    [House Hearing, 117 Congress]
    [From the U.S. Government Publishing Office]

                  A DISCUSSION WITH SBA ADMINISTRATOR ISABELLA CASILLLAS GUZMAN

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

                                    HEARING

                                   BEFORE THE

                          COMMITTEE ON SMALL BUSINESS
                                 UNITED STATES
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED SEVENTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                  HEARING HELD
                               NOVEMBER 16, 2021

                                   __________

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                Small Business Committee Document Number 117-041
                 Available via the GPO Website: www.govinfo.gov

                                   __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    46-064 PDF                 WASHINGTON : 2022

    -----------------------------------------------------------------------------------

                       HOUSE COMMITTEE ON SMALL BUSINESS

                     NYDIA VELAZQUEZ, New York, Chairwoman
                              JARED GOLDEN, Maine
                              JASON CROW, Colorado
                             SHARICE DAVIDS, Kansas
                             KWEISI MFUME, Maryland
                            DEAN PHILLIPS, Minnesota
                             MARIE NEWMAN, Illinois
                           CAROLYN BOURDEAUX, Georgia
                             TROY CARTER, Louisiana
                              JUDY CHU, California
                           DWIGHT EVANS, Pennsylvania
                           ANTONIO DELGADO, New York
                         CHRISSY HOULAHAN, Pennsylvania
                              ANDY KIM, New Jersey
                             ANGIE CRAIG, Minnesota
                  BLAINE LUETKEMEYER, Missouri, Ranking Member
                             ROGER WILLIAMS, Texas
                            JIM HAGEDORN, Minnesota
                            PETE STAUBER, Minnesota
                            DAN MEUSER, Pennsylvania
                            CLAUDIA TENNEY, New York
                           ANDREW GARBARINO, New York
                             YOUNG KIM, California
                             BETH VAN DUYNE, Texas
                             BYRON DONALDS, Florida
                             MARIA SALAZAR, Florida
                          SCOTT FITZGERALD, Wisconsin

                     Melissa Jung, Majority Staff Director
                Ellen Harrington, Majority Deputy Staff Director
                         David Planning, Staff Director

                               C O N T E N T S

                               OPENING STATEMENTS

                                                                       Page
    Hon. Nydia Velazquez.............................................     1
    Hon. Blaine Luetkemeyer..........................................     3

                                    WITNESS

    The Honorable Isabella Casillas Guzman, Administrator, United
      States Small Business Administration, Washington, DC...........     5

                                    APPENDIX

    Prepared Statement:
        The Honorable Isabella Casillas Guzman, Administrator, United
          States Small Business Administration, Washington, DC.......    49
    Questions and Answers for the Record:
        Questions from Hon. Velazquez and Answers from Hon. Guzman...    59
        Question from Hon. Mfume and Answer from Hon. Guzman.........    65
        Questions from Hon. Carter and Answers from Hon. Guzman......    66
        Questions from Hon. Luetkemeyer and Answers from Hon. Guzman.    68
        Questions from Hon. Meuser and Answers from Hon. Guzman......    95
        Questions from Hon. Tenney and Answers from Hon. Guzman......    97
        Questions from Hon. Van Duyne from Hon. Guzman...............    99
    Additional Material for the Record:
        AFSA - American Financial Services Association...............   122
        CUNA - Credit Union National Association.....................   124
        ICBA - Independent Community Bankers of America..............   126
        Letter from Hon. Angie Craig to Hon. Nancy Pelosi and Hon.
          Steny Hoyer................................................   129
        Letter from Hon. Young Kim to Hon. Isabella Guzman...........   131
        Letter from Alfredo Ortiz, President and CEO of the Job
          Creators Network to the Committee on Small Business........   133
        MHI - Manufactured Housing Institute.........................   135
        NAFCU - National Association of Federally-Insured Credit
          Unions.....................................................   137
        U.S. Travel Association......................................   139
        Questions submitted for the record from the hearing dated May
          26, 2021...................................................   140
        Questions submmitted for the record from the hearing dated
          October 6, 2021............................................   154

          A DISCUSSION WITH SBA ADMINISTRATOR ISABELLA CASILLAS GUZMAN

                                  ----------

                           TUESDAY, NOVEMBER 16, 2021

                      House of Representatives,
                   Committee on Small Business,
                                                        Washington, DC.
        The committee met, pursuant to call, at 10:01 a.m., in Room
    2360, Rayburn House Office Building and via Zoom, Hon. Nydia
    Velazquez [chairwoman of the Committee] presiding.
        Present: Representatives Velazquez, Golden, Davids, Mfume,
    Phillips, Newman, Bourdeaux, Chu, Evans, Delgado, Houlahan, Mr.
    Kim, Craig, Luetkemeyer, Hagedorn, Stauber, Williams, Meuser,
    Tenney, Garbarino, Ms. Young Kim, Van Duyne, Donalds, Salazar,
    and Fitzgerald.
        Chairwoman VELAZQUEZ. Good morning. I call this hearing to
    order.
        Without objection, the Chair is authorized to declare a
    recess at any time.
        I would like to begin by noting some important
    requirements. Standing House and Committee rules and practice
    will continue to apply during hybrid proceedings. All Members
    are reminded that they are expected to adhere to these standing
    rules including decorum.
        House regulations require Members to be visible through a
    video connection throughout the proceeding, so please keep your
    cameras on. Also, please remember to remain muted until you are
    recognized to minimize background noise.
        In the event a Member encounters technical issues that
    prevent them from being recognized for their questioning, I
    will move to the next available Member of the same party and I
    will recognize that Member at the next appropriate time slot
    provided they have returned to the proceeding.
        For those Members and staff physically present in the
    Committee room today, in accordance with the attending
    physician's most recent guidance, all Members and staff who
    attend in person will be required to wear masks in the hearing
    room. With that said, Members will be allowed to briefly remove
    their masks if they have been recognized to speak.
        Now, let's turn to why we are here today--a discussion with
    the Small Business Administration Administrator. First, I would
    like to welcome Administrator Guzman. Thank you for being here
    today. We appreciate you coming in for another appearance
    before this Committee during your short time as administrator.
        Back in March when you were confirmed small firms were
    still reeling from 2020, a year when around 800,000 small
    businesses permanently closed their doors--roughly 30 percent
    more than in a typical year. Since then, you and the dedicated
    staff at the SBA have worked tirelessly to administer the
    relief programs that Congress created and help entrepreneurs
    get back on their feet.
        The work of the agency should not go unheralded today.
    Small firms across the country are in a better place thanks to
    the American Rescue Plan and the economic relief programs
    Congress passed. The economy has added an average of 620,000
    jobs per month since President Biden took office, and small
    firms are leading the way. These figures would not have been
    possible without the historic relief measures that this
    Committee put in place and the work of the SBA.
        In addition to massive demand for the relief programs, the
    agency has had to operate its traditional lending offerings and
    core programs. I was pleased to see your recent announcement
    that traditional SBA loan programs provided a record amount of
    funding to small firms in fiscal year 2021--$44.8 billion in
    financing through more than 61,000 loans, to be exact. These
    numbers are evidence of the extraordinary potential that the
    agency has to help entrepreneurs get back on track.
        I look forward to hearing more about your vision for the
    agency and how we can all work together to highlight efforts
    that have been successful and thoughtfully examine the programs
    that need improving. This will require a substantive, focused,
    and measured conversation on SBA's programs and the issues
    facing us today.
        America's small employers deserve nothing less. They do not
    have time for accusations, gotcha questions, and partisan
    bickering. They are 100 percent focused on their survival and
    future. I, too, want to look to the future. With COVID cases
    falling and vaccination rates rising, we are steadily putting
    COVID behind us. This new post-COVID economy may be unfamiliar
    for many entrepreneurs, but it also presents a great deal of
    opportunity.
        I believe these opportunities will only increase with
    President Biden's agenda to build back better and correct
    decisions made in the previous administration that has led to
    many of the crises we face today--such as inflation, workforce
    shortages, supply chain disruptions, inequity in health care
    and childcare, and worst of all a slow recovery. So much time
    was wasted last Congress but now we are course correcting to
    address many of these issues by investing in America.
        Earlier this month, House Democrats and a handful of our
    Republican colleagues finally delivered on the promises of
    infrastructure week by passing the Infrastructure Investment
    and Jobs Act. This legislation will rebuild roads and bridges,
    expand broadband access, and generally prepare the American
    economy to grow from the bottom up in the 21st century.
        The bill will also allow small firms to play a role in
    revitalizing American infrastructure by creating many good-
    paying jobs that cannot be sent overseas. In fact, Republican
    Senator Rob Portman described these investments as adding ``to
    the supply side of the economy and will be counter-inflationary
    at a time of rising inflation.''
        Democrats are also busy providing small businesses with a
    substantial $5 billion investment through the Build Back Better
    Act. The bill will tackle core small business issues by
    improving access to capital, boosting underrepresented firms,
    and creating opportunities for small contractors. The
    legislation will pave the way for recovery in the short term
    and prosperity in the future.
        Taken together, the Infrastructure Investment and Jobs Act
    and the Build Back Better Act amount to a generational
    commitment to the success of American small businesses. You and
    the staff at SBA are a key component to these initiatives. I
    look forward to hearing your testimony and discussing these
    issues today.
        I now yield to the Ranking Member, Mr. Luetkemeyer, for his
    opening statement.
        Mr. LUETKEMEYER. Thank you, Madam Chair. Thank you for
    joining us in person today to discuss the current small
    business landscape.
        As you very well know, small businesses across the country
    have been facing a multitude of challenges, many of which have
    been caused by the overreaching grasp of the federal
    government. The Small Business Administration is tasked with
    assisting these struggling firms, especially in the wake of the
    pandemic. However, month after month, we have witnessed quite
    the opposite coming from this administration's SBA and other
    agencies.
        Treasury Secretary Yellen, who is legally required to
    testify before our Committee, continues to ignore us. It
    appears that she has time to do many events even on the
    campaign side and meet with a variety of people, but she still
    refuses to fulfill her legal duty to testify before this
    Committee. Secretary Yellen's inability to appear before us is
    an insult to small business owners across this nation. She is
    blatantly turning her back on a sector of the economy that
    produces nearly two out of every three jobs and contributes
    just under half this nation's gross domestic product. Small
    businesses, entrepreneurs, and startups are an essential factor
    to America's economy and she still refuses to testify. This is
    unacceptable.
        We are glad, however, that you are here representing the
    primary and sole federal agency that was created to defend and
    protect small businesses. It is no secret that the nation's
    smallest firms are still working tirelessly to recover from the
    everchanging and overreaching state and local shutdowns ordered
    during the pandemic.
        If it was not bad enough, now they are facing some of the
    strongest economic headwinds in recent memory with the Biden
    and the Democrats' massive spending agenda. As Members of the
    Committee, we hear from small business owners every day. When
    we are back in our home district, we visit with their
    storefronts and listen to their stories. Unfortunately, the
    reports coming from main street USA are far from positive.
    Prices are soaring at the sharpest rate in over 30 years.
    Supply chain disruptions are making it nearly impossible to
    obtain good and products. Americans are refusing to get back to
    work because the government is paying them to stay home
    creating a labor shortage crisis.
        Main street is still facing a looming vaccine mandate
    requirement for their already depleted worker pool, and now
    small business owners are being threatened with increased taxes
    due to the trillions of dollars this administration plans to
    spend at the expense of middle class Americans. These are
    monumental issues that deserve a full and comprehensive
    discussion.
        You can look at some of the recent small business surveys
    and they show the exact same thing. The top issue small
    businesses are struggling with today are the severe economic
    conditions that they face. Take for example the Job Creators
    Network Monthly Monitor Poll. Inflation is the top challenge
    reported by small business owners. Or the NFIB Jobs Report that
    shows 49 percent of small business owners cannot fill the open
    job positions they then have. These are fundamental and core
    issues to our country's distressed small business landscape.
        I ask that you put yourselves in the shoes of a small
    business owner just for a moment. Your inventory is low because
    your products are stuck on a ship that is sitting off the cost
    of Los Angeles. You are forced to raise prices during the
    critical holiday season, and you cannot find any workers. With
    all these issues combined, I do not see how small business can
    be successful.
        And what have we heard from the administration as a
    response? You plan to force through trillions of dollars in
    spending all on the back of small business owners. And as a
    reminder, a recent study from the left-leaning Tax Policy
    Center found that this administration's far-left spending spree
    would raise taxes on the middle class of our American friends
    and colleagues by 30 percent. Additionally, instead of allowing
    our small businesses to operate independently, this
    administration is imposing more mandates and regulations.
        So the question remains, who is actually standing up for
    the nation's job creators within the Biden administration?
        Ms. Guzman, that is your duty. The Small Business
    Administration has a duty to defend these small business
    owners. I plead with you to listen to them and hear what they
    have to say. These men and women are not asking for new
    programs so they can receive a direct loan from the federal
    agency. They want common sense, pro-growth policies that will
    provide them with the ability to run a well-rounded, efficient
    operation, free from the hand of government.
        Ms. Guzman, if you took the time to hear from small
    businesses in urban, suburban, and rural areas of the United
    State you would hear a lot and learn a lot.
        Today, I look forward to having a conversation on all of
    these topics and we expect our questions to be answered.
        Before we begin, I must note that simply saying that your
    agency will get back to us in writing will not stand.
        I would like to ask for unanimous consent to enter into the
    record more than 60 questions the Republicans submitted to
    Administrator Guzman after appearing before our Committee in
    May and more than 60 questions for the record the Republicans
    submitted to Administrator Mark Madrid after his appearance
    between our Committee in September.
        Chairwoman VELAZQUEZ. Without objection, so ordered.
        Mr. LUETKEMEYER. Thank you, Madam Chair.
        I will note for the record that we have not received an
    answer to any of these questions thus far. And it is not just
    our questions during Committee hearings that go unanswered. My
    colleagues have asked numerous questions posed to you on behalf
    of their small business constituents and they do not receive
    any responses. One of the many examples, questions about
    Economic Injury Disaster Loans go unanswered.
        If it is your desire for this administration to be a direct
    lender, why is your current direct lending tool such a
    disaster? Not only is EIDL a black hole when it comes to
    customer service, but it is also riddled with fraud according
    to the SBA Inspector General. I will say it again. The SBA,
    which pushed through approximately $1 trillion the last 18
    months had better wake up. If you ignore and refuse to answer
    the representatives' questions that we were sent here on behalf
    of our constituents and our small businesses to ask. You have
    refused to implement countless recommendations from the
    Inspector General and your actions do not match what the small
    businesses say are the top concerns facing their operations.
    Over $32 billion small businesses across the United States
    deserve better. Main street USA deserves better.
        And Madam Chair, with that, I yield back.
        Chairwoman VELAZQUEZ. Thank you, Mr. Luetkemeyer. The
    gentleman yields back.
        With that, I will now introduce our distinguished witness,
    the Honorable Isabella Casillas Guzman. Administrator Guzman is
    currently serving as the 27th administrator of the Small
    Business Administration. Her previous experience as director of
    the California Office of the Small Business Advocate, coupled
    with her position as senior advisor and deputy chief of staff
    at SBA make her uniquely qualified to take the helm. Not only
    does she have the knowledge needed to assist small businesses
    in their recovery, but as a former small business owner and
    advisor to entrepreneurs, she has the understanding to advocate
    on their behalf. Administrator Guzman earned a Bachelor of
    Science from the University of Pennsylvania Wharton School of
    Business.
        Welcome, Administrator Guzman. You are recognized for 5
    minutes.

