[Senate Hearing 116-603]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 116-603

                       THE CORONAVIRUS AND AMERICA'S SMALL 
                            BUSINESS SUPPLY CHAIN

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                          AND ENTREPRENEURSHIP
                          UNITED STATES SENATE

                     ONE HUNDRED SIXTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 12, 2020

                               __________

    Printed for the Committee on Small Business and Entrepreneurship
    
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        Available via the World Wide Web: http://www.govinfo.gov
        
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                    U.S. GOVERNMENT PUBLISHING OFFICE                    
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            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                     ONE HUNDRED SIXTEENTH CONGRESS

                              ----------                              
                     MARCO RUBIO, Florida, Chairman
              BENJAMIN L. CARDIN, Maryland, Ranking Member
JAMES E. RISCH, Idaho                MARIA CANTWELL, Washington
RAND PAUL, Kentucky                  JEANNE SHAHEEN, New Hampshire
TIM SCOTT, South Carolina            EDWARD J. MARKEY, Massachusetts
JONI ERNST, Iowa                     CORY A. BOOKER, New Jersey
JAMES M. INHOFE, Oklahoma            CHRISTOPHER A. COONS, Delaware
TODD YOUNG, Indiana                  MAZIE K. HIRONO, Hawaii
JOHN KENNEDY, Louisiana              TAMMY DUCKWORTH, Illinois
MITT ROMNEY, Utah                    JACKY ROSEN, Nevada
JOSH HAWLEY, Missouri
                Meredith West, Republican Staff Director
                 Sean Moore, Democratic Staff Director
                            
                            
                            C O N T E N T S

                              ----------                              

                           Opening Statements

                                                                   Page

Rubio, Hon. Marco, Chairman, a U.S. Senator from Florida.........     1
Young, Hon. Todd, a U.S. Senator from Indiana....................     1
Cardin, Hon. Benjamin L., Ranking Member, a U.S. Senator from 
  Maryland.......................................................     5

                               Witnesses

Gibson, Ms. Rosemary, Senior Advisor, The Hastings Center, 
  Arlington, VA..................................................     7
Anderson, Dr. Gerard, Professor, Johns Hopkins University, 
  Baltimore, MD..................................................    15
Morrison, Mr. Tim, Senior Fellow, The Hudson Institute, 
  Washington, DC.................................................    22
Briscoe, Ms. Wynne S., Acting Director, The Small Business 
  Development Center--Southern Maryland Region, La Plata, MD.....    30

                          Alphabetical Listing

Anderson, Dr. Gerard
    Testimony....................................................    15
    Prepared statement...........................................    17
    Responses to questions submitted by Senator Rosen............    52
Briscoe, Ms. Wynne S.
    Testimony....................................................    30
    Prepared statement...........................................    32
    Responses to questions submitted by Senator Rosen............    54
Cardin, Hon. Benjamin L.
    Opening statement............................................     5
Gibson, Ms. Rosemary
    Testimony....................................................     7
    Prepared statement...........................................    10
Morrison, Mr. Tim
    Testimony....................................................    22
    Prepared statement...........................................    24
Rubio, Hon. Marco
    Opening statement............................................     1
U.S. Chamber of Commerce Small Business Council
    Letter dated March 11, 2020..................................    56
Young, Hon. Todd
    Testimony....................................................     1

 
       THE CORONAVIRUS AND AMERICA'S SMALL BUSINESS SUPPLY CHAIN

                              ----------                              


                        THURSDAY, MARCH 12, 2020

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:35 a.m., in 
Room 428A, Russell Senate Office Building, Hon. Marco Rubio, 
Chairman of the Committee, presiding
    Present: Senators Rubio, Ernst, Young, Romney, Hawley, 
Cardin, Shaheen, Booker, Hirono, and Rosen.

  OPENING STATEMENT OF HON. MARCO RUBIO, A U.S. SENATOR FROM 
                            FLORIDA

    Chairman Rubio. Thank you all for coming today, and I 
appreciate the witnesses being here on this hearing. The 
hearing will come to order. I am going to go out of order 
quickly because Senator Young has another related topic event 
that he has to be at and I wanted to recognize him just 
quickly. He wanted to say a few words on this topic and I 
wanted to make sure he was able to get on the record before we 
begin.

   OPENING STATEMENT OF HON. TODD YOUNG, A U.S. SENATOR FROM 
                            INDIANA

    Senator Young. Well thank you, Mr. Chairman, for holding 
this important hearing, and I first want to get on the record 
and thank all our subject matter experts. I think if there is 
anything we legislative leaders ought to be doing, and more 
broadly our government leaders, is listening to the public 
health experts. So thank you so much to the experts in some of 
these discrete areas that will be impacted by the coronavirus.
    I do regret that in minutes I have another meeting that 
also pertains to this important topic. I just want to publicly 
express my intention to submit to the record some important 
questions I have for you related to the increasingly integrated 
supply chains that we now have between various enterprises. And 
I guess this situation has exposed that that creates certain 
vulnerabilities during times of what is now a pandemic. I have 
some questions related to supply chain mapping that I am hoping 
someone will be prepared to answer.
    And lastly, our reliance on foreign-made medical supplies 
is something that I think we are going to have to rethink over 
the course of the coming weeks, months, and really years. But 
it has certainly caused us to heighten awareness of this 
important issue.
    So your attention to those issues would be much 
appreciated. Thank you again, Mr. Chairman, for this 
opportunity to say a few words and for holding this important 
hearing.
    Chairman Rubio. Thank you. So we are going to begin and I 
am going to give the Ranking Member the opportunity for opening 
comments and then I will go to mine.
    Senator Cardin. I do not mind if you go first.
    Chairman Rubio. Well, he wants me to go first. Very nice 
people here. We work on a lot of stuff together.

OPENING STATEMENT OF HON. MARCO RUBIO, CHAIRMAN, A U.S. SENATOR 
                          FROM FLORIDA

    Chairman Rubio. Anyway, as I said, today's hearing really 
is timely, unfortunately, because of the challenges that we are 
now seeing, and I want to sort of bifurcate it into two steps. 
The first is what we can do, obviously, to help small business 
weather the coming storm that is going to be created by the 
fact that people are not going to be able to be together with 
one another in places, and that is obviously going to impact 
cash flows and the impact that has on employees, and in some 
cases the threat it poses to a business' ability to continue to 
function. And I think that is of immediate concern. That is the 
one thing we have got to deal with if we are triaging this 
problem right away.
    But I think we are beginning to see the outlines of a 
second problem, and that is what it means when your supply 
chain is disrupted. And we all just left a meeting of the 
entire Senate with leaders in our country and health care, and 
what is becoming evident and apparent is that one of the 
impediments to the widespread availability of testing is a 
supply chain unpredictability. It is not just the tests. If you 
do not have cotton swabs, if you do not have protective gear 
for the lab technicians or the basic ingredients needed for the 
test you are going to have a problem in conducting those tests.
    And from our perspective is the role that small business 
can play, structurally, now and for years to come, in ensuring 
that these sources of supply chain disruptions do not become a 
national threat to the country. A lot of it will be focused on 
China, because that is where a lot of this activity has gone, 
but it is not just China. If you are India, if you are South 
Korea, if you are a country that also makes these things, and 
you are facing this threat, you are going to hoard it. You are 
going to act in the best interest of your nation, and that is 
understandable. We need to start acting in the best interest of 
our Nation in these regards, and so that is important.
    Later today, if we can bring it here--because I believe we 
can--we have been engaged before last night in conversations 
with the White House, with Ranking Member Cardin and his team, 
with individual members of this Committee, with our 
counterparts in the House Small Business Committee, on what 
relief to small businesses should look like and how we can help 
them. And so hopefully later today we are going to have an 
opportunity to present it, and the crux of it, as I have 
already outlined to some, is taking the commitments the 
President made last night and funneling it through our 7(a) 
program and our community banks, because they are in the 
community, they have, through Community Advantage and other 
related programs as well, have the ability to process the paper 
on this.
    We are going to have to give a little flexibility. We are 
going to have to allow small businesses to use the funds they 
have borrowed to make payroll, to provide paid sick leave for 
employees that are hurt or employees that are sick or employees 
that, frankly, cannot come to work. We are going to have to 
give them the flexibility to do that. We want to make sure that 
the money is being lent is real and going to be paid back, but 
by the same token--and that is where the community bank process 
can help--but we also have to make it quick. These guys cannot 
wait 90 days to get these funds, and workers cannot wait 90 
days for the paid sick leave that these will give the small 
businesses an opportunity.
    I am not claiming this solves all the problems. It does 
help. If we are going to make that kind of commitment to small 
business I believe that it should be in a way that is most 
effective and responsible with the taxpayer money, but also 
most helpful to those small businesses.
    On the supply chain issue, I think the backdrop to our 
general economy, even before--and this Committee issued a 
report a year ago that warned about it--even before all of this 
is that we are dangerously reliant, in particular, on China for 
the production of critical goods, and that includes goods, as I 
have already outlined, that are needed to fight the 
coronavirus.
    And I think we rely on far more goods than we know, and 
part of the economic pain that is going to be inflicted on the 
country as a result of these disruptions will be directly 
related to disruptions in the supply chain, because of an 
outbreak that shut down factories that end up impacting the 
availability of important consumer goods.
    Just a brief review that our staff put together for this 
hearing, last year--and this is according to the Census 
Bureau--China accounted for 88 percent of electric hand drill 
and saw imports, 87 percent of air conditioning machinery 
imports, 83 percent of hydraulic jacks and hoists, 72 percent 
for cell phones and its parts, 58 percent of forklifts, 51 
percent of lithium ion batteries. The list goes on and on. 
Disruptions in these supply chains tell you that even after the 
virus is contained and starts coming under control we could 
have shortages, and you know the industries that are reliant 
upon this. This is where the spread of this becomes much more 
serious.
    So the focus is on three things that we really want to talk 
about. First is the immediate consequence of not having the 
capacity to produce these essentials to your home. And small 
businesses are going to experience a great deal of economic 
pain as a result of supply chain disruptions.
    But there is also going to be increased demand, increased 
demand for medical supplies and surgical masks and 
pharmaceutical drugs, and our small businesses can be a part of 
the answer to that, to filling in those gaps in the supply 
chain for critical sectors that have been exposed, as weakened 
because of offshoring of our productive capacity to China and 
elsewhere.
    The absence of having these domestic businesses that can 
ramp up production to meet demand for these critical goods 
limits our ability to mitigate the worst effects of this virus 
beyond its broader economic impact, and the result is that the 
virus could end up being more damaging than it needed to be, 
and the economic impact, as a result, greater than it needed to 
be.
    As I pointed out earlier, we are already seeing this. One 
of the reasons why we have struggled to produce the testing 
kits is because we rely on foreign producers for the chemicals 
that are needed to make them. And there is a growing shortage 
because more people are testing, and as I said earlier, the 
countries that have it are going to be less willing to provide 
it.
    So I truly believe that one of the things we should look at 
after we provide the initial set is what can we do, through the 
SBA, through the work of this Committee, and it has to be 
bipartisan--there is no other way to do it--to help small 
business be a growth sector in our economy to meet some of this 
increased demand.
    Second, obviously, that we will discuss, and I am sure you 
will point to, is the long-term consequences of the 
vulnerability, particularly when it comes to China. This was 
not the accidental byproduct of globalization. It is an outcome 
of a deliberate strategy on their part which made biomedicine 
and high-end medical equipment a priority. In their Made in 
China 2025 plan they put it in writing. It has long been 
practiced. It encourages domestic companies and their predatory 
practices, and provides a short-term bargain for foreign 
companies, but big-time costs for our Nation and the world.
    For years, China has been able to entice American 
multinational corporations with access to its markets in 
exchange for offshoring and sharing intellectual property, and 
we have watched as Beijing captured critical portions of the 
global supply chain. Today, 80 percent of the active 
pharmaceutical ingredients in the United States, in the drugs 
that are here, are sourced somewhere else, and a lot of that is 
China. And now, in the face of the pandemic, as I said, the 
absence of this capacity in the medical sector is endangering 
our health care system, and that is something we have to figure 
out, in the short term and forever.
    So it is hopefully something that we are able to act on to 
find out what role can small business play in growth and in 
taking back the ability to make these critical goods in the 
United States right now and in the future.
    So I hope that we can come up with a second wave of 
proposals that will empower small businesses to bring the 
production of critical goods all in-house and getting American 
multinationals to buy domestically from them, not as a matter 
of economic protectionism but as a matter of national security 
and national economic stability. This is good for our public 
health, it is good for our economy, it is good for, as I said, 
our national security, and it is good for our people.
    So I look forward to hearing from our witnesses who are 
experts on these topics about what we can do to help small 
business be a part of solving this challenge, and now I turn it 
to the Ranking Member.

