[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
ORGANIZATIONAL MEETING AND SBA VIEWS AND
ESTIMATES FOR THE 114TH CONGRESS
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
FEBRUARY 12, 2015
__________
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Small Business Committee Document Number 114-002
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HOUSE COMMITTEE ON SMALL BUSINESS
STEVE CHABOT, Ohio, Chairman
STEVE KING, Iowa
BLAINE LUETKEMEYER, Missouri
RICHARD HANNA, New York
TIM HUELSKAMP, Kansas
TOM RICE, South Carolina
CHRIS GIBSON, New York
DAVE BRAT, Virginia
AUMUA AMATA COLEMAN RADEWAGEN, American Samoa
STEVE KNIGHT, California
CARLOS CURBELO, Florida
MIKE BOST, Illinois
CRESENT HARDY, Nevada
NYDIA VELAAZQUEZ, New York, Ranking Member
YVETTE CLARKE, New York
JUDY CHU, California
JANICE HAHN, California
DONALD PAYNE, JR., New Jersey
GRACE MENG, New York
BRENDA LAWRENCE, Michigan
ALMA ADAMS, North Carolina
SETH MOULTON, Massachusetts
Kevin Fitzpatrick, Staff Director
Stephen Dennis, Deputy Staff Director for Policy
Jan Oliver, Deputy Staff Director for Operation
Barry Pineles, Chief Counsel
Michael Day, Minority Staff Director
C O N T E N T S
OPENING STATEMENT
Hon. Steve Chabot................................................ 1
Hon. Nydia Velaazquez............................................ 2
APPENDIX
Additional Material for the Record:
Rules and Procedures......................................... 9
Oversight Plan of the Committee on Small Business for the One
Hundred Fourteenth Congress................................ 23
Views and Estimates of the Committee on Small Business on
Matters to be set forth in the Concurrent Resolution on the
Budget for Fiscal Year 2016................................ 30
ORGANIZATIONAL MEETING AND SBA VIEWS AND ESTIMATES FOR THE 114TH
CONGRESS
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THURSDAY, FEBRUARY 12, 2015
House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 10:00 a.m., in Room
2360, Rayburn House Office Building. Hon. Steve Chabot
[chairman of the Committee] presiding.
Present: Representatives Chabot, Luetkemeyer, Hanna,
Huelskamp, Rice, Gibson, Brat, Radewagen, Knnight, Curbelo,
Bost, Hardy, Velaazquez, Hahn, Payne, Meng, and Adams.
Chairman CHABOT. Good morning. The Committee will come to
order.
I call the Committee on Small Business Organizational
Meeting to order at this time. I want to welcome all the
returning and new members of the Committee. And before
introducing the new Republican members, I would like to take a
moment to recognize the Ranking Democratic Member,
Congresswoman Nydia Velaazquez, with whom I served as ranking
member when she was the chair of this Committee back in 2007-
2008. We had an excellent working relationship for the most
part, and I hope to use that example to foster civil discourse,
even when we have our policy differences. And we know, of
course, there will be differences in this Committee as there
are in all Committees, but for the most part, the Small
Business Committee is one of those Committees, kind of like the
Foreign Affairs which I also serve on, where there is more to
agree on than disagree. So I hope that we can continue to have
that very good relationship that we have both personally and
professionally.
There are seven new Republican members of the Committee.
Mr. Gibson retired from the United States Army as a colonel,
and then returned to his hometown in the Hudson Valley of New
York when he was elected to Congress back in 2010. And we
welcome him here to the Small Business Committee.
The other new members that I am going to recognize at this
time are our freshmen. Mr. Bost served as a state legislator
and helped run a small business in Illinois.
Mr. Brat was a professor of Economics and Business at
Randolph Macon College in Virginia. And it was kind of an
earthquake last year when he won a primary but we will not go
into that. So we are welcoming him to the Committee certainly.
Mr. Curbelo was a small business owner and school board
member in Miami, Florida, and we welcome him here to the
Committee.
