[Congressional Record (Bound Edition), Volume 147 (2001), Part 20]
[Senate]
[Pages 26914-26915]
[From the U.S. Government Publishing Office, www.gpo.gov]



                EMERGENCY SMALL BUSINESS LOAN ASSISTANCE

  Mr. KYL. Mr. President, I rise today to share concerns raised by the 
Bush administration and some of my colleagues regarding S. 1499, 
authored by my colleague from Massachusetts, Mr. Kerry.
  I strongly believe that we must come to the aid of small businesses 
hurt hard by the September 11 attacks. That is why I have 
enthusiastically endorsed the Bush administration's ongoing, active, 
and aggressive efforts to provide emergency small-business loan 
assistance.

[[Page 26915]]

  Unfortunately, S. 1499 came to the Senate floor without debate, 
without committee hearings, and without an opportunity for concerns 
about the bill to be raised and addressed. No CBO score was released, 
depriving those who are fiscally-responsible of a cost estimate of this 
legislation. Yet the Senate leadership attempted to pass this bill 
without affording us any opportunity to offer amendments.
  Scarcely any explanation of this bill's provisions was ever offered 
before it was moved to the Senate floor--and that is extremely 
troubling.
  We do know now that the costs of this bill--as much as $815 million--
would actually exceed the entire 2002 budget for the Small Business 
Administration, nearly doubling it, at a time of a economic slowdown.
  Additionally, the agency responsible for carrying out this 
legislation--the Small Business Administration (SBA)--has raised a 
number of concerns about this bill that have not been adequately 
addressed.
  First, some of the provisions of the Kerry bill duplicate efforts 
already underway by the Bush administration. After the terrorist 
attacks, the SBA established the September 11 Emergency Injury Disaster 
Loan, EIDL, assistance program to make loans available to small 
businesses throughout the United States, who could demonstrate economic 
injury as a result of the terrorist attacks.
  This was an appropriate and necessary response. I emphasize, Mr. 
President: these loans already are being made available.
  In addition to duplication of ongoing efforts, the SBA also expressed 
the concern that provisions of the Kerry bill would actually increase 
the number of small-business loan defaults, at the expense of the 
American taxpayer.
  As the SBA wrote in a letter to the sponsors of this measure:

       By relaxing credit requirements, reducing interest rates, 
     eliminating fees, increasing the government guarantee, 
     deferring principal payments, forgiving interest and 
     increasing government liability, S. 1499 could make 
     government-guaranteed small business loans more attractive 
     than conventional loans, potentially displacing private 
     sector options. In addition, S. 1499 significantly reduces 
     lender and borrower stakes in a loan, thereby increasing the 
     likelihood of default.

  Certainly the sponsors of this measure do not want to promote 
defaults. After all, the goal of small-business assistance is to help 
entrepreneurs build, sustain and grow small businesses, with sound and 
fiscally-responsible loan assistance programs.
  The existing EIDL assistance program provides a reasonable mechanism 
for needed aid by offering up to $1.5 million in emergency loans to 
small businesses at four percent interest over 30 years. Loans are not 
intended purely as a means of disaster relief.
  Additionally, S. 1499's language is so broad that loan assistance 
could be provided to any small business that have ``been, or, that 
(are) likely to be directly or indirectly adversely affected'' by the 
terrorist attacks. Obviously, such language is ripe for abuse and could 
lead to exorbitant costs for the American taxpayer. Surely, this is not 
what the bill sponsors intended from this provision.
  Lastly, the Small Business Administration expresses concerns 
regarding S. 1499's provisions providing emergency relief for Federal 
contractors. The provisions would allow an increase in the price of a 
federal contract that is performed by a small business in order to 
offset losses resulting from increased security measures taken by the 
Federal government at Federal facilities. As the SBA points out: 
``providing equitable relief through SBA acting as a central clearing 
house would prove inefficient, costly, and burdensome on the Federal 
acquisition process.''
  All of us want to come to the aid of small businesses adversely 
affected by the September 11 attacks and their aftermath. But we can do 
so in a cost-effective and responsible way, instead of a rushed, 
haphazard process designed to thwart compromise.
  I am confident that a bipartisan compromise on this issue can be 
found in the near-term, so that the concerns raised by the 
administration can be taken into account, and we can pass something the 
President will support.

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