      STATEMENT OF ISABELLA CASILLAS GUZMAN, ADMINISTRATOR, U.S.
                     SMALL BUSINESS ADMINISTRATION

        Ms. GUZMAN. Good morning, Chairwoman Velazquez, Ranking
    Member Luetkemeyer, and distinguished Members of the Committee.
    Thank you for the opportunity to be here to discuss the
    important work of the U.S. Small Business Administration and
    what we are doing to help America's 32.5 million small
    businesses and innovative startups continue to propel our
    economy forward.
        Though we have made considerable progress fighting COVID
    and reopening small business and our economy thanks to the
    American Rescue Plan, the Delta variant has lingering impacts
    and many small business still need the SBA's help as a result
    and we continue to deliver billions of dollars in relief. At
    the same time, the American entrepreneurial spirit is stronger
    than ever with more than 9 million new businesses applying for
    filing since January 2020. At the SBA, we are working hard to
    ensure small businesses continue to drive our economic
    recovery.
        Over the course of the pandemic, our agency has scaled from
    40 billion per year output to distribute more than $1.1
    trillion in emergency relief. Alongside our core programs, many
    of which have also delivered at record levels, today, the SBA
    is continuing to deliver for millions of small businesses. In
    the 8 months of my leadership, we have leveraged technology to
    streamline, automate, and deliver relief to small businesses
    with a customer service and an equity focus. We are working
    across our programs and services to better meet the needs of
    all small businesses, especially those that were left out of
    early rounds of relief, often our smallest businesses and those
    owned by women and people of color and other underserved small
    businesses.
        In 2021, we have made important gains. After making key
    programmatic changes to the nearly $800 billion Paycheck
    Protection Program, 96 percent of PPP loans went to small
    businesses with fewer than 20 employees with strong performance
    and low to moderate income communities and rural communities.
    In addition, a recent GAO report found that our reforms helped
    close those capital gaps in PPP. Now, we are delivering on the
    promise of forgiveness for PPP loans. We have ensured this
    process is being carried out at the highest standards and with
    utmost integrity.
        We launched the SBA PPP Direct Forgiveness Portal to offer
    a pathway to relief for the 6.5 million small business owners
    who took out loans of $150,000 or less.
        We have seen similar positive results with our reforms and
    improvements to the COVID Economic Injury Disaster Loan
    Program, the last and most flexible of our SBA COVID lifelines
    with billions more available. We have approved more than 3.8
    million COVID EIDL loans for a total of more than $295 billion,
    plus an additional $26 billion in COVID EIDL grants both
    targeted and supplemental. And we expanded our reach while
    protecting against fraud, waste, and abuse. We brought back tax
    record verification consistent with our historic approach. We
    have also implemented additional measures to help ensure good
    stewardship of this program's resources.
        We are taking steps to improve outreach across all of our
    programs to small businesses in every corner of the nation,
    including our underserved communities. We recently announced
    the Community Navigator pilot program grantee organizations,
    which will deploy trusted community partners in underserved
    communities to better connect small business owners to
    government resources.
        As the nation emerges from the COVID pandemic, the SBA will
    help try to path forward to a thriving and equitable economy
    that lifts all small businesses and innovative startups in
    communities across American building from the bottom up and the
    middle out to leave no one behind.
        Access to capital remains one of the most critical factors
    for small business success. Yet, small businesses, particularly
    those from underserved communities lack access to the small
    dollar loans they need to survive and grow. The president's
    Build Back Better framework will help us increase access to
    capital for small businesses by creating a direct lending
    product that leverages the strength of our incredible growing
    lender network. We are also working to close the opportunity
    gap by increasing the number of small businesses that do
    business with the federal government. The Build Back Better
    framework will help us build equity in government procurement
    with nationwide investments in business incubators and
    innovation accelerators and a specific program for veteran
    entrepreneurs. Now is the right time to ensure that more small
    businesses will be able to take part in the $1.2 trillion in
    historic investments in the rebuilding of our nation's
    infrastructure made possible through the bipartisan
    infrastructure deal.
        We know that many challenges remain. In the months ahead we
    will continue to harness the power of the entrepreneurial
    spirit to drive our economy and our nation forward.
        Thank you so much, Chairwoman Velazquez, Ranking Member
    Luetkemeyer, and distinguished Members of the Committee, for
    the opportunity to appear before you, and I look forward to
    your questions.
        Chairwoman VELAZQUEZ. Thank you, Administrator Guzman.
        Now we will turn to questions. I will recognize the
    gentleman from Maine, Chairman of the Subcommittee on
    Underserved, Agricultural, and Rural Business Development, Mr.
    Golden, for 5 minutes.
        Mr. Golden, you are muted. Mr. Golden, we cannot hear.
        I will then recognize the gentlelady from Kansas, Ms.
    Davids, Chairwoman of the Subcommittee on Economic Growth, Tax,
    and Capital Access.
        Ms. DAVIDS. Thank you, Chairwoman. And thank you for
    holding this hearing today.
        Administrator, it is good to see you. I appreciate you
    recently coming to visit the Kansas Third. You know, half of my
    job is spreading the good word of Kansas and so it was a
    pleasure to have you come visit alongside the First Lady where
    you heard firsthand stories of entrepreneurs and small business
    owners who are reeling from the effects of the pandemic.
        I think that there is a couple of things. One, I would be
    very curious, and we will follow up about the assertion that
    you have not responded to nearly 60 questions submitted by
    Members of the House. And we will follow up just to discuss
    that with you. Our experience in my office has been a lot of
    response whether we agree on the issues that we are dealing
    with or not.
        So I want to kind of turn to the programs that existed
    previously and the ones that we have seen emerge because of the
    pandemic, namely the Paycheck Protection Program. The SBA 7(a)
    and 504 loan programs have existed for a while and prior to the
    Paycheck Protection Program there were about 1,900 lenders
    engaged in those programs. With the Paycheck Protection Program
    coming online, we saw that there were 5,000 new lenders that
    participated in that.
        I am curious what ways you all are looking at to kind of
    leverage the increase in participation by lenders, by the
    private sector with this federal program, and just what we need
    to be thinking about as we move forward and how we can assist
    in leveraging that.
        Ms. GUZMAN. Thank you so much, Congresswoman, for the
    question.
        We do think it is a historic opportunity to take advantage
    of these expanded networks, not only in our lending circles but
    just broadly the attention on small businesses and that is what
    we have been focused on.
        Across our lending network, we have been able to really
    develop our relationships with community financial
    institutions, as well as community banks and others who require
    that technical assistance with the SBA as well. And so my
    Capital Access team stands ready to support them in using all
    of your products, transitioning from PPP to the 7(a) and 504 so
    that we can better distribute our loans into communities across
    the country. And we look forward if there are any lenders in
    particular that your office is focused on that we could pay
    attention to. It is partially why we launched the Director
    Forgiveness portal to simplify for those smaller banks that
    maybe did not have the technology to streamline processing of
    PPP so that they could take advantage of it and offer it to
    their constituents, their customers.
        Ms. DAVIDS. So that is the lender side. I am also curious
    about ways that additional engagement or support has been given
    to the new entrants into all of these programs across the board
    during what has been a pretty chaotic time, not just for the
    SBA but for lenders and the entrepreneurs and small business
    owners. I am curious what you all are doing to facilitate
    additional growth and leverage the new engagement that we are
    seeing.
        Ms. GUZMAN. It is definitely our goal to try to serve more
    of those 32.5 million small businesses. So across our network
    of resource partners, some of them have seen up to a 10x
    increase in the amount of businesses coming to them. We want to
    continue to direct individual businesses to them. We have
    recently launched the Community Navigator pilot program. Those
    grantees are trusted organizations that can authentically reach
    communities focusing on women, people of color, veterans, rural
    communities, and broadly try to further enhance our services,
    especially for these highly entrepreneurial communities that
    are starting up at the highest rates. And so we plan to expand
    those connections to small businesses, build more bridges so
    that they can work with the SBA. We want to be part of their
    team and let them know that resources are available to them.
        Ms. DAVIDS. Thank you, Administrator.
        And Madam Chair, I yield back.
        Chairwoman VELAZQUEZ. The gentlelady yields back.
        Now we recognize the Ranking Member, Mr. Luetkemeyer, for 5
    minutes.
        Mr. LUETKEMEYER. Thank you, Madam Chair.
        Just a quick housekeeping situation here. We have got two
    of my Members today actually have birthdays, Ms. Van Duyne and
    Mr. Fitzgerald. So congratulations. You made it to another
    momentous day here.
        Chairwoman VELAZQUEZ. Happy birthday. Yeah.
        Mr. LUETKEMEYER. With regards to Ms. Guzman, thank you for
    coming today.
        You and I had a conversation this last week and I am going
    to be true to my word here. We are very concerned about the
    kind of communications or lack thereof that we are getting out
    of your office. You seem to ignore our letters and requests. In
    fact, I got a letter yesterday to my requests already several
    months ago. Still missing one from April 16th. There is a
    letter that I asked. Still no response to that. I know some of
    our Members got letters yesterday to their letters which were a
    long time ago were asked. So apparently, we need to have you
    scheduled every week for 5 minutes before this Committee so we
    can get letters responded to from the previous week. Is that
    what is going to have to happen from now on?
        Ms. GUZMAN. I can assure you that my team is working
    diligently. We have had about 90 requests and have responded to
    80 of them and we continue to try to increase that pace as we
    do want you to have the information you need.
        Mr. LUETKEMEYER. Okay. Well, we need to increase it a
    little more because getting a letter 6 months late does not
    answer my question. That is not acceptable. You have got to do
    better than that.
        Also, from the standpoint that your testimony, we did not
    get it until 3 o'clock yesterday afternoon. And by the rules of
    this Committee, we are supposed to get it 72 hours. That is not
    acceptable either.
        Also, with regards to Ms. Yellen and my testimony, and I
    mentioned it to you the other day, what have you done to
    contact her to have her live up to her responsibilities? The
    PPP program is a Treasury program. She is in charge of that
    program. The banks are administered from the standpoint of
    executing the program and SBA is administering the program.
    Have you talked to her at all about showing up at this
    Committee?
        Ms. GUZMAN. We talk about small business issues. We have
    not talked about this----
        Mr. LUETKEMEYER. Why have you not addressed that issue that
    is by law she is required to show up?
        Ms. GUZMAN. Apologies. I know that the invitation went out
    to her and I am sure that her team will respond to you. I
    cannot respond on her behalf.
        Mr. LUETKEMEYER. Six and a half months now she is past due
    at showing up at this Committee. That is not going to get it,
    Ms. Guzman, saying that her team is going to take care of it.
    She has totally checked out. She is not going to come to this
    Committee. You, as the SBA Chairman, Administrator, need to
    contact her and say, Ms. Yellen, you need to show up here.
        Ms. GUZMAN. The SBA is working diligently to actually
    administer the PPP and the direct lending and so we can
    continue to report to you. I know that my team shares over 4
    weekly reports with the Committee, including on PPP
    forgiveness, and so we will continue to provide the information
    you need.
        Mr. LUETKEMEYER. Two more situations here.
        Number one, the IG report. And we had a meeting with the
    IG. And he indicated to us that even now a lot of the, you
    know, they gave you a lot of suggestions on how to clean up the
    mess, especially in the EIDL program. This direct lending is a
    disaster quite frankly and when you have 30 percent, almost 30
    percent of the program is fraudulent, that cannot happen.
    Cannot stand. And we do not need to put another direct lending
    program within your jurisdiction if that is what is going to
    happen to it as well.
        So one of the comments that he made to me in our little
    group when we were discussing it is that even though he puts
    these programs in place and suggestions in place and you say
    they are going to execute them, the staff does not execute on
    those recommendations. They refuse to do it. That is his words,
    not mine. How are you going to address that situation to get
    your staff to actually do their job to execute----
        Chairwoman VELAZQUEZ. Would the gentleman yield?
        Mr. LUETKEMEYER. Sure.
        Chairwoman VELAZQUEZ. So I----
        Mr. LUETKEMEYER. As long as it does not take away from my
    time.
        Chairwoman VELAZQUEZ. No, no, no. I will let you go on for
    a little more. We requested a bipartisan briefing with the IG
    and you did not accept that.
        Mr. LUETKEMEYER. We had our meeting with the IG, Madam
    Chairman.
        Chairwoman VELAZQUEZ. Yes, you did. The version that you
    are presenting here is totally different from the version that
    he presented to us. Let's bring the IG here and let's discuss--
    --
        Mr. LUETKEMEYER. That would be great.
        Chairwoman VELAZQUEZ.--the fraud that occurred under the
    Trump administration. This is Administrator Guzman.
        Mr. LUETKEMEYER. That is not my point. The point is that we
    have SBA staff that do not adhere to the recommendations that
    the administrator accepts from the IG. And as a result, those
    things are not getting done. The safeguards that we need to put
    in place are not being put in place and executed. This cannot
    happen. There is a reason for those recommendations.
        Ms. GUZMAN. I meet biweekly with Inspector General Ware to
    ensure that we can be coordinated and that my team knows that
    we are sincere about implementing. We have satisfied multiple
    IG recommendations at this point and we continue to implement.
    And per the IG, the conversations I have had with him, we are
    making great progress towards that aim. And I will point out
    that COVID EIDL, specifically since you brought that up,
    previously in CARES the administration made decisions not to
    select 4506T transcripts. Those are the tax documents that we
    need to prevent fraud. Those have all been corrected per the
    IG's recommendation and thanks to the Economic Aid Act. And so
    I appreciate this Committee's advocacy to make sure we could do
    that.
        Mr. LUETKEMEYER. Along that line, the IG as of 11-15, this
    is their report. They have 35 recommendations and 20 of them
    still remain open. And it has been like this for months. So
    there has to be some execution on your part to get this done
    and have the staff execute as well.
        I have one more quick question before we leave you here.
        With regards to the portal. It is not a bad idea and it
    works if they want to take advantage of it. The problem is, one
    of your staff Members threatened--I have an email--threatened
    the bankers and said if you do not use this portal, we are
    going to have--what was his exact word here? We are going to
    threaten an enhanced audit of you if you do not use this. What
    do you think about that?
        Ms. GUZMAN. That was misconstrued. That was not a threat
    towards the bank.
        Mr. LUETKEMEYER. I read the email, Ms. Guzman. It was
    pretty explicit.
        Ms. GUZMAN. So what we have informed our banks is that we
    want to make sure that they are following the process and
    actually going through the forgiveness process for the loans.
    We saw some delays happening across our lending partners and we
    wanted to ensure that those delays were not impacting our small
    businesses and that they could process those forgiveness loans
    so we did not----
        Mr. LUETKEMEYER. Ms. Guzman, all of my questions and all my
    comments this morning point to a lack of leadership at the top
    with regards to communication and oversight over your staff
    that lends to one of two things. Either you have a disdain for
    us. We have somebody here that just commented they have
    responses from you. Our side does not get them. Is that what is
    going on here?
        Ms. GUZMAN. Absolutely not, Congressman.
        Mr. LUETKEMEYER. Either it is disdain for our side or it is
    incompetence. It is one of the two. You cannot continue to do
    this and be expected to get something done with this agency.
    This is an extremely important agency. Our job here is not just
    legislative, it is oversight. And from our standpoint of
    oversight, you have failed with a true F.
        I yield back.
        Chairwoman VELAZQUEZ. Your time has expired.
        Now we recognize the gentlelady from Illinois, Ms. Newman.
        Ms. NEWMAN. Thank you, Madam Chair. And thank you, Ranking
    Member. And thank you, Administrator Guzman. So good to see
    you.
        So first of all, thank you for all your leadership. I have
    seen a steady incline in activity and the information disbursal
    of various PPP issues and EIDL issues. So thank you for all
    your help. Have heard it across the board on both sides of the
    aisle by the way. And then secondly, I do have a question for
    you regarding the 504 program.
        So we know that a record has been made in 2021 that the SBA
    has approved $8.2 billion I believe in loan value in fiscal
    year 2021, exceeding the $7.5 billion cap. Is the $7.5 billion
    enough to meet the increased demand for the 504 loans? And if
    there is and if you can share a little bit of editorial around
    it that would be great. Thank you.
        Ms. GUZMAN. Thank you for that question.
        The 504 program is an important economic development
    program creating jobs. We have that $7.5 billion cap on the
    program and we exceeded it last year. So those additional
    loans, nearly a billion, did have to sit for up to 3 weeks
    waiting for us to enter into the new cycle. So we definitely
    feel that there is heightened demand on this product. It is a
    very popular product and our lenders are doing great work