Mr. Hardy, Crescent Hardy served in the Nevada state
legislature. Where is Crescent? There he is, right here. And
owned a small construction firm in Nevada.
Mr. Knight is--there he is. Mr. Knight is also a veteran.
He was a police officer and served in local government and the
state legislature in California.
Amanda Radewagen is the first woman to represent American
Samoa in Congress, and has the title of orator in the village
of Aumua.
The very diverse background of our new members will add to
the experience and expertise of our returning members to create
a pro-growth agenda for America's entrepreneurs.
I would like to welcome back the members who served on the
Committee during the 113th Congress. Mr. King from Iowa, Mr.
Luetkemeyer from Missouri, Mr. Hanna from New York, Mr.
Huelskamp from Kansas, and Mr. Rice from South Carolina.
And finally, I would like to announce the vice chair of the
Committee and the subcommittee chairs for the 114th Congress.
Mr. Luetkemeyer, who served as vice chair of the Committee in
the 113th Congress will return to that position in the 114th
Congress, and we are very fortunate to have somebody of Mr.
Luetkemeyer's stature and capabilities in case I cannot make it
to a meeting or whatever because he is a tremendous member of
Congress and we are lucky to have him.
Two subcommittee chairs from the 113th Congress also will
be returning to those positions in the 114th Congress. Mr.
Hanna will chair, again, the Subcommittee on Contracting and
Workforce, and Mr. Rice will chair the Subcommittee on Economic
Growth, Tax, and Capital Access. Mr. Curbelo will chair the
Subcommittee on Agriculture, Energy, and Trade. Ms. Radewagen
will chair the Subcommittee on Health and Technology. And Mr.
Hardy will chair the Subcommittee on Investigations, Oversight,
and Regulation. And I think we are going to have a great year,
a great Committee, and we welcome everybody--the new members
back and the older members, we hope that you will put as much
effort into it this Congress as you did last because it was
really an excellent Committee under the previous chairman, Mr.
Graves, and we are going to try to follow in his footsteps as
far as the way he led this Committee because I think he did a
very good job.
And I would now like to yield to the Ranking Member, Ms.
Velaazquez, to introduce her members.
Ms. VELAAZQUEZ. Good morning, and thank you, Mr. Chairman.
I, too, want to say that it is a pleasure to have Chairman
Chabot at the helm because we have worked together before when
I was the chair of the Small Business Committee and he was the
ranking.
I always say that when it comes to small business, there is
no republican or democratic approach; that we need to do our
best to address the issues that will enable small businesses to
do what they do best, and that is to create jobs and to expand
our economy. I look forward to a cordial, productive,
substantive working relationship with the chairman and to be
able to pass bipartisan legislation the way we did when I was
the chair. I always recognized the right of the minority, and I
expect that the chairman will do the same. I am confident that
will happen.
Also, I would like to welcome the members of the committee,
new members and all members from both sides of the aisle.
We have two new members joining us, Brenda Lawrence of
Michigan. I believe she is not here yet. Representative
Lawrence is new to Congress this term. She is a former mayor of
Southfield, Michigan, and a former long-time employee of the
U.S. Postal Service. She also serves on the Oversight and
Government Reform Committee where she is ranking member of the
Subcommittee on the Interior.
Alma Adams of North Carolina, welcome. Representative Adams
is new to Congress as well. Prior to being elected to the
House, she served in the North Carolina House and was also
Professor of Art History. In addition to this committee, she
serves on the Education and Workforce Committee and the
Agriculture Committee.
We have several returning members to the committee. With us
today is Janice Hahn of California. This is her second full
term on the committee and second in Congress as she initially
won a special election in 2011 and filled a portion of that
term. Prior to being elected to the House, she served on the
City Council in Los Angeles. She also served on the
Transportation and Infrastructure Committee.
Congresswoman Grace Meng hails from Queens, New York, and
this is her second term in Congress and on the committee. In
addition to this assignment, she also serves on the Foreign
Affairs Committee. An attorney, she previously served in the
New York State Assembly.
I look forward to working with all of you during the next
two years. I thank the chairman and yield back.