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

    Senator Cardin. Well, Mr. Chairman, thank you very much for 
convening this hearing. As you pointed out, we came from an 
all-Senate members briefing on the COVID-19 virus and its 
consequences. We learned from that briefing, we heard last 
night that it has struck our family. Senator Cantwell's staff 
person has the virus, Senator Cantwell, former Chair and 
Ranking Member of this Committee, and a senior member of this 
Committee, and that there are members of her staff that are now 
in quarantine as a result, and, of course, one needing 
treatment. So we know this impacts all of us.
    I want to just underscore the last point that you made. Our 
first priority is to triage, to deal with the circumstances 
that we are confronting today, whether they are the medical 
circumstances or the economic circumstances. But I hope that we 
will follow your advice and recognize this will not be the last 
crisis that we are going to have, and in regards to the supply 
chain we need to take a look at making sure that we are better 
prepared for the next crisis that comes down than we were for 
this one. So I agree and I look forward to working with you in 
regards to those issues.
    Clearly our first priority is to deal with the medical 
challenges. That is our first priority. We still are not where 
we should have been or need to be in regards to testing. We are 
developing the vaccines and drugs that will hopefully be 
available. The drugs, the therapeutic drugs, may be available 
to help us in this crisis; it is possible. The vaccines will 
not. But I am proud of our leadership in regards to those 
developments at institutions located in the state of Maryland, 
including the National Institutes of Health and Johns Hopkins 
University and University of Maryland Medical Center.
    We need to deal with local responses, make sure they have 
the capacity, the hospital capacity, mitigate the spread. And 
the emergency supplemental dealt with many of those needs, and 
as the Chairman pointed out that is the first installment. It 
is not going to be the last installment.
    And we also have to deal with the economic impact, 
including the disruption of the supply chain to American small 
businesses. I was pleased to see that it was recognized in the 
supplemental. There was a recognition of the problems small 
businesses are confronting. We recognize that small businesses 
are very much impacted by the facts that Americans are self-
quarantining and not using the business community as much as 
they would, the avoidance of gatherings, the cancellation of 
events, the school closures, the trip cancellations. All of 
that has an impact on American small businesses.
    I can give you specific examples in Maryland. Johns Hopkins 
has just announced that they are closing their campus from the 
point of view of students and faculty. I can tell you Charles 
Village in Baltimore City, a lot of small businesses are 
located in Charles Village. They depend upon the students and 
faculty. They are not going to be there, and it is going to 
impact those small businesses.
    We can give you many, many more examples. Chanell Wallace, 
who owns a hair salon in Bowie, Maryland, shared that order for 
her hair extensions placed in January has yet to be filled with 
her vendor in China because of the coronavirus. Jerry Chan, who 
owns a noodle restaurant in Gaithersburg, reported in the 
middle of February that his restaurant has already experienced 
a 30 percent decline in sales, and the spread of the 
coronavirus is only going to make that situation worse. 
Sterling Forever, a jewelry company based in Towson, reported 
that not only were some of the factories in their supply chain 
closed, their distributors were requesting advanced payment to 
help with the crisis. And the list goes on and on and on.
    So we know that we are just starting to see this. It is 
getting worse by the--I would say by the day, but it seems like 
it is getting worse by the hour. So we know we have an 
immediate crisis.
    Capital is the lifeblood of small businesses. We need to 
deal with that issue. The emergency supplemental allowed small 
businesses to qualify for economic injury disaster loans, EIDL, 
and provided some resources to the Small Business 
Administration in order to administer that. We need to build on 
that supplemental.
    Let me point out, Mr. Chairman, that I have already heard 
from some small businesses. They need to get the information on 
how they qualify, so we need to get that help out to small 
businesses so that they can take advantage of what was in the 
first supplemental dealing with the coronavirus.
    Our resource partners need to be better empowered. They are 
the ones in which small businesses will go to for help. Our 
Women Business Centers, our Minority Business Development 
Centers, and the other resource partners, we need to make sure 
that they have the resources.
    We all heard last night, as President Trump mentioned a 
number for small businesses that I thought was one that we 
could work with, $50 billion. Let us work with that in the most 
effective way. Chairman, I agree. We all need to come together 
with a bipartisan solution.
    I would hope that the disaster loans will provide help and 
will deal with resiliency the issues that you talked about--
paid leave for the workers of small business, dealing with 
telecommuting. That is going to cost some resources. Do we have 
the resources to provide that? Let us take a look at the SBA 
loan packages. Let us make them easier, more generous, and less 
costly for small businesses to be able to take advantage of 
those, including looking at the costs of taking out a small 
business loan.
    And Mr. Chairman, I would hope we would also look at one 
additional factor. If you have seen a 30 percent decline in 
your revenues, will you qualify for a loan? The disaster loans 
are direct loans--that is good--from the SBA. But they have to 
be repaid. If you do not have the revenues, how are you 
expected to repay, and will the SBA structure allow those loans 
to take place? We need to take a look at a targeted grant 
program to keep small businesses afloat. Why? Because that is 
where job growth, innovation, and our economy depends upon it.
    This is an extraordinary crisis that requires us to respond 
in kind. Let us act in that regard to triage the current 
situation, be prepared for the future. I think we can work 
together and get this done. We need to do that for the sake of 
American businesses. As Congress begins to address this 
economic impact of the coronavirus, we must ensure that we 
focus on being prepared to withstand the economic disruption 
that is occurring in our economy.
    I look forward to hearing from our very distinguished 
witness panel, and look forward to all their testimony.
    Chairman Rubio. Thank you, and just along those lines, 
before I turn it over to our witnesses, items we have discussed 
with your staff, as you are aware, in the 7(a) loan part, is 
allowing the loans to be used for payroll support. That would 
include paid sick leave, so employers could use that. We waive 
the fees on both the borrower and the lender to lower the 
costs.
    On the particular of the SBA express loans, increasing the 
loan limit for those, those turn around in about 36 hours. And 
on the EIDL loans, which have already been approved for 
coronavirus impact, and 20 states have already applied, the SBA 
will be able to determine repayment solely on the applicant's 
credit score. They are not going to have to go and get tax 
returns or transcripts, and they do not have to prove that they 
could not get credit from somewhere else.
    So some of those ideas to address some of the issues you 
raised. It will not solve every problem, obviously, but 
certainly we are trying to move as quickly as we can on these 
topics. But it will have to be done, because of the nature of 
this place, not to mention the nature of this crisis, in a 
bipartisan way, and I think we can get to a point where we can 
put something forward that would achieve the President's 
purpose of getting $50 billion available to small business, but 
do it in a way that works, is responsible, and works for the 
borrower.
    So with that I appreciate everyone who has come here. We 
are going to try to move on this now, and we are going to begin 
with all of our witnesses. I will begin with Ms. Gibson, who is 
a Senior Advisor at The Hastings Center. She led the National 
Health Care Quality and Safety Initiatives at the Robert Wood 
Johnson Foundation. She is the author of China Rx: Exposing the 
Risks of America's Dependence on China for Medicine. So, Ms. 
Gibson, thank you for being here.

