[Congressional Record Volume 152, Number 21 (Friday, February 17, 2006)]
[Senate]
[Pages S1476-S1477]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MAKING SUPPLEMENTAL APPROPRIATIONS FOR THE SMALL BUSINESS
ADMINISTRATION
Mr. FRIST. I ask unanimous consent that the Senate proceed to the
immediate consideration of H.R. 4745, which was received from the
House.
The PRESIDING OFFICER. The clerk will report the bill by title.
The assistant legislative clerk read as follows:
A bill (H.R. 4745) making supplemental appropriations for
fiscal year 2006 for the Small Business Administration's
disaster loans program, and for other purposes.
There being no objection, the Senate proceeded to consider the bill.
Ms. LANDRIEU. Mr. President, after the close of business on February
9, 2006, the Small Business Administration, SBA, notified my office
that the SBA Disaster Loan Program was going to run out of money 4 days
later on February 13, 2006. I was outraged that my office was only made
aware of the situation because USA Today was about to do a story on it.
The Disaster Loan Program is one of the most important lifelines that
the people of my State are relying on to pull themselves out of the
destruction wrought by Hurricanes Katrina and Rita. When SBA first knew
about the funding shortfall in this program, the Senators from
Louisiana, Mississippi, Florida, Texas, and Alabama should have been
the first people told. No doubt some of my colleagues may only have
learned about this in the media. That is not how a Federal agency
should notify Congress of important developments.
The administration has requested, and the Appropriations Committee
has approved, a reprogramming of $100 million from SBA's salaries and
expenses account to the Disaster Loan Program to keep it funded for
another 2 weeks. The program will still need additional funding beyond
this. H.R. 4745, that is before the Senate today, will allow for a
reallocation of $712 million in funds from the Federal Emergency
Management Agency to SBA in order to keep the Disaster Loan Program
running until the end of April. They hope that by then Congress will
have acted on an additional Katrina supplemental appropriations bill to
keep the Disaster Loan Program funded through the end of the fiscal
year. I certainly support this legislation and I am pleased that SBA
acted to keep the Disaster Loan Program funded.
But even with these temporary extensions, this latest incident is
just another example of the poor performance of SBA under the its
Administrator Hector Barreto. SBA told us that it has known about this
problem since December when they realized that their average disaster
loan size for damage as a result of Katrina was double what they had
previously experienced in the program. So all of their estimates were
off. They knew that the amount of money they had budgeted for disaster
loans to businesses and homeowners for the program would not last. But
they never said anything to us about it--until they thought that the
press would tell us first.
The Small Business Committee held hearings focusing on SBA's disaster
response to Katrina and Rita, so the agency knew that this was a major
concern to the chair and ranking member of the committee, Senator Snowe
and Senator Kerry, as well as myself and my colleague from Louisiana,
Senator Vitter. The committee staff is in almost daily contact with
SBA, giving SBA ample opportunity to discuss upcoming issues that would
warrant congressional attention. No one at SBA raised this issue,
everything was fine.
When the administration released the Federal budget for 2007, SBA
made no mention that the Disaster Loan Program was going to need
additional funding. The SBA's Chief Financial Officer took part in
budget briefings for staff along with other SBA officials. Again no
mention that the Disaster Loan Program was running out of money.
Mr. President, if this was an isolated incident or oversight, I would
not be nearly as disappointed. But this is far from an isolated event.
My constituents have been complaining about SBA and the Disaster Loan
Program since the earliest days after the disaster. Katrina and Rita
catastrophically destroyed or damaged over 18,000 businesses and over
200,000 homes in Louisiana alone. Early on after the storm, disaster
victims had to wait months for their loans to be approved. The agency
did not have enough staff on the ground to do damage assessments. The
situation has improved since those early days, and the SBA has finally
heeded our calls to contract out the loss verification process to speed
things up. I commend them for coming to their senses on that, but I
still believe that the SBA's slow start has led to business failures
and has left many homeowners without any hope of returning home.
Furthermore, SBA's failure to accurately track the finances of the
Disaster Loan Program, and more importantly, its neglect in keeping
Congress updated on this developing problem, is evidence of a culture
of inefficiency that goes through to the highest levels of the SBA. I
want to know what these officials knew and when they knew it, because
certainly no one in Congress was told until February 1. That is 12
days--I repeat 12 days--before the program was set to run out of money.
