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tv   Key Capitol Hill Hearings  CSPAN  August 10, 2015 5:02pm-6:01pm EDT

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you can watch that on c-span at 8:00 p.m. eastern. tonight, on the communicators. arthur and british technology pioneer kevin ashton on the creative process, and how that process takes work. >> why did the right brothers fly first, and what was the process they used? they wrote the first people to -- were not the first people to have the idea of a flying machine, and they were not the first to try. the with a once to succeed when everyone else failed. they understood the problem they were trying to solve much better than anyone else. notidea being creative is liable inspiration. it is about solving the problem one step at a time. the problem with a piece of ,aper, the problem of balance that was key for the right brothers on their course >>.
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kevin ashton, tonight on the communicators, on c-span2. tomorrow on washington journal, gretchen working set of morgansen talking about the affordable housing program. vince is a girl soon talks about alcohol-related problems and all fetal syndrome in drinking mothers. washington on journal, life tuesday at 7:00 a.m. eastern on c-span. >> officials with the red cross talked about economic recovery, agency coordination and delivery efficiency. they were joined by representatives of the small business administration fema, and the private sector, during a
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hearing on post-disaster issues for small businesses. davidundtable was held by vetter of louisiana to mark the anniversary continued. -- katrina. this is about an hour. senator vitter: good morning everyone. welcome. thank you for joining me for this discussion roundtable about a very important ongoing challenge in relation to disaster recovery. natural disasters are obviously indiscriminate, affecting life, property and livelihoods of families and businesses. with this roundtable, i hope to highlight improvements made in disaster recovery efforts in the last decade, discuss what continuing challenges we still face, in the wake of natural disasters, and have a conversation about paths forward for disaster mitigation and response. this is, as you know, the 10th anniversary of hurricane katrina. we are going to acknowledge that.
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we certainly won't celebrate, but acknowledge that in a couple of weeks. i want to take the opportunity to remember the tens of thousands of families who were horribly impacted by that natural disaster. 10 years ago this month, we all experienced devastating, deadly and costly natural disaster. the most costly and devastating in american history. hurricane katrina caused over 1200 deaths, and $108 billion in damage. the damages from that year caused 50,000 people to be unemployed by the second half of 2009. here we are 10 years later in 2015, still dealing with the impact on top of the other significant disasters we have suffered in the last decade. between 2008-2012, with more
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hurricanes, there was over $44 billion in damages. on october 29, 2012, superstorm sandy devastated the vast majority of the east coast. 131 people lost their lives, and 12 states, including the district of columbia, were declared disaster areas. the disaster relief appropriations effort provided a $50.7 billion package of disaster assistance. the lives lost, exorbitant
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amount of money spent, and lasting impact still felt today from all of these events, are highlighted here as the foundation for discussing ways to mitigate these losses in the future, and implement strategies for recovery to get our lives back in order as soon as possible following a disaster. i witnessed firsthand after hurricane katrina, both the enduring strength of our communities, and the devastating failures into many cases of government in delivering recovery assistance. while businesses and communities came together, willing and able to deliver vital relief, too many times they were turned down by bureaucracy within government agencies. immediately following the event, i heard reports of hellish conditions at the superdome. witnessed unacceptably slow response times from fema, long delays in the delivery of the emergency assistance, food, water and necessities, failing evacuation systems, and ineffective federal contracting practices. disaster relief funds either never made it to the hands of those they were intended for, or arrived too late. all of these failures obstructed vital recovery coming out of katrina, and these are just the immediate failures afterwards. long-term disaster recovery assistance comes from others.
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ps pa and others whose responsibility, long-term recovery loans you can get vital community and economic resources back on track.
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after hurricane katrina struck louisiana, we learned the hard way what works and what did not work in this long-term credit gory as well. after each major disaster since then, we have learned small businesses need extra help to get back on their feet. that is a very important focus of this discussion. as chair of the senate small business and entrepreneurship committee, i'm committed, as are all members, to serving small businesses across the country and ensuring they are afforded the resources and assistance they need to help them recover as well. a completely separate category, certainly important in the hurricane katrina and rita context is the corps of engineers and disaster recovery and storm protection in that category. i have done quite a bit of work on that, reforming the court process, improving how they respond before and after disasters. that has more been in the context of my work on the environment and public works
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committee, but certainly that is another very important piece of the equation that we may touch on here today. earlier this year with all of these thoughts in mind, and as chair of the small business committee, i passed that committed as 1470, the rise after disaster act of 2015, along with legislation to address needs, protection, and recovery of all businesses in particular. the rise after disaster act reflects a number of things we have learned. i think it will definitely help future disaster victims recover more quickly and with less red tape from the federal government. specifically, it provides long-term recovery loans to small businesses through community banks one disaster assistance is no longer available. it directs federal agencies to utilize local contractors for response and recovery efforts, rather than government contractors from washington dc, and other far-flung areas.
