▶ 0:07:58e e
▶ 0:08:31make sure you hit the top
▶ 0:13:58e e
▶ 0:14:45good morning everyone before we get started I want to recognize Congressman Brad finstead from the great state of Minnesota to lead us in the Pledge of Allegiance and a prayer father we thank you for
▶ 0:15:46regulation to order without objection the chair is authorized to declare a recess of the committee at any time I now recognize myself for my statement welcome to today's in which will focus on restoring the SBA to its original Mission of serving Main Street America first I want to thank our Witnesses all three of you for joining us today on your own time and your own dime I really appreciate you being here I hope this hearing will continue to be a productive Dialogue on how we can ensure
▶ 0:16:16that the small business administration returns to its mission to assist small businesses while increasing efficiency at the agency owning your own business is one of the most rewarding careers in our great nation the SBA has dedicated resources to Aid job creators who find themselves having a tough time navigating their entrepreneurial Journey Through the public private partnership with the Small Business Development Center small businesses at all stages can receive critical counseling and training sbc's
▶ 0:16:47have many solutions to support main street from preparing loan applications to Workforce Development since we spend taxpayer dollars providing these resources to entrepreneurs we must ensure that these programs operate effectively and efficiently importantly these programs must be consistent with the intent and mission of the SBA unfortunately during the Biden Harris Administration the SBA strayed from its core Mission and prioritized politics and misguided policies over American small businesses
▶ 0:17:17an overall theme was the sba's flawed operation that limited the agency's day-to-day work notably the agency's work from home policy for SBA staff hindered its ability to execute its Mission up until a few weeks ago thanks to president Trump and our new administrator Biden's SBA falsely claimed that it could operate remotely but the reality was that the SBA was a ghost town we saw it firsthand when members of this committee visited the
▶ 0:17:48SBA headquarters we found rows of empty desk calendars that had not been moved since 2020 and this was when they knew we were coming coming the Biden SBA repeatedly failed to deliver for America small businesses while also failing to conduct sufficient oversight of its programs instead they focus on turning the agency into a voter registration arm of the Biden Heron reelection efforts it is critical that we conduct the necessary oversight
▶ 0:18:18over the sba's operations especially for political initiatives like voter registration that we're well outside the scope of the agency's core Mission providing support to America's small businesses as I just mentioned thanks to president Trump's steps to address these egregious failures and more being taken with the new SBA administrator Kelly leer during this hearing we will dive into what went wrong however it's equally vital to focus on creating positive change these efforts should begin with the untapped potential of the SBA office of
▶ 0:18:48advocacy better known as advocacy the office of advocacy is supposed to serve as the independent voice for small businesses within the federal government monitor and ensuring compliance with the regulatory uh reflex ability act and helping policy makers better understand issues confronting small business owners over the years though advocacy has faced several challenges in advocating for small businesses of top concern the Biden administrations refuse to even nominate an individual for the position
▶ 0:19:18of Chief counsel of the office of advocacy leaving the top small business Advocate position vacant last Congress a committee sent letters to then President Biden calling on him to fill the position but instead Reckless rulemaking followed while small businesses were forced to endure Biden's unprecedented onslaught of regulations his administration shamefully did not prioritize appointing an independent voice for small businesses these failures have shown just how out of touch the SBA had become it's
▶ 0:19:48time it's time to return the SBA to its core Mission and finally meet the needs of Main Street America and that is why I'm proud to announce that I have introduced The Returning SBA to Main Street act in the US House the returning SBA to Main Street Act was first introduced in the Senate by the committee on small business and entrepreneur chair entrepreneurship chair Senator erns I'm honored to introduce the house companion bill to ensure that the SBA Workforce
▶ 0:20:19is no longer centered around DC and will meet the needs of small businesses where they are especially in rural communities in my district in Miss Miss's fourth district today our office sent a letter to administrator leer requesting that the sba's Kansas City Regional Office be moved to Columbia Missouri in accordance with her initiative to move SBA offices out of sanctuary cities while Kansas City's policies are only Sanctuary City adjacent
▶ 0:20:50Colombia offers a far superior alternative thanks to its closer proximity to the University of Missouri Missouri Small Business Development and the rural communities that reflect the heart of America again I want to thank the witnesses for being here today to testify and with that I now recognize my friend and the distinguished ranking member from the great state of California Mr Tran for his opening remarks thank you chair Alfred and I'm pleased to have the opportunity to serve as the ranking member of this important
▶ 0:21:20subcommittee I look forward to working with you throughout this Congress to conduct robust oversight of the small business administration thank you to the witnesses for being here today I hope to hear more today on how we can support our small businesses access the tools they need to launch and grow successful businesses let me Begin by mentioning that under the Biden Harris Administration more than 21 million business applicants applications were filed the largest number in a single presidential term in the history of our nation
▶ 0:21:51women minorities and immigrant entrepreneurs played a leading role in this historic surge business ownership doubled for black households while Latino and Asian-American household reached a 30-year High more Americans than ever were able to pursue the American dream and that is a milestone that we should be celebrating today we should also be focusing on the achievement of the previous administration in fiscal year 2024 SBA approved more than 76,000 loans in the 7A and 504
▶ 0:22:21programs providing 37.7 billion to small businesses the micro loan program which provides provides loans up to $50,000 approved 94 million in new small dollar loans meaning meaning the smallest of the small businesses were able to access Capital which can be so hard to come by and can be a barrier for growth the Resource Partners offered free and lowcost counseling to hundreds of thousands of entrepreneurs to help them tackle
▶ 0:22:51the challenges they face every day and in part to sba's efforts federal agencies awarded 28 .4% of federal Contracting dollars 178.6 billion to small businesses the fact speaks for themselves despite what you may hear today SBA is committed to its mission of helping small businesses that has been true under each Administration in large part because of dedicated civil servants their work should be applauded not demonized
▶ 0:23:22SBA employees work day in and day work day and night under the first Trump Administration and through the Biden ad Administration to implement emergency covid programs that meant the very survival of millions of small businesses and nonprofits in this country I stand ready to work with everyone here to ensure the Integrity of programs and efficient government but it canot come at the expense of SBA staff working diligently to serve small employers turning to the environment today
▶ 0:23:52we are in the midst of troubling and chaotic times in the roughly two short months of the Trump Administration we have lurched from one crisis to another late in the night on January 24th president Trump fired sba's Inspector General Mike wear without the 30-day advance notice to Congress or a reason as required by law Mr wear testified before our committee committee multiple times about the potential fraud and the pandemic relief programs and was praised by members on both sides of the aisle for his work to investigate
▶ 0:24:22and recover fraudulent pandemic funds which I should note occurred mostly under their first Trump Administration a couple of days later om released a memo requiring all agencies to freeze Federal funding which led to widespread confusion for small businesses lenders Resource Partners and contractors small businesses rely heavily on sba's counseling Contracting and access to Capital programs and a disrupt uh disruption in funding even for a short period of time could
▶ 0:24:52impact the viability cash flow and services of small businesses while the me while the memo was supposedly rescinded the next day the White House Press Secretary said the freeze remained in full force and effect needless to say these actions cause undue confusion chaos and uncertainty I along with the ranking member rnia Velasquez sent an oversight letter to the SBA expressing Our concern over the administration's action to freeze Federal funding
▶ 0:25:23and to obtain a list of any and all programs that may have been affected then on February 3rd we started hearing reports that Elon Musk and his doge team infiltrated the SBA gaining access to all of SBA systems including Human Resources contract and payment system this breach has widespread implications for America's 35 million small businesses potentially endangering their private information despite sending two letters to the SBA SBA along with all the Democratic members
▶ 0:25:53of the committee we have yet to receive a legitimate legitimate response to our questions about Elon Musk and Doge team accessing the systems within SBA on Friday February 7th hundreds of SBA employees received termination notices leaving them and their supervisor scrambling for information then on Monday February 10th SBA officials said it was a mistake only to receive a termination notice again on Tuesday February 11th but this time the firings were for real and
