Following is a statement from Sen. John Kerry (D-Mass.), top Democrat on the Committee on Small Business and Entrepreneurship, as prepared for delivery today on the Senate floor: Mr. President, last Friday, May 5th, I took my second trip to Louisiana since Hurricane Katrina, I wanted to see the recovery effort up close now that we’re eight and a half months into the process. Senator Landrieu has worked tirelessly to help rebuild the city she grew up in, and she took me around New Orleans East before we sat down to hear first hand accounts of the challenges small business owners are facing eight months after the storm. We have all heard the statistics: Before Hurricanes Katrina and Rita, Louisiana had 86,000 small businesses employing more than 850,000 people and contributing $22 billion to the local economy. Of those, 71,000 were in the disaster zones and nearly 20,000 were catastrophically destroyed. More than 365,000 residents were left homeless. But those statistics don’t tell the story of what’s happening to New Orleans today. I wish I could come to the floor today and talk about the great progress being made since September. But instead, what I saw in New Orleans East and what I heard during my trip left me stunned by how little is happening compared to how much more must be done. When I went to Louisiana the first time, I saw a region damaged by a storm, but strong in spirit. I talked to people who proved their resilience and their love of their state when they committed themselves not to give up, not to leave – to rebuild their homes and businesses. On this trip I met people who feel little more today than disappointment in the federal government’s inadequate response I met people in New Orleans who were afraid, angry, and disillusioned. I was reminded by small business owners and homeowners last week, New Orleans doesn’t only have a hurricane problem, it also has a levee problem. But little has been done to guarantee the strength of those levees in the future. And I left New Orleans convinced that the Gulf coast doesn’t have a morale problem, Washington has a leadership problem. It’s up to us to change that before it’s too late. We all understand the inefficient, ineffective, mismanaged federal response in the immediate aftermath of Katrina. We’re all angered by it. But what is most distressing to the people I met in New Orleans, is that they were fed empty promises after the initial shock of the Superdome. They believe promises have been broken and more mistakes have been made, after they’d been promised that mistakes would not be repeated. On September 15, the President spoke to the nation from Jackson Square and made a series of promises. He said:
“Throughout the area hit by the hurricane, we will do what it takes, we will stay as long as it takes, to help citizens rebuild their communities and their lives.” “When the streets are rebuilt, there should be many new businesses, including minority-owned businesses, along those streets. When the houses are rebuilt, more families should own, not rent, those houses. When the regional economy revives, local people should be prepared for the jobs being created.”
Well, over eight months later, history is repeating itself. Too little has been provided in real response, and too much time wasted without real solutions for getting the Gulf Coast back to business. Eight months after the president stood in Jackson Square, there aren’t trucks lined up to haul debris out of New Orleans East. In fact, there seems to be little activity from the federal government. Piles of debris remain standing before every building as a constant reminder of the devastation Katrina and Rita left behind. Local officials told me of their fears that mosquitoes and rodents are carrying diseases as a result of the piles of garbage on the streets. In the richest country on the face of the earth, we shouldn’t have Americans abandoned to worry that their children will be at risk for third-world health problems because Washington didn’t meet its most basic obligations to its citizens. More than $10 billion in contracts have been awarded for debris removal, emergency response, and reconstruction efforts. But tens of thousands of abandoned cars litter the streets of New Orleans. Garbage, hurricane debris, and trash were in front of virtually every home or business that I saw. Katrina pulled back the curtain and revealed poverty and squalor many didn’t believe could exist in our country. But eight months later, after so many said ‘no more’ and ‘never again,’ after the cameras went away, these images are still there on the streets of the New Orleans I visited. I don’t know any Americans who remember what they saw in the Superdome feel that their dues have been paid as citizens with a one-time donation to the Red Cross. But if they saw what I just saw they might wonder whether Washington has come to a different conclusion. Eight months after the President promised the revitalization of “new small and minority owned businesses,” the businesspeople who have shown great courage staying in New Orleans are still fighting to keep their doors open in the face of a slow and woefully inadequate federal response. Orleans Parish, the center of Louisiana’s economy, had 12,695 small businesses, employing 245,000 people, in operation before August 29, 2005. Today, it is estimated that only a little more than 2,000 have re-opened. Where is the response from Washington? What about the promise to do what it takes and stay as long as it takes? The President seems to mean these words when he speaks them about Iraq, but they appear to be hollow right here at home when he talks about New Orleans. One person I spoke with confirmed what I could see with my eyes. He said that “basic services in 70 % of the city do not exist. In these areas there is no fire protection, police presence is minimal. Garbage, hurricane debris, and trash are in front of virtually every home…billions have been spent but yet the city is piled high with debris of every kind.” The residents of New Orleans are beginning to put their hopes elsewhere, to put their futures in a new place. Over 3,400 private homes are for sale in New Orleans – more than at any other time since we started tracking this indicator six weeks after Katrina made landfall. This is up from approximately 2,800 homes for sale in February and is the highest number since October 2005. Jim Funk, CEO of the Louisiana Restaurant Association said that the pre-Katrina restaurant workforce of New Orleans has been reduced from 133,000 to 22,000. Only 1,500 of the 3,400 pre-Katrina restaurants are back open. And the unemployment rate of those who remain displaced jumped to nearly 35 percent in March, a 54 percent increase from the month before. I met Pat Murphy who owns United Cab, a sixty-six year old business. After wading through red tape and months of administrative delay, in a process that he described as “turning into harassment,” he finally received his SBA loan. Why does a small business that’s been up and running for sixty-six years have to go through such a painful process to receive assistance from the federal agency that’s sole reason for existing is to help small businesses in need? And the worst part is, Pat Murphy will