[Congressional Record Volume 147, Number 161 (Tuesday, November 27, 2001)]
[Senate]
[Pages S12045-S12047]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
UNANIMOUS CONSENT REQUEST--S. 1499
Mr. KERRY. Madam President, Senator Bond and I have been trying to
bring S. 1499 before the Senate since it was introduced, but literally
for more than 1 month steadily, we have been held up, depriving the
Senate of an appropriate debate and depriving us of an opportunity to
achieve maybe 90 to 95 votes for this legislation.
I ask unanimous consent that the Senate now proceed to Calendar No.
186, S. 1499; that the Kerry-Bond substitute amendment which is at the
desk be considered and agreed to, and the bill, as amended, be read
three times, passed, and that the motion to reconsider be laid upon the
table with no intervening action or debate.
The PRESIDING OFFICER. Is there objection?
Mr. KYL. Madam President, I object reluctantly on my behalf and on
behalf of other Senators. I believe both Senator Kerry and Senator Bond
wish to speak on the issue, and I will speak to it when they have
completed their remarks.
The PRESIDING OFFICER. The objection is heard.
Mr. KERRY. Madam President, I understand the Senator from Arizona has
indeed objected to this bill for a period of time now, as I referenced
moments ago. I regret that. We have tried to work out the issues with
respect to what is the American Small Business Emergency Relief and
Recovery Act of 2001. The ranking member of the Small Business and
Entrepreneurship Committee, Senator Bond, has joined me for some period
of time now in trying to move this important legislation for the small
businesses of our country. We have 55 cosponsors of this bill, a
majority of the Senate, prepared to help the small businesses of the
country. Two United States Senators, I regret to say, oppose this bill,
and we are not able to proceed forward.
We have the support of the Airport Ground Transportation Association,
the American Bus Association, the Association of Women's Business
Centers, the CDC Small Business Finance, the Chicago Association of
Neighborhood Development Organizations, the Citizens Financial Group of
Rhode Island, the Clovis Community Bank of California, the Coastal
Enterprises of Maine, the County of San Diego, the Delaware Community
Reinvestment Act Council, the Fairness in Rural Lending Group, the
Florida Atlantic University Small Business Development Center, the
Helicopter Association, the National Association of Development
Companies, the National Association of Government Guaranteed Lenders--
some 5,000-plus lenders--the National Community Reinvestment
Association, the National League of Cities, the National Limousine
Association, the National Restaurant Association, the National Small
Business United, National Tour Association, the Rural Housing
Institute, the Rural Opportunities, Small Business Legislative Council,
the U.S. Conference of Mayors, the United States Chamber of Commerce,
the United States Tour Operator Association, the Women's Business
Development Center, and others.
This amendment incorporates a number of improvements that Senator
Bond and I have made at the recommendation of the administration and of
other colleagues and of the business community. It seeks to provide
help to small businesses nationwide that are struggling because of the
events of September 11, exacerbating an already declining economy in
the months prior to September 11.
They need access to working capital until normal operations resume,
or until they can restructure or change the business to address the
market changes. Many small businesses simply cannot find the working
capital they need, even though they are a viable business under normal
circumstances, because of this momentary downturn, because of an abrupt
cutoff of business due to the reduction in auto rentals, hotel rentals,
visits to restaurants, travel and therefore business with travel
agencies. All of those immediately impacted by the events of September
11 are living out an aberration in the economy. It is not the normal
course of doing business. Those are businesses that could be viable in
a matter of months, which we do not want to lose, providing in the
normal course of business we provide them with adequate access to
credit.
The problem is, all across the country, we know credit has tightened
up as a consequence of the outlook of the economy. So we create this
self-fulfilling prophecy, this cycle of a downward trend as a
consequence of people saying: I think the economy looks bad. . . . We
have to hold back on those loans. . . . Consequently, they hold back on
the loans and then, indeed, the economy looks bad because the failures
ensue because working businesses do not get their capital.
In American Banker, they wrote the following:
Lenders were already skittish following the steep economic
decline of the past year. The events of September 11 have
diminished their confidence and dimmed their prospect for
recovery.
This bill is geared to try to provide emergency lending completely
within the current law and capacity of the Small Business
Administration. It builds on SBA's disaster loans, the 7(a) working
capital loans, the 504 loans for equipment and building improvements,
the venture capital investments and expanded access to SBA's business
counseling. SBA has done an extraordinary job of leveraging small
amounts of money into larger amounts of money in the country.
Let me point out that one of the objections of our colleagues who
keep stopping us from proceeding forward is that this bill will cost
money. Based on a 1992 study by Price Waterhouse, the $17 billion of
7(a) loans authorized by this bill will yield tax revenues from the
small businesses borrowers of about $2.5 billion in the first year
alone, more than off-setting the cost of the entire bill.
