[Congressional Record (Bound Edition), Volume 152 (2006), Part 2]
[House]
[Pages 1869-1873]
[From the U.S. Government Publishing Office, www.gpo.gov]




  SMALL BUSINESS ADMINISTRATION'S DISASTER LOANS PROGRAM SUPPLEMENTAL 
                          APPROPRIATIONS, 2006

  Mr. LEWIS of California. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 4745) making supplemental appropriations for fiscal 
year 2006 for the Small Business Administration's disaster loans 
program, and for other purposes.
  The Clerk read as follows:

                               H.R. 4745

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled, That the 
     following sums are appropriated, out of any money in the 
     Treasury not otherwise appropriated, for fiscal year 2006:

[[Page 1870]]



                     Small Business Administration


                     disaster loans program account

                     (including transfer of funds)

       For an additional amount for ``Disaster Loans Program 
     Account'' for the cost of direct loans authorized by section 
     7(b) of the Small Business Act, $712,000,000, to remain 
     available until expended: Provided, That such costs, 
     including the cost of modifying such loans, shall be as 
     defined in section 502 of the Congressional Budget Act of 
     1974: Provided further, That the amount provided under this 
     heading is hereby derived by transfer from the amount 
     provided for ``Disaster Relief'' in Public Law 109-62: 
     Provided further, That the amount provided under this heading 
     is designated as an emergency requirement pursuant to section 
     402 of H. Con. Res. 95 (109th Congress), the concurrent 
     resolution on the budget for fiscal year 2006.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
California (Mr. Lewis) and the gentleman from Wisconsin (Mr. Obey) each 
will control 20 minutes.
  The Chair recognizes the gentleman from California.
  Mr. LEWIS of California. Mr. Speaker, I yield myself such time as I 
may consume.
  Mr. Speaker, this supplemental appropriations bill, H.R. 4745, 
provides critical funding to assist victims of Hurricanes Katrina, Rita 
and Wilma by making $712 million in loan subsidy funds available for 
the Small Business Administration's disaster loans program.
  The funding provided in this bill translates into $4.8 billion in 
loans that will now be available to victims of the gulf coast 
hurricanes.
  To date, the Small Business Administration has approved more than 
60,000 business and home loan applications, awarding $4.3 billion in 
loans. Loans continue to be approved at a record pace, yet 160,000 
applications remain in the pipeline, and the application period remains 
open for 3 more weeks.
  Without this critical infusion of funds, the Small Business 
Administration is in danger of depleting its loan funds prior to the 
Congress considering the administration's next supplemental request for 
hurricane-related costs.
  This bill simply provides a temporary fix by shifting funds 
previously appropriated for the Federal Emergency Management Agency and 
redesignating them for the Small Business Administration's disaster 
loan program.
  I also note that the SBA administrator has informed the 
Appropriations Committee that the need could be much higher than the 
amount provided in this bill. However, the committee has used the best 
available estimates to determine the short-term funding requirements 
and will continue to review the matter as it considers the next 
supplemental request submitted by the administration.
  This funding is needed immediately as a stopgap measure so that 
lending to affected homeowners and businesses can continue 
uninterrupted.
  Mr. Speaker, I reserve the balance of my time.
  Mr. OBEY. Mr. Speaker, I yield myself 7 minutes.
  Mr. Speaker, as the gentleman from California has indicated, the 
majority is bringing to the floor a bill that transfers $712 million 
from FEMA to SBA for Katrina-related costs. We are told that SBA 
projects they will run out of money by February 21 without the action 
contained in this bill. That is despite the fact that the Congress has 
just passed a supplemental appropriation for Katrina that was signed 
into law on December 30 of 2005.
  At that time, Congress actually provided SBA emergency supplemental 
funding totaling $441 million. SBA stated that the reason their 
projections were inadequate was because the size of the loans were much 
larger than previous disasters, from approximately $30,000 to $60,000 
per loan.
