    [House Hearing, 118 Congress]
    [From the U.S. Government Publishing Office]

       FIELD HEARING ON THE STATE OF THE AMERICAN ECONOMY: THE HEARTLAND

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

                                    HEARING

                                   BEFORE THE

                          COMMITTEE ON WAYS AND MEANS
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 FIRST SESSION
                                   __________

                                 MARCH 7, 2023
                                   __________

                                Serial No. 118-3
                                   __________

             Printed for the use of the Committee on Ways and Means

                      [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                                   __________

                        U.S. GOVERNMENT PUBLISHING OFFICE

    53-101                     WASHINGTON : 2024

                          COMMITTEE ON WAYS AND MEANS

                        JASON SMITH, Missouri, Chairman
    VERN BUCHANAN, Florida               RICHARD E. NEAL, Massachusetts
    ADRIAN SMITH, Nebraska               LLOYD DOGGETT, Texas
    MIKE KELLY, Pennsylvania             MIKE THOMPSON, California
    DAVID SCHWEIKERT, Arizona            JOHN B. LARSON, Connecticut
    DARIN LaHOOD, Illinois               EARL BLUMENAUER, Oregon
    BRAD WENSTRUP, Ohio                  BILL PASCRELL, Jr., New Jersey
    JODEY ARRINGTON, Texas               DANNY DAVIS, Illinois
    DREW FERGUSON, Georgia               LINDA SANCHEZ, California
    RON ESTES, Kansas                    BRIAN HIGGINS, New York
    LLOYD SMUCKER, Pennsylvania          TERRI SEWELL, Alabama
    KEVIN HERN, Oklahoma                 SUZAN DelBENE, Washington
    CAROL MILLER, West Virginia          JUDY CHU, California
    GREG MURPHY, North Carolina          GWEN MOORE, Wisconsin
    DAVID KUSTOFF, Tennessee             DAN KILDEE, Michigan
    BRIAN FITZPATRICK, Pennsylvania      DON BEYER, Virginia
    GREG STEUBE, Florida                 DWIGHT EVANS, Pennsylvania
    CLAUDIA TENNEY, New York             BRAD SCHNEIDER, Illinois
    MICHELLE FISCHBACH, Minnesota        JIMMY PANETTA, California
    BLAKE MOORE, Utah
    MICHELLE STEEL, California
    BETH VAN DUYNE, Texas
    RANDY FEENSTRA, Iowa
    NICOLE MALLIOTAKIS, New York
    MIKE CAREY, Ohio
                           Mark Roman, Staff Director
                     Brandon Casey, Minority Chief Counsel
                                     ------

                             C  O  N  T  E  N  T  S

                                  ----------

                               OPENING STATEMENTS

                                                                       Page
    Hon. Jason Smith, a Representative from Missouri, Chairman.......     1
    Hon. Richard Neal, a Representative from Massachusetts, Ranking
      Member.........................................................     2
    Advisory of March 7, 2023 announcing the hearing.................     V

                                   WITNESSES

    Bryan Jackson, Owner, Route 66 Meat Processing...................     5
    Chuck Mills, Owner and President, Mills Machine Company Inc......    11
    Kelli Payne, Former President, Oklahoma National Stockyards......    15
    Joe Brevetti, Managing Member, Charter Oak Production Co.........    20
    Shiloh Kantz, Executive Director, Oklahoma Policy Institute......    29

                               LOCAL SUBMISSIONS

    Local Submissions................................................   101

                               PUBLIC SUBMISSIONS

    Public Submissions...............................................   103

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                THE STATE OF THE AMERICAN ECONOMY: THE HEARTLAND

                                  ----------

                             TUESDAY, MARCH 7, 2023

                              House of Representatives,
                                   Committee on Ways and Means,
                                                       Washington, D.C.
        The committee met, pursuant to call, at 8:02 a.m. at
    Express Clydesdales, 12701 W. Wilshire Blvd, Yukon, OK 73099,
    Hon. Jason Smith [chairman of the committee] presiding.
        Chairman SMITH. The committee will come to order.
        Without objection, the gentleman from Oklahoma, Chairman
    Lucas, is authorized to participate in the hearing and ask
    questions.
        Welcome to the second field hearing of the Ways and Means
    Committee.
        Thank you to our host, Express Clydesdales, and to
    Representative Hern and Representative Lucas, for hosting us in
    your beautiful State.
        The committee is in Yukon, Oklahoma, today to listen to
    working Americans about how to make life better for their
    families, neighbors, and communities. Oklahoma is a place where
    self-reliance and the frontier spirit run deep. Oil, natural
    gas, and agriculture built Oklahoma. America's heartland is the
    story of the people who fuel, feed, and build our country.
        Today, two-thirds of all the energy produced in Oklahoma is
    exported across the country and the world. The State is the
    number one producer of rye, one of the top producers of beef
    cattle, and it has the fourth largest number of farms in
    America. And yet, Democrats in Congress and the White House
    have targeted communities like this one for the heavy hand of
    government regulation. ESG standards will limit the capital
    needed to expand Oklahoma's oil and gas leadership and put
    radical climate and social policies ahead of the retirement
    security of working families.
        The President's policies have made life unaffordable for
    middle-class families. Even here, a State with plentiful
    energy, diesel prices were 62 percent higher at their peak than
    the day Joe Biden became President. Over the last decade, 92
    farms in Oklahoma went bankrupt.
        President Biden, in his budget this week, will want to make
    it even harder to pass the family farm down to the next
    generation. He wants to repeal stepped-up basis and increase
    the death tax, treating family farms like piggy banks to pay
    for more welfare for the wealthy. When it comes to Oklahoma
    manufacturing, the prices that producers pay have risen 17
    percent during President Biden's administration. Small
    businesses can barely make payroll and pay rent with their
    razor-thin margins.
        I am pleased to welcome Bryan Jackson, an Iraq veteran and
    founder of a meat packing company; Chuck Mills, owner of a
    family owned manufacturing company; Kelli Payne, a fifth-
    generation rancher from Mustang, Oklahoma; and Joe Brevetti, a
    small oil producer; and Ms. Kantz from Tulsa.
        In 2 days, President Biden will release his latest budget.
    If history is our guide, America's heartland should expect a
    budget that continues Washington's assault on their way of
    life. Biden's last budget threatened $45 billion--$45 billion
    in new taxes on American energy producers. It spent $330
    billion on policies that discouraged work, worsened supply
    chains, and leaves Main Street littered with ``help wanted''
    signs.
        Biden's 25 percent increase for the EPA would supercharge
    an agency that thinks it is their business to tell farmers
    whether a small stream, pond, or farm dust is is harming the
    environment. We must humbly listen to the working Americans who
    are living under these failed policies so we can chart a better
    course.
        For those of you from the community attending today, or
    employees of Express Clydesdales, we also want to hear from
    you. There will be notebooks and clipboards passed around in
    the back, and I want to encourage every audience member to
    please share your experiences and ideas to help us get this
    country back on the right track. These will be entered into the
    official hearing record to guide this committee's work.
        I want to thank our witnesses for taking the time away from
    their families and busy schedules to be here today, and we look
    forward to your testimony.
        I am pleased to recognize ranking member from
    Massachusetts, Mr. Neal, for his opening statement.
        Mr. NEAL. Thank you, Mr. Chairman.
        I want to thank Frank, and I want to thank Kevin for their
    warm welcome to Oklahoma.
        If you are wondering what my interest was in Oklahoma, any
    place that produced Mickey Mantle has got to be a great place
    to live.
        So, I want to thank you, Mr. Chairman, and thank our
    witnesses for joining us this morning.
        President Biden and congressional Democrats, our economic
    agenda is focused on building the economy from the bottom up
    and the middle out. And the legislation delivered by the Ways
    and Means Committee and Democrats has already delivered for
    Oklahoma, and most importantly, for its workers.
        The State GDP outpaced national growth in the third quarter
    of 2022, and unemployment hovers at historic low rates. I see
    the motto of ``work conquers all,'' and I know you don't take
    it lightly in Oklahoma. But a desire to work isn't all that is
    needed. In even a strong economy, workers must be able to work
    fairly and be compensated fairly.
        Further, supercharging our economy will only come when we
    take action on affordable childcare and universal paid leave
    realities, which will eventually happen. This is why Federal
    direct investments in workers and their families have been so
    crucial to these communities. Democrats expanded the child tax
    credit, which brought nearly 60,000 Oklahoma children out of
    poverty, cutting the poverty rate in half. No policy has done
    more to reduce child poverty than this one.
        The American Rescue Plan permanently increased desperately
    needed Federal care in terms of child investments across
    Oklahoma and other 49 States. The critical step was first in
    expanding that child credit and enabling workers to reenter the
    workforce. I will say again that we will continue to defend
    Social Security and Medicare and not to have any cuts based
    upon some of the proposals that we have heard about.
        We also put money back in the pockets of working Americans
    with the Inflation Reduction Act. We helped lower healthcare
    costs by allowing Medicare to negotiate high-cost drugs,
    capping out-of-pocket costs for 21,000 Oklahoma seniors and
    reducing health insurance premiums for millions of Americans.
    All of these life-saving policies will provide more certainty
    for American families.
        We have already seen this law drive industry action. Just
    this week, a major insulin manufacturer announced a universal
    cap on insulin costs. And our work in spurring growth for small
    businesses and workers and families across the State of
    Oklahoma, in places just like Yukon, will continue, you can be
    assured. This is one of the top States for clean energy
    development, thanks to Oklahoma's ample wind, solar, and hydro
    energy potential, existing infrastructure, and talented labor
    force.
        When coupled with the bipartisan infrastructure law and tax
    credits championed by the Ways and Means Democrats in the
    Inflation Reduction Act, the clean energy economy in Oklahoma
    is accelerating. I must tell you all today that I hope that
    this State, like others, will take full advantage of $369
    billion of tax credits for battery power storage, which this
    State is particularly well positioned to take advantage of.
        An estimated 2,000 clean energy jobs have also been created
    in Oklahoma since last August, and that is just the beginning.
    Companies across the heartland are capitalizing on incentives
    to drive R&D and turbo charge manufacturing right here at home.
    From electric vehicles to wind power, economic growth will be
    felt by rural and industrial communities alike.
        And as you will hear today, the contrast is clear: We want
    to make sure that the wealth of America is evenly distributed
    across this great country of ours. We know that the state of
    our economy is strongest when government puts the interest of
    the middle class over the well-connected and the wealthy.
        We are going to continue to build on that work to expand
    affordable childcare, paid leave, protect Social Security and
    Medicare, and for those who are openly advocating tearing up
    those benefits from the people of Oklahoma. We too understand
    the importance of promoting economic opportunity for family
    farmers and other business in the agricultural sector. One of
    the great things that happened in this country was the unity
    that was caused by great farmers in the farmland of this
    country and what it did for urban people who needed food. You
    helped contribute to making that a reality.
        So, thank you, Mr. Chairman, and I want to thank our
    witnesses for being here today. I look forward to them sharing
    their experiences with us.
        Chairman SMITH. Thank you, Ranking Member Neal.
        I am pleased to recognize the gentleman from Oklahoma, Mr.
    Hern, for 1 minute.
        Mr. HERN. Thank you, Chairman Smith.
        I want to start by thanking our host and welcoming my
    colleagues to the heartland of America and my home, the great
    State of Oklahoma.
        Although my fellow Oklahomans here today are facing many
    challenges under this administration's economic policies, it is
    fair to say we are all proud to be Americans, but we thank God
    we are from Oklahoma. Most don't know this, everybody thinks of
    us as a 95 percent oil and gas State, but almost 50 percent--
    over 50 percent of our energy in our State are from renewables,
    something that needs to get out across America. We believe in
    the all-the-above energy for all of America.
        You know, over the past few years, our State has welcomed
    families and businesses, both small and large, from States like
    New York and California, and we are represented today from our
    members from New York and California. We want them to
    experience--and maybe you all will want to come here also. Not
    in your current capacity, but--in fact, census data shows that
    Oklahoma is among the top ten States in the country where
    people are moving to. But while Americans can migrate to States
    with friendlier business climates, they still face an
    overbearing Federal government and burdensome policies from the
    Biden administration that stunt their growth.
        I am excited for my colleagues to hear the stories of
    hardworking Oklahomans. Unfortunately, many job creators and
    entrepreneurs face unnecessary struggles because of this
    administration's harmful regulation and reckless spending.
        I want to thank our witnesses for being here today. I
    appreciate your time away from what you do every day to come
    here and speak to us. Your testimony today will inform our
    legislative process. And as a former business owner who spent a
    lifetime on farms--I literally sold a farm to buy my first
    McDonald's restaurant--I know firsthand the American people,
    not Washington, know what is best for all of us.
        Thank you, Chairman Smith, for coming to the heart of
    America and allowing Oklahomans to highlight the devastating
    effects of the Biden economy. I yield back.
        Chairman SMITH. Thank you, Mr. Hern.
        I am pleased to recognize the other gentleman from
    Oklahoma, the chairman of the Science Committee, Mr. Lucas.
        Mr. LUCAS. Thank you, Chairman Smith. And I would like to
    extend a very warm welcome to you and Ranking Member Neal and
    all the other members of the illustrious Ways and Means
    Committee to the great State of Oklahoma.
        For those of you who are not familiar with the committee
    process, I, like many other members, belong to a variety of
    other committees. But my friends here would note to you there
    is only one Ways and Means Committee. Correct, Mr. Chairman?
        Chairman SMITH. That is correct.
        Mr. LUCAS. The topic of this field hearing is not only
    timely and appropriate, but the location is too. I can't think
    of a single industry in our State that is not directly impacted
    by the work of this committee. The future of ag, energy,
    manufacturing in Oklahoma and across the country is dependent
    on tax and trade policies that work for these industries, not
    against them.
        I look forward to joining my colleagues today in learning
    more about the challenges these witnesses are facing on the
    ground and how Congress can help address those issues.
        With that, thank you again, Mr. Chairman. Thank you to the
    committee, and I yield back.
        Chairman SMITH. Thank you. Mr. Chairman.
        I would like to introduce our witnesses. Mr. Bryan Jackson
    runs Route 66 Meat Processing & Market, Oklahoma's only USDA
    inspected meat processing facility. He is a West Point graduate
    and served in the Army for 6 years for which he was awarded the
    Distinguished Service Cross and Purple Heart.
        Mr. Chuck Mills is owner and President of Mills Machine
    Company, Incorporated, a major custom manufacturer of Earth-
    drilling tools founded by his family in 1908. The company now
    exports an average 25 percent of its products to an estimated
    70 international markets.
        Ms. Kelli Payne is a fifth-generation farmer and rancher
    from Mustang, Oklahoma, and serves as north central district
    vice president for the Oklahoma Cattlemen's Association and was
    recently appointed as chairperson of the Oklahoma Cattlemen's
    Foundation.
        Mr. Joseph Brevetti manages all aspects of oil and gas
    operations, prospect and property evaluation for independent
    exploration and development for Charter Oak Production.
        And Ms. Shiloh Kantz is the executive director of the
    Oklahoma Policy Institute, an organization she has worked with
    since 2010.
        The committee has received your written statements, and
    they will all be made part of the formal hearing record, as I
    also want to let others in attendance know that they too may
    provide a written statement. Please find the clipboards and
    forms that our teams will have throughout the hearing where you
    can fill those out and submit your information into the record.
        Now for our guests, you each all have 5 minutes to deliver
    your oral remarks.
        Mr. Jackson, you may begin when you are ready.