    ensuring that their businesses are served, so we support the
    efforts to potentially increase the cap or have flexibility,
    just as we do on the 7(a) to adjust that if demand is increased
    towards the end of the year. And so we support both measures in
    terms of flexibility for the administration to adapt to the
    marketplace demands.
        Ms. NEWMAN. Thank you, and I yield back.
        Chairwoman VELAZQUEZ. The gentlelady yields back.
        Now, we recognize the gentleman from Texas, Mr. Williams,
    Vice Ranking Member of the Committee for 5 minutes.
        Mr. WILLIAMS. Thank you.
        Administrator, I am a small business owner currently. I am
    a main street America guy. I have got a few simple questions,
    yes or no.
        Number one, do you support the Bild Back Better Act?
        Ms. GUZMAN. Yes, I do.
        Mr. WILLIAMS. Do you support raising taxes on small
    businesses particularly as businesses continue to recover from
    COVID-19?
        Ms. GUZMAN. The Build Back Better Act does not raise taxes
    on small businesses.
        Mr. WILLIAMS. No, my question is do you support raising
    taxes on small businesses?
        Ms. GUZMAN. I support the Build Back Better's raising taxes
    on large corporations.
        Mr. WILLIAMS. Let the record show Administrator Guzman
    supports raising taxes.
        Ms. GUZMAN. On large corporations. Yes.
        Mr. WILLIAMS. Do you support President Biden's vaccine
    mandate on small businesses with over 100 employees?
        Ms. GUZMAN. Over 98 percent of businesses, small businesses
    would not be affected by that.
        Mr. WILLIAMS. Do you support that?
        Ms. GUZMAN. And yes, I do support----
        Mr. WILLIAMS. Yes or no, do you support that?
        Ms. GUZMAN. I do support that we should vaccinate as much
    as possible.
        Mr. WILLIAMS. Okay. Are the current supply chain
    disruptions having a negative impact on small businesses?
        Ms. GUZMAN. I am sorry; can you repeat the question?
        Mr. WILLIAMS. Supply chain. Is it having disruption, a
    negative disruption on small business?
        Ms. GUZMAN. Yes, supply chain is affecting small
    businesses.
        Mr. WILLIAMS. All right. Administrator Guzman, you are
    tasked with leading the SBA, yet you do not know what policies
    will hurt or help small businesses. You just showed that a
    minute ago. You continue to back the Biden administration's
    claim that the Build Back Better plan would not raise taxes on
    individuals earning less than $400,000 per year. However, a
    recent report by the bipartisan Joint Committee on Taxation
    debunked that pledge, exposing that this plan would have a
    significant tax increase for Americans of all income levels.
    Higher taxes force business owners to decide whether to reduce
    capital, lay off employees or pass the cost along to the
    consumers in order to offset increased costs and maintain
    profit margins. The bottom mathematics tells you 20 percent is
    more than 30 percent. So these are difficult decisions
    businessowners should not be forced to make and you should be
    protecting them.
        On top of the looming tax increases, the NFIB reports that
    49 percent of small business owners continue to struggle to
    find workers to fill open positions. Meanwhile, the Biden
    administration is imposing overreaching and unconstitutional
    vaccine mandates that will cause businesses to lose more
    employees. We are already facing a labor shortage and it hurts
    even more.
        So as the administrator of the SBA, you are charged with
    aiding, assisting, and advising small businesses across the
    country but at every juncture it seems, at every juncture you
    have imposed or supported policies like this Biden
    administration things that we see that let businesses down and
    make doing business even more difficult. This administration's
    actions will lead to more layoffs and more inflation. Your
    failure to quickly implement or roll out critical business-
    saving programs like the Save Our Stages we talked about had
    dire consequences for main street businesses who had nowhere
    left to turn, and you continue not to assume any accountability
    for that failure. You have refused to respond in a timely
    manner we have heard today to Members of this Committee who
    have had urgent questions for businesses in their districts
    setting the tone that you and other bureaucrats that work at
    the SBA are above the taxpayers you represent is very poor
    service.
        So my last question, Administrator, why should America's
    small business owners like myself and others, why should we put
    our trust in the SBA or you even and believe you have their
    best interest in mind when you have not demonstrated a single
    action that serves their best interests while promoting higher
    taxes and bigger government? How can we rely on you?
        Ms. GUZMAN. The SBA has effectively delivered programs to
    small businesses that are helping them even navigate supply
    chain challenges, navigate the workforce issues that they are
    facing, as well as navigating the rising costs due to the
    pandemic. Further, we have been supporting them with access to
    markets, making sure that they can increase their revenues,
    access the federal government. So we believe the SBA is
    strongly positioned to help small businesses.
        Mr. WILLIAMS. The SBA believes that. Okay. So let me move
    on. The SBA believes that. Not small business. Not main street
    America.
        So, look. This Committee is charged with overseeing the
    SBA, and I strongly urge your administration to put the needs
    and concerns of America's small business first. And do what
    Chairman Luetkemeyer asked you to do. The SBA should be
    nonpolitical. It should be nonpolitical. You should be fighting
    every single day to cut taxes. You should be fighting every
    single day to cut regulations to help small business. It should
    be nonpolitical but you do not do that. Your support for the
    Biden administration's higher taxes, vaccine mandates and
    bigger government will shutter small businesses. We need to
    turn the SBA around before it is too late for main street
    America.
        You mentioned about history. History will show that this
    Small Business Administration gave small business and main
    street a gut punch when we needed a lift more than ever.
        I yield my time back.
        Chairwoman VELAZQUEZ. The gentleman yields back.
        Now we recognize the gentlelady from Georgia, Ms.
    Bourdeaux, for 5 minutes.
        Ms. BOURDEAUX. Thank you, Chairwoman Velazquez. And thank
    you, Administrator Guzman, for taking the time to join us
    today.
        As we continue to recover from the COVID-19 pandemic, it is
    critical that SBA provide the resources and information
    necessary to support the growth of innovative job creating
    small businesses. I believe the Community Navigators program
    and its grantees will play a critical role in that and I really
    commend this Committee and Administrator Guzman for your
    leadership and the creation and implementation of that program.
    My district office has helped to recover over $15 million for
    constituent small businesses through diligent work with SBA's
    Georgia District Office. So thank you so much for that.
        We do have a concern that has come up. We have begun to
    hear in recent weeks from small businesses about the EIDL
    program. The deadline is approaching on December 31st, and so
    just a couple questions with respect to that.
        First of all, does SBA have a plan to process the EIDL
    applications which are pending in queue between now and
    December 31st? And will you continue to process the
    applications after December 31st? Additionally, we are seeing
    some problems where small businesses cannot apply because of
    holdups and delays in the IRS processing of their 2019 returns.
    So they are kind of caught in this bind so the other part of
    this is SBA working with the IRS to expedite the processing of
    these returns or is there something that Congress can do to
    ensure some small businesses do not miss out on this needed
    relief?
        Ms. GUZMAN. Thank you so much for the question.
        When I arrived, I looked at all of our programs from top to
    bottom just to see what improvements could be made, especially
    focusing on customer service technology for process
    improvements. COVID EIDL is a program that had challenges but
    has delivered nearly $300 billion to businesses across the
    country. It is affordable patient capital for our businesses. I
    have moved the COVID EIDL program to our Office of Capital
    Access to ensure that we could leverage industry best practices
    and improve the processing time. In fact, we went from 2,000
    processed applications a day to 37,000. Over the summer, as a
    result, we were able to clear 600,000 in backlogs on the COVID
    EIDL program. And further, we were able by the fall to clear a
    total of a million across the entire COVID EIDL package,
    including the grants and the loans. This program,
    unfortunately, was challenged with issues in terms of not only
    processing but in terms of fraud as was mentioned earlier and
    we were able to reinstate a lot of the policies that have been
    in the EIDL program, the traditional disaster loan program for
    years where we have successfully put out $67 billion of
    disaster loans over the years effectively without fraud. So we
    were very pleased to be able to reinstate these longstanding
    fraud controls onto our program and start to improve customer
    service as well, which speaks to your point in terms of being
    able to process the full demand by the end of the year. We feel
    good that we have billions available and that we will be able
    to distribute those effectively through the communities and we
    look forward to working with you and all your constituents in
    processing.
        We currently do not have a backlog. The challenges that are
    in the system for individual borrowers that you might be
    hearing from oftentimes are due to appeals, multiple appeals.
    They are oftentimes due to fraud flags. Again, we have
    instituted new fraud controls and so these people may have gone
    through the system previously without any fraud checks and so
    we are now going through that. So we do feel good about
    processing the applications. The will be allowed to apply
    through December 31st and then we will process them after that.
    So that is the deadline. The same for the targeted advance,
    that $10,000 grant. Businesses can apply all the way through
    December 31st. The supplemental targeted advance is the only
    one that will have to be processed and distributed before
    December 31st. So that means your constituents who are eligible
    for that additional $5,000 grant will need to apply by
    approximately December 10th.
        In terms of the IRS processing, we have, as I have said,
    cleared the backlog on this important program. And so we have
    effectively been able to administer it. We do feel that,
    unfortunately, for those who did not file 2019 taxes, the
    processing time for a paper application without errors is about
    30 days. We are seeing that that could be much longer, up to 20
    weeks if they have an amendment. So unfortunately for that,
    processing times, they are going to need to coordinate closely
    with the IRS and make sure that all their documents are in
    order, but if they have their 2019 taxes, we are able to
    process them efficiently thanks to the improvements and the
    gains that we have made on the program.
        Ms. BOURDEAUX. If we can continue to work with you on that
    because we are getting a ton of complaints into our office
    right now where people, I absolutely support the anti-fraud
    measures, of course, but also want to make sure we are actually
    able to get things done for the small businesses. But thank you
    so much for the answer.
        I yield back.
        Chairwoman VELAZQUEZ. The gentlelady's time has expired.
        Now, we recognize the Ranking Member of the Subcommittee on
    Underserved, Agricultural, and Rural Business Development from
    Minnesota, Mr. Hagedorn.
        Mr. HAGEDORN. Thank you, Madam Chair, and Ranking Member
    Luetkemeyer. I appreciate the hearing. Administrator, it is
    good to see you.
        I used to be a congressional relations officer for two
    nonpartisan Treasury agencies and I would always tell my boss,
    you know, before we go testify on Capitol Hill, let's make sure
    that we answer the questions of the Members that we are going
    to go testify in front of. What we actually tried to do was
    answer their questions. You did not do that. It looks like you
    did like kind of a data dump. You just got all of our letters
    that have been sitting around for months and months and then
    sent us back a form letter. I sent you a letter on May 20th
    talking about the Restaurant Revitalization program. A pretty
    important program which is still out there. A lot of America's
    restaurant owners are hurting. You did not send anything back
    talking about that. And then I asked, well, what is going on
    with this Biden Executive Order on equity? How are you going to
    be revamping things down at SBA in order to meet that? Again, I
    got nothing back. I got two paragraphs of just a bunch of form
    stuff.
        So Madam Chair, I would like to introduce these into the
    record if I could at this time.
        Chairwoman VELAZQUEZ. Without objection, so ordered.
        Mr. HAGEDORN. But I think what is going on here is I really
    do not probably need an answer anymore to figure out what is
    happening with the whole equity exercise down at SBA because
    the Restaurant Revitalization Fund was really the first part of
    the woke agenda. That was the fund where it was decided there
    were going to be about $28.5 billion for restaurant owners who
    were hurt during the COVID situation and the Democrats and
    Biden decided they were going to have a priority list. And
    everybody on the priority list could get their application in
    early and get their money first and the people who were not on
    the priority list, well, they had to wait in line and hopefully
    they get some money sometime. The people on the priority list
    were pretty much everybody but white males. And lo and behold,
    all sorts of applications came in, all sorts of money went out.
    A lot of people were paid, and of course, the monies ran out
    and Congress and the administration, nobody has done anything
    about it since. There are hundreds of thousands of people out
    there who own restaurants and bars who happen to be white males
    who never received any money.
        Now, the people who did receive the money on the priority
    list, and I am for that. I want them all to get the money, but
    everybody should be treated equally. We should not be
    discriminating one way or the other. Every person who is a
    restaurant owner should be treated the same way. I think that
    is what everybody wants. But the folks that did get the money,
    do you know what they used it for? They went out and hired
    staff. They fixed up their restaurants. They paid bills. They
    did a whole bunch of things. Maybe advertised. They did
    everything they could to bring the customers back in the store.
    The people who did not get the money, some of them might be
    across the street, they probably went broke. They are hurting.
    They do not have that money to lure in new staff, increase
    their wages and so forth.
        Do you think that is fair, Administrator, that people on
    the priority list were given this money and the people not on
    the priority list were not? Do you think that is fair?
        Ms. GUZMAN. Thank you, Congressman. And just to address the
    letter concern, we will definitely continue to be in
    correspondence with your office, and I welcome any calls that
    you want to place to me. I know that several of you have been
    connecting with my staff but I will definitely make sure that
    those are addressed.
        In terms of the Restaurant Revitalization Fund program, the
    SBA worked diligently to try to administer the program as
    quickly as possible working in close collaboration with key
    stakeholders like the NRA and others. We administered the
    program that was laid out by Congress.
        Mr. HAGEDORN. I asked you if it was fair. Is it fair that
    some restaurant owners were given money and other restaurant
    owners still do not have it? It is an unfair competition;
    right?
        Ms. GUZMAN. Well, my charge is to administer the programs
    that are given to me and ensure that----
        Mr. HAGEDORN. Okay. Well, part of your charge then was to
    put together a bill with the administration which had the
    priority list in there which gave people an advantage over
    other restaurant owners. Totally unfair. We do not need this in
    America. We want everybody to be treated equally. This whole
    equity stuff needs to go away. This woke stuff needs to go
    away. Treat every American citizen, every American business the
    same way. If you are going to be giving out government grants,
    let's make sure that everyone has the same opportunity. I think
    that is what America is all about. At least that is what I
    think.
        Now, you are traveling the country quite a bit; right? You
    are getting around. I am, too, in the district in Minnesota.
    Can you tell me any small business owners that have come up to
    you in the last 4 or 5 months about this Build Back Better bill
    that want higher taxes, more regulations, that want higher
    energy costs through this Green New Deal stuff that is coming
    along? Is anybody begging for that?
        Ms. GUZMAN. What small businesses are telling me is that
    they are having trouble finding workforce. That healthcare
    costs are high. Childcare costs are high. And Build Back Better
    will address those issues to try to help our small businesses
    with their workforce----
        Mr. HAGEDORN. Well, you have not heard any business owner
    say please raise my taxes, increase my regulations, and make my
    energy costs go up; correct?
        Ms. GUZMAN. Small businesses have not----
        Mr. HAGEDORN. Thank you. I yield back.
        Chairwoman VELAZQUEZ. The gentleman yields back.
        Now, we recognize the Chairman of the Subcommittee on
    Oversight, Investigations, and Regulations from Minnesota, Mr.
    Phillips, for 5 minutes.
        Mr. PHILLIPS. Thank you, Madam Chair. And greetings,
    Administrator Guzman.
        I want to thank you for your work on behalf of small
    businesses. I know how tough these days have been for small
    businesses all around the country and for you and your team at
    the SBA. You have played an integral role in America's recovery
    from the pandemic and most of us are grateful, especially small
    business owners.
        I want to begin with the RRF, the Restaurant Revitalization
    Fund. When it was first opened to applicants as we all know,
    Congress reserved the first 21 days of the application period
    for priority groups, including women and veterans and socially
    and economically disadvantaged entrepreneurs, the people that
    needed the support the most. My colleague from Minnesota argues
    that we have got to get rid of equity. I just happen to believe
    that we should support those who have been denied access and
    opportunity. I think America is at its best when we support
    those who have big dreams, especially entrepreneurs, especially
    veterans. And when I talk about equity, not just economic and
    racial, but geographic, rural America. We should be supporting
    entrepreneurs in those parts of the country as well.
        And while the SBA, of course, succeeded in distributing
    billions of dollars to disadvantaged groups, we all know that
    the lawsuits ruled that those were unlawful, and 3,000 priority
    applicants were left in the cold due to depletion of the funds.
    I know that you were frustrated by this because, of course, the
