Military Construction and Veterans Affairs and Related Agencies Appropriations Act, 2016

Floor Speech

BREAK IN TRANSCRIPT

Mrs. SHAHEEN. Mr. President, I come to the floor this afternoon to ask the Senate to take up and pass two bipartisan no-cost bills that will help small businesses with one of their most urgent needs; that is, access to credit. Specifically, I am referring to Senator Risch's bill to enhance the SBA support for startup firms, which is called the Small Business Investment Company Capital Act, and the bill I have sponsored with Senator Isakson, the Commercial Real Estate and Economic Development Act, which is also known as the CREED Act.

Both of these bills have broad bipartisan support. In April, almost 6 months ago, the Senate Committee on Small Business and Entrepreneurship voted unanimously to pass both of these bills. I had introduced the CREED Act with my friend from Georgia Senator Isakson to reinstate a new version of a successful no-cost program at the SBA known as 504 refinancing. That program had expired before many of the small businesses that needed help could benefit.

Congress had created this refinancing program during the financial crisis when small business lending was frozen. As real estate values declined, many small businesses, even those that were performing well and were current on their mortgage payments, were unable to refinance their loans through traditional methods. Small businesses with equity in their properties were often unable to access that equity for additional operating capital.

That 504 refinancing program worked. For the short time that it was active, SBA and its loan partners were able to help a lot of those small businesses. More than 2,300 small firms refinanced $5 billion of small business debt. Unfortunately, the program expired in September of 2012, even though there was still significant demand for this type of financing. In fact, on the last day this program was authorized, more than 400 businesses from around the country applied.

There is still a significant demand for this lending today. We keep hearing from small businesses that they would benefit greatly from this type of financing. In particular, it would help the many small businesses who are paying too much in interest because they took out their loans during the recession. As one lender in New Hampshire said:

During the crisis, businesses took whatever financing they could get. The banks wouldn't commit to long terms. Today the rates are much better, [so businesses holding those loans are paying too much].

Now, while the economy is better and lending to small businesses is starting to recover, many banks today either cannot or will not refinance or renew an existing commercial real estate loan on terms as beneficial as the 504 refinancing loan could.

We know there is real need for this program. We have heard it from small businesses, and we have heard it from groups that work directly with small businesses. I have a chart here that shows a number of those groups we have heard from. The U.S. Chamber of Commerce and the American Bankers Association support the legislation. The National Association of Development Companies; the National Small Business Association; the Consumer Bankers Association; the Small Business Majority; Women Impacting Public Policy, which does so much to support women-owned businesses; the Association of Women's Business Centers; and then we have a whole list of those development companies that support this legislation. I won't read through those development companies, but these are all organizations and businesses that want to see us start this program again because they have small businesses that need this lending.

I have a number of letters here that I will just hold up and show. We have a whole packet of letters, and I ask unanimous consent to have printed in the Record these letters.

BREAK IN TRANSCRIPT

Mrs. SHAHEEN. The support for this bill is so broad, as indicated by this chart and as indicated by these letters, because the need is so great. There is no reason we shouldn't take up and pass this bill. It has been approved by the committee--the small business committee. It has broad bipartisan support. It is cosponsored by Senators Fischer, Ayotte, Coons, Cantwell, Hirono, Franken, and Casey. I thank them for their support, and I thank the small business committee for its work.

Mr. President, like so many of the important bills that go through the Senate, this bill has been paired, as I said earlier, by the chairman of the small business committee, Senator Vitter, with another no-cost small business bill which is authored by Senator Risch from Idaho. That bill, along with the CREED Act, will provide no-cost solutions that will help small businesses in this country get the credit they need to fuel our growth.

Again, both of these bills passed unanimously out of the small business committee. I believe the time has come to pass them in the Senate. They have been held up for too long.

At this time I want to yield to my colleague, who is going to talk about the hold problem we have been facing on this bill.

BREAK IN TRANSCRIPT

Mrs. SHAHEEN. I thank my colleague from Oregon for pointing out the fact that people who want to hold up legislation that has broad bipartisan support are supposed to make themselves publicly known. It took us months to figure out who was actually holding up this bill. So I do intend to ask unanimous consent to move the bill forward. I appreciate the Senator pointing out the change we have agreed to as a Senate in how we handle those holds and that the people holding up the legislation should be public so the public understands who is objecting and has a chance to weigh in with the people who are objecting.

Mr. President, with that said, I ask unanimous consent that the Senate proceed to the immediate consideration of Calendar No. 104, S. 552, and Calendar No. 107, S. 966, en bloc; that the bills be read a third time and passed; and that the motions to reconsider be considered made and laid upon the table with no intervening action or debate.