     STATEMENT OF BRYAN JACKSON, OWNER, ROUTE 66 MEAT PROCESSING,
                            YUKON, OKLAHOMA

        Mr. JACKSON. Chairman Smith, Ranking Member Neal,
    distinguished members of the committee, thank you for the
    opportunity to appear before you today. It is truly an honor
    for me to be here to share my thoughts with you on the state of
    the American economy.
        I have had the honor to serve in combat in Iraq, spent a
    decade in the oil field, and now own and operate a USDA-
    inspected meat processing facility in western Oklahoma. We are
    located about halfway between Amarillo and Oklahoma City, so we
    serve customers from two States. From our faith in God and a
    little perseverance, we built our facility from the ground up
    during the COVID pandemic and are one of twelve USDA-inspected
    plants in the State. We left the city life to live on my wife's
    fifth-generation family farm. To give you an idea of our size,
    a large meat packer can process 800 beef in a day. We process
    that in a year. It takes dozens of plants like ours across each
    State to meet the demands of the local community.
        Our first challenge I would like to discuss is labor. And
    there is a families quote by Michael Hopf that sums it up: Hard
    times create strong people; strong people create good times;
    good times create weak people; weak people create hard times.
        Coming out of the COVID pandemic, we are still facing an
    increasingly challenging work environment where employees may
    or may not show up to work for a slew of reasons. As a result,
    our ability to complete the work we commit to is made even more
    difficult. Today, we find ourselves counseling and coaxing
    workers into just showing up to work and doing a satisfactory
    job.
        I believe a deterioration of our family structure and work
    ethic contributes to the rise in mental health issues we are
    seeing. Trauma, like what I saw in combat, requires tools to
    learn to cope with, and today that is being substituted in our
    culture by drugs, alcohol, and other harmful vices. I see
    firsthand that we are at a point of weak people creating hard
    times due to a widespread entitled attitude.
        People in our community are suffering, and part of the
    problem is they aren't empowered to change it. Hopelessness and
    depression are rampant, yet there are still hardworking people
    out there, most living paycheck to paycheck, just not as many
    as there used to be. We are grateful for the team we have, and
    we take their welfare very personal. In our small farming
    community, we don't have an endless supply of workers. We are a
    town of 4,800 people, most of whom have to travel for work. We
    work what is considered a dirty job, but still an essential
    job. For our team of people, it provides them a work-life
    balance, but it does require grit.
        I have been humbled several times by corporate layoffs and
    then later by the experience of starting a small business. To
    be as resilient as generations before us, we need to toughen
    up. Failure is part of the journey. Being allowed to fail
    instead of having your way paved for you is empowering. The
    American Dream is not lived on Easy Street. It takes grit and
    the discipline to put the work in day after day to realize the
    American Dream. Employers must adapt to the current work
    environment or risk having to close the shop.
        For 2022, we sent out almost four times more W-2s than the
    number of employees we currently have on staff. Finding ways to
    be more flexible with employee work schedules is key. From my
    time in the Army, I learned that in order to have the best team
    you have to have high standards, but also take care of them. It
    is about respecting other people and their property. And the
    fact is, people do not care what you know until they know that
    you care.
        The second area to cover is inflation. We see firsthand how
    out of control costs have gotten in the last several years.
    Equipment costs have doubled. If you were to construct our
    building today, it would cost at least twice as much. And for
    supplies we face both rising freight cost and parts on back
    order being commonplace.
        Every week we see the purchasing power of our dollar
    continue to decline. When it comes to cash flow we are
    experiencing delayed payment from customers, sometimes up to 60
    days. And for a small business that operates on cash, it
    restricts our ability to meet our obligations on time.
        Interest rates are high even if you have excellent credit.
    The beef industry as a whole is in a tough spot. There is not
    much profitability for a rancher because the cost of fertilizer
    and feed is too high. We have seen smaller and smaller, less
    fed-out cattle come through our facility than when we first
    opened 18 months ago.
        My brother-in-law is a fifth generation rancher who
    supplies all of our beef that we retail on wholesale. And we
    provide farm-to-table beef locally raised, locally processed,
    and we see the impact of higher costs. I am proud to be an
    American and would like to emphasize the importance of creating
    value in American-made products. This will continue to create
    more pride in the work that we do so that more hardworking
    people come to work for the American Dream. At some point, it
    seems like we have lost our way. We need to have pride in the
    products that come from our country.
        And in conclusion, as a nation we face many challenges, but
    there is nothing that we cannot overcome by working together.
    Just as my grandparents did following the Great Depression, the
    hard times we are in now will create a stronger nation for our
    kids. I am encouraged by your willingness to listen and effect
    change.
        Thank you for your consideration of my testimony and for
    your service to our great Nation.
        [The statement of Mr. Jackson follows:]

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        Chairman SMITH. Thank you, Mr. Jackson.
        Mr. Mills, you are now recognized.

