Richard Baker, a man with the plan
Popular housing plan has helped re-define longtime congressman
Baker, now 58, provides an unconventional answer when asked why he got into politics in the first place. His mother-in-law, who used to hold backyard meetings for local politicians in north Baton Rouge, inspired him to run for office. Meanwhile, his father, a Methodist preacher, instilled a capacity for public responsibility in him.
For those who know the Republican darling, this worldview probably makes a lot of sense. In Washington, D.C., Baker is viewed as an introspective policy wonk, a man who keeps to himself and focuses only on issues where he can make a dramatic and real change, dogging the topics until they yield something tangible.
And it’s that gentle tenacity that has come to define Baker -- until now.
In the week following the landfall of Hurricane Katrina, as Louisiana’s elected officials ran around wildly trying to score national media interviews, Baker was nowhere to be seen. That’s because he was behind the scenes, working on a plan that would ultimately be heralded as a singular solution to recovery. Baker, however, admits his proposal for federally-backed buyouts of flooded homes in the devastated region is not the end-all answer.
“I thought this would be one contribution in a complicated mix,” Baker revealed in an interview last week. “Probably the most surprising thing to me is not the attention it has gotten, but the lack of alternatives. I still don’t have an answer to that.”
Gov. Kathleen Blanco is pushing her own housing plan, albeit significantly more modest, but she doesn’t have the drama attached to her efforts like Baker does -- facing off against the President, twisting arms from his own party and watching the concept tick along on life support as fellow conservatives take their swipes.
Even though the passage of the Baker plan is now questionable, or even dead in many ways, the crusade can be confidently credited for pressuring the White House into proposing another multi-billion dollar relief package for the state’s housing needs.
Ironically, that same proposed allocation can also be held responsible for knocking nearly all of the wind out of the Baker plan and bestowing Blanco’s proposal with more credibility. The end result could be a battle of the plans between a congressman and a governor, although both sides have voiced a willingness to work together.
Through all the turmoil and political strife, Baker says he has managed to offer people hope. Politically speaking, he has also built up a nearly unstoppable momentum from the national press coverage and statewide praise. He speaks from the heart about his intentions—or lack thereof—for the upcoming governor’s race, and appears hopeful as the odds-on favorite to become the next chairman of the U.S. House Committee on Financial Services.
Wherever his path leads, though, Bakers says he is prepared for the future, largely because he knows where he has been.
The Hayride Years
Given his own father’s philosophical career choice, the obvious path for Baker would have been in the church. In many ways, the congressman still flaunts the required characteristics. He’s got that preacher charm—a slight southern drawl, motivational phrasing and an animated conversation style. Alas, the clerical life was not for him.
Instead, Baker pursued a geology degree at Louisiana State University, turning down a football scholarship from the school because he was more interested in being a student than a linebacker. While on a fieldtrip in Texas during his junior year, chewing on limestone to determine its grain, Baker said a heavenly voice pushed him in another direction -- politics.
While still finishing up his studies at LSU in 1971, Baker was elected as a Democrat to the state House of Representatives at the age of 22, becoming one of the youngest ever to serve in the Legislature.
“When he got in the Legislature as a rookie, he dug in like no other legislator since and started looking into the Department of Highways,” said C.B. Forgotston, who worked as a staff attorney for the Legislature during the 1970s and then as chief counsel for the House Appropriations Committee
“He didn’t ask the staff to do anything,” Forgotston added. “He learned everything himself. He got in and got his hands dirty, learning everything from the administration down.”
During one televised debate with the agency head, Baker dropped a bombshell by uncovering an annual expenditure of $2.3 million for snow removal—in Louisiana. It provided Baker with instant credibility in the Baton Rouge region, and the opportunity to serve as chairman of the transportation committee.
“That’s when I gained great appreciation for doing your homework, learning your subject, not opening your mouth until you’re sure, and then once you get it in view, don’t stop until you get there,” Baker said.
Upon the Hill
After switching parties to join the GOP ranks, Baker was elected to the U.S. Congress in 1986. And it didn’t take Baker long to learn the ropes. Like he did in Louisiana, Baker followed his own path and intensely focused in on one topic -- this time it was financial institutions -- and he became the House banking committee’s resident expert on the issue of systemic risk.
Prior to Katrina and Rita, Baker was best known for his quest to reign in Fannie Mae and Freddie Mac, fighting for major regulatory reforms in the mortgage finance industry long before any accounting irregularities were revealed. He was given his own subcommittee and led the way with hearings on the Enron scandal and mutual fund reform.
In 2001, Smart Money magazine named Baker among the world’s 30 most influential people in investing who have “the greatest impact on your financial health.”
And all the while, Baker did it his own way.
“He's seen as more of a loner than as an insider,” said one high-ranking Democratic staffer. “I say loner not in a negative way. Some loners don't work well with others, but he does work well with others. He is a very effective lawmaker on his issues. Though he's somewhat quiet and unassuming, he's a brilliant public speaker when he's really wound up.”