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i also introduced a last month, the bad -- bipartisan natural relief tax act, providing tax relief for people who have experienced disasters. increasing -- including hurricane isaac and red river floods. working for future disasters, it will allow businesses to create national disaster funds in order to prepare -- prepare for costs including insurance. i hope to focus on some of the improvements that the agencies and organizations have made since these tragic events 10 years ago. to have this discussion, we are really honored by having six great leading participants, and i want to briefly introduce them and i look forward to hearing from all of them.
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james rivera is the associate administrator for the small business administration's office of disaster assist. during his 25 years, he has led several efforts to improve the agency's disaster operations after hurricanes katrina, rita and wilma, including development of more efficient loan and processes, computer upgrades, and other initiatives. gerilee bennett his deputy director at the national directorate recovery division at fema. she has been leading recovery planning and exercising initiative since 2003. including overseeing the implementation of national discovery -- recovery framework. she supported disaster
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assistance through major businesses since the 1990's. russ paulsen is the executive director for nationwide community preparedness and resilience building programs of the american red cross. he joins us with over 25 years of experience, leading some of the largest disaster response and recovery efforts in that organization's history. william is director of financial markets and community investment at the u.s. government accountability office, and will be offering significant insight into today's issues having directed substantial bodies of work.
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andrea is the director of the credit programs group in the audit division in the office of inspector general. she brings years of experience
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in investigations and oversight to the table. finally, the leader of the small business -- development center. he has this entrepreneurs and small business owners start and grow businesses, including serving their communities through additional disaster recovery guidance. i look forward to hearing from all of you, and then we will have a discussion coming out of those observations. why don't we start with mr. rivera. james rivera: thank you, chair for inviting us appear and our partners. we have made almost $2 million in loans for about $53 billion since we started in 1953. we are not a first responder, but i'm glad that jerry leads with our partners in the red cross. they do a great job with the need to get on the ground. from our perspective, we have worked diligently since the hurricanes, we have done a lot of process improvements and we continue to learn from every disaster. most recently with sandy, we also continue to learn from that. take a step back after both katrina and after sandy, we have now implemented a three-step process to try to simplify the process and make it easier for the survivor to have a good understanding of what we are doing. as we continue to modernize the credit management system, we take advantage of credit scoring opportunities on how we can approve individuals, homeowners and businesses with higher credit scores and put them through the system faster. we recently updated our standard operating procedure to add back to basics approach. we always look at what works, what does not work, and how we can improve moving forward. i look forward to having the conversation and look forward to any questions you might have. thank you. senator vitter: thank you mr. rivera.
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gerilee bennett: thank you very much for the invitation to be here. as mr. rivera said, fema is very pleased to be able to anticipate in this roundtable with our partners, so we have been working very closely with to improve our disaster upon that response and recovery since katrina.
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their ideas in support of many disasters throughout hurricane sandy, hurricane isaac, which somewhat got overshadowed, we had already implemented a lot of changes even by then. i want to focus today on some of the improvements we have done in partnership with the interagency members of the national disaster recovery framework. the framework was developed in response to hurricane katrina, the post-katrina emergency reform act called for national strategy, and fema led the development that it was really a partnership of interagency partners including nongovernmental partners like the red cross. some of the key elements of the framework are that it promotes partnership, planning for disaster recovery in advance, and the development and establishment of an organizational structure and leadership in advance that focuses on disaster recovery, not just response. one example of this is at the federal level. we have developed the economic recovery support function. is led by the department of commerce, economic development administration, and key partners include sba, the department of treasury, the department of agriculture. fema is also a primary partner.