     STATEMENT OF CHUCK MILLS, OWNER AND PRESIDENT, MILLS MACHINE
                     COMPANY INC., YUKON, OKLAHOMA

        Mr. MILLS. Good morning, Chairman Smith, Ranking Member
    Neal, and distinguished members of the committee. It is an
    honor to testify before you today. My name is Chuck Mills. I am
    president of Mills Machine Company, custom manufacturer of
    shallow infrastructure, Earth-drilling tools and bits located
    in Shawnee.
        We were established in 1908 and still operate under the
    same family ownership. I personally have been managing the
    business for 44 years and have guided it through multiple
    booms, busts, and recessions. The last 3 years have been the
    most difficult.
        Before the pandemic, we faced some workforce issues. Our
    company, like so many others, struggled to find skilled
    workers. Initially, I believe that education was one of the
    issues and felt that one solution would be engaging private
    sector business people into the classroom to promote applied
    learning practices that would be beneficial to the students. I
    promoted that while I was the chairman of the State chamber to
    try to get other businesses engaged to do the same.
        As you can tell, I like to be involved in finding solutions
    for common business problems, which is why I have been involved
    in workforce development for 22 years serving on local and
    State workforce boards, so I have a good idea of what the
    problems are.
        Locally, I served as the mayor of Shawnee from 2004 to
    2008. Though we struggled before to find workers before COVID,
    the pandemic made this struggle so much harder on my company
    and employers across Oklahoma. It was hard for me and other
    business owners to understand how the Federal government could
    incentivize Americans to stay home.
        A perfect example of our problem with our supply chain is
    if my supplier is unable to find employees, he is unable to
    provide me the raw materials needed for my business, which
    negatively impacts our ability to satisfy our customers' needs.
    This caused delays throughout the supply chain. The lack of
    workforce, in my opinion, is the root cause of all of our
    problems today.
        To help alleviate the supply chain concerns for my company,
    I had to hire a full-time employee just to source materials.
    This staff member spends all day sourcing best materials and
    availability. We are constantly looking for new vendors so that
    we can remain competitive for our customers.
        We have successfully sourced about 40 to 50 new vendors in
    the last year. When we do find materials we must outlay more
    cash upfront to buy as much product as we can in order to lock
    in the price. The lack of workforce and supply chain issues
    combined with inflationary pressures have made this economy the
    most difficult economy I have dealt with in over 4 decades.
        Prior to the pandemic, we had a predictable price increase
    from 3 to 3.5 percent a year. In 2021, starting really in
    January, we were hammered with compounding price increases for
    our raw materials. Really starting in January of 2021, we first
    had our increase of 25 percent. The following month we had
    another 15, the following 20, and it went from 10 to 25 percent
    for the next 8 months compounding monthly.
        After 8 months, my vendors finally said, I can't send you a
    price list anymore. You will have to call in order to get the
    price, which makes it very difficult to price your products to
    your customers. The practice continued through all of 2022, and
    now in 2023 the prices have stabilized somewhat but have
    increased on others. Due to these price increases, we are
    forced to reprice our materials every 90 days. We offer
    thousands of products, so this is a significant undertaking.
        We also have been forced to import materials in order to be
    competitive. I have explored options for on-shoring and near-
    shoring in response to the tariffs on Chinese metal products,
    and it hasn't been competitive. The tariffs simply add 25
    percent to the cost of our raw materials making it harder to be
    competitive in the world economy. Overall, our sales are
    similar to pre-COVID levels, but it is not because we are
    selling more product. We are actually selling less at higher
    prices.
        I am having to spend more and more time on day-to-day
    operations like workforce issues and adjusting prices, which
    has resulted in less time for marketing, new product
    development and business expansion, which will be better for
    our business, the local economy, and the country.
        I love what I do. I love making things and offering
    solutions for our customers. All I ask is for Congress to
    please allow me to continue running my family owned business so
    that I may be able to pass it to the next generation. Please
    encourage all able-bodied Americans to return to the workforce,
    and do not raise taxes that would further restrict our cash
    flow. I will close by asking to not make it any harder for me
    to stay in business here in Oklahoma. Thank you.
        [The statement of Mr. Mills follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman SMITH. Thank you, Mr. Mills.
        Ms. Payne, you are now recognized.

     STATEMENT OF KELLI PAYNE, FORMER PRESIDENT, OKLAHOMA NATIONAL
                               STOCKYARDS

        Ms. PAYNE. Chairman Smith and members of the Ways and Means
    Committee, I want to thank you for the opportunity to appear
    today. My name is Kelli Payne. I am a fifth-generation farmer
    and rancher from Mustang, Oklahoma, and I have had the
    opportunity to serve on the district staff for former
    Congressman Wes Watkins. I have been a small business owner,
    worked for a number of cattle livestock auctions and cattle
    buying companies, and even ran for Oklahoma City council.
        I have also held a variety of economic development
    positions with an emphasis on agriculture, including previously
    serving as the first-ever female president of the Oklahoma
    National Stockyards. I am currently serving as North Central
    District Vice President for the Oklahoma Cattlemen's
    Association, and was recently appointed as chair of the
    Oklahoma Cattlemen's Foundation. I am also a proud Oklahoma
    Farm Bureau member. While my primary agriculture operation is
    cattle ranching, I also have a family agritourism venture with
    my sister.
        I would like to begin by sharing some very staggering
    numbers relative to the drought. The USDA January 1 inventory
    of all cattle and calves in Oklahoma was down 11.5 percent from
    2022. That is a decrease in 600,000 head in 1 year. It is
    double that of Nebraska, the State with the second largest
    decrease in cattle. It is important to remember that this
    number reflects all cattle, including the cow herd, replacement
    heifers, stockers, and feedlot cattle. The decrease in the
    number of cows in Oklahoma alone was 140,000 head, again, the
    largest decrease of any State in the Nation.
        While these numbers alone are staggering, when one begins
    to think of the negative implications the situation absolutely
    becomes overwhelming. Oklahoma is a beef cow State. Much of our
    rural economy is dependent upon the cow. Every year ranchers
    wean and sell their calves, which represents the heart of the
    economic engine in rural Oklahoma. With fewer calves to sell,
    that means fewer dollars generated. But worse, not only are
    there fewer calves, there are also fewer cattlemen and women.
        The struggles of drought are exacerbated by high input cost
    including fuel, feed, and other supplies. All these negative
    impacts have caused some ranchers to sell their entire herd,
    and many have indicated that they won't restock anytime soon,
    if at all. Fewer cows also means that fewer bulls are needed.
    Seed stock operations, like our host today, Express Ranches,
    depend upon a robust bull market driven by cow calf producers
    with plenty of cows.
        Currently, the cattle market is strong. For the last week
    of February, 600-pound calves selling at the Oklahoma National
    Stockyards were bringing $200 to $215 per hundred weight. This
    makes sense though given a drastic reduction in the cattle
    supply. But high prices of something that I don't have many of,
    or any of, doesn't help me economically. Remember, we have
    140,000 less cows. That means 140,000 less calves to sell.
        Federal government involvement in livestock production does
    have a positive side. The farm bill of 2018 signaled a major
    turning point for animal agriculture in the U.S. That important
    piece of legislation enshrined permanently many of the programs
    that have directly benefited livestock producers, specifically
    in times of hardship. Examples include the Livestock Indemnity
    Program, the Emergency Livestock Assistance Program, Emergency
    Relief Program, and the Livestock Forage Disaster Program, just
    to name a few.
        The total disaster payments for program year 2022 in these
    categories alone in Oklahoma are $4.6 million and rising. Let
    me be very clear, these programs are vital and important to
    livestock producers, and they must be continued in the 2023
    farm bill.
        The negative side of the story deals with the overreaching
    regulatory agenda that proposes new and debilitating burdens
    that will undercut our livestock business. Examples include the
    EPA's new waters of the U.S., or WOTUS, rule issued just a
    couple of months ago.
        While EPA did recognize ponds and watering holes, the new
    rule goes backward to regulate ditches and draws that seldom
    see water and certainly not in times of drought. The new WOTUS
    rule ignores the great work that animal agriculture has done to
    preserve and promote a positive impact on our environment.
    Modern poultry, swine, and cattle operations have adopted so
    many new and emerging technologies that have provided
    substantial benefits in decreasing water usage and positively
    managing manure as fertilizer.
        Here in Oklahoma, the Endangered Species Act has been
    employed by administration's U.S. Fish and Wildlife Service to
    the detriment of cattle grazers in western Oklahoma. Recently,
    the service issued a threatened and endangered listing for the
    Lesser Prairie Chicken requiring ranchers to seek an approved
    grazing permit--excuse me, plan for their own ranches. Once
    again, the great work ranchers have done to improve and
    maintain wildlife habitat was ignored, and the service provided
    no direction about who can approve a proposed grazing plan.
        Many producers, including myself, began diversifying our
    operations about a decade ago when we went through our last
    drought. By certifying a portion of our own farm in
    agritourism, investing in greenhouses and partnering with other
    fruit and vegetable growers, we were able to have an additional
    revenue stream. We also began hosting two festivals to educate
    our urban friends on where their food comes from.
        While this has been incredibly rewarding to us, regretfully
    we have had to cancel the last two events due to drought in the
    current economic State, further reducing our family income, as
    well as cutting off a source of fresh food to our customers. We
    have enough challenges with mother nature. Let's not compound
    the problem with more regulations.
        I look forward to any questions you may have. Thank you
    again for allowing me to share my perspective on the state of
    the American economy in the heartland.
        [The statement of Ms. Payne follows:]

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        Chairman SMITH. Thank you, Ms. Payne.
        Mr. Brevetti, you are recognized.

        STATEMENT OF JOE BREVETTI, MANAGING MEMBER, CHARTER OAK
                             PRODUCTION CO.

