In the Aftermath:
Why We Need a New New Deal
By George Locker

On September 11th, a handful of men on a small budget carried out the ultimate act of globalization, exporting urban mayhem and the mass murder of civilians to New York City.

As the horror engulfed us, working-class New Yorkers and their neighbors poured out to respond, to volunteer, to comfort, and to bear witness. Public servants died serving their public. It was the muscle and machinery of the real economy that matters, not the computer and microchip of the new. In tragedy, we were magnificent. Everywhere, there was greatness in the acts of individuals. Meaning was to be found in real events. Everyone counted. Our monument to the widespread horror and destruction must be nothing less than rebuilding the city itself.

As a first measure, we must immediately create 100,000 public-sector jobs, at public-sector wages, for any person who lost work or a business as a result of the attack. This will help to cushion individuals and families, boost public morale, and improve city services and amenities.

We should build 50,000 units of affordable residential housing a year for 15 years, to eliminate the housing shortage; construct enough schools to reduce class size to 20 students; build the rail freight tunnel under the harbor, double the capacity of mass transit; and enhance the parks. How do we begin to pay for this? Is it the right time?

Before the attack, the nation and the city were staring a recession in the face. As the buildings crumbled, so went any hope of a soft landing for Wall Street and a reprieve for New York. Cleanup costs and tax losses will be staggering.

History instructs us that the size and depth of the economic contraction before us calls for our government to institute bold programs and not brutal cutbacks. In response to the Great Depression, Mayor Fiorello LaGuardia and President Franklin D. Roosevelt transformed New York with public-works projects of all kinds.

The immediate key to resuscitating New York’s economy lies in three sources of funds about which much is unknown even today: monies available under the Stafford Disaster Relief and Emergency Assistance Act, the $20 billion appropriated by Congress after Sept. 11, and private insurance payouts to public and private entities. The total money that could be available to rebuild is considerable.

The Stafford Act is a source of federal funds to reconstruct and rehabilitate areas devastated by disasters that "disrupt the normal functioning of governments and communities" and "adversely affect individuals and families with great severity." It enabled the Housing Act of 1937 for the provision of low-income housing, and the Public Works and Economic Development Act of 1965.

Of the $20 billion appropriated in the aftermath of the attack, it is said that $17.5 billion is earmarked for the needs of New York City. Because this amount is small in comparison to the total damage, and Congress will restrict its uses, it is crucial to spend this money wisely.

In this regard, the $17.5 billion and the credit it could generate should be used exclusively for public projects within the public sector, and which in turn are not covered by insurance payments or by funds available under the Stafford Act.

The third source of funds, insurance payouts for damage to property, has received little public discussion. We do know that many public entities were affected: the City of New York, the State of New York, the Port Authority of New York and New Jersey, the Metropolitan Transportation Authority, the Battery Park Authority, and so on.

Each of these public parties should specify its own property losses and its own insurance coverage. This should apply as well to the telephone and utility companies. Until there is an overarching city/state authority to coordinate all of the rebuilding and to allocate all of the expenses in a fair and equitable way, each entity, public or private, should be financially responsible for its own costs.

Finally, the rights of private parties, notably the 99-year leaseholders of the Twin Towers, remain murky. The provisions of the lease agreement with the Port Authority have not been made public; one cannot guess whether and how they addressed what would happen if the buildings were totally destroyed. It is impossible to have an intelligent discussion of the possibilities for the downtown site until these and other basic facts (or contentions) are made public.

Let us hope that the events of September 11th become the point of departure for a thoughtful and forthright campaign to make the city more just, egalitarian, and inclusive. A new New Deal would be the humane and intelligent response of a civilized people to the hateful and mad acts, the huge losses, the great sadness, and the perils ahead.

We owe this much to the victims, to ourselves, and to the fragile democracy we need to cherish and protect.

George Locker is a tenants’ attorney and a member of the Five Borough Institute.