▶ 0:26:23effective immediately Not only was this incredibly confusing but it was mean exped cruel and made clear that no meaningful thought went into the decision and now small firms and Farmers all over the country are reeling from the back and forth nature of tariffs with Canada and Mexico the uncertainty has left many struggling to keep up we've seen this before in June 2018 when the Trump Administration launched a trade war with the EU over steel America's
▶ 0:26:53small distilleries were hit by retaliatory tariffs and saw a production cost rise for example Cedar R Ridge distillery in Iowa face higher prices for the steel use in their aging barrels which led to higher cost in production and force them to end plans for expansion even the US Chamber of Commerce has raised the alarm bells of small businesses scrambling to adjust to the current trade War for example take PL Inc a texas-based company that makes diaper changing tables they're now forced to revisit their budget allocating
▶ 0:27:23more for tariffs while cutting back on marketing American small business cannot stomach the chaos confusion and uncertainty of a trump Administration and they deserve better it is time to work together and conduct real and meaningful oversight into the administration and the effect it's having on small businesses I look forward to hearing from our Witnesses today thank you and I yield back thank you Mr Tran I now recognize the chairman of the full committee from the great state of Texas chairman Roger Williams for an opening statement
▶ 0:27:54chair thank you chairman Alford and uh I'm pleased to announce the first hearing organized by the subcommittee on oversight investigation and regulations focuses on restoring the SB to its uh foundational mission of serving Main Street America and also want to thank you all the witnesses for being here today too uh now since the sba's founding 70 years ago its mission statement has renamed uh remained the same and that is to Aid Council assist and protect the interest of small business concerns unfortunately
▶ 0:28:24under President Biden the SBA deviated from its coration of of helping America start grow and build resilient businesses for example instead of listening to the very real hardships experience by Main Street like access to Capital inflation regulatory burdens in 2024 the SBA entered into a memo orou with the Michigan Department of State which allowed the SBA to register voters at its events in Michigan and with a link to the sba's website now registering voters undeniably irrelevant to the
▶ 0:28:54sba's mission and is unconscionable that political activities were prioritized over the voices of small business owners and further the SBA has been operating both duplicative and unauthorized programs over the years this is particularly troubling since the most important programs are performed on the ground where Staffing and resources are already stretched very thin and it has recently come to the attention of the committee that the SBA may have attempted to leverage A Small Business Development Centers to carry out duties
▶ 0:29:24that aligned with the Biden Harris misguided policy and political initiatives pull pulling them away from the counseling and training that programs at Main Street and small business owner need now to Echo subcommittee chairman Alford and the work of this subcommittee uh at large we must make sure that they we are both doing right by the taxpayer and entrepreneurs that the sba's programs are streamlined effective and efficient alongside president Trump and administer leer there is a committee that
▶ 0:29:54we as a committee remain focused on putting Main Street first and I'm I'm glad to see representative Alford introduce the house companion to chair earn returning SBA to Main Street act the critical legislation will ensure that the needs of the main street are met by relocating more of the SBA Workforce to Main Street in other words in retail business take the product to the customer and ensuring that all SBA programs are running effectively is essential to meeting the needs of small businesses and the idea shared today will help the sba's future and right sizee the agency
▶ 0:30:25so with that being said I look forward to today's important conver want to thank all of you again and I yeld back thank you Mr chair it's now my honor to recognize the ranking member of the full committee from the great state of New York ranking member Vasquez for an opening statement thank you thank you Mr chairman and Mr TR um thank you to the witnesses for being here today the purpose of today's hearing is to restore the SBA and put Main Street America First well
▶ 0:30:55we're going to have to sit through the red rhetoric to find the facts let's begin by talking about the small business boom more than 21 million small businesses were created during the Biden Administration and women and minorities leted the way starting more businesses providing for their families and creating economic growth in their communities we should be building on the previous administration efforts Instead
▶ 0:31:26This Administration in three short months has opted to opend one policy after another and injecting chaos confusion and uncertainty for small businesses let's focus for a minute on the presence on again off again tariff war with Canada and Mexico is a white whip blash for employers simply trying to run their business the bottom line is consumer
▶ 0:31:56prices will search even the US Chamber of Commerce recognizes this and published a report entitled small businesses are afraid they are worried that the ated ca of tariffs will adversely impact their ability to remain competitive and turn a profit small businesses need certainty and instead they must adjust adjust to chaotic economic policies turning to the SBA
▶ 0:32:28we have a tech billionaire riffling through SBA data and we cannot get a straight answer from the SBA as to what data has been accessed and why or even why they need it Democrats on this committee sent numerous letters that have gone unanswered and while this letter have gone unanswered the newly confirm administrator wasted no time walking through the SBA pointing out out
▶ 0:32:58empty desks for a photo up on her policy to end T workking what was not mentioned was the mass termination of hundreds of employees days before in less than a week hundreds of employees were fired only to be told it was a mistake and then they were fired again effective immediately we're still waiting for the agency to respond to requests detailing the impact and breath of of determination
▶ 0:33:28so we can understand how it serves the SBA Mission and most concerning are the recent reports that employees of SBA fraud risk management board which was created in 2022 to root out waste Fraud and Abuse at the agency have been terminated and that is in addition to the president firing the SBA IG how could we has spent two
▶ 0:33:59years in this committee talking about curbing fraud in the pandemic programs and SE ID by while the Trump Administration is firing the key people who can investigate prevent and recover fraudulent funds and now we are hearing not being informed that the new administrator is closing down six Regional Offices in Democratic cities not less with no plans to relocate
▶ 0:34:29them I can only assume that this must be part of the reorganization an effort of re uh to R RF federal employees all in the name of complying with immigration executive orders I hope we get assurances this won't hinder the agency's mission to provide assistance to small Employers in this city as well as others and while we are speak speaking of the SBA Mission
▶ 0:34:59which is to assist more small Employers in accessing capital and entrepreneurial development I am curious as to why administrator ller likes the idea of as SBA taking over the student loan process who's going to take care of this business firing the workforce that works at SBA and where are the resources when they are cutting its budget how does this fit the agency Mission that's the real question
▶ 0:35:30while I appreciate the witnesses that are testifying today I am frustrated that we do not have the SBA administrator here to speak directly to us we must conduct real oversight of the SBA and bringing the agency heads to shed light into what is going on behind closed doors thank you and I yield back thank you ranking member appreciate that I will now introduce our Witnesses for today our first witness
▶ 0:36:01is Mr Ted J Gutierrez Mr Gutierrez is the state director of the Missouri Small Business Development Center in Columbia Missouri in the fourth congressional district Mr guaris joined the Missouri Small Business Development Center in 2022 following years of experience at the Virgin Island St Louis and Southern Illinois University locations prior to that Mr guus worked as a banker at Mid Country Bank and a managing director of the Jackson County mass transit district in Illinois Mr gueras currently
▶ 0:36:31serves on the national board for America Small Business Development Center and as an education director for the University of Missouri's extension business development program Mr gueras holds a masters of Business Administration from the University of Redlands in Redlands California and a Bachelor of Science from the University of New Mexico in Albuquerque thank you for joining us today sir I'm looking forward to today's important conversation our next witness here is Mr Alfredo Ortiz Mr Ortiz is the chief executive officer of the job creators Network in Atlanta
▶ 0:37:01Georgia Mr Ortiz joined the job creators Network in 2014 prior to that he served as vice president of CSM Bakery products Food Service Division and as a consultant for Boston Consulting Group in their Washington office he's also worked in marketing new product development and corporate strategy for Georgia Pacific craft and others Mr Ortiz is currently a board member for the Georgia Chamber of Commerce and an Advisory Board member for lit's workplace policy Institute he's also the co-host
▶ 0:37:32of the Main Street matters podcast Mr Ortiz holds a master of Business Administration from the University of Michigan in an arbor and a bachelor in economics from Pomona College in Claremont California thank you sir for being here today I look forward to hearing your testimony and having a great conversation we appreciate all of you being here today and before we recognize the witnesses I want to remind them that their oral testimony is restricted to 5 minutes and our ranking member will now introduce the witness for the minority