  STATEMENT OF ROSEMARY GIBSON, SENIOR ADVISOR, THE HASTINGS 
                     CENTER, ARLINGTON, VA

    Ms. Gibson. Good morning. Thank you, Chairman Rubio and 
members of the Committee for the opportunity to be here today. 
I am here to talk about small businesses that are prepared to 
start production of critical medicines that are in short 
supply, that are needed to care for people who are hospitalized 
with coronavirus.
    The medicines I am talking about today are generic drugs, 
and generics are 90 percent of the medicines that we take. 
Members of Congress take them, occupants of the White House--
the focus is generic drugs. And right now we are rationing, in 
the United States of America--the term is ``on allocation''--
essential medicines, including critical antibiotics that are 
necessary to treat hospitalized patients with coronavirus.
    I visited a hospital last week and there is an antibiotic 
that they can no longer get. There are other antibiotics that 
are in short supply. There was a volunteer EMS worker who goes 
out on ambulances in her community and she said they do not 
have epinephrine on their ambulance, which is used to revive 
people. I said, ``So what do you do?'' and she said, ``We just 
drive faster to the hospital.''
    The $8.3 billion emergency package for coronavirus was an 
important step forward. There is support for research for 
vaccines for coronavirus, therapies to actually cure people 
with coronavirus, but there was nothing in that supplemental 
package to make, here in the United States, the essential 
generic drugs that are necessary to treat critically ill people 
with coronavirus, as well as critically ill people under normal 
circumstances in our Nation's hospitals.
    China is the dominant global producer of the core chemicals 
to make thousands of our generic drugs. It was mentioned of the 
active ingredients coming from China and other countries. We 
have to look beyond the active ingredients. That is the data 
the FDA has. But what is missing are the core chemicals to make 
those active ingredients. For essential medicines to treat 
coronavirus patients--sedative, pressers to raise their blood 
pressure, antibiotics--90 percent of those core chemicals are 
sourced in China.
    There is talk that we should let the free market fix this. 
The reality is that there is no free market. Generic 
manufacturing has collapsed in the United States. There are 
only two Western companies left that are making generic drugs, 
and they announced last year they are dropping half their 
products because they can no longer make them, so they are on 
the FDA shortage list.
    And how does this happen? It is because patterns of China 
forming cartels, which has driven out production of so many of 
our core medicines--we cannot make penicillin anymore because 
of what I wrote about in China Rx, the penicillin cartel. We 
cannot make vitamin C. We cannot even make aspirin, and 
thousands and thousands of other medicines.
    And India put out its export ban because its giant generic 
industry, which supplies us with 25 percent of our generics, 
depends on China for those core chemicals.
    So what can we do? In doing this work on China Rx, small 
companies have approached me, and these are brilliant people 
prepared tomorrow to start using advanced manufacturing 
technology to make medicines fully made here in the United 
States that are in short supply.
    There is a precedent for the U.S. government to fund 
medicinal manufacture, namely flu vaccines, through HHS and 
BARDA. BARDA knows how to do this. We could use that same model 
to make critical essential generic drugs through BARDA, through 
public-private partnerships. They do investment for capital and 
for equipment, but the production costs of using new technology 
would make our drugs much less expensive.
    I would like to close by saying there is another thing we 
have to address, and this has nothing to do with coronavirus. 
But there are thousands of children who have died in recent 
years because we can no longer make the old staple, generic 
drugs that are necessary to sustain them. These are children 
with rare diseases. There are small companies that approached 
me. They want to make them, and together we can make a 
difference, not only for coronavirus patients but for these 
children.
    I look forward to working with the Committee and the staff 
on how we together can do a lot of good to ensure that every 
patient has the medicines that they need when they need them.
    Thank you very much.
    [The prepared statement of Ms. Gibson follows:]
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    Senator Cardin [presiding]. Thank you, Ms. Gibson, for your 
testimony. I will now call on Dr. Gerald Anderson, who is a 
professor of Health Policy and Management and professor of 
International Health at the Johns Hopkins University Bloomberg 
School of Public Health and a professor of Medicine at the 
Johns Hopkins University School of Medicine. He is also the 
director of the Johns Hopkins Center for Hospital Finance and 
Management.
    Dr. Anderson.

STATEMENT OF GERARD ANDERSON, Ph.D., JOHNS HOPKINS UNIVERSITY, 
                         BALTIMORE, MD

    Dr. Anderson. Thank you, Senator Cardin, Senator Rubio, and 
members of the Committee.
    I have been a professor at Johns Hopkins School of Public 
Health for the last 37 years, and let me tell you about my 
greatest fear about coronavirus.
    Yesterday I went to the local grocery store. Tonight, I 
will go to the dry cleaners and maybe go out to dinner with my 
wife. My greatest concern is these people in these small 
businesses will go to work with coronavirus. The shop keeper 
will want to keep this business open because they do not have 
the funds to keep the office closed for 14 days. The worker 
will not want to report that she has coronavirus because she 
probably does not have sick leave.
    The uninsured worker will not have the $200 or so that is 
necessary for the coronavirus test. Remember, 10 percent of 
Americans are uninsured and they are most likely to be working 
in small businesses.
    So what Congress do to alleviate my fears? Pay the 
shopkeeper to close the business for 14 days if they do have an 
employee with coronavirus. A loan probably will not do the 
trick because most of them have huge bad debts anyway. As 
Senator Cardin said, grants may be necessary.
    At least for the next 90 days, make sure the person has at 
least 14 days of paid six leave. And for the next 90 days, pay 
the provider giving the test to the uninsured person at 
Medicare rates.
    While larger companies allow the people to work from home, 
and Johns Hopkins is doing that for me, many small businesses 
do not have the option because they have to work with their 
clients face-to-face. Helping the cruise line is under 
discussion. From a public health perspective, small businesses 
are so much more important than the cruise lines. We can get 
along without vacations. We cannot get along without the small 
businesses that feed us.
    Let me change the subject for a minute. The good news in my 
testimony is that small business is doing to develop the 
vaccine for coronavirus. A significant portion of the world's 
new drugs come from the uniquely American public-private 
partnership that involves the NIH, our universities and medical 
centers, small biotech companies and, finally, large 
pharmaceutical companies. Most of the initial drug development 
occurs in universities and small biotech companies, not the big 
pharmaceutical industries.
    For example, this is how the first drug that was effective 
in treating hepatitis C was developed. It began in a lab at 
Emory University with funding by the National Institutes for 
Health. With promising results, they started a small business 
and attracted venture capital. After the clinical trials showed 
positive results, a big company, Gilead in this case, purchased 
the small company Pharmasset. One year after that, we had 
hepatitis C drugs with FDA approval and it was brought to 
market.
    One of the companies with a promising coronavirus right now 
is a small business. Its name is Moderna. It began operations 
in 2011. The first clinical-grade batch of this drug was 
shipped to the NIH for a Phase 1 clinical trial in late 2019, 
and the clinical trials have already begun.
    In my written testimony, I list three other small companies 
that are developing coronavirus and there are 40 other ones 
developing vaccines.
    So how can the Congress help these small biotech companies 
develop a vaccine? The key is knowing that the small business 
will get paid for developing the vaccine. Congress can 
guarantee the purchase of a certain volume of vaccine at a 
price or giving them advance market commitments to purchase 
safe and effective products.
    In my written testimony, I also discuss some other ways 
that Congress could help the small businesses provide services 
to address the coronavirus epidemic. Small business can provide 
telehealth services to people in quarantine and in rural 
communities. People in quarantine need to discuss their health 
condition with medical professionals without subjecting the 
clinician or the public to the disease. Medicare now pays for 
telehealth but most private insurers do not.
    Congress could ensure that more generic drugs are made in 
America. In my written testimony, I explained how we helped 
create a small non-profit company that is going to manufacture 
drugs that are overpriced and in short supply. Working with 
Intermountain Healthcare, we created Civica Rx. It has gotten 
up and running and it is now manufacturing 20 drugs with 20 
more in the pipeline. BlueCross just gave them $55 million to 
expand into the outpatient market.
    Finally, small business can assist in worker training. Many 
hospitals are not prepared to train their employees, and small 
business can do that.
    I am happy to answer any questions.
    [The prepared statement of Mr. Anderson follows:]
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    Chairman Rubio [presiding]. Thank you, Dr. Anderson.
    Tim Morrison is a Senior Fellow at the Hudson Institute, 
where he specializes in Asia-Pacific security, missile defense, 
nuclear deterrent modernization, and arms control. He was 
previously Deputy Assistant to the president for national 
security and has written and spoken extensively about the 
national security aspects of supply chain issues.
    Thank you for being here.

