This election is going to come down to just a few states and a handful of voters. Anything could tip the scales.
And now Biden-Harris got slapped with a damning report that they are struggling to recover from.
A recent report from the House of Representatives is spotlighting what it describes as the Biden administration’s negligence in recovering an estimated $200 billion lost to fraudulent COVID-19 pandemic loans.
The House Small Business Committee, led by Chairman Roger Williams (R-Texas), has been examining how the Small Business Administration (SBA) managed the emergency relief programs put in place after pandemic lockdowns shuttered businesses nationwide.
“In creating the COVID Lending Programs, Congress understood that the relief funds needed to be issued quickly to help businesses cope with the economic strain of the pandemic,” the report explains.
But that rapid rollout, aimed at getting relief out fast, led to corners being cut, with the hope that improper disbursements would be recovered afterward.
However, the report criticizes the SBA for making “numerous decisions that decreased the likelihood” of reclaiming funds granted under false pretenses.
Altogether, the committee estimates $200 billion may have fallen into the wrong hands.
Of the approximately $5.5 trillion approved by Congress for pandemic aid, $1.2 trillion flowed through the SBA, largely under two legislative actions: the CARES Act, signed by former President Trump, and the American Rescue Plan, signed by President Biden.
The committee’s report, while recommending reforms for the COVID loan system, calls out Democrats for focusing heavily on the Paycheck Protection Program (PPP), which had an estimated $64 billion in fraud, while the Economic Injury Disaster Loan (EIDL) program saw a much higher $136 billion in fraud.
Drafted by the Republican majority’s staff, the report acknowledges the strain placed on the SBA’s limited infrastructure in 2020, saying, “In the days after Congress passed the initial COVID relief legislation, SBA employees worked night and day to craft the rules and policies for its new lending programs.”
The agency reportedly issued more funds in the first 14 days of these programs than it had in the previous 14 years combined.
While the SBA staff “did a remarkable job” setting up the programs, they lacked adequate support, time, and staffing to ensure the systems were secure from fraud.
The report slams the Biden administration for failing to implement anti-fraud safeguards and for not recovering funds lost when it took control in January 2021. It also criticizes the Democratic-led Congress for zeroing in on PPP, despite EIDL having “approximately four times” the fraud rate.
The report suggests Democrats’ emphasis on PPP stems from its connection to private sector partners, arguing, “It is likely that this misplaced focus by Congressional Democrats, and their surrogates in the media, obscured the realities of fraud in these programs, at least to some degree.”
Republicans highlighted the need for “substantial changes” to improve PPP’s efficiency and fraud resistance.
In response, Rep. Nydia Velázquez (D-N.Y.), ranking Democrat on the House Small Business Committee, contested the report’s claims, pointing out that most fraud in COVID-19 business programs occurred under the Trump administration’s initial rollout.
“The vast majority of fraud in COVID-19 small business programs occurred in the first nine months of implementation under the Trump administration,” Velázquez stated. “The Biden administration inherited these programs and the controls in place at the time.”
An SBA spokesperson emphasized that “86% of the suspected fraud” in both PPP and EIDL happened during the Trump administration’s early months, noting that safeguards removed to expedite disbursement were later restored under Biden’s leadership.
They also pointed out that the committee had yet to share the report with the SBA, calling it “standard investigations practice” to inform agencies of findings before public release.
Stay tuned to Prudent Politics.
