WASHINGTON, May 22 (UPI) -- The U.S. Small Business Administration could run out of funds to support disaster loans for Gulf Coast hurricane victims.
According to estimates supplied to lawmakers, the shortfall could occur while Congress is on its upcoming Memorial Day recess, increasing pressure on House-Senate negotiators to complete work on the fiscal 2006 emergency war and hurricane relief spending bill, CongressDaily reported Friday.
Appropriators are looking for offsets within the bill and could cut as much as $200 million in SBA administrative expenses from the White House's $1.3 billion request for the agency. There should be enough money to get through the end of the fiscal year, as the average daily rate of obligations is slowing and a deadline for new loan applications has passed, officials told CongressDaily.
But with an estimated 14 days remaining until the SBA burns through its remaining $86.5 million in loan subsidy funds, without an agreement between Congress and the White House, the agency might not be able to disburse any money -- even for applicants whose loans have been approved.
The agency has enough money to support another $591.1 million in loans; the program is so popular with the victims of hurricanes Katrina, Rita and Wilma that SBA has approved more than $9.3 billion in loans to over 143,000 homeowners, renters and businesses in five states, with nearly $6 billion in Louisiana alone, the report said.
An SBA spokesman told CongressDaily that 98 percent of loan applications have been processed, and the rate of expenditures "is slowing significantly as we reach the end of the pool." But the situation has warranted significant concern from the Senate Small Business Committee, which met with SBA officials Friday to assess the situation.
Small Business Chairwoman Sen. Olympia Snowe, R-Maine, wrote to SBA administrator Hector Barreto May 10, urging him to come up with a contingency plan.