  Even though Katrina and other hurricanes hit in late August, because 
the SBA was so slow in approving loans, they had no idea of the size. 
Once the SBA began to approve loans at a quicker pace, they apparently 
discovered that they would probably be short of funds, but even that, 
Mr. Speaker, is not the whole story.
  SBA believes they will need an additional $400 to $600 million on top 
of what is being provided here to provide funding for all the hurricane 
victims of Katrina, Rita and Wilma. The difference is expected to be 
presented during the larger Iraq-Katrina supplemental, which is 
supposed to be coming any day.
  The fact that the administration had no idea that one of the key 
agencies on the ground in Louisiana was almost out of money seems to me 
to be just another example of the wholly inadequate response which the 
Nation has seen in the aftermath of these hurricanes. The 
administration's initial response was disorganized and indecisive. The 
people who knew what they were doing, the experienced career employees 
of FEMA and other first responders, were apparently ignored by 
incompetent and unqualified political cronies who should never have 
been in the positions of leadership that they had.
  I would have thought that 9/11 would have been a wake-up call. I 
would have thought that Katrina would be a wake-up call. I think that 
every Member of this House has the right to be tired of being 
disappointed by the folks who cannot shoot straight when it comes to 
providing the needed relief.
  Let me also, Mr. Speaker, express my concern about the fact that this 
Congress is not taking action to address another problem which is an 
emergency, namely, the energy crisis in this country. Despite some 
relief being caused by warmer than usual temperatures, the latest 
figures issued on February 7 by the Department of Energy confirm that 
the cost of heating one's home has still risen dramatically this 
winter. Comparing this winter to last, average prices for natural gas 
are up by 31 percent, average prices for home heating oil are up 25 
percent, and average prices for propane are up 18 percent just over 
that year.
  In spite of those price increases, this year's appropriation for the 
Low Income Heating Assistance Program is actually $21 million less than 
last year. A shortfall in LIHEAP is even more serious than these price 
figures would suggest, Mr. Speaker, because, first, this winter's 
increase comes on top of price increases over the past several years 
that far outpace the appropriations this Congress has provided for 
LIHEAP.
  Since the winter of 2001-2002, the average price of home heating oil 
has more than doubled, the average price of natural gas has gone up 95 
percent, and propane is up 68 percent, yet funding for LIHEAP has 
increased only 20 percent over that period.
  So high energy prices were causing a serious problem even before the 
gulf hurricane disrupted oil and gas production, and that drove prices 
still higher. The hurricanes simply made an existing problem worse.
  I would also point out that these big increases in heating bills mean 
big increases in the number of people who need our assistance, as well 
as increases in the amount of aid that they need. The LIHEAP program 
has been serving only about 16 percent of those who are eligible based 
on Federal income standards, and I think we ought to be able to do 
better than that.
  I would say that with the number of recipients rising faster than the 
appropriation, the average grant has been going down. At the very same 
time, prices are going up. The energy assistance directors estimate 
nationwide that the average LIHEAP grant shrunk by about 10 percent 
over the last 4 years.
  So it seems to me, Mr. Speaker, the need for supplemental funding for 
LIHEAP is apparent. I wish that we could provide it. I wish it were 
before the House today in a vehicle which would allow an honest 
discussion of what funding level is needed, in a vehicle that would 
allow the House to work its will, offer whatever amendments Members 
think are appropriate so we can approve at a funding level commensurate 
with national need.
  It would seem to me that at the very least we should be providing 
emergency funding to bring the LIHEAP program up to the authorized 
level of $5.1 billion. This is an emergency now, not in April or May, 
and I wish that this Congress saw fit to deal with this problem.
  We obviously have enough time today. I am told that when this debate 
is over we are going to be rolling these votes or delaying them until 
about 4:30

