Business aid slow, critics say

By Brian P. Nanos

WASHINGTON - In testimony before a Senate committee skeptical that the Small Business Administration was doing all it could to help firms recover from Hurricane Katrina, SBA head Hector Barreto introduced a new program Tuesday that will provide loans to Gulf Coast small businesses.

The program will allow some private banks to use simplified loan procedures to get money to the area faster.

Unhappy with Barreto's optimistic predictions for federal aid to Gulf Coast businesses at his last meeting with the committee, some members voiced doubts that the second meeting would produce concrete results.

"I'm pretty sure of what I'm going to hear today," Sen. John Kerry, D-Mass., said. "I'm not sure what I'm going to see tomorrow."

"Somehow we've got to find a way to get this to mean something," he added.

After the last time Barreto appeared before the committee, senators wrote legislation to give the SBA greater power in helping Gulf Coast small businesses recover from the storm.

Barreto said the legislation expanded the SBA's authority beyond what was necessary. Republicans have blocked the bill from getting a vote in the Senate.

In Tuesday's hearing, Barreto argued that the new program would provide some of the help in the blocked legislation without requiring the SBA to increase its budget. He also responded to complaints that the SBA has been slow to process loan applications by arguing that no faster response to a disaster of this size could have been expected

Others appearing before the committee were Maj. Gen. Ronald Johnson of the Army Corps of Engineers, Gregory Rothwell from the Department of Homeland Security and Mississippi Rep. Bennie Thompson.

Thompson said that government subcontractors working in the Gulf States are being paid only a fraction of the amount given to the large businesses.

"Let me say I am from Mississippi," he said, "and I know sharecropping when I see it."