The Big Easy highlights Bush's fiscal facade

The final blow, however, came in June. Louisiana state officials had been hoping a provision in the Senate energy bill calling for US$500 million in offshore energy revenue from the federal government would finally provide Louisiana and four other coastal states with the funds they desperately needed to repair their damaged wetlands to protect themselves, among other things, against possible weather-related disasters.

But the White House adamantly refused to part with the US$5 billion it gets from drilling in the Gulf Coast, its second biggest source of revenue (after the Internal Revenue Service), choosing to use most of those funds to finance the Iraq war.

To ensure that the message came across crystal clear, Bush ordered White House aides to take the unusual step of sending a letter to House and Senate negotiators advising them to kill the revenue-sharing plan in the final version of the energy bill.

The White House’s Office of Management and Budget released a policy statement in June that said the Bush administration opposed “the significant new funding authorisations and diversion” of Outer Continental Shelf revenue included in a national energy bill being discussed in Congress.

"Currently the federal government does share royalties with coastal states - more than US$3 trillion to date, in fact. Changing this amount only increases the budget deficit and diminishes the benefit the rest of the nation receives from these national resources," Scott Milburn, press secretary for the White House’s Office of Management and Budget, told The Associated Press in June.

“Disheartening,” “frustrating,” “upsetting” and “just another nail in my coffin” are how Louisiana senators, community leaders and coastal advocates responded to the news that the White House intervened and advised the Senate to defeat the revenue provision, according to a June 16 report in the Louisiana’s Houma Courier.

Ironically the erosion to the state’s coastline - which became considerably worse over the past five years - is due, in part, to oil and gas drilling in the Gulf, much of which takes place right in New Orleans. Although the state is responsible for repairing its coastline to support its oil and gas infrastructure, it barely benefits financially from the drilling that takes place in its own backyard.

“While inland states enjoy 50 per cent of the tax revenue from drilling on their federal lands, Louisiana gets back a mere $35 million of the $5 billion it contributes to the federal treasury each year from offshore drilling, or less than one per cent,” the Courier said.

In a written statement, Louisiana Democratic senator Mary Landrieu, condemned the White House position. Landrieu said the Bush administration simply could not  comprehend why Louisiana needed compensation for producing a bulk of the nation’s energy supply. Coastal oil and gas-producing states account for 25 per cent of the nation’s natural gas and 30 per cent of oil.

“The President’s statement indicates a failure to appreciate the burdens borne by the people of Louisiana and other coastal oil-and-gas-producing states,” Landrieu said.

It wasn’t long after the White House issued its statement on the revenue-sharing concept that Louisiana lawmakers predicted an apocalyptic end to New Orleans.

Louisiana civil engineer and coastal advocate Clifford Smith, who is also a member of the US Army Corps of Engineers’ Mississippi River Commission, told the Courier in June that without federal assistance New Orleans could very well drown if it took a direct hit from a hurricane.

"We’re not going to get the kind of recognition and concern we deserve until we have a disaster," he said.