[Senate Hearing 113-346]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 113-346
 
       SMALL BUSINESSES SPEAK: SURVIVING THE GOVERNMENT SHUTDOWN? 

=======================================================================

                                HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                          AND ENTREPRENEURSHIP
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 15, 2013

                               __________

    Printed for the Committee on Small Business and Entrepreneurship

         Available via the World Wide Web: http://www.fdsys.gov

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            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                    ONE HUNDRED THIRTEENTH CONGRESS

                              ----------                              
                   MARY L. LANDRIEU, Louisiana, Chair
                 JAMES E. RISCH, Idaho, Ranking Member
CARL LEVIN, Michigan                 DAVID VITTER, Louisiana
TOM HARKIN, Iowa                     MARCO RUBIO, Florida
MARIA CANTWELL, Washington           RAND PAUL, Kentucky
MARK L. PRYOR, Arkansas              TIM SCOTT, South Caarolina
BENJAMIN L. CARDIN, Maryland         DEB FISCHER, Nebraska
JEANNE SHAHEEN, New Hampshire        MICHAEL B. ENZI, Wyoming
KAY R. HAGAN, North Carolina         RON JOHNSON, Wisconsin
HEIDI HEITKAMP, North Dakota         JEFFREY S. CHIESA, New Jersey
EDWARD J. MARKEY, Massachusetts
                Jane Campbell, Democratic Staff Director
           Skiffington Holderness, Republican Staff Director



                            C O N T E N T S

                              ----------                              

                           Opening Statements

                                                                   Page

Landrieu, Hon. Mary L., Chair, and a U.S. Senator from Louisiana.     1
Heitkamp, Hon. Heidi, a U.S. Senator from North Dakota...........     4
Cardin, Hon. Benjamin L., a U.S. Senator from Maryland...........     7
Levin, Hon. Carl, a U.S. Senator from Michigan...................     7

                           Witness Testimony

Smith, Joaneane, President and Chief Executive Officer, Global 
  Commerce and Services, LLC.....................................    12
Leh, Christopher J., President, Tl Technologies, Inc.............    15
Firestone, Lisa, President and Chief Executive Officer, Managed 
  Care Advisors..................................................    19
Griffall, Keith, Chief Executive Officer, Western Leisure, Inc...    25
Poole, Sabrina B., President and Chief Executive Officer, SERDI, 
  LLC............................................................    30
Singh, Barun, Founder and Chief Technology Officer, WegoWise, 
  Inc............................................................    35
Robertson, Sally B., President and Chief Executive Officer, 
  Business Finance Group, Inc....................................    41
Ford, Antwayne, President and Chief Executive Officer, 
  Enlightened, Inc...............................................    49
Withee, Charles, President, The Provident Bank...................    55
Paul, Ronald D., Chairman, Eagle Bancorp, Inc....................    58

          Alphabetical Listing and Appendix Material Submitted

Cardin, Hon. Benjamin L.
    Opening statement............................................     7
Farquharson, Dr. Stuart
    Prepared statement...........................................   108
Firestone, Lisa
    Testimony....................................................    19
    Prepared statement...........................................    20
Ford, Antwayne
    Testimony....................................................    49
    Prepared statement...........................................    51
Griffall, Keith
    Testimony....................................................    25
    Prepared statement...........................................    26
Heitkamp, Hon. Heidi
    Opening statement............................................     4
    Prepared statement...........................................     5
Landrieu, Hon. Mary L.
    Opening statement............................................     1
    Post-hearing questions for the record posed to:
        Sally B. Robertson.......................................    84
        Lisa Firestone...........................................    91
        Joaneane Smith...........................................    93
        Keith Griffall...........................................    94
        Sabrina B. Poole.........................................    99
        Christopher J. Leh.......................................   102
Leh, Christopher J.
    Testimony....................................................    15
    Prepared statement...........................................    16
Levin, Hon. Carl
    Opening statement............................................     7
    Prepared statement...........................................     9
List of 7(a) and 504 Loans Approved..............................   123
National CAPACD
    Prepared statement...........................................   104
Paul, Ronald D.
    Testimony....................................................    58
    Prepared statement...........................................    60
Poole, Sabrina B.
    Testimony....................................................    30
    Biographical sketch..........................................    32
Robertson, Sally B.
    Testimony....................................................    41
    Prepared statement...........................................    43
Singh, Barun
    Testimony....................................................    35
    Prepared statement...........................................    37
Smith, Joaneane
    Testimony....................................................    12
    Prepared statement...........................................    13
Tobiska, W. Kent
    Prepared statement...........................................   109
U.S. Senate Committee on Small Business & Entrepreneurship
    ``Shutdown Impact Stories''..................................   124
Withee, Charles
    Testimony....................................................    55
    Prepared statement...........................................    56
World Trade Center New Orleans
    Prepared statement...........................................   116


       SMALL BUSINESSES SPEAK: SURVIVING THE GOVERNMENT SHUTDOWN?

                              ----------                              


                       TUESDAY, OCTOBER 15, 2013

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2:30 p.m., in 
Room SR-428A, Russell Senate Office Building, Hon. Mary L. 
Landrieu (Chair of the Committee) presiding.
    Present: Senators Landrieu, Levin, Cardin, Shaheen, Hagan, 
Heitkamp, and Fischer.

 OPENING STATEMENT OF HON. MARY L. LANDRIEU, CHAIR, AND A U.S. 
                     SENATOR FROM LOUISIANA

    Chair Landrieu. Good afternoon, everyone. Thank you all for 
making the effort to join us here today for this hearing to 
allow the voices of small business and partners of small 
business to be heard in how this shutdown of the Federal 
Government is affecting you.
    We are now on day 15 of a government shutdown and, 
unfortunately, only two days away from the possibility of the 
United States signaling to the world that we will not pay our 
bills. American Express CEO Ken Chenault said, quote, ``If the 
United States hits a debt ceiling and is unable to pay its 
debts, the consequences will be immediate and dramatic. The 
United States,'' he went on to say, ``has been the wealthiest 
nation on the planet for 100 years. No one ever believed the 
United States would not pay its bills. If the U.S. defaults, 
the world financial system literally unwinds.''
    Gautam Mukunda, a Harvard Business School professor, said 
this week, ``The economic risk to the average American if the 
government defaults on its debts is so great, I find it hard to 
believe policy makers would ever allow it to happen. The entire 
crisis is entirely unnecessary and avoidable.''
    Yet, we are here today still facing this potential 
catastrophic crisis because of, in my view, a small minority 
from one party in one House decided to hold the Federal 
Government and the global economy hostage to defund or delay a 
health care law they find objectionable, a health care law that 
passed the Senate on December 24, 2009, passed the House on 
March 21, 2010, was signed into law by President Obama on March 
23, and upheld by the Supreme Court on June 28, 2012.
    Hundreds of committees held hearings on this law over a 
span of 40 years. This committee held several hearings on this 
law, one just recently, where we had people come in and talk 
about what they liked about it, and what they did not like 
about it. I will refer to that in a minute. At our recent 
hearing, we heard from one small business owner from Maryland. 
He stated, ``I always wanted health insurance, and being self-
employed, we could not afford it. I do not want to go back to 
that.'' He went on to say the status quo was completely 
unacceptable. ``Doing nothing would have wreaked havoc on my 
business and other small businesses like it.'' We had at that 
time a stream of testimony that is on this record and public 
record of business owners saying how pleased they were with 
many parts of the law. We had some on record that said they did 
not like parts of the law.
    But what we find ourselves here today is because a small 
group could not get it amended, repealed, et cetera, they have 
now shut down the government. And I wanted to give voice to 
small businesses today, regardless of what your feeling is 
about that particular act or health care in general, we want to 
hear from small businesses about how the Federal Government, 
when it furloughs almost 800,000 people and puts a stop to 
contracts, projects, et cetera, how it affects small business. 
Maybe there is no effect. We will hear from you all today. I 
think there is.
    So, this hearing will attempt to focus attention on the 
current government shutdown on America's small businesses, and 
there are 27 million of them, 20 million self-employed, about 
seven to eight million small businesses, and we have thousands 
of banks represented here that lend to those businesses. We are 
going to get some of this on the record today.
    Our witnesses, all of you, come from a variety of different 
industries. You come from the tourism industry, from the high-
tech efficiency firms, from IT, from cybersecurity firms, you 
represent the health care sector, and even a small manufacturer 
of gun parts is here to testify about how this shutdown is 
affecting your business.
    Some of my colleagues that have joined me, and I will 
recognize them in a minute and thank them for being here--
everyone is on a tight timeframe today--but some of their firms 
that they represent in their States have expressed strong--
given strong letters of support for this hearing and expressed 
their views. Here are just some that we have collected, and I 
will do this briefly.
    One of my small business owners in Donaldsonville, 
Louisiana, Todd Dorian, sent me a letter. He works in the sugar 
industry. He is owner of a small consulting business, but he 
wanted to open Grapevine Cafe and Gallery in Donaldsonville. 
Now, we are famous for our restaurants, lots of good food, and 
they are not always fancy places, but they are always good. I 
have no doubt his would have been one. He had nearly completed 
an application for a 504 loan which he would use to purchase 
the restaurant. The SBA had not approved the loan yet. The 
restaurant he is buying has 15 employees, but in his plan, he 
was going to add five new jobs within 90 to 120 days of 
purchase. That job hiring has been delayed because his loan 
application could not be approved because this is just one of 
500 agencies of the Federal Government that are closed down and 
not operating properly.
    Another one of our businesses, in business a long time, 
Perez and Associates from the 1940s, it has grown into a 
national company. This company happens to now be owned by women 
and minority-owned. Their government clients include the Corps 
of Engineers, Department of Agriculture, U.S. Air Force. More 
than 50 percent of their work is Federal contract, but 50 
percent is private. They are losing, they have testified to me, 
more than $41,000 a day and 40 employees are affected by this 
shutdown.
    Another Louisiana company, Gulf Coast Bank, that I am well 
aware of, they are one of our strongest small business lenders. 
They are one of the largest mortgage lenders in South 
Louisiana. They have closed over 1,300 loans totaling $230 
million to date. They are on target this year to close $300 
million because the market is picking up and things are moving 
forward. Yet, every day, they said, they are losing--they are 
saying no to $1.8 million in lending because of this closure.
    I am going to read just one more off that is not from 
Louisiana, that is from Philadelphia, Pennsylvania, and then 
turn it over to my colleagues for brief opening remarks as we 
get to our panel. But in the Wall Street Journal just this 
week, Charlotte Calmels had been planning to use a $150,000 SBA 
loan to open her second French restaurant in Philadelphia. But 
before the loan can close, her lender, which is Susquehanna 
Bank, must confirm her legal immigration status. That process 
begins with the SBA. The Federal immigration agency, which 
remains open because they are under an exception, stopped 
receiving requests because they cannot get what they need from 
the SBA, which brings to the point that just because a few 
agencies have been deemed ``essential'' under the emergency 
does not mean by any chance that operations are going smoothly 
and it is stopping a lot of economic work in our nation. I hope 
that we can open up our government.
    I am going to submit the rest of my statement for the 
record, but I want to just say that the SBA approved 53,000 
loans supporting over 30 business and small business lending 
through its flagship 7(a) and 504 loan programs. If loan 
volumes hold, that means every day the government is shut down, 
an average of 150 loans totaling over $93 million are not being 
processed.
    The Export-Import Bank is under the wheelhouse of this 
committee. What about that bank? Last year, 88 percent of the 
Export-Import Bank transactions were from small businesses, 
totaling $6.1 billion. That bank today is not currently 
operating. Translate that to $16.7 million a day of lost 
transactions for small businesses all over America.
    Now, let us take the IRS. I promise you, this is not going 
to be on the favorite list of House Republicans to open it up. 
It is not one of my favorite agencies, either. However, many 
small mortgage lenders and real estate agencies are in danger 
of seeing transactions put on hold because, by law, any 
mortgage loan approved is subject to the review by a mortgage 
lender of at least one year's worth of Federal tax returns. If 
they cannot get one year's worth of Federal tax returns 
verified by the IRS, all of these mortgages and loans are tied 
up. So you can see what our situation is here.
    So, let me, in closing, say we have a wonderful collection 
of small business owners today who, I know you are eager to 
tell your stories. I look forward to hearing you all.
    Chair Landrieu. I am going to turn to my Ranking Member 
when he arrives, but until then, let me, in order of 
appearance, recognize the Senators just for a very brief, you 
know, one minute or two, opening remarks, and then I would like 
to introduce our panelists.
    Senator Heitkamp.