▶ 0:38:02thank you Mr chair I am delighted to introduce Mr Richard Trent the executive director of Main Street Alliance Mr Trent had a dynamic career prior to joining the Main Street Alliance as the executive director of friends of anacasa Park Mr Trent oversaw one of the East Coast's largest environmental restoration projects today he's working every day to create a Level Playing Field for Main Street small businesses his work has helped uplift communities all
▶ 0:38:32across the country and in turn boost their local economies I look forward to your testimony which will reflect the voices of the mom and pop small businesses thank you for being here again just for the witnesses uh want to remind you you have five minutes for your opening remarks uh you'll see a red clock in front of you that's set to 5 minutes and when your time is expired we will gather you uh out and go go to the next witness remarks so thank you I now recognize Mr Gutierrez for
▶ 0:39:02his 5minute opening remarks sir good morning chairman Alfred ranking member Tran members of the committee thank you for inviting me to testify today my name is Theodore tedj gutieres and I'm the state director for the Missouri Small Business Development Center hosted by the University of Missouri extension our network is dedicated to supporting and advancing the success of Missouri's entrepreneurs and small businesses we are a proud part of the Nationwide Small Business Development Center system of 63 networks with over
▶ 0:39:33900 locations and over 3,000 professional counselors advisers Specialists and support staff for over 43 years sdc's have been providing one-on-one counseling services to small business owners and aspiring entrepreneurs at no cost during that time our member networks have developed a wide variety of services tailored to meet the needs of Main Street America some of the subject matter we Council on and train include cyber security export assistance disaster recovery and resiliency
▶ 0:40:03manufacturing Marketing sales e-commerce accounting financial statement analysis business strategy development business plan basic credit practices pre business startup planning existing business expansion and of course exit strategy and succession planning and many more as dictated by statute sdc's continue to evolve to meet the needs of America's small businesses we are we are tasked with providing almost every conceivable form of technical assistance to small businesses in our respective States
▶ 0:40:33each spdc network is nationally accredited which distinguishes US among available resources our networks Leverage The accreditation to evaluate and update our services to meet the changing needs of our clients who drive our services our economic impacts and performance numbers are based on attributed verified input from our clients by sheer volume locations and economic impact the sbdc program is the number one resource in the United States and its territories providing technical assistance and training for entrepreneurs
▶ 0:41:04in small businesses and FY 2223 Congressional funding or investment for America's sbdc is translated to 26.4 million in federal revenues generated and 327.2 million in state revenues generated every Federal dollar receive rendered $159 in federal tax revenue and $240 in state tax revenue a new job is created every 6.5 minutes a new business is started every 33.3 minutes
▶ 0:41:34our clients experien an average of 15% annual sales growth compared to the national average of 6.2% with 6.6 billion in sales spdc is provided 90% of sba's access to Capital assistance spdc served 92% of sba's technical assistance clients despite sdc's economic impact P generation and Roi here are a few challenges we Face funding priorities versus demand for our services both Federal and local
▶ 0:42:05political agendas which lead to Mission drift funding to bring on more staff with industry expertise funding for technology and implementation in ways to reach additional small businesses in needs of help especially in Rural America funding to provide disaster planning resiliency and Recovery here are a few challenges faced by Main Street America confusion of resources is available uncertainty of economic climate I.E High interest rates taxes supply chain disruption increased costs of the workforce
▶ 0:42:36minimum wage laws finding and hiring people who are relable and want to work and of course Disaster Recovery efforts strategies for long-term recovery sdc's are the First Responders to a natural disaster or disaster and sdc's are during are there during and after the disaster so we ask how can the SBA be restored simply by putting Main Street America First the SBA is responsible for responsible for dispersing the allocated
▶ 0:43:06Congressional funding and administration of our grant program it is important to distinguish that the spdc is not part of SBA nor our employees of SBA over the years sdc's have worked with SBA administrators from every Administration we do that because SBA is our partner just as our host universities States Banks and economic development groups the SBA is ready for clarity of purpose and vision to serve entrepreneurs and small businesses the SBA should remain an advocate for the millions of small businesses
▶ 0:43:36in our country not focused on political agendas SBA has many Fantastic Tools and partners they need to use them appropriately and efficiently to regain public trust in the SBA it must focus on providing resources and collaborate with partner programs such as the sbdc so every entrepreneur can work towards achieving their dream and contribute to the overall well-being of our economy every entrepreneur from the wheat fields to the shops of Main Street America should have the same opportunity for Success this concludes my testimony
▶ 0:44:07once again thank you chairman Alin and the committee for allowing me to speak here today great timing thank you let's go to Mr Ortiz for his five minute remarks sir good morning chairman Alfred and distinguished members of the oversight investigations and regulations subcommittee thank you for the opportunity to testify today on the vital topic of restoring the US small business administration my name is Alfredo ortis and I am the CEO of of job creators Network and the nation's largest conservative small business
▶ 0:44:37organization it's no secret that small businesses have faced historic challenges over the past few years these include the co pandemic and the heavy-handed government response as well as the weak economy characterized by high inflation and overregulation the Biden Administration implemented a nearly $2 trillion regulatory burden that disproportionately harmed small businesses now more than ever small businesses need an effective agency in Washington looking out for them unfortunately
▶ 0:45:08the small business administration has let American entrepreneurs down over the past few years under the bid Administration it prioritized political activities such as voter registration and diversity equity and inclusion over the real concerns of small businesses ignoring repeated urging from chairman Williams and the broader small business community Biden Administration never even nominated a chief counsil for advocacy leaving a key office unfilled that that could have acted as the voice of Main Street during this difficult
▶ 0:45:38period the SBA also did not adequately require its staff to return to work resulting in an office vacancy of 90% by one estimate no wonder American small businesses have lost faith in the SBA that changes with the trusted and proven leadership of administrator Kelly leer the SBA now has the opportunity to restore its core mission of helping small businesses that means ending the agency's politization and bureaucracy requiring staff to return to work and engaging
▶ 0:46:08in rigorous oversight and accountability under the chief Council of Economist uh Casey Mulligan who successfully LED Trump's Council of economic advisers in his first term the sba's office of advocacy can finally get the leadership it needs to be small business's independent voice within the federal government the office of advocacy plays an important role in ensuring compliance with the regulatory flexibility act which the previous administration routinely ignored to the detriment of small
▶ 0:46:39businesses jcn is fighting to pass the pro it act which fulfills the intent of the regulatory flexibility act and gives small businesses a seat at the ru making table but until then a strong office of advocacy can reduce red tape and stand up for the small businesses in once restored the SBA can take steps to do even more good for small businesses at the top of this list is prioritizing training programs to teach entrepreneurs the skills they need
▶ 0:47:09to survive and thrive teaching small businesses how to fish so they can be successful for the long term the SBA should harmonize existing private sector small business efforts by the likes of Goldman Sachs and American Express in a public private partnership small business training program this program will teach entrepreneurs the basics of succeeding in today's economy including building a convincing business plan identifying suppliers and selling online
▶ 0:47:39these efforts can significantly reduce the first year small business failure rate which currently stands at 20% decreasing this failure rate to around 10% let's say would result in millions of more small businesses and millions of jobs over the years significantly strengthen strengthening the the American economy a key component in this more effective SBA is heading chairman Alfred's is heeding Chairman Alfred's recommendation to move Personnel to Regional Offices closer to the small businesses they serve
▶ 0:48:10it's impossible for the Washington SBA to have its pulse on the needs of Main Street in communities from coast to coast SBA loan making should also be conducted by third-party Community Banks with a lend expertise and Community relationships under the leadership of administration leer and chief Council Mulligan as well as the oversight of this committee the SBA can be restored and rein reinvented and the agent into the agency
▶ 0:48:40that the American small businesses want and need thank you very much for your time and I'd be happy to answer any questions you may have thank you sir I now recognize Mr Trent for his five minute opening remarks uh chairman Alford and uh ranking member Tran uh thank you for the opportunity to testify today I'm Richard Trent the executive director of Main Street Alliance representing over 30,000 small business Nationwide our members span Industries but they share a fundamental need a