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all of these agencies work together to support communities and states, and more portly, businesses, and grow businesses after devices -- disasters to get support they need together businesses up and running. some of the strategies the economic recovery support function undertakes -- economic assessment post-disaster, what the real needs are, is this a rural disaster or small business kind of disaster, or an urban disaster?
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> is there a major employer in the area who, if that business gets back up and running, will make all the difference in the world getting people moving back into the area? they also work together to make sure there are business recovery centers, usually sponsored by the sba, and areas that have partners available to find resources available. they sponsor business roundtables and partnership in collaboration with the local chamber of commerce to make sure education, counseling, technical
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assistance and networking for resources, and support are available,. after a disaster it is a good opportunity to provide support and information to businesses about resilience. that never before a disaster our people as much in june to the need to be resilient, to have insurance, to have good supply networks that are also resilient. it is a good time to take advantage. roundtables often focus on those topics. i look forward to the conversation, thank you for the invitation. senator vitter: thank you. now we move to russ paulsen. russ paulsen: thank you for inviting the red cross to talk with our partners. i am executive director of community preparedness at the right cost. before this, i had the honor of leading the recovery after hurricanes katrina, wilma, and rita. after 26 years, i have seen the importance of small businesses after disasters. our goal is to make sure when disaster strikes, people have a warm, safe, and dry place to go with their families, something to eat and somewhere to go to. we do this 70,000 times a year on average. we served over 12,000 meals and snacks in north louisiana. we keep that promise after home fires that have been about every eight minutes every day, every year. we can only do this because of the financial generosity of the american people, and heroic actions of volunteers, americorps members and employees. like kay wilkins, who organized her team to open up shelters throughout south louisiana after katrina came through.
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not seeing her family for days, a young woman who had never lived away from home before she came to the new orleans area to be a red cross americorps member, who after being there for two weeks, was sent to run a shelter on the north shore. and who had to deal with the needs of all kinds of people, including helping a gentleman who did not have his health aide and needed help with daily living. never had any training. but it is people who step up and do it they need to do. a young man who ran a shelter and had to figure out what to do with the shelter full of scared people when the roof started peeling back. it is heroic actions by ordinary people in the response phase,
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and for people who they will probably never meet again. mr. chairman, katrina was by some measures 10 times bigger than anything the red cross had dealt with. we served 68 million meals, we served clients who had evacuated all 48 of the united states. we had never happened before. that was only possible because of volunteers and employees. we were also able to contribute to the recovery of katrina for several years after the storm, helping people rebuild, funding summer camps, and help people access mental health services, which is often not thought about. after it, like katrina, it is more than people can handle. i want to mention a component i think was helpful. we designed it almost like an insurance program where people can make sure they can pay the bills of independent providers, and those providers knowing they
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had a market, can move back to town. recovery is such a gordian knot after a big disaster. businesses are reluctant to come back without employees and a customer base. residents are reluctant to come back without businesses where they can shop and work. government cannot provide services without tax base. it is a really tricky proposition and often times, it is the small business that comes back first. and then people come back around it. katrina caught all of us, there are some disasters bigger than any of us. for years we worked with the sba and fema, but we learned we have to work not only with traditional partners, but people who normally would not get involved here it now we have faith-based service and other urbanization's who had not worked in disasters before. now we work with catholic charities, islamic relief, lutheran church, methodist church, church of latter day saints, partnerships like the naacp and national council of rossa, center for independent living, and at the local level to make account. we have put in place technology
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to help people find shelters, first aid apps. we outnumber firefighters so people need to help each other. apps to help people find relatives. we are working to get ahead of a disaster by going door to door, neighbor to neighbor, installing smoke alarms in at-risk neighborhoods. fires kill more than anything in the country. also talking about hurricane and tornado preparedness. we have made a lot of progress. still more to go. but it was quite an it didn't. -- an experience. senator vitter: thank you very much for that perspective. william: thank you for the invitation. it is good to be back here with the small business. we have done a very large body of work looking at the disaster loan program, going back to hurricane katrina. i will just stayed that as
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always, going forward, it is a resource in terms of navigating those reports and testimonies, and the various things we have done. they're all on the homepage. but think of me and us as a resource to help navigate that. what i brought today for the purpose of this introduction, i'm glad to answer any questions about our body of work. i brought highlight pages about testimonies. one was a testimony in may 2010 before the committee. it was based on a report that came out july 2009. we were asked to look at how much progress had sba made in implementing the small disaster business response and in loan improvement act of 2008. it is a mouthful.