[[Page 1871]]

or 5 o'clock. That would have been plenty of time to have a spirited, 
full debate on the issue, give Members the opportunity to offer 
whatever amendments they needed in order to fulfill our 
responsibilities to attack national problems. We are not doing that 
today with respect to that problem. We are meeting a temporary need in 
SBA, and I am sure Members will want to vote for that, but we ought to 
be doing a lot more.
  Mr. Speaker, I reserve the balance of my time.
  Mr. LEWIS of California. Mr. Speaker, I yield 2 minutes to the 
gentleman from Virginia (Mr. Wolf), my colleague, who is the chairman 
of our Subcommittee on Science, State, Justice and Commerce.
  Mr. WOLF. Mr. Speaker, I thank the chairman for the time and rise in 
support of the bill and would say that the subcommittee will be holding 
hearings to get to the bottom of this.
  The funding provided in the bill translates into $4.8 billion in 
loans that will now be available to victims of the gulf coast 
hurricanes. The bill simply provides a temporary fix by shifting funds 
previously appropriated to the Federal Emergency Management Agency and 
redesignating them for the Small Business Administration disaster loan 
program.
  The funding is needed immediately as a stopgap measure so that 
lending to affected homeowners and businesses can continue 
uninterrupted.
  As a personal comment, when we listen to the different debates and 
comments and all the shows and all the attacking, the things going on 
in this city, I think it is really time for both parties to come 
together and to attempt to deal with some of these issues that we have 
in this country in a less partisan way. There was a very good article 
that David Broder did in the Washington Post about a week-and-a-half 
ago when he talked about when President Ronald Reagan was shot outside 
the Hilton, Tip O'Neill went to his bedside at the George Washington 
University Hospital and held his hand and prayed with him. There were 
differences in the country those days, but there was just a different 
tone.
  So I would hope that we could return to the days of Ronald Reagan and 
Tip O'Neill whereby the differences were less sharp and more civil to 
do which, quite frankly, with the problems that this country has both 
domestically and internationally, come together to do the best thing 
for the country.
  With that, I appreciate the gentleman bringing up this bill.

                                    Congress of the United States,


                                     House of Representatives,

                                                 January 30, 2006.
       Dear Colleague: You may have missed the David Broder column 
     below that appeared in the Sunday, January 29, Washington 
     Post on the same day my pastor preached a sermon based on 
     Ephesians 4:29-32 about being kind to one another.
       There will always be real differences in our views on 
     issues, but there should not be an absence of kindness and 
     civility in our dealings with one another.
       It would be a good idea for the Congress and the country to 
     adopt the Ronald Reagan/``Tip'' O'Neill model.
           Sincerely,
                                                    Frank R. Wolf,
                                               Member of Congress.

                [From the Washington Post, Jan. 1, 2006]

                    When Partisan Venom Didn't Rule

                          (By David S. Broder)