Slaying the proverbial dragon quickly became Baker’s shtick, but his most challenging task was still ahead.
The Birth of a Plan
Baker’s plan to create the Louisiana Recovery Corporation, which would oversee an extensive rebuilding of housing in the hurricane-stricken areas, was a reprieve from uncertainty in the months following Katrina and Rita. No other plans were being put forth by elected officials and, aside from levee board consolidation, it seemed to be the only concept the public was backing.
Nationwide, the LRC bill received favorable editorial comments from all along the ideological spectrum, the so-called liberal New York Times, left-of-center Washington Post and ultra-conservative Mobile Register. Seemingly overnight, the Baker bill became a policy juggernaut.
While the issue itself is still alive, the LRC plan is starting to resemble a closed chapter in the hurricane history book, a rallying crusade that came up short. Many of those who surround Baker on a regular basis contend he is taking the hits personally.
It’s not widely known that Baker’s roots run deep in New Orleans; he was actually born there, as was his mother. But the political side of the brawl has been devastating as well.
Last year, during the first life of the plan, Baker had to fight off what one staffer referred to as "theoretical think-tank conservatives in D.C. who believe that government shouldn't do anything like this.” And that was just in committee, from members of his own party. Then the measure stalled in the Senate and all hopes turned to this year’s congressional session.
Lawmakers in Louisiana’s delegation say Baker has been cooperative and flexible throughout the process, with a willingness and openness to work with anyone to modify the plan. That's why it was considered so strange that the Bush administration hasn't worked closer with Baker to try and fashion something they could live with. They essentially shut the door on him.
“I was very disappointed,” Baker said. “I thought we were in good faith negotiations with the President’s people.”
In an op-ed column carried by The Washington Post earlier this month, Donald Powell, the administration's hurricane recovery coordinator, expressed a staunch opposition to the Baker plan by the White House.
When asked about the incident later, Baker revealed he was “surprised” and had no idea the op-ed piece was going to run.
“That was a departure of expectation,” Baker said.
The worse, however, was yet to come.
Dead or Alive?
Roughly two weeks following the op-ed piece, the White House dealt a death blow when President Bush announced he would request another $4.2 billion from Congress to help Louisiana repair, rebuild or buyout flood-damaged homes.
The news sent vibrations through Baker’s offices. While it’s likely the money would have never materialized without the pressure from the popularity of the Baker plan, it was certainly meant to kill the plan politically and offer the state an alternative.
Another deciding factor will be how the governor’s housing plan develops, and whether the federal government views it as a more attractive alternative to the Baker plan.
Congress also has to give approval to the President’s $4.2 billion aid proposal, which will have to happen through federal legislation. As a congressman, Baker enjoys the luxury of having a major say in that process, whether his own plan fails or not.
“It will be subject to amendments, and you better believe I will be involved in that,” Baker said.
The entire debate, in fact, seems to be boiling down to a battle of the plans.
Denise Botcher, Blanco’s press secretary, said the governor has always been supportive of the Baker plan and was “very disappointed” when the White House took an opposing stance.
“The governor won’t abandon hope until [Baker] does. She would do whatever he asked of her. But she had to continue to press upon the White House. We still want to fight for it, but Congress gave us this other mechanism,” she said, referring to the recent rash of federal housing money proposed for the state.
Blanco’s plan, which failed to gain the support of the Legislature during the recent special session, is still in the preliminary stages, but the governor says it would only address residential properties. In a speech last week, Blanco told a group gathered in Lake Charles that assistance for homeowners would be capped at $150,000, and they would be able to sell their homes at 60 percent of the pre-storm value. The governor plans to address the entire coastline, but it’s still unclear how lenders will be handled, if at all.
“I don’t know how the governor’s plan helps everybody,” Baker said. “What has happened is now there is an uncertainty created by the governor’s plan. It will take some time to see how the governor’s plan will work. We need to have more of a conversation on where the state plan will lead us, versus what I have proposed on the federal level.”
Baker’s proposal, meanwhile, would form the LRC, a quasi-public corporation that would be underwritten by federal money and loan guarantees. It would address buyouts for both residential and commercial structures, acting as a middleman between homeowners and lenders.
As crafted, the plan would include a $500,000 payout cap for property owners. In some cases, homeowners could receive at least 60 percent of the value of their land, and lenders could receive up to 60 percent of what they are owed. It would cover the entire coastline and allow for certain waivers, like holding new buyers harmless and exempt from pre-existing environmental laws.
As for what will eventually happen to his plan, as well as the governor’s, Baker doesn’t dare venture a guess. Recovery will have to proceed one way or the other, and housing will need to be addressed along the way. For now, Baker said he can only take deep breaths and wait for the outcome to snake its way through the system.
“I’ve learned just to take it one newspaper headline at a time,” Baker said.
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