March 15, 2013

State of Alabama
Press Release: Alabama Department of Commerce

Lawmakers: Small Businesses Vital to Disaster Recovery

March 14, 2013

By Deborah Barfield Berry, Gannett Washington Bureau

Small businesses hurt by natural disasters should get federal aid faster so they can help jump-start recovery efforts, Democratic Sen. Mary Landrieu of Louisiana said Thursday. (Photo: Manuel Balce Ceneta, AP)

WASHINGTON – Small businesses hurt by natural disasters should get federal aid faster so they can help jump-start recovery efforts, Sen. Mary Landrieu, D-La., said Thursday.

"Our small businesses are the economic heartbeat of these communities,'' said Landrieu, chairwoman of the Senate Small Business and Entrepreneurship Committee. "They deserve to get the fastest and best help possible, particularly businesses that take the risk of being the first to open back up before they even know if anybody else is coming back.''

Landrieu's committee held a roundtable Thursday on a bipartisan bill she and Sen. Thad Cochran, R-Miss., introduced last month that would make it easier for some small businesses to get federal aid after a disaster.

The bill aims to fix problems raised after Hurricanes Katrina and Rita struck the Gulf Coast in 2005 and after Superstorm Sandy devastated parts of the Northeast last fall, the lawmakers said.

After the 2005 hurricanes, small-business owners complained that the Small Business Administration was slow to respond and burdened them with red tape, Landrieu said. In some cases, she said, it took more than two months for the agency to process businesses loans.

Though there have been improvements, Gulf Coast lawmakers said more needs to be done.

Under the Small Business Disaster Reform Act drafted by Landrieu and Cochran, the agency would change requirements, so borrowers wouldn't have to use their personal homes as collateral for business loans of less than $200,000.

The measure would allow out-of-state small-business development centers to provide aid to businesses in areas declared a disaster by the president. The centers are limited in how much aid they may provide to businesses outside the state.

"We're offering common-sense, fiscally responsible proposals to make it easier for small businesses to reopen and get back to work following a disaster,'' Cochran said when the bill was introduced Feb. 28. "This will help them keep people employed, provide vital services and stabilize the local economy."

Co-sponsors include Sens. Roger Wicker, R-Miss., Kirsten Gillibrand, D-N.Y., and Mark Pryor, D-Ark.

Several Louisiana groups have endorsed the bill, including the North Louisiana Economic Partnership, the Southwest Louisiana Economic Development Alliance and the St. Tammany Economic Development Foundation.

David Muhlhausen, a research fellow at the Heritage Foundation, said the measure wouldn't go far enough to "reduce the costs of future disaster polices.''

He said Congress should focus on better preparation for disasters and reducing federal recovery costs.

"Given the increasing financial stress facing the federal government, reform should be focused on preventive measures that limit the costs of disaster recovery,'' he told lawmakers at Thursday's roundtable.

The federal government pays so much for natural disasters that state and local governments are less inclined to respond or solve problems, Muhlhausen said.

Landrieu said that's not the case in Louisiana, where officials are "scrambling to build levees.''

She said some are "frightened to death that Katrina is going to happen to them.''

Erwann Michel-Kerjan, managing director of the Center for Risk Management at the University of Pennsylvania Wharton School, warned that disasters will only get worse, partly because more people live in high-risk areas.

"Superstorm Sandy is another reminder of our vulnerability,'' Michel-Kerjan said in written testimony.

Making sure the nation is "resilient to disasters'' should be a priority for Congress and the administration, he said.

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