       The stench of partisanship is so strong in Washington these 
     days that it is difficult to remember that it was not always 
     the case that Republicans and Democrats were at each other's 
     throats. But, in truth, there was a time when friendship and 
     simple human compassion were far more powerful than any 
     political differences.
       A wonderful reminder of that fact can be found among the 
     oral histories compiled by two dozen of Ronald Reagan's main 
     associates that are being released Sunday by the Miller 
     Center of Public Affairs at the University of Virginia. The 
     transcripts are available at www.millercenter.org.
       One of the tapes was furnished by Max Friedersdorf, who ran 
     the White House congressional liaison staff for Reagan. 
     Friedersdorf recounts in the interview what happened while 
     the president was recovering at George Washington University 
     Hospital after the assassination attempt outside the 
     Washington Hilton hotel on March 30, 1981.
       Reagan was seriously wounded by John Hinckley, and the day 
     after the shooting, Friedersdorf got a call in the White 
     House from James Baker, Reagan's chief of staff, who was at 
     the hospital. ``Get over here,'' Baker commanded.
       ``I went over to GW Hospital and went up to the president's 
     room,'' Friedersdorf said, ``and Jim was outside the room 
     with Mrs. Reagan and her Secret Service agent. Baker said, 
     ``I want you to stay here until I tell you to leave.''
       What had happened, Friedersdorf learned, was that Nancy 
     Reagan ``was all upset,'' because Sen. Strom Thurmond had 
     come over to the hospital a few hours earlier and somehow had 
     talked his way through the lobby, up the elevator and into 
     Reagan's room, where he attempted to chat with the gravely 
     wounded president.
       ``Mrs. Reagan was outraged, distraught,'' Friedersdorf 
     said. So Baker directed him to take up the watch, and ``if 
     any congressman or senator comes around here, make sure the 
     Secret Service doesn't let anybody up, even on this floor.''
       Friedersdorf said he remained on duty during daylight hours 
     for the next three or four days, and then word came from 
     Baker that the president had recovered enough to start to see 
     people.
       The first person to be admitted, Friedersdorf said, was 
     Thomas P. ``Tip'' O'Neill, the speaker of the House.
       When the Massachusetts Democrat arrived, Nancy Reagan 
     slipped out of the room and Friedersdorf retreated to a 
     corner of the suite where he could remain unobtrusive. ``Tip 
     got down on his knees next to the bed, and said a prayer for 
     the president, and he held his hand and kissed him and they 
     said a prayer together . . . the 23rd Psalm.
       ``The speaker stayed there quite a while. They never talked 
     too much. I just heard him say the prayer, then I heard him 
     say, `God bless you, Mr. President, we're all praying for 
     you.'
       ``The Speaker was crying. The president still, I think was 
     a little, he was obviously sedated, but I think he knew it 
     was the speaker because he said, `I appreciate your coming 
     down, Tip.' He held his hand, sat there by the bed, and held 
     his hand for a long [time].''
       When I reached Friedersdorf last week at his retirement 
     home in Florida, I asked him how it happened that Reagan's 
     first guest was the leading Democrat on Capitol Hill. 
     ``Well,'' he said, ``Tip was third in line of succession 
     [after the vice president] and the fact he was a Democrat 
     didn't bother anybody. We didn't even think about it. Tip had 
     been calling constantly to see how the president was doing. 
     And there was a bond there.
       ``I remember,'' Friedersdorf continued, ``the first dinner 
     the Reagans had in the private residence was for Tip and his 
     wife, and my wife and I were there. Tip and the president had 
     a drink or two and started swapping Irish stories.
       ``Often, after that, Tip would say pretty harsh things 
     about some of our legislative proposals, and the staff would 
     want Reagan to answer him. But they trusted each other, and 
     the president would say, `That's just Tip,' and let it go.''
       I asked Friedersdorf if he could imagine that sort of 
     relationship flourishing now between the Republican president 
     and the top Democrats in Congress.
       ``Absolutely not,'' he said. Sadly, I think he is right.

  Mr. MANZULLO. Mr. Speaker, I commend the Chairman of the 
Appropriations Committee, Mr. Lewis, and the Chairman of the Science, 
Departments of State, Justice, and Commerce Subcommittee, Mr. Wolf, for 
the expeditious consideration of this legislation. Without passage of 
this legislation today, the disaster loan program of the Small Business 
Administration would not be able to offer critical disaster loan 
assistance to anyone across the nation after February 21. This 
legislation is also budget neutral--it simply redirects $712 million 
previously appropriated to the Federal Emergency Management Agency to 
the SBA's disaster loan account. This bill does not create any new 
spending. However, HR 4745 will enable the SBA to support about $4.8 
billion in disaster loans to homeowners, renters, and businesses 
through May 1 when the next Katrina-related supplemental is expected to 
be completed.
  This legislation is needed because SBA is, in a sense, a victim of 
its own success. Despite all of the huge hurdles and unfair attacks the 
SBA has received in recent weeks, the SBA has approved over $4.3 
billion in disaster loans to more than 60,000 residents and business 
owners in the Gulf States region in five and a half months--despite not 
being able to get into the region until after the first month after 
Hurricane Katrina hit the Gulf coast. In comparison, it took the SBA 
more than 12 months to approve a similar amount of disaster loans to 
the victims of the Northridge Earthquake in California in 1994.
  The SBA disaster loan program offers low-interest loans up to 
$200,000 for homeowners and $1.5 million for small business owners in a 
disaster area for those items not covered by insurance for the purpose 
of long-term recovery. Most of the victims of Hurricanes Katrina and 
Rita did not have flood insurance because they weren't in a designated 
flood plain. Thus, the average size of a typical SBA disaster loan has 
doubled for this event.