 OPENING STATEMENT OF HON. HEIDI HEITKAMP, A U.S. SENATOR FROM 
                          NORTH DAKOTA

    Senator Heitkamp. Thanks so much, Chairwoman Landrieu, for 
putting this hearing together in such a short period of time, 
and I want to assure the witnesses, we understand that your 
time is valuable, but your stories are extraordinarily 
important and this opportunity to really tell those stories, I 
think, is critical to impressing upon people that there is more 
that is hurt than just feelings here. There is more than what 
is hurt than just our emotion.
    And this may come as a surprise. This committee is a 
committee that I worked very hard to be on because North 
Dakota, in fact, is affected almost more than any other State 
with the SBA shutdown. My home State of North Dakota actually 
ranks number one in the number of loans per capita based on 
dollar value secured through the SBA. The agency reported that 
in fiscal year 2012, it granted almost $28 million, or $152 per 
resident, of loans in North Dakota. And in the first four 
months of the current fiscal year, the SBA provided twice as 
much financing compared to the same period in 2012. And you 
might know that North Dakota is undergoing a huge economic 
boom.
    But what is really tragic here is that this opportunity 
that small business people have of taking advantage of this 
economic opportunity in North Dakota is being stifled every 
day, and tragically, the places where it is being hit the 
hardest is our Indian Reservations. And I could tell you very 
sad stories, but I think it is important that we hear your 
individual stories and not relay the ones that we have from 
home, and so I would ask that my whole opening statement be 
available for the record.
    [The prepared statement of Senator Heitkamp follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chair Landrieu. Without objection. Thank you.
    Senator Cardin.

 OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, A U.S. SENATOR 
                         FROM MARYLAND

    Senator Cardin. Well, Chairman Landrieu, first of all, 
thank you very much for bringing us together and thank you for 
pointing out so frequently on the floor of the Senate, in our 
caucus, and to the American people the harm being caused to our 
country as a result of the shutdown of government.
    I represent the State of Maryland. We have ten percent of 
our workforce that works for the Federal Government--ten 
percent of our workforce. It has had a huge impact on the 
Maryland economy. So we know about that ten percent. We know 
about that 125,000 or 130,000 Federal workers who are 
furloughed. But it is having a major impact on small businesses 
in our State.
    I stopped at a restaurant last week near the Baltimore 
beltway and I know the owner and I asked him how things are 
going. He said, ``Terrible.'' He said, ``You know, we do not 
have the Federal workers who usually come in here and have 
lunch. I do not know how much longer we can deal with our 
current situation with the government shutdown.'' So businesses 
are hurting.
    I want to thank all of the guests that we have here today 
that are going to relay their stories. I am particularly 
pleased that we have so many on the panel that have a Maryland 
connection.
    We talk about the Federal workers, but how about the 
employers that do contract work for the Federal Government? 
That is a huge number in my State and around the country. So I 
am glad that Lisa Firestone is here, who will be able to talk 
about the fact that 90 percent of her revenues are in jeopardy 
because of the shutdown. She helps save money for the Federal 
Government in the work that you do for lost days and worker 
comp costs, and we know the great work that you do. We want to 
see you at full strength.
    And to Sabrina Poole, a woman-owned small business, 25 
percent of her revenues are jeopardized because of the 
shutdown.
    And I want to also thank Sally Robertson and Ron Paul for 
being here to explain what this will mean from the point of 
view of the SBA inactivities as it affects the businesses done 
by their financial institutions. This is important for us to 
get your story and I thank you for being here.
    Chair Landrieu. Senator Levin.

   OPENING STATEMENT OF HON. CARL LEVIN, A U.S. SENATOR FROM 
                            MICHIGAN

    Senator Levin. Thank you very much, Madam Chairman, for 
doing this, and for your great leadership here.
    Small business is getting clobbered by this government 
shutdown. Each of us have probably dozens of stories. I have 
about a dozen in my statement, which I would ask that you put 
in the record. I will just use one of those stories, and will 
try to pick out the one here which maybe somehow or other will 
resonate.
    There is a little ferry service that runs out of Leelanau 
County way up in the Northwest part of the Lower Peninsula, a 
little ferry service that runs hunters and hikers and bikers to 
a little island in the Sleeping Bear Dunes National Lakeshore. 
Under the government shutdown, that ferry service cannot run. 
Five runs a week is all it was doing, 50 people on each ferry, 
about 250 people at about $35 each. That is the income of that 
ferry service. It cannot run. It is about $8,000 in lost fares 
per week. A small business, one of, again, a dozen that I am 
setting out here in my opening statement.
    The only point I would make other than that, Madam 
Chairman, is this. Everybody wants us to negotiate. It is 
obvious we should negotiate. It is obvious that the 
negotiations have to be bipartisan. The real issue is whether 
government is going to be functioning while we negotiate. And 
on that, everybody ought to join in and say, of course, 
government should be functioning while you negotiate. That is 
the issue.
    And I would hope our small business people will let their 
own representatives and Senators know how important it is that 
government reopen. Negotiate, of course, but for heaven's 
sakes, pay our bills while we negotiate. But please, please get 
government open again while these negotiations take place.
    So, again, my thanks to you, Madam Chairman, for your 
tremendous leadership, not just in this committee, but publicly 
on the floor of the Senate and so many other ways you are 
indispensable in this effort.
    [The prepared statement of Senator Levin follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chair Landrieu. Well, thank you, Senator. I appreciate 
that. You have been a leader for many years yourself.
    I am going to ask each member, because we have a large 
panel, and it is unusual, but we have set it up this way so we 
could be both formal, if necessary, and informal in questions 
and back and forth. Let us start with you, Ms. Smith, if we 
could. If you would, just introduce yourself and for one minute 
give your views about your business and how it is being 
affected. And then I have got questions to throw out to all of 
you as we continue this hour-and-a-half hearing. Thank you.

  STATEMENT OF JOANEANE SMITH, PRESIDENT AND CHIEF EXECUTIVE 
           OFFICER, GLOBAL COMMERCE AND SERVICES, LLC

    Ms. Smith. Okay. My name is Joaneane Smith. I am President 
and CEO of Global Commerce and Services. We are an information 
technology company based in New Orleans, Louisiana.
    I am currently in D.C. because I have meetings with private 
industry clients. Originally, I planned on meeting with Federal 
Government agency clients. However, they are unavailable due to 
the shutdown. We are not able to meet with our small business 
representatives, our contracting officers, and our contracting 
officer representatives at the agencies to get assistance since 
they are furloughed, as well.
    GCS was started with me being an independent contractor 
while working my own contracts before branching out to other 
agencies. We managed to get a line of credit for our business 
while using my property as collateral.
    I have been asked to talk about the impact of the shutdown 
and how it has affected me and my company. The most compelling 
thing that has happened as a result of the shutdown is having 
my resources at home and not billing my USDA contract in New 
Orleans. The contract started September 1 of 2013 with three 
resources and we received a stop work order two weeks ago. USDA 
is one of our major agencies we work with.
    In the interim, we are still paying salaries, health 
insurance, and other benefits for resources with hopes of 
starting back on our contracts soon. We currently have a total 
of 17 resources covering our contracts. GCS is a $2 million 
company in revenue. Payroll is $33,000 per month, and insurance 
is $3,800 per month. We have approximately $60,000 in reserves 
that we can use for payroll.
    We are doing our best to keep our employees working, since 
they have already started the contract before the furlough. 
Another two weeks of the furlough, it will make it tough for us 
to continue to pay our employees who are not billable at this 
time. Another three or four weeks of the furlough, we will 
definitely have to have our own furlough.
    There are contracts which we are anticipating awards. 
However, they have been placed on hold because of the furlough. 
GCS is pushing for the furlough to end so we can put our people 
back to work.
    [The prepared statement of Ms. Smith follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chair Landrieu. Thank you, Ms. Smith.
    Mr. Leh.

