[Congressional Record (Bound Edition), Volume 151 (2005), Part 21]
[Senate]
[Pages 28485-28486]
[From the U.S. Government Publishing Office, www.gpo.gov]




               SBA RESPONSE TO HURRICANES IN GULF STATES

  Mr. KERRY. Mr. President, obviously somewhere in the next few days--
we don't know when yet--we are going to be wrapping up our business 
here, and that will mark the end of the first session of the 109th 
Congress. Before we leave, Members on both sides of the aisle are very 
concerned that we will not have provided the assistance to the small 
businesses in the Gulf States region that they desperately need in 
order to recover from the effects of Hurricanes Katrina and Rita.
  The effect is that literally hundreds of thousands of small 
businesses are in desperate need of assistance throughout that region. 
Without the jobs those small businesses provide, the economy of the 
gulf coast is going to have a much harder time coming back.
  Since Hurricanes Katrina and Rita hit the gulf coast, regrettably--
this has been commented on again by Senators on both sides of the 
aisle; it is not a partisan issue--there has been a stunningly slow 
response by the Administration to provide relief to small businesses.
  The administration has now sent up three pieces of emergency 
legislation--three supplemental emergency spending bills worth more 
than $62 billion--and yet we have not adopted any direct relief for 
small businesses.
  The latest supplemental request asks for $471 million in additional 
funding for SBA disaster loans and the SBA Inspector General. But, 
frankly, giving more money to the disaster loan program doesn't address 
small business needs. It's too narrow in scope and is not delivering 
relief with urgency.
  Senator Lott has talked about the problems--Senator Cochran has too--
and there is a recognition that you have a lot of small businesses that 
can't wait till their disaster loans are processed or disbursed. They 
need access to capital immediately.
  It is a matter of record now, commented on in many national journals, 
that the SBA has done a completely inadequate job--abysmal may be a 
better word--of getting disaster loan funds into the hands of small 
businesses in the gulf region.
  It is not because of the lack of funds or the lack of employees. The 
SBA has enough funding to grant $1.4 billion in disaster loans, and 
$249 million for administration and staff. The staffing has been 
increased from some 800 employees to 4,000 employees.
  As of Monday of this week, almost 39,000 small businesses had applied 
for SBA disaster loans. Yet with all of these resources, both personnel 
and money, only 9,200 loans have been actually processed, which is 25 
percent, and only 2,600, which is 7 percent, had actually been 
approved. Only 240 had actually seen a disbursement of money.
  In addition, as of last week, the SBA had handed out only 10 of its 
new gulf opportunity loans the administration's answer to the business 
community's call for bridge loans.
  We were assured by the SBA Administrator several weeks ago in a 
bipartisan committee hearing that those loans were on track, that they 
would respond rapidly, that they had enough people in place, that they 
were going to get the money out, and, indeed, here we are with the same 
record that was the incentive to have that hearing in the first place.
  These loans, I might add, have an interest rate of as much as 13.5 
percent. Why would we be providing a 13.5 percent loan to people who 
have been hit when you are trying to do it as a matter of disaster 
response? Frankly, that is beyond me.
  The program has generated irate complaints from the very people whom 
it has been set up to try to help. One small business owner who called 
my office referred to the SBA and FEMA as ``blackwater mercenaries.'' 
They feel set upon, not helped. We are not going to help the small 
businesses down there until we pass comprehensive small business 
assistance.
  Senators Lott and Cochran have stated that the pace of reconstruction 
in their home State of Mississippi and the other Gulf States is 
``unacceptable.''
  Despite the assertion of the administration that the Nation's ``small 
business sector is vibrant,'' Senator Lott has said that the slow pace 
of approving disaster loans ``is preventing small