        Mr. BREVETTI. Chairman Smith, Ranking Member Neal,
    distinguished members of the committee, thank you for this
    opportunity.
        Congressman Hern, thank you for your leadership. It is an
    honor to testify before you today on behalf of Charter Oak
    Production the Petroleum Alliance of Oklahoma.
        I am Joe Brevetti, the managing member of Charter Oak
    Production, and we are a small, private oil and gas company
    here in Oklahoma City with nine employees. Since founding the
    company in 2004, our primary focus has been in the oil-rich
    areas of central to southern Oklahoma.
        I began my career in the industry as an engineer working in
    the field in South Texas. I am a board member of the Petroleum
    Alliance of Oklahoma, which represents 1,400 individual and
    member companies. I am also honored to have been appointed a
    board member of the producer funded Oklahoma Energy Resources
    Board, which restores historic well sites and provides
    classroom resources for educators from elementary through the
    college level.
        Charter Oak is one of 4,000 oil and natural gas companies
    working in Oklahoma. To put it in perspective, together we make
    up more than half of the State's private sector GDP growth. We
    are the State's largest taxpayer accounting for about one-third
    or $65 billion of Oklahoma's GDP, and generating $2.5 billion
    in tax payments to the State.
        The oil and gas industry provides employment for 200,000
    Oklahomans, 75,000 in direct jobs, and another 125,000 in
    supporting sectors. Each year, Oklahoma oil and gas producers
    pay more than $2 billion in royalties to mineral owners. These
    mineral owners are everyday people who use this money to buy
    groceries, they support their family farms and ranches, and
    just help pay their daily living expenses.
        In the past year, Charter Oak and its dedicated team of
    service companies who employ hundreds of people in the field
    drilled and completed ten wells to help meet the energy needs
    of American families. During that same year, we have seen the
    cost of our wells increase from less than $8 million each to
    over $10 million each, a 30 percent increase, and that is
    considerably more than what we are told the inflation rate is
    by the current administration.
        Companies like Charter Oak have made the U.S. not just a
    world leader today in oil and natural gas production, but we
    are also the world leader in greenhouse gas reductions, thanks
    to natural gas-powered electric generation. There is no
    company--there is no other country in this world that produces
    hydrocarbons in a manner as clean and as safe as we do here.
    Importing foreign oil production or encouraging the same is
    contrary to American principles, and it threatens our energy
    security as a nation.
        My written testimony provides color on many regulatory
    hurdles that we are dealing with today and the challenges we
    are expecting later this year. The EPA's proposed one-size-
    fits-all rules for methane and waste prevention is a killer for
    small family owned companies whose marginally economic wells
    are very important to America's energy portfolio.
        The administration's permitting reforms for operations on
    Federal lands are unnecessarily complex, costly, and delay oil
    and gas projects far beyond what is reasonable. A current
    example is, last week we were informed that it would take the
    BLM Cadastral Office in Santa Fe between 2 to 3 years to review
    our river survey just so we could get to the point to nominate
    acreage into a Federal lease sale. By the way, we have already
    drilled this well, it has been delayed so long. We have altered
    the tract of this well so we didn't have to traverse Federal
    minerals, but they are still within our unit.
        On the tax front, I ask the committee to protect the
    ability of oil and gas companies of every size to deduct their
    ordinary and necessary business expenses. These intangible
    drilling costs, which are expenses like fuel, labor, and
    trucking, frequently make up 85 percent of the cost of the new
    well.
        The recent book minimum tax unfairly penalizes some of the
    larger independence from deducting such expenses. For a smaller
    independence, the punitive nature of the alternative minimum
    tax in the current Tax Code limits our deductibility of the
    IDC. We drill out of our cash flow, and the AMT severely
    restricts our ability to invest in new drilling.
        So let me conclude, we don't want special treatment; we
    just want a level playing field to encourage investment.
    Burdensome regulations, increased taxes on oil and natural gas
    hamper production and the ability of companies like ours to
    work. Unchecked inflation has hit all Americans very hard,
    including the independent oil and gas producer.
        Please address this by slowing Federal spending growth,
    balancing the Federal budget as all of us do with our personal
    and business budgets. And let's stop going down the same anti-
    hydrocarbon road that is wreaking havoc in Europe. That is our
    wakeup call, America. We don't want an America like that. We
    don't need more energy--I mean, America needs more energy not
    less. More energy for America equates to more prosperity for
    all Americans, and America-produced energy is translated to
    improve American national security.
        Thank you for your time, and I am happy to address my
    questions.
        [The statement of Mr. Brevetti follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman SMITH. Thank you, Mr. Brevetti.
        Ms. Kantz, you are now recognized.