 STATEMENT OF CHRISTOPHER J. LEH, PRESIDENT, TL TECHNOLOGIES, 
                              INC.

    Mr. Leh. Thank you, Madam Chairwoman, Senators, and fellow 
entrepreneurs. I wanted to take a quick moment just to thank 
you for the opportunity to tell my story about the success and 
the plight of my company, TL Technologies.
    TL Technologies is a specialty manufacturer of precision 
metal components, supplying brand-name manufacturers and 
worldwide markets. Since its inception, the business has grown 
rapidly from an idea and is now poised with recently awarded 
projects to double in size in 2014.
    To truly appreciate the predicament that we find ourselves 
in today, I believe it is really important for you to 
understand the investment that I, my family, and my business 
partner have made to build TL Technologies to be a $1.2 million 
company.
    We currently employ three people in the manufacturing 
sector. We were about four weeks into the process of securing 
additional capital to support the new business and we were 
being backed by an SBA 7(a) loan and we missed the window when 
the government shut down, so we cannot proceed with the 
purchasing of our equipment. We had to stop about $600,000 
worth of equipment from moving. We idled riggers, electricians, 
employees. We had already extended two offers of employment to 
highly educated CNC machinists who would make combined salaries 
of around $130,000 a year with full medical benefits. We had to 
rescind those offers and we are completely and absolutely in a 
stall mode at this point.
    [The prepared statement of Mr. Leh follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chair Landrieu. Thank you.
    Ms. Firestone.

  STATEMENT OF LISA FIRESTONE, PRESIDENT AND CHIEF EXECUTIVE 
                 OFFICER, MANAGED CARE ADVISORS

    Ms. Firestone. Chair Landrieu and distinguished members of 
the committee, thank you for this opportunity to testify this 
afternoon.
    My name is Lisa Firestone. I am President, CEO, and owner 
of Managed Care Advisors, a woman-owned small business founded 
in 1997 specializing in employee benefits and workers' 
compensation. I also sit on the board of Women Impacting Public 
Policy, or WIPP.
    MCA specializes in reducing the risks associated with work-
related injuries and illnesses. Since 2005, our Federal agency 
customers have projected workers' compensation savings of more 
than $100 million, which includes 440,000 avoided lost time 
days. Today, we hold six Federal contracts accounting for 
approximately 90 percent of our revenue. We have 39 employees 
in 16 States. We expect to hire more than 25 additional 
employees during 2014.
    In many ways, our growth through public sector contracting 
is the success story that this committee seeks to promote, yet 
our company has been thrown into turmoil since the government 
shutdown. The new staff we have hired cannot complete their 
required security clearance, so I am forced to carry them 
longer than anticipated. New hires are also held up because the 
e-Verify system is not operational due to the shutdown. My 39 
employees are working. However, it is uncertain when the 
company will be paid. In order to meet our financial 
obligations, we will be drawing on our line of credit, which we 
estimate can cover us for 60 to 90 days and no longer, and we 
are paying an interest rate of 4.5 percent.
    During WIPP's annual meeting in Washington, D.C. last week, 
many women came forward to plead to Congress to open the 
government. They came from both political parties and made it 
very clear that we were not interested in assigning blame, that 
we just wanted a solution. Small businesses like MCA, who are 
draining our resources to cover the government's obligations, 
need to know whether there is a plan in place for expediting 
the payment of past-due invoices when Congress reopens the 
government.
    I would like to end with a favorite quote. Nobody can go 
back and start a new beginning, but anyone can start today and 
make a new ending. I urge the Congress to work together in a 
bipartisan fashion to make a new ending, one that benefits all 
of us.
    Thank you very much for the invitation to speak today. I 
look forward to questions.
    [The prepared statement of Ms. Firestone follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    Chair Landrieu. Thank you very much, Ms. Firestone.
    Mr. Griffall.

 STATEMENT OF KEITH GRIFFALL, CHIEF EXECUTIVE OFFICER, WESTERN 
                         LEISURE, INC.

    Mr. Griffall. Thank you, Chairwoman Landrieu and all the 
members of the committee. I really appreciate you having the 
foresight to have us come here and tell our stories, and 
hopefully, we will make it clear that this is devastating to 
small businesses.
    I am the founder and CEO of a small tour operator located 
in Salt Lake City, Utah. We operate tours and they are 
customized group travel tours for other tour operators and 
special interest groups. Most of our tours operate in the 
Western United States, and consequently, we include national 
parks, monuments, and recreation areas in almost all of our 
tour programs. It would be pretty hard to overstate the adverse 
economic effects this shutdown of the government and the 
national parks has had on small businesses and entire 
communities of the Western United States.
    I am here not just to represent my company, which is 
managing to hang in there for the moment, but there are 
thousands of small businesses that are related to the tourism 
industry. It is an industry which is populated mostly by small 
and very small businesses, and as a tour operator, we use these 
businesses on every program we operate, everything from hotels, 
attractions, motels, gift shops, restaurants.
    These businesses were immediately affected by this shutdown 
and they are suffering and many of their workers will never see 
this money come back, and certainly the companies will not, 
either. This is not something they are going to get back pay 
for. If you work in a restaurant and you make tips for a living 
and no one shows up to your restaurant, you do not get that 
money back. So it is the type of thing that truly has been 
difficult for the tourism industry.
    The first years of the 21st century have been very 
difficult for the tourism industry and we have, as a small tour 
operator out West, still suffered from all of these. Obviously, 
the first one was the terrible events of September 11, 2001. It 
took us about three years to recover from that, and 
fortunately, we had loans from the Small Business 
Administration to get through that time frame.
    The natural disasters that have come from Hurricane 
Katrina, which I am sure Senator Landrieu would be more than 
familiar with, Western forest fires, Superstorm Sandy, and on 
to the difficult economic times of 2008, which have just this 
year turned the corner, where tourism businesses are coming 
back to where they were before 2008. People had confidence. 
They began to spend their money on travel again.
    And now we have the government shutdown of 2013, which is 
just one more devastating blow to the small businesses, not 
just in the Western United States but certainly throughout 
America. Thank you.
    [The prepared statement of Mr. Griffall follows:]

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    Chair Landrieu. Thank you.
    Ms. Poole.

 STATEMENT OF SABRINA B. POOLE, PRESIDENT AND CHIEF EXECUTIVE 
                      OFFICER, SERDI, LLC

    Ms. Poole. Good afternoon, Honorable Chair, Ranking Member, 
and members of the committee. I am Sabrina Poole, President and 
CEO of SERDI. SERDI is a small disadvantaged woman-owned 
certified 8(a) information technology firm providing IT 
consulting services to the Federal Government. So, basically, 
the Federal Government is our number one, you know, source.
    I am pleased to be here today to discuss the impact of what 
the shutdown has to my company. I cannot even begin to speak, 
because it has been quite from one extreme to the other. We 
have had to lay off our billable and non-billable staff, which 
means that the current contract that we do have that is 
ongoing, where we have not had a stop work order, we do not 
have anyone to really oversee the contracts, which is on the 
DOD side. This means that our revenue is going to be down and 
we are not, compared to large companies, we do not have deep 
pockets where we can afford to have folks stay on the payroll, 
so we were forced to lay off. We could not do like you did and 
keep them on the payroll for an extended amount of time.
    The financial impact has been really horrible. Our revenues 
are down about 25 percent and it has continued to go down from 
there. Most of our employees are not billable, which means that 
we have a big decrease in revenue and we will see this decrease 
for several months because as the government invoice cycle 
continues to progress and the new contracts we have won, there 
are no task orders on them, we think that it probably will take 
us about a year to recuperate some of the losses we have had.
    Similar to Ms. Smith, we worked for the last six months to 
capture work, which you spend six months capturing and winning 
work. We won the work. In September at the USDA, the same thing 
happened. They pulled the plug. The State Department has been 
ongoing for our essential personnel. The FAA pulled the plug. 
The IRS pulled the plug.
    And so all my employees, I now have them on unemployment. 
Our staff has been laid off and they are going for unemployment 
benefits. There has been a lot of talk about the Federal 
workers being paid. I have yet to hear about the contracting 
staff, so they know they will not be paid for this time off.
    Ultimately, my fear is that a lot of my good employees, my 
good qualified employees, are going to be looking for work in 
the commercial industry, and some of them who have security 
clearances that cannot afford to pay their bills, it will 
impact them as they come up for reinvestigation, because as 
part of reinvestigation for your security clearance, you cannot 
be late on any bills, and most of my contracts have security or 
TS-level clearances. So I am really concerned about that.
    My last point is I am really concerned that I will be 
forced to close my business if a resolution is not reached 
quickly. Myself and other small businesses may be forced to 
close our doors. And my fear is also if one company closes its 
door, then a handful of folks are impacted. If numerous 
companies are forced out of business, then it becomes the large 
business take over, which puts the small business exactly where 
we were before, where we fought over the last ten years for me 
personally to get to.
    In conclusion, we have sacrificed, struggled, and slowly 
make progress as a woman-owned small business and the shutdown 
is threatening to destroy all our progress, wiping away ten 
years of sacrifice. I am an IT expert. I can always go back to 
work. It is not something I want to do, but if that is what I 
have to do, I will do it to feed my family.
    To me, it is disturbing that the government has caused 
SERDI and other small businesses to lose employees and 
significantly impacted our revenue. How can we make up for the 
loss of revenue? How are our employees going to pay their 
mortgages and feed their families? And, lastly, how are small 
businesses supposed to survive?
    I agree with the rest of the panel members. I do not care 
about Democrat or Republican. I just want a solution and I am 
praying to God that one comes very quickly.
    Thank you very much.
    [The prepared statement of Ms. Poole follows:]

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    Chair Landrieu. Thank you.
    Mr. Singh.

STATEMENT OF BARUN SINGH, FOUNDER AND CHIEF TECHNOLOGY OFFICER, 
                         WEGOWISE, INC.

