A group of Republican senators filed a lawsuit against the Small Business Administration (SBA) after officials announced earlier this week that two major hurricanes had depleted funds in the agency's disaster loan program. I'm looking for answers.
The letter, addressed to SBA Secretary Isabel Casillas Guzman, includes four Republicans on the Senate Small Business Committee: Sen. Joni Ernst (Iowa), Sen. Tim Scott (South Carolina), and Todd Young. It included the signatures of U.S. Senator (Indiana) and Representative James E. Risch (Idaho). ).
In their letter, the senators expressed concerns about the government's handling of disaster loan accounts and the government's “failure to provide the legally required information to the authorization committee.”
“These concerns are only exacerbated by the SBA’s lack of transparency, including its failure to submit formal requests from the Office of Management and Budget (OMB) and required notifications and reports to authorizing boards,” they wrote. I'm writing. “These significant failures by your agency, along with your urgent request for additional funds, raise serious questions about the SBA’s ability to oversee its disaster portfolio.”
The letter was issued days after President Biden said the program, which he described as a “critical lifeline for small businesses, homeowners, and renters affected by disasters,” had been exhausted.
Biden administration officials have been sounding the alarm about the program's finances in recent weeks, after it became clear that funding was at risk of running out before Congress reconvenes next month.
Officials said the program will cost about $1.6 billion after increased demand after Hurricane Helen.
However, the senators wrote in their letter that “despite several news articles, the SBA did not follow the law and provided statutory written notice of the need for additional funds. It only happened on October 10, 2024, a few days after the article was published.”
The senators said the SBA failed to comply, or partially failed to comply, with its reporting obligations under the law, which ensures that the SBA provides “adequate notice and information to Congress before a shortfall in disaster accounting occurs.” he accused.
“We must consider whether SBA's internal decisions triggered this unfortunate situation,” they wrote in the letter.
In a statement to The Hill, an agency spokesperson said the agency “first raised the need for additional funding with Congressional appropriators in September 2023.”
Since then, the agency has “held several bipartisan briefings and made numerous proactive calls to ensure that disaster financing programs are fully funded,” representatives said.
“Unfortunately, the SBA's request was not realized, but we hope that tens of thousands of small business owners, homeowners, and renters affected by Hurricanes Helen and Milton will receive the funds they need to rebuild their homes. The SBA remains ready to work with Congress.''The spokesperson added.
However, the senators also said they were targeting specific administrative changes to the disaster loan program that would “result in a significant increase in subsidy rates,” and that “SBA has failed to adequately model and assess its impact.” “We did not properly notify the approver.” concerns about these changes.
They also listed a list of information requests for the agency to respond to by Oct. 21, including reports on disaster financing programs and disbursement rates, disaster executives, “up-to-date copies of SBA's disaster strategies,” and “documents.” provided. Communications Related to Additional Funding Requests for Fiscal Years 2024 and 2025.”