▶ 0:49:10stable predictable economy that allows them to plan invest and grow unfortunately that stability is being undermined not by market forces alone but by Reckless decision-making that injects uncertainty into the economy and disrupts small businesses ability to while some argue that regulations are the biggest burden on small businesses our members tell us otherwise their greatest concerns aren't red tape their instability at Key agencies policy reversals and economic disruptions
▶ 0:49:41that shake their ability to plan for the future today I want to focus on three urgent issues that are fueling uncertainty and put and putting small business survival at risk first I'll just say that SBA instability is hurting entrepreneurs the small business admin rtion is a Lifeline for 35 million small businesses yet recent Mass firings sudden program changes and bureaucratic delays have thrown thousands of entrepreneurs in Del limbo Patrick dula owner of salvator's tomato pies in Madison
▶ 0:50:11Wisconsin is actively repaying an economic uh injury disaster loan that kept his doors open during covid if the US enters a downturn the sba's ability to offer hardship waivers will be critical but Staffing Cuts raised serious concerns about whether those safeguards will still exist Shannon Burns an entrepreneur and consultant in Alexandria Minnesota helps new small businesses craft business plans with 20 million new businesses launched since 2020 sba's resources are needed more than ever yet reduced Staffing
▶ 0:50:41will limit access to these vital Services Molly moon Nel who testified here a few weeks ago owner of Molly Moon's ice cream in Seattle Washington was expanding her business when she learned of leadership changes and Staffing cuts at the SBA she had contract signs and signed and Investments made and any delay in finalizing her loan would have made that devastating for her decentralization must be strategic and planned not weaponized in ways that create chaos for businesses
▶ 0:51:12all of this is happening against a backdrop of inflationary pressures and Market uncertainty the trade war escalations and erratic tariff policies are already impacting small businesses two weeks ago a Dodge Ram truck cost $80,000 now it's $100,000 if that's what's happening to trucks imagine the impact on restaurants grocery stores and retailers that rely Imports ballooning deficits and corporate tax loopholes put upward pressure on interest rates oh excuse
▶ 0:51:42me uh second it's important to not that Federal funding freezes and data breaches are direct attacks on small business stability when Federal funding is frozen or misused the first to feel the impact are small business owners who rely on these funds to keep employees on payroll and communities thriving a tech entrepreneur in Utah lost multiple contracts when the freeze stalled nonprofit sales disrupting her Revenue pipeline a Wisconsin child care provider feared delays in state block grant funding would leave her unable to pay staff and a researcher in Oakridge
▶ 0:52:12Tennessee had her federally funded project suspended overnight leaving her uncertain about her income and career these aren't abstract concerns they're real businesses real jobs and real consequences and when federal funds stop flowing they don't just delay government projects they slow down entire economies and Beyond funding freezes the Doge seizures of sensitive IRS data is an existential threat one of the world's richest men is now has access to bank statements tax records and competitive financial data of millions of businesses
▶ 0:52:42including his own competitors this is not draining the swamp it's stocking it with more crocodiles no CEO in America should have access to that kind of intelligence which destroys Fair competition and erods Trust in government institutions the third thing I'll bring up was just that SBA office relocations in the erns bill will hurt local economies we've seen what happens when abrupt agency relocations gut institutional knowledge and destabilized communities in 2019 the S the USDA moved two research agencies from DC to Kansas and 75% of employees
▶ 0:53:12resigned stalling grants research and hurting local businesses that relied on federal contracts now the administrator's memo mandates that SBA Regional Offices relocate from Sanctuary cities turning thriving small business hubs like Boston Atlanta Denver and Seattle into collateral damage for political posturing I urge this committee to focus on practical bipartisan Solutions in light of the current economic uncertainty fully staff the SBA so it can meet the needs of entrepreneurs unfreeze critical funding that small businesses
▶ 0:53:43rely on block corporate access to sensitive financial data to preserve Fair competition and reject policies that inject instability into the economy and instead strengthen uh main Street's ability to compete thank you and I look forward to your question questions thank you Mr Trent well done uh we now move to the member questions under the five-minute rule I recognize myself for five minutes Mr gutieres this morning I was proud to introduce the returning SBA to Main Street act companion bill to chairwoman erns bill in the
▶ 0:54:13US Senate Mr Gutierrez over the past four years you've had firsthand experience working to fill the Gap somewhat big gap left by a political SBA can you speak to us about how an ba that is actually focused on Main Street could actually help small businesses thank you for the question Congressman you know having SBA focus on what the mission and values of SBA should be on supporting small businesses is crucial
▶ 0:54:43um I know that several SBA field offices uh are short on staff I know that uh many of them were um uh not necessarily available to help um as soon as uh help was needed uh therefore we were able to fill the Gap along with some other Resource Partners as well but um SBA essentially just needs to focus on what it is they're doing and serving the small businesses relying on its Partners to work and to um help on the front lines having SBA in the field would be a tremendous
▶ 0:55:14asset to small businesses uh particularly in um you know throughout the throughout the Midwest of course um working with the community Bankers to having those subject matter experts in the field would be amazing over the past uh few years years we've had one SBA uh representative in the field in Missouri down in Springfield um and the others were located in both St Louis and Kansas City so that's simply just not enough assistance from SBA throughout the state and of course um any time uh that assistance was needed they typically
▶ 0:55:44refer them out to the partners such as sdcc's um the women's business centers uh the uh veterans business Outreach centers and score as well so what would it mean if we ended up moving the Kansas City SBA office to Colombia well Colombia will be very excited to have SBA presence there again um I believe that during covid the the SBA office was removed at that time and so just having that uh local presence that local subject matter would do wonders because it would mean more availability to community Bankers
▶ 0:56:14being Central to the state would be more access throughout the state um within five six hours drive anywhere across the state um and it would just serve as a a signal that SBA is here and ready to help serving the communities Mr Ortiz SBA administrator ler is echoed the president's return to office mandate SBA staff are now required to be in the office 5 days a week while this is a great start you have further recommended that funding Regional initiatives like entrepreneur centers would be a more efficient use of taxpayer dollars please
▶ 0:56:44explain your reasoning for that recommendation sir Mike please your mic thank you chairman Al for the question uh having education and Innovation centers I I think regionally uh closer to where our small business owners are would be extremely uh I think well received by our small business owners I doubt there are too many small business entrepreneurs out there in let's say De Moine Iowa that decide hey I want to start my own small business let me get on a plane fly up to DC and enter the halls of
▶ 0:57:14SBA to help help me do that they need them there they need where they are where the ideas are we need to bring those resources to the people uh where the people are not here in DC uh one of the recommendations I had made is let's just close down the DC offices I don't see why we would need that I think we need those resources out in the fields we need support for folks like Mr Gutierrez here um and we need to be able to support our small business owners where they are which is in the fields they're not in DC and so I think having the opportunity to do that
▶ 0:57:44I think would make uh you know the 1.4 billion roughly that's allocated for the uh Department much more effective and more efficiently thank you sir Mr Gutierrez back to you uh through the uh covid-19 pandemic was declared over in 23 Community Navigators programs continued well into 2025 fact that program set to Sunset nine months from now uh some people call it walking money uh for Biden preferred organizations it seems that Community Navigators has a reputation
▶ 0:58:14for not being very efficient can you walk us through uh how the community Navigators program duplicated efforts already done by sbc's so my understanding with the community Navigators program is that each state was allocated a certain amount of funding and it was granted towards a certain NGO um or nonprofit and um to be quite honest with you uh the sdc's in several States actually hosted The Navigators program in the state of Missouri
▶ 0:58:45um we did not we were actually never contacted by The Navigators program I cannot speak to any type of results or any type of information produced by The Navigators program other than we knew there were there somewhere in Missouri and uh I don't even know if they're staffed anymore so um as far as duplication of of efforts we were doing that all along for 43 years we'll be doing it for another 43 years thank you I now recognize a ranking member for five minutes of questions thank you Mr chairman in less than a week between 400
▶ 0:59:15to 700 SBA employees were in were terminated with notice then informed the terminations were a mistake and then fired effectively immediately effective iMed immediately many of the many of these employees were veterans injured or disabled workers and workers with years of service Mr Trent can you please share how these termination will affect small businesses who rely on these employees for loans disaster Aid and small assistance