Mr. President, Katrina and Rita threw the gulf coast into a state of
uncertainty. SBA's handling of the Disaster Loan Program has only made
this feeling of uncertainty worse. We need more than a string of
temporary fixes to the financial viability of the program to ensure
that the dollars will be there for the people in the gulf who are
trying to rebuild. We need a permanent solution or else the management
mistakes of the past will continue to plague the SBA's disaster
response for future disasters.
Mr. KERRY. Mr. President, the Small Business Administration's
disaster loan program is facing another shutdown this month unless
Congress passes a bill to provide the program with more funding. A
shutdown of this program would further slow the recovery of the gulf,
where hundreds of thousands of business owners and homeowners have been
waiting months for the administration to process and disburse loans to
help them pay their bills and start rebuilding their businesses and
homes.
As of this week, according to the SBA's data, out of more than 60,000
loans approved for businesses and homeowners, only 23,000 have been
partially or fully disbursed. And out of the almost 375,000
applications received, 190,000 are still waiting to be processed. The
families and businesses waiting should not be subjected to yet another
roadblock to assistance through the disaster loan program.
The mismanagement of the SBA's disaster loan program has been well-
documented on national news programs like CNN and in major papers like
the Washington Post and USA Today. The Committee on Small Business and
Entrepreneurship has held two hearings on the matter. Adding to the
problems, the SBA was not paying attention to the books and didn't
realize it was making larger loans and spending more than it had
estimated. This lack of oversight brought the program to the brink of
shutting down.
When the President's budget was released on February 6, the SBA
discovered it only had enough money to make it to February 13. Instead
of being forthcoming about the problem when the SBA and its financial
team came up to brief the oversight Committee on SBA's budget and
financial standing, they were silent. Luckily, as has been the pattern
since President Bush has been in office, the Congress stepped in to
pass emergency legislation to keep one of SBA's small business programs
up and running.
Specifically, Congress approved a last-minute request from the
administration to reprogram $100 million from
[[Page S1477]]
SBA's disaster administrative funds into the account for disaster
loans. Unfortunately, not only did SBA wait until the last minute to
seek assistance, but the assistance it sought was not enough to keep
the program running long--just enough to keep the program running from
February 14 to maybe the end of the month. To make it through the year,
the SBA needs an estimated $1.3 billion.
Demonstrating yet another lapse in judgment, the administration did
not plan to seek the entire amount to avoid another shutdown but
instead decided to take a piecemeal approach. Their plan was to ask now
for enough money to make it through July and then later in the year to
seek the rest of the needed funding. I disagreed with this approach and
urged the President and Senator Majority Leader Frist to request the
entire funding at one time and to move the funding measure as a
freestanding bill so that it could pass before the Congress breaks for
the Presidents Day recess. Waiting until Congress comes back on
February 28 would be too risky given that SBA only has the $100 million
it requested to keep going.
Given all that is at stake for the families and businesses in the
gulf, I am very glad that today, before we recess, the Senate is
considering H.R. 4745, a bill to provide funding to the SBA's disaster
loan program. I am glad that Congress has come to the administration's
rescue to pass another emergency bill, one that is freestanding. I only
wish the bill provided the full $1.3 billion instead of $712 million.
This will only keep the program running through April. However, the
House has already recessed, so we are not in the position to add more
funding at this time.
I hope this bill gives some peace of mind to those in the gulf
waiting for help, and I hope that when we come back we can be just as
swift in approving a final measure to fully fund the disaster loan
program.
In closing, I ask unanimous consent that letters from me and my
colleagues to President Bush and Majority Leader Frist be printed in
the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
U.S. Senate, Committee on Small Business &
Entrepreneurship,
Washington, DC, February 10, 2006.
Re Averting Shutdown of SBA's Disaster Loan Program.
The President,
The White House,
Washington, DC.
Dear Mr. President: We have just received word that the
Small Business Administration's (SBA) disaster loan program
was on the brink of running out of money next week, on
February 13, 2006. Our Committee was not notified until this
week that the SBA needed more funding, and according to
documents I have just received, not even the appropriators
were notified until recently. Instead of waiting until the
last minute to try and avoid a shutdown, further exacerbating
the disaster loan program's failure to meet the urgent needs
of hurricane victims in the Gulf, the Administration should
have notified Congress of this problem sooner. This is
reminiscent of the way in which the Administration handled
the shutdown of its largest small business lending program
two years ago and the way it handled the shortage of funds to
pay SBA's disaster loan staff during the 2004 Florida
hurricanes.
