[Congressional Record (Bound Edition), Volume 152 (2006), Part 16]
[Senate]
[Pages 21545-21546]
[From the U.S. Government Publishing Office, www.gpo.gov]




                      DISASTER ASSISTANCE REFORMS

  Ms. LANDRIEU. Mr. President, like many in Congress, I am disappointed 
that we are adjourning Congress for the October recess without enacting 
comprehensive U.S. Small Business Administration disaster assistance 
reforms. As our small businesses impacted by Hurricanes Katrina and 
Rita last year can attest, this is an agency that is in woeful need of 
substantive reforms to its Disaster Assistance Program. Our businesses 
had to wait 4 to 6 months for SBA disaster loans to be approved, and 
some are still waiting to this day, for loan amounts to be disbursed.
  For my part, I have worked for the past year to enact substantive SBA 
disaster reforms to ensure that `lessons learned' from Katrina and Rita 
were incorporated and that businesses nationwide could count on a 
better prepared and more efficient SBA should a disaster strike their 
community. Under the leadership of the chair and ranking member of the 
Senate Small Business Committee, Senators Olympia Snowe and John Kerry, 
we sent to the Senate floor bipartisan legislation, S. 3778, which 
along with reauthorizing SBA programs, also enacts comprehensive SBA 
disaster reforms. Instead of working with us to take up and pass this 
important bill, the administration has frustrated this bill's passage 
at every turn and will not allow it to the Senate floor for 
consideration--almost 9 weeks after it was introduced. I am concerned 
about this lack of urgency from the SBA and the administration so just 
this week, I sent a letter to the new SBA Administrator Steve Preston. 
In this letter, I requested his cooperation with our committee to pass 
this important legislation before Congress adjourns at the end of the 
year.
  I will ask that a copy of this September 27, 2006, letter be printed 
in the Record.
  As we adjourn tonight, I note that we are set to pass legislation 
which temporarily extends programs under the Small Business Act until 
February 2, 2007. Although I do believe it is essential to extend these 
SBA programs, I worked with my colleague Senator Kerry to revise this 
date to November 17, 2006. This November date would have ensured that 
the Congress would have to return in November and at least attempt to 
pass SBA Disaster reforms. Instead, with these programs authorized 
through February 2, 2007, the Congress will adjourn in September 2006 
and not take up SBA reauthorization until at least February 2007. I am 
disappointed by this development because, as elected officials, I 
believe it sends the wrong signal to our small business community.
  If the Congress, in partnership with the SBA, does not address these 
systemic problems now, I am afraid that it will continue to plague the 
SBA's disaster response for future disasters. I believe there is a 
general consensus that these reforms need to get done. Therefore, I 
will continue my work with my colleagues from sides of the aisle to 
make these essential improvements this year.
  Mr. President, I ask unanimous consent that the letter to which I 
referred be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                  U.S. Senate,

                               Washington, DC, September 27, 2006.
     Hon. Steven C. Preston,
     Administrator, U.S. Small Business Administration, 
         Washington, DC.
       Dear Administrator Preston: Let me take this opportunity to 
     again congratulate you on your confirmation as Administrator 
     of the U.S. Small Business Administration (SBA). Your 
     management experience and passion to serve will prove 
     extremely helpful to you in this challenging position.
       I write you today because, as a member of the Senate 
     Committee on Small Business and Entrepreneurship, as well as 
     senator from a state hit hard by both Hurricanes Katrina and 
     Rita, I believe it is my duty to ensure that we implement 
     substantive changes to SBA's Disaster Assistance Program 
     during this session of Congress.
       The SBA's response to Hurricanes Katrina and Rita was too 
     slow and lacking in urgency-threatening the very survival of 
     our affected businesses. A year has passed since Hurricanes 
     Katrina and Rita, yet while Congress is currently acting on 
     extensive reforms for the Federal Emergency Management Agency 
     (FEMA), there has been only incremental changes to SBA's 
     Disaster Assistance Program. That is why I am pleased to 
     learn that you have recently created the Accelerated Disaster 
     Response Initiative to identify and help implement process 
     improvements to enable the SBA to respond more quickly in 
     assisting businesses and homeowners in need of assistance 
     after a disaster. I applaud these efforts and your leadership 
     on this issue. But much more must be done to address the 
     systemic problems that led to delays and inaction post-
     Katrina and Rita.
       For our part, the Senate is also attempting to address the 
     multiple problems that hampered SBA's ability to assist 
     impacted Gulf Coast small businesses and homeowners. Under 
     the leadership of the Chair and Ranking Member of the Senate 
     Committee on Small Business and Entrepreneurship, Senators 
     Snowe and Kerry, the committee voted unanimously to approve 
     S. 3778, the ``Small Business Reauthorization and 
     Improvements Act of 2006'' and sent it to the full Senate for 
     consideration. A copy of the bill is attached for your 
     convenience. This bipartisan legislation re-authorizes SBA 
     programs, and also

