A blame game has begun between the Biden administration and Republican lawmakers after funding for a major disaster loan program dried up during a devastating hurricane season.
The Biden administration has announced that Hurricanes Helen and Milton have depleted the Small Business Administration's (SBA) disaster loan accounts, which businesses and homeowners rely on for low-interest loans to recover from disasters. He said he needed $2 billion in funding.
But Republicans have increased scrutiny of the agency's handling of disaster funds and are demanding more information about the circumstances surrounding the lapses.
Sen. Joni Ernst (Iowa), the top Republican on the Senate Small Business Committee, said, “The agency's refusal to be transparent raises questions about when the SBA is likely to run out of funding and how existing disaster funds will be depleted.'' “It's now crystal clear how billions of dollars were spent.” he said in a statement to The Hill on Monday.
“Innocent victims should not be left out in the cold because of bureaucratic failures.”
The SBA strongly pushed back against Republican criticism, noting Congress' “inaction” but saying it has been “very vocal and transparent” about funding levels for its loan programs.
In a letter obtained by The Hill, the SBA told Ernst last week that the agency has been complaining about the need for a spending negotiator and additional funding since last year.
The agency noted previous efforts to seek additional funding in collaboration with the Office of Management and Budget, and said it would “regularly brief the Appropriations Committees on the declining balance in the SBA disaster grant loan account starting in August 2024. “I started it,” he said.
The office said, “Since 2008, as required by law, the SBA has provided detailed monthly performance reports that include total available grant balances, along with data on loan applications, disbursements, activities, disaster declarations, and related activities.” have been provided to Congress.”
“Multiple members of your committee's staff have received these reports. SBA also publishes these monthly disaster loan reports online.” “Despite Congress' inaction, SBA disaster assistance staff continues to receive funding and provide assistance to survivors and process claims.”
Also, with the 2024 campaign season in full swing, emergency spending was included in a stopgap government funding bill that Congress passed in September to avert a shutdown before leaving town for recess in October. It was also pointed out that this was not the case.
The letter was issued weeks after Mr. Ernst and other Republicans on the Small Business Committee sent a letter to SBA Secretary Isabel Casillas Guzmán, which asked about disbursement rates for disaster loan programs, staffing levels during disasters, It requested reports on documents and communications related to funding requests and other information. .
At the time, the Republican caucus, which also included Sens. Tim Scott (South Carolina), Todd Young (Indiana) and James Risch (Idaho), also cited what they described as a “failure” by the office. expressed concern about what had happened. To provide legally required information to the licensing committee. ”
“We must consider whether SBA's internal decisions triggered this unfortunate situation,” they wrote at the time, while also ensuring Congress was “adequately notified and informed.” It accused the SBA of failing or “partially” complying with its reporting requirements. Provide information before your disaster account runs out. ”
Mr. Scott and Mr. Ernst then joined Sen. Thom Tillis, RN.C., in a bipartisan effort that included measures to provide emergency funding to the SBA and to review the causes of the shortfall and identify possible executive actions. submitted a bill. The measures were taken to prevent “future funding shortages.”
The push is just the latest example this year of government agencies coming under intense attack from lawmakers over their requests for emergency funding.
The Department of Veterans Affairs (VA) warned earlier this year that without action from Congress, benefit payments to veterans were at risk of being cut off in October due to a nearly $3 billion budget shortfall.
Lawmakers averted the threat of a benefits cliff after passing a bipartisan bill to make up for the shortfall, but require the Secretary of Veterans Affairs to submit a report to lawmakers detailing how to improve forecasts and budget assumptions. This does not mean that they did not take measures to require the submission of information.
Lawmakers representing states hit hard by the storm are ramping up the pressure for disaster relief from both sides of the aisle. But some Republican negotiators have suggested there are potential hurdles to requesting funding for programs such as the Department of Education and the Environmental Protection Agency included in the Biden administration's $100 billion disaster funding request. There is.
“It needs to be a very robust package. We understand that. We agree with that,” House Appropriations Committee Chairman Tom Cole (R-Okla.) told reporters last week. He told the group.
“What we disagree with at this point is some of the additions to the program that the administration wants, and there are some things that we think the administration should have considered that they have left out,” he said. said.
Meanwhile, Tillis said at a Senate Appropriations Committee hearing last week that he “fully” supports the administration's $100 billion request. But he added: “That's just the beginning.”
“We have to respond differently to storms. This may be the first time, but like we saw in North Carolina, it won't be the last, and we have to do better for the American people. We have an obligation to be prepared to respond,” Tillis said.
President Biden said the SBA's disaster loan program ran out of money in mid-October. The agency said it cannot make new loans without additional funding from Congress, but officials said they are continuing to process loan applications.
Asked for comment on Monday following recent Republican criticism, the SBA said the agency's “backlog of loan offers to survivors of Hurricanes Helen, Milton, and other disasters has increased by more than $1 billion.” He cited Guzmán's testimony before the Senate Appropriations Committee last week. The agency stands ready to spend as soon as Congress provides additional funding. ”
“SBA recognizes that disaster victims urgently need these funds and stands ready to provide funds as soon as Congress acts.”
Guzman told Senate appropriators that the SBA has approved “more than 27,000 disaster loans and 160 disaster declarations totaling $1.7 billion” across the nation and territories in fiscal year 2024.
“The SBA currently supports more than 400 total disaster declarations across the United States and manages a portfolio of 2.5 million loans worth $285 billion,” he said at the hearing, adding that “SBA has already supported more than 12,500 disaster declarations across the country. There are more disaster victims waiting in line.” ”