    guiding purpose of the SBA in my estimation is to promote
    entrepreneurship and help underserved small businesses, the
    very ones that were denied funds.
        So my first question is a simple one. Should we consider
    additional financial relief to the most hard-hit industries and
    small businesses in categories that have been denied funding?
        Ms. GUZMAN. With similar programs like the Restaurant
    Revitalization Fund, the Shuttered Venues Operator Grant that
    we have been able to effectively distribute over $12 billion in
    relief, these hard-hit industries do need additional
    assistance. As I am meeting with businesses around the country,
    they still need relief, which is why we are thankful that we
    have the COVID Economic Injury Disaster Loan to offer them but
    this is a loan, not a grant. And so we continue to try to
    support them though with resources and these loan offerings.
    And if Congress were to fund hard-hit industry grants, SBA
    would focus on effectively distributing them as equitably as
    possible.
        Mr. PHILLIPS. Okay. And Administrator, do you know how much
    additional funding would be necessary to fully replenish the
    RRF and ensure that those that were denied funding that
    otherwise qualified can still receive it?
        Ms. GUZMAN. Within the RRF, we still had a pending of over
    $44 billion, $44.1 billion of requests within the system.
        Mr. PHILLIPS. So theoretically, small businesses that
    qualified but simply were denied because we did not allocate
    enough; is that fair?
        Ms. GUZMAN. We did not finish processing all of those
    applications.
        Mr. PHILLIPS. Okay.
        Ms. GUZMAN. And so those are the pending, what we deem,
    what we can guess at eligible businesses that were not
    immediately remoted.
        Mr. PHILLIPS. Okay. With my remaining couple of minutes,
    Administrator, I want to acknowledge in a very bipartisan
    fashion that one of our fundamental responsibilities on this
    Committee is oversight, especially considering the size of the
    support programs that Congress has initiated during the
    pandemic and the ones that you are administering. Every
    fraudulent dollar that goes out is one less that we can
    allocate to businesses that qualify. We would all agree with
    that.
        So what can our Committee do to support oversight of the
    SBA programs, especially the recent pandemic programs, whether
    that be congressional directives or additional resources?
        Ms. GUZMAN. SBA has been able to utilize administrative
    funding to continue to try to build in strong processes and
    technologies as well as controls to make sure that these funds
    get into the hands of the businesses it was intended to serve.
    We will continue to work with the IG closely and the GAO to
    make sure that we are implementing the remainder of the
    recommendations that are in place across our COVID EIDL, PPP,
    and all of our relief programs, as well as our CORE programs.
    And so that continued support and collaboration is what we deem
    necessary to continue to support anti-fraud measures.
        Mr. PHILLIPS. Okay. And we all know that, of course, you
    are working hard and others to identify fraud and those who
    inappropriately received funding. What is the current process
    and what is the timeline for clawing back those fraudulent
    loans and disbursements?
        Ms. GUZMAN. My apologies. Is that on a specific program,
    Congressman or just----
        Mr. PHILLIPS. More of a broad question because I know there
    is fraud in a variety of programs.
        Ms. GUZMAN. Yes.
        Mr. PHILLIPS. But just in broad strokes, especially through
    the more recent programs.
        Ms. GUZMAN. Thank you, Congressman. Yes, we are working
    closely with the IG and the Department of Justice to make sure
    that if there is identified fraud that they are able to fully
    prosecute and recover those funds. The IG has already worked to
    recollect millions of dollars across the PPP program and the
    COVID EIDL program and we continue to support their work as
    they do so across all of our programs.
        Mr. PHILLIPS. Thank you. I see my time has expired. I yield
    back. Thank you so much.
        Chairwoman VELAZQUEZ. The gentleman's time has expired.
        We recognize the gentleman from Minnesota, Mr. Stauber, for
    5 minutes.
        Mr. STAUBER. Thank you very much, Madam Chair.
        Administrator Guzman, thank you for being here to testify.
    I have to say it has been difficult getting some response from
    you or your office.
        But as you recall, back in May, when you were in front of
    this Committee over 6 months ago, I asked you a series of
    questions regarding the Biden administration's small business
    tax increase proposals that you could not answer. You said to
    me in this Committee at the time that you would follow up with
    my office with answers to my questions. It has been 6 months.
    No follow up to me or my staff. So at that time I was asking
    you about proposals but now we have in writing the tax increase
    the Biden administration plans to impose on small businesses.
    Given you have had 6 months to figure out a response, I am
    going to ask you once again these questions.
        How many small businesses are organized as a subchapter C
    corporation?
        Ms. GUZMAN. The majority of businesses are not organized as
    C corporations. I do not have the exact number of those
    businesses.
        Mr. STAUBER. Does the Build Back Better legislation
    increase the corporate tax rate?
        Ms. GUZMAN. The Build Back Better framework actually
    focuses on leveling the playing fields. And I agree with the 3/
    4 of small businesses polled who want to see large corporations
    pay their fair share. And so the Build Back Better framework
    focuses on that, making sure that our large corporations, those
    that pay zero including are the ones who are covering for this.
        Mr. STAUBER. The question was does the Build Back Better
    legislation increase the corporate tax rate?
        Ms. GUZMAN. It provides for a minimum corporate tax rate of
    15 percent that will affect less than 200 large corporations so
    it will not affect our small businesses.
        Mr. STAUBER. It will not affect the small businesses at
    all?
        Ms. GUZMAN. It will affect less than 200 of the largest
    corporations, the 15 percent corporate tax. Correct.
        Mr. STAUBER. So the Build Back Better legislation is going
    to increase the corporate tax rate as you just said on small
    businesses subchapter C. According to the Tax Foundation, this
    tax increase is going to reduce the GDP and cost about 25,000
    jobs. How many small businesses are organized as pass-through
    businesses?
        Ms. GUZMAN. Many more are pass-through entities. A majority
    of them are.
        Mr. STAUBER. So the majority, 95 percent?
        Ms. GUZMAN. I do not have those exact numbers.
        Mr. STAUBER. Well, the answer is nearly 95 percent of all
    small businesses that you oversee in this country are pass-
    throughs.
        Does the Build Back Better legislation increase taxes on
    pass-through taxes?
        Ms. GUZMAN. President Biden's plan never focused on the--I
    am assuming you are talking about the 199A. And no, it did not
    ever propose that. President Biden's proposal in this current
    framework does not include the 199A either.
        Mr. STAUBER. So you are telling us that legislation will
    not increase taxes on 95 percent of the businesses that are
    pass-through; is that correct?
        Ms. GUZMAN. The current BBB proposal does not increase--
    does not affect the 199A. So small businesses will not be
    affected by that.
        Mr. STAUBER. According to the Tax Foundation, this tax
    increase is going to eliminate 16,000 jobs. Do you agree with
    that?
        Ms. GUZMAN. I know that economists are still debating what
    those final impacts are. We believe strong that the Build Back
    Better plan will actually crease jobs and will help small
    businesses, especially when it comes to their workforce,
    educating their workforce, creating workforce development
    opportunities, lowering the cost of childcare so we can get
    more people back to work. Those are really important things to
    small businesses, as well as the cost of healthcare which is
    rising and this Build Back Better framework will decrease those
    costs.
        Mr. STAUBER. Have you ever owned a small business?
        Ms. GUZMAN. I have, yes.
        Mr. STAUBER. As a pass-through?
        Ms. GUZMAN. Yes; correct.
        Mr. STAUBER. Okay. Do you still own it?
        Ms. GUZMAN. No, I do not.
        Mr. STAUBER. Okay. Another thing I would like to have a
    short conversation with you. You were in our great state of
    Minnesota just a few months ago and we appreciate that. You
    came with my democratic colleagues to Minneapolis. There are
    two of us that sit on this Committee that were not invited. Was
    it for political reasons that we were not invited to celebrate
    and encourage small businesses in the state of Minnesota? Can
    you tell us why you did not reach out to us?
        Ms. GUZMAN. Congressman, I would welcome a visit with you.
    And if an invitation is extended, I would love to travel with
    you to meet with your small businesses and see how we can
    further help them.
        Mr. STAUBER. Did you even think about inviting us in rural
    Minnesota? You talk about rural America. We represent rural
    Minnesota. We were not even invited by somebody such as your
    stature to come into Minnesota and celebrate small businesses.
    Would you agree maybe that was a misstep on your part by not
    inviting us, two Members of the Small Business Committee?
        Ms. GUZMAN. While I was not in your district? I would
    welcome the opportunity to extend my stay or go directly just
    with you in the future.
        Mr. STAUBER. Last thing is--okay, my time is up. I yield
    back. Thank you, Madam Chair.
        Chairwoman VELAZQUEZ. The gentleman's time has expired.
        Now we recognize the gentlelady from California, Ms. Chu,
    for 5 minutes.
        Ms. CHU. Administrator Guzman, I believe that the Build
    Back Better bill will truly help small businesses. And in fact,
    I am proud that it includes $275 million for the authorization
    and funding for the Community Advantage program. We know that
    Community Advantage is an effective tool for increasing access
    to capital for underserved small businesses with SBA data
    showing that the program reaches significantly more female and
    minority businesses. That is because Community Advantage
    lenders have the necessary relationships within their
    communities to facilitate lending to the small businesses that
    need it most. These mission-driven lenders are not only skilled
    inn localized character-based lending but also provide hands-on
    coaching to borrowers, many of whom are overlooked by big
    banks.
        Can you talk about how you see Community Advantage figuring
    into SBA's long-term recovery plans, particularly your plans to
    improve capital access for underserved businesses?
        Ms. GUZMAN. Yes. Thank you so much for that question.
        Community Advantage is an important pilot program that the
    Office of Capital Access administers and it does allow us to
    better reach those underserved communities through great
    community financial institutions like the CDFIs. We want to
    continue to expand all of our lending partnerships as we have
    been able to during PPP and continue to grow that. Permanence
    of the Community Advantage program will mean certainty for
    these lenders and that is what they need to continue to expand
    in the program and we look forward to Build Back Better's
    proposal to do that as well as fund it for a 10-year basis and
    definitely support our smallest entities and those underserved
    communities and have a far reach within every corner of our
    nation. In addition, that actually also helps us to fortify
    those banking relationships which we rely on to distribute our
    loans. They were great partners for us during PPP with the
    acceptance of fees and as we look towards direct lending we
    will rely on that strong network of community financial
    institutions to deploy small dollar loans into communities
    across the country.
        Ms. CHU. Thank you for that. And there is another very
    positive thing that Build Back Better does for our small
    businesses and that is provide $60 million to improve the
    program's outreach with the Small Business Investment Company
    or SBIC program. And I am proud that my legislation to allow
    more bank capital to be invested in SBICs, the Investing in
    main street Act did pass the House earlier this month and, in
    fact, would enable these banks to invest up to 15 percent of
    their capital and surplus in SBA licensed small business
    investment companies which will significantly help startups
    that have grown into companies like Tesla and Apple.
        So could you talk about how the SBIC program can help our
    small business recovery and discuss how the Build Back Better
    Act's investment can strengthen the program over the long-term?
        Ms. GUZMAN. Thank you. Yes, we believe that the Build Back
    Better will strengthen our SBIC program. Right now we have 300
    private SBICs distributing capital across the nation to our
    small businesses. We really want to focus on making sure small
    businesses outside of those venture capital rich areas of the
    nation and private equity rich areas have access to capital
    through our SBICs. And so with emerging managers as well as
    micro funds, we will be able to further expand our SBIC
    pipeline of strong private equity and venture firms to be able
    to support our small businesses with leverage from the federal
    government.
        Ms. CHU. And finally, let me ask about the Community
    Navigator program. I understand that the grants have been
    awarded to 51 HUB organizations but it was very competitive.
    And I have heard from disappointed organizations like community
    groups and mission-based lenders who were not selected but
    remain eager to contribute to the program. I know that the
    Community Navigator program relies on community groups that can
    reach the hardest to reach businesses. Can these mission-based
    lenders still be part of the Community Navigator program?
        Ms. GUZMAN. Thank you. Yes, we received over 700
    applications for the Community Navigator pilot program and I
    think that really is exciting because it speaks to the
    heightened attention on small business development across our
    cities and counties and nonprofits across our ecosystems. We
    believe that we can continue to integrate all partners within
    that hub and spoke framework, whether they are working directly
    as a spoke with one of those grantee organizations or as part
    of an ecosystem leveraging any of our programs, whether it is
    the capital programs or other grant programs. So we look
    forward to continuing to build that out with all of those
    community financial institutions and others.
        Chairwoman VELAZQUEZ. The gentlelady's time has expired.
        Now, we recognize the gentleman from Pennsylvania, the
    Ranking Member of the Subcommittee on Economic Growth, Tax, and
    Capital Access, Mr. Meuser for 5 minutes.
        Mr. MEUSER. Thank you very much, Madam Chairwoman. And
    thank you to our Ranking Member Luetkemeyer. Thank you,
    Administrator, for being here.
        So small businesses are struggling. In spite of the high
    level of consumer spending that is taking place, small
    businesses are making less. They are dealing with inflation.
    All this should be nothing new to you. Organizations like the
    NFIB are stating this as loudly as they can to the
    administration. There are workforce shortages. Serious
    workforce shortages. Every small business I walk into, and I am
    sure you, too, is beside themselves with being so busy and
    making less and trying to figure things out. Supply shortages.
    Their shelves, their inventory, their warehouses are much less
    than they would prefer. Energy costs are baffling them.
    Gasoline prices, heating, you name it for their trucks, for
    their deliveries. Everything is going up. Wages are going up.
    That is usually a good thing but in this case it is going up a
    little bit too fast. These mandates that are being discussed
    are very, very unclear and it is really making many businesses
    very, very nervous as to what to do. You know all this.
    Potential tax increases.
        Now, Administrator, you said small businesses will not be
    facing any tax increases. That just is not accurate. The 3.8
    percent Medicare surtax, which expands the Medicare surtax to
    invest in individuals actively involved in S corporations or
    partnerships. So in other words, if a company with 50 employees
    was bringing in $10 million in revenues, they will maybe net $1
    million at the end of the year. They will be paying 3.8 percent
    on that $600,000, the delta between the 400.
        So, now it is a pass-through. So that business will be
    paying that extra. Now, he might be paying himself, or she,
    $100,000, $200,000, $250,000, $350,000 a year but they are
    still being taxed as a pass-through business. So stating that
    small business is not paying more tax--and by the way, that is
    a big number. That 3.8 percent, if I believe offhand, that is
    in the neighborhood of $300 billion of new taxes, of revenues.
    So I do not know how we can say small business is not getting
    any new taxes when you are scoring it at $300 billion.
        And then, of course, NOL is being changed. The IRS
    enforcement. That is going to be wonderful for small business.
    I was former revenue secretary of the Commonwealth of
    Pennsylvania. The last thing you do without making it a higher
    quality level of information for those auditors to work off of
    is just add 87,000 new people and think they are going to go
    out and shotgun approach on small business because they are the
    easiest victims, to go in and audit them randomly. And the idea
    that it would raise $400 billion is absolutely nonsense. Come
    on. You went to the Wharton School of Business. I mean, it just
    came back CBO I think said $120 billion. That is about right.
    So there is a lot of phony-baloney stuff in here.
        So I just want to ask you, do you advocate for small
    businesses? When you talk to the president, do you say, Mr.
    President, these taxes, inflation, gasoline prices, you know,
    you have your spokesperson Jen Psaki and a new potential
    controller of the banks saying how it is a great thing to ruin
    fossil fuel companies and oil companies and gasoline companies.
    Somehow that is a good thing because then we move into green
    energy. I mean, do you say, hey, we have got to rethink some of
    these things, Administrator?
        Ms. GUZMAN. My responsibility is to, of course, administer
    the programs of the SBA as well as visit with these businesses
    and hear their concerns which, of course, I agree with you the
    supply chain and the workforce issues have been challenging for
    them. We have been focusing on getting them support so that
    they can navigate these issues.
        In terms of some of the specific issues that you addressed,
    like the Medicare tax loophole, that really again is still
    focused on those individuals making more than $400,000. So the
    majority of small businesses will not be affected and that
    really what it does is focus on making sure that investments
    are treated the same way as your business income. And so
    whatever the issue might be, the note that this Build Back
    Better agenda is focused on leveling the playing field and that
    is where small businesses have free----
        Mr. MEUSER. I do not think it held any ROI whatsoever for
    the economy and you have got economists agreeing with me. The
    lending product you bring up. Now, we had two test programs,
    the RRF and the EIDL, all run by the SBA. And I think you have
