That's right.
If there is anything that is proof of the simple, outright ineffectiveness of this administration's policy of under-funding the interior and spending our resources on totally useless crusades in the middle east, it is New Orleans.
According to DailyKOS, just 20 million dollars would have been enough to raise the levies enough that they could have significantly reduced the impact of the flooding in New Orleans.
There really isn't any scapegoat for the administration to put this on, everyone knows that it was funding at the federal level that just wasn't there when they needed it to protect the city.

What good is "fighting terrorism" abroad if we can't even maintain our infrastructure at home?

There just isn't any way around it: The government is less effective when guided by a philosophy that neglects internal issues, such as the Bush administration has.
There are a lot of things that need fixing in this country, and New Orleans and other civil engineering-preventative maintainence projects are just two of them.
We need to actually get a handle on our economy again, and that means kicking Big Oil in the balls until it builds new refineries and actually takes the initiative to repair the old ones. It doesn't get to just let them dry-rot and bump up prices arbitrarily. When gas is expensive, that makes everything expensive, and business suffers.
We need to get our money into education again for obvoius reasons.
We need to get the hell out of Iraq.
We need to address the trade defeceit, not excuse it away.
We need to manage corporate welfare with more attention payed towards economic impact:
IE: Companies that contribute positively to their local economies are eligible, companies that export or depreciate local economies are automatically disqualified and are not eleigible to recieve tax-payer money. It just makes sense.

It would also help if our president didn't look so stoned out all the time, and could actually address the nation without sounding quite so oblivious.