieved of his onsite command of FEMA's response effort three days earlier.

FOX News' Greg Simmons and The Associated Press contributed to this report.