    got a good staff. In Pennsylvania you have got a good staff.
    But they are completely understaffed. They have nowhere near
    the IT systems and the RRF was a disaster. Let's face it. And
    the EIDL had $67 billion plus in fraud and yet you are saying
    you want a self-run, internally run lending product within the
    SBA to add onto what we know is already a disaster?
        Ms. GUZMAN. The SBA has been doing direct lending for over
    68 years. We have had a $67 billion portfolio within our
    disaster products without these incidences of fraud. These are
    unique to the COVID EIDL product as a result of the CARES Act
    requiring that the SBA not collect tax documentation.
        Mr. MEUSER. I am sorry, I have to yield back. But a joint
    partnership with banks and the SBA clearly worked a lot better.
        I yield back, Madam Chairwoman.
        Chairwoman VELAZQUEZ. The gentleman yields back.
        Now we recognize the gentlelady from Pennsylvania, Ms.
    Houlahan for 5 minutes.
        Ms. HOULAHAN. Thank you, Madam Chair. And thank you very
    much for being here as well.
        My question is going to be forward-looking at a future
    program I am hoping and I very much thank you for being with me
    in our community. The last time we saw one another we were
    walking in the streets of Philadelphia and we were talking to
    small business owners back there. Sadly, since then, since your
    visit, my district was hit hard not just by the pandemic and
    supply chain constraints which I know a lot of folks have been
    hitting on today but also by Hurricane Ida, and we are under a
    federal state of emergency.
        So today, I want to talk about relief for our small
    businesses and owners who have been impacted by natural
    disasters that are not pandemic. Following this devastating
    storm, I heard from many of our small businesses in our
    community who are continuing to recover through no fault of
    their own from the pandemic and now from this natural disaster.
    One of these businesses was Animated Brewing, a brewery in
    Coatesville. And during the visit to their business, the co-
    owners expressed their hesitancy around applying for an SBA
    loan. While they very much appreciated a low or no-interest
    option, they simply did not have the capacity at that time to
    pay it back. Their losses from the storm were too great and
    their losses from pandemic as well. And another business
    similarly informed my office that they would rather be closing
    their doors in the coming months rather than incurring yet
    another bill to pay.
        These businesses represent nationwide concerns with the
    lack of direct aid that is available to small businesses that
    follow a natural disaster. Natural disasters, as we have
    mentioned, are not dissimilar to the shocks such as a pandemic
    and according to the Federal Emergency Management Agency,
    almost 40 to 60 percent of small businesses are never able to
    reopen their doors after such a disaster.
        Which leads me to a question that I have heard over and
    over again since Hurricane Ida has hit my region. Why can there
    no be a loan forgiveness or grant program available similar to
    PPP to help small businesses recover from natural disasters
    just as Congress has provided to respond to the public health
    crisis of COVID? Given the anticipated increase in frequency of
    climate change-related natural disasters such as Hurricane Ida,
    I am interested in this concept and interested in your
    response. Do you think that the status quo is sufficiently
    meeting demand for natural disaster experiences by small
    businesses? Should the SBA play a bigger role in supporting
    small businesses that are recovering from a natural disaster
    beyond low interest rate loans?
        Ms. GUZMAN. Thank you. Yes, we do agree that recovery is a
    long tail for communities and for businesses, and I would like
    to see the SBA engaging more in that recovery and providing
    support, whether it is connecting to affordable capital, if
    that is the right fit, or providing some other technical
    assistance to help those communities recover.
        Ms. HOULAHAN. Or potentially similar to PPP loan programs
    that become grants with certain conditions met.
        So Congress set up a PPP program in recognition of the
    importance to small businesses to the overall economy of
    communities nationwide and to the unique and historic nature of
    the pandemic. Perhaps maybe there could be a federal emergency
    protection program similarly that parallels something like
    this. Do you see the parallels that exist between incidents of
    climate-related disasters or natural disasters and pandemic?
        Ms. GUZMAN. Businesses are dramatically affected during
    disasters. I mean, the FEMA data shows that if they do not
    reopen in 5 days, 80 percent chance that they will be closed
    within a year. So the effects are devastating which is why it
    is so important to invest in climate solutions and why we would
    want to continue to support our small businesses with whatever
    tools Congress provides to us.
        Ms. HOULAHAN. Thank you. And what are the biggest lessons
    you think that we learn from PPP that could be considered when
    crafting a similar program for natural disasters?
        Ms. GUZMAN. Well, one thing that we found is 11 million
    loans, and seen a lot of sole proprietors especially come into
    the program in 2021 and small employers, 20 and under that were
    not served previously. We think that those are key lessons
    learned to demonstrate that there is a demand out there for
    capital and that businesses can leverage capital to grow
    effectively which is why direct lending is such an important
    product because we are seeing that there is a decline in small
    dollar loans out there available to our smallest entities and
    we would like to try to solve for some of those huge market
    gaps.
        Ms. HOULAHAN. Administrator Guzman, one of the things that
    I was struck by with the crisis of pandemic and with the PPP
    having been stood up so rapidly but also expanded as you
    mentioned to a vast array of businesses that would not have
    historically been considered in these sorts of opportunities
    and programs, we have created the neuropathways and the memory
    mechanisms. We have created the business banking relationships
    that small businesses now have with each other. We have also
    created the relationships that the SBA now has with the banking
    industry. We really ought to be able to take advantage of this
    and pivot this to what will be inevitably in the future
    increasingly more and more natural disasters and more people
    needing help with this.
        Thank you so much once again for visiting our community and
    I yield back.
        Chairwoman VELAZQUEZ. The gentlelady yields back.
        Now we recognize the gentlelady from New York, Ms. Tenney,
    for 5 minutes.
        Ms. TENNEY. Thank you, Madam Chairwoman. And also to the
    Ranking Member. And thank you, Administrator, for being here
    today. I did send you a list of questions in May and I am
    hoping that at some point you will follow up since I have not
    received an answer yet. I know you are getting yourself
    organized in the position but we really have pressing questions
    that we need to ask.
        My first question I want to ask you is during your
    confirmation hearing in the Senate, you promised to investigate
    why the SBA wrongfully approved small business loans for
    multiple Planned Parenthood affiliates. However, since the SBA
    has proceeded to confirm an additional six loans for Planned
    Parenthood affiliates, including $10 million for Planned
    Parenthood of Greater New York. As you are aware, and as this
    legislation states, federal funds cannot be used to pay for
    abortions and all applicants for PPP loans must abide by
    affiliation rules and size standards. Since Planned Parenthood
    has over 16,000 employees nationwide that makes them
    ineligible. Has the SBA forgiven any of the PPP loans that have
    gone to Planned Parenthood?
        Ms. GUZMAN. I do not have a status on individual loans to
    share with you.
        Ms. TENNEY. Have any of them that you know generally been
    forgiven?
        Ms. GUZMAN. That I am not aware of. I know that we have
    continued to process those loans in the order. And as you know,
    borrowers attest under PPP for their eligibility.
        Ms. TENNEY. Will you forgive those loans? I started to
    reclaim my time. But will you forgive those loans at this
    point? Is that a policy that you are taking?
        Ms. GUZMAN. Fortunately, it is not up to me to determine
    individuals loans. There is a process in place for all loans.
        Ms. TENNEY. But you as the administrator have the ultimate
    say. Will you actually not allow those loans, not allow their
    forgiveness, and will you ask them to pay the money back?
        Ms. GUZMAN. They will be processed according to the rules
    that were administered by the SBA that have been made public
    and that have been shared with our lenders.
        Ms. TENNEY. So what you are saying is that based on the
    rules and based on the rules of the legislation that you will
    be denying that forgiveness and you will also be requiring them
    to pay back based on a rules based?
        Ms. GUZMAN. I am not speaking to any individual PPP
    eligibility.
        Ms. TENNEY. But can you say that based on the rules that we
    just outlined, the fact that they are not eligible, that you
    would say in a reasonable estimate that those loans would not
    be forgiven and therefore, you would ask for that money to be
    paid back?
        Ms. GUZMAN. I am not the one who individually investigates
    specific eligibility.
        Ms. TENNEY. I am asking you as the administrator. You
    obviously have a position. You would ultimate make this
    decision if it came to your desk; right?
        Ms. GUZMAN. My positions and my political choices are not
    at play here. It is really just the process and the rules that
    are in place for both the borrowers to attest to their
    eligibility and for the lenders to determine if they will
    process based on that eligibility and that attestation.
        Ms. TENNEY. Right. And so----
        Ms. GUZMAN. Further----
        Ms. TENNEY. Can I just add?
        Ms. GUZMAN. Sure.
        Ms. TENNEY. I do not mean to harp on this but if it was
    determined by your people and the people that work under you
    that they were actually forgiving the loans, would you overrule
    that decision because it is not based on the rules that are set
    forth in the statute?
        Ms. GUZMAN. I would not overrule the processing that is in
    place that is abiding by the rules. So the process does abide
    by the rules and determines eligibility. Again, the borrower
    attests to the eligibility. The bankers are then processing
    those PPP loans.
        Ms. TENNEY. Do you know the rules that say that they are
    not eligible. Is that something you are aware of?
        Ms. GUZMAN. I know our affiliation rules broadly but I have
    not investigated any particular loans of the 11 million loans
    that we have processed at the SBA.
        Ms. TENNEY. Okay. Just one more question because I have a
    little time left.
        In your remarks, you talked about gaps in access to capital
    and you make no mention of SBA initiatives addressing the fact
    that most venture capital and early stage funding flows to just
    a few cities around the country and many are left behind,
    including my upstate rural suburban district. And you make no
    mention of the fact that very little investment, including
    SBA's own programs goes to innovative capital-intensive
    businesses that are in the manufacturing sector that once
    supported our middle class. Is that something you are going to
    be considering as adding more options and supporting the
    legislation that I have and others that would give more loans
    to businesses that have long-term prospects, long-term
    manufacturing, and would rebuild and reindustrialize the
    regions such as mine that were once the home of the beginning
    of the industrial revolution?
        Ms. GUZMAN. Yes. We completely support building up a
    manufacturing base in America. The Made in America initiative
    focuses on that and we have key programs to support that,
    whether it is on our lending program or encouraging
    manufacturing support within our SBIC program.
        Ms. TENNEY. One last thing that my colleague alluded to.
    The current nominee for control of the currency is talking
    about ending private bank accounts and putting them in the
    hands of the federal reserve. Do you support that initiative?
        Ms. GUZMAN. I just support that small businesses have
    options to find banking institutions that can support them or
    lenders that support them and my job as the administrator is to
    make sure that those----
        Ms. TENNEY. So you do not support them giving their bank
    accounts over to the federal reserve?
        Ms. GUZMAN. I do not have information on that to share
    anything further.
        Ms. TENNEY. Thank you.
        Chairwoman VELAZQUEZ. The gentlelady yields back.
        Now, we recognize the gentleman from New Jersey, Mr. Kim,
    for 5 minutes.
        Mr. KIM. Thank you. Thank you, Madam Chairwoman.
    Administrator, thank you for coming today.
        I hope you take away from this hearing that there is a lot
    of bipartisan engagement when it comes to our restaurants. That
    this is something that I think we need to make sure that we are
    prioritizing to the level that we are hearing. I want you to
    know that from my district that is still the number one issue
    that I hear about when it comes to small businesses. And the
    job is not done. I wish we were able to put in additional funds
    into the Restaurant Revitalization Fund. I certainly supported
    that from the outset to avoid the problem that we had that was
    foreseeable. We knew there was going to be a challenge there.
    And I want to find a way to fix it. But you know, you have
    talked about this already, but we talked about it in terms of
    the amount of money to be able to put in. And I certainly
    support funding this more. But I also wanted to ask you what
    flexibility does SBA need from Congress in statute if we were
    able to provide additional funding for the Restaurant
    Revitalization Fund. We want to make sure that we ensure that
    no applicant at the end of the queue is left off without relief
    again. My understanding it is not just about the funding; that
    there are other elements here that we need to be considering
    here. So I just wanted to get your take on this.
        Ms. GUZMAN. Congress would need to fully fund the
    Restaurant Revitalization Fund program so that we could support
    the remainder of the restaurants who have applied or put a cap
    on the program so that whatever the funds allocated to lessen
    the $44.1 billion would be enough to cover those applications
    in the pool. We would be happy to work with you to further look
    at those numbers.
        Mr. KIM. Yeah. Because I think we are hearing, again, in a
    bipartisan way a desire to make sure that our restaurants and
    our communities are getting that kind of support. And I hope
    that my colleagues across both parties work together to be able
    to do that. I certainly stand ready to do that myself.
        What I also wanted to talk to you about is just as you were
    talking to my colleague about sort of the long road to recovery
    head that we have when it comes to small businesses. And I
    agree with you that right now we are certainly having a crisis
    point. But I think we understand that this is not going to just
    go away overnight. This is going to be a long road to recovery.
    So I guess I wanted to just get a sense from you how you see
    this unfolding here. There are particular industries and small
    businesses that you think are going to have a longer road to
    recovery and a tougher time. How do you sort of see this
    unfolding over the course of the next few years, over the
    course of the next couple years of this administration for
    instance?
        Ms. GUZMAN. Small businesses polled, as well as those that
    I meet with project that there will be months of uncertainty
    still remaining for them as we fight the pandemic. The number
    one thing is to fight the pandemic and make sure that we can
    get more people vaccinated so that people start to consume
    services as much as they have been consuming our products and
    goods. And so that first and foremost has to be the priority.
    Saving our small businesses means vaccinating and implementing
    strong protocols to help recover from the pandemic which is
    underlying as economists agree the supply chain challenges and
    the workforce challenges that including our small businesses
    are facing.
        So as we move forward, we really believe that we need to
    have the tools in place around access to capital to make sure
    that we are supporting small businesses, especially those
    startups, those over 9 million business applications I
    referenced earlier. We want to make sure that they can be
    equipped with the technical assistance, the capital, and the
    access to markets that they need to grow strong businesses for
    our communities and for our economy.
        Mr. KIM. Look, I am glad to hear that, and the reason why I
    mentioned this question is I was reading through your testimony
    and you used a phrase to describe SBA. You said it was first
    responders. And I understand what you are getting at with that,
    saying that SBA is the first responder in terms of this crisis
    and certainly the struggles that have been there. But I think I
    would like to push back with you a little bit on that. What I
    have heard from the small businesses in my district is that it
    is about a relationship. It is about a deeper engagement. A lot
    of the small businesses in my community up until the last 18
    months had very little, if any, connection with SBA. Had very
    little understanding of what SBA, what tools you had and things
    like that. You now have an opportunity here not just to connect
    with them for the Restaurant Revitalization Fund or the
    Paycheck Protection Program, but I urge you to build off of
    that. Now that you have connected with so many small businesses
    in their time of need, build off of that in terms of letting
    them know what next. As a first responder, yes, you provide
    that kind of initial support but I do not want you to think
    that they are just going to then move on off and that is not
    your responsibility. And I just want to make sure that we are
    engaged on that over the course of the long term. Thank you. I
    yield back.
        Ms. GUZMAN. Yes. I would be happy to do that.
        Chairwoman VELAZQUEZ. The gentleman yields back.
        Now we recognize the gentleman from New York, Mr.
    Garbarino, for 5 minutes.
        Mr. GARBARINO. Thank you, Madam Chair. Thank you,
    Administrator, for being here today.
        I have been watching the hearing in my office and I walked
    over. My colleague before had asked you if you had spoken to
    the president and let them know whether you agree with some of
    the policies that are coming back in BBB and your answer was
    your job is to administer programs and to meet with small
    businesses and hear their concerns. So what do you do with
    those concerns after you hear them? Where do they go? I mean,
    you are hearing their concerns. Do you just not share them with
    the president or----
        Ms. GUZMAN. No, that was perhaps taken out of context or
    not fully communicated properly. But yes, of course, I share
    what I am hearing in the field from our small businesses, from
    our district offices, from our resource partners to relay that
    they are having supply chain concerns. That they are having
    workforce challenges. This is a whole of government approach to
    fighting this pandemic and making sure that we implement