[[Page 28486]]

businesses from coming back and jobs from returning or being created. 
Not unexpectedly, the unemployment rates in the two largest coastal 
counties, Harrison and Jackson, are more than quadruple the national 
average.''
  Senator Lott is absolutely correct, and we need to do something about 
it.
  So far, the best efforts of the Senate have been stymied. One bill 
passed 96-0 in the Senate during consideration of CJS. That was dropped 
in conference. Another bipartisan bill, S. 1807, the Small Business 
Hurricane Relief and Reconstruction Act, has been blocked by the White 
House since September 30. That is almost 2\1/2\ months.
  Small business owners such as Dr. Edward Lang and Dr. Angela Lang, 
who rushed to complete their disaster loan application in the weeks 
following the hurricane, believing that assistance was going to be 
there, have been told that everything was going to be done to help 
people recover. They have gone months now without hearing any response 
from the SBA whatsoever.
  In the immediate aftermath of the storm, their small but successful 
podiatry office based out of New Orleans was deluged with 5 feet of 
water.
  With their savings all but gone, and the ever-shrinking list of 
patients, all of whom have been displaced by the storm, the Langs are 
in dire need of assistance. They want to stay there. They want to 
rebuild their business there. It is essential to New Orleans that 
people who make that choice are empowered to be able to do so.
  Despite repeated offers from out-of-state hospitals, they are 
sticking by their plan to try to rebuild in the city they love and the 
place they want to work. But the cold shoulder they received from the 
SBA is a virtual death sentence for their livelihood. They are just one 
example of countless other gulf coast businesses that have been ignored 
by the very governmental agencies that exist to serve them. On its 
face, that is unacceptable.
  The request that has been put forward by the Small Business Committee 
for $720 million is a little more than 1 percent of the $62 billion the 
administration has requested for Katrina relief. This legislation is a 
very small cost compared to the total amount of money the Government is 
putting in, but an enormous return for the small businesses that need 
it.
  Once again, we are seeing a situation where big business is able to 
walk away with most of the funding while the vast majority of the job 
base is in small business, and they are not getting the assistance they 
need.
  What our bill does is to authorize $450 million for the impacted 
States to provide immediate assistance to small businesses struggling 
to get on their feet. It authorizes additional funding for SBA's 
partners--such as the small business development centers that are out 
in the field trying to provide business counseling to the many people 
and to the owners who are trying to determine what comes next.
  There are too many businesses on the verge of bankruptcy in the 
hurricanes' wake. Since the goal shared in a bipartisan way by all of 
the Senate and the House is to try to get those businesses to be 
leveraged as best as possible, to be able to return as soon as 
possible, and each small business that returns helps the other small 
businesses to be able to return, all of those things will make a 
difference. Tax breaks will help. But the fact is, tax breaks are not 
enough because tax breaks do not make an impact until you file your 
taxes. They have nothing to do with the assistance one needs now to be 
able to have cash in the pocket, to be able to survive the gap. Small 
businesses need that additional relief, access to capital, immediate 
and longer-term.
  Our bill also addresses the Administration's failure to contract with 
small businesses to rebuild the region. The New York Times reported 
more than 80 percent of FEMA contracts alone were awarded on the no-bid 
limited competition basis. This bill we have introduced--Senator Snowe, 
myself, and other members of the committee--encourages greater 
competition by implementing a 30-percent goal for prime contracts and a 
40-percent subcontracting goal. With billions of dollars being 
allocated to relief and reconstruction, it is important to demand fair 
competition. We need to ensure that America's small businesses are not 
left behind.
  The citizens of the gulf region are courageously and desperately 
trying to rebuild their communities. The empty promises of several 
weeks ago, ``we will do what it takes, we will stay as long as it 
takes,'' are ringing in their ears. Frankly, they are wondering where 
the actions are to back that up.
  According to Mike Allen of Time magazine, one Presidential adviser is 
quoted as saying recently:

       Katrina has fallen so far off the radar screen you can't 
     even find it.

  We need to find it. We need to put small businesses back on the radar 
screen. We need to follow through on the commitments to the victims of 
these devastating hurricanes. We need to ensure that we do not leave 
the citizens of the Gulf States behind.
  There is bipartisan support to do this. The Senate passed this 
legislation previously. My hope is before we decide to go home, we will 
do what is necessary for the citizens who have been so badly impacted 
in the Gulf State region get the relief they have told us they need.
  I yield back the remainder of my time.
  The PRESIDING OFFICER. The majority leader.

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