[Congressional Record Volume 152, Number 87 (Thursday, June 29, 2006)]
[Senate]
[Pages S7175-S7176]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                     Small Business Administration

  Mr. KERRY. Mr. President, today the Senate Committee on Small 
Business and Entrepreneurship unanimously reported the President's 
nomination of Steven Preston to serve as Administrator for the Small 
Business Administration. I would like to thank Chair Snowe and her 
staff for their work on this nomination.
  Mr. Preston brings keen business sense and a wealth of management 
experience to an agency woefully in need of better management. From the 
disaster loan program to oversight of federal contracting, the SBA has 
failed small businesses under the current administration. Hurricane 
Katrina is now 10 months behind us, and still we are witnessing delays 
in getting loan money to the residents of the Gulf Coast. Deep budget 
cuts have bled the agency of key staff. Efforts to eliminate key 
programs like the Microloan program, PRIME and New Markets Venture 
Capital have undermined access to capital and business counseling for 
small businesses, especially the smallest of firms. As Mr. Preston 
stated many times throughout the nomination process, morale at the SBA 
is dangerously low. There is a vacuum of leadership into which Mr. 
Preston now steps, and there is much for him to do to reinvigorate this 
agency.
  I am hopeful that Mr. Preston will prove to be an aggressive advocate 
for small business. His career and his actions demonstrate that he is 
not a political person, and I hope his instincts lead him to do the 
right thing rather than the political thing. With investment, 
commitment, and most of all, strong leadership, the SBA can make a real 
difference in people's lives.
  I am also hopeful that as Administrator, Mr. Preston will fight for 
realistic budgets. The budget delivered to Congress by President Bush 
this past year had no basis in reality. The former SBA Administrator's 
reaction was to travel the country to support Administration proposals 
that often had little to do with the needs of small businesses. 
Meanwhile, the SBA budget was being slashed. The SBA needs someone who 
will consider the impact of the budget on small businesses and disaster 
victims and will fight budgets that hurt these communities. The 
President is proposing to assess unprecedented administrative fees on 
small business loans, on top of the high fees that are already passed 
on to small businesses in this zero subsidy environment. He is also 
trying to balance the Federal budget on the backs of disaster victims 
by raising interest rates on disaster loans. These are not recipes for 
helping small business, and I hope Mr. Preston recognizes that.
  The SBA also needs to be a more vigilant watchdog for small business 
contracting. The record of the last few years is appalling. Federal 
small business contracting numbers have been manipulated and overstated 
to score political points. The SBA's office dedicated to veterans 
contracting has been shut down. Implementation of the women's 
contracting program has been delayed for 6 years. The SBA IG reports 
and GAO reports make it clear: There is a pattern of neglect when it 
comes to SBA's oversight of federal contracting to ensure fair access 
for small firms. Report after report indicates that there needs to be 
more staff to oversee federal contracting, and the agency continues to 
deny our efforts to get more accurate small business contracting 
numbers. This is a serious problem, and through this nomination 
process, Mr. Preston has been made well aware that I and my fellow 
committee members expect it to be addressed.
  Above all, I am tired of hearing the administration's claim that it 
is doing ``more with less.'' At some point, this catch phrase gives way 
to the reality that an agency can no longer even fulfill its mandate 
with any less. It is my belief that we have reached that point. Small 
Business Development Centers have been forced to reduce services. 
Women's Business Centers are on the verge of shutting down. Lending to 
minorities has been generally flat or has gone down, particularly 
dollars loaned to African Americans and women. This agency has a unique 
role to play in fostering entrepreneurship in underserved communities. 
It is clear from his history of charitable involvement that Mr. Preston 
understands the needs of these underserved communities, and I hope that 
this spirit is evident in his work at the SBA on behalf of underserved 
and disadvantaged businesses.
  I have served on the Committee on Small Business and Entrepreneurship 
for 21 years, as ranking member or Chairman since 1997, and I have 
worked with a number of SBA Administrators. Too often, a nominee comes 
before the Committee and says all the right things to get confirmed. My 
hope for Mr. Preston is that he will not simply talk the talk, but that 
he will walk the walk. By living up to his promises, I think Mr. 
Preston will see that he and Congress can work side by side to help 
small businesses across the Nation.
  Ms. LANDRIEU. Mr. President, I welcome the confirmation of Steven 
Preston to be U.S. Small Business Administration, BSA Administrator. I 
had the pleasure of meeting with Mr. Preston a few weeks ago, and I 
believe that he has the management experience to take on the many 
challenges facing the Small Business Administration. More importantly, 
I was impressed with his passion to serve and to take on this 
particularly challenging position.
  For too long this agency, which serves the backbone of our Nation's 
economy, has been a second-class citizen in this administration. The 
SBA enjoyed Cabinet-level status under President Clinton but has since 
been downgraded to a second-tier agency. The SBA's budget has been cut 
by nearly 40 percent since 2001--more than any other Federal agency. 
This sends the wrong signal to small businesses, especially our small 
businesses down in the gulf coast. It tells them that they are not 
worth the investment, that small businesses are not a national 
priority.
  We need a SBA Administrator who is a ``work horse'' not a ``show 
horse.'' Washington has plenty of show horses, but they should not be 
running Federal agencies. We have seen that in the gulf, and we don't 
want to see it again. I am willing to work with Mr. Preston and with my 
colleagues on the Senate Committee on Small Business and 
Entrepreneurship to help the SBA be more effective and responsive in 
good times and bad.
  One of the first challenges Mr. Preston will face is to ensure that 
the SBA is ready for this year's hurricane season. Experts forecast 
that this will be a very active season, and the SBA has to be ready. 
Last year, we had the sense that the agency was acting by the seat of 
their pants. Under the circumstances, that is not so surprising. The 
country had never seen anything like Katrina before. But now Mr. 
Preston and the SBA have the opportunity to take the lessons of last 
year to better prepared for this year.
  The emergency supplemental appropriations bill we most recently 
passed contains language that I sponsored to require SBA to submit a 
comprehensive disaster preparedness plan to Congress by July 15. SBA 
did not have one in place for Katrina, so my colleagues and I want to 
ensure that they are more prepared for hurricane season this year and 
future disasters as well. I look forward to receiving this report next 
week.
  I mentioned that Mr. Preston's management experience will serve him 
well as he works to make the SBA a more efficient and responsive 
agency. Congress also needs to give SBA the tools to allow it to 
improve. After Katrina, small businesses in Louisiana had nothing but 
complaints about SBA's service in the Disaster Loan Program.

