Budget and staffing cuts could hamper the U.S. Small Business Administration's response to hurricane victims, according to the American Small Business League.

The agency's relief efforts during Hurricane Katrina proved inadequate and the response to this year's storms, including Dolly, Gustav and Ike, could be worse, said Lloyd Chapman, president and founder of ASBL.

"During Katrina, the SBA hired thousands of temporary workers who didn't know anything about anything, slowing down the government response time," Chapman said. "Some (applicants) are still waiting for their loans."

A Government Accountability Office report from 2007 found that the SBA struggled to train and supervise thousands of temporary employees in the aftermath of Katrina.

In addition, the processing time for disaster loan applications averaged 74 days and was considered a factor in hundreds of cases of fraud.

Earlier this year, the SBA Office of Inspector General released a report that the high volume of applications caused a backlog of more than 90,000 undisbursed loans.

To expedite disbursement, SBA launched a 90-in-45 Campaign to resolve the backlog. However, in January of this year, the SBA had only dispersed $6.3 billion while approving more than 160,000 disaster loans.

"People are probably under the impression that they can fill out some paperwork and get a check in a few weeks when it could take more than two years," Chapman said. "What good is that? By the time the check comes you'll already be bankrupt."

Concerns that the SBA is unprepared are overstated, said Ben Raju, spokesman for the SBA.

After the chaos of Katrina, the SBA established a reserve supply of 2,000 additional employees that it can call upon as needed. The employees are trained and, in fact, they have been called on recently to assist with the volume of relief applications expected from Hurricanes Gustav and Ike.

"We're not anticipating a slowdown in applications," Raja said. "We have the structure in place to accommodate the load we're expecting."

Businesses, renters and homeowners in presidentially declared disaster areas are eligible for low-interest SBA loans. Homeowners and renters can qualify for as much as $200,000, while businesses are eligible for $2 million of under-insured or uninsured losses from the storm.

The ASBL maintains that despite the adjustments, temporary staffing at the SBA is insufficient to meet business needs.

Since taking office, President Bush has cut the SBA's budget from $866 million in 2000 to just shy of $572 million for 2008.

With several storms making landfall through the midpoint of the hurricane season, Chapman added, the SBA may be forced to resort to hiring inexperienced temporary workers.

"Even if the magnitude of disaster is not as big as Katrina, the SBA is even more handicapped," Chapman said.

August 27th, 2008 - 2:02 pm ICT by IANS - Washington, Aug 27 (IANS) Santanu “Sandy” K. Baruah, an Indian American, has taken over as Acting Administrator of the Small Business Administration (SBA), an independent agency of the federal government, to help small business concerns.President George Bush had nominated Baruah, 43, to be the new head of the agency with proposed 2009 budget of $659 million in June 2008, but his Senate confirmation ran into bipartisan concerns about the agency.

Bush then appointed Baruah acting administrator Aug 15 under the Federal Vacancies Reform Act of 1998 that allows him to continue in the post till the President leaves in January.

On taking over the post last week, Baruah said he planned to “help SBA carry on its mission as it navigates the height of hurricane season and deals with the current economic challenges and tightening credit opportunities for small business.”

Baruah has been with the Bush administration since 2001, most recently serving as head of the Economic Development Administration at the Commerce Department.

Before joining the Bush administration, he worked for seven years as a senior consultant at the Performance Consulting Group in Portland, Oregon, which had some big-name clients like Walt Disney and Intel. The firm closed in 2000.

Baruah also served in the administration of George H. W. Bush, working as a legislative affairs officer in the Labour Department and as a confidential assistant for the Interior secretary.

Earlier in his career, he served as Deputy Assistant Secretary for Economic Development at the Department of Commerce. Baruah received his bachelor’s degree from the University of Oregon and his master’s degree from Williamette University.

Baruah’s confirmation troubles stemmed from a rule issued by the agency last December - more than six months before he was named to the SBA post. The rule narrowly defining the women’s government contracting programme set off protests on Capitol Hill and among women’s groups.

Democratic Senator John F. Kerry, who is chairman of the Senate Committee on Small Business and Entrepreneurship, has accused Bush of circumventing the confirmation process and of undercutting efforts to open government contracting opportunities for women.

“This nominee and the administration know that I am vehemently opposed to them moving forward with the unconstitutional women’s procurement rule that makes it harder for women to access federal contracts,” Kerry said.

Republican Senator Olympia J. Snowe, who is the ranking minority member on the committee, tried to extract a pledge from Baruah on the issue at a meeting last month. Snowe said she ‘demanded Baruah make a commitment to either withdraw this proposed rule or defer action on this issue until the next administration.’

Baruah did not make a commitment. Even so, Snowe this week issued a statement welcoming his designation but urging him to “rectify the administration’s recent failure to implement a meaningful women’s contracting rule.”

Several small-business groups said it was beneficial to have an administration-selected agency head because the hurricane season was beginning, and a firm hand was needed to oversee the agency’s disaster loan programme.

But Lloyd Chapman president of the American Small Business League, which has locked horns with the SBA over the awards of small-business contracts to large corporations, said Baruah’s lack of small-business experience meant he was not qualified for the job.

Source:  http://www.thaindian.com