Following is a statement by Senator John Kerry (D-Mass), Ranking Democrat on the Senate Committee on Business and Entrepreneurship, submitted for the record on the Supplemental Appropriations for SBA’s Disaster Loan Program (HR 4745) which passed the Senate today:
Mr. President, the Small Business Administration’s disaster loan program is facing another shutdown this month unless Congress passes a bill to provide the program with more funding. A shutdown of this program would further slow the recovery of the Gulf, where hundreds of thousands of business owners and homeowners have been waiting months for the Administration to process and disburse loans to help them pay their bills and start rebuilding their businesses and homes.
As of this week, according to the SBA’s data, out of more than 60,000 loans approved for businesses and homeowners, only 23,000 have been partially or fully disbursed. And out of the almost 375,000 applications received, 190,000 are still waiting to be processed. The families and businesses waiting should not be subjected to yet another roadblock to assistance through the disaster loan program.
The mismanagement of the SBA’s disaster loan program has been well-documented on national news programs like CNN and in major papers like The Washington Post and USA Today. The Committee on Small Business and Entrepreneurship has held two hearings on the matter. Adding to the problems, the SBA was not paying attention to the books and didn’t realize it was making larger loans and spending more than it had estimated. This lack of oversight brought the program to the brink of shutting down.
When the President’s budget was released on February 6th, the SBA discovered it only had enough money to make it to February 13th. Instead of being forthcoming about the problem when the SBA and its financial team came up to brief the oversight Committee on SBA’s budget and financial standing, they were silent. Luckily, as has been the pattern since President Bush has been in office, the Congress stepped in to pass emergency legislation to keep one of SBA’s small business programs up and running.
Specifically, Congress approved a last-minute request from the Administration to reprogram $100 million from SBA’s disaster administrative funds into the account for disaster loans. Unfortunately, not only did SBA wait until the last minute to seek assistance, but the assistance it sought was not enough to keep the program running long – just enough to keep the program running from February 14th to maybe the end of the month. To make it through the year, the SBA needs an estimated $1.3 billion.
Demonstrating yet another lapse in judgment, the Administration did not plan to seek the entire amount to avoid another shutdown, but instead decided to take a piecemeal approach. Their plan was to ask now for enough money to make it through July, and then later in the year to seek the rest of the needed funding. I disagreed with this approach, and urged the President and Senator Majority Leader Frist to request the entire funding at one time and to move the funding measure as a free-standing bill so that it could pass before the Congress breaks for the President’s Day recess. Waiting until Congress comes back on February 28th would be too risky given that SBA only has the $100 million it requested to keep going.
Given all that’s at stake for the families and businesses in the Gulf, I am very glad that today, before we recess, the Senate is considering H.R. 4745, a bill to provide funding to the SBA’s disaster loan program. I am glad that Congress has come to the Administration’s rescue to pass another emergency bill, one that is free-standing. I only wish the bill provided the full $1.3 billion instead of $712 million. This will only keep the program running through April. However, the House has already recessed so we are not in the position to add more funding at this time.
I hope this bill gives some peace of mind to those in the Gulf waiting for help, and I hope that when we come back we can be just as swift in approving a final measure to fully fund the disaster loan program.
In closing, I ask unanimous consent that letters from me and my colleagues to President Bush and Majority Leader Frist be included in the record, along with my statement.