    Mr. Singh. Thank you, Chairwoman Landrieu and members of 
the committee for the opportunity to speak today. I am here as 
founder and CEO of WegoWise, a Boston-based web start-up that 
is helping solve one of our nation's most pressing challenges 
by improving the efficiency of the buildings in which we live 
and work.
    In just over three years, WegoWise has grown from idea to 
industry leader, with 32 employees and contractors. We help 
organizations across the country identify inefficient buildings 
and uncover savings, which creates new jobs for auditors and 
contractors, reduces expenses for building owners, and 
increases tenant comfort. By drastically reducing energy 
consumption, we are also supporting our nation's energy 
independence goals.
    Many of our customers manage market-rate buildings in the 
private sector. At the same time, we are very proud to have 
helped our home State of Massachusetts identify over $300 
million of potential energy savings in affordable housing. We 
also help local governments better understand their utility 
expenses. That includes the City of New Orleans and Los 
Angeles.
    We are proud participants in the American system of 
entrepreneurship. It has allowed a company like ours, with 
innovation and hard work, to thrive and to transform society 
for the better. We are a mission-driven for-profit enterprise, 
meaning we believe business should provide meaningful value in 
a self-sustaining way.
    Our model of innovation relies, however, on a supportive 
public sector. Government has been vital to the efficiency 
industry. Every American household knows the value of buying an 
Energy Star appliance. The same thing is happening today with 
buildings themselves. The EPA's Portfolio Manager tool provides 
a mechanism for buildings to receive Energy Star scores. This 
drives the construction of more efficient buildings and 
investment in efficiency retrofits. The government is 
essentially helping the market work the way it was meant to 
work, by presenting consumers with clear information and thus 
catalyzing economic activity.
    The shutdown has prevented the EPA from offering its Energy 
Star services. Anyone relying on these tools is being forced to 
defer decisions regarding building efficiency upgrades. These 
upgrades create local jobs that cannot be outsourced. These are 
the jobs of the new economy, and building efficiency can add a 
trillion dollars and create 3.3 million job years to the 
economy. The shutdown is directly slowing the growth of this 
vital sector of our economy.
    We have invested significant resources into creating 
technology to integrate with Portfolio Manager. We have had to 
delay one contract and have been fielding concerned calls from 
current and potential customers that may result in further 
delays. For companies like ours, the investments we make in 
product development, marketing, and sales come from a very 
limited set of resources and we are sensitive to unexpected 
changes in cash flow.
    Entrepreneurs and small business owners already face 
tremendous odds, and government has a role to play in fostering 
success. The current shutdown adds a significant amount of 
uncertainty to the market, which increases our risk and makes 
it more difficult for us to grow our business.
    Thank you.
    [The prepared statement of Mr. Singh follows:]

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    Chair Landrieu. Thank you, Mr. Singh. I am glad that 
Senator Shaheen came in right before your testimony. She has 
been the leader on building efficiency here in the Senate. We 
recognize her leadership and thank you very much.
    Ms. Robertson.

STATEMENT OF SALLY B. ROBERTSON, PRESIDENT AND CHIEF EXECUTIVE 
             OFFICER, BUSINESS FINANCE GROUP, INC.

    Ms. Robertson. Thank you, Chairman Landrieu. I wanted to--
--
    Chair Landrieu. You have to press your button and speak 
into your mic, if you would. Lean forward. There you go.
    Ms. Robertson. Sorry. Thank you very much, Chairman 
Landrieu. It is a pleasure to be here today and I thank you and 
the members for the opportunity to speak. I also wanted to let 
you know how much we appreciate the example that you have set 
in this committee for the rest of Congress in working together 
and compromising to bring back 504 debt refinancing, which is 
in the best interest of small business.
    The impact of--well, first, I am Sally Robertson. I am the 
President of Business Finance Group. We are a nonprofit 
Certified Development Company providing 504 financing in 
Maryland, D.C., Virginia, and West Virginia. I am also the 
Chairman of the National Association of Development Companies 
and our 270 CDC members do 95 percent of the 504 loan volume in 
the country.
    The government shutdown has had a very large impact on 504 
lending. Clearly, there are no new loan applications being 
approved. One thing that is often overlooked is that we are 
fixed asset financing, and so borrowers enter into contracts to 
buy fixed assets. Those borrowers have deposits at risk. If 
they are unable to meet settlement deadlines because they do 
not have financing in place or because other post-approval 
documents have not been approved by SBA, they are at risk of 
losing not only those deposits, but all the feasibility costs 
that they have poured into these projects. And to say these 
borrowers are also expanding their businesses and they are 
losing opportunities for growth if we are not able to get their 
applications released so that they can close on their 
transactions. Additionally, 504 businesses create jobs and none 
of those jobs are going to be created.
    We fund our projects through a bond sale process. Should 
the Federal Government default on its obligations, we have no 
idea what value that full faith and credit guarantee of a U.S. 
agency will be in the marketplace. We risk much higher rates 
for our borrowers forward into the future, and we are very 
concerned that our November bond sale may not occur if SBA does 
not return to work very shortly. Our deadline is now for SBA to 
be moving packages forward into the bond sale process. Hundreds 
of loans are already closed on a nationwide basis in 
anticipation that sale will occur. Should it not occur, those 
loans are going to have to be re-closed at somebody's cost, 
unfortunate that small businesses would have to pay for it.
    And then we run the risk of what is the perception of our 
bank partners if they do not receive their paydown in a timely 
fashion? Are they going to charge small businesses more for 
interim loans in the future? And if investors feel our sale is 
not a dependable, timely product, are they going to continue to 
buy it at the same rates? I think we are looking at much higher 
costs for our small businesses, and that would be a tragedy, I 
think, for a 504 program which is so valuable for small 
businesses that are expanding and creating jobs.
    Thank you very much for the opportunity to talk today and I 
would be happy to answer questions.
    [The prepared statement of Ms. Robertson follows:]

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    Chair Landrieu. Thank you very much, Ms. Robertson, for 
that detailed explanation of how this program affects so many 
entities.
    Mr. Ford.

   STATEMENT OF ANTWAYNE FORD, PRESIDENT AND CHIEF EXECUTIVE 
                   OFFICER, ENLIGHTENED, INC.

    Mr. Ford. Good afternoon and thank you very much, Madam 
Chair and committee.
    Hello. My name is Antwayne Ford, President and CEO of 
Enlightened, Incorporated, as well as the Chair of the D.C. 
Chamber of Commerce and on the President's Council for the U.S. 
Black Chambers. Enlightened is a technology firm specializing 
in cybersecurity, system integration, and software development, 
and have realized great growth over the last 14 years, serving 
primarily the Federal Government. I am here to tell you how 
this government shutdown and the fight over the debt ceiling 
are continually causing company layoffs and reduce production 
on government contracts.
    As a small business owner, I am deeply impacted by the 
events that have unfolded over the last two weeks that have 
forced our employees and their families to cope with the 
realities of this government shutdown. They now know what it 
means to have their jobs and financial security placed in 
jeopardy by events that are wholly outside of their control.
    As a result of the shutdown, Enlightened has made difficult 
choices in the way we manage our human capital. Permanent 
layoffs due to government shutdowns have become commonplace, 
forcing us to say goodbye to some of our best and brightest 
employees. We were forced to immediately furlough two employees 
due to the loss of work at the Department of Justice and 
another 25 in the 14 days since October 1. Those not presently 
affected by the layoff live with the real danger of losing 
their jobs. Meanwhile, they watch their elected representatives 
battle one another in a war of uncompromising positions. Not 
only do I fear losing established personnel, but my company 
faces an equally daunting challenge of attracting new talent to 
a field in a government that has become an increasingly 
unreliable employer for us.
    There are long-term effects to this temporary shutdown. In 
the short- and long-term, Enlightened will suffer. With 70 
percent of our workforce sourced from the Federal Government, 
it has become impossible to depend on a reliable stream of 
solicitations from Federal agencies that may or may not have 
been canceled, reopened, or canceled again, or postponed 
indefinitely. Our existing contracts where work has been 
praised face the real possibility of not being renewed. 
Enlightened cannot afford to wait and wait and wait while our 
government leaders in Congress negotiate our livelihoods.
    Enlightened is providing services to several Federal 
agencies. However, one customer in particular, OPM, is critical 
to my success. Enlightened is assisting OPM with modernizing 
systems that provide background checks for Federal Government 
employees and their contractors. To date, this contract has not 
been affected, but if it is stopped, Enlightened would not be 
able to recover. This could be the death blow for the company.
    As an IT and cybersecurity service provider, I am 
concerned. Several agencies have made contingencies for some 
productive measures during government shutdown. Their plans 
call for heavily scaled down their IT teams to maintain and 
manage and protect government IT infrastructure. Contingencies 
are seldom as strong as the original.
    Agencies that we do do work for, such as the Department of 
Veterans Affairs, Health and Human Services, HUD, and OPM, have 
had layoffs to cyber professionals that protect the nation's 
infrastructure. Most other Federal agencies are expected to 
have a similar handful of IT security staff and other essential 
personnel to run the infrastructure and this is a problem.
    With the potential that the government will default on our 
Federal debt, Enlightened would not receive any payments from 
our Federal contractors, accounting for 70 percent of our 
business. In turn, we would not be able to pay our employees, 
our bills, nor our line of credit. And just like Congress 
elected to shut down the government, we, too, would be forced 
to shut down and go out of business with no financial guarantee 
available to recover. Small businesses cannot borrow when there 
is no collateral.
    I am here today testifying before you representing the 
effect your decisions are having on everyday hard working 
Americans and small business owners like myself and countless 
other Americans. We have to end this before the backbone of 
America breaks. This backbone is small business owners. The 
backbone is entrepreneurs. The backbone is hard working 
Americans. Let us put America back to work.
    [The prepared statement of Mr. Ford follows:]

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    Chair Landrieu. Thank you.
    Mr. Withee.

