Bipartisan Group of Senators Praise Passage of Disaster Reform Bill

Senators John Kerry [D-Mass.], Olympia Snowe [R-Maine], Mary Landrieu [D-La.], David Vitter [R-La.], and Bill Nelson [D-Fl., pictured] praised the Senate’s unanimous passage last night of a critical disaster loan bill that will improve assistance to business owners and homeowners after a disaster. The legislation’s swift movement comes as the two-year anniversary of Hurricanes Katrina, Rita and Wilma approaches.

“We’ve passed this critical disaster aid legislation, recognizing that there are Gulf Coast residents who are still seeking to recover nearly two years later," said Kerry, chairman of the Committee on Small Business and Entrepreneurship.

“We made these changes to help future disaster victims – whether from floods or fire in my home state of Massachusetts, or the Katrina disasters of tomorrow," Kerry added. "I thank all of my colleagues for working together in a bipartisan way to address concerns and move this important bill.”

“This legislation provides vital resources to the SBA to enable it to respond effectively and swiftly to future disasters,” said Sen. Snowe. “The SBA's slow response to Hurricane Katrina makes plain the need for the SBA to be provided with additional disaster-response tools. A product of compromise, this bill is forward-looking, and I urge Congress to move ahead quickly with final passage.”

“One of the important lessons of Katrina and Rita is that we need the Small Business Administration [SBA] to be nimble, effective and timely in disbursing loans following a disaster," Sen. Landrieu explained. "The Senate’s passage of this bipartisan disaster loan bill is a huge step forward for the SBA’s disaster-recovery reform. It will greatly improve the loan process for business owners and homeowners, ensuring that essential recovery dollars quickly move into the hands of disaster victims."

Vitter agreed. “Small businesses are a vital part of Louisiana’s economy, and after the hurricanes of 2005, small businesses suffered greatly,” he noted. “This legislation will help make SBA better prepared for the next disaster. It addresses some of the problems that we had with SBA after those hurricanes, and will improve how quickly disaster victims receive their loans.”

“We're trying to get the government to speed up assistance to disaster victims,” said Sen. Nelson, whose home state of Florida is in the midst of the 2007 hurricane season. “We can't afford to have another mess like the one we experienced after Hurricane Katrina.”

The Small Business Disaster Response and Loan Improvements Act of 2007 [S. 163]:

* Establishes a Private Disaster Loan program to be used in the aftermath of catastrophic disasters, allowing banks to make loans directly to victims with an 85 percent government guarantee;

* Creates a new, expedited disaster-assistance business loan program to provide short-term relief to businesses damaged or destroyed in catastrophic disasters while they await other federal assistance or insurance payments;

* Creates a new presidential declaration of “Catastrophic National Disaster,” which will allow the SBA to issue nationwide economic-injury disaster loans to small businesses affected by a large-scale disaster;

* Provides key tools for processing disaster loan applications more quickly -- such as working with qualified private contractors -- to process the loans, and requiring the SBA to report to Congress on how the application process can be improved; and

* Increases the maximum size of a disaster loan from $1.5 million to $2 million, and allows non-profit groups to be eligible for disaster loans.

Sources: Library of Congress, National Hurricane Center, Peace Corps Online [photo], U.S. Senate Committee on Small Business and Entrepreneurship
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Sens. Kerry, Landrieu Call on Republicans to Stop Blocking Disaster Reform Bill

Today, Sens. John Kerry [D-Mass.] and Mary Landrieu [D-La., pictured] called on the Republican minority to stop blocking a critical loan bill that will improve assistance to business owners and homeowners after a disaster.

Kerry and Landrieu spoke on the Senate floor today, seeking unanimous consent to pass legislation that has bipartisan support -- including from the Bush Administration and every member of the Committee on Small Business and Entrepreneurship. The committee’s ranking member, Olympia Snowe [R-Maine], and committee member David Vitter [R-La.] are cosponsors of the bill, and have worked with Kerry and Landrieu since September 2005 to craft this legislation.

“The Republicans standing in the way of passing this bill should be ashamed, because we can’t afford another Katrina-like response from the federal government,” said Kerry, committee chairman. “This bill has been fully vetted, has bipartisan support, and we’ve taken care to make changes to address every single concern raised. Yet, here we are today with Republicans blocking the very tools we need in Washington to get aid out to disaster victims quickly without red-tape bureaucracy.”

“Now, two months into what is predicted to be a very active hurricane season, this is not a time for partisan politics or procedural maneuvers; it is a time for action,” said Landrieu. “This bipartisan bill, which was unanimously reported out of committee, creates a better, more efficient SBA disaster response, and I urge my colleagues to help us move this important bill forward.”