Chairman CHABOT. Thank you very much. The gentlelady yields
back.
Now we will move on to the organizational part of today's
meeting.
There are 28 million small businesses in America, a lot.
While the members of this Committee will have policy
differences, all of us have one common goal--to make sure that
our small businesses can prosper and create the solid middle-
class jobs that America needs. Given that, there are certainly
numerous issues where we can find common ground, as the Ranking
Member said, that will make government more efficient and
ensure that the Small Business Administration carries out the
will of Congress, rather than continually inventing new and
untested initiatives. I believe that the Rules Package,
Oversight Plan, and Budget Views under consideration today will
lay the groundwork for finding those areas that we have in
common, while maintaining the highest levels of bipartisanship
for which the Committee is known.
I would now yield to the ranking member, Ms. Velaazquez, if
she would have an opening statement.
Ms. VELAAZQUEZ. Thank you, Mr. Chairman for yielding.
Small business continue to make unprecedented contributions
to our economy, and we will do whatever it takes to support
them. They have generated nearly two-thirds of net new jobs
over the last 15 years and are the innovators and drivers of
economic progress. Entrepreneurship also serves as the backbone
of our nation's economy, enabling individuals to pursue their
dreams and become financially self-sufficient.
As we move forward, we must make sure that small businesses
are given the resources and protections they need to prosper as
both republicans and democrats want and need small firms to
succeed and create jobs in our community. I look forward to
continuing this tradition during the 114th Congress.
I yield back.
Chairman CHABOT. Thank you. The gentlelady yields back.
I would like to thank the majority and minority staffs for
their hard work and cooperation in putting together this rules
package. There is only one significant change from the rules
adopted in the 113th Congress. In consideration of the time
demands of members, I believe it is appropriate to apply the
five-minute rule on questioning of witnesses to the Chair,
myself, and the Ranking Member. Even with this change, I expect
that we will be able to accommodate the needs of all members in
questioning witnesses. So basically, we had the opportunity to
go on more or less as long as we wanted before other members
and we are going to make sure that we make it as equal as
possible so that all members have an opportunity to question
witnesses. So we are going to apply that same rule to
ourselves. And I would now recognize the ranking member, Ms.
Velaazquez, for any remarks that she may have on the rules
package.
Ms. VELAAZQUEZ. Sure. Thank you, Mr. Chairman.
Our committee's rules are not only a vital institutional
requirement, but they also set clear parameters for how we will
operate. More importantly, they contain protections to ensure
that all points of view are considered. It is important for
members on both sides of the aisle to note that in most
regards, these are the same rules that I used when I was chair
of the committee, and I believe this is a testament to Chairman
Chabot's leadership.
In this day and age when too many try to stack the rules in
their favor, it is refreshing that this committee does not have
to be concerned about those distractions. A committee that is
run openly and with a sense of community is a committee that
works and can best achieve its objective. It is my hope that
the rules we consider today will make this happen.
I yield back.
Chairman CHABOT. Thank you.
Are there any other members who wish to be recognized for a
statement on the rules package?
If not, the Committee now moves to consideration of the
rules package. The clerk will read the title of the document.
The CLERK. Rules and procedures adopted by the Committee on
Small Business, United States House of Representatives, the
114th Congress 2015-2016.
Chairman CHABOT. I ask unanimous consent that the rules
package be considered as read and open for amendment in its
entirety.
Does any member seek recognition for the purpose of
offering an amendment?
Seeing no amendments, the question is on adopting the
rules. All those in favor say aye.
All opposed say no.
In the opinion of the chair, the ayes have it.
The ayes have it.
The rules for the Small Business Committee of the 114th
Congress are adopted and the staff is authorized to make
technical and grammatical changes.
Today's second order of business is to consider the
Committee's Oversight Plan. This plan represents the agenda for
the Committee during the 114th Congress. I wish to thank the
ranking member, Ms. Velaazquez, for her input into the
Oversight Plan. The plan is very similar to that adopted in the
113th Congress with a slightly greater emphasis on performing
an examination of SBA programs. It is my view that the plan
recognizes this Committee's broad oversight authority under the
rules of the House to investigate any problem affecting small
business.