tell you he’s one of the lucky ones who actually received a loan, he knows many more who are still waiting. You may have heard the Administration brag about the $9 billion in disaster loans they have approved. In reality, as of today, only $1 billion of that money has actually made it into the hands of Gulf Coast businesses and residents to help rebuild their communities. That’s a mere 11 percent. In addition, what’s more, about half of those who applied for disaster loans were denied. What are they going to do? Where are they going to turn? For many fortunate enough even to receive housing assistance, they’re living in front of their damaged homes in trailers sitting on concrete blocks. Some fear for the safety of those trailers. The National Weather Service is predicting fourteen named storms to hit the gulf during the next hurricane season – which begins in three weeks. How will those trailers stand up in severe weather? How safe will they be when 60 and 70 mile per hour winds throw around the remaining debris? When 2 by 4s and household items are turned into projectiles by strong winds? What type of leadership results in spending $900 million to buy 25,000 manufactured homes and 1,300 modular homes, most of which cannot be used because FEMA rules say they are too big or unsafe in flood zones? What type of leadership results in spending $249 million to secure 8,136 cruise-ship cabins for six months, at a cost that Inspector General Richard L. Skinner estimated at $5,100 a month per passenger –six times the cost of renting two-bedroom apartments. Eight months after promises were made, New Orleans has only one Level-1 trauma center. The largest medical complex, Charity Hospital, needs to be rebuilt, but FEMA will only fund repairs. What will the residents of New Orleans do during the coming hurricane season if one of those named storms is severe? Eight months after promises were made to expand local business participation in the recovery, why is FEMA continuing its business model of hiring mega contractors to oversee the recovery efforts? Why is it that debris removal contract dollars are not making it to the local businesses? Why are so many local contractors still waiting for FEMA to pay them millions of dollars for work already completed? Some progress is being made in the Congress, but Washington has miles to go to the urgent needs in the Gulf Coast. Last Thursday, the Senate passed an emergency spending bill that includes $2.2 billion for levee reconstruction in southeast Louisiana, $1.5 billion for Orleans Parish levee projects, and $1.3 billion for the disaster loan program. Senator Landrieu sponsored, and I cosponsored, two key amendments to the bill.
- The first, to make sure the SBA sends up its disaster response plan to Congress before June 1st – the start of the 2006 hurricane season.
- The second, to require the SBA to report to Congress monthly the status of the disaster loan program now and after future disasters. Senator Landrieu, Senator Snowe, and I also cosponsored an amendment by Senator Vitter that declares areas hit by Hurricanes Katrina and Rita as Historically Underutilized Business Zones (HUBZones) and makes sure small, local businesses get first consideration for federal contracts. This is something we have been trying to get done since September and so I hope it survives conference.
But that’s only part of the story. The Senate has passed legislation, S. 1807, that offers a more comprehensive approach to get small businesses back on their feet, but it’s being blocked by the Administration. This legislation includes essential bridge loans and grants that would help those suffering the most, the local small businesses, keep their doors open. The Senate has yet to take action on S. 2482, a bill introduced by Senator Landrieu which I cosponsored, a follow on bill to S.1807, which has additional provisions recognizing the situation and needs on the ground. We must pass this legislation now and action must be taken to implement these initiatives now – not after another storm hits. I don’t just want to talk about the slow response that I saw in New Orleans, but to demand an increased sense of urgency here in Washington to correct it. We need to offer leadership that solves problems, not that talks about them. The businesses in the Gulf Coast cannot continue to face red tape and delays. Many simply can’t last much longer. Many of the businesses that didn’t have business interruption insurance and the significant resources needed to weather an extended hiatus are already gone. Many others are on the verge of closing unless they are able to secure much-needed financial assistance in an expedited manner. These companies can’t continue on empty promises, they need action from this Administration, and they need it now – not after they close their doors and declare bankruptcy. What Louisiana and Mississippi need are solutions, not excuses – leadership, not bureaucracy. We need to come together with creativity and ingenuity to rebuild the region. We must tap into the goodwill and hard work of the American people – people who desperately want to help New Orleans recover from this disaster. We could create civilian assistance corps -- one group of volunteers from every state could take responsibility for a block or a neighborhood to clean up and help rebuild. We need a disaster “ombudsman,” a citizen general who can direct, organize, and structure a recovery effort. We know it can be done because in the aftermath of Katrina we saw General Honore, a career solider in the Army, demonstrate how an organization with clear lines of command, organization, and structure could bring order, hope, and assistance to the chaos faced by the citizens of the region. I came to the floor today to talk about the people of New Orleans and about rebuilding their lives and their city. But this is about more than just the future or a government in Washington that has failed. New Orleans is one of the great cities in this country with an extraordinary history, a diverse and ethnically rich population, and a wonderful culture. All Americans have a stake in its resurrection. In closing, I would like to thank Senator Landrieu again for inviting me to New Orleans for a first-hand look at what she has been living and breathing over the past eight and a half months in a city she loves. Every step of the way she’s been and continues to be an incredible leader and advocate for Louisiana. We owe it to her and to the people she fights for to get this recovery in gear. We should start by passing the legislation, S, 2482, that Senator Landrieu has offered, and we need to hold the Administration accountable for the promises they made and the actions they must take to assist the Gulf Coast region Eight months ago, we saw too many people left on rooftops and in the Superdome because of poor planning and incompetent response. We said ‘never again.’ The clock is ticking in New Orleans to learn whether Washington was ashamed of that failure, or just embarrassed by it. New Orleans, the Gulf Coast, and our country need to know that when we said never again, we meant it. Let’s take action to prove we will not let New Orleans wait any longer. Let’s make it clear that our word is still good.