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we call it the 2008 act. important piece of legislation. it looked at that. it was a good way to look at progress sba had made from the problems that incurred during katrina and rita. it was also what remained to be done. the other thing we did was extensive fieldwork, looking at the response of the 2008 disasters.
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which were of smaller magnitude than katrina or sandy. it was the midwest floods and hurricane isaac. we did extensive fieldwork. we could see how well sba had done. the response had improved. that is one data point that i want to provide through the testimony. then, the other document is, last month we testified part -- before house small business on the response to hurricane sandy. it was based on a report issued in september 2014. here, we looked at, obviously a much larger disaster, and looked at the response. we saw certain deficiencies in terms of timeliness, and deficiencies in terms of following through with plans, and stated plans to initiate
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other provisions of the 2008 act. in particular, three loan programs that would operate through private-sector lenders. i will just close up this statement. and look forward to questions. our report in 2014 on sandy had two recommendations. one was to better account for the early influx of applications due to greater you -- use about tronic reporting. -- electronic reporting. the other one had to do with really, doing a documented evaluation of lender feedback. in particular, the immediate disaster assistance program. of the three programs, that is the one that sba stated it wanted to start first. to really evaluate lender input, and to move forward with the pilot. it is something that goes back a number of years. it is one that is important in
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terms of developing the capacity, at least testing how well a program of that nature could work. in a future disaster. now i say, thank you for the invitation. i look forward to the discussion. senator vitter: thank you very much for that body of work. next we hear from andrea deadwyler. andrea: thank you for the opportunity to be here. i represent a dedicated men and women of the sba oid. we perform audits and inspections and investigations relating to the sba programs and supporting operations. the disaster assistance program is a high-risk program, and is the focus of our oversight efforts. i believe our investigations and auditor recommendations are having a positive impact on the integrity of the program. the disaster loan program plays a vital role in the aftermath of disasters by providing long-term low interest loans to affected businesses and organizations, to assist with rebuilding properties and mitigating economic effects.
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following katrina, the oig issued several reports assessing loan disbursements, early defaulted loans, use of proceeds and eligibility. since the gulf coast hurricanes, sba has addressed many recommendations and improved rossa sees. most recently, we perform several audits and reviews following hurricanes -- sandy. preventing duplication of benefits with community development grants, sba's compliance with improper payment and recovery act. our 2010 audit identified issues with entering controls to prevent duplications with community but grants. as a result of the audit, the revised policies and improved internal controls. thus when we conducted the audit and 2015, we found the internal controls to prevent duplication of benefits were adequately
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working as intended. we also implemented an electronic implementation for hurricane sandy survivors. the office did not anticipate the surge of workload which created a backlog of over 20,000 applications. excuse me. there was expedited processes and that included credit scores and verified incomes.
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we found a way to reduce processing time but the exit budded -- but the expedited process did not resort in any savings. we have identified challenges to meet our goals will we get high application volumes. the fact that we need to in crew -- improve significantly our staffing levels as well as the need to mobilize and stave -- train stuff quickly. we notice the spa reported an improper payment rate in its program from 2014, which is a significant reduction from the 18.4% reported in the prior year.
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we believed the improve rate -- improve rate is due to a number of things. -- improved rate is due to a number of things. this is primarily due to hurricane sandy. they also implemented multilayer reviews at the distribution center to identify and prevent improper payments as well as performance rating factors for reducing improper payments were included in performance evaluations of all staff. the improper payment rate continues to exceed the 10% rate. hence, we consider this an ongoing challenge.
