The Duplication of Benefits (DOB) saga is a fascinating one, but nothing brings that into as sharp a relief as the ending.
For those at home, DOB became a massive point of contention after the Great Flood of 2016. Local residents were pushed to apply for both the Restore Louisiana program and for Small Business Administration (SBA) loans. The Restore program was funded with disaster monies and provided residents with “no obligation” recovery money – they didn’t have to pay it back.
SBA loans, on the other hand, were just that – low interest, government-backed lines of credit.
Federal and local officials pushed both means because, as with any governmental budget, the more who apply the larger the pool of money that comes available.
Unfortunately, what the general public wasn’t told is this – SBA loans have always counted as DOB.
The distinction makes sense as both monetary sources are government funded. Therefore, SBA loans that come with the low interest and federal backing still count as federal assistance if applied for under the umbrella of “disaster recovery.”
This came with two problems. First, as defined by spokesmen for both Restore and the U.S. Department of Housing and Urban Development (HUD), there was a “hiccup” in the program as even those who applied for SBA loans, and either denied funding or were declined, still got knocked with the DOB category.
Hiccup? More like massive screw-up.
Second, the problem of omission. In this case, federal managers of the program failed to alert local officials and Louisiana’s D.C. representatives that pushing folks into the SBA category, whether they received money or not, would automatically disqualify or discount their Restore Louisiana award under the DOB provision.
The second issue is probably what constitutes the change in the law. Yes, you heard that right – DOB law was changed to exempt any disasters beginning Jan. 1, 2016, and moving forward to Dec. 31, 2020. Those who were denied or declined SBA funding will no longer face deductions on their Restore distribution.
Residents who accepted SBA loans will now receive a credit, worth the value of their Restore Louisiana grant, toward their total loan award amount.
What a mea culpa – Sens. Bill Cassidy and John Kennedy, as well as Congressman Garret Graves, have forced Dr. Ben Carson and HUD to say, “Maybe we shouldn’t have tried to skimp on the payments.”
Because that’s exactly what this is. Yes, a federally-backed loan is still a negative on the balance sheet for the federal government. Combined with forking out billions in grant funding, the feds had to find a way to save cash – especially in a world of gigantic, thrift-spend budgets and mounting costs of disasters as they seem to come one after the other.
They were hoping to save money, but in the world of recovery, victims are going to find their money.
And it’s in that realm that Congressman Graves is right – disaster recovery is six times more expensive than disaster prevention, and eventually someone has to pay up.
J. McHugh David is editor and publisher of the Livingston Parish News.