[[Page 1872]]

  Combine this with the fact that this is the largest unprecedented 
natural disaster ever to hit the United States, I trust that my 
colleagues can see why it is very difficult to accurately predict 
exactly how much should be appropriated for the SBA disaster loan 
program for an entire year.
  I commend the hard work of the SBA and their disaster loan officers, 
led by Administrator Hector Barreto and Associate Administrator Herb 
Mitchell, in providing this record-amount of assistance to Gulf States 
victims. I urge my colleagues to support HR 4745 so that these fine 
public servants can continue their good work not just in the Gulf 
States region but also for other parts of the United States that may 
unfortunately be hit by a natural disaster in the coming weeks and 
months.
  Mr. RANGEL. Mr. Speaker, as a result of this Administration's failed 
leadership and mismanagement of resources, H.R. 4745, Hurricane Katrina 
Small Business Loan Supplemental is a corrective measure. The 
supplemental funding needed is directly in response to the gross 
incompetence and poor planning by the Bush Administration. This 
proposed legislation comes on the heels of Congress providing more than 
$400 million for Katrina disaster loans two months ago. This highlights 
that the Small Business Administration is unable to accurately assess 
the needs on the ground and funds that have already been allocated have 
been mismanaged. Running out of disaster loans for Hurricane Katrina 
victims is an embarrassment to this Administration and a slap in the 
face to those who survived Hurricane Katrina. The facts are clear; the 
Bush Administration is failing to help Gulf Coast residents rebuild 
their homes and their lives.
  Immediate assistance must be given to the region's local small 
businesses. Currently, only 37 percent of Hurricane Katrina disaster 
loan applications have been approved from a total of 280,000. 
Furthermore, less than 10 percent of those loans approved have been 
paid out. As it stands now, there is a backlog of 105,664 pending 
applications. Congress must take action to ensure that this 
mismanagement does not continue to compound the devastation of 
Hurricane Katrina survivors. The Gulf Coast region is depending upon 
swift deliberate action to revive its economy and put it on the road to 
full recovery. However, the Bush Administration is steeped in 
incompetence, mismanagement and cronyism.
  Nearly 750,000 families remain displaced from their homes and are 
paying the price for this Administrations lack of strong leadership. 
Additionally, this administration has rejected the only bi-partisan 
plan to rebuild Louisiana. The recent budget proposal indicates 
misplaced priorities and seeks to slash funding for small businesses, 
community development and rural development. These funds are precisely 
what the Gulf Coast requires in order to rebuild. Furthermore, the 
abuse and the fraud persist in this Administration regarding no-bid 
contractual agreements which are not capable of rebuilding communities 
effectively and efficiently in the Gulf Coast.
  The Bush Administration has not met the needs of Katrina families, 
small businesses and communities. To further compound this colossal 
failure in leadership, the Republicans are refusing low-income energy 
(LIHEAP) assistance funds today, even though home heating costs are up 
and federal grants are down. Additionally, 12 states have already run 
out of energy assistance, and some people may have their heat shut off 
in the next month. I must underline that these are poor families that 
are struggling to make ends-meat. Congress has cut home energy 
assistance by $21 million, while the number of people applying for help 
with their heating bills has reached a 12-year high. Families are 
essentially paying 17 percent more this year for home heating and 67 
percent more since this Administration took office. While millions of 
Americans are cold at home, oil companies are reporting record profits 
and Republicans are ensuring that this does not change.
  It is clear that Democrats are moving to the beat of a different drum 
than this Administration. We are committed to putting an end to the 
corruption, mismanagement and poor leadership that has adversely 
impacted Hurricane Katrina survivors.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise in support of H.R. 
4745, but not without reservations. During the last 5 months the Small 
Business Administration has issued $4.12 billion in disaster assistance 
loans to homeowners and businesses in declared disaster areas, 
processing 214,000 applications. It has approved approximately $1 
billion in loans to businesses surviving the destructive attacks by 
hurricanes in 2005.
  On the surface it would appear that the SBA is performing well. 
However, upon closer inspection, reports indicate, that in Louisiana, 
the roughly 185,000 applications made on behalf of homeowners, a 
shocking 60,000 were denied. The SBA is distributing a large amount of 