    STATEMENT OF SHILOH KANTZ, EXECUTIVE DIRECTOR, OKLAHOMA POLICY
                               INSTITUTE

        Ms. KANTZ. Thank you, Chairman Smith and Ranking Member
    Neal and members of the Ways and Means Committee. I am very
    honored and thank you for the opportunity to submit testimony
    on the topic in what ways can the Federal government make the
    economy work for Oklahomans.
        My name is Shiloh Kantz, and I am the executive director of
    Oklahoma Policy Institute, or OK Policy as we are informally
    known. We are a nonprofit, nonpartisan public policy think
    tank.
        While COVID-19 laid bare economic vulnerability in
    Oklahoma, these problems were not new. Oklahoma's poverty rate
    is consistently among the highest. Even pre-pandemic, one in
    seven Oklahomans, including one in five children, lived in
    poverty. In 2018, one in four Oklahoma jobs were in occupations
    with a medium wage below the poverty line for a family of four.
        Our poverty rates have barely budged over the last decade.
    Federal actions during the pandemic made a real difference. It
    is a shame those interventions were not made permanent. 460,000
    Oklahoma households, including 816 children living in those
    households, received the expanded child tax credit. The credit
    lifted an additional 59,000 Oklahoma children out of poverty.
    That money was spent wisely on food, utilities, clothing, rent,
    and transportation, likely minimizing the trauma to our
    children. Now, 276,000 Oklahoma children are losing out on that
    full credit.
        The child and dependent care tax credit expansion helped
    our working families secure childcare to continue their
    employment. Qualifying Oklahoma families got back up to half of
    what they spent on childcare that year. For some households,
    that is a game changer. Expansion of the earned income tax
    credit meant there was a brief moment when Oklahoma's childless
    workers received targeted relief. The expansion tripled the
    EITC for childless adults and waved the usual age limits and
    reached an estimated 229,000 childless workers in Oklahoma. It
    too lapsed at year end.
        So where do low-income Oklahomans need support? At work. I
    think the testimony we have heard here definitely addresses
    that as well. Some Oklahoma workers are covered by the Family
    and Medical Leave Act, the FMLA protections, but they can't
    afford to take unpaid leave. Only one in 20 of the bottom 10
    percent of earners have paid leave. Just one in five workers
    have access to paid leave, and those are mostly high-income
    earners.
        The impact these numbers have on Oklahoma's families are
    real. I can't take off if my kid is sick if I don't have unpaid
    leave. More than half of Oklahomans, including 68 percent of
    rural Oklahomans are in a childcare desert, either no providers
    within their ZIP code or there are too few slots. This number
    just really hits me hard, because I have got three kids at home
    too. In recent years, the number of childcare facilities has
    fallen by two-thirds, from 6,000 to 2,300.
        Housing was an issue before the pandemic. Oklahoma's two
    largest metros were the Nation's top 20 for eviction rates per
    capita. Emergency rental assistance during the pandemic helped,
    but it also lapsed. Today, more than two in five Oklahomans
    working full time can't afford a two bedroom rental. An
    Oklahoma worker needs to earn $16.61 per hour to afford that
    two bedroom rental; but 17 of the most common 30 professions in
    Oklahoma, including teachers assistants, home health aides, and
    customer service representatives, pay less than that.
        So what has helped our workforce? Two major programs
    brought targeted relief, including Unemployment Insurance and
    Medicaid expansion. When the pandemic hit, Oklahoma saw more
    unemployment claims in March 2020 than it did in 2009 at the
    Great Recession's peak.
        While some fraudulent unemployment claims were made,
    including some to us, those claims were investigated and
    determined ineligible for payment. The State's Unemployment
    Insurance did what it was created to do in that unprecedented
    time: Assist Oklahomans in their time of need.
        And in the summer of 2020, Oklahomans passed Medicaid
    expansion through a ballot initiative. It has been an
    unequivocal success. In January, 358,155 working age adults
    were enrolled in Medicaid expansion. Because of Medicaid
    expansion, Oklahomans exiting incarceration will get insurance
    before returning to their communities. Tribal health systems
    are more solvent and record levels of children are insured.
        I know if we prioritize our communal why, improving the
    lives of all Oklahomans, we can find compromise across
    political divides. Thank you for the time to be here, and I
    look forward to your questions.
        [The statement of Ms. Kantz follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman SMITH. Thank you, Ms. Kantz.
        And I want to thank all of our witnesses for your excellent
    testimony and for--once again, thank you for taking time out of
    your busy schedule, for being here.
        We will now proceed to the question and answer session, and
    I will begin first. I know that my colleagues are eager for the
    opportunity to ask a number of more specific questions as we
    hear from you all about how the policies coming out of
    Washington have impacted your lives here in the heartland. So I
    will keep my questions to just one, but I will ask each of you
    all to respond to it.
        Under President Trump, one of the key changes this
    committee made for working American families was to double the
    amount folks can deduct from their income each year and to
    lower their Federal tax bill. Those who are benefiting the most
    from that change are median-income households, which is about
    $60,000 per year right here in Oklahoma.
        As life has become more expensive for all Americans over
    the last 2 years, we are seeing why deducting more from income
    makes sense, because more and more family budgets is having to
    be used for so many basic needs just to get by. And when
    President Biden releases his budget on Thursday, we will again
    see that he wants this relief from Federal taxes for American
    families to expire.
        I want you each to answer this question through the
    perspective of your customers, your suppliers, your neighbors
    and friends. In the midst of a 40-year high spike in the cost
    of living, what would it mean for them if this committee
    further reduced their yearly tax burden to give American
    families an extra couple hundred dollars in their pocket each
    year right now?
        Mr. Jackson, why don't we start with you and go down the
    line.
        Mr. JACKSON. Chairman Smith, I can tell you that reducing
    the taxes for a small business would greatly help us. Was that
    your question as far as--could you repeat that, please?
        Chairman SMITH. So in the taxes that were cut in 2017, it
    was doubling of the standard deduction for folks who don't
    itemize, and so this affected over 80 percent of Americans. So
    most of your customers would probably be in the standard
    deduction. That will expire; in fact, in the President's budget
    on Thursday, he will outline for it to expire. Do you think
    that it will help your customers, your suppliers, if we would
    actually increase the deduction so that they would save more on
    their taxes?
        Mr. JACKSON. I think further reducing taxes would
    definitely be a great thing. And as a small business owner, I
    can tell you that any money saved is reinvested in our
    business. And how early on we are, it is a struggle to make
    sure, like I mentioned in my testimony, to have the cash flow
    to make sure that we can meet payroll, and then beyond that,
    offer benefits for people who have been with for an extended
    period of time, paid time off, and healthcare, things like
    that. So the more we can receive in terms of help in making our
    life easier and paying less taxes, the more we can do for our
    employees.
        Chairman SMITH. From a business perspective, a small
    business perspective, what is the tax advantage that has helped
    your small company the most?
        Mr. JACKSON. I would say, the number one thing was the
    payroll tax credit early on that helped fund us as we cycle
    through so many employees early on. We have retained about 25
    percent of those folks that started with us in the beginning,
    and so that was the greatest benefit for us to help us meet our
    obligations early on as we had to operate with cash as an early
    business.
        Chairman SMITH. Perfect.
        Mr. Mills.
        Mr. MILLS. I would concur with really pretty much
    everything he said. You know, I think more about my employees
    than myself because they are really the ones that do the work.
    I just kind of guide them. So, you know, they are definitely
    impacted everyday by, you know, the taxes they have to pay. We
    are burdened, of course, with having to continually pay more
    and more and more just to keep our employees. And as a small
    company, we compete against most of the big companies and
    especially in the oil field. I mean, I make drilling tools and
    bits, but it is not for oil. It is just shallow drilling, like
    water and things.
        And so--but we have to compete. We have to pay those same
    benefits, healthcare, you know, so there is a huge burden on
    myself as a small business. But I think it would be a mistake
    to take away those taxes, you know, breaks for especially just
    the average worker. With inflation today, you know, it is
    accelerated so much that it is a huge benefit.
        And I agree with the--I have to tell you, I have never
    taken any Federal funds ever in my--none of our generations
    have. We have always just been on our own. You know, there was
    no bailouts or--we are just not in that industry. And that
    payroll protection program was a huge shot in the arm at the
    right time, and it allowed us to retain all of our employees
    and continue to prosper and grow with a good base.
        So that is one of the few really bailouts that we have had
    the opportunity to work with, and I thank Congress for that at
    the perfect time. So it did work. But I would think this would
    be a very bad time to take away anymore tax breaks for
    especially the average worker.
        Chairman SMITH. Thanks, Mr. Mills.
        Ms. Payne.
        Ms. PAYNE. I think you will see the panel mirror the
    responses all the way down the line here. I guess, from my
    perspective though, anytime that hardworking Americans can keep
    more money in their pocket we should give them that
    opportunity, especially in these uncertain times that we are
    in. A lot of my neighbors are not only farmers and ranchers,
    but they have an off farm job because they have to.
        But as things get tighter from in the ag sector and all of
    us, the more money--Grandpa always said, if you want to double
    your money, you know, fold it in half and put it in your
    pocket. I think those days are over. But that would be where I
    am coming from with it.
        Chairman SMITH. Thank you, Ms. Payne.
        Mr. Brevetti.
        Mr. BREVETTI. Well, Chairman Smith, I am having a hard time
    thinking of any country that tax their way to prosperity, so
    lower taxes are certainly better for all. That rising tide
    would lift all boats.
        Specifically to your comment about the removal of the
    standard deduction, I think of all of the workers in the field,
    the dozens and dozens of people who work on our wells and
    whether they are driving saltwater trucks, whether they are
    building a fence or working on a drilling rig or a frat crew,
    they are not itemizing deductions. They depend upon that
    standard deduction. I think that is very critical for working-
    class Americans, and I would certainly hate to see that lapse.
        Chairman SMITH. Thank you, Mr. Brevetti.
        Ms. Kantz.
        Ms. KANTZ. Thank you, Chairman.
        I do believe that targeted relief is the way to go. I
    think, we firmly believe--we hear a lot of working Americans,
    working Oklahomans. We truly feel that sweeping--and I truly
    feel that sweeping--maybe the Tax Code isn't the place unless
    it is targeted tax credits like we spoke about, about the child
    tax credit and child dependent care tax credit. The income tax,
    I think, from my history, has less impact immediately on the
    people who need it the most.
        Chairman SMITH. Thank you.
        Mr. Neal, you are now recognized for questions.
        Mr. NEAL. Thank you, Mr. Chairman.
        And thanks to our witnesses for your superb testimony.
        I was reminded as a supporter, even though I come from a
    highly urbanized State, I have been a consistent supporter of
    the farm bill. And part of the reason for that is it is what
    the farmlands of the country produce for urban America. But it
    is also a reminder of how Congress once cooperated on many of
    those issues. Two champions of that substantial initiative were
    Bob Dole and George McGovern, who both had shared a common
    World War II experience with heroism, the two of them. And I
    think that these conversations that we have about these sorts
    of initiatives could be a lot less hostile than they have
    become. And trying to find this common purpose and common
    ground is really important.
        So let me go to Ms. Kantz for a moment. The Affordable Care
    Act has really been a success. 20 million more Americans have
    health insurance, and insurance is based on risk and the
    sharing of risk. One of the issues that has always troubled
    many of us has been those States that did not expand Medicaid.
    And I want to congratulate Oklahoma for expanding Medicaid, to
    make sure that those at the lower end of the economic spectrum
    have an opportunity to receive healthcare in an earlier stage
    of life. It is a good investment in good healthcare.
        So the results that you've had, Ms. Kantz, here in Oklahoma
    have really been positive. Could you briefly talk about how
    important this step was in benefiting families across Oklahoma?
        Ms. KANTZ. Absolutely. Thank you, Ranking Member Neal. We
    estimated in July 2022 that Oklahoma's uninsured rate had
    dropped below 10 percent due to the combination of Medicaid
    expansion and the public health emergency's continuous coverage
    requirement. In addition to reaching Oklahomans who were in
    what we called the coverage crater, formally unable to access
    either Medicaid or subsidized marketplace coverage, expansion
    has reached kids who were formally eligible but whose parents
    likely didn't know it.
        In 2022, Oklahoma's child uninsured rate reached its lowest
    rate ever. Because of Medicaid expansion, Oklahomans can expect
    stronger hospitals moving forward as hospitals in States that
    have expanded Medicaid are 84 percent less likely to close than
    hospitals in non-expansion States. Based on other States'
    experiences, Oklahoma's hospitals can expect to see less,
    uncompensated care, increased Medicaid revenue, and better
    financial margins.
        Roger Knak is the CEO of Fairview Regional Hospital and a
    member of my board. Medicaid expansion has allowed his hospital
    to expand. And a few years ago, his hospital nearly went out of
    business because it couldn't afford to keep the lights on.
        We anticipate that Medicaid expansion will have helped our
    workers keep working. It is hard to tease that information out
    right now given noise of the pandemic and the data, but other