At this point, I would yield to the Ranking Member for nay
comments she may have on the Oversight Plan.
Ms. VELAAZQUEZ. Thank you, Mr. Chairman.
The oversight plan sets forth a policy framework for our
work this Congress, and the chairman is to be commended on
producing a thoughtful document. The plan calls for the robust
oversight of the SBA and other federal small business
initiatives, a long tradition that this committee takes
seriously. It also delineates several programs for review and
possible termination. In this context, the committee has forged
a bipartisan consensus opposing the SBA's continued creation of
unauthorized pilot programs. Diverting taxpayers' dollars away
from proven programs can often open the door to fraud, waste,
and abuse, something we are all working to minimize. Whether it
is the SBA or other matters of importance to small businesses,
Congress needs a clear agenda of assisting them, and it is
paramount that we start addressing these issues as soon as
possible. By doing so, we have the potential to truly help
create new jobs and move the economy forward.
With that, I urge members to approve this oversight plan.
I yield back.
Chairman CHABOT. Thank you.
Are there any other members who wish to be recognized for a
statement on the Oversight Plan?
If not, the Committee now moves to consideration of the
Oversight Plan. The clerk will read the title of the document.
The CLERK. Oversight Plan of the Committee on Small
Business for the 114th Congress.
Chairman CHABOT. I ask unanimous consent that the Oversight
Plan be considered as read and open for amendment in its
entirety.
Does any member seek recognition for the purpose of
offering an amendment?
Seeing no amendments, the question is on adopting the
Oversight package. All those in favor say aye.
All those opposed say no.
In the opinion of the chair, the ayes have it.
The Oversight Plan for the Small Business Committee in the
114th Congress is adopted, and Committee staff are authorized
to make technical and grammatical changes in the Oversight
Plan.
Today's third order of business is to consider the Views
and Estimates of the President's Fiscal Year 2016 budget for
the Small Business Administration. The SBA budget request for
Fiscal Year 2016 in my view fails to address certain critical
matters. These matters are not items on which the Agency has
discretion; they have been mandated by Congress. During the
last five years, Congress has imposed some 15 requirements on
the SBA to complete with respect to its government contracting
programs. The SBA only has completed one of those tasks.
Despite this, the SBA budget request makes no mention of these
mandates. The SBA is required to have an individual whose
primary responsibility is to oversee acquisition management
within the Agency, the chief acquisition officer or CAO. This
is a significant vulnerability for the SBA in my view and for
the taxpayers. Yet, the Agency's response is to assign the
CAO's duties to the chief financial officer, thereby
distracting the chief financial officer from providing
appropriate oversight to the SBA's $100 billion loan portfolio.
In addition, the Agency does not have an individual that
serves as the chief information officer even though it is a
statutory requirement. This compounds the problem of overseeing
the SBA's information technology, including the Loan Management
Accounting System that uses 1960s technology and that the
inspector general continues to cite as a critical
vulnerability.
While the Agency continues to ignore congressional
mandates, the budget request has the audacity to request over
$40 million for initiatives of its own design. The SBA's first
responsibility is to complete the tasks mandated by Congress
before it expends funds on untested initiatives the Agency
believes will help small businesses. Even if the SBA had
completed all of the tasks assigned to it by Congress and
filled the statutory mandated management positions, the budget
request priorities still, in my view, are misplaced. The budget
request makes no mention of adding more key personnel who will
help small businesses enter or compete in the nearly $500
billion federal procurement marketplace. Instead, the SBA
requested nearly $37 million to provide entrepreneurial
training that duplicates longstanding programs operated by the
SBA and its partners, such as Small Business Development
Centers and SCORE.
The views and estimates that we are considering today
highlight these problems and asks for a reduction of SBA's
budget while judiciously reallocating funds to areas that will
reduce agency vulnerabilities and prove more effective in
assisting small business owners.