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in closing, we acknowledge the challenges that the office of disaster assistance faces in providing loans to disaster prone -- disaster survivors. we will continue to emphasize these programs as a priority in her office. thank you for the opportunity to participate today. sen. vitter: thank you very much, and next is tee rowe. president rowe: thank you very much, chairman, and i appreciate very much being here. the american sbdc has centers nationwide, so when a disaster hits, we are there. we are there because it is our neighborhood, it is our clients, it is our community. in every case, in particular with katrina, we have learned an awful lot. mary wilkinson, who is our past director in the state of louisiana, did an amazing job in disaster recovery and helping people to share best practices and really tear down our effort to coordinate with spa and improve the response. i have to say from my personal experience that during katrina, i was the head of congressional affairs at spa, so i was there in the trenches with james, maybe not as deep in the trenches. but i saw how spa came forward and my members of the smb --
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sbdc overcame. at every level, people are overwhelmed. at the sbdc, we tried to bring other members together to help set up the disaster recovery centers, and when you work with these centers, the staff are there, they are usually there, but they are temporary, because they've got to move from place to place. so they are there for about a week, and we are still there at the sbdc, helping the small businesses. that process has gotten so much better. our new york state director can't say enough great things about the work that james has done. i just was on a call with our southeast director, so they are kind of the disaster specialists just because of the way that mother nature works. they truly appreciate both the changes that the spa has it lamented but also the changes in your will. you are trying to remove roadblocks for what we are trying to achieve. for example, for the ability of the sbdc to work across state lines. for example, when the
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legislation was written, it was just kind of forgotten about in regards to disasters. you have done a great thing in letting us in disaster situations send oaks from across the country to help out. it is a great improvement in the way that sbdc will be able to assist small businesses. i would like to talk very quickly about something that is very important. while we are there at the disaster center and we are helping people with loan applications, a business loan application is a lot more complicated than a home loan application. we are helping them retrieve information and help to put their lives back together. what we have been focused on more and more and we actually have two specialist in florida who work all throughout the gulf region is that recovery specialists can be seen as resiliency specialists. we work so hard to make sure that the clients all across the country are prepared to recover. without that preparation, you are just that many more steps behind. now, i will just quickly sum up the last thing, we really
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appreciate section 102 of your bill, the additional reward to the spa -- to the sbdc. we found in sandy how helpful that additional funding was, because even several years after, we are still doing recovery work. it is vital to us to be able to provide that long-term assistance in our recovery situation. with that, i will finish up, and thank you so much. sen. vitter: great, thanks to all of you for the comments. now, we just want to have an open conversation and follow up on all of this. there is no particular format so please just jump in when you have a relevant thought. my questions are probably naturally going to focus more on the light of the katrina experience, my experience, and also on the small business side of things since this is the small business committee. i guess my questions for fema and red cross and sbdc is how is your response different for catastrophic disasters, whatever that means, katrinas and sandys, versus other events?
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you have a different rulebook? a different playbook? and where, roughly, is that line where you would distinguish between catastrophic disasters and other events? anybody want to take a stab at that? mr. rivera: i can go first and i really look forward to hear what fema has to say, but we handle the nonmajor, for example, the red river flooding. it didn't meet the criteria for a presidential declaration, but
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we were there for two or three days, but we are well coordinated in our recovery centers where there is a disaster recovery center for major disaster declarations or whether it is a disaster loan operation center at the spa level. quart nation her agencies, we kick up -- coordination between our agencies, we pick up -- we hiccuped a lot. when i started, when gerilee and i first met, we are a mature organization, and these are the roles and responsibilities of the response players and these are the roles and responsibilities of the role players.
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we have actually even taken a step further after sandy and we have operation teams and our field directors and everybody else so we can continue as we get in and out of a disaster, because we provide loans and a longer-term effect from that perspective. sen. vitter: ok, fema, gerilee, you want to take a stab?
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director bennett: i would say we don't have a different playbook for catastrophic disaster, because it is really important that we have the basic plans and systems and teams in place for all of the factors and that they practice on the smaller disasters and the exercises so they would know what to do if there was a catastrophic disaster. if we design things and we did much differently with a catastrophic disaster, we wouldn't be as ready because we didn't practice it that way. we do have some regional
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catastrophic disaster plans for some very high risk scenarios that we work together collaboratively with our partners and with specific states and with urban areas who might be affected by those hybrid scenarios, so we do do that. those plans are very much based on a system and teams and all kinds of plans that we have in place for all kinds of scenarios. sen. vitter: ok. russ? director paulsen: the commitment we have for people to have a
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warm, dry, safe place to go with her family and a place to eat, we provide a service beyond that in regular disasters. so for city, for example, we had caseworkers with individual families trying to bridge gaps, things that the fema programs can't cover through statutory limitations, we would try to bridge gaps. that one-on-one casework assistance is very labor intensive and long, and probably something we would not be getting to very quickly after a catastrophic disaster.
