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Louisiana still waiting for how, when Trump plans to fix disaster aid 'duplication of benefits'

November 21, 2018
In The News

WASHINGTON — State officials are still waiting on action from the Trump administration before paying out millions in Restore Louisiana flood recovery money to homeowners who’d taken out Small Business Administration disaster loans.

Congress changed federal law in October to allow 2016 Louisiana flood victims who tapped SBA disaster loans to also receive grants. But federal officials at the White House and the U.S. Department of Housing and Urban Development — which funds the Restore Louisiana program — haven’t given state officials the green light to cut checks.

Just when and how the Trump administration will clear up the issue remains unclear.

A federal duplication-of-benefits rule — designed to prevent flood victims from receiving multiple federal payouts for the same disaster damage — has so far blocked Louisianans who took out SBA disaster loans from getting Restore Louisiana grants.

That’s saddled homeowners who would’ve otherwise received free-and-clear grant money to rebuild with decades of repayments on low-interest, and in some cases market-rate, SBA disaster loans. About 6,000 Louisiana households were hit by the rule, according to state officials, who’ve held $230 million in grant money to send out once the rule is lifted.

Louisiana Gov. John Bel Edwards and the state’s congressional delegation asked President Donald Trump to sign off on a waiver exempting the state from the rules, allowing those homeowners to pay off their loans with new Restore Louisiana grants.

The law passed by Congress in October gave Trump 45 days to approve waiver requests — a deadline which has now passed — though it didn’t outline consequences for moving more slowly.

But several congressional sources told The Advocate a presidential waiver is unnecessary because the recently passed law declares that loans won’t count against grant applications. At least some White House officials have indicated they don’t believe a waiver is needed and expect updated HUD rules to clear up the issue, according to sources.

U.S. Rep. Garret Graves, R-Baton Rouge, said he’s been wrangling with bureaucrats at the White House and various agencies for weeks trying to free up the cash. The White House has said the issue “should be resolved shortly,” Graves said.

The congressman, who helped write the change in the law, said it clearly frees homeowners who’ve taken out SBA disaster loans to receive grants.

“There is a disagreement among the bureaucrats about whether the waiver actually needs to be signed or not,” Graves said by email on Wednesday. “I could care less about why they think the legal authority is there — all we want is for the money to get to flood victims. We have been waiting too long already.”

State officials have held off sending out checks to affected homeowners until the federal government gives them final clearance on the chance the Trump administration ends up ruling against the state and forcing the state to claw back money already distributed.

Graves called the state’s hesitation understandable but said he’d “just cut the checks” because he’s confident that bureaucratic incompetence — and not an actual legal issue — is delaying the final fix to the duplication of benefits issue.

Brian Sullivan, a spokesman with the Department of Housing and Urban Development, said lawyers and other officials at the agency are still reviewing the recent changes to the law and Louisiana’s requests.

Sullivan said he couldn’t comment on how HUD would implement the change until that review is completed.

Spokespeople for the White House and the Small Business Administration didn’t respond to questions about the duplication-of-benefits regulation and Louisiana’s waiver request.

“Our office has urged the White House to communicate the duplication-of-benefits guidance to the governor and we will continue working to ensure all flood victims receive what they are owed,” Matt Wolking, a spokesman for U.S. Sen. Bill Cassidy, R-Louisiana, said Wednesday.

Graves added Wednesday he’s planning on holding a congressional oversight hearing to demand an explanation for the delay from federal officials.

“This is a perfect example as to why people hate bureaucrats,” Graves said. “Someone needs to be fired over this. I intend to help make that happen.”