By Ned Randolph

A critical piece of Louisiana's recovery puzzle, which the state has not seen from Washington, D.C., is relief for struggling businesses. Theories vary from a Republican revolt in Congress to road-blocking by the Bush administration.

Gov. Kathleen Blanco, who on Thursday again appealed to Bush, has requested $200 million in bridge-loan financing from Congress to get capital to businesses waiting on U.S. Small Business Administration loans.

Her request, which is included in a larger bill, called the Small Business Hurricane Relief and Reconstruction Act of 2005 and would give the SBA more authority to provide bridge loans and grants, is apparently opposed by that agency.

"We understand that SBA personnel are discouraging Congress from passing that bill because it would pre-empt their own program," Louisiana Economic Development Secretary Mike Olivier said.

The bill, which has bipartisan support from Louisiana's two senators as well as Sen. Olympia Snowe, R-Maine, and Sen. John Kerry, D-Mass., would provide $750 million in bridge loans and grants for all of the states affected by hurricanes Katrina and Rita.

In a hearing last week, Snowe and Kerry said the SBA was blocking their bill.

In a statement, Kerry said Thursday: "We have continued meeting with White House officials, but these negotiations are very one-sided. We keep offering solutions, and they keep saying no. They have an opportunity to provide some real help, and just won't do it."

Another amendment with the same provision was stripped from a separate bill by Republicans who are apparently rebelling against Katrina spending.

Louisiana Recovery Authority vice chairman Walter Isaacson said he believed the bill is being used as a political football in a fight over tax cuts.

"What are they thinking?" he asked at a conference last week.

"The White House wants to help us more than they can get through Congress," Louisiana Recovery Authority member Sean Reilly said. "They're in a political fight over how much they can allot to Rita and Katrina."

Waiting on federal relief, Blanco offered her $10 million "rapid response fund," traditionally used to snare economic development projects, to instead finance a Louisiana bridge-loan program. The money ran out this week.

Participating Louisiana banks processed 560 applications and approved 407 loans in two weeks, according to Olivier's office.

Meanwhile, the SBA has been paralyzed by the size and scope of the disaster, dispersing only 18 checks to small businesses in Louisiana since Katrina, Olivier said in a speech last week .

"The SBA is broken. It does not work," he said Nov. 11 at the Recovery and Rebuilding Conference in New Orleans.

The agency has been plagued by an untested computer system it placed into service only this year.

The new "paperless" system, which requires that all forms be manually scanned into the network, has crashed periodically since Katrina.

Some SBA employees, active and retired, have expressed similar frustrations with the agency's response, but have said they are afraid to make any public statements for fear of retribution.

Meanwhile, the SBA last week announced a new "Go Loan" program to use private banks to administer loans capped at $150,000 to affected businesses.

Unlike the disaster loans, which are pegged at 4 percent interest, the Go Loans have no set interest rate, leaving it up to the banks.

"We cannot find out what the interest rate is," Olivier had said, adding that there are a lot of unanswered questions surrounding Go Loan. "Do you have to get disqualified from SBA first to get a Go Loan?"

Rob Stuart, president of Hibernia National Bank of Baton Rouge, said Wednesday that he expects the interest rate to be at least around the prime rate, about 7 percent.

The impact zones of Katrina and Rita cover 13 parishes. About 72,900 small businesses have been affected by the storms, and few have been able to resume normal operations, Olivier's office said.

"I'm hopeful because after Sept. 11, (2001's terrorist attacks) we keep referring to legislation that was passed … in 2002. It took that long."

In Blanco's letter to Bush, she also pointed out that in addition to the bridge loan program, the state has placed nearly 5,000 trailers at Louisiana businesses as temporary housing for workers.

The state has also paid $441 million in unemployment benefits to more than 311,000 workers.

She has asked the federal government to pick up some or all of the state's expected $3.7 billion bill owed to the Federal Emergency Management Agency.

FEMA has made such provisions before, after hurricanes Andrew and Hugo and the 9-11 attacks on New York.

"We have absorbed billions in disaster costs already," Blanco said. "We simply can't absorb any more in the form of cost-share for federal aid."