Mr. President, your FY2007 budget was released on Monday,
and you deployed your staff out to the various oversight
Committees this week to promote your priorities for the
various agencies and departments and to justify the requests.
Among other key SBA employees, Committee staff met with the
SBA's Chief Financial Officer. No one should be in a better
position to know the Agency's fiscal standing in its
accounts. Yet, not once did the CFO or anyone from the SBA
mention a need for additional disaster loan funding.
For too long, you have ignored the mismanagement of the
SBA. The draconian cuts to the SBA by this Administration
have proven deleterious to the delivery of resources
important to small businesses across the nation. The near-
shutdown of the disaster loan program demonstrates the short-
sightedness of these budget cuts.
It is time to get the SBA's disaster loan program running
smoothly and remove the red tape that is keeping so many
homeowners and business owners from getting much-needed
disaster assistance. As of yesterday, SBA's data showed that
almost six months after Hurricane Katrina hit, 50 percent of
the loans requested by homeowners are waiting to be
processed, and 35 percent of the business owners are waiting
for their loan applications to be processed.
I understand that the Administration's reprogramming
request of $100 million approved yesterday by Congress will
only provide enough funding to keep the program running for
about 14 more days. To avoid a shutdown during Fiscal Year
2006, the SBA disaster loan program needs an estimated $1.3
billion. Currently, your Administration is planning to
request $1 billion to be reallocated from the billions
sitting idle at FEMA. Unfortunately this will only fund the
disaster loan program through July, requiring an additional
request for the remaining $300 million in supplemental
appropriations to make it through the end of the fiscal year
in September. Rather than continue this piecemeal approach to
budgeting, I urge you to request the full amount to operate
the program properly now and make sure the needs of the Gulf
and future disaster victims are met.
Sincerely,
John F. Kerry.
____
U.S. Senate, Committee on Small Business &
Entrepreneurship
Washington, DC, February 14, 2006.
Re Passing Legislation To Prevent Shutdown of SBA's Disaster
Loan Program.
Hon. William H. Frist, M.D.,
U.S. Senate Majority Leader, U.S. Senate,
Washington, DC.
Dear Mr. Majority Leader: We are writing to ask your
immediate attention in passing critical legislation to
prevent the Small Business Administration's (SBA) Disaster
Loan program from shutting down.
As you are aware, the SBA Disaster Loan program would have
run out of money yesterday, February 13, 2006, if the
Congress had not approved a last-minute request from the
Administration to reprogram $100 million. The SBA has told
the Committee that the reprogrammed funding will only keep
the program running for about 12 more days and estimates it
will need an additional $1.3 billion to avoid a shutdown in
FY2006.
Instead of seeking the full amount, SBA has informed the
Committee that the Administration intends to request only
part of the needed money now, through a reallocation of $1
billion from the unspent funds in the Federal Emergency
Management Agency's (FEMA) Disaster Relief Fund.
Unfortunately this will only fund the disaster loan program
through July, requiring an additional request for the
remaining $300 million in supplemental appropriations to make
it through the end of the fiscal year in September.
Rather than continue this piecemeal approach to budgeting,
we believe the Congress should pass legislation with the
entire estimated amount so that there is stability in the
delivery of disaster relief to meet the needs of the Gulf
victims, as well as any future disaster victims. We also
believe that the request should move as a free-standing bill,
rather than combining it with other bills that run the risk
of delay because of unrelated controversies.
In summary, we seek your cooperation to immediately pass a
free-standing bill in the Senate that would authorize FEMA to
reallocate from its Disaster Relief Fund $1.3 billion to the
SBA's Disaster Loan program. And we request that any
reallocated funds from the Disaster Relief Fund be restored
as soon as possible through the next supplemental emergency
funding bill that Congress enacts.
Sincerely,
John F. Kerry.
Carl Levin.
Mark Pryor.
Mary Landrieu.
Maria Cantwell.
Tom Harkin.
Mr. FRIST. I ask unanimous consent that the bill be read a third time
and passed, the motion to reconsider be laid upon the table, and any
statements relating to the bill be printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
The bill (H.R. 4745) was read the third time and passed.
____________________