    expansion States have found that expansion helped people
    without a job get one and helped people with a job stay in that
    job. We are no longer tying healthcare to an employer. We are
    all better able to show up at work and at home when we can see
    a doctor and fill a prescription.
        In terms of our state budget, we have every expectation the
    expansion will at least break even or save Oklahoma money,
    because that is the experience every other expansion State has
    had. Medicaid on the chopping block means people's lives on the
    chopping block. It is whether a parent can see a doctor and
    fill a prescription. It is whether the kids with disabilities
    can see a specialist. My own daughter sees a specialist. We
    have to drive an hour and a half to see a specialist because
    there is no other specialist in Oklahoma providing care that
    she needs.
        So for us, before Oklahoma was known for having the most
    successful Medicaid expansion coming out of State question,
    before we were known for leading the country in criminal
    justice reform, we were the State with the chronic budget
    shortfalls. We had nine revenue failures between 2000 and 2020.
    So we need Medicaid. We want Medicaid in Oklahoma, and our
    families need Medicaid. We shouldn't have to decide between
    going to the doctor and paying rent.
        Mr. NEAL. Thank you. And I would just make a quick comment
    as my time is running low. Not knowing a lot about healthcare
    in Oklahoma, I can say this with some accuracy, that those
    hospitals are heavily dependent upon Medicare and Medicaid.
    Private insurance pays a very small amount now in our
    healthcare system. And the truth is that, I think you could
    say, a rule of thumb, it is close to 65 percent of the money
    that is allocated from Medicare and Medicaid.
        And the other point that I want to make about Medicaid is--
    I assume we are going to be discussing it in the next few weeks
    as we see the Republican budget as well--that a reminder,
    almost $0.70 on the dollar now goes to nursing home care from
    Medicaid. It has become a middle-class entitlement which was
    not its original intention.
        So, thank you, Mr. Chairman.
        Chairman SMITH. Thank you, Mr. Neal.
        I would like to recognize the gentleman from Oklahoma, Mr.
    Hern.
        Mr. HERN. Thank you, Mr. Chairman.
        For far too long, unelected bureaucrats and D.C.
    politicians have attacked the family run farms, energy
    producers, and manufacturing companies across the heartland,
    what some in Washington would consider to be the flyover
    country. These same politicians have never set foot in a place
    like Oklahoma, so, again, I appreciate everybody being here.
        But to see what has happened with you all, you have
    invested your lives in what you are doing, your stories,
    fourth, fifth generation, for your time in Iraq and defending
    the freedom of this country, it is great for everybody to hear
    in D.C. of what America looks like. Since many of us represent
    800,000 in our districts across America, it is great to see
    everybody, what they are doing.
        Many Oklahomans ask me, having spent 35 years in business,
    when I first started running, what surprised me the most about
    being in Washington, D.C. And my response was then the same as
    it is now, is how many people talk about things they know
    absolutely nothing about. And what you all do and our witnesses
    do when we come to these hearings is to tell us what is really
    going on with the policies that are being produced by the
    Federal government.
        You know, as we see what is happening in the last 2 years,
    as we have seen a border crisis, we see on TV every single day,
    regardless if we want--anybody wants to admit it or not, it is
    a crisis. Economic crisis, you all feel the experience of
    inflation; a labor shortage crisis, you all explain that; a
    supply chain crisis, we talk about what we want to do with
    China, but policies coming out of the administration right now
    are completely contradictory to that; energy crisis, you all
    are experiencing this every single day.
        So despite the last 2 years of what we have seen in this
    economy, this administration has chosen to stand by their tax
    and spend agenda that leaves everyday American taxpayers with
    less money in their pockets. When the Federal government spends
    more--here is a fact--the American taxpayer has less.
        Before Joe Biden took office, Oklahoma's economy was
    thriving. We saw significant sectors of our economy, from
    agricultural to manufacturing to energy, create new job
    opportunities. Now restrictive trade policies, as was
    mentioned, and unnecessary tax increases are limiting the
    ability for farmers, energy producers, and manufacturers to
    compete in the global marketplace.
        I really want to--I had a question here, but I really just
    want to say something. You know, really, as you all listen to
    what we say, and what I have experienced now being in Congress
    for 4 years, really at the heart of the whole conversation is
    with us in Washington, D.C. versus everyday Americans that we
    are out in the heartland is really trying to ascertain who does
    it better, you as the individuals creating the jobs, the
    workers trying to take care of themselves and their family, or
    Washington, D.C. that wants all of your taxpayer dollars and
    for us to decide who should get what in a targeted environment.
    And that is really the--that is the decision process at the
    highest level that is going on right now: Who can do it better,
    Washington, D.C. or everyday Americans?
        So my question is something very simple: Which is better?
    Leaving the taxpayer dollars--we have a baseline we have to
    meet. National defense, secure our Nation, as our founders
    describe, leave as much money in the--certainly in the lower
    middle-class income pockets so that they can do the basic
    needs, like supply childcare and healthcare and go find their
    right job and not depend on the Federal government.
        Our success should be measured by how many people we get
    out of poverty not how many people are on Medicaid expansion or
    other programs in the Federal government. And as a person who
    grew up on food stamps, and, you know, whether people want to
    hear this or not that may be sitting at this table, I have
    experienced it. I have experienced the way out. And my success
    story was not that I am still on welfare, is that I got off of
    welfare, and I experienced the American Dream.
        And that is what we will hear all about today is to try to
    ascertain--I do believe in the heart of heart of everybody here
    it is about my members that are here, my friends that are here,
    is that we all have the same goal in mind, is everybody become
    successful of the American Dream. It is the pathway of getting
    there that we can't agree on.
        So with that, I would love to start, Ms. Payne, you
    actually alluded to this, and I would like to hear your
    thoughts on this as well.
        Ms. PAYNE. Representative, very well said. I was about
    moved to tears over here, and this farm girl doesn't cry very
    often, but--in thinking back, whenever I was running the
    Oklahoma National Stockyards and the employees that we had
    there, it was a very diverse group. And some of the challenge--
    some of it is because it is very--well, as Bryan mentioned
    earlier, it is a dirty job, so not everybody wants to do it.
    But the diversity within our staff was everything from
    obviously the red-headed female, we had Army veterans that
    worked on staff, and we also utilize a lot of justice involved.
        And seeing, especially with the justice involved, being
    able to offer them an opportunity to break their cycle, to have
    a job that meant something at the end of the day, and to be
    treated fairly, was one of the most rewarding things I have
    ever seen in my life. And that is part of this American Dream.
        It doesn't matter where you are from, it doesn't matter if
    you are a farmer, rancher, steel, oil and gas, or if you have
    ran into trouble in your past, it doesn't define who you are,
    but America gives that opportunity and that is incredible.
    Within that, you make difficult choices of what--on taxing us,
    but we need to be thinking about as we move forward how to--
    everybody deserves a chance to make it. So thank you all.
        Mr. HERN. Thank you. I yield back.
        Chairman SMITH. Thank you.
        I would like to recognize the gentleman from California,
    Mr. Thompson.
        Mr. THOMPSON. Mr. Chairman, thank you very much for having
    this hearing. And thank you all for being here, the witnesses,
    and for a very gracious host.
        I just want to make a couple of comments on the opening
    statements that were made by our witnesses. The issue of
    skilled labor and the shortage of skilled labor was brought up.
    And I just want to say, you know, you are not alone. I hear
    about that every day in my District.
        Big contributors are the age of the workforce. People are
    retiring. And a big contributor to that is the lack of
    childcare, which is a huge, huge problem. So, there is
    tremendous competition for available workers, and the pay kind
    of dictates where folks are going. And I think that is an
    important thing to remember.
        And I am sorry about your herd size. I am a farmer myself.
    And I have--in California, up until just recently, we have
    been--experienced tremendous drought. So, I get it. And I have
    colleagues who have had to sell their herds because they can't
    afford the food. There is no water. And there is not a lot--as
    Mr. Lucas mentioned, this is the premier committee in Congress,
    but there is little we can do about the drought.
        In Ukraine, the war in Ukraine--Russia's illegal invasion
    of Ukraine has really hurt us as well. We are hurting for
    fertilizer. In my District, one of the crops grown are
    sunflower seeds, and we sell 50 percent of the seeds to Ukraine
    for their seeds. And that market has just gone away.
        The good news is, this is the one thing that Congress was
    able to do--and I know Oklahoma was a big recipient of this.
    You received a lot of help in regard to disaster relief. And I
    think that is important. And with the farm bill reauthorization
    coming along, you ought to be really plugged into that lane. It
    is important.
        And tariffs--you are right. Tariffs are terrible. They
    should be the last resort. We are experiencing problems from
    the last administration's imposition of tariffs. Everything
    from raw materials to nails. And it has been crippling.
        And Mr. Jackson, thank you for your service. And thanks for
    being in the best branch of the military. And thank you for
    raising the issue of mental health. It is a huge, huge issue.
    And I think it is important to note that the Democrats on this
    committee supported strongly the increase in veterans' benefits
    that are entitled--veterans are entitled to. It has helped them
    a lot. But we still have a long way to go. And I am a believer
    that we need to make a major investment in brain research so we
    can get ahead of the mental health problems rather than
    applying expensive Band-Aids along the way.
        Ms. Kantz, I would like to start--I have a couple questions
    for you. You mentioned in your testimony that one in five
    Oklahoma kids in 2019 were living in poverty. When the
    Democrats on this committee expanded the Child Tax Credit, the
    child poverty rate in Oklahoma fell from 13.1 percent to 6.9
    percent. Can you tell me what Oklahomans use their Child Tax
    Credit for? What types of things did they buy?
        Ms. KANTZ. I absolutely can. Thank you, Representative.
        Data shows that more than 90 percent of the families with
    lower incomes use their monthly payments in five major
    categories: Putting food on the table, paying utility bills,
    covering rent or mortgage payments, buying clothing, and
    covering education costs, which during the pandemic, was a new
    piece for a lot of families to overcome. And they also bought
    schoolbooks, paid credit cards. Very few, under 20 percent, put
    it into savings. And then several put it into childcare. The
    money went into Oklahomans' pockets and helped ease the burden
    of their monthly bills.
        Mr. THOMPSON. So that money is spent out across the economy
    in every city, town, and county in Oklahoma. Thank you very
    much.
        There was a lot of talk about the tax policies that the
    Republicans passed and what we should do about that. I think it
    is important to note that the centerpiece of that tax bill was
    the cut in corporate tax rates that went from 35 to 21 percent,
    a much bigger cut than the proponents even wanted.
        And so, Ms. Kantz, I was interested to know, for families
    in Oklahoma, what is more compelling, the Child Tax Credit or
    extending the corporate tax cuts?
        Ms. KANTZ. Well, I think from the testimony that we have
    heard here, that anything we can do to help our workforce is
    where we need to be investing. And that will fuel up through
    the corporate sector. So, any investment into our families,
    into our homes, into our children, to help with the trauma, to
    help with getting out of poverty. I agree with Representative
    Hern's statement that our measure of success should be how many
    people we are getting out of poverty. Every Oklahoman deserves
    the opportunity to thrive, and how are we providing that?
        Mr. THOMPSON. Thank you very much. Thank you, Mr. Chairman,
    for your generosity with the clock.
        Chairman SMITH. Thank you, Mr. Thompson.
        I would like to recognize the gentleman from Oklahoma.
        Mr. LUCAS. Mr. Chairman, before I begin, I would like to
    submit for the record the statement by Austin Puckett, the
    owner of Benjamin Lee Bison, a family-owned and operated bison
    range from Sayre, Oklahoma describing how soaring fertilizer,
    energy, repair, and shipping costs as well as labor shortages
    have harmed his operations.
        Chairman SMITH. Without objection, so ordered.
        [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. LUCAS. Thank you, Mr. Chairman.
        Kelli, you are a constituent, so I think I can call you by
    first name. Thank you for your participation today in the
    hearing and all the work you do on behalf of cattlemen and
    women of the great state of Oklahoma.
        I have often said that the role--that I view the role of
    Congress to do things for people, not to people. In your
    written testimony, you speak about the positive impact that the
    farm bill programs have had on the cattle industry, and you
    touched on WOTUS and a number of other regulations that
    potentially harm the industry.
        Could you speak to the importance of collaboration with
    producers on the ground when it comes to crafting policy?
    Should we be asking the people who have to live with what we
    are doing?
        Ms. PAYNE. Thank you, Congressman. As a long time
    Oklahoman, I have got to brag on our delegation. I have always
    felt like we have--we can get ahold of them and we can talk to
    our elected officials on the Federal level. And whenever I ran
    the stockyards, I had an opportunity to host many of our
    federally elected officials there. They came to us. They
    understand boots on the ground. Collaboration is key.
        It is nice to be able to--it is not just talking directly
    to you all, but to have access to your staff and to understand.
