When you have no assets to start out with and no savings to rely on, and then your income stream is disrupted, something that might have been poverty with extreme hardship shifts into desperation.

Isaac Shapiro, a research analyst at the Center on Budget and Policy Priorities

They've become a new class of poor, one that makes the old class look well off by comparison. They have not only lost their jobs and their homes; they're also isolated from family and friends, putting them at great risk for depression and substance abuse.

"When you have no assets to start out with and no savings to rely on, and then your income stream is disrupted, something that might have been poverty with extreme hardship shifts into desperation," said Isaac Shapiro, a research analyst at the Center on Budget and Policy Priorities, a liberal think tank.

For some evacuees, however, Katrina and the attention it brought to America's urban poor may give them the opportunity to break free from the cycle of poverty, other officials said.

With about 1 million people fleeing the Gulf Coast again this week, there is the potential for more poor to join the ranks of the devastated. Hurricane Rita is expected to make landfall Saturday between Galveston, Texas, and the Texas-Louisiana border.

The challenges of helping as many as 900,000 displaced households as a result of Katrina fall on a number of federal agencies. The Health and Human Services Department oversees programs that provide health care and cash assistance. The Labor Department oversees job training programs. The Housing and Urban Development Department oversees voucher programs that subsidize the cost of housing. The Federal Emergency Management Agency has distributed over $1.5 billion in federal aid to more than 717,000 households.

Wade Horn, assistant secretary for children and families at Health and Human Services, said the federal government can help ensure that people get basic necessities, but it will take help from the private sector, namely civic organizations, churches and schools, to help the more destitute survivors recover.

"One of the things we know is that when people feel socially isolated from supportive networks, they are more prone to substance abuse, depression, a sense of helplessness and hopelessness," Horn said. "Part of what the private sector can do is, they can reach out and try to integrate evacuees into new social networks that can provide the social connectiveness and support that help people through times of crises."

Horn said the federal government has made it easier to apply for programs run by the states — such as Medicaid, the health insurance program for the poor — and to ensure that states are provided with the additional resources they need to serve the extra caseload. Soon, however, the government will have to make the transition from meeting the daily needs of evacuees to meeting their more long-term needs.

"What you don't want is to reinforce the sense that there is no vision for the future, that the best we can do is help you with the day-to-day stuff," Horn said. "That's a recipe for long-term dependency on government. It's a recipe for depression."

Horn said an example of a program designed to meet evacuees' long-term needs is a proposed $5,000 voucher that a survivor could use for job training, child care and an array of other services.

"When I talked to evacuees, one of the things that struck me was that so many of them were saying, 'As terrible as this was, this may have given me the opportunity to reassess my own life and to think differently about what opportunities are available to me,'" Horn said. "That, to me, is the great untold story."

Some Bush administration proposals go beyond helping evacuees get back on their feet. Surgeon General Richard Carmona has talked about rebuilding the health care system in New Orleans to include the latest improvements, such as computer databases containing patient records.

"Let's not automatically just rebuild a hospital because it had a certain amount of beds," Carmona said.

Bruce Katz, a scholar at the Brookings Institution, says the federal government should learn from its past mistakes of pushing poor people into certain neighborhoods by building all the public housing stock in those neighborhoods.

"Bunching poor people together in the same neighborhood has enormous implications for education, business investment and the health of families," Katz said. "The issue in New Orleans is not only about rebuilding a great American city, but it's also about undoing 50 years of mistakes of federal housing policy."

New Orleans residents and economists stressed that the great majority of people there were employed, even in the poorest of neighborhoods.

In what researchers call the inner city, nearly 87 percent of the adults worked, but their earnings were often meager. About 30 percent of those workers earned less than $10,000 a year, said The Initiative for a Competitive Inner City, which promotes inner-city economies through the private sector.

Father Michael Jacques, pastor of St. Peter Claver Church near the French Quarter, said: "The parishioners of the church I minister in are 80 to 90 percent below the poverty level. They didn't have much then and now they have nothing."

Copyright © 2005 The Associated Press

###