Biden warns that disaster aid will go broke before election

President Biden warned that the money for a disaster aid loan program used by survivors of Hurricane Helene and other calamities will soon dry up without intervention from Congress. 

In a letter to the four congressional leaders on Friday, Mr. Biden said the Small Business Administration’s program is on the verge of going broke before Congress is slated to return after the Nov. 5 election. 

The loans are a “critical lifeline” that act as the “largest source of Federal disaster recovery funds,” he said, adding that $1.2 billion is needed to refill the program’s coffers. Lawmakers are out of town until Nov. 12.

“I warned the Congress of this potential shortfall even before Hurricane Helene landed on America’s shores,” Mr. Biden said. “I requested more funding for SBA multiple times over the past several months and, most recently, my administration underscored that request as you prepared a continuing resolution to fund the government. Now the need is even more urgent.”

While the stopgap bill passed by Congress at the end of last month included $20 billion for the Federal Emergency Management Agency, it didn’t have additional funding for the SBA’s disaster loan program. 

Hurricane victims in Florida, Georgia, North Carolina, South Carolina, Virginia and Tennessee can access SBA loans. Businesses can receive loans up to $2 million to repair real estate, inventory, equipment and other losses, while homeowners can get loans up to $500,000 for property damage and other losses. Individuals can get up to $100,000 for personal property losses, like vehicles. 

Mr. Biden’s request for emergency money comes after he called on Congress to return from its recess to pass more funding for FEMA. Calls have grown from Republican and Democratic lawmakers in states affected by Helene to return to pass an emergency spending package, but the president hasn’t formally called Congress back to the Capitol. 

In his letter, Mr. Biden said that while FEMA “has the resources it requires right now to meet immediate needs, the fund does face a shortfall at the end of the year.” 

He added, “Without additional funding, FEMA would be required to forego longer-term recovery activities in favor of meeting urgent needs. The Congress should provide FEMA additional resources to avoid forcing that kind of unnecessary trade-off and to give the communities we serve the certainty of knowing that help will be ongoing, both for the short- and long-term.”

The agency has doled out over $110 million in aid to people affected by the storm, including $26 million to 25,000 households in North Carolina.

Moody’s Analytics on Monday estimated that the cost of recovery from Hurricane Helene will be $20 billion to $34 billion.

While the four congressional leaders haven’t said whether they support Congress returning early to pass more disaster aid funding, House Speaker Mike Johnson admitted that FEMA’s $20 billion would likely not be enough to cover the entire scope of the damage caused by Helene and that Congress would “have to address it.” 

The president said, “It is critical that Congress ensures that no critical disaster programs, such as the SBA disaster loan program, run out of funding during the congressional recess period.

“I also urge that after the Congress comes back into session on Nov. 12, [congressional leadership] will act with all appropriate speed and provide comprehensive disaster relief so that the people, families, businesses and communities affected by Hurricane Helene — as well as those still recovering from past disasters — are not only made whole, but can proceed in a way to make them more resilient in the face of future extreme weather events and other disasters.”