Lending Program for Natural Disaster Relief Is on a Project 2025 Chopping Block
A direct lending program providing financial relief after a natural disaster could be eliminated if President-elect Donald Trump follows the recommendations of the conservative Project 2025 playbook.
A direct lending program providing financial relief after a natural disaster could be eliminated if President-elect Donald Trump follows the recommendations of the conservative Project 2025 playbook.
Eliminating loans provided through the Small Business Administration (SBA) would be particularly harmful to rural communities who are disproportionately affected by natural hazards, according to one economic expert.
“Rural communities are more exposed to natural disasters, but they're less resourced to deal with them,” said Natalie Baker, director of economic analysis at the Center for American Progress.
Of the communities identified most at risk of natural disaster under the federal Community Disaster Resilience Zones program, 41.9% were rural, according to a 2023 Urban Institute analysis. This is considerably higher than the number of people who live in rural America, which is an estimated 20% of the total U.S. population.
The natural disaster risk rural communities face is increasing. Warming temperatures have intensified storms, so when they do hit, they’re often more destructive and costly, according to the National Oceanic and Atmospheric Administration.
Communities in Florida, Texas, and Louisiana have especially relied on the Small Business Administration’s direct lending program to keep them afloat, which for some people is the only support they get post-disaster. That’s because the SBA’s disaster loans can be used for financial losses that are not covered by insurance or Federal Emergency Management Agency payouts, and they’re available not only to businesses but homeowners, renters, and nonprofit organizations as well.
Project 2025 proposes “an end to SBA direct lending,” which is only ever offered to communities after a natural disaster, according to the Center for American Progress.
Whether Trump will follow the Project 2025 recommendations, which were written by the conservative think tank Heritage Foundation, has been widely debated by pundits. During his presidential campaign Trump said he purposely hadn’t read the 900-page document, but during his first term there were more than 70 former Heritage Foundation employees on his transition team or part of his administration.
Since his win on November 6, Trump has once again turned to the Heritage Foundation to help fill the roughly 4,000 government jobs that are appointed by the president, according to NBC News reporting. This affiliation suggests he is likely amenable to Project 2025’s policy proposals.
Trump also has a track record of denying disaster declaration requests that puts federal money in the hands of local communities. For example, in 2017 he denied then-Pennsylvania governor Tom Wolf’s request for $7 million for communities hard-hit by a snow storm in the northeast part of the state. Trump also denied North Carolina 99% of the funds Governor Roy Cooper requested after Hurricane Matthew killed 26 people in the state in fall of 2016.
“I think if this administration were to follow through on the Project 2025 recommendations, which we have strong reason to believe that they will, it's going to leave rural communities in a very financially vulnerable position after a natural disaster,” Baker said.
This article first appeared on The Daily Yonder and is republished here under a Creative Commons license.
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