    And I would encourage every member in here to spend that time.
    This is an incredible honor for us to have you all here today
    and to be able to talk to you face-to-face, but it is just
    critically important to get this kind of feedback so that you
    are not picking winners and losers.
        We are all--in reference to Representative Hern's statement
    earlier, this is the American dream. We are all in this still
    together. Let's collaborate and talk one-on-one. Let's show
    you. I am sure you didn't expect today to come in here and
    stand next to great, big Clydesdales downstairs. But this is
    what we do. And I would be happy to put any of you in the
    tractor with me.
        Mr. LUCAS. I have got one more question for you, but before
    I go to that, I want to turn to Bryan for just a moment. I
    think it was about a year and a half ago, maybe almost 2 years
    ago, you gave me a tour of the facility in Sayre. We are
    getting ready to fire up.
        For the benefit of the crowd, you and I both know State-
    inspected meat in Oklahoma and federally-inspected meat, same
    safety, same quality, same everything. Explain to us why the
    Federal stamp matters. Even though it costs more, why does it
    matter?
        Mr. JACKSON. That is a great question, Congressman. The
    benefit of being USDA-inspected is there is no restrictions on
    any quantity where it can go to. It can ship between States, so
    there is no limitation. It could even be exported if we chose
    to and were licensed for that.
        Mr. LUCAS. And that matters greatly when you are moving
    your product, especially in a State where we produce so much
    beef in particular. Thank you.
        Kelly, back to you. Oklahomans--Okies, as some of us like
    to call ourselves--are very resilient people, and we have got a
    long history of responding to tough things: The Dust Bowl, the
    Great Depression, the droughts of the 1950s, the hideous
    drought of 10 years ago, that oil bust of the 1980s that turned
    much of the State upside down.
        What have producers--through all of these challenging
    times, what have producers done voluntarily to preserve and
    improve their land in order to better meet the challenges with
    weather and prolonged drought? We are not just sitting on our
    hands, right?
        Ms. PAYNE. That is correct, Congressman. And you referenced
    the Dust Bowl. We have obviously learned a lot. We learn more
    every day. We have technology in place. We just know more now
    than we ever have. So whether it was the shelter belts that
    were planted in the 1930s all the way up to current.
        My operation itself is in a river bottom. It is very sandy
    soil. We call it blow sand. And if you had been standing out
    there on Sunday, you would have had two pounds of it in your
    eyes. But we have to protect that. We, on our outfit, can run
    about 250 mama cows. I have one cow with a calf at her side as
    of this morning, and the three bulls were loaded in the
    trailer. And then I have seven fat steers to be able to put in
    the freezer here in about a year. There is nothing there. But
    we had to pull those cattle off to protect that grass. If I
    don't have grass, I can't put cattle on it.
        So we had to make that decision versus--and we can't afford
    hay. There is all kinds of sad, sad things going on. But to be
    able to put in place conservation-type practices so that we can
    be sustainable when it finally does start raining, Congressman.
        Mr. LUCAS. Bottom line, comprehensive farm bills where we
    make sure we have the ability to produce and consume are
    critically important. And in this farm bill, we have got to
    address how to make the Federal inspection available to more
    packers.
        Fair statement, Brian?
        Mr. JACKSON. Yes, sir.
        Mr. LUCAS. I yield back, Mr. Chairman.
        Chairman SMITH. Thank you, Mr. Chairman.
        I would like to recognize the gentlelady from California,
    Ms. Sanchez.
        Ms. SANCHEZ. Thank you, Mr. Chairman. And I want to thank
    all of our witnesses for sharing your perspectives with us this
    morning.
        Not every issue raised here is under our committee's
    jurisdiction, but it is important for us to understand the
    unique challenges facing each State. And there are certainly
    differences between the communities that I represent in
    Southern California and the native rural and urban communities
    here in Oklahoma. But there is also a lot of common ground in
    terms of the challenges that our small businesses are facing,
    both in Oklahoma and in California.
        Supply chain challenges have made life difficult for
    businesses in both our States, and thankfully, in the last
    Congress, Democrats were able to work with some of our
    Republican colleagues to pass the CHIPS and the Science Act. We
    have been talking for years about the loss of supply chains and
    good-paying jobs overseas, and under the leadership of
    Congressional Democrats, we didn't mindlessly hand
    multinational corporations a massive tax cut that they didn't
    need and that they didn't ask us for. Instead, we actually
    delivered real incentives and the largest infrastructure
    investment in generations to bring those supply chains back to
    the U.S.
        I would note that all five of my Oklahoma colleagues voted
    against these critical investments in our Nation's
    infrastructure. And I guarantee working families in both our
    States share some of the same challenges trying to juggle
    childcare and eldercare, medical expenses, and the paid time
    off to deal with unexpected emergencies.
        Once again, Democrats acted to take the pressure off of
    working families. Under the American Rescue Plan, we expanded
    the Child Tax Credit and the Child and Dependent Care Tax
    Credit. I heard from countless constituents that the advanced
    monthly Child Tax Credit payments finally gave them the
    breathing room that they needed. And we didn't stop there.
    Under the Inflation Reduction Act, Democrats delivered reform
    to control the cost of prescription drugs, like capping the
    cost of insulin at $35 a month. And in my State, most workers
    can count on guaranteed paid leave. Of course, there are still
    gaps in paid leave, and the expansion of the Child Tax Credit
    sadly was only temporary.
        But we know that these are policies that make a meaningful
    difference for working families. These social programs are not
    designed to avoid work. They just mean that workers don't have
    to make those impossible choices between putting food on the
    table and caring for their loved ones. Democrats delivered
    critical steps to supporting working families, and we can't
    stop now.
        Ms. Kantz, could you please explain the economic impact
    that a lack of affordable childcare has on families throughout
    the State? And I am particularly interested in that because I
    am a working mother, and I have had those struggles. They are
    very real.
        Ms. KANTZ. Yes. Thank you, Representative. And I also am a
    working mother of three and was actually pregnant with my third
    child when I started this position. And if it had not been for
    my former boss, David Blatt, saying bring your kid to work with
    you, I would not still be sitting in this seat. So I can
    definitely speak to it.
        I think the most immediate impact is the lack of affordable
    childcare that--the most immediate impact the lack of
    affordable childcare has is the access to the workforce. It is
    going to keep parents home. The HHS guideline is 7 percent of
    your income should be paid towards childcare. I think, right
    now, it is about 16 percent for Oklahoman families. That is
    huge if you have got two minimum wage earners working to head
    up a household.
        Then you get into a situation where you have to decide
    between work and safety for your kid. Do I have affordable
    childcare, or do I have cheap childcare that might not be as
    safe for my child?
        Ms. SANCHEZ. I am sorry. I don't mean to interrupt you. But
    there is a statistic that six million women left the workforce
    during the pandemic because they were primary caregivers either
    to young children, aging parents, disabled children. We are not
    seeing that number of women reenter the workforce. And what do
    you think that that is due to?
        Ms. KANTZ. I think it is that the majority of the people
    who stay home and are choosing to stay home in the workforce
    don't have a choice. They can't--they might not have a parent
    at home who can help. They might not have a boss who says,
    bring your kid to work. And I really do feel that it negatively
    impacts women. The majority is women, of caregivers. They are
    even impacted on their future employment opportunities because
    there is a gap in their resume now.
        Ms. SANCHEZ. So what steps should Congress be taking to
    ensure that all working class families in Oklahoma have access
    to quality and affordable childcare?
        Ms. KANTZ. One of the things I think that was key to the
    Child Tax Credit was the ability to receive the timing of the
    payments. They were spread out. They were better able to manage
    their money. They were better able to plan. There was some
    consistency. It wasn't a one-time windfall to their income.
        Ms. SANCHEZ. Thank you. I appreciate it.
        My time is running short, but I just wanted to make one
    last comment, which is, an earlier colleague mentioned real
    Americans in the heartland. And I want to assure people that
    the people I represent in my District are no less real
    Americans. They are no less resilient. They are no less
    hardworking towards trying to achieve that American dream. And
    with that, I will yield back.
        Chairman SMITH. Thank you, Ms. Sanchez. We are all great
    Americans. Hardworking, great Americans.
        Mr. LUCAS. And there is a lot of descendants of Okies in
    California, too.
        Chairman SMITH. Consistent with committee practice, we will
    now recognize members on a two-to-one ratio.
        I recognize the gentleman from Nebraska, Mr. Smith.
        Mr. SMITH of Nebraska. Thank you, Mr. Chairman. Certainly,
    thank you to our witnesses. I think a great perspective, a
    varying perspective shared among our witnesses.
        As a representative of Nebraska and a huge agriculture
    District, it has been great to be here in an ag area of our
    country where we get to help feed the world. I think that is a
    task that sometimes we take for granted ourselves with the
    production here in America. But with the fact that the world is
    relying on us in so many ways, I think it is important that we
    get it right.
        If we look at the employee shortage, the worker shortage,
    how that triggers the supply chain disruptions crisis, the
    housing crisis, there are so many things we really need to talk
    about, and obviously there is a diverse perspective here on
    this at this table.
        And I hope that we, as the American people and the
    representatives, those of us more specifically, can have the
    discussions that we need to have, where we can discuss the
    economic needs of a country where the--the Broad Base Tax
    Relief of 2017 was great for our economy, great for wages,
    great for productivity, so that individual workers could
    produce more because the world needs more. The growing
    population around the world needs to eat, certainly, and we
    need to be prepared for that.
        I grow concerned that government payments are discussed in
    a context without talking about inflation. And if you look at
    2020, as painful as it was, I think it is important that we
    look at that data because, in the spring of 2020, with the
    onset of COVID, the economy tanked. Unemployment spiked.
    Congress got involved on a bipartisan basis. Not in a perfect
    way. It would be very interesting to litigate all of that. We
    don't have the time to do that today. But Congress got involved
    twice, basically, in 2020, in a bipartisan fashion.
        By the end of 2020, the GDP was back to about even from
    before the thriving economy that we had heading into COVID. So
    a new administration came into the White House and insisted on
    increasing and extending government payments. The President was
    warned that it would trigger inflation. He dismissed that. He
    pushed it anyway.
        And so, you know--and other comments that have been made
    across our economy, across our country, based on the type of
    industry that you are involved in. I think the President thinks
    less of people who are involved in the oil and gas industry,
    and perhaps some other industries as well. And I hope that,
    again, we can have the discussions we need to have, the debates
    that we need to have. We shouldn't shy away from disagreement
    either. Our country is founded on disagreement. But when you
    look at the policies that need the discussion, I hope that we
    can do that moving forward.
        Mr. Jackson, my colleague--I believe your congressman--he
    stole some of my questions relating to inspection. But I know
    that it is important, especially as it relates to the Federal
    Government, what you do. I would like anyone on the panel here
    to discuss what you have done most recently to address the
    worker shortage that is so acute.
        Maybe, Mr. Jackson, if you want to start with that. What
    you have done most recently to attract more employees.
        Mr. JACKSON. One of our biggest challenges is just, being
    in a small community having a small population, it is very hard
    to find people with those skill sets. Most people that walk in
    the door, we have to train them from the ground up. And so any
    way we can incentivize people looking under a rock, wherever we
    found people to work, the people who want to show up every day,
    that is what it has taken.
        So we have hired the whole gambit of different types of
    people that you could imagine. Some of my best employees have
    been former felons. And so they have had challenges, as
    veterans do sometimes, in readjusting to society. But we have
    had challenges with just keeping those people. But the number
    one thing we have done is just searching for them and providing
    the best opportunity that we can, a healthy environment that is
    positive, and then not focusing on just the retaining, but also
    on the growth aspect. How to help them in their work-life
    balance and help them improve their lives for themselves and
    their families.
        Mr. SMITH of Nebraska. Anyone else? Briefly. I apologize.
    My time is expired, and I know time is short.
        Chairman SMITH. Go ahead, Mr.----
        Mr. SMITH of Nebraska. I will defer to the chairman.
        Chairman SMITH. Yeah. You were going to say something, Mr.
    Mills?
        Mr. MILLS. Well, you know, to me, the workforce--like I
    said, I have been involved about 22 years. And, you know, we
    have got two fronts that we have got to work on the hardest.
    One is preparing our youth for a successful career. That is our
    future. For now, it is getting people to come back to work. And
    I know healthcare--I mean--I am sorry. Childcare has been an
    issue for a lot of people. And, you know, they experience
    workforce issues as well. That is why there is so many, you
    know, less daycare facilities open because they can't find
    workers.
        You know, so we all are experiencing this. It is a huge
    issue. And so, you know, what is it going to take to
    incentivize people to come back to work and not stay at home?
    You know, everything changed with COVID. People got used to