STATEMENT OF TIM MORRISON, SENIOR FELLOW, THE HUDSON INSTITUTE, 
                         WASHINGTON, DC

    Mr. Morrison. Thank you, Chairman Rubio, Ranking Member 
Cardin, and members of the Senate Small Business Committee. 
Thank you for the invitation to be here today.
    I would like to start with the cold reality and the simple 
fact: according to the World Health Organization, the National 
Health Commission of the People's Republic of China initially 
knew of the Wuhan virus as early as December 8 of 2019. Yet, 
initial substantive disclosures to the WHO did not take place 
until approximately January 11, 2020.
    I do not think it is too much to ask how many people in the 
United States and elsewhere have been infected, gotten sick, or 
worse as a consequence of the Chinese Community Party's 
decision to sit on the fact of this epidemic?
    In fact, I think you as our elected officials must demand 
the answer to this question and determine how to respond.
    In 2004, as Ms. Gibson has explained, the United States 
stopped making penicillin domestically. This happened without a 
vote in this body. It happened without decision in the 
Executive Branch. It is a decision that was consulted about 
this decision. It was a decision prompted by China's Made in 
2025 plan to dominate what the Chinese Community Party 
determined were strategic sectors which Chinese industry should 
control globally.
    And so we are here today to ask, ``on a good day, what does 
it mean to rely on the People's Republic of China for our basic 
health care commodities?''
    Larry Wortzel, a member of the U.S.-China Commission, will 
tell you about his blood pressure medicine making him sick 
because it was contaminated with rocket fuel in a Chinese 
manufacturing facility. Rocket fuel.
    Surgeons around this country may tell you about the 
hundreds, if not thousands, of surgeries that were canceled 
because millions of surgical gowns had to be recalled because 
they may not have been sterile when they were packaged up in 
the People's Republic of China and sent to the United States. 
This was in January of this year.
    Now what if there was a malign intent? For example, what if 
this body passes a resolution demanding a high-level visit of 
an American official to Taiwan in furtherance of the Taiwan 
Travel Act of 2018? What if the United States chooses to 
sanction Huawai, or another Chinese state-proxy, for the Uyghur 
suppression? What if the Chinese Communist Party decides to 
retaliate to these sovereign decisions by cutting off the 
shipment of medicines to the United States?
    Do you think it cannot happen? Ask the Japanese who lost 
access to rare earth elements from the People's Republic of 
China in 2010 over a territorial dispute.
    The People's Republic of China's state-owned Xinhua, a 
communist party propaganda outlet, recently noted that the PRC 
could--and I quote--``plunge the U.S. into the mighty sea of 
coronavirus'' if it wanted to do so.
    I ask you to think about all of the tools of economic 
statecraft that you can use to support American producers, 
including small businesses and strategic industries. For 
example, I know that several of you were involved in the 
passage of the BUILD Act in 2018. This was an effort to 
leverage private sector investment in international development 
to counter China, Inc.
    What other tools are available to do the same at the Small 
Business Administration or the Export-Import Bank?
    I urge you, do not allow America's job creators and 
innovators to be unilaterally disarmed. Their government can 
and should defend them from foreign aggression.
    Chairman Rubio, your amendment to last year's National 
Defense Authorization Act concerning reliance on the PRC for 
pharmaceuticals was a key step. You sounded the alarm on this 
risk.
    Lastly, I know several of you serve on the Senate Foreign 
Relations Committee and related national security committees. I 
urge you to investigate the influence of the People's Republic 
of China in international organizations like the World Health 
Organization. Ask yourselves why, despite meeting all of its 
established criteria, the World Health Organization waited more 
than three months to label COVID-19 a pandemic? Why is the 
World Health Organization choosing now to adopt the Chinese 
Communist Party's playbook by removing Taiwan from its country 
list?
    I want to thank you for the opportunity to testify here 
today and I stand ready to answer your questions.
    [The prepared statement of Mr. Morrison follows:]
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    Chairman Rubio. Thank you.
    And our final witness is Ms. Wynne Briscoe, the Acting 
Director of the Small Business Development Center in the 
Southern Maryland Region. Thank you for being with us.

STATEMENT OF WYNNE S. BRISCOE, ACTING DIRECTOR, MARYLAND SMALL 
   BUSINESS DEVELOPMENT CENTER, SOUTHERN REGION, LA PLATA, MD