aid, but that aid is not reaching all of those in serious need. This is 
evident by the House Minority Small Business Committee's statement that 
80% of overall disaster loans have been denied.
  I bring these statistics to the forefront of my argument not to 
completely admonish the agency, but to make the point that if we are to 
appropriate more funds, they must be better distributed.
  The administration's low interest rates on loans are necessary for 
the reconstruction of the economy in Gulf Coast region, and vital if 
any sense of stability is to be achieved. The denied applicants often 
have no other sources of loans, unable to secure the necessary credit.
  The interest rates are of particular importance and have increasingly 
been coming under attack. The Bush administration has announced that as 
part of its 2007 budget proposal that it would require recipients of 
loans to pay higher interest rates after five years.
  The SBA may be approving loans at an unprecedented rate, but it is 
failing to sufficiently respond to the situation. The destruction 
caused by the hurricanes occurred on an enormous scale, which is why 
more funds should be appropriated to the organization only on the 
condition that it make better use of those funds. The administration is 
doing a disservice to potential recipients of aid by denying them the 
resources that should be made available to them.
  In the wake of these wide-scale disasters, we should not be cutting 
funds, but rather focusing on better and wider-reaching distribution of 
those funds and the waiving of restrictive regulations that prevent 
help going to deserving Katrina and Rita survivors to bring relief to 
those in need. I urge my colleagues to support the appropriation of 
additional funds to the SBA, but with confidence that in the future the 
SBA can make the necessary changes to ensure the widest distribution of 
loans.
  Mr. LARSON of Connecticut. Mr. Speaker, I rise today concerned that 
H.R. 4745, legislation making a supplemental appropriation for the 
Small Business Administration disaster loan program, is another example 
of the continued mismanagement of the Gulf Coast recovery effort.
  This $712 million supplemental comes before us today as we discover 
that the SBA will completely run out of funding for disaster loans 
sometime in the next week. It is clear that the $441 million previously 
appropriated to this program was far from adequate to meet demand for 
the loans. As a result, the SBA has approved only 37 percent of the 
280,000 disaster loan applications the agency has received and is 
facing a backlog of over 105,000 applications. Of the loans approved, 
only 10 percent have been actually paid to the homeowners and small 
businesses that are relying on this critical funding to rebuild their 
livelihoods in the wake of this unprecedented natural disaster.
  How this administration could so grossly underestimate the need for 
these loans is beyond me. From the very beginning, the response by our 
Government to this disaster has been wholly inadequate--and this 
shortfall is just another sad example of the consequences of the poor 
planning, lack of leadership and incompetence demonstrated in the wake 
of Hurricane Katrina. Rebuilding the Gulf Coast is going to take a long 
term commitment of will and resources by the Federal Government. Yet, 
time and again, this administration has failed to level with Congress 
and the American people on the full costs needed to support the 
rebuilding effort.
  The needs of the families, small business and communities of the Gulf 
Coast are too important to be shortchanged by estimation errors or 
budgetary gimmicks. I hope that any Katrina legislation this Congress 
may consider in the next few months includes a full accounting of the 
funding truly needed to meet our commitment to the Gulf Coast.
  Mr. OBEY. Mr. Speaker, I was told that I had one other Member who 
wanted to speak, but she is detained in another meeting. So I think if 
the gentleman is interested in yielding back the balance of his time, 
we could do that on this side as well.
  Mr. LEWIS of California. Mr. Speaker, I have no additional speakers. 
I might mention that the gentleman and I, our ranking member, have been 
working hard to try to bring ourselves together and go down and visit 
the gulf coast. I think we are going to be able to accomplish that 
sometime in the near term. It is on both of our agenda, but, in the 
meantime, I have no additional speakers, and I yield back the balance 
of my time.
  Mr. OBEY. Mr. Speaker, I yield back the balance of my time.

[[Page 1873]]

  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from California (Mr. Lewis) that the House suspend the rules 
and pass the bill, H.R. 4745.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of 
those present have voted in the affirmative.
  Mr. OBEY. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this question will 
be postponed.

                          ____________________