This bill is fiscally responsible. The Congressional Budget Office
(CBO) has informally scored S. 1499 at $860 million if all aspects are
fully funded and utilized. CBO has estimated that the vast majority of
the loans provided by S. 1499 (those made under section 7(a) of the
Small Business Act) will cost 3 percent; that means that for every $100
loaned, the cost to the government is $3. This is a cost-effective way
to provide necessary access to capital to small businesses throughout
the country.
The judgment that is made in making a loan is how assured is that
return on investment or what is the track record of the people to whom
you are lending. The fact is that the track record of the Small
Business Administration over the last years has been improving steadily
and is at a rate today that would suggest this is a positive
undertaking for the Government of the United States. It is particularly
important for us to engage in it. In fact, the Administrator of the SBA
recently said at a conference that the cost of the 7(a) program will be
50 percent less in FY 2003.
I might point out that if one were to take a number of the businesses
that have been helped by the Small Business Administration--and I will
be very quick because I know my colleague from Missouri wants to
speak--the entire budget of the SBA for several years has been paid for
many times over by the tax revenues that have come from the success
stories of the companies that the SBA has funded. How many of our
colleagues are aware that SBA was involved in funding Fed Ex, SBA was
involved in the funding of Callaway Golf, SBA was involved in the
funding of Intel? Intel alone has returned more in terms of the tax
revenue in this country than the entire annual budget of SBA.
So we have many small businesses that are currently trying to stave
off
[[Page S12046]]
bankruptcies. They are trying to prevent the doors from being closed.
They want to keep people working, and keeping those people working is
in itself a stimulus for the United States because those are people who
pay their health bills, pay their mortgages, make their car payments,
and all of that begins to restore the health of the economy in the long
run.
I urge my colleagues to take up this legislation in the next few
days. Small businesses are asking Members to do this. Our friends in
the House of Representatives, Congressman Don Manzullo, chairman of the
committee, and Congressman Jim Moran have introduced a companion bill
and are gearing up to pass it as soon as possible. I hope my 55
colleagues, who are consponsors of this, and others waiting to vote for
it, and the small businesses who need it, will be liberated from this
hold in the Senate.
Mr. President, I thank my 55 colleagues who are cosponsors of this
bill, with a special thanks to Senator Bond, the ranking member of the
Senate Committee on Small Business and Entrepreneurship. I also want to
thank the many supporters of this legislation.
I ask unanimous consent that the list of cosponsors and several of
the many letters of support for the legislation be printed in the
Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Cosponsors--The American Small Business Emergency Relief and Recovery
Act of 2001
Senators Bond, Wellstone, Harkin, Cleland, Lieberman,
Edwards, Carnahan, Levin, Cantwell, Landrieu, Snowe, Allen,
Crapo, Enzi, Burns, Ensign, Schumer, Clinton, Daschle,
Bingaman, Inouye, Sarbanes, Akaka, Reed, Durbin, Kennedy,
Grassley, Torricelli, Lincoln, Rockfeller, Hollings, Leahy,
Corzine, Johnson, Collins, Biden, Warner, Bill Nelson,
Mikulski, Jeffords, Bennett, Murray, Carper, Domenici,
Conrad, Smith (OR), Graham, Roberts, Stabenow, Dorgan, Hagel,
Hutchison, Dodd, Hutchinson, and Boxer.
____
Chamber of Commerce of the
United States of America,
Washington, DC, October 12, 2001.
Hon. John Kerry,
Chairman, Small Business Committee,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: I am writing to thank you for
introducing S. 1499, ``The American Small Business Emergency
Relief and Recover Act of 2001,'' on October 8, 2001, and
pledge the U.S. Chamber of Commerce's support for this
important bill that provides much needed relief to many of
America's small business owners.
As a direct result of the events of September 11, many
small businesses have been physically and economically
devastated. Because of the unique character of this disaster,
many of the existing programs meant to act as a ``safety
net'' to the small business community have been found to be
inadequate or not available. Your bill, ``The American Small
Business Emergency Relief and Recover Act of 2001,'' serves
to correct these inequities and provide the economic tools
necessary for many small business owners to recover from this
tragedy.
For those small business owners whose enterprises have been
shattered by the repercussions of the economic shockwave from
ground zero, we must extend the lifeline of assistance in the
form of expanded Small Business Administration low-interest
loans and programs. We must not let the recent tragedies
serve to dampen the drive and determination of our nation's
existing small business owners who may be struggling
financially as a result of the events of September 11.
