12:47 PM CST on Thursday, January 12, 2006

Nedra Pickler / Associated Press

BAY ST. LOUIS, Miss. -- President Bush, visiting the hurricane-ravaged Gulf Coast Thursday for the first time in three months, hailed marked improvement despite warnings to lower his expectations about the pace of recovery.

Evan Vucci / Associated Press

New Orleans Mayor Ray Nagin, right, looks on as President Bush gestures during a discussion with small business owners and community leaders on Thursday, Jan. 12, 2006 in New Orleans, La. Bush proclaimed post-hurricane rebuilding as a top priority for 2006, and highlighted the Gulf Opportunity Zone that Congress has declared in the regions hit by Hurricanes Katrina and Rita.

"I will tell you, the contrast between when I was last here and today is pretty dramatic," Bush said. "From when I first came here to today, New Orleans is reminding me of the city I used to visit."

The president met privately with small business owners and local government officials in the New Orleans visitors bureau, located in the Lower Garden District neighborhood that was not flooded. The area suffered little impact from the storm, and his motorcade passed stately homes with very little damage.

Bush praised the city's success in bringing much of its infrastructure back -- if not most of its citizens and businesses. He touted it as a "great place to have a convention" and as an attractive tourist destination.

"It's a heck of a place to bring your family," said Bush, seated before a colorful mural depicting jazz musicians, a river boat, masked Mardi Gras revelers and crawfish. "It's a great place to find some of the greatest food in the world and it's a heck of a lot of fun," he said.

After meeting with Mayor Ray Nagin and other elected officials, Bush was restating his commitment to rebuild during a speech in the crumbled town of Bay St. Louis, Miss. There, trees still lay snapped in half, debris is strewn across the landscape and people are living in tents and trailers in front of homes with missing roofs and shattered windows.

Many commercial buildings were destroyed. Some of those still operating among the wreckage displayed yard signs that said, "We are staying!"

Bush's message was that although recovery will be long and expensive, the federal government is in it for the long haul, said White House spokesman Trent Duffy.

"The destruction down there looks like it just happened yesterday," Duffy said. "It's easy for people outside the region to forget the challenges they still face."

White House chief of staff Andy Card said Wednesday that although the emotions from the immediate aftermath of Hurricane Katrina have passed, there is still need for government help. He said he warned Bush to be prepared to see lingering destruction.

"I had to manage his expectations this morning, because while there has great progress, there continues to be great need -- indescribable need," Card said in a speech to the U.S. Chamber of Commerce.

Card said the Gulf Coast economy is struggling and only about half of the 90 million tons of debris from Hurricane Katrina in August has been cleared.

In New Orleans, many neighborhoods are still abandoned wastelands, with uninhabitable homes, no working street lights and sidewalks piled with moldy garbage. The levee system is as vulnerable as ever. Barely a quarter of the 400,000 people who fled have come back, demographers estimate.

Bush said from the visitor's bureau that the federal government has made $85 billion available so far to hurricane recovery, $25 billion of which has been spent.

He rapped Congress for diverting $1.4 of the levee rebuilding money to non-New Orleans-related projects. "Congress needs to restore that $1.4 billion," he said.

Bush hasn't been to the coast since a trip to Louisiana and Mississippi Oct. 10-11.

He was initially criticized for a slow federal response to the disaster, then made eight trips to the region in six weeks, and the White House hardly went a day without an event or mention of the challenges there.

Then Bush shifted his focus to Iraq and a series of recent speeches designed to defend against growing criticism of the war. Eager to show that his attention to Katrina victims continues, the White House announced last month that the government would pay to rebuild New Orleans' shattered levee system taller and stronger than before -- but not necessaarily to the level that local officials wanted.

Before returning to Washington Thursday night, Bush planned to attend a Republican National Committee fundraiser at the sprawling oceanfront estate of Dwight Schar in Palm Beach, Fla. Schar is CEO of NVR Homes, a major homebuilder and mortgage banking company, and co-owner of the Washington Redskins football team. He raised more than $200,000 for Bush's re-election campaign.