   STATEMENT OF CHARLES WITHEE, PRESIDENT, THE PROVIDENT BANK

    Mr. Withee. Yes. Thank you, Chairwoman Landrieu, and thank 
you to my Senator Shaheen for having me here today. I am Chuck 
Withee, the President of the Provident Bank, a commercial 
community bank up in New Hampshire and Massachusetts. We, too, 
are a small business--we are 130 employees--so we share in the 
concerns, the deep concerns of the small businesses around the 
table here.
    And the 7(a) loan program and the 504 loan program are the 
backbone of what we do at the Provident Bank. Oftentimes, very 
promising businesses come forward, have a lot of promise but do 
not have all of the attributes that traditional lending serves 
and we use these programs to help them get over the finish 
line.
    Currently, we have 12 loans representing $2.7 million in 
limbo, just like Mr. Leh had indicated, very similar stories 
and very tragic stories because these companies are not large 
corporate America that have lots of cash on the balance sheet 
to sustain. They live day-to-day. They wonder how they are 
going to make payroll. They wonder how they are going to keep 
the lights on. And we are there to try to help with that. This 
government shutdown is impeding that process.
    I am also very concerned about the shutdown temporary move 
forward. I hope it happens. I hope it happens today. But I am 
concerned, also, with what is coming up. February is the next 
deadline. This creates a lot of uncertainty. There are a lot of 
people that are affected by this. That uncertainty is going to 
affect that in the future, and you can rest assured that that 
uncertainty is going to have an impact on our economy given the 
size of small business in that economy, and that is really why 
I am here today, folks. Thank you.
    [The prepared statement of Mr. Withee follows:]

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    Chair Landrieu. Thank you very much, particularly focusing 
on the uncertainty, which is very important.
    Mr. Paul.

   STATEMENT OF RONALD D. PAUL, CHAIRMAN, EAGLE BANCORP, INC.

    Mr. Paul. Chairwoman Landrieu and distinguished members of 
the committee, good afternoon. My name is Ron Paul, no 
relationship to Senator Paul nor Congressman Paul.
    [Laughter.]
    Mr. Paul. I am Chairman and Chief Executive Officer of 
EagleBank, a well capitalized, profitable $3.5 billion 
community bank headquartered in nearby Bethesda, Maryland. We 
are a very active lender with strong loan growth of 21 percent 
in 2012, a $3 billion loan portfolio, and we pride ourselves in 
having an average loan size of under $2 million. Our mission is 
focused on lending to small businesses.
    We are very active in SBA lending. We are a preferred SBA 
lender and rank number one among banks headquartered in 
metropolitan Washington, D.C. Nationwide, SBA lenders close 
nearly $100 million in loans every day. Right now, the program 
is frozen. At EagleBank, we have over 30 new SBA loans in 
process totaling $37 million, but we cannot proceed because the 
SBA has closed its doors. And when they reopen, there will be 
uncertainty as to when loans will be ready to close, since we 
do not know how big of a backlog there will be.
    Among others, government contractors and their 
subcontractors and vendors are not being paid. If you are a 
small business, a janitorial service or an IT consultant, you 
typically do not have capital and reserves to carry your 
employees and overhead. The result: Closed offices and laid off 
workers.
    The furloughed workers at a security company and the 
restaurant across from a government center and each of their 
employees just lost all their income. They no longer have 
disposable dollars to go to the local hardware store or local 
restaurant or local clothing store. Remember, this lost income 
can never be recovered. The government leases millions of 
square feet from the private sector. If the shutdown continues 
into November, these rent checks will not come in, but the 
developer's loan payments are still due, potentially resulting 
in loan defaults and credit quality issues throughout the 
banking industry.
    Another consequence of the shutdown is the impact on 
nonprofit organizations. Because of the shutdown's tourniquet 
on funding, one of EagleBank's customers, a youth center in the 
District of Columbia, had to furlough 90 of its staff of 145 
people. The ripple effect is enormous. That is just dealing 
with the shutdown.
    Now add all the potential consequences of not raising the 
debt ceiling in time. If Congress does not act within days, 
interest rates will go up, resulting in the likelihood of small 
businesses being less able to borrow money and at higher costs. 
Investment values will come down. Confidence will be severely 
shaken. And the nationwide uncertainty resulting from any 
short-term ``kick the can down the road'' and non-legislation 
will be devastating. Consumer confidence, already shaken, will 
dramatically fall.
    At EagleBank, we have let our customers and the local 
community at large know we will work to help them in their 
short-term cash flow needs, but every customer we work with who 
does not make a loan payment timely results in us having less 
cash to lend to our other customers. As interest rates rise 
because of concerns over the stability to the United States, 
the value of our investment portfolio and, therefore, our 
ability to borrow to fund loans, goes down.
    It is our hope, for the sake of small businesses and their 
workers nationwide, the fuel of the nation's economy, that 
Congress can find a way to reopen the government and enable 
people to get back to work.
    Thank you for the opportunity to speak today and I look 
forward to any further questions.
    [The prepared statement of Mr. Paul follows:]