The U.S. Chamber of Commerce is the world's largest
business federation, representing more than three million
businesses of every size, sector, and region. More than 96
percent of the Chamber's members are small businesses with
100 or fewer employees. On behalf of these small employers, I
again thank you for introducing S. 1499, ``The American Small
Business Emergency Relief and Recover Act of 2001.''
Sincerely,
R. Bruce Josten.
Executive Vice President,
Government Affairs.
____
The National Association of Government Guaranteed
Lenders, Inc.,
Stillwater, OK.
Hon. John Kerry,
Chairman, Senate Committee on Small Business and
Entrepreneurship, Russell Senate Building, Washington,
DC.
Hon. Christopher Bond,
Ranking Member, Senate Committee on Small Business and
Entrepreneurship, Russell Senate Building, Washington,
DC.
Dear Senators Kerry and Bond: On behalf of the members of
the National Association of Government Guaranteed Lenders
(NAGGL), SBA's 7(a) lending partners, thank you for your
efforts to support capital access for small businesses,
especially in this time of heightened need. In accordance
with this need, NAGGL's leadership and membership fully
endorses S. 1499, the ``The American Small Business Emergency
Relief and Recovery Act of 2001.''
This bill's goal is to provide small businesses with the
necessary financial assistance to spur them, and thus
America's greater economy, to full recovery. It will do this
by addressing the credit needs of a variety of small
businesses, from those located at or near disaster sites, to
the multitude of small businesses throughout the country that
were indirectly impacted by the events of September 11, 2001.
Prior to September 11, there were already signs of a
slowing economy and a tightening of credit underwriting
standards by commercial lenders. Some small businesses were
already facing difficulty in obtaining credit. The events of
September 11th have only exacerbated these problems.
This is why the quick passage of S. 1499 is so important.
This bill addresses the difficulties facing America's small
business sector, and so we encourage your Senate colleagues
to pass it expeditiously.
Sincerely,
Anthony R. Wilkinson,
NAGGL President & CEO.
____
National League of Cities,
Washington, DC, October 30, 2001.
Dear Senator: On behalf of 138,000 local elected officials,
the National League of Cities (NLC) strongly urges you and
your colleagues to support and push for immediate
consideration of S. 1499, the American Small Business
Emergency Relief and Recovery Act of 2001.
In the wake of September 11, cities nationwide have
reported stress to local economies and city finances, and
have indicated that a decline in local business is one of
their greatest concerns. In a recent letter to Senator
Daschle and members of the Senate Finance and Budget
Committees, NLC urged inclusion of small business relief in
any economic stimulus package.
S. 1499 would help the efforts of lending institutions,
community organizations and local public agencies in
providing assistance to small businesses. The measure would
expand access to Small Business Administration (SBA) low-
interest or no-cost recovery loans to small businesses that
were directly or indirectly affected by the attacks, and
those in need of capital and investment financing or
procurement assistance.
NLC has always supported adequate federal assistance to new
and existing small businesses, and this emergency legislation
reflects an important and timely effort by Congress to
recognize the impact of these attacks on local economies
nationwide by helping mitigate bankruptcies, business
closures, and lay-offs.
If you have any questions or comments, please contact Scott
Shrum in our office at 202-626-3033.
Sincerely,
Donald J. Borut,
Executive Director.
____
National Restaurant Association,
Washington, DC, November 14, 2001.
U.S. Senate,
Washington, DC.
Dear Senator: On behalf of the National Restaurant
Association, the leading trade group for the nation's 844,000
restaurant locations, we urge you to cosponsor S. 1499, the
American Small Business Emergency Relief and Recovery Act of
2001.
S. 1499 would address both emergency relief needed in the
aftermath of the September 11 tragedies as well as the
magnified credit crunch caused by the economic downturn and
the uncertain economic outlook facing our nation. In October
2001, eating and drinking places cut 42,000 jobs, which
followed a 43,000 job reduction in September (seasonally-
adjusted). This is the worst employment performance in the
industry for this two month period since records have been
kept.
The purpose of S. 1499 is to help small businesses meet
their payments on existing debts, finance their businesses
and maintain jobs in the aftermath of the September 11
attacks by strengthening and expending access to the Small
Business Administration's loan payments and management
counseling. With 11.3 million employees, the restaurant
industry is our nation's largest employer outside of
government. Ninety-two percent of restaurant in the United
States have fewer than 50 employees.
The National Restaurant Association applauds Senator John
Kerry and Senator Kit Bond for introducing this bipartisan
legislation and we ask that you consider cosponsoring S.
1499.
Sincerely,
Steven C. Anderson,
President and CEO.
Lee Culpepper,
Senior Vice President, Government Affairs and Public
Policy.
The PRESIDING OFFICER. The Senator from Missouri.