▶ 0:59:46well I can say that uh well over half of our 30,000 Plus Membership have applied for funding through the SBA and a significant portion actually rely on different loan products or technical assistance um over the last couple years the SBA has offered honestly a real bespoke Service uh to small business owners we've got members uh in our cohort who speak directly uh to Regional officers loan officers um that help them Drive business sustainability uh so uh the mass firing of between 400
▶ 1:00:16and 700 people will inevitably have a direct impact on uh entrepreneurs ability to successfully navigate the challenges that present themselves every single day uh as a small business owner thank you Mr Trent last Thursday administrator laugher announced that she's relocating six Regional SBA offices away from Sanctuary cities can you describe the effect the closure of these offices will have on Main Street businesses in urban areas well it's really unfortunate because uh what it means is that
▶ 1:00:46you've got honest hardworking entrepreneurs that are now caught in the middle of a game of political football that none of them wanted to have anything to do with in the first place uh I'll say that the example from uh 2019 the relocation of the USDA offices is a good example of what happens uh when the USDA office was moved from DC to Kansas back in 2019 75% of the of the workforce left uh the local shops that depended on that regular foot traffic
▶ 1:01:16languished um and Chief of Staff Mick milvan at the time uh was actually caught saying that this was all designed just to fire people essentially um so it'd be good I think that if we if we talked about it in those sort of blunt terms is just like yeah we wanted we'd like to to get rid of folks at the SBA but this is a a PR slight of hand that's really disadvantaging folks and uh the local economies will that are uh that thrive on on that foot traffic in Atlanta and Boston and Denver are certainly going to feel
▶ 1:01:46the effects of it thank you for that and then on March 3rd of 20125 the US Chamber of Commerce published a report titled I'm afraid small business small business business speak out on tariffs the report found that tariffs will have a real devastating impact on thousands of small businesses Across the Nation and on all Americans in the form of higher prices what are you hearing from the small businesses in the Main Alliance I have uh an inbox filled with
▶ 1:02:18messages phone calls and text messages from small business owners that aren't really sure how they're going to continue operating if some of these tariffs go through I mean we saw a report released from nfib historically the conservative voice for for small business America uh just came out and showed that February 12% of small business owners thought it was a good time to expand their business that's a 5% drop from the previous month the largest drop in that indicator since April 2020 when covid struck so you've got folks that are really
▶ 1:02:48scared out here uh and it's no laughing matter thank you Mr Trent I'm going to shift to you Mr Gutierrez SB DC's have received level funding over the years yet you're being asked to uh to do more and more with less and less can you please share the importance of full funding for the sbc's and how does lurching from one continuing resolution to another hurt sbdc ability to counsel small businesses thank you for the question so when a CR
▶ 1:03:18uh happens um it to be quite honest with you it doesn't affect us because we'll have to do what we do on a daily basis and that serve our clients um what it does is it promotes um the um uh the Reliance on our host universities to help or to offset any type of potential funding uh slowdown and um as far as sdc's being out there and doing the things that we do um we just keep our head down focus on serving those small businesses and make sure that we're able to um do what is asked
▶ 1:03:48of us what's tasked of us through the uh the grant program that we're we're tasked so thank you chairman your yield back thank you ranking member I now recognize Mr finstead from Minnesota for five minutes thank you Mr chairman and thank you for holding this important subcommittee hearing today and thank you to our Witnesses for taking time to be with us over the past four years small businesses across our country have been struggling to keep their doors open with the impacts of record high inflation supply chain disruptions and burdensome regulations hindering their growth
▶ 1:04:18I've heard firsthand from small businesses across my district about the impact that they have felt over the last few years here and and uh what it's meant to their businesses and and opportunities or lack of opportunities across southern Minnesota so that being said I want to go to Mr Ortiz uh as president CEO of the job creators Network you know the important role the SBA plays in supporting small business owners one of the things that that that I've seen uh in past experience working uh in federal government
▶ 1:04:49is the ability uh to meet the customers needs and that's usually a relation ship based face Toof face how can I help you kind of situation and so I'm really happy to hear uh that administrator laugher has returned the SBA to in-person work and so just want to know from you what do you believe this move will improve the services at SBA um Congressman thank you for the question I I believe the face Toof face is critical for the interaction for
▶ 1:05:19small business owners for their success um I I still would say that we have to get more people out to the field to the resources uh where the small business owners are it's great that there are some small businesses here in the DC area serving uh the community and serving Congress but that's not where the bulk of our small businesses are it's out in the field it's out in out the you know in in Pella Iowa in uh Portland Oregon it's all across the country that's where they need to be and that's where the resources need to be allocated and so
▶ 1:05:49I I think we it's a great step in the right direction but I think we need to go further and we need to reallocate those resources out to the fields uh thank you for that and uh all I would say is preach keep preaching and I represent a district of 21 counties pretty rural uh southern Minnesota and a lot of times these counties feel like they're fly Overland for uh organizations like SBA and so uh I completely agree with you um moving a little bit uh in February I was proud to reintroduce
▶ 1:06:19for the second time the House pass prove it Act and the prove it act it received the job creators NW work endorsement and this bill would give our small businesses a voice in the regulatory process as they work to serve their communities and pursue the American dream what impact uh Mr Ortiz do you think that the pass of this legislation would have on small businesses in navigating the regulatory environment thank you again uh for the question Congressman this is a game Cher for small businesses no doubt about it and uh
▶ 1:06:49we're we're glad to see that uh Senator erns also introduced a companion legislation in the United States Senate on this this is critical I think for too long agencies have been given a pass uh in terms of trying to do what they're supposed to do which is show the impact of small businesses on regulations uh too many waivers have been signed to basically say no it's actually fine and small businesses have been hurt all along the way they don't have the resources to come and bring all their lawyers and you know 12 lawyers and all everything else that they need
▶ 1:07:20at the end of the legislative process to try to challenge stuff and go to the Supreme Court they don't have the resources to do they're trying to run their their businesses 24/7 and so having the opportunity to you know finally Force agencies to actually consider the effect of regulation on small business is critical and having uh the opportunity to have a seat at the table at the beginning of the process rather than the end of the process is absolutely critical um again this is a GameChanger and uh I think we need to do everything we can to make sure that it passes quickly swiftly and in this Congress I appreciate
▶ 1:07:50those comments and I couldn't agree more with you it it is uh you know a d elction of Duty from Congress because we pass these good intended laws we leave it up to the regulatory state to create all the hoops and loops and bells and whistles and the rules and Regulatory climate that our business has to live under with no opportunity to weigh in on wait a minute you know this is going to impact us and to your point small businesses don't have Stables of lawyers and compliance officers and uh and so
▶ 1:08:20giving them uh more power in the in in the regulatory process is something I'm going to work hard for so I appreciate your support on that uh one last question here for Mr uh Gutierrez uh as Missouri's sbdc uh director you uh more than likely have a great pulse for what impacting small businesses across your state how is the regulatory environment impacted small businesses in your community and what can we do here in Congress to ensure Main Street businesses have the ability to grow and prosper sure one big topic uh for
▶ 1:08:50a lot of small business well for most small businesses has been the corporate transparency act um that was introduced I believe it was last year and then resend it and then paused and and going back and forth um that's some put some very very uh tough situation gentleman's time has expired I now recognize Mr cisos from California for five minutes thank you Mr chairman uh the conclusion of the majority's hearing memo included um you know the sba's Mr Ortiz uh testimony included ending
▶ 1:09:21the politization Mr Gutierrez shared that the SBA should not focus on political agendas Mr Trent you highlighted to us that this shouldn't be about partisanship we all agreed and we should not be politicizing the SBA and this committee has passed multiple bipartisan pieces of legislation unanimously uh so far today we heard the SBA should go to where the people are uh put Main Street America First yet we have an administrator
▶ 1:09:51an SBA administrator targeting major cities led by Democratic mayors as she seeks to close SBA Regional Offices in Boston Seattle Chicago Atlanta New York City and Denver and it's probably not long before my area of Los Angeles county is on that list as well so Mr Trent in your view how does the Brazen politicization of the SBA to close offices in major metropolitan areas impact small businesses yeah it impacts them uh directly