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    Chair Landrieu. Thank you very much.
    I am going to start with one question and throw it out, and 
if you want to be recognized, just stand up your placard, and 
then I am going to ask each colleague to take a turn, as well.
    Let me acknowledge Senator Hagan and Senator Shaheen that 
are here. We did opening statements. Would you prefer to wait 
for the questions? Okay.
    You know, some of our colleagues--first of all, let me say 
that all of your testimony was very, I think, critical to the 
immediate issue at hand and very compelling, giving me and the 
members that are here and others that are watching a great deal 
to think about.
    I have heard some people in Washington describe the 
government shutdown as a pinprick to the economy. I did not 
hear that today from any of you. Would any of you like to 
comment and just elaborate and underscore that what is 
happening is a great deal more than a pinprick, or how would 
you describe what is happening to you if it is not a pinprick?
    Go ahead, Mr. Griffall.
    Mr. Griffall. I would be happy to address that. I have seen 
a number of studies, and particularly the tourism industry is a 
major driver in 44 of the 50 States, and as an economic driver, 
the U.S. Travel Association released a new analysis that shows 
that this pinprick is now costing this travel industry $152 
million per day, and that is growing very quickly, and it is 
affecting as many as 450,000 Americans who have jobs in this 
industry.
    The National Tour Association did a quick survey after it 
started and showed that effects were felt in all but four of 
the States by their 3,000 members, and these effects are 
dramatic, immediate, and unrecoverable.
    But more importantly, this type of manmade crisis does 
create immediate effects for small businesses and all of their 
employees, but it creates long-term effects which everybody has 
talked to here that can even further depress the travel market 
going into the future. Travel is our number one services 
export, and we have a number of emerging markets, such as China 
and Brazil, that are increasingly coming to America. We have 
finally started a Brand USA Program. This is about two years 
old and it is just starting to make an effect. This will have 
long-term, lasting negative effects on all of those markets, 
and certainly all of the thousands of small businesses that are 
parts of this industry.
    Chair Landrieu. Mr. Leh, how would you describe it? Does it 
feel like a pinprick to you?
    Mr. Leh. No, it is definitely not a pinprick. I think what 
is really important to convey as a small business owner is 
you--when you go and borrow large sums of money, you put up and 
collateralize everything that you own in the world. Everything 
that I worked for my entire life is behind that loan. With the 
uncertainty that is being created right now, if interest rates 
go up one percent on the size loan that I am dealing with, over 
the life of my loan, that is $76,000. That is an employee. That 
may be me not being able to cover the bank note. That may be me 
losing my house. That is just one percentage point.
    So, we go through this game in Washington where every time 
it is time to decide whether or not we are going to raise the 
debt ceiling, we argue about it. It is ridiculous and it has an 
immediate impact on our ability to not lose everything that we 
have put forth and risked.
    So, in my particular situation right now where I had an 
excellent program to finance, if the interest rates go up two 
percent, I may not be able to do it anymore.
    Chair Landrieu. Thank you, Mr. Leh. Excellent.
    Ms. Robertson. We are going to do this quickly and then I 
am going to turn it over and then get Mr. Paul, and then we 
will ask some more questions.
    Ms. Robertson. Sure. Very quickly, I am at ground zero in 
terms of the government shutdown, being right here in the heart 
of the D.C. and the metropolitan area. We see in the newspaper 
yesterday two large defense contractors announced that they 
were going to reduce their upcoming layoffs to 5,000 people. 
Those people are not going to get back pay once they are gone. 
They are going to have to pay for benefits out-of-pocket. They 
are not going to have money to spend on day care, on 
entertainment. All of that trickles down to our Main Street 
businesses.
    And the reality is that the conversation has been going on 
for months about the shutdown, about the problems, about the 
debt ceiling. CEOs have been taking that into account for 
months. They have been making quiet cutbacks. They have been 
making layoffs. They have been making furloughs. So our economy 
has been suffering for months in this particular area.
    Our lending activity is down 30 percent from last year. 
That is a very large number. That is small businesses that are 
not buying buildings, that are not buying equipment to expand, 
that are not going to create jobs.
    So we think that this is much bigger than a small pinprick. 
We think it is a very major problem.
    Chair Landrieu. Thank you.
    Mr. Paul.
    Mr. Paul. Thank you. I do not also believe it is a 
pinprick. I think it is the beginning of a hemorrhage. I think 
that what we have experienced over the last couple of weeks, 
the number of phone calls that the bank has received from 
hundreds and many, many of our borrowers, making sure that they 
have their lines of credit that are available to them, has 
resulted in the bank making sure that we have our own liquidity 
that is available to us to continue to fund these lines of 
credit.
    I think that if you fast-forward this, if we should get 
this passed through February, what is going to happen between 
now and February, I think, is going to be equally as ugly as 
what has happened over the past couple of weeks. We have a 
situation right now that the consumer is going to be sitting 
and saying, you know what? We are not going to go out for 
dinner. We are not going to go to the movies. We are not going 
to go to a show. We are not going to buy a house. New home 
sales will dramatically be impacted because you will have 
people over the next three months that are going to be so 
paranoid about what is going to happen.
    I think it is an absolute embarrassment to this country. I 
think that the trickle-down effect has yet to be felt. I think 
the economy that is finally starting to get on its feet will be 
devastated as a result of this kicking the can down the road. 
Thank you.
    Chair Landrieu. Let me get the other three of you, but 
about the pinprick, stay on that, but also talk about some 
people around here are saying, well, we will pay the Federal 
workers back pay and that will supposedly solve the problem or 
make the problem go away. So when you answer this, talk about 
that because I think that is missing a big point, that some of 
your small businesses, they are not going to be in that payback 
discussion. I do not think they are included in that.
    Ms. Smith, is that what you are hearing?
    Ms. Smith. Yes, I am hearing that, as well, and yes, it is 
more than a pinprick. We have companies decreasing in revenue. 
We have many small businesses that may have to close their 
doors. Small businesses, we are the lifeline of the economy and 
the key to recovery. So, yes, it is definitely more than a 
pinprick.
    Chair Landrieu. Mr. Withee, and then Mr. Ford, and then I 
am going to go to the others for questions.
    Mr. Withee. Yes, I would agree it is much more than a 
pinprick unless it is a very large pin.
    [Laughter.]
    The majority of the employment in this country is by small 
businesses like the people we have around this table and like 
many of the clients I have at the bank, and two-thirds of the 
economy is consumer-driven. It was mentioned just a moment ago 
about the uncertainty creating problems with that part of the 
economy, and I believe that is real and I believe that is 
large. So this really is not a pinprick.
    Chair Landrieu. Mr. Ford.
    Mr. Ford. I certainly agree, and to your point, Senator, 
small businesses will not be paid for the work that we have 
lost now. That is lost revenue. That is going away. That will 
not return. If we look at contracts that we have, as soon as we 
do go back to work, those contracts will have to be modified 
because those contracts have deliverables that are time-based, 
so that means those contracts need to be modified which further 
delays the process because have to get new contracts, and 
again, that will not be paid.
    If you are an 8(a) company--we are a graduated 8(a) 
company--if you are an 8(a) company, that time that is lost is 
lost. You will not get that changed. So if I am an 8(a) 
company, I would be concerned because that time is not coming 
back.
    If we look at the concept of a pinprick, we are talking 
about when we had to lay people off and you have to look in the 
eyes of somebody that you know you have a family--I know about 
the kids of the people that we had to lay off. These are people 
that came to our corporate picnics. That is not a pinprick.
    When you are talking about people who may have to go on 
assistance of a government that they do not trust anymore, they 
also lose confidence in small businesses, which are the 
innovators of America. That is not a pinprick.
    We look at the fact that, I think as you talked about, my 
line of credit is based on the creditworthiness of myself and 
my partners. Everything I have had over the 14 years has been 
put into this business. My home has been put into this 
business. That is what my banking friend here used as 
collateral. If I go out of business, everything that my three 
kids that I am working for goes away immediately. This is not a 
pinprick.
    Chair Landrieu. And nobody is going to reimburse you for 
this.
    Mr. Ford. No.
    Chair Landrieu. There is no bill to reimburse----
    Mr. Ford. There is no bill for this at all.
    Chair Landrieu. All right. Senator Heitkamp.
    Senator Heitkamp. I am struck because we are talking not 
only about the shutdown, but we are also talking about this 
uncertainty about the debt limit and what interest rates--how 
they all affect all of you.
    Now, on top of hearing that it is a pinprick, I am sure you 
have also heard that there are a number of amateur economists 
out there who have been telling us all that the debt limit can 
be managed by simply paying our interest. The debt limit--those 
are false days and we do not need to worry about it. We 
recently had a hearing in the Banking Committee where we heard 
from the Realtors who told us that they believe that if we miss 
this default deadline, home mortgages will go up at least one 
percent, if not more, and we are already seeing our Treasuries 
being discounted, maybe as high as almost 70 basis points.
    And so my question is to all of you that we include in this 
discussion, as you have, about what the debt limit means and 
this constant uncertainty, and I really would appreciate 
comments on the proposal, which a lot of you have referenced, 
of only going out to February as opposed to looking at a long-
term deal and really encourage you to encourage us to look at 
something much longer than that to give you the certainty that 
you need. And so anyone who wants to comment on the debt limit, 
I would appreciate that.
    Chair Landrieu. Mr. Singh.
    Mr. Singh. Being that we are in a start-up world on the Web 
where things are venture-backed, uncertainty is a part of what 
we sign up for, in some sense. But we do assume that the full 
faith and credit of the U.S. Government is something we do not 
have to be uncertain about. The decisions that investors make, 
and the decisions that the capital markets make, reflect on 
what start-ups get founded. They reflect on whether they happen 
in this country or whether they happen somewhere else where 
there is more confidence.
    I find it to be--especially when this is manufactured 
crisis leading into manufactured crisis, that these are things 
that we can control. It is somewhat callous, I suppose, to call 
it a pinprick to the people who are directly affected; whether 
that means they are on government assistance and they cannot be 
part of the economy because they do not have any income anymore 
or whether they get laid off from their job.
    But, also, further down the line, all those people are 
engaged--all these small businesses are directly affected by 
the products that other small businesses are producing. So 
there really is this domino effect where it is not just the one 
business shutting down. It is the five or six other businesses 
down the chain that it affects.
    Chair Landrieu. Ms. Firestone.
    Ms. Firestone. Thank you. I think my comments are more 
related to the short-term fix. My company was awarded a very 
large contract in October and, as a result, it is expected that 
we will hire a lot of people, which is great for the economy, 
but do I have the confidence to hire new staff knowing in three 
months we face another shut down, then what happens to a 
business I have worked 16 years to grow? We have a large 
payroll and hire doctors, nurses, and analysts. There is a lot 
of competition for that talent. And now I am faced with having 
to hire, which is a really good problem, but on the other hand, 
how are we supposed to handle that in three months if we have 
to let them go?
    Chair Landrieu. And, Ms. Firestone, just for the record, 
what would you pay a doctor or some of your medical 
professionals, like the range of what you are offering people 
in that contract?
    Ms. Firestone. Our average salary for our nursing staff, we 
do--we have nurses across the country--is somewhere in the 
range of $70,000 is an average salary, and the physicians, as 
I--it is probably twice that.
    Chair Landrieu. Unbelievable.
    Mr. Griffall.
    Mr. Griffall. As I have stated many times, it is just hard 
to overestimate the pain this causes to a lot of people. But if 
we do not assure the American people, and particularly the rest 
of the world, that this is not going to be a recurring event, 
we will have absolutely no confidence in traveling to America 
or even dealing with America if we get a little farther than 
that, and that has been a giant issue.
    Haybina Hao, who sells tourism to China--she used to be an 
employee of mine, she now works for the National Tour 
Association--she said, ``compared to other countries that 
utilize creative ways to lure Chinese tourists, the U.S. 
shutdown will shatter the confidence of international travel 
companies, and that has been shown again and again, that when 
we have bad events here, it creates long long-term effects that 
will obviously affect all of us.''
