Deal yields $3.1 billion to strengthen levees

Process to take two years
Officials on Thursday said the levee system would be rebuilt to its previous level of protection before the hurricane season next year, and that the process of strengthening them further would take two years.

Nagin acknowledged that the most heavily devastated areas of the city — Lakeview and the Lower Ninth Ward — were not ready for returning residents, but he promised they would be eventually. He suggested that officials may need to find housing elsewhere in the city in the meantime.

“At the end of the day, our entire city will be rebuilt,” he said.

Gov. Kathleen Blanco and other Louisiana officials, as well as businesses and homeowners, have argued that the levees must be improved to protect against Category 5 storms if the New Orleans metropolitan area hopes to persuade people to return.

Such improvements would require federal funding. Early estimates ran as high as $32 billion, and it would take up to 30 years to complete the work.

Senate debating tax breaks
On Capitol Hill, meantime, Senate tax-writers embraced the casinos, golf courses and liquor stores as part of a roughly $7 billion program of tax incentives to rebuild Gulf Coast businesses damaged or destroyed by hurricanes.

The Senate could act as soon as Thursday on a package of tax breaks and other assistance that fulfills Bush’s call for a special business zone in the Gulf Coast. Lawmakers hurried to finish the bill before taking a holiday break. The House earlier had denied including the casino and other businesses in the tax relief.

The House last week passed its own package of aid. Its key benefits matched the Senate and included increased write-offs for small business investments and an additional write-offs for other businesses purchasing equipment and new property.

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