    Ms. Briscoe. Good morning. Thank you all for having me this 
morning. Again, Wynne Briscoe, the Acting Director for the 
Small Business Development Center. In that capacity, I consult 
with manufacturers throughout the State of Maryland. Based on 
those experiences, I wish to offer some recommendations to your 
Committee.
    I see the coronavirus pandemic and the supply chain 
disruptions that it has caused for some companies offering an 
opportunity to address the supply chain concern with a longer-
term question: What opportunities do the current crisis offer 
U.S. businesses to fill newly emerging supply chain 
vulnerabilities within other companies? And how can these 
supply chain opportunities assist American small businesses 
long after the current health crisis has come and gone?
    In other words, I believe that we should act and think 
about the supply chain disruption and the current crisis in a 
way that will take us beyond the current crisis and set our 
economy on a level plane.
    When I consult with Maryland manufacturing companies, I 
insist that they have at least three alternative sources for 
the products that they produce. This is something that is going 
to be long beyond the current health crisis and something that 
the SBA can help make happen. And my idea I have created based 
on my experience with manufacturing companies is that I am 
recommending that you direct the Small Business Administration 
to produce a nationwide list of companies. Let them self-
identify their supply chain concerns, those that have current 
supply chain concerns and those that forecast in the future of 
having supply chain concerns.
    From there, it would be a self-identified list of Made in 
America products and services the SBA would be monitoring, and 
these would be an opt-in list for those businesses that wish to 
participate. This would be businesses that the SBA has worked 
with throughout the country currently as well as over the last 
10 years. This list would be compiled and it would be monitored 
by the Small Business Administration.
    For example, if they find when they are doing their 
outreach efforts, hypothetically a company in Miami that might 
be producing paper and its largest manufacturer might be China, 
can we find an American company to replace that source?
    Again, another example might be a Maryland-based company 
that may be looking to replace its suppliers of key ingredients 
for its bakery supply products of a specialty product that it 
sells locally. The SBA does not have to do this process alone. 
They can work together with other Federal agencies such as the 
Department of Commerce or the Minority Business Development 
Administration to identify additional smaller companies that 
may be having concerns. With SBA compiling this Made in America 
master list, it could be sorted through NAICS Codes and have 
descriptions that would describe it, such as ``paper products'' 
or ``sweeteners'' so that it would be easy to sort and address. 
These companies would receive this information on a regular 
basis, and it would be distributed throughout our network of 
Small Business Development Centers as well as the agencies that 
the SBA regularly communicates with.
    This process and something similar to it, using the SBA to 
identify companies looking to expand their American supply 
chain suppliers as well as the companies looking to bolster 
their supplies domestically is essential to our Nation's 
economy. May we learn from this time and learn from this crisis 
using this to strengthen our Nation's supply chains well into 
the future.
    Developing alternative suppliers of key products and 
services well in advance is how we like to prepare our 
businesses with the Maryland Small Business Development Center. 
And it is how I suggest that we move the Nation forward and 
proceed. We should look at this situation as a way to 
strengthen America's supply chain and ways to benefit America's 
smaller businesses.
    So I appreciate you listening to my suggestion of creating 
a voluntary, opt-in nationwide list of supply chain 
opportunities of Made in America products and services and for 
recognizing the insights of America's Small Business 
Development Center consultants and what we bring into solving 
this national problem by inviting me to this panel today.
    Thank you for your time.
    [The prepared statement of Ms. Briscoe follows:]
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    Chairman Rubio. Thank you.
    The Ranking Member, are you ready for questions?
    Senator Cardin. Let me thank all four of our witnesses. Ms. 
Briscoe, let me just ask a question where you ended off. I 
think your suggestion is an excellent suggestion, but it does 
point out the fact that we need to be better prepared for the 
next crisis. I said that in my opening statement. We need to 
have better supply chains locally, and there is real 
opportunity for small businesses in helping us in that regard.
    The challenge will be to connect the opportunities with the 
businesses that are there, and there is where our resource 
partners can be of tremendous help. I appreciate what you do in 
the State of Maryland in our Minority Business Development 
Centers, our Women Business Centers. All those are places of 
contact where this type of a list could connect to the 
companies that are out there with investors to really provide 
new opportunities for small businesses.
    So I just really wanted to underscore and get from you your 
capacity today to reach out. We have already modified the 
disaster relief programs so that small businesses can qualify. 
I know that they are going to be knocking on your door saying, 
``Can we get help under this program?'' The State of Maryland 
will help, but they are going to be your offices that are going 
to be called upon to do this.
    Do you have the capacity to expand your reach to take care 
of, for example, the suggestion you made on developing a list?
    Ms. Briscoe. Well, it would initially start with compiling 
the data from the businesses, so the SBA is what I am 
recommending start from the top down, utilizing the Small 
Business Development Centers, utilizing all of the agencies 
that work along with the SBA, and find the businesses that 
currently do produce products here in this country that can be 
of assistance to other businesses that they may not be aware 
of.
    So the first short term would be identifying what is made 
here in this country, and from there SBA would then follow up 
with sort of an opt-in matching, if there is a company that is 
looking for that product or service and they are now being 
matched with a product and service that is made here with that 
business in exchange.
    So that is how we see foresee this rolling out from the top 
down through SBA, through the resource partners such as the 
Small Business Development Center and SCORE and the Minority 
Business Centers and the Women Business Centers and our Veteran 
Business Centers, and connecting with the key stakeholders 
throughout the State, and then not just doing it alone, 
throughout the country working along with the Commerce 
Department and all of the other Federal agencies that work with 
businesses so that we can from a higher level identify what is 
being made here currently and how that can be a gap in the 
supply chain for the businesses that need them here nationally.
    Senator Cardin. I think it is an excellent suggestion, and 
I am just trying to figure out how we encourage that to be done 
and where the resources need to be placed in order to make that 
a reality. And I think you have given us a good blueprint, so I 
thank you for that.
    Ms. Briscoe. You are welcome.
    Senator Cardin. Dr. Anderson, you gave a pretty chilling 
account. You are small business owner. You are running a 
cleaning establishment that depends upon you and perhaps one or 
two other workers. You do not feel well. The advice is for you 
to go home and stay home, and perhaps someone in your 
operation, in fact, did get the virus. Now you have got to be 
treated and be isolated for a period of time. That is what we 
want you to do. We do not want you to spread that disease to 
people coming into your establishment because you need to keep 
your business open.
    So how do we provide the financial help to that type of a 
small business owner, which is in our interest to stop the 
spread of the virus, but also to keep that business open 
because of the impact it has on the local community? The 
Chairman talked about and we are working on a program that is 
going to make it easier for SBA loans, including how we 
determine whether they are creditworthy. Those are important 
steps. But if you are talking about closing a business, it is 
hard to understand how you can deal with another loan on top of 
that, and that is why I appreciate your response in regards to 
perhaps looking at a grant program. It is a little more 
complicated because we have not done that in the past. But I 
take it that your comment means that in our toolbox, if we 
really are interested in dealing with this crisis, we are going 
to have to look beyond the traditional loans.
    Dr. Anderson. Yeah, I mean, my local person that does my 
dry cleaning--there are two people that work in that place. I 
am sure there is somebody in the back office, but there are two 
people in the front office. And if one of them has coronavirus, 
that place has to close because they are essentially--you know, 
they just cannot work with just one person. And they are not 
going to be able necessarily to take out a loan. It is going to 
be a lot of work. They are going to need help to open again 14 
days later, and I think a grant is what they are going to 
actually need.
    Senator Cardin. I thank you. I think we just have to have--
we have got to be flexible. This is a crisis that no one could 
anticipate how it is impacting. Every hour it is becoming more 
and more devastating to our economy. So we are going to need to 
develop in Congress a flexible toolkit in order to keep 
businesses going in our community, particularly small 
businesses.
    Again, I thank you all for your testimony.
    Chairman Rubio. Thank you.
    Senator Hawley.
    Senator Hawley. Thank you, Mr. Chairman, and thank you for 
holding this hearing today and for focusing our attention on 
what is obviously a very hugely significant topic. I think it 
has been clear for a while now that we are far too reliant on 
China for our domestic production, especially for essential 
products that we rely on, and, of course, our medical supply 
chain is at the very top of that list, as we are sadly finding 
out. This is one of the reasons that I introduced legislation 2 
weeks ago that would give the FDA more authority to require 
that our medical product manufacturers report all the details 
of their supply chain, report where they are facing potential 
shortages, and then give the FDA new authority to speed 
potential replacements, including, of course, replacements 
ideally that are made in this country.
    Ms. Gibson, can I just start with you? You stated in your 
testimony that we know China produces about 9 percent of our 
generic drugs, which is a lot, but do you have any sense of how 
many of our drugs involve Chinese production? In other words, 
maybe they are not made wholly there, but Chinese production is 
involved.
    Ms. Gibson. Thousands. Thousands of our generic drugs and 
even some of the brand-name products and perhaps even new 
therapies for coronavirus may depend on the chemicals that are 
sourced primarily in China. If you are hospitalized with 
coronavirus, if you have a severe case, which, thankfully, is 
small numbers of people, a small percentage, you will need--you 
might be on a ventilator, so you will need sedatives like 
fentanyl and propofol. Your blood pressure may get dangerously 
low, so you will need pressors like dopamine or epinephrine. 
You might get a secondary infection, bacterial in nature, and 
you will need antibiotics. You might become septic, which is 
life-threatening.
    I was sitting in a room where the people actually make 
medicines. These are the men and women in pharmaceutical 
engineering, pharmaceutical chemistry. I said, ``So tell me, if 
you have to make these tomorrow, where do the core chemicals 
come from to make it? How much are we dependent on China?'' 
They said 90 percent of the chemicals to make those basic 
generic drugs depend on China.
    The good news is that there are advanced manufacturing 
technology and really brilliant chemists right here in the 
United States that want to make it, are capable of starting 
production tomorrow. And Civica Rx, they have committed to all 
their APIs being made outside of China. But they want to take 
the next step and make sure all the chemical components were 
not dependent on China. Advanced manufacturing technology--and 
we have brilliant people in this country, and they want to do 
it. So we can make a lot of these medicines here. They just 
need the investment to get started.
    Senator Hawley. It just strikes me, based on your 
testimony, which I think is really eye-opening, that we 
probably do not appreciate or have not appreciated until now 
the extent of our reliance, the true scale of the vulnerability 
in our medical supply chain.
    Dr. Anderson, let me ask you, in your view, what is the 
most helpful thing the Federal Government can do to support 
these small biotech companies that you have spoken about and 
that you write about? What are the right incentives that we 
