Helene, Milton wreckage puts spotlight on disaster loan program

Tussling ratcheted up between the White House and GOP leaders on Thursday over when Congress needs to return to take up emergency disaster relief for victims of the twin hurricanes that have battered southern states in recent days, including twice-hit Florida.

While there’s been substantial confusion and misinformation about the Federal Emergency Management Agency’s disaster relief fund, there’s general agreement that FEMA has enough money to get past the elections after receiving $20 billion in the Dec. 20 stopgap law. The Small Business Administration’s disaster loan account, however, is another matter.

President Joe Biden has already called on Congress to come back into session early to refill the SBA’s coffers and reiterated that sentiment on Thursday. “I think in terms of the SBA it’s pretty right at the edge right now,” Biden said. “I think Congress should move as rapidly as they can, particularly on the most immediate need, which is small business.”

The SBA says it has just $50 million left in the account with which to make loans, while thousands of applications a day are coming in and the agency is still sifting through requests for aid related to Hurricane Beryl, which struck Texas in July. Thursday was the deadline for loans related to property losses due to Beryl; the agency announced a day earlier it had already approved more than $500 million for Beryl and other recent Texas disasters.

The SBA is “quickly exhausting current federal funding to make new offers for affordable recovery loans to homeowners, renters, small businesses, and nonprofits,” SBA Administrator Isabel Casillas Guzman said in a statement. “Americans should not have to wait for critical assistance when they need it the most.”

Biden said he hasn’t spoken directly to Speaker Mike Johnson, R-La., about reconvening Congress before next month’s elections.

Johnson, who’s been out on the campaign trail and visiting hurricane-stricken districts, continues to argue there is enough money to tide the administration over and lawmakers don’t need to return to Washington until after the elections.

“The media needs to stop spreading misinformation,” Johnson spokeswoman Athina Lawson said in a statement. “To be clear: Congress will act again upon its return in November to address funding needs and ensure those impacted receive the necessary resources.”

Tallying the damage

The SBA received $175 million for its disaster loan account in fiscal 2024 — plus that amount prorated for the 81 days covered by the stopgap law — and asked Congress for $524 million in fiscal 2025. After Helene struck the Southeast, the agency asked Congress to increase that amount to $1.6 billion, which would be similar in size to what Congress approved in fiscal 2018 in the aftermath of three massive hurricanes: Harvey, Irma and Maria.

The agency uses disaster loan appropriations plus any carryover balances from previous years to fund the administrative costs of processing and servicing loans and to cover potential estimated defaults. The SBA can typically loan out somewhere in the ballpark of three to four times the actual subsidy from Congress; for example, fiscal 2018 saw the agency lend $7 billion to hurricane and other disaster victims.

Loan amounts the agency can support fluctuate with the severity of the disaster and expectations of recipients’ repayment ability. But officials believe if they receive the $1.6 billion, the SBA could make around $5 billion available to victims of Hurricanes Helene and now Milton on top of outstanding applications related to other recent disasters.

In fiscal 2023, the SBA lent $3 billion to disaster survivors after receiving $1 billion in appropriations.

FEMA’s funding situation is different, and Biden and Johnson are in agreement that lawmakers can wait until the lame-duck session to restock that agency’s disaster aid fund.

It received nearly $20.3 billion in the stopgap law and as of Wednesday, had committed $344 million in direct aid specifically for Helene survivors. Before Helene or Milton struck, FEMA estimated it would burn through about $9 billion this month in its major disasters account. On Wednesday, FEMA Administrator Deanne Criswell told reporters she believed the agency had about $11 billion left unobligated in its disaster fund.

Johnson has been clear that Congress will take action to add more money for FEMA and other agencies in the lame-duck session. But that hasn’t reassured a growing chorus of members on both sides of the aisle urging him to call the House back early.

That includes at least one House Republican — Florida Rep. Anna Paulina Luna, who represents Milton-battered Clearwater. Luna is the sole GOP cosponsor of a bill from Jared Moskowitz, D-Fla., to provide FEMA with $10 billion plus $5 billion for the Department of Housing and Urban Development, and she wants Johnson to schedule a vote “immediately.”

Luna, a member of the hard-right Freedom Caucus, voted against the stopgap law that contained $20 billion for FEMA. She voted for an earlier GOP-drafted version that would have provided $30 billion for the disaster fund, but that legislation extended to the end of March and contained proof-of-citizenship rules for voter registrations that Democrats opposed.

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