▶ 1:10:21and listen I I I feel for and have have thousands of small business owners in rural areas Minnesota Wisconsin um and I hear from them you know it's absolutely it can be tough to access some of these SBA resources and you know what it's okay to talk about maybe moving a couple staff to different parts of the country to to to have more direct service for for Rural entrepreneurs but uh the truth is that uh you've got
▶ 1:10:51hundreds of thousands of entrepreneurs concentrated in Atlanta in Denver in Boston that are going to feel the effects uh of of sort of the this this move away uh from these from these entrepreneurship hubs um and uh it's it's really unfortunate I'd say and and we can already feel the Rumblings and it it adds to this environment of uncertainty for for entrepreneurs that are going to have to take on more costs frankly just to meet basic technical assistance needs thank you for that answer
▶ 1:11:21um again Mr Trent you represent a nationwide network of over 30,000 small business owners many of which depend on the SBA in your testimony you urge the committee to reject policies that that inject instability into the economy as we have seen with the Trump tariffs the president the president is on again off again based on whoever is in his ear at that given moment uh main Street's getting Whiplash how important is it for small businesses to have stability it's
▶ 1:11:52unbelievably important uh so around 50% uh of small businesses across the country are operating with about a month of operating reserves um so we've got to be making decisions that are reflective of the fact that we respect these small business owners we respect where they are right with with that little operating Reserve um and the uncertainty around the tariffs the the will they won't they soap opera um it it affects budgeting uh for entrepreneurs it affects planning it affects
▶ 1:12:22uh the way that they're thinking about growing their teams uh the year ahead and so there are the direct impacts as as tariffs start to to come into play but then there are the KnockOn effects that were really not going to be able to know the full extent of the problem until six months a year from now thank you according to the sba's own website the office of the Inspector General provides independent objective And Timely oversight to improve the Integrity accountability and performance of SBA and its programs for
▶ 1:12:52the benefit of the American people uh the SBA administrator on day one said from day one the SBA will uphold the highest standards of accountability performance and integrity Mr Trent how can the SBA have the highest standards if the office task to provide oversight is vacant did President Trump's illegal firing of the Inspector General already undermine the administrator's will the administrator wanting to uphold the highest standards of accountability and integrity
▶ 1:13:23uh it's it's going to be tough without someone in that office uh is that Inspector General is is is not just the main person investigating a lot of Fraud and Abuse within the agency but also a sounding board for for thousands and thousands of entrepreneurs across the country uh so with that with that post vacant uh that's an ally for small business owners that is not there uh right now and and frankly it's it's going to be uh it's going to be scary for for for our entrepreneurial class all right well thank you for your testimony and I yield my time back
▶ 1:13:53thank you Mr Saros I now recogniz chairman Williams from the great state of Texas for 5 minutes thank you Mr chairman and Mr Trent on a side note thanks for being here absolutely thanks for having me you're saying Dodge pickups went up from 18,000 to 20,000 880,000 to 100,000 yeah I'm a Dodge pickup dealer it's a good truck in Texas and we're selling for 70,000 it sounds like a sounds like a good you need get down there and see me uh uh Mr gues
▶ 1:14:23as we've been discussing bloated and duplica SBA programs waste taxpayers dollars and undermine the efficiency of the effectiveness of services provided to small business could you elaborate on ways the committee can streamline SBA programs sure I I love the idea of having uh more SBA um presence in the field um to serve the rural communities um I I believe that there there is a lot of programs that um were created to duplicate some
▶ 1:14:53of the services that we've been doing for over 40 years for example I believe The Navigators program was designed to um reach those under underserved um populations we are already there we're already serving the underserved populations from rural America to uh to um Main Street St Louis Main Street Kansas City to down in Joplin Missouri we do all that sort of stuff so to have that money duplicated to a whole or a whole new agency or or or um organization you're recreating the wheel we've been doing it for for like I
▶ 1:15:23mentioned over 40 years uh during the time that uh there was carac money we were allocated a large amount of money our results doubled or sometimes tripled in some of the areas when that funding did go away we were left with we called what we believe would have been the covid cliff where the money dried up but the demand for our services didn't we're still at an all-time high so the services that we provide um we often have up to two weeks before someone can come in and see one of our business counselors in the rural area but as far as duplication in a
▶ 1:15:53process we're the ones the first ones here will be the last ones out the door because we're here every day doing what we need to do to serve serve Main Street America thank you Mr Ortiz as you mentioned in your testimony assessing the performance of SBA programs is important to maximize the utility of a taxpayer resource in aiding and supporting small businesses so my question to you would be what performance metrics would you suggest the SBA consider implementing to maximize the effectivess of the SBA programs chairman Williams thank you very much
▶ 1:16:24for the question um in this era of Doge uh I think trying to achieve that combination of effective and efficient is what we need to do here and with the SBA that's one of the things we need to do as well um I think it's important that we set metrics to know that we are successful one of the biggest metrics that I see that we can do and this is a very very tangible one is the failure rate of small businesses for example the failure rate for small business the first year is about 20% and when you look into the number one reason why it's because they don't know
▶ 1:16:54how to create a business plan so again I go back to the teach the fisherman how to fish let's actually teach them how to create business plans imagine if we could reduce that failure rate in four years from 20% to 10% you have 33 million small business owners one could actually conceive that you create another 15 million small businesses by doing so and then if each small business employs two people you've just added 30 Millions more American small uh businesses or jobs to those small businesses and so there's an important metric there that we need to take into
▶ 1:17:24account establishing I guess this uh effective and efficient combination of a $ 1.5 billion agency it's not necessarily about saving money it's just about making those dollars work hard for taxpayers well that's great and we know that small business is the backbone of our country 99% of the businesses are small businesses 75% 75% of the workforce and payrolls done by small business that's correct and we got to keep risk and reward in their life all the time where they can take some risk and get reward and not be burdened by regulation
▶ 1:17:55in the federal government easier to compete against each other than to compete against the federal government that's correct I think every single day uh with that Mr chairman uh they've never been cheaper than they are today Mr Trent let me tell you that okay and uh it's thank you for letting me have fun with you okay I you have my time back thank you Mr chair I now recognize Miss mckyer from New Jersey for five minutes thank you uh chairman and ranking member for having this hearing and thank you to our Witnesses for joining us
▶ 1:18:25today this hearing could not come at a better time considering the rapid changes occurring at the small business administration sba's work has helped has helped turn the dreams of countless everyday entrepreneurs into reality and has helped thousands climb up the socioeconomic ladder in America my home District the 10th District in the great state of New Jersey is proud to host the SBA New Jersey regional office providing important services All Over
▶ 1:18:55the Garden State for years SBA employees have worked hard for the American people and we owe it to them to ensure that they are treated fairly while performing their work for our communities as mentioned in this Committee hearing today we've heard over and over again about the Reckless firings of hundreds of employees at SBA including the pro the probationary employees which is why I introduced the Merit act to ensure that these employees are granted back their jobs immediately and
▶ 1:19:25the back pay I've heard from many of you today about the strains on the department which obviously trickle down to the businesses and the support that they're able to get so for each of the witnesses today I would like to ask do you support the firing of these hundreds of hundreds of employees we can start with Mr Gutierrez under the
▶ 1:19:56current direction of the administration um I I would say yes it's funny because in your opening statement you said that they were short staff so I mean the SBA is already short staff but you support the firing of these hundreds of employees that was just recently fired I would say that the majority of the of the firings from what I understand um and what I've read um are out of the DC area as opposed to what's going on in the field um I know that the field has really under represented it
▶ 1:20:26and I believe that when you have any type of transition like this that could lead to potentially more um um stability down the line um that's something that from a private standpoint that's that goes to efficiency so so yes I understand that there's been a lots of jobs left are lost um but uh to like to my point earlier um those jobs were never out in the field and they were never really affecting a lot of the uh the regions that they were in do you know that for sure well I can speak uh uh directly IR ly to the Missouri and the
▶ 1:20:56Kansas City District but not for the entire not for every office or every of course not I can't speak thank you Mr Ortiz I worked at a uh Consulting agency called Boston Consulting Group this is something that we used to do day in in day out is trying to make sure that we have an organization that is more effective and efficient for uh in this particular case it's not an organization but it's an agency that works for the federal government who actually is funded um we have a responsibility to our small business
