John Kerry’s Floor Statement on Relief For Small Businesses Harmed by Hurricane Katrina

The following is the text of Senator John Kerry’s Floor Statement, today on Relief For Small Businesses Harmed by Hurricane Katrina:

Wednesday, September 14, 2005

Mr. KERRY. Mr. President, I ask unanimous consent to bring up Senate Amendment No. 1695 to the CJS FY2006 Appropriations Act. I offer this amendment with my colleague, Senator Landrieu, to provide comprehensive relief to the small businesses harmed by Hurricane Katrina. This assistance is necessary because of the two supplemental spending bills sent to Congress, not one penny of the combined $63 billion was for small business relief.

In spite of this gross omission, members have come to the floor to say we shouldn’t do any emergency assistance for Katrina victims on the Commerce, Justice, Science appropriations bill. Mr. President, I disagree. This appropriations bill is the funding source for the Small Business Administration, and it is through the Small Business Administration that disaster loan assistance is available, for homeowners and business owners, and it is through the Small Business Administration that the Federal government provides the full complement of assistance to the small businesses in our nation. The SBA is indispensable to the recovery of the Gulf region after Hurricane Katrina. If the Administration is not going to provide small business relief in the emergency spending bills its sends to Congress, this is absolutely appropriate.

Before I get into the goal of our amendment and highlight some of the details, let me be clear on our intention. While Senator Landrieu and I are willing to make reasonable compromises on what we are proposing, we are not willing to do nothing. The orders from the Republican leadership to offer a small business Katrina relief package as a free-standing bill instead of as an amendment to the appropriations bill, as we are considering, is not an option. Based on past experience, it will be a waste of time. We will have a repeat of S. 1499, the American Small Business Emergency Relief and Recovery Act. After the terrorist attacks of 9-11, the Administration blocked the passage of this comprehensive small business relief for almost five months, a bill with 63 cosponsors, from the most conservative to the most progressive, and a cost almost five times cheaper than what the Administration proposed. Senator Bond and I spent many a late night here negotiating with the President’s top advisors, only to hit road block after road block. Left to pay the price were thousands of small businesses who made ends meet by financing costs with expensive credit card money, depleting their personal savings, laying off employees, ruining their credit, and even filing for bankruptcy. No, doing a free-standing bill will lead to the same tag-team of anonymous holds, delaying needed relief to our small businesses.

Now’s the time. While states are still trying to assess the extent of the damage, there are an estimated 800,000 small businesses in Louisiana, Mississippi, and Alabama, and we are getting reports that more than 100,000 in Louisiana, and some 50,000 in Mississippi, were damaged or destroyed. We also know that in Louisiana alone, small businesses provide more than 65 percent of the jobs. That’s typical for most of America, making small businesses key to the economy. The only way we can get everyone back to work, and get these areas thriving again, is to make small business assistance a top priority.

Our amendment recognizes that it will take months, if not years, for small businesses to get back to normal. SBA’s federal disaster loans – both physical damage loans and economic injury loans – will play a critical role in this recovery. Our amendment also recognizes that, similar to the domino effect of the 9-11 attacks on our economy, we need to help not only those small businesses physically located in the declared disaster areas, but also those that are indirectly harmed.

The tourism industry, so important to New Orleans, has suppliers around the country. Travel agents that book conferences into the city. Companies that provide food, beverages, and supplies to the hotels, restaurants, and bars, that suddenly have no orders. There are the small businesses that could help rebuild the damaged and destroyed homes, businesses, and infrastructure, but need legal protection to make sure they are part of the Federal contracts paying for these services. Too often, the government takes the easy way out and makes several big contracts to the Halliburton’s of the world, leaving the local economy without the benefits of growth in local tax revenue and job creation. And then of course there’s the under-estimated, but essential, counseling. Small businesses need help figuring out how to restructure, how to adjust their businesses plans for the losses, and many other important questions.

To put together this package of small business relief, I have worked closely with Senator Landrieu, who herself, and her staff, have worked tirelessly in recent days to determine just what businesses in her state need to get Louisiana small businesses on the road to recovery. And we should all be encouraged at how much we can do under the auspices of the Small Business Administration to help.

• Recognizing that these businesses have no way of even operating now, or likely anytime soon, we defer for two years the interest and principal payments for those small businesses located in disaster area that have been adversely impacted.

• Businesses directly impacted may use disaster loans, which have interest rates capped at 4 percent, to refinance existing disaster loans and existing business debt to consolidate debt and lower overall debt.

• For those businesses directly impacted that had SBA 7(a) and 504 loans before Katrina and can’t make their payments, we direct the SBA to assume the payments for up to two years, or until the business can resume payments.

• For businesses indirectly impacted, such as suppliers to the extensive tourism businesses in the Gulf Coast, we make available SBA 7(a) loans at reduced rates, with protections to make sure those who need them, get them.

• For those businesses that need counseling, we increase funding to SBA’s counseling partners, to serve businesses whether they are in Louisiana, or Mississippi, or Alabama, or whether they are still displaced in other states like Texas or Arizona.

• We put in place contracting protections to encourage the Federal government to help rebuild the economy by using local businesses, or small businesses.

• We authorize $400 million in grants to the states in the declared disaster areas to make bridge loans or grants to those small businesses harmed by Hurricane Katrina that need access to money immediately, and can’t wait for disbursement of Federal loans or other assistance.

• As we all know, Hurricane Katrina knocked out roughly 10 percent of U.S. oil refining and natural gas pipeline capacity in this country, causing prices for gasoline and natural gas to go through the roof, and experts estimate the impact will hit us in the winter too when heating oil prices will increase as much as 70 percent. To help small businesses and farmers and manufacturers being crippled by these energy prices, we give them access to low-cost disaster loans. This is a very good, but unfortunate, example of how businesses outside the declared disaster areas will be indirectly seriously and adversely impacted by Hurricane Katrina.

• To drive down the overall costs of the SBA’s largest loan program as Hurricane Katrina takes its toll on the economy, adding to the increased costs to small businesses of health care, energy, and rising interest rates, we reduce the fees. The Congressional Hispanic Caucus has been calling for this relief for Hispanic small business owners because since the Administration raised the fees on these 7(a) loans, loans to Hispanics have fallen 14 percent. With the added problems to the economy caused by Hurricane Katrina, access to affordable capital is all the more important.

In closing, I want to thank Senators Reid, Mikulski and Landrieu for their leadership in helping us move small business disaster relief for Katrina victims. The coming weeks and months are critical for struggling small businesses. We must do everything we can to make sure there are jobs waiting for the people of New Orleans and the Gulf Coast when they finally return home. I ask my colleagues to vote in favor of this amendment.

An advance copy of the summary of this amendment can be found here.

Related Posts:
— Kerry, Landrieu Fight for SBA Disaster Loan Extension
— John Kerry Offers Major Package of Legislation to Help Small Businesses, Others Devastated by Hurricane Katrina

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2 Responses to John Kerry’s Floor Statement on Relief For Small Businesses Harmed by Hurricane Katrina

  1. Indie Liberal says:

    Thanks for posting this Pam. 🙂