    But most importantly, we need to assure everybody that this 
is not something that is going to continue, because if we have 
to do that every single time we go through this process, we 
will have no confidence to buy anything in America, but more 
importantly, travel is a seasonal business. Most of the 
companies I deal with, which are all small businesses, make 
their money very quickly in three or four months. Those 
businesses have to have that profit in order to make it to the 
next year. So not only are we not going to be paid back wages, 
these companies may not survive to the next year when they are 
already planning for that travel season.
    Chair Landrieu. Well, I know there is never a good time to 
go through what we are going through, but you can think about 
the particular months of November and December--October, 
November, and December--being very substantial retail months, 
which everyone is aware of. You do not need a special degree to 
understand that. And that is the season that we are coming to.
    Let me get Mr. Withee and then we are going to turn to 
Senator Shaheen for her question.
    Mr. Withee. Okay. Mr. Singh is absolutely right. Investors 
and bankers make decisions on certainty and predictability, and 
you can just walk down the hall and talk to your friends at the 
FDIC and the OCC if you want clarification on that. But before 
the shutdown, our bank, like Mr. Paul's bank, experienced 
record loan growth, and we are a commercial lender, really, by 
trade, and that means that small business had a lot of 
confidence and wanted to invest and wanted to borrow to do that 
investment.
    I am very concerned about this temporary fix, because that 
confidence is going to go away. And what has started to become 
a real energized recovery is going to be stalled and, I fear, 
worse than that, that you can lull back into recessionary 
times, which would be really unfortunate because I heard 
earlier the term ``manufactured,'' and this is a manufactured 
problem, and that is too bad and I would like to see it end.
    Chair Landrieu. Senator Shaheen.
    Senator Shaheen. Thank you very much, Chair Landrieu, and 
thank you for holding this hearing, and thank you to each and 
every one of you who are here representing your businesses and 
the small business communities in your States.
    I have heard from so many small business people in New 
Hampshire, which has 96 percent of our employers are considered 
small businesses, who are experiencing the same kinds of 
challenges that you have talked about today. I want to 
especially recognize Chuck Withee, who is the President of 
Provident Bank, which has four branches in New Hampshire and 
does a great job of lending and participating in the SBA 
lending program, so thank you for being here, as well.
    I want to make a point of saying to all of you that I think 
everyone of us here are as frustrated and upset about the 
irresponsible and reckless behavior on the part of some members 
of Congress that have led us to this point. We all believe we 
need to start the government back up immediately, that we need 
to put in place a long-term solution to raise the debt ceiling 
so that we can reassure not only people in this country but 
around the world that America is going to pay its bills, and 
that we should end these manufactured crises and get on with 
the business of governing the country. So please know that 
every one of us here is working toward that end and very 
distressed, as I know all of you are.
    Chuck, I want to go back to your initial testimony where 
you talked about some of the loans that are being held up 
because of the shutdown. Do you also have new borrowers who are 
coming in the door who you cannot help? And when you look at 
the kinds of projects that they are looking for help on, do you 
expect those will be able to continue after the shutdown, that 
you will be able to help them, or are we looking at a long-term 
impact for the people that you are working with?
    Mr. Withee. Well, that is a great question. We are seeing 
continual need for the SBA loan program. Just because of the 
shutdown does not mean people were not coming in after. The 
numbers I gave you were actually in the process and were 
stalled. There are a number of folks looking at business 
acquisition opportunities, permanent working capital and 
equipment that are stalled, as well.
    What do I see? I see perhaps some of those still coming 
through, but others not, because day in and day out, if it is 
for permanent working capital and weeks on end go by, 
opportunity goes by, as well.
    I also worry about one in particular that is the purchase 
of another business, owners that are retiring. They could sell 
out to a large concern. If they sell out to a large concern, 
then the employment goes away, basically. But if they sell out 
to another like-kind small business, they are likely to keep 
the employees. Well, you know, a purchase and sale can lapse 
and renegotiation can occur and then all of the sudden, the 
game is changed for both small businesses, and everybody around 
this table knows what I am talking about. So, you lose 
credibility if you cannot deliver, right, so that is a big 
problem.
    Also, we embarked on a microloan program. In fact, we hired 
a specialist to take this on and was literally about to launch. 
And it is really $10,000 to $100,000 loans for the micro small 
businesses of the world, and everybody around this table knows, 
at some point, you were there. And we had a very abbreviated 
process. We were about to launch it literally, literally, this 
week, and we have stalled that because it is based on the use 
of the 7(a) loan program. And that is real. That is a real 
issue. And that is problematic. Do I see that coming back, 
Senator Shaheen? I do, because we really want it, but it is 
predicated on the U.S. Government getting back to work and the 
SBA loans being available.
    Senator Shaheen. Thank you very much.
    Chair Landrieu. Senator Cardin.
    Senator Cardin. Let me thank you all for your comments and 
putting a face on the issue. You hear the numbers, you hear the 
thousands of people and hundreds of thousands of people and 
millions of people, but until you can put a face on it so 
people can recognize it is their neighbors, it is their 
community that has been impacted, it makes it difficult. So, I 
would just urge you to--I would be interested to more of the 
specifics about those companies that have not been able to 
complete their loans and the impact it has on their economic 
growth and their future.
    You talk about consumer confidence, which is a driving 
force in our economy. There have been studies done that show 
that as a result of this manufactured crisis, consumer 
confidence has been more adversely affected than in any of our 
natural disasters, that is worse than the attack on our country 
on 9/11 as far as the consumer confidence issues.
    And the challenge here, and what I really want to get you 
engaged, is that, yes, we want to make sure government is open. 
We want to make sure we do not default on our obligations. But 
the best case scenario right now, knowing where we are on this 
date, is that we will work out some short-term solution keeping 
government open and paying our bills and to negotiate, 
hopefully, a budget agreement. If that happens, the pressure is 
going to remain on Congress to get a budget agreement so that 
we eliminate this short-term governance from crisis to crisis. 
Consumer confidence will only be restored if they believe that 
we have our act together here.
    So, I would just urge you not to leave the debate later 
this week, if we are successful in getting government open and 
not defaulting on our debt, but to get engaged in the process 
of working out a budget agreement for this country. And I agree 
with those of you who said, look, you have got to come 
together, Democrats and Republicans. Democrats are not going to 
get their way. Republicans are not going to get their way. But 
those who say they will not compromise are the ones who are 
driving this country on the brink of disaster. We have got to 
be able to make the system work and compromise and get things 
done. So, I would just urge you to do this.
    Let me just reinforce the point that you made, Mr. Withee, 
in that the small company that will not get its microloan and 
may have discovered a new way of innovating in cybersecurity or 
a new way of innovating in the service industry, that is 
competitiveness that is forever lost in America. And that young 
scientist who might have gone into NIH and might have gotten an 
award this year, but because of the government shutdown that 
award was not coming, who chooses to go to a different field or 
a different country, that is lost forever in this country. So 
we have hurt ourselves. There is no question about the 
permanent damage that has been done to individual businesses 
and to the competitiveness of America.
    But we all have a responsibility to figure out a way to get 
beyond this. And as frustrating as it is for you, believe me, 
it is just as frustrating as it is for us. I agree with Senator 
Shaheen. I really do not understand how people could deny 
government staying open and paying our bills, why they would 
want to put that threat on America. But we are where we are.
    So, I guess my comment, if anyone wants to further identify 
the type of companies, I think that would be helpful. Put more 
of a face on this. Let us know the types of businesses who 
cannot get loans as a result of this and what that means in 
Rockville. Make it as personal as you can to your community. 
That would be helpful to us.
    Chair Landrieu. Mr. Paul.
    Mr. Paul. First, thank you for all the great work that you 
do in our great State of Maryland.
    One topic that I think is important, as you have all heard 
from the small business owner, is that they have put up 
everything that they have in order to borrow those funds. Well, 
as we all know, in 2008 and 2009, when the value of real estate 
plummeted, there was very little equity remaining in their 
homes. So now, which I believe will happen over the next few 
months, especially if we are just kicking a can down the road, 
consumer confidence is going to drop. The value of homes are 
going to go down and that home equity is going to dissipate. So 
what happens to that customer, what happens to that borrower, 
that is looking to start its own business, or maybe a current 
borrower that is currently looking for that SBA loan right now 
that does not have the equity in their home any longer? So, all 
of a sudden, that equity that they have always been able to 
leverage against, which is what this country has built itself 
upon, being able to borrow through the net worth of what you 
have, which is primarily your home, goes away.
    So, I just believe, and I am not an economist, but I 
certainly speak to enough that I do believe, interest rates 
will go up. I think whatever appreciation we have seen in real 
estate values are not necessarily as a result of real estate 
values going up, but the fact that you have interest rates 
going down and, therefore, their ability to buy homes has 
increased. But when that equity drops and interest rates go up, 
I think that you will be back to a recessionary discussion in 
terms of the slowdown in our economy.
    And you are absolutely right. This is not a Democratic, 
this is not a Republican, issue. This is a U.S. issue. And I 
think that the embarrassment that we have caused ourselves, who 
knows whether or not the--we all know, listening to Chairman 
Bernanke in terms of how we artificially have dropped interest 
rates, where we have only been able to artificially drop 
interest rates because our international friends have been 
willing to buy our debt, are they going to continue to buy our 
debt under the current circumstances that we are in? I think 
not at these current levels. It is just not worth the risk. So, 
therefore, I think that will be one more reason that rates will 
go up. So, I think this is as much of a macro issue as it is a 
micro issue.
    Chair Landrieu. Thank you. Ms. Robertson and then Mr. Ford, 
in answer to Senator Cardin's question about the face on people 
and the impact.
    Ms. Robertson. Thank you. I have a couple of 504 stories 
that I would like to share with you. One is a borrower in 
Owings Mills, Maryland. They are constructing a new Holiday Inn 
Express, which will create 20 new jobs. They have been through 
all the due diligence for a new construction project. Their 
loan application is sitting at SBA waiting for approval. They 
cannot break ground. This is a business dependent on the 
tourist season. If they do not break ground shortly, their 
hotel will not be built in time to take advantage of the 
tourist system [sic]. They are going to be facing major losses 
their first year in business. That is certainly a very 
detrimental thing for small business.
    I have--a couple of my colleagues shared a couple of 
projects in Massachusetts. One is for an existing 504 borrower 
that is purchasing a second location for expansion. They are 
buying a building that is currently in foreclosure, so it is an 
unutilized building, so it is bringing a building back into the 
economy. They have posted a $149,000 deposit that they will 
lose along with the opportunity to buy the building at this 
discounted price and 25 new jobs that would have been created.
    We have another in Hyannis, Massachusetts, that is a 
printer buying a larger facility. He needs a new and bigger 
printing press that will not fit in his current space. He has 
got a $35,000 deposit on the building and another $35,000 
deposit on the printing press. If he cannot close by November 
4, he loses the building and then he has to cancel the order 
for the press because he has no place to put it. So, there is 
$70,000 he has lost, two jobs for his business, and those are 
good paying pressmen jobs.
    So, there is a lot of impact all over the country for small 
business owners. I mean, we can come up with a lot more 
stories, but it is just incredible.
    Chair Landrieu. Well, and I would just add--and Mr. Ford, I 
will get you in a minute--the loss of the machinery and the 
buildings is heartwrenching and really devastating to families, 
but the loss of faith in their government, it is hard to 
measure.
    Mr. Ford.
    Mr. Ford. I will be quick on these other populations. 
Senator Cardin, you talked about technology. We are looking at 
programs, the STEM program, where we as a country are woefully 
behind in the technology area. Those programs are not being 
funded. People that are doing research and development in 
cybersecurity, where we want to protect our country, those 
companies are going out of business.