BREAK IN TRANSCRIPT

Mrs. SHAHEEN. Reserving the right to object to the modification, let me point out that Senator Toomey's objection to this bill is not only wrong, it is inconsistent. The Senator is not objecting to Senator Risch's bill, S. 552, which is also being considered today. He not seeking to amend it, even though it would increase small business assistance and also require taxpayer guarantee.

We have also recently passed bills that increase small business assistance, including Senator Vitter's disaster legislation and an increase to the cap for the SBA 7(a) Loan Program. The fact is that the amendment Senator Toomey is proposing is really not a compromise. Let me take a few minutes to explain why.

This amendment would essentially gut the pre-legislation, the 504 refinancing program, and it would prevent it from ever helping small businesses.

I appreciate Senator Toomey's experience as a small business owner. My husband and I started out our married life as small business owners. We had a family business. It did very well by us. I learned a lot about the challenges facing small business. One of the major ones is access to credit.

What Senator Toomey is talking about would single out this legislation and gut the intent of this legislation, and that is not what small businesses need.

I want to read a letter that we received from nine lenders--the nonprofit SBA certified development companies in the State of Georgia that worked with this program--about their assessment of what Senator Toomey is proposing. They say:

It is our understanding that some have suggested that this program be held to accounting standards outside of the current federal budgeting procedure. The process of how the budget is managed is a contentious one and one that should not hold this bill hostage. ..... We know the performance of the loans that were refinanced during the downturn while [the] program was in place have outperformed OMB projections and the regular default rates on standard SBA loans. SBA implemented credit safeguards by making the program available only to businesses who have been in business two or more years and by not allowing businesses to refinance debt that has been past due in the year prior to the application.

That is the end of the quote from the letter, and it was submitted as part of the package of letters I submitted earlier.

What Senator Toomey's proposal would do is single out this program and make it subject to a budget standard that would artificially raise the cost of programs meant to help small businesses, farmers, students, and so many others get access to credit.

I understand the Senator from Pennsylvania wanting to change budget rules for credit programs. Certainly, if he has a concern about that, he should try to do that. I am happy to have that debate. But this isn't the right place to do it. We shouldn't be holding small businesses hostage.

The Budget Committee recently started a series of hearings on budget reforms, and I think that is the right venue for this discussion.

I would point out that Senator Enzi, who chairs the Budget Committee, voted for this legislation. He was part of the vote in the Small Business Committee that passed this legislation.

I would also like to note that the CREED Act, as passed by the committee, was supported by a number of organizations from the Commonwealth of Pennsylvania.

I will quote again from one of the letters we received from one of those lenders from Pennsylvania, NEDCO. They said:

I write to share my enthusiasm for the CREED Act. ..... I urge you to push for quick consideration of this bill in the Senate and vote in favor of it so that Pennsylvania small businesses, and small businesses everywhere, can once again have access to this valuable program. ..... While large businesses have equal access to capital as they did before the recession, small businesses still have a tight credit market. ..... With interest rates at historic lows, reinstituting the refinancing program will give small business owners a once-in-a-lifetime opportunity to lock in a fixed-rate refinanced loan and be able to use those savings to reinvest and grow their businesses.

The letter goes on. That is just one lender. Across Pennsylvania, the program had a big impact while it was up and running. In fact, Pennsylvania was the 12th most active State, with more than $64 million in loans and more than 1,700 jobs supported in about the 18 months of the program.

We did amend the bill in the Small Business Committee to address some of the concerns from Republican Members about its budget implications. Those changes have been made. They have been vetted by our committee. But now, after months of delay, Senator Toomey has proposed an amendment that is not a good-faith effort at compromise, from my perspective, that would effectively prevent the program from ever helping small businesses that we need to help.

For all of these reasons, I object, and I would again ask unanimous consent to take up and pass both bills as reported by the committee of jurisdiction.

BREAK IN TRANSCRIPT

Mrs. SHAHEEN. Mr. President, I understand Senator Toomey has objected to my unanimous consent request, but I do think it is important to point out that in fact the amendment he has proposed would essentially undermine the program. That is why I say that is not an amendment that is a real effort to improve the bill. In fact, it is not being offered on any other of these kinds of programs--didn't offer it on Senator Vitter's legislation, on increasing the SBA 7(a) program cap.

If that is a conversation he wants to have as a member of the Budget Committee and for the Budget Committee to start talking about that, that is very appropriate, but that should not undermine the efforts of small businesses to get the lending they need. In fact, this is a program that has a history. It has a history that shows that it has a lower default rate than other SBA loan programs. In Pennsylvania alone, it created 1,700 jobs during the time it was in effect.

So I think there is the possibility to get to some agreement, even though we have already made some reforms to this bill in committee, but I don't think gutting the program in a way that makes it ineffective is the way to do that.

I yield the floor.

BREAK IN TRANSCRIPT

Source