Community Disaster Loan Equity Act of 2005

Mr. Speaker, I ask unanimous consent to take from the Speaker's table the Senate bill (S. 1858) to provide for community disaster loans, and ask for its immediate consideration in the House.

Mr. Speaker, will the gentleman yield?

Mr. Speaker, there is within the construction of FEMA a loan program called the Community Disaster Loan Program. Currently as constructed, there is a $5 million limit per loan per community under the rules that govern distributions of these loans. There is also a funding limitation of some considerable concern in light of the community needs pursuant to Hurricanes Katrina and Rita.

The purpose of this legislation is to designate $700 million of previously appropriated funds for the purpose of making them available under the provisions of the current Community Disaster Loan Program.

Secondly, the bill would waive the $5 million arbitrary cap in light of the current need, but only as to the $700 million specified, and only as to the final disposition of the need for Hurricanes Katrina and Rita.

Pursuant to those modifications, the Senate has also adopted a provision which would not allow the waiver of repayment which has been historically the case over the course of the administration of the Community Disaster Loan Program. The bill as now constructed does not permit the waiver of repayment of these loan obligations. This will in effect create a $700 million loan program which must be repaid by the communities which have suffered the Katrina-Rita losses without a limit as to the $5 million cap on a per-loan consideration.

Mr. Speaker, I certainly appreciate the gentleman from Minnesota yielding and just wish to express appreciation for those concerns he has noted. Certainly, the repayment obligation should be met at some point. The arbitrary deadline, in fact, may be problematic going forward.

I would suggest in consultation with the other members of the Louisiana delegation, we fully intend to examine this going forward and hope to have the opportunity to bring our concerns to the attention of this body and the Senate as well. The principal concern, as the gentleman has identified, is the Senate has passed this vehicle in its current construct. If we were to amend it as suggested, it would have to return to that body for their agreement.

We are very concerned with potential layoffs occurring next week in various municipalities. So this loan package is very much an emergency issue; and albeit with the nonwaiver of repayment provision, we fully support it in its current form, given the constraints we face.

Mr. Speaker, I appreciate the courtesy. I shall be brief. I wish to express appreciation to those Members who brought to the House's attention that the waiver of repayment has been stricken from the bill, but I would also indicate that in discussions with people and in the loan construction packages they have great latitude as to terms and conditions of repayment. They have been quite assuring that they will work with communities in a manner which is responsible to assure relief is provided, but that the taxpayers of the United States have some assurance that, when possible, communities will give back that which was extended during times of hardship.

I would also want to point out that there literally have been billions of dollars made available to constituents in Louisiana of great scope and consequence from the FEMA checks to the provision of temporary housing. There has been a great deal of work conducted here.

I wish to express appreciation for the administration and all those who are engaged in this work and to the people of this great country, who have given

voluntarily huge charitable contributions to various organizations to be of assistance to us. We are indeed appreciative, and we do not wish to leave the House floor today with the impression that Louisianans have been ignored. Far from it.

We have a long way to go. There is much work to do. There is suffering still far too rampant in our communities. This act today will go another small step in helping those people get back to normality. But there is a lot happening as fast as can be conducted, I believe, in the State of Louisiana, and I am sure in other coastal States as well, and I would like the record to reflect some balance, that it is not as fast as everyone would like, but help is coming, and I appreciate the gentleman's allowing me to make that statement.

Mr. Speaker, I certainly understand the reason for the gentleman's inquiry and the illustrative list gentleman presents is very reasonable. In other circumstances, we found ourselves with the luxury of a little time with which to consider the matter. If we were to agree to that modification, I understand the matter would be referred to the Senate for further consideration and may well put in jeopardy the adoption ultimately of this loan program, which we are hoping to have in effect and available on Monday morning to affected communities.

I have, however, conversed with the gentleman from Alaska (Chairman Young), the ranking member, the gentleman from Minnesota (Mr. Oberstar) and others on the committee who have jurisdiction over FEMA matters in

which this loan program is domiciled, and have assurances from them that we will visit the gentleman's concerns and adopt a reporting regime, if not exactly, very similar to this.