    solutions to help our small businesses, as well as our economy
    broadly recover from COVID. And of course, I share as much as I
    can in terms of that outreach that I have been doing and the
    results that I receive.
        Mr. GARBARINO. So with Build Back Better coming and as you
    said, small businesses are coming out of COVID, one of the
    increases in taxes which small businesses are going to see even
    though they are saying there is going to be no increase on
    small businesses is the permanent extension of the loss
    limitation deduction. I mean, that is something that right now
    it is law but this would extend that. And spend $167 billion by
    extending this permanently. How is that not seen as a tax
    increase, especially for businesses that are coming out of this
    COVID debacle which everything was shut down and they could not
    make any money. They have probably taken tons of losses. How is
    making this loss limitation deduction permanent not an increase
    on taxes on small businesses, something that they were probably
    planning on getting back?
        Ms. GUZMAN. Businesses will definitely continue to be able
    to take their business losses against their business. This was
    dealing with investments specifically. And the most important
    thing is that this is broadly about leveling the playing field
    for our small businesses and they do agree that large
    corporations, those 55 large corporations, profitable
    corporations that paid zero was just not enough. They would
    like to see parity and I agree that that should be the case
    that everyone pays their fair share and that we are able to
    ensure that the resources are available to support our
    infrastructure as well as build back better with strengthening
    our care economy and fighting climate change. And so I believe
    wholeheartedly that small businesses will benefit greatly from
    Build Back Better and that they will not see the effect. They
    will see a level playing field instead.
        Mr. GARBARINO. So you do not think raising taxes on certain
    corporations which other small businesses do business with,
    whether it is energy or transportation, that when these
    businesses have to pay more in taxes, these major corporations
    you call them have to pay more in taxes, you do not think they
    are going to have to pass that down to the small businesses and
    increase their costs for those small businesses that do work
    with them or that do business with them in addition to taxes
    and not having a loss deduction which we are making permanent
    here and some other things? They are already dealing with
    inflation. They are already dealing with high cost of products
    going up, supply chain issues. Now, their business partners,
    whether they deal with energy or transportation issues, those
    costs are going to go up with these additional taxes. Are they
    not concerned about that? Or have they not shared their
    concerns with you about that?
        Ms. GUZMAN. I have not heard those concerns and I know that
    there are even large corporations that will be affected that
    believe that this could still, nonetheless, be a strong
    positive impact on our economy because they know that it will
    strengthen the people. It will strengthen the workforce. It
    will strengthen care economy and healthcare economy as well. So
    I know that that 15 percent corporate minimum tax is, again,
    only affecting less than 200 corporations and those are not
    small businesses and they will not be impacted.
        Mr. GARBARINO. Okay. You talk about the workforce and
    strengthening the workforce. In your meetings with all the
    small businesses, I am sure you have heard about how they
    cannot hire people, they cannot get the proper workforce to do
    the jobs. Has anybody brought up to you their concerns about
    the new OSHA ruling? And I know you do not oversee OSHA with
    the vaccine mandates, but you deal with small businesses. You
    said yourself you meet with them daily, or weekly, or whenever.
    They have to be concerned about what this is going to do to
    small businesses and the fact that they already cannot staff,
    they are already having trouble staffing their businesses, this
    additional vaccine requirement of OSHA, what are you hearing
    and what are you sharing with the president about maybe this is
    not the best idea right now?
        Ms. GUZMAN. Well, I mean, first to consider is that 98
    percent of the businesses would not be affected because of that
    100 employee rule. So your mom and pops, your main street
    businesses, you know, those businesses also, and for the most
    part small businesses support vaccine mandates. They support
    facemasks. They want to keep their employees safe. They want to
    also attract customers who want safe environments. And so I
    think that from the majority of what we have heard is that
    small businesses support this. They know that we need to fight
    the pandemic and that this is the way to do that.
        Mr. GARBARINO. I think we are talking to different small
    businesses but I will yield back because I am out of time.
        Ms. GUZMAN. Thank you.
        Chairwoman VELAZQUEZ. The gentleman yields back.
        Now, we recognize the gentleman from Pennsylvania, Mr.
    Evans, for 5 minutes.
        Mr. EVANS. Thank you, Madam Chair. Thank you for this
    opportunity to talk to the administrator.
        The question I would like to ask earlier this month, the
    Committee held a hearing on entrepreneurship, and we learned
    that the applications to start new businesses increased
    significantly in 2020, more than any other year over the past
    50 years. As someone who is on the ground talking with new
    businesses every day, what happened during the pandemic that
    led to so many people starting a new business?
        Ms. GUZMAN. I believe it was a mixture of both opportunity
    entrepreneurship, as well as necessity entrepreneurship. For
    those who were either part of that, either decided to go on a
    different course and wanted to find a different opportunity as
    so many people left their professions. And so amongst this
    group though, we are still seeing high trends across women and
    people of color starting businesses at really high rates and it
    is across the country.
        Mr. EVANS. How can SBA and Build Back Better programs help
    those budding entrepreneurs survive and thrive in a post-
    pandemic economy?
        Ms. GUZMAN. Access to capital is always one of the top
    issues that small businesses share and is a challenge for them.
    Obviously, they are trying to expand and grow and enter new
    markets and so they need not only the capital but also the
    technical assistance and SBA is uniquely positioned to support
    these small businesses as they start up and launch their firms
    with capital and as well as technical assistance. Better
    connecting, especially through the Community Navigator pilot
    program small businesses to resources that exist strengthening
    local ecosystems so small businesses can be supported. So the
    SBA is working hard to make sure that we are building those
    relationships extensively across the country to support
    especially underserved businesses who have not been able to
    necessarily connect in the same way, and we are trying to
    expand our product pool as well so that we can fill some of the
    market gaps that we see out there especially in small dollar
    loans or in investment capital as we see these businesses and
    know that they are going to need support to create the jobs
    that they do. They create 2/3 of net new jobs and 40 percent of
    our output and we need to continue to support them with that
    charge.
        Mr. EVANS. I would like to also thank you for the visit
    that you did to Philadelphia and talking down 52nd Street was a
    very important part. A lot of things have happened in that
    neighborhood just recently, along with an organization called
    Phila TEC entrepreneur Della Clark, along with Wells Fargo Bank
    that like rebuilding the businesses on the corridor. And
    certainly, your presence was very important just to show
    people, to give a sense of hope and optimism. So again, I thank
    you for your leadership of coming down and walking down the
    street. So I want to personally say on record thank you.
        And I yield back, Madam Chairperson.
        Chairwoman VELAZQUEZ. The gentleman yields back.
        Now we recognize the gentlelady from California, Mrs. Young
    Kim, Ranking Member of the Subcommittee on Innovation,
    Entrepreneurship, and Workforce Development.
        Mrs. YOUNG KIM. Thank you, Chairwoman Velazquez, and
    Ranking Member Luetkemeyer, and Vice Ranking Member Williams.
    Thank you very much for holding this hearing. I would like to
    thank Administrator Guzman for joining us today.
        Yesterday, California gas prices hit yet another record
    with $4.70 per gallon. This is the highest in the country. To
    further compound the higher prices facing Californians in my
    district, our country is confronting a deep labor shortage and
    a supply chain crisis disrupting small businesses' inventories
    and pushing prices even higher.
        Administrator Guzman, with your main function as the most
    important small business advocate in the Biden administration,
    how often are you in direct communication with President Biden
    to counsel him and with the White House staff regarding some of
    the challenges small businesses are facing with labor shortages
    and an inflation rate not seen in 31 years? And does your
    office perform economic analyses of how different policies
    impact small businesses?
        Ms. GUZMAN. We are coordinating with the White House on a
    daily basis across various taskforces and communicating to the
    National Economic Council and the Domestic Policy Council
    regularly in terms of the programs that we see that could help
    on our supply chain or on workforce issues. So that----
        Mrs. YOUNG KIM. When you say regularly, how often is that--
    weekly, daily?
        Ms. GUZMAN. Daily. Daily we have been communicating with
    the White House, various components because there are so many,
    of course, important issues and taskforces that we are trying
    to----
        Mrs. YOUNG KIM. What about the economic analysis?
        Ms. GUZMAN. The Office of Advocacy within the SBA conducts
    economic analysis and research on a regular basis. And we rely
    on them for those insights. And so they regularly publish with
    notices the intended economic research so that different
    institutions can fulfill that and they publish those results.
        Mrs. YOUNG KIM. Well, thank you.
        President Biden's supply chain announcement mentioned his
    commitments from large companies like UPS, FedEx, Walmart, and
    Target to use expanded hours to move those goods. As you know,
    small businesses lack the pricing flexibility and purchasing
    power to compete with the big businesses. And so from the small
    trucking companies, supply houses, small business operations
    and storefronts, small businesses continue to be harmed and
    left out in times of supply chain shortages. So what solutions
    are you offering small businesses during these disruptions? And
    how are we using the entrepreneurship programs to help small
    businesses navigate through the supply chain crisis?
        Ms. GUZMAN. On the capital front that is really key for
    businesses to navigate disruption. As an example, a Texas
    manufacturer that was able to secure our loan to acquire a
    manufacturer because the part that they were getting from
    abroad was taking too long. And so they built that and had
    actually 30 percent savings and that was as a result of an SBA
    loan. Another aerospace exporter in the Northeast was able to
    use one of our loans recently to be able to drive down that
    price because they were able to, with our export financing,
    prepay for goods and so that enabled them to get the goods
    faster. So capital is really important, as well as entrepreneur
    development. And SCORE chapters, SBDCs, WBCs have been
    increasing their support around vendor relationships and
    financial management and supply chain.
        Mrs. YOUNG KIM. Thank you.
        I want to turn my attention to another matter. Last month,
    this Committee passed reconciliation instructions that included
    $2 billion funded over the next 10 years to allow SBA to offer
    direct lending options. Can you talk to the Committee about the
    intent of the program? And my question is more, why are we
    moving away from a public-private lending partnership that we
    know is more efficient in preventing fraud than direct lending
    programs like EIDL?
        Ms. GUZMAN. SBA would not move away from its current
    programs. The 7(a) and 504 portfolios are strong programs and
    we will continue to work with our direct lenders. Where we see
    gaps is on small dollar loans. Note that less than 50 percent--
    I think it is 43 percent of businesses have been able to access
    a bank loan when seeking capital. You see people going more and
    more to online fintech lenders for financing. There are gaps in
    this marketplace of small dollar loans and the direct lending
    program focuses on addressing those gaps. Even within our
    lending programs, although we had a record year of $44 billion,
    we only did 18,000 loans under $150,000. Our own SBA loans are
    in decline and there are less lenders willing to do those
    loans.
        Mrs. YOUNG KIM. Well, thank you, but when SBA lowers
    interest rates, it is unfair competition if the government is
    offering lower interest rates and is putting smaller local
    lending institutions out of business. So I would urge you to
    analyze the direct lending provisions and its impact on smaller
    businesses before considering its implementation.
        And thank you for joining us today.
        Ms. GUZMAN. Thank you. Thank you.
        Chairwoman VELAZQUEZ. The gentlelady yields back.
        Now we recognize the gentlelady from Texas, Ms. Van Duyne,
    Ranking Member of the Subcommittee on Oversight,
    Investigations, and Regulations.
        Ms. VAN DUYNE. Thank you very much for your time.
        It seems like you have been all around the country with my
    Democrat colleagues. You have visited their areas. You have
    talked to their small businesses. You have taken their
    questions and you have answered them. I appreciate that for
    those folks. But I am going to take you up on your officer. I
    have offered this before numerous times. Come to my district.
    Come talk to the businesses that I am talking to. Listen to
    what their concerns are. Because from your testimony here today
    and your testimony in the past, I have no idea who it is that
    you are talking to because it is not what I am hearing.
        On Friday, I had over 30 small businesses come at a
    roundtable and tell me about what they are experiencing right
    now. Their number one complaint was the blockades that the
    federal government continues to put in their way as they are
    trying to open back up. You said that you saw that most small
    businesses are supportive of the vaccine mandate. Are you aware
    that 90 percent of small business employers are concerned that
    they are going to have to actually lose workers? Workers are
    going to quit over the vaccine mandate? Are you aware of that?
        Ms. GUZMAN. Well, 98 percent of those businesses would not
    even be affected by the mandate, so----
        Ms. VAN DUYNE. Ninety percent of small businesses are
    concerned that they are going to lose employees because of this
    vaccine mandate. Forty-nine percent of small business employers
    have job openings that they cannot fill. We have lost 5 million
    people out of the workforce in the last several months. Five
    million. We are at what, 61 percent now. Have you done any kind
    of impact about what this vaccine mandate is going to mean to
    small businesses?
        Ms. GUZMAN. And I appreciate the invitation to come to your
    district. And yes, my understanding is that 98 percent of all
    the----
        Ms. VAN DUYNE. No, no, I am asking has the SBA done any
    kind of a fiscal impact report on what the vaccine mandate will
    mean to small businesses?
        Ms. GUZMAN. Our Office of Advocacy has not yet done that
    analysis.
        Ms. VAN DUYNE. Okay. So we are already starting about
    putting this in and we have not even given any advice. We have
    no idea what the financial impacts are going to be.
        Supply chain. Ninety percent of small businesses are
    impacted by supply chain shortages right now. What we are
    looking at is an administration who is supporting killing our
    energy industry and increasing those costs, a vaccine mandate
    that is actually going to get truckers and folks who are
    delivering packages and logistics even later. I mean, those are
    businesses that have been dying for workers. Cannot find them
    now and we are going to fire them. Have you done any fiscal
    impact statements on what the supply chain effects are going to
    be on small businesses?
        Ms. GUZMAN. SBA, specifically, no. But of course, the
    Biden-Harris administration has economists----
        Ms. VAN DUYNE. I have not seen them. Have you seen them?
    Because we wrote to your office and we asked. And we have not
    gotten a response back.
        Ms. GUZMAN. Well, economists have weighed in that, in fact,
    the bipartisan infrastructure deal is going to make huge
    impacts in terms of improving our supply chain.
        Ms. VAN DUYNE. Huge. Do we have any numbers?
        Ms. GUZMAN. Well, I mean, that still does not apply to the
    immediate needs that I know small businesses are strained with.
    And so I think it speaks back to what the SBA can do around
    capital access----
        Ms. VAN DUYNE. It would be great if we knew this. If we
    actually knew the numbers.
        So the newest spending spree is going to be about $400
    billion in taxes on small businesses. That is going to result
    when you look at all the increases of a top federal tax rate
    increase of approximately 50 percent. Fifty percent. Are you
    aware that small businesses actually purchase regular gas and
    that has gone up 50 percent in costs?
        Ms. GUZMAN. I am aware. I am----
        Ms. VAN DUYNE. Trucks rentals are up almost 40 percent.
    Energy costs are up almost 30 percent. We have seen the highest
    inflation level in over 30 years. Inflation is taxation. And
    yet, from the SBA, we still cannot get any reports on what
    those impacts are going to be to small businesses.
        Ms. GUZMAN. We know that pandemic-induced inflation is
    affecting our small businesses. And economists largely agree
    that this is something that will go away in the coming months
    and we continue to try to implement----
        Ms. VAN DUYNE. And I hear that and I appreciate that. The
    last time you were here I asked you a number of questions about
    what the financial impacts were going to be on small businesses
    and you told me that you would get back with me. You have not.
    What you told me over and over again, and we have heard from
    other people from this administration, is that none of these
    effects are supposed to be on anybody over than $400,000 or
    large businesses. The fact that the SBA has not even looked
    into the fiscal impacts shows how completely out of touch you
    are with the needs of the small businesses and the impacts, the
    consequences that are going to happen with these fiscal
    policies that continue to go down. And I have to ask, if you
    cannot give me those answers, who is advising this
    administration on what costs their policies are having on small
    businesses?
        Ms. GUZMAN. The analysis, I continue to share information
    about our small businesses and the impacts that----
        Ms. VAN DUYNE. Information is great, but fiscal impacts are
    important. And if you, as the administrator of the SBA, do not
    have the answers to these immensely significant questions, who
    in the administration does? Who is advising the president of