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our focus after a catastrophic disaster has to be on that sheltering, that immediate sheltering and feeding in place. we don't have a number in mind between the difference from a catastrophic disaster and irregular disaster, but when katrina was something like 10 times bigger than anything we have dealt before, that was catastrophic. sandy was a big disaster but certainly if you go through any disaster, it is catastrophic for you, but regular systems worked for that scale of a disaster.
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sen. vitter:. ok -- ok. anybody else? president rowe: i would just like to echo what russ said where each disasters catastrophic to you, but you have to be on the understanding that you are going to have to do that extra work with the businesses affected in your area as they recover. but when you run into something like sandy, where i think, you know, the spa had something like 600,000 applications or 400,000 plus like we had in katrina, spa is literally working with hundreds of thousands of businesses and helping them with recovery. at the same time a year or two later, everybody thinks, well, the disaster is over. but it is still affecting the community, it is still affecting
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businesses. sen. vitter: let me jump in. one of the reasons that i asked this question is i know the gao concluded a study on sandy and said that there was not operations that surged quickly enough. that is the reason that i'm asking if there is a metric where you get it immediately that this is another category and there is a surge that starts that would not be required in less -- required unless there is a disaster? mr. rivera: as far as the gao report, as far as how we staffed up, we had 800 people on the rolls, we went up about 200 or 300 people with the louisiana hurricane that predated sandy. we ended up with about 2500 employees. staff wasn't an issue, it is because we just didn't what them on board fast enough. i katrina, we didn't have a staffing strategy. post-katrina, we now have core surge and surge plus, so now we have those on call who are available.
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the timing of how quickly we on boarded the staff, that was really the issue internally. we are prepared to onboard much quicker, we will handle the applications much sooner than the traditional paper. we tripped up there, but we have addressed that, we have provided the input to the gao and we have changed our sop. we have changed our disaster internal -- our disaster preparedness plan internally. that shouldn't be an issue if we have any disaster activity. the staff is available, and we have a contract in place that will supplement if we go beyond that 3000 level employees, where we can have them contract out, that is a little bit more expensive, but we can fill any gaps across the disaster program. sen. vitter: ok. go ahead. sure. director shear: sandy was obviously a much bigger disaster than katrina, so it was about the speed of things coming in, so that is definitely a part of the delays. where we are at now is at -- there have been changes to the
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sba's play forms. this is the disaster recovery plan forecasting models, so we are at the stage now where we have seen a change to the playbook, and james that i have talked about this and at the sba, we need a little bit more assurance from them. it might is be talked about, but as far as how do these different pieces fit together to make sure that there is another major disaster like sandy, we are prepared, or of that magnitude, that the process would work out differently, and that sba would be more ready to respond. sen. vitter: ok. let me move to a slightly different topic, which was a huge frustration of mine after katrina and continues to be in general, which was that i saw in so many cases federal response, reroofing contracts, debris removal, etc., focus on national
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mega firms and local, small businesses were virtually completely left out. if they had any participation, it was literally five different loan processes. as all of you acknowledged in various ways and your comments, a big part of the recovery is local small business recovery, right? so here is a huge opportunity to drive that through this work, through the debris removal, reroofing, whatever. i saw so many cases after katrina where the locals, again, either were forgotten or were five subcontracting layers down.
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it also, by the way, resulted in a lot of cases of greatly increased costs. i did a specific study after katrina, comparing those mega contracts after the fact to local governments that had standby previously negotiated contracts for debris removal. for louisiana, it is not a question of if, but a question of when, right? the price difference was astronomical. what are you doing differently since katrina to involve far more local small businesses? i guess that is primarily fema, but certainly involves others as well. gerilee, do you want to start? director bennett: i can get back to you later with specific statistics, but i can tell you the approach we are taking.
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in order to be able to get in fast of provide that service, we do rely heavily at fema on standby contracts and interagency agreements after disasters, where we provide funding to the army corps of engineers or departments in other agencies where we provide contract work. but i think what we are doing differently in approach is that we have those and we don't provide the full scope for the disaster upfront, we ask that they get in and do early work and then transition to local business contracts as soon as possible. so we can get you more details about how that works and statistics afterwards. sen. vitter: ok. anybody else?