I would be supportive of and I am sure all members of the Louisiana delegation who are here on the floor would also support the gentleman's request, but would respectfully ask, given the concerns of time and the issues at hand, that the gentleman would withdraw his objection. We would be happy to note formally in the record our agreement to proceed with the gentleman on our return to work absent the Columbus Day recess to achieve the gentleman's interest.

Mr. Speaker, if the gentleman will yield further, I thank the gentleman for his question. I would point out, we would act forthwith, and perhaps there would be additional items that we would be interested in having reported to us on the matter of these loan dispositions. So we have some accountability to our constituencies and know what local governments are seeking in the way of assistance and how we may further provide aid.

So the gentleman's point is important to us in the delegation as well as to the gentleman for his own satisfaction that the funds are being used appropriately.

I would like to have the possibility of working with the gentleman's staff over the recess week we are about to enter into, in consultation with the staff from the offices of the gentleman from Minnesota (Mr. Oberstar) and the gentleman from Alaska (Chairman Young), to try to perfect a reporting regime that the gentleman and I and the chairman would find acceptable to achieve his goals, and it would be obtained as soon as agreement can be obtained. I would commit our delegation to be fully supportive of that effort.

Mr. Speaker, reserving the right to object, under my reservation, I ask the gentleman from Louisiana (Mr. Baker) to explain the substance of the bill.

I yield to the gentleman from Louisiana.

Further reserving the right to object, and I thank the gentleman for that explanation. Earlier this week, under the leadership of our chairman of the Subcommittee on Water Resources of the Committee on Transportation and Infrastructure, the gentleman from Tennessee (Mr. Duncan), 10 House Members traveled to the three principally affected Gulf States to see firsthand the effects of Hurricane Katrina.

We met with officials in Baton Rouge at the Joint Operation Center for New Orleans and then on through Mississippi and Alabama, during which session the gentleman from Louisiana (Mr. Baker) made, I thought, a superb, a superlative presentation of the history of the storm and the disastrous affects of Katrina and the consequences on the people and the businesses and the need for reconstruction.

Citizens of the Gulf States are doing everything they can to pick up where the storm left off and rebuild their lives. As we saw, nearly a month after the storm, they are still hurting. After 5 weeks of debris removal, the debris remaining is overwhelming.

Local governments' tax base is gone. In our meeting with Mayor Nagin, the mayor of New Orleans, he pointed out that the city of New Orleans accounts for 35 percent of the total economy of the State of Louisiana.

Of course, we also know very well that New Orleans is the world's most important grain export facility. Yet grain is backed up all along the Mississippi, the soybean crop coming in that will not be able to move until New Orleans is able to operate.

In the course of our meeting, Mayor Nagin said, with a heavy heart, with candor, that he had to leave that meeting and go to another news conference to announce layoff of half of the municipal workforce of New Orleans because the city has no revenue coming in and no ability to pay its workforce.

But it was not just New Orleans. We heard that in Bay St. Louis, we heard it in Biloxi, we heard it in Mobile. We saw the pain. This legislation is desperately needed. I support the transfer of $750 million already appropriated in the emergency supplemental of September 8, transferring that money to FEMA, to the community disaster loan program.

I support waiver of the current $5 million cap, but I think it is hard to swallow the insistence by the Office of Management and Budget that the loan

forgiveness provision is discontinued. I look back over the major hurricanes of the last decade and a half: 1889, Hurricane Hugo, Virgin Islands, $50 million forgiven; 1992, Hurricane Andrew, Homestead, Florida, $10 million forgiven; Kauai in Hawaii, 1992, $50 million, Hurricane Iniki, forgiven; Virgin Islands, 1995, Hurricane Marilyn, $127 million, forgiven. Every penny, principal and interest, forgiven. They needed it. It was desperate for those communities. They needed the loan forgiveness.

The damage from Katrina as we have seen is unprecedented. It is heart-breaking, it is devastating. It has affected the gentleman from Louisiana personally, his family, his constituents. It has affected my own family. My wife's brothers still live in New Orleans. One completely lost his home and a second home in Pass Christian.