    the financial impacts of these fiscal policies? Who is
    advocating for the 31 million small businesses across the
    country? These are basic questions. Trillions of dollars are
    being spent and they are being shoved down the throats of small
    businesses and we cannot even tell you what the impacts are
    going to be.
        Ms. GUZMAN. The Department of Treasury has analyzed. And
    again, the largest corporations, those less than 200, will be
    impacted.
        Ms. VAN DUYNE. Fifty percent. Fifty percent.
        I yield my time. Thank you.
        Chairwoman VELAZQUEZ. The time has expired.
        Now we recognize the gentlelady from Minnesota, Ms. Craig,
    for 5 minutes.
        Ms. CRAIG. Thank you so much, Madam Chairwoman. It is a
    real honor to be back here in the Committee room and thank you,
    Administrator Guzman, for your testimony today, and for your
    dedicated service to America's small business owners.
        You and I had a chance to visit together with
    Representative Phillips in Minnesota this summer, and we were
    able to get together several small business owners from across
    our districts to hear about the struggles that they have
    continued to face. I would just pause to make sure that my
    colleagues across the aisle understand that 98 percent of small
    businesses are fewer than 100 employees. Ninety-eight percent.
    So I appreciate your tolerance of some of the past testimony
    here today.
        Look, we have worked tirelessly to keep small businesses
    open and frankly, on a bipartisan basis over the last couple of
    years. I am very grateful to see that we have had such strong
    take up of the Shuttered Venues Operator grant program. I know
    we talked a lot about that when you were in Minnesota. That
    program, quite frankly, had a bit of a rough start and I was
    glad to see the administration worked to tirelessly to get that
    on a better path. That program has been an absolute lifeline
    for many, many of our small businesses. But there is a clear
    need to do more, and I want to make sure that this Committee
    understands that COVID is not over. The way we get to COVID
    being over is COVID is still here. Minnesota has some of the
    highest positivity rates in the country right now. In fact,
    yesterday, I think we were the highest. And our businesses are
    just going to extraordinary lengths to keep my constituent safe
    on a day-to-day basis.
        But I am hearing from business owners and local leaders in
    the district about those businesses that have been left out of
    the recovery. It is not any fault of their own but it is really
    important that the Small Business Committee not choose winners
    and losers. So I really do hope, Madam Chair, that this
    Committee can come together in a bipartisan manner again just
    like we did under the previous administration, to make sure
    that we do not lose any more of our small businesses that make
    up really the fabric of our local communities.
        And I will pause here to say 98 percent of small businesses
    are less than 100 employees. Just yesterday, I sent a letter to
    House leadership urging support for a small business relief
    package to come together for businesses that have been left out
    of our previous efforts and to replenish other programs like
    the Restaurant Revitalization Fund. There were some of us on
    this dais today who said that the amount of money in the
    American Rescue Plan was never going to be sufficient for the
    demand and the cost.
        So Administrator, if you have been touring the country, I
    am sure you have heard from businesses that are saying the same
    thing as you heard in Minnesota's 2nd District. Do you see need
    for further action from Congress to ensure businesses are not
    left out of these programs, especially as the holiday season
    comes into full swing?
        Ms. GUZMAN. We would welcome the opportunity to continue to
    work with you and your district to make sure that the COVID
    EIDL program in particular and those grants that are available
    for small businesses get into the hands of those who have not
    been able to benefit from recovery and we are making great
    efforts to try to increase our outreach on those programs in
    particular. We know that there was unmet demand with the
    Restaurant Revitalization Fund. It looks like Shuttered Venues
    will have enough funding for not only the initial grants but
    also the supplemental, but we know that these high-impact
    industries are still being impacted and we would happily
    administer any program that Congress would see fit to pass.
        Ms. CRAIG. Let me just make sure I make the point that the
    support we gave to the economy, to small businesses on a
    bipartisan basis, as well as Americans under the CARES Act, the
    previous administration, as well as the American Rescue Plan,
    that is one of the reasons why we are seeing such a strong
    recovery of demand. People are out trying to spend their money.
    And, of course, we have seen a once in a lifetime global
    pandemic which has disrupted our supply chains. Can you say a
    little bit more about what the administration is doing to help
    with those supply chain disruptions, the increased gas prices,
    more expensive shipping and overhead costs like rent and
    utility increases? We have to be honest with ourselves in that
    we have a challenge here. We have got a lot of demand and we do
    not have the supply to meet it right now.
        Ms. GUZMAN. We have definitely had global pandemic shifts
    in our supply chain that have affected our small businesses and
    their ability to get inventory. And as well, of course,
    influencing inflation and the demand, the prices, rather. So
    for our small businesses, obviously, they fit within the
    overall administration's priorities of trying to improve the
    supply chain, the investments in the bipartisan infrastructure
    deal that will be made over the year will go a long way to
    improving, of course, some of those bottlenecks, our ports and
    our roads and our bridges. And so we are looking forward to
    those key investments. On an immediate basis, of course, the
    administration took immediate action to try to solve some of
    those bottlenecks as well.
        Ms. CRAIG. Sadly, my time is expired so I will yield back.
        Chairwoman VELAZQUEZ. The gentlelady yields back.
        Now we recognize the gentleman from Florida, Mr. Donalds,
    for 5 minutes.
        Mr. DONALDS. Thank you, Madam Chair. Thank you, Ranking
    Member Luetkemeyer, and the Committee for this important
    hearing.
        Real quick a couple things. It has kind of been debated
    amongst the Members about how 98 percent of the 31 million
    small businesses in our country are less than 100 employees.
    Obviously, that is true. But also, the other truth is that with
    the OSHA mandate, which is unconstitutional, by the way, this
    OSHA vaccine mandate being pushed by the administration would
    start at 100 employees. The administration has already signaled
    that they want to push it to all small businesses, not just
    stopping at those with 100. So let's be very clear for the
    record what the intention of Joe Biden and his presidency is. I
    actually want to thank the 5th Circuit and any other courts
    that have struck down that mandate because it is
    unconstitutional. Congress never gave OSHA any authority
    whatsoever to tell employers what they must require employees
    to inject into their body. We have such a thing called HIPAA in
    the United States. It is surprising to me that we have
    forgotten our HIPAA laws considering the fact that we are
    largely dealing with COVID-19 in the best possible ways.
        Secondarily, I think it is also important to note that any
    president that has the authority to make you take an injection
    is frankly a totalitarian president and that flies in the face
    of our constitution the way it was written, the way it was
    drafted, the way it was conceived. Even the very framework of
    our nation. So it is unconstitutional. That thing is going to
    go away. Hopefully, the courts continue to do that and the
    Supreme Court follows suit in short order.
        Real quick, Administrator Guzman, thanks so much for
    coming. I do appreciate you being here. You mentioned earlier
    you believe inflation is pandemic induced. Do you hold the view
    that it is purely pandemic induced? Can you explain that?
        Ms. GUZMAN. I am relying on our economists who are sharing
    with us and most agree that the pandemic is causing these
    supply chain disruptions globally.
        Mr. DONALDS. Do you think it is that the pandemic is
    causing it or do you believe that it is now work-related issues
    associated with massive social spending and also in conjunction
    with environmental policy in the State of California which has
    made it harder for truckers to access the ports of Long Beach
    and Los Angeles?
        Ms. GUZMAN. The pandemic is underlying all of the
    inflation. Yes.
        Mr. DONALDS. Is there any reason why the social spending
    that frankly this Congress and this president started back in
    February, if we did not actually continue that social spending,
    do you think that we would have employees basically sitting at
    home or taking less hours?
        Ms. GUZMAN. What I am hearing from small businesses and I
    am not sure what you are hearing in your district, but their
    workers are staying out because of care issues, because of
    healthcare concerns. Because there also was----
        Mr. DONALDS. So quick question. When a local 7-Eleven down
    the street from my house has in the window that they want to
    give somebody a $500 signing bonus to come to work, that is
    because they are concerned about care issues or is it because
    they are concerned about money? Or is it that there is now a
    bargaining chip from the federal government that gives them
    more money than actually going in and taking more hours at
    work? Which one is it?
        Ms. GUZMAN. What I was about to say as well is the final
    thing is, you know, what I heard recently when I was convening
    a group of resource partners at the Institute for Veterans and
    Military Families that there is this great resignation as well
    and people are shifting careers. So these are the more dominant
    factors that are affecting our workforce. And yes, they are in
    control in terms of the opportunity that they have to demand
    higher wages.
        Mr. DONALDS. Let me ask you this question because I know
    you said earlier you support obviously the budget
    reconciliation package, Build Back Better, Build Back Broke.
    You know, everybody likes their little acronyms. Come on. This
    thing is building us back broke. You can acknowledge that. But
    I digress.
        Do you think that the social spending aspects of that bill
    will make it easier or harder for small business owners to find
    employees?
        Ms. GUZMAN. I think actually it will make it easier. And
    there are key investments within the Build Back Better
    framework that involve workforce development, apprenticeships,
    as well as----
        Mr. DONALDS. I almost gave you a title increase.
        Administrator, can we honestly have a conversation and sit
    here that if you do something like Child Tax Credit which will
    give people $300 per child that that is going to make it easier
    for them to go back to work or is it going to make an economic
    decision where they are going to make the choice of, you know
    what, maybe I do not need the additional 5 hours. If you
    cascade that through an economy across the 31 million small
    businesses in the United States, do you think it is going to be
    easier or harder for small businesses to staff their companies
    in order to be effective for their customers?
        Ms. GUZMAN. As President Biden says----
        Mr. DONALDS. Well, we all know President Biden does not
    know much about the economy. We know this.
        Ms. GUZMAN.--against the American people and workers who
    want to work, who want to have the protections in place and the
    care for their elders or for their children that is
    affordable----
        Mr. DONALDS. Administrator Guzman, the President of the
    United States has never worked a day in his life outside of
    Washington, D.C. You have done more than he has. Come on now.
    You were a small business owner. If the federal government was
    providing outside spending that competed directly with your
    ability to pay people to come to work, do you think it would
    make it harder for you as a small business owner which you
    were, not an administrator now in the administration, would it
    make it easier or harder for you to keep people under your
    employ?
        Ms. GUZMAN. Again, these investments in Build Back Better
    will strengthen----
        Chairwoman VELAZQUEZ. If you will excuse me.
        Ms. GUZMAN. Apologies.
        Chairwoman VELAZQUEZ. Decorum is important in this
    Committee and respecting----
        Mr. DONALDS. Madam Chair, I was just referring to the
    president----
        Chairwoman VELAZQUEZ. Respecting the President of the
    United States is part of that.
        Mr. DONALDS. Madam Chair, the President of the United
    States has never worked in our economy. Those are facts. That
    is not about decorum. That is the truth of the matter. He has
    never worked a day in our economy. He has always worked in
    Washington, D.C. So to point out that fact, and to illustrate
    the fact that we are talking about major economic policies that
    do impact the 31 million small business owners in our country
    is not about decorum. I did not trash the man. I am just
    speaking facts.
        Chairwoman VELAZQUEZ. Your time has expired.
        Mr. DONALDS. I yield.
        Chairwoman VELAZQUEZ. Now we recognize the gentlelady from
    Florida, Ms. Salazar.
        Ms. SALAZAR. Thank you. Thank you, Chairman Velazquez and
    Ranking Member Luetkemeyer, for holding this necessary hearing.
    And I also want to thank you, Administrator Isabella Guzman,
    for being present and willing to answer our questions. Because
    unfortunately, Madam, your people, the SBA office in my
    district just do not answer the phones. And I have consulted
    with other congressional offices and the same thing. A small
    business owner is desperate looking for a loan and he just
    cannot get through.
        Let me just give you an example. His name is Marquis
    McLemore. He lives in South Miami and he finally reached a
    human being, not a machine. The SBA lady who answered the phone
    was unaccountable and unable to answer basic questions. And I
    know the situation very well, Madam Guzman, because in my
    district office I created a division called the Prosperity
    Center to help my people achieve the American Dream, and for us
    immigrants it is to have their own business. And you know the
    SBA is instrumental for that Prosperity Center.
        There are other scenarios. When an individual who has been
    able to start the process, thank God, but gets stuck in the
    middle of it because every time they call there is a new person
    to talk to, they have to re-explain their problems, they have
    to reupload the documents. You know, Madam, SBS is not a
    MasterCard or a Visa to be bouncing people around. People have
    a choice to get another credit card but in this case there is
    no other SBA for small business. And your agency can make it or
    break it for millions and millions of small businesses in
    America.
        Let me tell you so bad that my congressional office and my
    Prosperity Center has a hard time getting information from your
    agency. So just imagine if a congressional office cannot get
    through, what about Rosa Lopez from Little Havana or John
    Rogers from Cutler Bay?
        Madam Guzman, I understand that you are responsible for
    this and I also understand that this is uncomfortable, very
    uncomfortable for you for what I am describing but it is more
    painful to lose your business because of a bureaucrat. And I am
    sure you agree with me. These are real people and these are
    real life-changing problems.
        Let me just give you one more piece of information and then
    maybe you can answer me. There are 2 million small business
    owners in South Florida. Two million. There is one office. One
    office that serves 2 million people. During the pandemic, as
    you have said, the SBA received 3 billion to hire more people
    and provide a better service.
        Now, let me ask you something. How many people have you
    hired in the last 10 months? How many of those in South
    Florida? How many new call centers and how many of them are
    bilingual?
        Ms. GUZMAN. Thank you for that. We do value customer
    service experience and that has been a priority of mine since I
    came in which was what instigated our overhaul. And I think you
    are referencing mostly to the COVID EIDL program where it has
    been very challenging to get answers. So we have----
        Ms. SALAZAR. So you know that we have a problem with
    customer service?
        Ms. GUZMAN. We completely agree with you and we are trying
    to fix it. And what we have done so far is we have three times
    the amount of customer service resources that we have
    available. We have switched vendors as well and we have, of
    course, bilingual capacity is available within this network. We
    have also tried to increase in the field and so we will take
    back your concerns about the Florida District Office in
    particular.
        Ms. SALAZAR. Thank you.
        Ms. GUZMAN. We have also tried to increase the district
    connection to our platform. Previously, they did not have----
        Ms. SALAZAR. I am going to get back to you in 30 days and I
    am going to tell you if my Small Business Administration office
    in South Florida is working according to what you are telling
    me.
        Let me just give you one more concern. A month ago, and
    this is even worse, a month ago the General Inspector, or
    Inspector General I should say, the Inspector General found
    that women and minorities, you and me, women and minorities are
    not getting their fair share of receiving small business
    government contracts. For me that is lethal because I promised
    this to my constituents through my Prosperity Center and I have
    to deliver, Madam. And the SBA has to help me because it is
    instrumental. My question is how are you going to fix this,
    that we do get the fair share of what we need? Women and
    minorities.
        Ms. GUZMAN. Thank you for the question. Yes, government
    contracting is a priority and equity across our programs. We
    want to make sure all of our small businesses access the
    federal government. And right now we have seen over the past 10
    years a decline of 40 percent.
        Ms. SALAZAR. Those are stats. What are you going to do in
    order to right now under your administration being able to, for
    women and minorities, to get more government contracts?
        Ms. GUZMAN. So we have a multi-prong approach. The first is
    working collaboratively with the White House and OMB on the
    policies like category management and other policies to make
    sure that businesses can access all contracts across the
    federal government. We have increased the budget for the
    president's request for an increase on the government
    contracting business development teams resources so that we can
    increase outreach and get more----
        Ms. SALAZAR. Can you give me in 30 days a report of what
    have you done in South Florida in order to improve the access
    for these women and minorities?
        Ms. GUZMAN. We would be happy to sit down with you and your
    team to go over specific initiatives that we can implement.
        Ms. SALAZAR. To help my constituents. Thank you, Madam.
        Chairwoman VELAZQUEZ. Time has expired.
        Now we recognize the gentleman from Wisconsin, Mr.
    Fitzgerald, for 5 minutes.
        Mr. FITZGERALD. Thank you, Madam Chair. And thank you,
    Administrator Guzman.
