A recent report from the House of Representatives accuses the Biden administration of failing to recover around $200 billion in fraudulent COVID-19 pandemic loans. The House Small Business Committee, led by Chairman Roger Williams, conducted an investigation into how the Small Business Administration handled emergency financial aid programs set up during the pandemic. The report stated that in the rush to distribute relief funds quickly, shortcuts were taken which resulted in improper disbursements to small businesses, with $200 billion likely going to fraudulent recipients.
Out of the $5.5 trillion approved by Congress for pandemic aid, approximately $1.2 trillion went to the SBA through legislation such as the CARES Act under former President Trump and the American Rescue Plan under President Biden. The report recommends reforms across the COVID loan system and criticizes Democrats for focusing disproportionately on the Paycheck Protection Program (PPP), which saw around $64 billion in fraudulent loans, while the Economic Injury Disaster Loan (EIDL) saw $136 billion in fraud. The report highlighted that the Trump administration’s added responsibility in 2020 strained the SBA’s federal agency infrastructure.
The report mentioned that the SBA staff worked tirelessly to create rules and policies for the new lending programs after Congress passed the initial COVID relief legislation. However, the staff did not have enough support or resources to design fraud-resistant programs. The Biden administration was accused of not implementing sufficient anti-fraud measures and failing to recover lost funds after taking office in January 2021. The report also criticized the previous Democratic Congress for focusing on PPP, even though the fraud rate for EIDL was higher, accusing Democrats of masking the true extent of fraud in these programs.
The report highlighted the need for substantial changes to be made to the PPP program in order to enhance its effectiveness and reduce vulnerability to fraud. It suggested that Congress should direct its oversight efforts towards beneficial endeavors for the American people rather than focusing on messaging strategies. The report called for investigations to ensure private companies were following the rules, but urged caution in ensuring that congressional efforts are directed towards meaningful oversight. Fox News Digital reached out to the SBA and the House Small Business Committee’s Democratic minority for comment on the report’s findings and recommendations.