ought to be proposing or adopting?
    Dr. Anderson. Essentially, that they have a guaranteed 
place to sell their products. So right now, they are coming up 
with these great new ideas, and they do not always have a place 
to sell their products. And it is true mostly in--not in cancer 
where there is a lot of profit in there, but in anti-
infectives, in antibiotics, and things like that. You develop 
something new in that area, and the current system does not 
work. So that is why we had to create Civica Rx, which is this 
thing that is run out of Intermountain Health Care in Utah and 
other places. We just did not see that the marketplace was 
producing certain areas because the profitability was not high 
enough.
    Senator Hawley. Let me ask you about something else I found 
interesting. You wrote in your testimony that while small 
biotech companies often make the initial discoveries during a 
vaccine or drug development process, it is the large pharma 
companies that then often buy them up.
    Dr. Anderson. Correct.
    Senator Hawley. And gain ownership over the IP. I am 
wondering if that trend accelerates the offshoring of our 
capacity to China. Are those things related?
    Dr. Anderson. Well, I think what we are seeing now is, in 
fact, that is happening. So all of a sudden, you know, Pfizer 
has their major manufacturing plant in China. So the big 
companies are looking where they can produce it the least 
expensively and are going there, especially in the generic 
because it is all price-driven.
    Senator Hawley. Mr. Morrison, before I run out of time, I 
was reading your testimony and was astounded to learn--you 
reiterated this fact; Ms. Gibson, you mentioned it, too--that 
we stopped making penicillin domestically in this country in 
2004, right? Yet the CDC says 62 million penicillin 
prescriptions were filled in the United States in 2015. I have 
got two little boys at home. I think the Hawley household 
accounted for a number of those prescriptions.
    [Laughter.]
    Just to make it clear here, is it correct to characterize 
the decision to move the production of penicillin overseas as 
an economic decision, it was economically driven, it was a 
profit-driven decision? Is that your understanding?
    Mr. Morrison. Yes, sir. I think the point of Made in China 
2025 is essentially to destroy the free market and create 
incentives to offshore production in China. And originally this 
seemed like a good thing. We will save prices, we will move 
value where value could be moved. We will continue to do the 
innovation. But China is scooping that up as well. And so 
without any decision by any Government authority, this 
happened, and now we are going to deal with the consequences. 
And, of course, an antibiotic is not instrumental to treat a 
virus, but the respiratory infection, it is.
    Senator Hawley. Right. It just strikes me--and this is my 
last comment, Mr. Chairman--that our current drug policy seems 
to privilege economic considerations of maybe a few companies 
over public health considerations. Is that fair to say, Mr. 
Morrison?
    Mr. Morrison. I would largely agree, sir.
    Senator Hawley. Thank you, Mr. Chairman.
    Chairman Rubio. Senator Booker.
    Senator Booker. Mr. Chairman, thank you very much.
    I have got three areas that I want to try to get to in a 
very short 5 minutes, and, Dr. Anderson, maybe I can just get 
you, because I am uncomfortable right now. The Senate is about 
to go on a recess. We see this curve, the bell curve that we 
are in right now, of increasing levels of infections and it is 
going to continue to go up. Any modeling would say that our 
control actions to try to bend this curve are not doing that 
well. Having been an executive during a number of crises, 
including Superstorm Sandy, it is the first order of keeping 
people safe, but it is the second-order consequences when 
something like that happens.
    We are about to face nationwide second-order consequences 
of what it means to have schools closed, what it means to be 
told to go home and stay home. And so could you just take 30 
seconds for me to sound the alarm a little more dramatically 
than you did, just like saying going out tonight to your--what 
does it mean if we have large-scale orders for social isolation 
as well as basically people sheltering in place in terms of the 
local economies that depend upon small businesses? Can you just 
paint this picture for me? Because I think that we need to be 
taking a lot more dramatic action to try to stabilize a lot of 
the small businesses and help people who are going through this 
crisis.
    Dr. Anderson. So I just walk through my neighborhood, and I 
see basically restaurants basically empty. I see dry cleaners, 
no one going. I see in the last week or so a fundamental change 
in how the economy is working, and I think the stock market is 
telling you that is what is happening. And I think what we are 
seeing in the real world in our neighborhoods every day is just 
so----
    Senator Booker. So something as basic as schools closing, 
child care crises--I live in a community at the poverty line 
where people if they miss one paycheck, they cannot make a rent 
payment, they cannot make their car payment. Their lives spiral 
out of control. So telling a food service worker, for example, 
to stay home for 2 weeks is just not going to happen, right?
    Dr. Anderson. Unless they get paid.
    Senator Booker. Right.
    Dr. Anderson. And you have got to make sure that they are 
willing to stay home because they are going to get paid.
    Senator Booker. Eighty percent of our food service workers 
do not have paid family leave. Every year we see the spread of 
flu and like that because they are handling our food. Right now 
in this crisis we cannot bend the curve unless we find a way to 
make it so people can stay home without putting themselves in 
pending doom.
    I want to stop there and pivot real quick. The testimony of 
Morrison and Gibson, I wish every Senator could read that 
because clearly this is a national security issue. It is not 
just pharmaceuticals. It is rare earth metals. I can go through 
the things, should something more major in terms of a conflict 
between us and China breaks out, that would cripple our economy 
and our health and well-being and safety. And so this idea that 
it is a free market, when I know this from New Jersey that 
people are luring companies to manufacture over in China, and 
so, again, knowing--here we are in a time of crisis, it is too 
late. Shouldn't we as a Federal Government be doing more on 
these issues to make sure we are building manufacturing 
capacity here?
    Ms. Gibson.
    Ms. Gibson. Yes, what we can do and what small businesses 
want to do to prevent a future situation with drug shortages, 
they want to make the active ingredients, which is what makes 
the medicine medicine. They can make it fully here in the 
United States using advanced manufacturing technology. 
Stockpile that, because it lasts longer than the finished 
drugs. And if we have another coronavirus outbreak, have a 
stand-up facility ready to go, which we have with--you know, 
companies have these as backup, redundant capability. Take that 
API out and make those medicines that are in critical 
shortages. This is what small business, the innovative thinking 
and the technology and the brilliance----
    Senator Booker. But this takes conscious, long-term 
planning. You cannot just flip a switch and have the 
manufacturing capacity here. I have a bill that tries just 
talking about seeding critical startup capacity here so that we 
build it, correct?
    Ms. Gibson. There are small businesses that can start 
production of active ingredients made here in the United 
States. They could start within weeks. It would take maybe 9 
months to start making small quantities of these key 
ingredients fully made in the United States, not dependent on 
China for chemicals. They could do that in about 9 months.
    Senator Booker. Mr. Morrison.
    Ms. Gibson. And they could start for the stockpile DOD and 
VA, use our Government purchasing power to stimulate that 
market.
    Mr. Morrison. That is, in fact, where I was going, sir. You 
have tremendous purchasing power through Medicare, Medicaid, 
TRICARE, the Department of Veterans Affairs. These are some of 
the largest health care consumers in the world. You can control 
their procurement regulations.
    And if I could just make one more pitch, right now the 
Federal Government may be about to allow the TSP I Fund to 
invest in the MSCI Index. We are going to be investing in 
Chinese enterprises. I have worked 19 years for the Federal 
Government. Please do not put my pension in nontransparent 
Chinese companies.
    Senator Booker. And so I just want to make just a massive 
appeal to my Chairman right now that this should be a Committee 
urgency. We can address this. It is actually not that hard. We 
just do not have the collective will. This is a national 
security crisis that one of our serious adversaries is doing 
things strategically to undermine our health and economic well-
being, which at any point they could cripple our economy. And, 
actually, this has a win-win. It corrects for a national 
security crisis, and it actually helps our overall economy, and 
the fact that they are doing it and we are not.
    So I would just appeal to the Chairman and the Ranking, let 
us work on this as a project. This is an obvious area where we 
should have bipartisan commitment to fill these vulnerabilities 
and actually build more American economic manufacturing.
    Chairman Rubio. Absolutely. And that is the goal of the 
second tranche of work we are going to have to do on this. We 
are trying to figure out what can we do to help assist small 
business quickly right now. But we are going to have to come 
back and do more on a host of issues. This hearing has actually 
been scheduled for over a month and a half before this, so we 
already identified this in our report last year. And I agree 
with you. There are still a couple people that debate whether 
we have a supply chain issue. I am not sure they will be able 
to make that argument here any longer in any event.
    Senator Cardin. Let me just underscore what the Chairman is 
saying. We are going to try to see whether we can get something 
done as early as today, if at all possible. We recognize that 
within the next couple weeks we really need to put together a 
package that is going to make a broader appeal to some of the 
issues that are here. We are not talking about months. We are 
talking about we need to respond while there is an interest.
    So we are going to try to work with everyone and try to see 
what we can get done.
    Chairman Rubio. Yes, and one last point before I turn to 
Senator Hirono. We want to do it in a way that obviously 
respects the jurisdiction of this Committee, which is small 
businesses that have supply chain disruption vulnerability, but 
also small businesses as the answer to the supply chain 
vulnerability. And that will require access to capital and the 
ability to invest to ramp up. So we have got some work to do, 
but I am glad we have a head start on some of this.
    Senator Hirono.
    Senator Hirono. Thank you, Mr. Chairman.
    Did I hear you say that we can reduce or totally eliminate 
the overdependence we have on China, that we in our country 
have the capacity to create or manufacture these chemicals that 
are so necessary?
    Ms. Gibson. For a lot of medicines, brilliant chemists and 
pharmaceutical engineers can make these chemicals here.
    Senator Hirono. So why is that not happening?
    Ms. Gibson. Well, on the generic side, the margins are so 
slim that companies would not invest in the new plant and 
equipment to do it, and also our last large generic company, 
Mylan, in Morgantown, West Virginia, merged with Pfizer, and 
Pfizer last year announced the opening of its global generic 
headquarters in Shanghai. So we do not have these companies. In 
5 years--there are two more Western companies--they will be 
gone.
    Senator Hirono. So we have a so-called free marketplace 
where companies can make those kinds of relocation decisions. 
So are you suggesting that there be some kind of legislation 
that will prevent or effect a cost on these companies that will 
take their manufacturing to places like China?
    Ms. Gibson. Well, I think sort of the horse is out of the 
barn on that. How can we grow and incent small businesses that 
are eager to fill this very large vacuum that we have. They 
want to do it. Civica, I am sure, would want to purchase 
essential medicines and all their ingredients made here in the 
United States. The DOD could purchase it, the VA. We could 
start a whole new market with manufacturing here in the United 
States.
    Senator Hirono. I think we are going to need to figure out, 
though, because if a small business creates these chemicals, et 
cetera, and they get bought up by a larger company that is 
interested in the bottom line, they go off to China, that is 
not resolving the situation. So we are obviously going to need 
to come up with some really, in my view, tightly drafted 
legislation that will get us to where we need to go.
    Ms. Gibson. There are some provisions that can be done, 
that you cannot sell your plant for national security reasons. 
If we make any investment, it----
    Senator Hirono. I think those are the kind of ideas we need 
to put in place, I would say.
    Dr. Anderson, here we are in the midst of a pandemic. It is 