The Small Business Disaster Response and Loan Improvements Act [S. 163] would:

* Establish a Private Disaster Loan program that allows banks to make loans directly to victims, with an 85 percent government guarantee;

* Create a new, expedited disaster assistance business loan program to provide short-term relief to businesses while they await other federal assistance or insurance payments;

* Create a new presidential declaration of “Catastrophic National Disaster,” which will allow the Small Business Administration [SBA] to issue nationwide economic-injury disaster loans to small businesses affected by a large-scale disaster;

* Provide key tools for processing disaster loan applications more quickly -- such as working with qualified private contractors to process the loans, and requiring the SBA to report to Congress on how the application process can be improved; and

* Increase the maximum size of a disaster loan from $1.5 million to $2 million, and allow non-profit groups to be eligible for disaster loans.

GoodBiz113's take: Small businesses of all political stripes deserve a helping hand when disaster stikes. S. 163 -- replete with ample bipartisan backing and support from the Bush administration -- should be passed and fully funded ASAP.

SOURCES: Library of Congress, U.S. Senate Committee on Small Business and Entrepreneurship, Washington Post [photo]
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Kerry: Gulf Coast Needs More than Empty Promises; Calls for Reviews of Disaster-Recovery Contracting Practices

Last Thursday, after President Bush's Gulf Coast visit, Sen. John Kerry [D-Mass.] had some harsh words. Kerry, chair of the U.S. Senate Committee on Small Business and Entrepreneurship, is the lead sponsor of bipartisan legislation to overhaul the government's disaster loan program, which the Bush Administration has been blocking since September 2005.

"Long-term recovery for the Gulf Coast requires a whole lot more than 18 months of empty promises," said Kerry. "Businesses that were once the heart of the Gulf Coast economy are now hanging on by a thread. Yet the bipartisan proposals in Congress to get these businesses back up and running have been blocked by the Bush Administration at every turn.

"On his last visit to the Gulf Coast, the President predicted a bright future for the region's entrepreneurs. Yet, in the six months since that visit, nothing's changed. While the Go Zone legislation represented a good first step, we still need fundamental reform of the government's disaster loan program to permanentlyremove delays and red tape that have prevented businesses from getting timely financial assistance."

The Small Business Disaster Response and Loan Improvements Act of 2007 [S.163], sponsored by Kerry and cosponsored by Sen. Mary Landrieu [D-La.], Sen. Olympia Snowe [R-Maine] and Sen. David Vitter [D-La.], would:
* Establish a Private Disaster Loan [PDL] program that allows banks to make loans directly to victims after meeting Small Business Administration [SBA] criteria. The SBA will provide an 85 percent guarantee for these loans;

* Require the SBA to draft rules within one year that would create a new "expedited disaster assistance business loan program." These short-term loans would have low interest rates similar to regular disaster loans. This would provide businesses with short-term assistance while they await other forms of federal assistance or insurance payouts following future disasters. It specifically addresses one of the major issues following Hurricanes Katrina and Rita -- a lack of access to immediate capital to keep businesses afloat;

* Create a new presidential declaration of "Catastrophic National Disaster," which will allow the SBA to issue nationwide economic-injury disaster loans to small businesses affected by a large-scale disaster;

* Allow the SBA to provide relief to fuel-dependent small businesses when energy prices increase at extraordinarily high rates.

* Provide key tools for processing disaster loan applications more quickly by authorizing the SBA to enter into agreements with qualified private contractors to process disaster loans, and requiring the SBA to analyze and report to Congress on how the disaster loan application process can be improved; and

* Increase the maximum size of an SBA disaster loan from $1.5 million to $5 million, and allow non-profit groups to be eligible for disaster loans.

Sen. Kerry also called on major federal agencies awarding contracts after disasters to issue and enforce contracting plans, to ensure small firms and disadvantaged businesses receive their fair share of contracts.

A Government Accountability Report released today found that there needs to be better transparency and enforcement at agencies responsible for 94 percent of federal disaster recovery contracts after Hurricane Katrina. Those agencies are the Departments of Homeland Security [DHS] and Defense [DOD], the General Services Administration [GSA], and the Army Corps of Engineers [Corps].

"All the presidential photo opportunities in the world haven't resulted in more small and local business participation in rebuilding communities devastated by Hurricane Katrina," said Kerry. "This GAO report reveals a severe gap in the information we need to ensure small businesses are afforded every opportunity to win contracts and help recover after a disaster. We need more information and better oversight to ensure the government is following the law."

Kerry sent a letter to the heads of DHS, DOD, GSA and the Corps, calling on the agencies to implement the GAO's recommendations to: 1] issue guidance to key personnel reinforcing the importance of subcontracting plan requirements; and 2] consider requesting that the agencies' Inspectors General review compliance with this guidance.

To read the GAO report, visit: http://www.gao.gov/new.items/d07205.pdf.

To read the text of the letter, click here.

Sources: Library of Congress [via THOMAS], U.S. Senate Committee on Small Business and Entrepreneurship
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