Friday, February 10, 2006

John Kerry Calls on President to Fully Fund Disaster Loan Program

With the SBA's disaster loan program on the verge of shutting down, John Kerry, Ranking Member on the Senate Committee on Small Business and Entrepreneurship, called on Bush today to request full funding to adequately respond to Gulf area disaster needs.

“The Bush Administration’s short-sightedness in short funding the SBA and its Disaster Loan Program has caught up with them again, this time at the expense of Gulf area victims,” said Kerry, noting the President sought to eliminate all disaster loan funding requested in his Fiscal Year 2006 budget. “Last year the President didn’t view disaster loan funding as a priority, and now today, he has waited until just days before the disaster loan program would have been bankrupt to ask Congress for critical funding.”

In a letter sent to the President today, Kerry urged the White House to act immediately on the mismanagement of the SBA, noting that when Committee staff met with the agency’s Chief Financial Officer earlier this week there was absolutely no mention of the funding crisis. This letter comes on the heels of the Administration’s request to Congress for an additional $1 billion in resources to be reallocated from the Federal Emergency Management Agency to the Disaster Loan Program. Unfortunately, this request is still not enough, as it would only fund the program through July. In order to fully fund the Disaster Loan Program through the end of the September, the SBA needs $1.3 billion.

According to the SBA’s own data, almost six months since Hurricane Katrina hit, 50 percent of homeowners are in bureaucratic red tape waiting for their disaster loan requests even to be processed. Similarly, more than 35 percent of business owners are still waiting.

“Time and time again, the Bush Administration has not requested enough funding for small business or disaster loan assistance, leaving Congress to bail them out,” said Kerry. “Since taking office, President Bush has slashed the SBA’s budget by more than 40 percent, depriving small businesses around the country of the resources that would help them contribute to our country’s economic growth. This has resulted in poor oversight and ultimately the inability for the agency to respond to the needs of homeowners and businesses devastated by Hurricanes Katrina, Rita and Wilma. The White House has ignored the deficient and disastrous response of the SBA for too long.”

The text of Kerry's letter can be found here.


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