The Senate Small Business Committee holds a hearing on pending nominees and legislation.
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NewsTranscript
00:00I ask unanimous consent to postpone votes on any question of approving any measures
00:28or matter or adopting an amendment on which a roll call is requested.
00:33And without objection, so ordered.
00:36And the first item of business is S. 1047, the Assisting Small Businesses, Not Fraudsters
00:42Act.
00:44Now we have two amendments filed to this bill.
00:48And those will be Senator Markey's bill, or amendments to the bill.
00:55And we will pause as we wait for the ranking member.
00:59You may continue your discussions.
01:27Senator Young, this is your bill, and I'll recognize you if you'd like to speak on your
01:32bill.
01:33Well, thank you, Chair.
01:35Grateful for that.
01:37And colleagues, I think we should be all able to agree on the commonsensical nature of this
01:43bill.
01:44Let me outline it for you as outlined in my notes.
01:49The Assisting Small Business, Not Fraudsters Act simply does this.
01:53It prohibits an individual or a business that that individual is associated with from
02:00receiving assistance from the Small Business Administration if they were convicted of financial
02:05misconduct in relation to the SBA's pandemic programs.
02:11It does have some carve outs, provides an exception for disaster loans from this prohibition.
02:20If an individual who previously perpetrated fraud against the SBA should not be eligible
02:25for SBA assistance, and this bill ensures the SBA and American taxpayers are further
02:33protected from fraudulent actors.
02:36That's all it does.
02:38This is a companion bill to H.R. 825, which was a bipartisan bill that passed the House
02:44by a recorded vote of 405 to 0 on February 24th of this year.
02:52Thank you, Chair.
02:55Thank you, Senator Young, very much for offering up this bill.
02:58Now I recognize Ranking Member Markey for his opening statements and for his amendments
03:04to the bill.
03:05Thank you, Madam Chair, very much.
03:09Last Friday, President Trump and Administrator Loeffler announced they would be cutting nearly
03:15half of the SBA workforce, while at the same time proposing that the SBA take on the country's
03:25$1.6 trillion student loan portfolio.
03:31Administrator Loeffler is also threatening to relocate regional offices for political
03:37reasons with Musk and Doge canceling SBA office spaces left and right.
03:45So they're going to reduce the workforce by 43 percent, take out 2,700 jobs, there's 70,000
03:58positions for loans from the SBA every year, and also add on the entire student loan portfolio.
04:11So if you're a small business person across the country, this is not good news, okay?
04:16There's going to be a long, long wait for anyone to be able to deal with your small
04:23business loan in person, because you just can't do it, okay?
04:27It's just impossible to be able to accommodate that kind of service to people, and these
04:32are the smallest of business people.
04:34They don't have the kind of support the SBA employee is the one that really is helping
04:40people to figure it all out.
04:42So you cut the workforce in half, you double the workload by moving over the entire student
04:47loan portfolio, it's $1.6 trillion.
04:49So I just think that there's big problems that are being created here with these kind
04:54of proposals.
04:55So it's just not how you lead an organization, it is how you actually run an organization
05:02into the ground.
05:03So this is an agenda that puts big, big interests, I'm sure they need the money for the billionaire
05:10tax breaks, but it's going to come at the expense of the smallest business people in
05:17the country, and these for the most part are not big liberal people either, they're just
05:22hard struggling small business people.
05:26So today's business meeting, we're going to consider two of Trump's nominees, I know we're
05:31going to pull them back at this point, Casey Mulligan and William Briggs, and while there
05:41are some significant concerns with each nominee, what is more troubling is the idea that we
05:47would move forward to confirm two more political appointees without knowing what is really
05:52going on in SBA.
05:54Congress does not know from DOJ who has access to borrowers' sensitive information.
06:01Congress does not know exactly who from SBA was fired and why.
06:06Congress does not know which district and regional offices will be shuttered and how
06:10that will impact service to small businesses.
06:13Congress does not know which and how many small business contracts and grants have been
06:18canceled because of the President's executive orders, and Congress does not know who is
06:23actually calling the shots at SBA.
06:26Is it President Trump, Administrator LaFleur, or is it Elon Musk?