[[Page 21546]]

     of great importance to me and my constituents, makes 
     essential reforms to SBA's Disaster Assistance Program. 
     However, Since S. 3778 was introduced on August 2, 2006, 
     almost nine weeks ago, it has been blocked from consideration 
     and the Committee is still waiting for budget information so 
     that it may file its report on the bill. It is my 
     understanding that the administration and SBA has several 
     concerns about this bill in its current form.
       I am very concerned at this apparent deadlock, a deadlock 
     which threatens our bipartisan efforts to implement 
     comprehensive SBA Disaster Assistance reforms before the end 
     of the year. In particular, I believe that there must be SBA 
     reforms in the following areas:
       Short-Term Assistance: Following Katrina and Rita small 
     businesses waited, on average, four to six months for 
     approvals and disbursements on SBA Disaster Loans. In order 
     to ensure the long-term survival of small businesses impacted 
     by a catastrophic disaster, SBA needs to be in the business 
     of short-term recovery-by providing either emergency bridge 
     loans or grants.
       Disaster Loan Process for Homeowners: While SBA's mission 
     is to ``aid, counsel, assist and protect, insofar as is 
     possible, the interests of small business concerns'' it also 
     has the added responsibility of helping affected homeowners 
     rebuild their housing post-disaster. Katrina and Rita 
     resulted in record numbers of SBA Disaster Loan applications 
     from homeowners, which strained SBA's existing resources and 
     personnel. If the SBA must bear this responsibility, the 
     agency should improve the process as well as possibly seek 
     greater coordination and cooperation with the U.S. Department 
     of Housing and Urban Development on disaster housing 
     assistance.
       Expedited Disaster Loans to Businesses: The SBA currently 
     has no mechanism in place to expedite Disaster Loans to 
     impacted businesses that are either a major source of 
     employment or that can demonstrate a vital contribution to 
     recovery efforts in the area, such as businesses who 
     construct housing, provide building materials, or conduct 
     debris removal. The SBA need the ability to fast-track loans 
     to these businesses, in order to jumpstart local economies 
     and recovery efforts.
       Economic Injury Disaster Loans: Although Katrina and Rita 
     directly affected businesses along the Gulf Coast, additional 
     businesses in the region, as well as the rest of the country, 
     were economically impacted by the storms. The SBA must have 
     the ability to provide nationwide, or perhaps regional, 
     economic injury disaster loans to businesses which can 
     demonstrate economic distress or disruption from a future 
     major disaster.
       Loss Verification and Loan Processing: Following the Gulf 
     Coast hurricanes, the SBA struggled for months to hire enough 
     staff to inspect losses and process loan applications. 
     Although SBA now has trained reserves to handle such surges 
     in demand, the SBA also needs the permanent authority to 
     enter into agreements with qualified private lenders and 
     credit unions to process Disaster Loans and provide loss 
     verification services.
       Administrator Preston, I was impressed by your expressed 
     willingness to be a bridge between Congress and the White 
     House. For the SBA to truly bring its disaster capabilities 
     to the next level, I believe that it must work in concert 
     with the Congress. Together, we must remove layers of 
     bureaucracy and red tape, which, following Katrina and Rita, 
     both overwhelmed and frustrated dedicated SBA employees and 
     those affected by the hurricane must also give the SBA new 
     tools to ensure that problems that occurred post-Katrina and 
     Rita never happen again.
       Last month we marked the one-year anniversary of Hurricane 
     Katrina, and now mark the one-year anniversary of Hurricane 
     Rita. It is essential that we take action now to make 
     substantive reforms to the SBA Disaster Assistance Program. 
     We owe nothing less to our small businesses. I ask that you 
     continue working with my office on this important issue and 
     respond to our approach in writing no later than October 31, 
     2006. This will help us develop a proposal which can address 
     the concerns of the SBA as well as provide a better and more 
     responsive SBA Disaster Assistance Program for our small 
     businesses.
       Thank you in advance for your assistance with this request.
           Sincerely,
                                                 Mary L. Landrieu,
     U.S. Senator.

                          ____________________