        Back in I think it was February-March timeframe, we started
    to get some numbers back on just exactly what did the PPP loan
    program look like and hindsight is 20/20. I think you would
    find agreement that there was a lot of successes and may have
    saved main street.
        Also, obviously, at the same time we were getting the
    reports that the direct loans made by the SBA were not only a
    high percentage that resulted in fraud and that money that was
    being distributed after individuals--crooks--I do not know how
    else to explain this--had gotten into the portal and obviously,
    you know, put in bogus facts and figures and got a check in the
    mail. We then had discussions with the IG and with others in
    law enforcement saying that they were working on claw backs and
    that SBA was working on claw backs and that also there had been
    some individuals ultimately who had been charged for fraudulent
    activities.
        So like I said, hindsight is 20/20. We learned our lesson.
    We kind of know, we have always known, that direct loan
    programs by the federal government result in a high percentage
    of fraudulent claims. So as we move forward and after this
    Committee was involved in, and this was referred to by some of
    the other Members here today, when the SBA got the $2 billion
    in loans directly to the borrower, you said earlier that
    financial institutions do not necessarily want to get involved
    with loans of 150 or less, but I am not finding that that is
    the case. Just a couple of weeks ago, Wisconsin Bankers
    Association, I think the credit unions are saying, whoa, whoa,
    whoa. Time out. Why would we not be involved in this,
    especially because the due diligence was done by those
    financial institutions and we now know that that makes for a
    much more legitimate process. And it seems like you are
    abandoning that and it does not make much sense to me right
    now.
        Ms. GUZMAN. Thank you so much for that. Well, one of the
    first things, just to mention on COVID EIDL and the fraud that
    the IG had outlined, that was all affecting, that was all
    reviewing 2020 loans. And so controls have been restored thanks
    to the Economic Aid Act. The SBA was given again the right to
    collect tax documents, which we have. And so we have $67
    billion in disaster portfolio over the years of SBA that does
    not have high incidence of fraud. So our direct lending
    programs across EIDL programs broadly do not suffer from that
    same effect and that is specifically to deal with COVID EIDL
    and the restrictions that were placed on the Agency at the time
    and the administration's choices.
        Mr. FITZGERALD. So do you believe that, in fact, there were
    vulnerabilities that now have been addressed and if we get
    together a year from now that you will be able to say that
    stuff was fixed and that is not going to be the case again?
        Ms. GUZMAN. Yes. And we have been working with the IG
    closely to make sure that we are implementing all the
    recommendations. So not just the tax document collection but
    other identity verifications across the COVID EIDL program. And
    we are making great progress.
        Within the direct loan proposal specifically, some banks
    are still doing those loans. I said 18,000 within the SBA's
    portfolio last year. We just continue to see large gaps. Of
    course, we have 32.5 million small businesses and especially as
    we have seen the footprint of so many banks shrink across the
    country where there are actual banking deserts, half of them in
    rural communities, we need to make sure that there are
    alternatives and that all our small businesses can connect to
    capital. And so we believe that SBA has a role to play to work
    with the lending partners similar to how we did with PPP, and
    with a fee-based program, distribute these loans through our
    lenders as well as directly.
        Mr. FITZGERALD. Let me shift gears real quick for a final
    question.
        There has been a lot of discussion about the vaccines and
    the 100-person mandate. What is the magic behind 100 employees?
    I have not been able to figure this out. I have been lectured.
    Everyone in America has been lectured about follow the science,
    follow the science. What is the 100-person threshold? And if we
    have an employer that has got 105 employees and another one
    that has got 95 and they are side by side, some of them would
    be subject to fines and others would not. I mean, what is the
    logic behind that?
        Ms. GUZMAN. Of course, with the proposed rule there will be
    comments and so we will find out more about how people feel
    about that analysis but my understanding was that it was done
    based on where they thought a company of that size would have
    the capacity to be able to administer a program like that and
    be able to comply. That is my understanding.
        Mr. FITZGERALD. So it has nothing to do with health or
    COVID itself or science?
        Ms. GUZMAN. As well as that. Yes, correct. You are correct,
    sir, that there is, of course, you know, in larger.
        Mr. FITZGERALD. I do not get it. I do not understand why
    100 is the magic number.
        Ms. GUZMAN. In larger facilities there have been, you know,
    of course there are more concerns of COVID outbreaks and so
    being able to control for vaccines and that matter would be
    helpful.
        Mr. FITZGERALD. Okay. I yield back.
        Chairwoman VELAZQUEZ. Time has expired.
        Now I will be asking questions. I will recognize myself for
    5 minutes.
        Ms. Guzman, the Department of Defense administered 17
    different vaccines and children are required to get vaccines
    prior to enroll in school. I just cannot see what the issue is
    with the vaccine mandate when we know that because of it we
    have been able to control the spread of COVID-19. Also, when
    people use the argument that it is impacting small businesses
    more than any other sector, 98 percent of small businesses are
    exempt from the 100 employee rule. There are other issues that
    were raised and I just want to give you an opportunity to
    answer.
        Administrator, since you have been in office as the head of
    the SBA, have you refused to provide access to data or
    information requested by the IG?
        Ms. GUZMAN. We have a very transparent and collaborative
    relationship with the IG and our teams meet regularly and we
    have disclosed all information that they have requested.
        Chairwoman VELAZQUEZ. When people talk about fraud in the
    EIDL program, that fraud was connected to the fact that the
    guardrails and protections under the previous administration
    were lowered. What steps have you taken to put those guardrails
    in place?
        Ms. GUZMAN. Yes. The IG report was focused on 2020 where
    the guardrails did not exist. We have implemented the
    collection of tax documents across the portfolio as well as
    implemented additional identity measures to make sure that our
    overall fraud control framework is in place and that we are
    following suggestions of the IG and the GAO.
        Chairwoman VELAZQUEZ. Let's talk about taxes and how in the
    BBB Act it impacts small businesses. People this morning have
    been referring to the tax provision under the Build Back Better
    Act and how those provisions will be impacting small
    businesses. I have here the Committee's Ways and Means section
    by section of the bill and I invite my colleagues to read it so
    that we can make the statement or the questions related to
    small businesses. I want to know how many small businesses will
    be impacted by the provision of the 15 percent corporate
    minimum tax to those businesses that are making $1 billion a
    year in profits. How many small businesses? How many businesses
    are operating overseas because of the global minimum tax for
    large multinational corporations, and how many small businesses
    will be impacted by that provision? How many businesses that
    have income over $25 million will be impacted with the
    surcharge of the wealthiest .02 percent of businesses? How many
    small businesses have a structure where they do corporate stock
    buybacks? Nowhere in this bill can you find where corporate or
    individual tax rates have been modified or will be modified.
        Let's go to the print so that we can say and have an honest
    discussion as to how those provisions will be impacting small
    businesses. Then, the Medicare surcharge closes the loophole
    that allows some wealthy taxpayers to avoid paying the 3.8
    Medicare tax on their earning. Those are not pass-through.
    Let's go to the source because it seems to me that people are
    discussing a bill that does not exist. Let's go now to some of
    the programs under SBA and the Build Back Better Act.
        Administrator, you discussed how the data shows small
    dollar loans have declined significantly as a share of the 7(a)
    portfolio with loans of less than $150,000 down by almost 53
    percent over the past years. The average 7(a) loan has more
    than doubled over a decade. Do you agree that a direct loan
    product will help fill this gap in the 7(a) program? Are you
    confident that the agency will be able to stand up and deliver
    this product in a timely manner?
        Ms. GUZMAN. Yes. We definitely have seen that gap in the
    marketplace and we believe the SBA is equipped, especially
    having learned from the great lessons of PPP and EIDL and
    implemented some incredible private sector best practices and
    expanded our network. We do have the tools to implement this
    effectively.
        Chairwoman VELAZQUEZ. What steps will you take to cure
    potential fraud in a direct loan program?
        Ms. GUZMAN. As we have on our previous disaster loan
    programs a $67 billion portfolio where fraud was not an issue,
    we will continue to follow those great standards as well as
    implementing new technologies as fraud evolves to make sure
    that we are fighting fraud on a regular basis and getting the
    funds into the hands of those businesses it was intended for.
        Chairwoman VELAZQUEZ. The USDA Business and Industry Loan
    program--and this is an important topic for me--so the USDA
    Business and Industry Loan program does not require co-ops to
    provide a personal guarantee but the SBA still does which
    prevents them from getting 7(a) loans. Instead of requiring a
    personal guarantee, USDA requires co-op Members to sign a
    profit nondistribution covenant. If this works for USDA issued
    work for the SBA, why will the SBA not provide this option for
    co-ops?
        Ms. GUZMAN. I know that, you know, thanks to your main
    street Act we have been exploring the options to expand the use
    of the 7(a) products across our ESOPs and our worker
    cooperatives broadly. I am happy to explore this a little bit
    further. We have made some changes within the program to open
    it up to ESOPs and co-ops and we have committed to making sure
    that we can continue to see how those loans perform and make
    additional changes.
        Chairwoman VELAZQUEZ. Will you commit to working with this
    Committee to ensure co-ops can access 7(a) loans?
        Ms. GUZMAN. Yes. I think it is a priority for us to make
    sure that there are options for especially exiting businesses
    to have a success plan that can work.
        Chairwoman VELAZQUEZ. Data shows that Black and Hispanic
    borrowers only received 3 and 6 percent of 7(a) dollars lent in
    2021, respectively. CDFIs and MDIs are better able to reach
    small businesses owned by people of color. They are recording
    that PPP is the latest example. How do you plan to bring more
    CDFIs and MDIs into the 7(a) program?
        Ms. GUZMAN. The Community Advantage pilot program that
    would be made permanent within the Build Back Better will help
    create certainty within a program that attracts our CFIs and
    enables them to leverage our 7(a) portfolio. We would use that,
    as well as other tools, to make sure that we are engaging with
    them and continuing the relationships fortified during PPP.
        Chairwoman VELAZQUEZ. Thank you.
        Every Member has had their 5 minutes. I just want to really
    thank you. I am looking forward to working with you and the
    Committee in terms of how we can strengthen the programs we
    have under SBA and the new programs that will be implemented. I
    really want to thank you and your staff for your service on
    behalf of American small businesses. I also appreciate your
    willingness to appear before and work with this Committee.
    Transparency, accountability, and responsiveness are critical
    to a positive working relationship between the agency and this
    Committee. When I say ``this Committee,'' I mean all of the
    Members of this Committee. Everyone in the room today has the
    same goal--to help our main street employers. I look forward to
    collaborating with you and all of the Committee Members as we
    work to get small businesses to full recovery. This is not a
    small task. We have laid out complicated issues today that need
    addressing. Given the monumental obstacles that SBA has
    overcome over the past 18 months, I am confident that you can
    correct these problems and make these programs better serve
    entrepreneurs.
        I ask unanimous consent that Members have 5 legislative
    days to submit statements and supporting materials for the
    record.
        Mr. LUETKEMEYER. Madam Chair?
        Chairwoman VELAZQUEZ. Yes, sir.
        Mr. LUETKEMEYER. You went over 2 minutes and 34 seconds and
    now you have had a closing statement. I think I get time to be
    able to rebut that.
        Chairwoman VELAZQUEZ. To rebut what?
        Mr. LUETKEMEYER. To rebut your 2 minutes and 34 seconds
    versus my 5. And now you have had a closing statement so I have
    another closing statement.
        Chairwoman VELAZQUEZ. I always give a closing statement.
    You never have.
        Mr. LUETKEMEYER. That was a lengthy closing. It is one
    thing to do 30 seconds but that was about 2 minutes worth of
    closing statement.
        Chairwoman VELAZQUEZ. I am the Chair of this Committee. I
    run this Committee and I try to run this Committee in a
    bipartisan way. I did it with Mr. Chabot. I have got to tell
    you, this has been the most partisan Committee ever, and I
    resent that because I try to be fair and balanced.
        Mr. LUETKEMEYER. Well, Madam Chair----
        Chairwoman VELAZQUEZ. I have always made a closing
    statement. As Chair, I have----
        Mr. LUETKEMEYER. That is wonderful you made a closing
    statement but I think if you are going to have a lengthy one--
    it is one thing to say thank you to the witnesses and just a
    recap, a small recap, but for----
        Chairwoman VELAZQUEZ. Reclaiming my time, sir, I have
    always given a closing statement. It does not have to be 2
    minutes long or 3 minutes long or 1 minute long. I just
    simply----
        Mr. LUETKEMEYER. If you have a closing statement of a
    significant length, I have the option to be able to have a
    closing statement as well.
        Chairwoman VELAZQUEZ. You are not the Chair.
        Mr. LUETKEMEYER. That is in the rules. That is not the
    Chair's prerogative. It is in the rules.
        Chairwoman VELAZQUEZ. You are not the Chair. So----
        Mr. LUETKEMEYER. So you are going to do it because you can.
    Is that what you just said?
        Chairwoman VELAZQUEZ. Well, I am the Chair, sir. I am the
    Chair. Mr. Chabot never gave----
        Mr. LUETKEMEYER. So next term, whenever I am the Chair, you
    are going to sit here and we will just make sure you have 5
    minutes and not go on for 20. Is that what you just said?
        Chairwoman VELAZQUEZ. I gave you the right to run your
    minority Members. I give you access in terms of your budget. I
    am the Chair. I give a closing statement and that has always
    been the tradition of the Committee.
        Mr. LUETKEMEYER. Madam Chair, with all due respect, there
    are rules in place to allow each----
        Chairwoman VELAZQUEZ. You want to give an opening? You want
    to give a closing statement? Make a closing statement, sir. You
    are recognized.
        Mr. LUETKEMEYER. Okay. Very good.
        Chairwoman VELAZQUEZ. You are recognized.
        Mr. LUETKEMEYER. Thank you.
        We could have been out of here 5 minutes ago if we would
    have just recognized it right off the bat but here we are.
        Chairwoman VELAZQUEZ. You know----
        Mr. LUETKEMEYER. Again, going through some of the last
    comments by the Chairman, the vaccine mandate, I think Ms.
    Guzman, you said 98 percent of small businesses are exempt. The
    problem is only about 40 percent. About 35 to 40 percent of the
    people are going to be exempt from that. There is about 60 to
    65 percent according to what our information is that are going
    to be affected by the vaccine mandate. So let's be honest about
    your statistics here.
        The Chairman talked about guardrails on things and I think
    that is great. We need to have guardrails on what is going on,
    especially in the EIDL program and some of the direct lending
    programs. The program is the staff do not follow the
    guardrails. The IG report says that this is happening so
    therefore, we need to make sure that the staff does its job,
    which is to adhere to the new challenges, new guardrails, new
    protocols that are in place. That is your job, Madam
    Administrator.
        One of the things that is frustrating to me is when you
    make these wild statements about we are going to raise taxes on
    the wealthy, in this BBB there is a huge tax break for the
    wealthy. It is called SALT. You cannot take on one side and
    give on the other and get away with just saying part of what is
    going on and not explain what is going on on the other side of
    this argument. So it is very frustrating to see that a lot of
    the information is not necessarily given in a frank form for
    both sides to understand the depth and problems that we have.
        Again, I thank you for being here, Ms. Guzman. I think that
    you have got a large job ahead of you. I think you found this
    morning the concerns that we have on this side of the aisle
    with regards to the inability to answer questions, the
    inability to provide studies to show that you are actually
    doing your job and making sure that the information you are
    giving us is actually done by a think tank or a study of some
    sort, that you can verify and back up what you are saying. This
    is very important. You talk about the COVID thing and right
    here I have got something from the Job Creators Network that
    says higher prices inflation by 40 percent versus 14 percent is
    the number one issue for small businesses. I hope that you have
    information like that because that is what you need to be able
    to make good decisions. So I am very concerned with the
    direction that we are going. This Committee hearing has not
    allayed my fears and we are going to be watching very carefully
    and providing what we are supposed to do, oversight.
        Thank you for being here, and with that, Madam Chair, I
    yield back.
        Chairwoman VELAZQUEZ. Yes. Let me remind the gentleman that
    almost every economist in this country is saying, including
    Senator Portman yesterday in his speech, that when it comes to
    inflation, no better to make investment in the infrastructure
    of this country. You know what is the problem here? That for
    the last 40 years America has been expecting an infrastructure
    bill. People and previous presidents make pronouncements of
    infrastructure bills and this one delivered. The President of
    the United States delivered yesterday.
        I ask unanimous consent that Members have 5 legislative
    days to submit statements and supporting materials for the
    record.
        Without objection, so ordered.
        If there is no further business to come before the
    Committee, we are adjourned. Thank you.
        [Whereupon, at 12:29 p.m., the committee was adjourned.]

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