At this point, I would like to yield to the ranking member,
Ms. Velaazquez, for any comments she might have on the
Committee's views and estimates.
Ms. VELAAZQUEZ. Thank you, Mr. Chairman.
The SBA continues to be an important agency for spurring
economic activity. Through its access to capital, procurement,
and entrepreneurial development programs, the agency assists
hundreds of thousands of entrepreneurs each year. The SBA
budget submission gives this committee the opportunity to
assess the agency's priorities on whether it is carrying out
its statutory mission appropriately. The SBA's near-term
blueprint for accomplishing its mandate is its Fiscal Year 2016
budget request of $860 million. This funding will enable the
agency to continue to provide loans, contracts, and training to
small businesses across the country. In this capacity, the SBA
truly plays a vital role, strengthening our economy and
promoting job creation.
In many areas, I concur with the majority's views and
estimates on this project. This includes opposing unauthorized
pilot programs which continue to grow unchecked at the agency.
Policing SBA's contracting programs has unfortunately become a
necessity and this needs to be a top priority. Finally, I am
glad to see that the majority opposes the administration's 504
refinancing proposal. Such an initiative is outside of the
mission of the underlying program's purpose and places undue
risk on taxpayers.
However, in several areas the views and estimates take
cost-cutting measures a bit too far. It supports abolishing the
Prime program as does the administration itself. This program
should continue to be funded as it provides resources to low
income entrepreneurs seeking to become self-sufficient. Critics
say Prime is duplicative, but that is a hard case to make when
the Microloan program is tied to a loan and Prime is tied to
capacity building and technical assistance. Plus, they barely
receive more than 3 percent of the agency's budget.
Similarly, eliminating the Veterans Business Outreach
Center, Office of Native American Affairs, and Office of
International Trade are misguided. While other departments do,
in fact, perform similar activities, the SBA operates these
initiatives with a small business focus, an element that the
other federal entities lack. As a result, these activities
should remain in the SBA, and if reform is needed, it should be
pursued incrementally instead.
As we all know, disagreement on priorities in the agency's
annual budget is not unusual. As we move forward, I look
forward to working to refocus the SBA on its statutory mission
in a manner that is both efficient and prudent.
And with that, Mr. Chairman, I yield back.
Chairman CHABOT. Thank you. The gentlelady yields back.
Are there any other members who wish to be recognized for a
statement on the Committee's Views and Estimates on the SBA
budget request for Fiscal Year 2016?
If not, the Committee now moves to its consideration of the
views and estimates. The clerk will read the title of the
document.
The CLERK. Views and estimates of the Committee on Small
Business on matters to be set forth in the concurrent
resolution on the budget for Fiscal Year 2016.
Chairman CHABOT. I ask unanimous consent that the views and
estimates be considered as read and open for amendment in its
entirety.
Does any member seek recognition for the purpose of
offering an amendment?
Seeing no amendments, the question is on adopting the views
and estimates on the SBA budget request for Fiscal Year 2016.
All those in favor say aye.
All those opposed, no.
In the opinion of the chair, the ayes have it, and the
views and estimates are agreed to.
I now recognize the Ranking Member for a motion.
Ms. VELAAZQUEZ. Sure. Mr. Chairman, I would like to ask
unanimous consent. I would like to give notice pursuant to
House Rule 11 Clause 2(l), that the committee democrats will be
filing additional views with the Budget Committee regarding
SBA's Fiscal Year 2016 budget.
Chairman CHABOT. Without objection, so ordered.
And the Committee is authorized to make technical and
grammatical corrections to the views and estimates.
I would like to thank everyone and look forward to working
with all of you. This meeting of the Committee on Small
Business is adjourned and the Committee will stand in recess
for a few moments to prepare for a Committee hearing. We do
have a hearing following up, so members and anyone here that
would like to stay, we will be starting that up in just a
moment or two so we can get the witnesses in there.
So at this time, the Committee is briefly adjourned. We
will be back shortly.
[Whereupon, at 10:25 a.m., the Committee was adjourned.]
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