The situation in Slidell, Louisiana, they would be eligible for a loan of $5 million. But if they do not recover within 3 years, the loan and interest under current law must be forgiven. Under the bill pending, Slidell will have to repay. If they have not rebuilt their economy, if they have not reconstructed, how are they going to repay?

Now, I am sure that colleagues in the committee will say, welcome back, we will fix this at a later time. Now is the time to fix it. I understand, we are not going to stand in the way of the administration's policy priority here. I think we all accept that with great reluctance and heavy heart. We need to resolve to come back and address this at a later time.

Further reserving the right to object, I yield to the gentleman from Louisiana.

Further reserving the right to object, I appreciate the gentleman's predicament and position, but I am also quite certain that within our committee, we will revisit this issue. I certainly intend to take the first opportunity to do so to correct what I think is an imbalance.

Mr. Speaker, I am happy to yield to the gentleman from Louisiana (Mr. Melancon) under my reservation.

Mr. Speaker, further reserving the right to object, I yield to the gentlewoman from New York.

Mr. Speaker, I thank the gentlewoman from New York (Mrs. Maloney) for her observations.

I am happy to yield further to the gentleman should he wish.

Mr. Speaker, reclaiming my time, I thank the gentleman for his observation. Again, I wish other Members had been present to hear his discussion and presentation of the State of affairs of the pre- and post-Katrina effects in Louisiana and throughout the gulf. The gentleman has certainly become a scholar of the issue.

Mr. Speaker, I include for the record at this point a compilation of the expenditures by FEMA and insured losses for fiscal year 1980 through 2000.

Mr. Speaker, I withdraw my reservation of objection.

Mr. Speaker, reserving the right to object to the gentleman's request, it is my understanding that this bill allows $750 million of the $50 billion in disaster relief funding that we provided to be used for loans to assist local governments in providing essential local services. It is also my understanding, as has been discussed here, that there is a ``fig leaf'' attached to this bill, at least it has been called that by some, which would create the impression that these communities are going to be provided loans, rather than grants, and that these loans must be repaid.

I would simply make this observation: This country forgave debt to Eastern Europe, billions of dollars worth of debt. We forgave debt to the tune of billions of dollars for Third World debt. Yet we are being told today that somehow we are supposed to believe that the communities who are supposedly assisted by this legislation will in some way be able to pay back the debt which they would incur under this legislation.

I think we are fooling the American people if we pretend that those communities are going to have the capacity any time soon to repay those debts, and I suspect that this provision is here more to deceive the American people about the true cost than to in fact reflect reality.

I think that if we are going to be honest with the American people and if we are going to be fair to the recipient communities, we need to recognize that these communities are not likely to have any ability to repay that was any greater than the ability of Eastern Europe or the Third World to repay the debts that we forgave in those cases a long time ago. That is one concern I have with the bill.

The second concern I have with the bill is a conservative concern, if you will, because while it is assumed that this bill will provide loans for functions such as police protection, fire fighting and everyday emergency work, in fact there is no guarantee that that is the only purpose for which these funds will be used. Because of that, I want to ask the gentleman whether or not he would be amenable and whether the majority leadership would be amenable to adding the following section to the legislation that the gentleman seeks to have considered. That

I yield to the gentleman from Louisiana.

Mr. Speaker, continuing my reservation, I have been told by several people that they do not want me to pursue this because ``the Senate is going out of session and it will be hard to get an amended version considered by the Senate.''

Heaven forbid that we should ask the Senate to come back and work on something of this urgency. This is the same Senate that did not hesitate to come back in order to tell one American family, the Schiavo family, how they should deal with an end-of-life issue for one of their family members, and yet we are told that we should not build in this protection for the taxpayer because it might inconvenience the other body.

I am very reluctant to agree to proceeding with this legislation without this reporting requirement because, as we have just discovered under the previous $50 billion that we provided to FEMA, they have given us a miserable explanation of the money that they have spent so far. They have given us meaningless spreadsheets and money defined in very broad, meaningless categories that tells the Congress nothing that will enable us to exercise our responsibilities as watchdogs of the public purse.

So, I guess my question is, if I withdraw my reservation, how soon can we expect to have this kind of reporting requirement brought to the House so that we know that in fact the money which is being provided will be used only for the purpose for which it is described today?