▶ 1:21:26owners to make sure that we have the most effective and efficient not only agency but people working for it I was a small business owner and I will tell you that I bet everything I had on my small business and I wanted to make sure that every small business owner that goes to the SBA knows that they have the most effective and efficient people working in that yes or no Mr Ortiz well that's my answer ma'am but so you don't it's yes or no do you support the firings of those people I support more effective and efficient agency okay next Mr Trent
▶ 1:21:57no um thank you yeah uh I mean I I come at this work as a as a veteran family uh and so I think when I think of SBA I think of Veteran entrepreneurs my grandfather served in World War II um my brothers both in the Army one went to was deployed to Iraq you've got thousands and thousands of Veteran entrepreneurs who started businesses that growth rate uh in in veteran-owned businesses doubled in the first two years of the Biden Administration now you've got those same veterans who served our country defending
▶ 1:22:28the freedoms that a lot of us take for granted who have had the rug pulled out from under them as a result of these Mass firings it's h it's shameful thank you so much for that I I want to thank the witnesses even those who kind of skated around the question but the point of the matter is is we have to make it make sense we cannot sit up here and say that you know it's we need a more efficient we need to um have more help at SBA we hear from different businesses all the time about the delay and assistance that they can get from SBA sometimes
▶ 1:22:58so saying sitting up here saying that we support the firings or we don't support there's not enough staff in it's just not all making sense and we should be supporting our small businesses and making sure we're delivering to them as much assistance that we can do that is our job here not to be making things harder for them thank you with that I yield back thank you I ask unanimous consent from Mr Weed from Wisconsin to wave onto this hearing without objection so ordered I now recognize Mr Weed for 5 minutes thank you Mr chairman
▶ 1:23:28for allowing me to speak in today's hearing and thank you to the witnesses who came here to share their experiences with us Northeast Wisconsin is home to a wide variety of small businesses who have faced economic uncertainty due to an overreaching and over taxing federal government as a former small business owner myself I know the challenges you must overcome to operate and grow a successful small business under this administration small businesses across the country faced increased regulatory burdens which made starting
▶ 1:23:58running and growing a small business more difficult at the same time the small business administration enacted policies such as allowing its employees to work from home that negatively impacted small businesses it's important that as a committee we address these broken and burdensome policies and make Main Street America great again my first question is for Mr Ortiz in your opening statement you spoke about the additional $2 trillion of regulatory burdens levied
▶ 1:24:29on businesses during the Biden Administration having fewer employees and less Financial Services small businesses bear an increased burden of these additional regulations as members of the small business committee what should our top priority be to reduce these regulations and provide immediate regulatory relief to small businesses uh thank you very much for the question Congressman uh the um one of the hardest things uh during the past four years under the Biden Administration for our small businesses was the regulatory environment that existed about $1.8
▶ 1:24:59billion doar that was placed on our uh businesses across the country um and also inflation when you take those two together it was a huge burden for our small businesses um and and and quite frankly um when you look at it compared to our large corporations it it it was extreme uh danger uh really for our small businesses on Main Street and so we have to make sure that we reduce that regulatory envir ironment I heard uh the uh Congressman on this side talk about 21 million
▶ 1:25:30small business applications for example filed in our cursory review of those 21 million small business applications those are actually gross applications so for example the they're not actually net applications so for example if I had a business in uh New York and I'm trying to flee New York to go to Florida because there's less taxes and less regulatory environment there that uh Joe's pizza place that moves from from Tex excuse me from New York down to Florida is considered a new business according to
▶ 1:26:00the buying Administration numbers of those $21 million 21 million applications and so when we look at the net applications actually small businesses didn't grow in those four years of the Biden Administration they shriveled because of that regulatory environment and because of high inflation so we got to make sure that we address those too and the last I check the SBA is not a jobs bank it's an environment it's an agency that needs to serve the American small business owner and there's 33 million of them that are struggling right
▶ 1:26:31now thank you all right thank you uh backck thank you Mr Weed I now recognize Miss Simon from California for five minutes thank you chair and thank you to the witnesses uh we don't have to argue that small businesses are the backbone of our economy I love this committee because we we consistently lift that up you know there are many issues that have been covered in this hearing and I will repeat some of them you know my concern the concern of
▶ 1:27:01many uh is that we have come together as a committee with a profound mission of advancing opportunities for small businesses in this country you know just in the last few days we know that 401 threes and 401ks have been thrown out of the window for folks folks have lost so much we also know that in this committee we have said together cross Isle we will make a commitment
▶ 1:27:32to disabled folks to our veterans to women-owned businesses on Main Street on Telegraph street on Broadway streets and here we are having conversation trying to figure out how to advance our way forward I think we all know what we want we more we want a more efficient sector we want a government agency that is can show up at the doors where the websites work within the last two weeks hundreds of SBA workers have been fired
▶ 1:28:02fired we are talking about closing down six agencies in major cities in this country so I want folks who are watching to know the dry cleaner the auto repair dealer the barber shop the woman who called my office yesterday who's starting a home care business to make sure that our elders have trained wonderful Ma at their homes every single day doing work that many of us have done where is she going to go she's
▶ 1:28:32called from outside of my district to get support you know she'll be on the phone for hours the websites they were already difficult to access three administrations to go four administrations to go what are we doing what are we doing and now we have this conversation that has become real that tariffs have met the doors of our small businesses we know that entrepreneurs are already working day and night to keep their doors open we also
▶ 1:29:02know that the cost of doing business in the last couple of weeks has shot up these policies are cruel they're cruel and they don't focus on lowincome and middle income and workingclass people who are trying to get off a government doll who want to make good for themselves and offer the folks in their communities and their sons and their daughters jobs they want to send their kids to college we are kicking them in the ribs not only the folks who work for small business agency but the folks who are on the ground you
▶ 1:29:33hire you hire an inspector General and you fire them you fire tons of workers hundreds of workers and then we have a policy that chooses to enact tariffs that will destabilize this country it's cruel and we know that we don't have to litigate that any one of us who've run small businesses who've run payrolls I've ran payroll since I was 19 years old I've hired hundreds of workers I've trained workers to leave incarceration in the streets and Foster Care to get jobs whether
▶ 1:30:03they're doctors or lawyers or medical providers I've done that work I know how hard it is to keep an institution alive when you're by yourself fine close Six agencies and see what happens to our economy we'll see we'll see when you fire IRS workers when you fire Frontline workers in communities that are helping small businesses I have to ask do we care do we truly care about folks on the ground you know I have one quick question which I think I know the answer to
▶ 1:30:34you know with with all that we're talking about I I want to say before I ask my question it will be quick this fiscal year alone in my district our local SBA office has served served on the like literally on the front lines 822 small businesses $351 million of Direct Loans to keep afloat if we care
▶ 1:31:04we would Advance those opportunities not take them away You're automating support through these actions you know Mr Trent I only have a couple of seconds left How can having field offices near Metro areas be a strategic choice and also an effective use of taxpayer dollars to serve small businesses How can having these offices near Metro areas be a strategic choice to support small businesses
▶ 1:31:34just a quick answer I'll just quickly say that because a lot of these City centers are hubs for entrepreneurship where there's a real preponderance of of small business Activity The Gentle woman's time has expired the chair now recognizes Mr Downing from Montana fores uh thank you Mr chairman and thank you to the witnesses uh under the Biden Administration ba suffered from serious mismanagement that uh hindered the agency's ability to support small business you know through irresponsible work from home policies Dei mandates and voter registration
▶ 1:32:05efforts Biden's SBA prioritized politics and bureaucracy over the interests of Main Street America uh first Mr Gutierrez uh your testimony demonstrates the power of small business centers or sdc's uh to assist small businesses and in you know produce a return on tax taay investment so from your experience as the Director of Missouri's sbdc how do they help support rural businesses which very often lack access to the information and training needed