    Small Business Innovation and Research, SBIRs, that have 
done incredible things to advance this country are not being 
performed right now, and so those companies that are focused in 
those areas right now are companies that are going out of 
business. Companies that are moving the needle for this country 
are not being supported. Those are some of the faces that are 
being impacted by this country.
    Chair Landrieu. Senator Hagan. And we are going to close at 
four o'clock. We have about ten more minutes.
    Senator Hagan. Thank you, Madam Chairman.
    This is a very important meeting and I think everybody 
here, and I hope the nation, understands how we feel that this 
is a manufactured crisis that does not need to take place. And 
it is, from my standpoint, very disturbing to hear the stories, 
the real stories, that are happening across the United States 
each and every day, especially with our small businesses.
    Mr. Singh, your comment about the risk that you take in 
your business is a risk that you are willing to take, it is a 
calculated risk that there are going to be good days and bad 
days, but you should not have to calculate into that risk 
whether the United States Government is true with its full 
faith and credit of the debt and the borrowings that we owe. 
Like, that should not be a part of the equation at all or ever.
    And, Senator Landrieu, your comment, too, along with Mr. 
Griffall about, from a tourism standpoint, the seasons, you 
know, in North Carolina right now with the national parks 
closed, there is a report that has just come out that said the 
Great Smokey Mountains National Park, just the first ten days 
of that closing has affected $33 million in lost revenue just 
in the Western part of North Carolina. You add that to the 
fishing off the coast of North Carolina and the campgrounds 
that are closed in our national parks and the number of 
visitors that were going to go hike in our national parks, stay 
in the local hotels and restaurants, and they are not doing 
that. I mean, why go when all of those areas are closed for, 
once again, an irresponsible, manufactured crisis? This is not 
the floods in South Dakota or the snow. This is something that 
we should be able to take care of without a second thought.
    Ms. Smith, in North Carolina, we have the third-largest 
military footprint in the nation, and I know we have got about 
eight percent of our population is employed as civilians by the 
Department of Defense, 416,000 jobs. Following Secretary 
Hagel's decision to recall most of these furloughed workers, do 
you have any understanding of how the Department of Defense is 
providing guidance on any--on how they intend to proceed with 
new contracts that are currently in the pipeline?
    Ms. Smith. I know some contracts are put on hold. We have a 
job fair on the 22nd of October and we are getting ready for 
some of these contracts that are going to come out real soon. I 
mean, then the furlough happened and we are just going to go 
ahead and just hold the resumes because there is nothing else 
we could do with them. So, a lot of contracts are definitely on 
hold. That is what we are getting.
    Senator Hagan. And, once again, that has such a detrimental 
impact to small business.
    Chair Landrieu. Yes, it does. Does anybody want to comment 
on the Department of Defense, and I think the reason the 
Senator asked, not only is it important, of course, in her 
State, but it is such a huge buyer of goods and services. And 
what I think we are trying to get people to understand is even 
if every Federal worker came back to the Department of Defense, 
but if you do not give a signal to your contractors, which are 
your partners, I think, in this--in every department, but 
particularly in this department it is significant. Maybe, Mr. 
Ford, you want to comment, and then Mr. Paul, and then I am 
going to end with one question.
    Mr. Ford. Yes. I mean, I think--as you know, being a DOD 
contractor, the excellence that you need to provide is high. We 
are talking about protecting the warfighter. The uncertainty 
that we face is what services that they need to support. I 
mean, as we look at as warfare has changed, it is the reliance 
on people and technology and processes that DOD requires to 
ensure that our warfighters have the best that they have to 
offer. But when we talk to our DOD clients, they are telling 
us, you need to wait because we do not understand what we can 
do, and that is the most difficult part, because we have been 
engaged over the last year to 18 months in what types of 
services we can offer to them and they obviously like various 
contractors--we would not be here--but they do not know how to 
proceed.
    I guess, as Mr. Singh said, we do not mind uncertainty, but 
it needs to be certain on one side or the other that you know 
you need the services, you do not know when, and you do not 
know how, and that is just very difficult----
    Chair Landrieu. And we do not have a budget.
    Mr. Ford. And we do not have a budget.
    Chair Landrieu. We do not have a budget and have not had a 
long-term budget.
    Mr. Paul, and then I will get Senator Shaheen for a 
question----
    Mr. Paul. Just very quickly----
    Chair Landrieu [continuing]. A comment.
    Mr. Paul [continuing]. We all know how important the 
construction and homebuilding industries are to our economy, 
and the BRAC realignment that has taken place in the State of 
Maryland is enormous. We have a number of construction jobs 
that have taken place in areas throughout the State of 
Maryland, and what we see very quickly is a drop in draw 
requests that are happening from the homebuilders, because they 
are not being able to have the home construction and the home 
sales taking place. So, clearly, right away, we are seeing in 
just over the past few weeks a drop in their draw requests due 
to demand in housing.
    Chair Landrieu. Senator Shaheen.
    Senator Shaheen. Thank you, Madam Chair.
    I just wanted to make a point for all of you who are 
involved with government contracting with the Department of 
Defense that this is not the first hit that folks have gotten, 
that this comes on top of sequestration, those automatic cuts 
which have already had a huge impact in the State of New 
Hampshire. The defense base accounts for 17,000 employees, 
about $1 billion in payroll and economic activity. So it is a 
huge impact and this is really a double whammy.
    Chair Landrieu. Excellent point.
    I am going to end with two questions, very briefly, and the 
first to Mr. Singh, and if anyone else wants to chime in. I 
think a lot of people up here, besides thinking this is a 
pinprick that is not really hurting anyone, it will go away 
shortly and we will be back on the road, which I think you all 
have dispelled in your comments today very well, but a lot of 
people are also saying, well, shutting down the government is 
saving the taxpayer money. Could you please explain from your 
perspective how that is absolutely--this is not saving the 
taxpayer any money, talking about maybe a few of the businesses 
that you know that are now closed down that, if let to operate, 
could actually save the taxpayer money, but they are being held 
back.
    Mr. Singh. Sure. I mean, I think, first off, if you are 
going to give back pay to all of the people you are just not 
letting work, then that is not really saving a whole lot of 
money. It is just making their lives harder.
    We work with building efficiency and we are seeing that for 
a lot of folks who might want to get loans to invest in 
improving their buildings, they are not going to be able to get 
loans so easily right now. They are not going to want to think 
about it. There is an entire network of small businesses that 
want to help improve efficiency in this country. If they cannot 
rely on small businesses, they cannot basically vitalize or 
revitalize this sector of the economy. You know, we rely on 
growth as our mechanism for moving things along. We cannot just 
say everything is okay as is, particularly in these areas where 
our country really needs improvement, not just from an economic 
perspective, but from an environmental perspective, from a 
social perspective.
    All we are doing is delaying our ability to implement 
change and to implement improvements. We have found that for 
folks we are talking to who would be interested in engaging 
with these sorts of activities you know, they might still be. 
We think they still will be in the future, but it is just on 
hold for a while and we do not really know for how long.
    Chair Landrieu. Ms. Firestone, let me get you to answer 
that and then I am going to end with one question to Mr. 
Griffall.
    Ms. Firestone. Thank you. I think one of the ways, as you 
saw in my testimony, we save money every day that we work. We 
are in the business of efficiency. And just to kind of give a 
face to how deep this ripple effect is, we have injured 
civilian employees who are unable to get doctors to treat them 
because they do not trust that they are going to be paid by the 
Federal Government. So, as long as we cannot implement our 
programs, we cannot do what we do best, save money, save lives, 
and improve productivity.
    I was just handed a statistic that astounds me as far as 
the pinprick. There was a study that just came out from the 
Economic Policy Institute that said that they are predicting 
about 900,000 were lost since 2009 as a result of sequestration 
and budget uncertainty. To me, that is not a pinprick. Thank 
you.
    Chair Landrieu. Thank you.
    And let me put into the record, and then I will end with 
one question, this is, ``The Government Shutdown Could Be 
Expensive for Taxpayers.'' It says, ``The answer might not be 
what you expect. Many experts estimate the shutdown will cost, 
not save, taxpayers and the bill could be steep. The last 
government shutdown in 1995-96 cost $1.4 billion. That is more 
than $2 billion in 2013 dollars.''
    Now, that is just a short-term shutdown. That is not the 
default on the good faith and credit of the United States. That 
is not the lack of a long-term budget. It is a very serious 
situation.
    Chair Landrieu. And my final question, because so much of 
the press has been focused about big cities, and around the 
beltway. Mr. Griffall, the testimony that I read in preparation 
for this hearing tells a little different story. It is not just 
the pain in big cities, in suburbs, but can you talk about 
rural areas and what you are seeing from some of your folks. 
And I think there was pretty riveting testimony about a small 
little town in Utah where they had, like, only 500 people in 
the town and they have already lost 60 percent of their 
revenues, the whole town.
    Mr. Griffall. Unfortunately, that is an easy question to 
answer. Yes. This, I guess, if you looked only at big cities, 
you would certainly see a lot of government losses, and they 
are very real. A lot of people are hurting.
    But in the tourism industry, most of the beautiful, scenic 
areas in America are in rural areas and the gateway cities to 
the national parks, national monuments, and national recreation 
areas typically are built around these absolutely fantastic 
scenic areas, and there are many towns, and I will talk about 
out West at this point, but believe me, they extend all across 
the country, everywhere from Michigan to North Carolina to 
Louisiana, but there are many small towns very specifically 
hurt by this.
    And the town you referred to, Senator, was Springdale, 
Utah. They are literally on the edge of Zion National Park. 
Their entire business is, unless you are a retired Californian 
and moved there, is the entrance to the national park. And this 
national park was closed.
    I will make a real quick footnote that if you are wondering 
why the taxpayers are suffering from this, the taxpayers of 
Utah, through the good leadership of our Governor, Governor 
Herbert, have now donated $1.7 million or so to the Federal 
Government to open these national parks for ten days because it 
was recognized that many of these towns in Southern Utah have 
no other source of income. And they--I can go to Springdale, 
Utah, Tusayan, Arizona, right outside the Grand Canyon, you do 
not go there unless you are going to the Grand Canyon. And when 
they shut that road through there, which they did after a 
couple of days, Tusayan, we as a small tour company had to 
cancel four different tour programs for the Best Western in 
Tusayan. That means that money will never be recovered by them. 
Nobody else was coming there to take those rooms.
    Moab, Utah, I talked to Marian DeLay. She is the Director 
of the Travel Council there and she did her own informal 
survey. They have 500 businesses in Grand County, Utah, that 
are tourism-related, and those are all small businesses, and 
she estimated in the first ten days of this shutdown they lost 
$10 million in revenue. Now, these are small businesses and 
they will not recover that.
    Chair Landrieu. Small businesses in small towns very 
focused, very focused----
    Mr. Griffall. Absolutely. Mariposa, California--it goes on 
and on. There are plenty of them.
    Chair Landrieu. Well, thank you all. Our time has come to 
an end. I really, again, appreciate the members.
    Senator, do you just want to add?
    Senator Shaheen. Well, I was just going to pick up on what 
Mr. Griffall said about Zion National Park, because we have a 
small business in New Hampshire called New Hampshire Gold which 
is a maple syrup company. They have four employers [sic]. They 
have their products in the store at the entrance to Mount Zion 
and they are very concerned about the lack of revenue because 
of the shutdown of the park. So----
    Mr. Griffall. Well, and shutting down New Hampshire in 
October----
    Senator Shaheen. Is also a big concern.
    Mr. Griffall [continuing]. Is pretty obviously a very, very 
difficult thing.
    Senator Shaheen. But, as everybody has pointed out, it is 
not just the immediate effect. It is that ripple effect that 
goes across the economy----
    Mr. Griffall. Across the economy.
    Senator Shaheen [continuing]. That is really at stake here.
    Chair Landrieu. Your voices have been very important for 
the businesses you represent and a very important sector of our 
economy. Thank you very much for giving your time and your 
effort and your thought.
    This record will remain open for two weeks. I am hoping the 
government will be open in two weeks to receive this testimony, 
and our committee will continue to work where we can.
    Thank you, and the meeting is adjourned.
    [Whereupon, at 4:10 p.m., the committee was adjourned.]



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