06:30We just don't know.
06:32We're flying blind here in a committee with jurisdiction over something that's central
06:37to 30 million small businesses in America.
06:41We just don't have any information at this point.
06:44And when will Congress get answers to those questions?
06:46We are an equal branch of government.
06:49We are not elected to rubber stamp the Trump Administration's nominees and agenda.
06:54The second part of today's business meeting is to consider two bills.
06:58The first bill is Senator Shaheen's Coordinated Support for Rural Small Business Act.
07:03This is a strong piece of legislation that will give businesses in rural America, Massachusetts,
07:09New Hampshire, but all across the country, more focused attention so they can access
07:14loans and counseling services more easily, but we stipulate it's with a dramatically
07:20reduced workforce.
07:22And the second bill, Senator Young's bill to restrict convicted COVID fraudsters from
07:28accessing SBA loans makes perfect sense at face value.
07:33People who defraud SBA should be held accountable.
07:36I support that bill in principle.
07:37However, as written, it could have unintended consequences on small businesses and their
07:42employees, and although the House companion to this legislation passed overwhelmingly,
07:48I think there are problems that are worth fixing.
07:52And while I intend to vote for this legislation out of committee, I just hope that I can work
07:56with you, Madam Chair, to address those issues, along with Senator Young, so that we can try
08:02to resolve them before we bring it out to the floor.
08:05So I'm going to continue to fight for small businesses to ensure that each and every one
08:09gets the resources they need to succeed and grow.
08:12I don't think that's where this is all heading, and I think it's really bad news for small
08:18businesses if the plan, as it's been announced, is in fact put into place.
08:23I just think it's going to make it harder and harder for the engine of growth in our
08:27country to get access to the information and the funding they need to keep hiring people
08:33in our country.
08:34So I yield back, Madam Chair.
08:36Thank you, Ranking Member.
08:37We do need to move quickly.
08:40I would like to process both Senator Young's bill and Senator Shaheen's bill today.
08:46I think we can move both of those out of committee.
08:49So Ranking Member Markey, you are recognized for two minutes for your amendment.
09:00So first – thank you, Madam Chair – This is amendment number one.
09:05Amendment number one.
09:06This legislation includes the overly broad definition of an associate, and this definition
09:12could apply to any employee who manages the day-to-day operations of the small business
09:18without any decision-making authority – any.
09:21That could mean the entire business is punished for past actions of a single employee, even
09:27if the business itself was never involved in a fraud.
09:31And second, the bill places a lifetime ban on SBA loans for implicated associates.
09:38We should instead mirror current SBA regulations and uphold ban-the-box initiatives.
09:45Lifetime bans are overly punitive and ultimately ineffective.
09:51So again, I hope to continue working with Chair Ernst to ensure the legislation is consistent
09:58with the idea that everyone should get a second chance after righting their wrong,
10:04but also that a peripheral employee does not ultimately then affect the core business and
10:11their ability to be able to move forward.
10:14So I want to work with you in order to improve the legislation.
10:19We just have to have, for better or worse, very clear definitions that are here, otherwise
10:26it could cast a cloud over many, many businesses who unknowingly wound up in a situation where
10:34there could have been an employee who was there.
10:37And I also want to work with you to make sure that we have a fully staffed and funded SBA
10:43and Office of Inspector General to address real fraud.
10:46We need to do that as well.
10:48So I am getting increasingly concerned that we're careening towards a real crisis at
10:55the SBA in terms of how it's going to be impacting all of those businesses.
11:01We focus upon small businesses, women-owned businesses, minority-owned businesses, rural businesses,
11:09but a vision without funding is an hallucination.
11:13A vision without funding is an hallucination.
11:15We can't pretend that if you've got 100 percent of the work to be done and then you cut the
11:23workforce by 40 percent and then you add another 40 percent on top of that 100 percent workload,
11:28all the student loans, that somehow or other what is going to happen, not going to happen,
11:33is that those small businesses across the country are not going to see a reduction in
11:38their service.
11:39So that would be my goal, and I withdraw the amendment at this time with the hope that
11:45I could work with you in order to remedy the obvious problems that are being created.