here and now. And, you know, any State that is so dependent on 
tourism as a major part of their economy, I would say most 
States tourism is their number one or number two driving 
factor. So we are already seeing thousands of people losing 
their jobs. Most of them probably do not have paid leave, sick 
leave, or anything else. So here and now, I agree with you that 
we really need to figure out how to ease the impact on workers 
and their families in the here and now, because if we expect 
people, 20 percent who are not even insured, to go to the 
doctor, that is not likely to happen.
    I think this crisis has really illuminated and illustrated 
the huge gaps in health care coverage in our country and how it 
is creating a risk for all of us. So we can have that 
conversation later. But for the here and now, I am wondering 
whether you think, Dr. Anderson, that we obviously need to have 
a lot more testing in our country so that we can get a sense of 
how far this--how much of this virus is already in our country. 
We do not know that, so testing.
    And then, obviously, we are going to see this continue if 
we do not develop a vaccine. Would you agree that testing and 
developing a vaccine are critical to our ability to get a 
handle on the spread of coronavirus in our country?
    Dr. Anderson. First of all, the vaccine is absolutely 
critical, but it is going to take a year or whatever.
    Senator Hirono. And in the fall this virus can come back.
    Dr. Anderson. Hopefully, it will not happen again, but it 
may resurge in the fall. Let me go back to the question, 
though, about what we can do besides for generic drugs, because 
we are now working with the State of California, and they have 
said that they want to essentially manufacture or produce drugs 
for the 13 million people that they insure. And they are trying 
now to do that based upon plants in California. And so they 
have the power of 13 million people that could manufacture 
drugs, and they are trying to do it with Civica and other 
places based in the United States.
    So the Government has this huge purchasing power and can 
use it to do things that are manufactured or produced in the 
United States.
    Senator Hirono. I am all for Government using its 
purchasing power, but I would note that we cannot even under 
Medicare have a discussion about, you know, drug purchasing 
where we cannot even negotiate those things. So I am all for 
our Government using its power to create the kind of situation 
where drugs that we need are being produced for our people, and 
we apparently are not there yet. But whatever you can do to 
raise your voices to head us in the right direction along these 
lines, I am grateful.
    Dr. Anderson. Medicare cannot, but Medicaid can. DOD can, 
VA can. So there are a number of very important buyers in the 
public system that can.
    Senator Hirono. Yes. Medicare, though, is a huge gap.
    Dr. Anderson. I understand.
    Senator Hirono. Thank you.
    Chairman Rubio. Senator Shaheen.
    Senator Shaheen. Thank you all very much for being here and 
for your testimony.
    The President last night talked about one of the actions 
that he was taking would be to invoke a travel ban on 
passengers coming from the EU, and initially it sounded like he 
was also saying cargo, although that got corrected later. But 
given what Senator Hirono said and what I know to be true in 
New Hampshire about the importance of the tourism industry and 
the impact on so many small businesses of our European 
travelers, can you speak to what the impact of that might be on 
the small businesses that you are working with? I had some 
questions, as did other Senators earlier, out of a briefing on 
the coronavirus about why the U.K. was exempt from that travel 
ban, and what we were told is because they are no longer, 
because of Brexit, part of the Schengen zone, which is where 
people can travel across borders without screening. But they 
are a part of that zone until December of 2020, so they are 
still very much in the Schengen zone, so I am just saying that 
I guess as a point. I am not necessarily asking you to comment 
on that, but if you could comment on what the impact you think 
will be on small business of the travel ban from European 
customers.
    Dr. Anderson. So, I think it is going to be huge for the 
people. I mean, if you are just in the Washington, D.C., area, 
we get so many visitors. You get them for skiing and other 
things. So you know, these are huge industries that are going 
to lose 20, 30 percent of their business literally overnight. 
They do not have contingency plans for a 20 or 30 percent 
reduction in their business.
    And it is not just oh, take out a loan. You are going to 
need some real cash immediately that you know you do not have 
to pay back because you are going to be in the hole for a 
while.
    Senator Shaheen. Ms. Briscoe, have you heard from any folks 
through the SBDCs in Maryland about the potential impact? Or is 
too soon to know?
    Ms. Briscoe. We have not had, at this current time, any 
businesses that have reached out to us specifically about the 
supply chain impact at this moment. But we will be sending out 
a correspondence to our caseload to ask them have they had an 
impact or how do they feel about a future impact. They may have 
supplies that can sustain them currently but is it something 
that, for the long run, that they can maintain. So we will be 
in communication with them.
    Senator Shaheen. Great, thank you.
    On February 27th, the FDA pointed out that it had received 
its first notification from a drug manufacturer about a drug 
shortage. I am sorry, I did not hear all of the testimony 
earlier from Ms. Gibson and Dr. Anderson, so you may have 
referenced this. But the question that I have is how do we 
balance the public's need to know on an issue like that without 
it creating a run on those drugs and a real panic about how to 
respond to that kind of situation?
    Ms. Gibson. I think the FDA did the right thing in not 
naming the medicine because that would have contributed to 
hoarding and precluded the opportunity to allocate it to those 
people who need it the most.
    But I also think, we have had drug shortages in this 
country for more than 20 years and we have not been honest 
about the impact that it has had on patients. So at some point, 
maybe when coronavirus--we get through this, we have to have an 
honest conversation about the shortages of medicines in this 
country, the terrible impact it has, what the real root causes 
are, and address those.
    Dr. Anderson. So the FDA says there are about 100 drugs. At 
places like Johns Hopkins, we know that there are 250, 300 
drugs that are, in fact, on shortage. And we sort of borrow it 
from the University of Pennsylvania and then pay it back to the 
Mayo Clinic and do all sorts of bartering on this when there, 
in fact, a shortage.
    But this is not a new thing. It is just going to get worse 
with the travel bans because so many of the drugs are 
manufactured overseas.
    Senator Shaheen. And of course, that does not address the 
cost of so many drugs which, while they may be available, if 
you cannot afford to use them because you do not have insurance 
and cannot cover the cost, you are in the same position.
    Dr. Anderson. Well, that is particularly true in this case 
for the uninsured because if you go to the doctor, it is going 
to cost you $200 just to get a simple test. And if you need to 
get some kind of x-ray or something, it is going to be now 
$1,000. And if I am uninsured, I probably do not have $200 or 
$1,000.
    Senator Shaheen. Well, as you all point out, this is an 
opportunity for us to look at some of those issues and 
hopefully respond in a more positive way going forward.
    Mr. Morrison, I would just like to share your concern about 
investment of the Thrift Savings Plan and the MSCI index, using 
that as the index for how to make those investments. Senator 
Rubio and I have been beating that drum for a while without 
much support from the administration.
    Mr. Morrison. Time is running out.
    Senator Shaheen. Thank you.
    Chairman Rubio. Just on that point, we have reason to 
believe that they have actually expedited moving in that 
direction. It is just crazy. It is crazy. And I mean, it is not 
a term that you normally use to describe public policy, but 
this is nuts, taking the retirement funds of Federal employees 
and the military to be invested in companies in China that are 
actively working to undermine our national security, our health 
care security, and our economic security. It just cannot 
happen. I mean, if it was not so serious, you would laugh at it 
and say that cannot be true, that is something from the 
Enquirer, or whatever.
    But it is real, and hopefully we can see action taken on 
this promptly, among other things.
    Senator Rosen, are you ready?
    Senator Rosen. Yes, thank you.
    Thank you, Mr. Chairman. Thank you to the Ranking Member. 
Thank you all for being here today.
    Needless to say, it has been quite the roller coaster since 
the coronavirus has reared its ugly head, and it is going to 
probably get worse before it gets better.
    And so, practically speaking, I can tell you that people 
think of Nevada and Las Vegas as these giant casinos. And we 
are those. But in fact, 99 percent of businesses in Nevada are 
small businesses in support of a lot of--especially in the 
Southern Nevada area--in support of those large businesses. 
They provide over 40 percent of the private jobs in our state. 
They really are the backbone of our economy. You think about 
all of the weddings we have. They are the vendors who bring the 
flowers and the candles. All of those people that make that 
happen, make the magic happen in Las Vegas, of course, in Reno 
and all across our state. And we have nearly 50 million of 
those visitors a year.
    So as far as small businesses go, what suggestions do you 
have for those businesses to be able to adapt in some way to 
the current environment. Maybe specifically, if you could speak 
to the people in the travel and tourism industry, do you 
suggest working through the Small Business Development Center? 
Are they a good cooperative partner, the SBA? Can you just talk 
about how some of these supportive businesses from our tourism 
industry, if you can? Anyone at all? Or just in general?
    Dr. Anderson. Let me try.
    I mean, I think the key thing is to make sure that they are 
going to be around in three months or two months. And I think 
what the challenge is, if you just give them a loan, they are 
going to be in trouble because they are now going to have to 
pay for it and not get any money for the last two months or so 
for the flowers and all those things because nobody is going to 
be having weddings and using all those flowers because they 
cannot bring all their friends and relatives to the wedding.
    Senator Rosen. Right.
    Dr. Anderson. And so, you are going to have to essentially, 
if you want them to survive after two months, is to give them a 
grant to survive. You are going to have to give the worker who 
might have coronavirus 14 days of paid sick leave so that they 
can quarantine at home. And you are going to have to give the 
uninsured person who needs to go to the doctor but does not 
have the $200 to go to the doctor some money and pay them on 
the basis of Medicare rates. You will not make them a medicare 
beneficiary but pay them on the basis of Medicare rates so they 
actually do get tested. And so when they are working in one of 
these small businesses, we know that you are safe to go to a 
small business.
    Because as soon as we feel like it is not safe to go to 
small business, we are going to stay at home.
    Senator Rosen. So we have to just remove the obstacles for 
specifically getting testing and being quarantined. I think 
that is the best thing. And then financial support that may not 
need to be repaid back is really the way to do it because it is 
going to take a while for everything to recover when we do, 
hopefully, all go into recovery.
    I know this is going to sound--this is happening, I know, 
across the country and not specific to tourism. But we have a 
lot of wonderful things about our entire Nation. A lot of it is 
diversity. I have heard stories about people and businesses, 
that they are not buying frozen Chinese food in a grocery 
store. They are not going--because they think that the virus is 
going to be at the Chinese restaurant. Or they think that oh, 
now that it has been in Italy, so I should not do this or that.
    So how do you think the mechanism for some of our small 
businesses--I guess they can put up signs. But how do we just 
try to dispel these myths that you shopping or going to a 
Italian restaurant in Henderson, Nevada, is not going to give 
you--it is not getting the coronavirus from Italy if we are 
living there.
    Ms. Gibson. Well, I will take a stab at that. To the extent 
that food service companies import food from China, we do have 
a lot of food imports from China, we should be mindful that the 
FDA withdrew its inspectors from there to protect them from 
what was going on.
    So the big question is who is going to be inspecting the 
places that are making our food in China or elsewhere to ensure 
that it is safe? The same is true for our medicines.
    Senator Rosen. Again, that is an imports issue.
    Ms. Gibson. That is a different issue from what you are 
talking about but there is some concern there. And I think it 