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mr. rivera: post-katrina, we had that problem, and as gerilee explained, they have that way were they step in, but there is a focus on the government contract offices and a way to communicate with the organization that has the commission assignment on how to get the work. so this exists pre-katrina, but that is something we have developed for all disasters since then. sen. vitter: ok. let me just also make the comment where there has been a trend for federal government agencies to deal more and more with mega contracts or bundling contracts that, by their size, have to go to mega entities. i think it is mostly because it is easier on the bureaucrats,
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right? you have won a contract, one mega contractor you are dealing with versus 100, and it is a lot easier within the government bureaucracy. i think that is a very worrisome trend. it is completely cutting out small businesses. small businesses either can't participate or if they do, like i say, they are layers down, in terms of subcontracting and getting pennies on the dollar. i certainly think that a lot of post-disaster contracts and work is a particularly worrisome example of that, but i think it is a bigger trend, so that is just my two cents. i would love for you all,
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particularly fema and small, sba, to look at my bill. we require that agencies use local subcontractors for debris removal or demolition, and we provide incentives to federal agencies to work with local contractors. i would love your very specific feedback on those provisions, and i am guessing most of those provisions really could be implemented in some form or fashion by you, if you wanted to do it now, so i would love your feedback on that. any other comments on that? in that general area? ok. let me ask the ig, based on your audits and investigations of the
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recovery programs, what are the outstanding, biggest concerns that you have, and what areas has the disaster loan programs been vulnerable to fraud or waste or abuse, and what are your sort of topline recommendations? director deadwyler: [indiscernible] anytime there is disaster, oh, i am sorry, anytime there is a disaster program, they get referrals from many different sources. they diligently look into any allegations of fraud. they participate in regards to especially the big disasters. that was a multilayered question -- sen. vitter: so as we speak, what would be all the topline recommendations in that whole
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category? director deadwyler: topline recommendations, well, one of the big things that we talk about is in regard to the gao report as well, and that is gearing up in an emergency. they have to implement a lot of different approaches in order to make sure that they are prepared for future disasters when it comes to receiving those electronic applications. i think in sandy, they can just start of the electronic applications, and they got so many, they got more than they anticipated, initially, so it took a while to address that backlog, but i think with the implantation of the rapid, expedited process, i think that
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they should be -- and with the new plan to ramp up more quickly -- i would like to think that they would be able to address those issues. so we just have to wait and see. sen. vitter: ok. director deadwyler: as we mentioned, every disaster is different, every situation is different, so we will just have to wait and see. sen. vitter: ok. let me highlight another concern, and this might be outside any of y'all's concern, because it is not a direct disaster response, but one big issue we have seen and focused on in the flood insurance program is participation, right? there has been very low -- is the participation rate. there has been a very low per dissipation rate. that affects the affordability of the program. by some estimates, like a study from 2006 said that only 49% of homes in a special flood hazard area had flood insurance. that's less than half of the participation rate that we should have. i think this is a continued problem. we have talked about it. we have talked about in committee. we have talked about it in
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banking committee, but i have not seen those rates, i have not singles rates rise dramatically, i haven't seen studies the document that. ms. bennett, do you have any observations on that, or maybe fema can follow up and give us a status on work in that area? director bennett: i will just mention that fema takes flood concerns post sandy very, very seriously, and we have created a task force that is focusing on revamping the way that the program is operating in making sure that it is customer focused on customer friendly. we have an ombudsman function now to help people better understand how they are participation -- how they can participate in a program and make sure that they have a place to provide feedback about the program. as to specific efforts to address participation rates, we will get back to you on that, sir. sen. vitter: ok. ok. let me start wrapping up. thank you all again, for your participation, for your ongoing work on this discussion. i want to highlight something i mentioned in my opening
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comments, which is some recent legislation that has been developed and worked on in this committee. i just mentioned s 1470, the rise after disaster act, again, i would love for you to look at the provisions, it is introduced but it is still moving through the process, and also, the national relief tax act, we introduced that last month on a bipartisan basis. please take a look at that as, and please offer any reaction or suggestions you may have. this is obviously ongoing work for all of us, and an ongoing discussion, so i am sure we will have plenty of follow-up, including the specific things that i mentioned, and i would love a follow-up for the record. with that, we will be adjourned. thank you very much. [captions copyright national cable satellite corp. 2015]
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[captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] [inaudible] >> tomorrow on "watch it in journal," gretchen morgan said speaks about the affordable housing progra

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