Mr. BOND. Madam President, I ask unanimous consent to be permitted to
speak as in morning business for up to 5 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BOND. Madam President, there are a couple of issues on which I
agree very strongly with my good friend, the chairman of the Small
Business Committee, and one on which I disagree.
[[Page S12047]]
First, I agree on the need to bring up an energy package, have a sound
and full debate, and pass a sensible energy package. We need it. I
disagree with him on the need to continue the environmentally sound
development of natural resources and petroleum products out of ANWR.
I have been on the North Slope, a frozen desert which is not harmed
by drilling there now. The 2,000 acres that would be involved out of
ANWR's 1.9 million acres will do nothing but provide a sounder base for
the caribou that live there--I disagree on that, but I strongly agree
with him on the need to bring up S. 1499.
If a Senator has a problem with it, air it on the floor. We have 55
cosponsors; 18 out of the 19 members of the Senate Small Business
Committee said it is time to do something for small business.
It had become apparent to all Members that in 2000 we had an economic
slowdown. Officially, we are in a recession. As we know, as banks
tighten credit standards, and as access to credit drops, small business
slows down. In the wake of the September 11 terrorist attacks, there
were significant weaknesses in the small business sector. We proposed a
reasonable, bipartisan measure that can go a long way toward helping
small business get the restart it needs to provide jobs and spur
economic activity in this country.
Very briefly, the American Small Business Emergency Relief and
Recovery Act would make economic injury disaster loans available to all
small businesses directly impacted by terrorist attacks. Businesses
that shut down, such as airport shutdowns and general aviation
shutdowns, and airport suppliers, would be allowed a repayment of
principal and interest deferral for 2 years and interest could be
forgiven.
The SBA current disaster loan program was not designed to meet the
extraordinary circumstances that came about as a result of the
terrorist activities. It could be a year or more before many of the
small businesses in New York City can open their doors. They could not
repay the loans right away, so we allow them to defer.
Small businesses throughout the United States have shut down. When
general aviation was grounded, flight schools were closed, and other
small businesses, depending on aircraft, were hurt. Our bill allows
these small businesses to defer for 2 years repayment of principal and
interest on their SBA disaster loans. Other small businesses
experiencing economic problems that need help with their cashflow,
working capital, or investments to continue their operation or hire
more people would be available for special loan programs with a lower
interest prime, with a 90 percent guarantee of the loan, and with a
deferral of principal and payments for up to a year.
Small businesses are already hurt. We need to give them a stimulus to
get them moving again. There would be other breaks: No guarantee fees
to be paid by small businesses. The amount that the SBA could guarantee
would increase from 80 to 90 percent for loans up to $150,000 and from
75 to 85 percent for loans greater than $150,000. The participating
bank fees would be removed on 504 certified development company loans.
That is what we propose. That is what the Small Business Committee
says makes sense. Right now we are talking about coming forward with a
$70 to $80 to $90 to $100 billion stimulus package because we know the
economy needs a jump-start. That is $70 to $80 to $90 billion that
would mostly be paid out in the hopes that people would use that money
to buy and get business started again.
We are in a business recession. The beauty of this program is no
money is spent unless small business borrows money to put to work. We
want small businesses to get back to work. This program doesn't cost a
thing unless some small business goes out and borrows the money and
puts it to work, buys equipment, uses it for working capital, uses it
to pay employees.
When we talk about credit scoring in the credit subsidy rates,
people's eyes always glaze over. They say the total cost of the bill
for 1 year is $815 million. That means they make $17 billion worth of
loans, and somewhere around half a percent of those or $800 million may
go bad. We are talking million. The rest is paid back. There are other
minor losses on fees. Total cost to the Government is $816 million.
I am almost embarrassed to come out here and talk about a stimulus
package in terms of millions of dollars because anybody on this floor
worth their salt can get up and talk about billions and billions and
billions of dollars they would like to see in stimulus. We can get
small business investing, growing, hiring more people, paying wages,
buying equipment, being good customers for other businesses, for $816
million.
I think this bill makes sense. We have a majority of the Senate
cosponsoring it. Let's get on with this bill. If we are not able to
bring it up as a separate bill, I have this warm feeling that it will
be offered as an amendment at some point and we will have an
opportunity for that full debate at that time.
I agree with my colleague from Massachusetts; I expect as usual when
we are talking about helping small business, some 80 to 90 Members of
this body will go along with us.
I strongly urge my colleagues to let us know what their problems are
with the bill, talk it out, get it done, and pass it. We are going to
have an opportunity to vote on it at some point.
I yield the floor.
The PRESIDING OFFICER. The Senator from New York.
Mrs. CLINTON. Madam President, I ask unanimous consent I be given up
to 15 minutes as in morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________