[[Page S7176]]

They needed access to immediate capital to pay employees, restore 
inventory, and make quick repairs, but SBA said it was not in the 
business of short-term recovery. That is why the upcoming SBJ 
reauthorization is going to be so important. This will be an 
opportunity to not only reauthorize funding for the SBA capital and 
technical assistance programs but also to make the SBA more responsive 
and efficient for future disasters.
  I intend to introduce legislation that I would like to see included 
in the reauthorization bill to give the SBA more tools for handling 
future disasters. We need to give SBA expedited disaster loan authority 
for businesses in good standing with the SBA. We need to authorize 
short-term bridge loan and grant authority, so that in a major 
disaster, businesses can get help earlier, rather than later. SBA needs 
a full-time planning staff, and we must encourage the agency to better 
utilize its district offices. In the aftermath of Katrina, we need a 
strong SBA more than ever. In taking the helm, Mr. Preston will be a 
pivotal figure in the recovery of the gulf coast as well as to the 
economic growth of small businesses nationwide.
  As Administrator, he will be inheriting an agency that by many 
accounts has an unfortunate legacy of mismanagement, inefficiency, poor 
employee morale, and soured relations with Congress. The management 
challenges are huge, but the need to do it right is greater. I believe 
that in Steven Preston, we have a nominee who can use his corporate 
management and finance experience to fix SBA. I invite him to not be 
afraid to take on the old ways of doing things at SBA. If he runs into 
roadblocks, come talk to us on the Senate Small Business Committee. If 
he needs a legislative change to move this agency forward, come to us. 
We want this agency to work. Our small businesses need this agency to 
work and to work well.

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