11:50I do appreciate that ranking.
11:52Senator Markey, would you like to offer your second amendment?
11:56Excuse me, Madam Chair, before he gets to his second amendment, if I may, I share Senator
12:01Markey's concern about the over-broadness of the definition of associated, and the fact
12:08that if you are deemed to fit into this overly broad category, you will not be able to access
12:14small business funds.
12:15I think that is rather, that is very draconian, so I would like to receive some kind of assurance
12:22that Senator Markey, in fact, will be able to work with you to narrow this definition
12:27or make it much more precise so that the people who should not have access to these loans
12:33are the ones who shouldn't have access to these loans.
12:37We are going to call the vote on this.
12:38Again, we want to –
12:39You cannot give me any assurance, excuse me, that these concerns –
12:42Maisie, we're going to call the vote.
12:46So you can vote no on the bill, that's your prerogative.
12:49I will remind everyone that this did pass the House 405 to 0.
12:56And, yes, was Senator Markey, would you like to offer your second amendment?
13:01Well –
13:02Oh, I'm sorry, he withdrew it.
13:06I'm withdrawing the amendments with the, you know, with the second amendment that we
13:13all worked together to try to resolve these issues.
13:16And I did serve in the House of Representatives for 36 years.
13:20And I did respect the House of Representatives, but I came to respect the Senate as well.
13:25It was an independent body that could actually use its cerebral mechanisms in order to deal
13:31with issues –
13:32Wonderful.
13:33Okay.
13:34The Senator has withdrawn his amendment number one, and the Senator has withdrawn his amendment
13:42number two.
13:44And so I move to favorably report as 1047.
13:48All in favor, say aye.
13:50Aye.
13:51All opposed, say no.
13:54Okay.
13:551047.
13:561047.
13:571047.
13:581047.
13:591047.
14:001047.
14:011047.
14:021047.
14:031047.
14:04The ayes have it, and it is the ruling of the Chair that S1047 with a quorum being present
14:08is reported favorably by the committee.
14:14Senator Hirono will be recorded as a no.
14:18Okay.
14:19Do you want a recorded vote?
14:21No.
14:22Okay.
14:23So we are moving on to Senator Shaheen's bill now, which is the next item of business.
14:29It's 1093, the Coordinated Support for Rural Small Businesses Act.
14:35No amendments were pre-filed.
14:37And I move to favorably report as 1093.
14:42And would the Senator like to speak on her bill?
14:44I would, just briefly.
14:46As we all know, small businesses in rural areas are particularly important.
14:51They account for 54% of employment compared to only 45% in urban counties.
14:57And it shows one of the things that I have found in New Hampshire is that small businesses
15:05look to not just the SBA, but to USDA and Rural Development for how to better put together
15:13support for what they're trying to do.
15:16And this bill is an attempt to try and better coordinate those resources between SBA and
15:21USDA.
15:22So I appreciate the Chair and Ranking Member's support for the bill.
15:28It has been through the committee before, and I hope this time we can get it through
15:32the floor.
15:34Yes, absolutely.
15:35And I urge my colleagues to support this bill, the Coordinated Support for Rural Small Businesses
15:41Act.
15:43So I move to favorably report as 1093.
15:48All in favor, say aye.
15:50Aye.
15:51Aye.
15:52All those opposed, say nay.
15:54The ayes have it, and it is the ruling of the Chair that S1093, with a quorum being
15:58present, is reported favorably by the committee.
16:09We will have to recess at this point.
16:11And thank you all for participating in today's meeting.
16:14I note the presence of quorum for all actions taken on all committee business today.
16:19I ask unanimous consent that with respect to legislation reported today, that the cordon
16:24rule be waived and that the committee staff be authorized to make technical and conforming
16:29changes to each of the measures reported out today to reflect the actions of the committee.
16:35Without objection, so ordered.
16:37I ask unanimous consent that each measure ordered reported today will be reported as
16:42a single amendment in the nature of a substitute incorporating any amendments adopted.
16:48Without objection, so ordered.
16:50With that, the Committee on Small Business and Entrepreneurship stands adjourned.