▶ 1:32:35to to thrive thank you for the question so the Missouri sbdc serves all 114 counties in the city of St Louis uh it's a large footprint across the state with uh 18 business service centers and two Satellite locations with a staff of 33 full-time uh folks that's simply just not enough um unfortunately um we are not able to have a physical presence um however with the introduction of different Technologies such as Zoom teams things of that nature
▶ 1:33:05we're able to reach more folks um we try to uh uh set up Regional meetings where we're meeting with several different counties at once we set up a revolving schedule to meet with different cities so we're there um on a regular basis but simply the fact is that we're stretched thin just like many of our other partners in the field that are front line and um it's we're doing as as best as we can um I mentioned earlier that sometimes because of Staffing um issues and funding issues uh it could take up to two weeks before they're able to see anybody in person
▶ 1:33:36uh at one of our rural business centers we're just trying to do a lot with uh with a little well thank you H so how did the sba's work from home policies under the previous administration negatively impact your spdc quite honestly they didn't impact us at all because we were on the ground were meeting with the businesses on a regular basis we knew that the SBA officers were there we helped support them whenever uh possible uh but um uh during the last three or four years uh we often found that
▶ 1:34:06uh traveling uh to the SBA offices in both uh Kansas City in St Louis unfortunately um the the Personnel was not there um I remember showing up for a meeting um and nobody was there uh with a meeting uh with our SBA um representative so uh it's just a matter of you know we're doing the best we can to meet the the needs of small business in Rural America and of course obviously Main Street America as well thanks uh according to a 2024 report from this committee the Biden Administration attempted to leverage sdc's
▶ 1:34:36to promote voter registration activities uh were you ever approached by the Biden Administration to support their voter registration efforts fortunately in the state of Missouri we were not do you believe the administration would have approached you if Missouri were a more competitive state in the presidential politics I would like to think that we would not have been approached but I can't answer that hypothetical thank you sir uh moving on Mr orti in your testimony you emphasized the truly egregious nature of sba's political activities under the Biden
▶ 1:35:07Administration uh how have these activities damaged sba's reputation as a reliable partner for small businesses across our country thank you Congressman for the question unfortunately uh small business owners just don't believe and trust in the SBA anymore I think they look to other partners outside of the SBA and quite frankly there are a lot of great Partners out there uh golden snacks American Express for example run some fantastic small business programs Sir Mr Gutierrez runs great programs as well
▶ 1:35:37um so I think what we need to do is we need to restore confidence in the SBA and and what do you what steps can SBA take to restore confidence with small business well I mentioned already in the testimony I think part of it is we got to move resources out to the fields uh better resources more effective resources um um I think uh you know certain folks were let go I would question and make the question is maybe they were maybe they should have been let go because they weren't exactly the most effective uh resources for our small business owners we need to
▶ 1:36:07make sure that we ensure people who have the experience to be able to make uh suggestions for example on how to create small business plans for small business owners we talk a lot about and the left talked about the Democrats uh talked a lot about um establishing uh small businesses need certainty for example well if they needed certainty I wonder why they didn't vote for example in the last uh budget uh you know the the the budget Bill uh none of them voted for a budget that included the extension of the tax cut and jobs act and how important do you think that is for Main Street
▶ 1:36:37America the tax cuts and jobs act it's it's hugely important in in 2017 with the tax and jobs act that provided the impetus for the successful economy that we had was the two biggest parts of the small business uh needs were the tax deduction and the immediate exp gentleman's time has expired we now recognize Miss goodlander from New Hampshire for five minutes thank you Mr chairman and thank you ranking member Tran I really believe deeply in the work of the oversight subcommittee um we all swore one thing that unites us all
▶ 1:37:08in this committee and in Congress is we all swore an oath to protect and defend this important document the United States Constitution and one of the core responsibilities of Congress is oversight uh it's because oversight is about transparency which is essential to public trust oversight is essential to cracking down on waste Fraud and Abuse which I'm deeply committed to um oversite is about making sure that our government works for hardworking people and that we give the American people and our small
▶ 1:37:38businesses the certainty that they need and deserve another core constitutional responsibility of Congress is is the power of the purse the power to direct and control federal spending um and that's because we live in a democracy uh and not in a monarchy and so what we've seen in the last 51 days is an unprecedented assault on this power of congress it's an assault that is Lawless it's dangerous and it it has had a really bad impact on so many of our small businesses
▶ 1:38:08and workers um across this country and across New Hampshire Mr Trent you you you testified that Federal funding freezes are direct attack on small businesses on the stability that small businesses need and that's certainly what I'm hearing from small business across New Hampshire who are unsure about whether they can keep workers on payroll um who aren't sure how they're going to provide Healthcare to those workers I I wondered if you could say more about what you're seeing from federal funding freezes across the country
▶ 1:38:39so U we've got hundreds of members that were directly impacted by those funding freezes um and the impact ripples throughout their own local uh economy um one member in new glaris Wisconsin uh runs a Child Care Facility worried about State block grant funding she thought that she might not be able to make payroll the next month and would have to fire half of her team uh we have um in Oakridge Tennessee a member um who does groundbreaking research for the government she
▶ 1:39:09logs into her her funding portal uh one morning and finds that uh the funding That was supposed to be powering her work was nowhere to be found totally totally frozen we've still got folks um who are wrestling with these freezes um everyone is just told to uh to be excited about the incoming you know deregulation regime regime and so it's it's it's really unfair um and we're certainly hearing from most of our members that this is something that's impacting them every single
▶ 1:39:40day well I should say also the impact um of these freezes has been on SBA workers in the state of New Hampshire it's not just here in the capital it's across the country in field offices uh which which is harming our small businesses too Mr Trent you you wrote about a subject that I care deeply about Fair competition and I think it's some it's another issue that should unite us all here in Congress our antitrust and consumer protection laws are as old the ideas
▶ 1:40:10in them are as old as America it's about checking power and here on the small business committee we're we're about bringing power back to our small businesses at a time when the American economy has never been more Consolidated you wrote about the impact of the unprecedented access that an unelected billionaire in the white house has to the sensitive data of small businesses and of people across the United States you've you you you testified that this destroys Fair competition alongside the destruction of public
▶ 1:40:40trust can you say more about that so there's a reason why you know Walmart doesn't have access to the books of the mom and pop stores right down the street from it there's a reason why no other CEO in this country has access to the bank statements taxpayer data uh of small businesses because it's an unbelievably unfair Advantage um and this includes the the taxpayer data and bank statements of some of Elon musk's actual competitors and so we need to be doing everything in our power to make sure that the playing field
▶ 1:41:10is level for uh for small businesses to compete and I'll just respond by respectfully disagreeing with some statements around deregulation and tax code that have been made with deregulation can be good but very often uh the benefits acre to the largest companies in the world the repeal of dodf Frank inev and the the the lessening of restrictions around Capital requirements inevitably led to the Fallout of Silicon Valley Bank uh JP Morgan was quick to gobble up thousands and thousands of depositors while
▶ 1:41:40uh mli a lot of different small Banks languished right the tax code 82% of of surveyed small business owners believe that the tax code is currently rigged against them favoring large corporations so you've got a growing sentiment among small business owners that things aren't fair and we need to do something to fix that thank you woman's time is expired i y back all right thank you so much I want to personally thank each and every one of you Mr Gutierrez Mr Ortiz Mr Trent it was a fascinating
▶ 1:42:10conversation today thank you for your testimony and your investment in small businesses in our future I want to thank a ranking member Tran uh and all the members of this subcommittee and also the staff which really uh is the impetus and the the hard work behind what goes on here so thank you staff without objection members have five legislative days to submit additional materials and written questions for the witnesses to the chair which will be forwarded to the witnesses I ask the witnesses to please respond promptly to those
▶ 1:42:41if there is no further Business Without objection the committee is adjourned e