NEW YORK -- When a witness at a Senate hearing in March on small business accused state and local governments of not doing enough to prepare for disasters, he got a sharp retort from the committee chair.
“You're talking, with all due respect, to a person who had a whole city go under water,” said Mary Landrieu, the Louisiana Democrat who heads the Senate Committee on Small Business & Entrepreneurship, as she refuted a charge that state and local officials aren't inclined to prepare for disasters because they expect financial help from the federal government.
“That is not the experience in Louisiana,” Landrieu said. “All 64 parishes are just frightened to death that Katrina's going to happen to them.”
When Landrieu became chair of the committee in 2009, she was well aware of the struggles that small companies deal with when a disaster strikes. Businesses in her state were devastated by Hurricanes Katrina and Rita. The state was hit again in 2010 by the Gulf oil spill, and last year, by Hurricane Isaac. She comes from a political family that has served locally, across her state, and nationally. Her father, Moon, is a former mayor of New Orleans and was Secretary of Housing and Urban Development under President Jimmy Carter. Her brother, Mitch, is the current New Orleans mayor and also served as Louisiana's lieutenant governor.
Landrieu brings all of that perspective to the committee that oversees the Small Business Administration, the agency charged with helping small businesses grow and providing aid after a disaster. After Superstorm Sandy swept across several East Coast states last fall, Landrieu campaigned in Congress for aid for the shattered coastline.
“I'm going to step up for New York, New Jersey and the East Coast,” she said. “We know what a successful recovery needs.”
Disaster aid for small businesses is one of the key responsibilities of the SBA. So are small business loans. But Landrieu, whose job makes her an advocate for small business more broadly, is concerned about a wide range of small business issues.
Her agenda includes helping companies to continue recovering from the recession, find skilled workers and have a voice in the debate in Congress over taxes. And she wants to make federal agencies reach the government's goal for giving contracts to small business.
Landrieu's view of how small business is faring matches that of many economists.
“It is hard to pinpoint exactly when our economy, including small business expansion, will really take off, but we are seeing encouraging signs,” Landrieu said in a recent interview with The Associated Press.
She says lawmakers can help the recovery pick up momentum, by helping to make loans easier for small businesses to get, and by sponsoring programs to mentor business owners and train workers so they'll have the skills that companies increasingly need.
But she's critical of lawmakers' bickering over the budget -- and of the $85 billion in across-the-board budget cuts that took effect March 1.
“Businesses both large and small are not only suffering the direct impact of these budget cuts, they are also operating through a never-ending cycle of uncertainty that makes business investment risky and is holding back growth,” said Landrieu, who has spent most of her adult life working in politics. Landrieu, 57, has held public office since she was 23. After working in real estate after college, she was elected to the Louisiana Legislature, served eight years as a state representative and two terms as state treasurer. She was elected to the U.S. Senate in 1996.
At last month's hearing on small business, Landrieu asked witnesses for their opinion of a bill she and fellow committee member Jeanne Shaheen, D-N.H., introduced to reinstate a law allowing companies to use SBA loans known as 504 loans to refinance mortgages. The law expired Sept. 27, and companies can now use 504 loans only to purchase or expand property. Owners who want to use cash from a refinancing to run their businesses no longer have that option.
“I'm such a strong believer in this program -- I've seen it literally with my own eyes save businesses in Louisiana,” Landrieu said during the hearing.
But her concerns about loans go beyond the SBA. Small businesses borrowed $30.3 billion through SBA loan guarantee programs in the fiscal year that ended Sept. 30. That was a fraction of the $584.1 billion in outstanding small business loans that the Federal Deposit Insurance Corp. reported at of the end of last year.
“The problem for small business in America is not only do they have difficulty getting loans, but when they get them, they are not as affordable as they should be, nor are they under the terms that are the most helpful. So you have a lot of small business operating debt on credit cards, (which are) high-interest and basically short-term,” Landrieu told the AP.
Landrieu will also preside this year over confirmation hearings for a successor to SBA head Karen Mills, who plans to step down as soon as her replacement is ready to be sworn in. Landrieu said the agency needs someone who has the ability to get a lot of work done with very little money -- the Obama administration's budget request for the SBA was $810 million, while the Pentagon was allotted $683 billion.
“I'm looking for a new administrator that is energetic, that is innovative, that believes in partnerships,” she said. “We believe in partnerships. “We've increased by 20 percent the number of banks that are partnering with the SBA.”
It's not known when President Barack Obama will nominate someone to succeed Mills.
The chairman of the House Committee on Small Business, Sam Graves, R-Mo., says he and Landrieu have a good working relationship. They worked together in the last Congress to win reauthorization of programs that allow small businesses to take part in government research and development projects.
Graves says he hopes the Senate committee would work with his on reducing wasteful and duplicate spending at the SBA and on further efforts to give small businesses more opportunities for government contracts.
At hearings, Landrieu is forthright when she hears something she doesn't agree with. When another senator, James Risch, R-Idaho, suggested repealing the Dodd-Frank law that regulates banks as a way to increase lending to small business, Landrieu shot back, “I'm not in (for a repeal) so that big banks can fail and taxpayers have to pick up the tab. I'm not going to go there.”
Dodd-Frank was passed following the near-collapse of the banking system in 2008.
Landrieu has fought for changes in how the government responds when small businesses are devastated by hurricanes and other severe weather. She's pleased that her efforts helped improve disaster response to small businesses.
“We did improve the response considerably after Katrina," she said. "Those reforms are being felt now by the survivors of Sandy. The time to get a loan has diminished significantly. The paperwork required has diminished significantly. The (disaster) loan limits were increased from $1.5 million to $2 million. There's much improved coordination between the IRS, the SBA and FEMA."
But more improvement is needed, she said.
“Recently, I held a hearing in Staten Island in New York. Our committee heard testimony that the interest rates on small business disaster loans are currently too high, the paperwork is still too cumbersome and the (loan) rejection rate is too high.”