is going to be a long time before the FDA meaningful can get 
back into certainly China and some of these other countries to 
really do the work they need to do to protect the American 
people.
    Senator Rosen. Thank you.
    Chairman Rubio. Go ahead and follow up, because I have a 
number of questions.
    Senator Cardin. I just was going to thank your panelists.
    But I do want to respond to Ms. Gibson's point about drug 
shortages because there is no question the coronavirus is 
causing a concern in our supply chain on drugs. That is a fact. 
And we need to be able to have domestic productions. That is a 
need.
    But make no mistake about it, the couple hundred drugs that 
were short before the coronavirus had nothing to do with the 
supply chain issue because they were produced domestically. It 
had all to do about the economics of productions of those 
medicines because they were basically inexpensive medicines in 
which the pharmaceutical companies were not making big profits 
off of. And that is a fact.
    So when we are dealing with the shortages of drugs, let us 
make it clear that we have responsibilities to make sure drugs 
are available in this country, and it is not just supply chain. 
It is the economics of how the pharmaceutical industry is 
organized here in the United States.
    Dr. Anderson. And that is why, when we created Civica, we 
had to have a guaranteed market. And so 1,200 hospitals jumped 
up and said we know there are shortages. We will buy these 
drugs from Civica. We will guarantee the purchase of those.
    So having a guaranteed purchase is the key thing for these 
small businesses.
    Ms. Gibson. If I may add, American companies are competing 
not with companies in China, they are competing with the 
Chinese government because their domestic companies are 
subsidized. So it really is an unlevel playing field.
    Senator Cardin. Again, I want to thank the witnesses for 
their testimony.
    Chairman Rubio. Thank you.
    Before we conclude, I had a number of observations and I 
wanted to elicit points from you. Let us start with the first, 
and that is--let me begin by saying I am a big believer in 
capitalism. I am a big believer in free markets. And one of the 
reasons I am is because I believe it provides for the most 
efficient allocation of capital to the most productive place.
    However, there are times in which the most efficient 
allocation of capital does not align with our national 
interests. And in those times in which it does not align with 
our national interest, it is incumbent upon public policymakers 
to make adjustments. So we are now facing that.
    And for many months and years we have been making this 
conversation, we have been talking about this in conversation 
with people. The answer always was that either a denial that a 
problem existed or accusing this of being some sort of 
rejection of the market. It was theoretical.
    Now, it is no longer theoretical. We have before us, just 
in the health care and medical field, a market decision that it 
was more efficient, that you can do it at lower costs despite 
transportation and everything else, if you made these things 
somewhere else. And that is what the market did, destroying 
jobs and companies here and providing that there.
    And this is now couched now in some anti-China narrative 
and so forth, but it really is not. There is a national 
security component to the fact that China is a geopolitical, 
near-peer competitor. But beyond it is the reality that even if 
they did not do it on purpose, the shutdown of factories 
because of an outbreak of this virus has impacts that end up 
hurting us here.
    So the question now becomes how do we address it? And what 
can we do to incentivize investment in critical industries? And 
the topic of critical industries today is broader than it has 
ever been in the history of the world.
    So we have to identify what those critical industries are 
and then decide, from a small business perspective, what do we 
need to do to incentivize investment in those industries? And 
that will require potentially government investment but also 
incentivizing private investment in those fields.
    Is that an accurate way to assess the challenge before us 
now? That what we have seen these things leading is the 
combination of our adherence to let the market decide where it 
goes, which is generally the right decision, combined with a 
deliberate policy aim on behalf of the Chinese government to 
attract that capacity away from us. And the result is we have 
reached an efficient market outcome despite market interference 
in their part that now places our national security and 
economic security interests in danger.
    Dr. Anderson. So I agree with you totally. I would just 
make one slight modification. That is saying not government 
investment but government purchase. I think it is important for 
these small businesses----
    Chairman Rubio. Meaning on the demand side?
    Dr. Anderson. On the demand side. That they essentially 
have to have a guaranteed market. So when we are working in 
California, they are going to buy for 13 million Californians--
the state is going to buy those. And that allows a company to 
get started in California because they have a guaranteed 
market.
    Civica has a guaranteed market for 1,200 hospitals. They 
are willing to get started. Otherwise, they would not get 
started. So guaranteed purchase is the critical thing.
    Chairman Rubio. And in that realm, let me say that there is 
a court decision that undermined the ability to do that. There 
is a DOD and VA requirement to Buy American on key components 
and drugs. And the Court ruled against it. And so this requires 
a legislative fix.
    Dr. Anderson. Correct.
    Chairman Rubio. And there is hopefully, any moment now or 
any day now, an Executive Order issued by the White House that 
will strengthen these Buy American requirements. Because now 
the Federal Government, in addition to driving the investment, 
one of the things that will drive investment is that there is a 
customer that is going to buy it. And we can be a big customer 
in some sectors.
    Again, that is not government ownership of the means of 
production, that is what socialism is. But it is government 
saying it is in our national interest to do these things.
    This is not just about--this is not even protectionism. 
This is security. So I hope we can fix that.
    Ms. Gibson. If I may add, Senator Rubio, and thank you for 
your leadership on this. We would not have our aircraft 
carriers or military equipment fully made in China. If we 
wanted to do a free market, we could do that and just outsource 
all of that. But we realize there is a point which we do not 
want to cross.
    I will say that if we want to have manufacturing here in 
the United States for our essential drugs as a national 
security issue, if we look at how we have been making medicines 
it is the same way we have been doing it 100 years ago. We have 
the opportunity to bring manufacturing home to make it more 
efficient, less costly. And that will take some initial 
investment so the DOD and the VA can have all of their 
components made here in the U.S.
    Otherwise, if we just buy--and Civica has found this. 
Civica is still finding it. It still has to get the core 
ingredients from China. New types of manufacturing, we can 
bring all of it back to the United States.
    Chairman Rubio. And this is something that I hope that we 
will be able to do together. Part of these hearings and the 
report we did is to create awareness about these challenges.
    I wanted to ask you about that in a second, Mr. Morrison.
    But I wanted to ask you, Ms. Briscoe, from the small 
businesses perspective--so we view the small business sector as 
a place that we can see some of the stuff happen. It is easy to 
focus on the guys on the cover of the magazines and on the 
stock market on a daily basis. But there is a lot of potential 
capacity out there now. And you have done a good job of 
addressing small businesses through your idea.
    Small business is vulnerable to supply chain disruption. 
But also, small businesses who could fill supply chain 
disruptions.
    Ms. Briscoe. Correct.
    Chairman Rubio. But finding the way small businesses could 
fill that is a key thing.
    So right now we are focused on just keeping people in 
business; right? There are a substantial number of small 
businesses that cannot afford to go seven to 10 days without 
operating. They do not have that kind of cash reserve, and 
things of this nature.
    Ms. Briscoe. They basically would be the problem and the 
solution at the same time. And that is what we are looking to 
do.
    Chairman Rubio. So what can we do, as we move forward on 
this first tranche of work, which is just making available in 
the most appropriate way, through 7(a) and Community 
Advantage--and using and leveraging the community banking 
industry which is there and on the ground, providing an 
increase in the percentage of guarantees to make the loans 
easier to issue.
    What would be the best thing we can do for small businesses 
to be able to access it quickly and stay afloat? Obviously, we 
have to make them aware of it, and from a paperwork standpoint 
and so forth. Do you have any practical advice as to how to 
make that--because one thing is to pass a bill that allows it 
and another thing is utilization, knowing it is there. And for 
some businesses, frankly, it may not be the solution.
    But what can we do on the ground level to actually make the 
program accessible?
    Ms. Briscoe. It should be a step-by-step process that is 
going to be easily and readily accessible for business owners 
to understand what they make and how it can benefit. As they 
have stated, a guaranteed buyer. If they have a matchmaking 
process, if I know I am making something and I know you are 
interested in purchasing, it should be just as simple as that.
    They will need an infusion of capital if they are going to 
scale up their production. So that is something that we are 
going to have to address as far as cash flow. And also work 
force. Those are two major things.
    Chairman Rubio. And that second point, about the infusion 
of capital, ties right in to one of the things that we have 
been talking about as far as the second step, and that is not 
only do you want to make more capital available for companies 
to stay afloat. But to the extent possible, we want to try to 
focus as much of that as possible not just to small business 
writ large, but in specific critical industries that could help 
fill these gaps and that are tied to all of this.
    Which leads me to the question for you, Mr. Morrison, and 
that is is not one of the challenges we face now that the 
definition of a critical industry for the country has to be 
broader than it has historically been? Everyone will agree 
aircraft carriers and airplanes are things we need to make. It 
takes a little while to convince people that making forklifts 
or pharmaceutical ingredients that, at an individual level may 
not mean anything to most people around this country but in the 
cumulative have enormous impact. Part of the challenge we have 
is identifying a much broader scope of what qualifies for a 
critical industry or critical supply need for the country in 
the 21st century which either we took for granted in the past 
or never had to address.
    Mr. Morrison. Mr. Chairman, I think that is exactly right. 
There is a reason that we have effectively lost the race for 
5G. It is because we have relied on the market and now there 
are no American companies left that do this work.
    The Chinese had a plan. They are on the cusp of their 14th 
five-year plan. They have Made in China 2025 and Made in China 
2035 is about to come out.
    They have determined the strategic sectors that they want 
to dominate in the future economy. And what they do in the 
domestic market is they boost up the price, they restrict the 
ability for outside companies, American companies and other 
companies to compete, and then they provide all manner of trade 
promotion tools, zero interest loans, to dominate export 
markets.
    And so our small businesses, our medium-sized businesses 
and other American ventures are playing by one set of rules and 
the Chinese companies are playing by another set of rules. In 
another realm of national security, we would call that 
unilateral disarmament.
    And so that is the question to investigate. That is why I 
talked about the BUILD Act. That is why I talked about your 
amendment to the Defense Authorization Act last year.
    Using our market power, determine what industries are 
critical, and then taking steps to level the playing field. Do 
not put our businesses on a different playing field and tie 
them to different rules than the Chinese hold its businesses.
    Chairman Rubio. I appreciate all of you being here today 
and your patience on the hearing. The Senate is voting now, so 
we will have to head to that.
    But I want to thank you because your expertise and your 
ideas are aligned with a lot of the work we are already doing. 
We have come up with some good new ideas, as well.
    The hearing record will stay open for two weeks and any 
statements or questions for the record should be submitted by 
Thursday, March 26 at 5:00 p.m.
    With that, the hearing is adjourned.
    [Whereupon, at 12:03 p.m., the Committee was adjourned.]

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