I yield to the gentleman from Alaska.

Mr. Speaker, continuing my reservation, I thank both gentlemen for their responses. Let me say that while I intend to withdraw my reservation, given those assurances, I would hope that that would happen as soon as possible, and I would also hope that sometime, somewhere, someone will explain to me why we can forgive billions of dollars of debt to the Third World, billions of dollars of debt to Eastern Europe, but not recognize that American citizens may need that same privilege.

Mr. Speaker, I withdraw my reservation of objection.

Mr. Speaker, I am new to the House, so maybe I should not be so shocked, so disappointed at what I have seen and heard this week. Maybe failing to address critical needs in a crisis is normal here. Maybe if I had been here a few terms, I would understand that is just part of the job to smile when you get nothing and then you say it is a good compromise.

Maybe with a little seniority, I would understand what it means to be a Member of the House of Representatives, to shake a lot of hands, make speeches on the floor, and deeply hope that your district ends up okay.

But I am new to this House. I do not understand. I do not understand why we cannot do what is so obviously the right thing. I do not understand how good people can have their hands so completely tied by leadership that refuses to let their Members voice their conscience. I have friends here and on the other side of the aisle. I do not understand why after asking me personally what they can do to help with this terrible tragedy, they are unable to explain to me why we have to compromise.

I am new here, Mr. Speaker. I heard the President make promises in Jackson Square, and I believed them. I believed the White House when they told me Wednesday that they would help local governments survive so that we can lay the ground work to rebuild. I believed the Louisiana Senators when they said they were committed to the same simple request.

Maybe it is because I am new, but what I am having trouble with today, Mr. Speaker, is the idea that this House would seek to put the people under south Louisiana under more debt and more pain. The loans that should be grants are about to become huge millstones around the necks of the people of south Louisiana when we act today.

When we leave this afternoon, we will have sent its local government along the gulf coast to hundreds of millions of dollars of debt. Why? That is what I ask. Why?

Senator Vitter tells us that it is the only way for this to pass the House. The only way he says that the leadership in this body will lift a finger to help the people in need in Louisiana, Mississippi, and Alabama is if we impose a crushing debt on them. All the signs point in the same direction, Mr. Speaker. The problem is here.

Senator Vitter worked in this House for 6 years and knows this leadership. He has placed the blame squarely at their feet, and I think they owe the entire gulf coast a explanation. Who is this compromise supposed to help, and why is it being done on the backs of those who need the help the most? Why have 90 percent of previous loans been forgiven, and why will loans for future disasters be forgiven but not these?

I will have to support this, Mr. Speaker. Then I am going to go back home, look my local leaders in the eye and tell them to take the money and run. Their Federal Government let them down again, just like we failed in the early days after this storm. They will be asked in 3 years to pay back the money, and that should have been a gift.

My advice to them, again, will be take the money and run. Spend it on your sheriffs' deputies, your firefighters, your public hospitals. Spend it and do not pay it back.

Mr. Speaker, I was sent here to do a job, to work for people that I represent, every day without exception, as hard as I know how. After Katrina and Rita, that focus has only sharpened. I now represent more homeless, broken and suffering people than almost anybody in this body. They have been drowned by the water, whipped by the wind, and now, Mr. Speaker, failed by the House.

Mr. Speaker, I am not going to object, even though this legislation is flawed in many ways, as my colleague pointed out, because we all understand the tremendous need for the people in the gulf region. I am not a Representative from the gulf coast, but I certainly understand the impact on tax revenues after a disaster. Repealing the $5 million cap on community disaster loans is something that I have been working on along with the New York delegation, ever since New York suffered at least $5 billion in lost tax revenues following 9/11 and the loss from the gulf region maybe more.

The bill before us lifts the $5 million cap, but it adds a provision that has never, ever been seen before with these loans. It prohibits, literally prohibits, the Federal Government from forgiving any part of these loans. This is incredibly important because there has been a long history of canceling these loans after they are given.

I have here with me, Mr. Speaker, a list of all the previous disaster loans that have been forgiven. So why are we now putting this terrible burden on the people in the gulf region?