    staying home. They were like, hey, I kind of like this. You
    know, I got my office here, and I can take care of my kids, and
    I can, you know, have all this free time, and I can work at
    night or whatever. And there are a lot of people that don't
    want to come back just because of that.
        My business won't allow that to happen. I have to have
    people in my shop every day to work. And it is harder and
    harder to find those skilled workers. But, you know, a lot of
    it is encouraging kids to actually seek a career and preparing
    them for a career. And we do a lot of great things at
    Workforce. We have got the individualized career and academic
    plan here in Oklahoma and many other States that is actually
    helping kids kind of develop a future for deciding what they
    want to do after graduation. But those are issues that we deal
    with. So I will stop.
        Chairman SMITH. Thank you, Mr. Mills.
        I would like to recognize the gentleman from Pennsylvania,
    Mr. Kelly.
        Mr. KELLY. Thank you, Mr. Chairman. And thank you for
    holding this hearing. I think it is really great that we get
    out of Washington, D.C. and actually get out into the country.
        And look, I realize we are all Americans. It doesn't matter
    where you live or where you work or where you raise your
    children or anything else. Yes. That is true. That is true. We
    are all Americans. I get it. But until you come here, you come
    to a place where things actually have to take place as opposed
    to creating a policy that may or may not work with one
    exception that it will cost you a lot of money.
        I want to hear more from all of you because the challenges
    you are facing--I am in the automobile business. The number one
    challenge we face now is finding talent. Not finding customers,
    but finding talent. How do you take care of those people who
    buy an automobile from you and bring it back because they need
    it serviced? Well, you better have a tech. Right?
        And where I live, people make a habit of hitting deer. And
    only because, during the season, when they are riding, a buck
    will go across any highway to get to a doe no matter what is
    coming. But we can't find people to fix cars anymore. We can't
    find people to do almost anything anymore.
        So when I talk to businesspeople and businessowners--and I
    want to tell you, the number one thing that I worry about in my
    business is debt. Unserviceable debt is especially scary. I do
    believe that, at some point in this current economy, this wave
    is going to crest, and it is going to fall. And when it falls,
    there are a lot of people that are going to fall with it
    because of unsustainable debt.
        Just to give you an example, last year, we brought in $5.0
    trillion in tax revenue. Incredible. Incredible revenue. But we
    went on to spend $6.5 trillion. So if we talk kitchen table
    economics, that means a family making $50,000 goes out and
    spends $65,000 and feels pretty good about itself until the
    bill comes due.
        Now, I don't know how you all handle what you have coming.
    I don't know how we are going to handle what the 250 people we
    pay every two weeks when we reach that point where the revenue
    doesn't match the outgo. Reckless, reckless spending in
    Washington, D.C. At the time, people thought this was great. It
    was a windfall for a lot. It wasn't. It was just a deepening
    tax burden.
        So each of you, because there is 2 and a half minutes left,
    the number one challenge you face other than talent. I don't
    know where you are on the debt side of this and how much of it
    worries you. I spend most of my nights waking up trying to
    figure out what is going to happen next.
        So, Mr. Jackson, starting with you. And you have done an
    incredible job. You hired somebody to go out and figure out how
    to hire other people. Where is the talent, and how do we get
    it?
        Mr. JACKSON. So I guess the best way to answer that
    question is just, it has taken us just doing whatever it took
    to try to stay ahead of the lagging accounts receivable that we
    face as a small business. And so our biggest challenge is the
    cash flow and being able to meet those obligations.
        So having access to operating lines and things like that is
    tough for a small business. But we are experiencing that no
    matter what small business that you are. So I would say that
    cash flow is our number one concern as a small business and how
    to meet those obligations.
        Mr. KELLY. Mr. Mills.
        Mr. MILLS. I agree with that. You know, in this economy,
    cash is key. And my dad taught me that. It is true. Having good
    credit and having cash flow. That is how we have survived
    through all these 115 years in business, is taking care of
    business like that, and providing good customer service and a
    quality product.
        But right now, my greatest concern is that cash flow.
    Again, with the supply chain, in order for me to control the
    escalating prices that still continue today is I have to go out
    and buy more inventory, outlay more cash. That money is just
    sitting there on the shelf in the yard. And, you know, you have
    got to pay for that. That gives you less money to go out and
    develop new product, buy equipment, hire more people. It is a
    negative impact on us.
        And so we are just like everyone else. We see this possible
    recession coming. Myself and my customers, we are all kind of
    holding back, being a little conservative, not buying quite as
    much, because when this thing does crash at some point--it has
    got to crash a little bit--we don't get caught. We want to stay
    in business. And so that is our greatest concern right now.
    Cash flow probably will be the same for everyone.
        Mr. KELLY. Ms. Payne.
        Ms. PAYNE. Thank you. Something that I think needs to be
    considered from the farming and ranching perspective is
    whenever you are--during calving season, say your cows are
    calving out in the spring, you are planning. You are looking
    way, way down the line for your next paycheck.
        In the cattle industry specifically, that calf crop is one
    time. So it is great that those calves may bring 70,000,
    100,000. That is your paycheck for the year, and it is way on
    down the line. So it is a little bit different thought process
    from my perspective.
        Mr. KELLY. Yeah. That is future inventory.
        Ms. PAYNE. Yes.
        Mr. KELLY. Mr. Brevetti.
        Mr. BREVETTI. Well, you mentioned about the lack of skilled
    workers, and that affects all of us. And it is--it is probably
    worth pointing out that you can get a loan to go achieve a
    degree that you may not be able to find a job in, yet how do
    you fund someone to become a welder? A truck driver? We have a
    part ownership in a service company, and crane operators are
    very difficult to find. And we are willing to put them through
    a training class.
        At the OERB, the Oklahoma Energy Resources Board that I am
    on the board, we have programs that we believe address this by
    starting with elementary education through middle school, high
    school, college. We try to get out volunteers in the classrooms
    to encourage people what we do in our industry so that they
    will want to work in it.
        And then on a college level, we provide scholarships along
    with other groups here in the State such as the local Society
    of Petroleum Engineers chapter and the API. We feel that, this
    way, we can bring more people in. But we still do need to do
    more.
        Chairman SMITH. I am sorry.
        Mr. KELLY. We have run out of time. Thank you, Mr.
    Chairman. Also, Express Clydesdales, this is a great place for
    us to come today. Thank you so much. It is a beautiful
    location. And it is really good to get out of Washington and
    get around real people who really have to produce every single
    penny that they spend in addition to the taxes that they pay.
    So thank you all so much, and God bless.
        Chairman SMITH. Thank you, Mr. Kelly.
        I do want to remind our friends in the audience as well, we
    have clipboards right here for you to submit anything to the
    record of information that you think we should know about,
    issues that we are facing in the state of the current economy,
    and also solutions that you think we should look at.
        I would love to recognize the gentlelady from Alabama, Ms.
    Sewell.
        Ms. SEWELL. Thank you, Mr. Chairman. I want to thank our
    witnesses for being here today and sharing your stories and
    your perspectives.
        I represent Alabama, and I can close my eyes and listen to
    all of you speak and know that the folks that I represent share
    many of your concerns. This hearing is about the state of the
    American economy. Not the Democratic economy. Not the
    Republican economy. It is the American economy. And you all
    have reinforced that. It is about making sure that all of us
    are vested. All of us are vested in the success of this great
    country that we live in.
        And that irrespective of your wealth, your race, your
    gender, we all want to achieve the American dream. We may
    differ on how we get there, but I think all of us want to
    achieve the American dream.
        You know, this month marks the third anniversary of the
    COVID-19 break out. I think all of us know that it was a global
    pandemic. It was not a hoax. A million people died. Folks in my
    District that were of color who had chronic diseases died
    disproportionately more often than others. But a million
    Americans died.
        And I think that no committee had a bigger impact on trying
    to mitigate the downturn in the economy than the Ways and Means
    Committee. And I am very proud of the fact that we were able,
    if only for 1 year, to give a fully refundable Child Tax
    Credit.
        And, Ms. Kantz, I want you to talk a little bit about that.
    I can tell you from the perspective of my constituents, I had
    lots and lots of fathers, not just mommies, telling me how
    important it was for that income support, especially during
    that vital time. And it did lift people out of poverty. In my
    District alone, it lifted 30 percent of the children out of
    poverty for that 1 year. All because it was an increase in the
    amount that was given. And as you rightly pointed out, it was
    given on a monthly basis, not a one-time basis.
        And so, can you talk to me a little bit about how that
    affected your community? And if you could also talk to us about
    how it affected the members of the Cherokee Nation and how
    income support was vitally important during that time. And tell
    us--because we came out of this pandemic stronger. This
    economy--you know, 12 million jobs were created in the last 2
    years. But, I mean, we obviously have things to do. But it is
    about balance to approach and making sure that employer and
    employee alike are prospering in this economy.
        Ms. KANTZ. Thank you, Representative Sewell. As a member of
    the--as a citizen of the Cherokee Nation, I definitely applaud
    all the work that the Tribes have done. There are 38 federally-
    recognized Tribes in Oklahoma. And they have truly been a
    beacon of how to care for your citizens. They have definitely
    stepped up and used the resources. And Cherokee Nation alone
    has a 3 billion-dollar economic impact on Oklahoma. So a very
    proud citizen here.
        But I definitely think that the Federal Government would do
    well to honor the sovereignty of those Nations and speak with
    them and have the table equal for the Nations to speak to their
    citizens needs individually and not as a whole.
        And as far as the Child Tax Credit, not everybody has a
    parent who can watch their kid. Not everyone can afford to work
    fewer hours. Not everyone works 9:00 to 5:00 hours. How many
    childcare systems do you know that are set up to support night
    shifts? Our hospital workers, our doctors, where are they
    finding their childcare?
        If they don't have a community--you know, we talk about
    having boots and pulling ourselves up by our bootstraps. I
    wasn't born into a family that had boots. We got hand-me-down
    boots. And we had a community in a village around us that
    helped with those boots. What are we doing in Oklahoma? What
    are we doing in America to ensure that we are sharing boots?
    Right?
        We really need to show up for the working class, our middle
    class. We have heard about the wealth gap. It is real. It is
    real. It is greater than it has ever been in the history of the
    United States. And we really do need to show up for our working
    class families.
        Ms. SEWELL. You know, the other thing that you mentioned
    that I thought was really poignant, is that my State did not
    expand Medicaid. And frankly, we have seen lots of rural
    hospitals close because we didn't expand Medicaid. And I think
    that when you are going through a global health crisis, to not
    have health insurance, to not be able to provide for yourself
    and your family, just further undergirds what you were saying.
        Mr. Chairman, I just want to conclude by just making a
    comment and observation. We on the Ways and Means Committee,
    because we have tax and trade and healthcare in our
    jurisdiction, can use our tax code to really help working
    families and entrepreneurs in small businesses alike--we would
    do well to remember that we are all interdependent. What
    happens to one of us definitely does affect all of us. And so
    thank you. With that, I want to, again, thank our witnesses for
    their testimony.
        Chairman SMITH. I want to thank the gentlelady.
        I recognize the gentleman from Arizona, Mr. Schweikert.
        Mr. SCHWEIKERT. Thank you, Mr. Chairman.
        Look, we have a country where we are borrowing, what,
    $48,000 every second. And you will actually hear both sides
    care. One side believes in subsidization. One side believes in
    incentives. But we are all, in many ways, trying to get to the
    same goal.
        And forgive me, but in listening, did anyone actually hear
    the obvious--at least one of the key obvious problems? I have,
    you know, four over here saying you are desperate to find
    labor. You know, people that will show up and work. And someone
    that is concerned about poverty. I was just looking up some of
    the data for your state, but it is true in my State of Arizona.
    And it is uncomfortable to talk about, but we got to--we are
    going to have to deal with it. Young males are dramatically
    underperforming showing up in the economy. Something is going
    on out there where they are entering universities in similar
    numbers and graduating in many universities at half the rate,
    or they are just not showing up to work. What is honestly going
    on in our society?
        And for those of you in the oil patch, you know, and the
    meat processing, let's be honest. You don't need someone with a
    university degree. You just need someone who shows up. If I
    have millions and millions of young males who somehow
    disappeared in our economy in the last couple years, what is
    going on?
        Mr. Jackson, your observation--I know you are in a smaller
    community. And I represent an urban-suburban District. We have
    fentanyl out of control. We have other things. What is
    happening in your communities? Why this disparity of, we have
    jobs, I don't have labor, but I also have data that says I have
    a substantial number of these young males not showing up. What
    is going on?
        Mr. Jackson. From my perspective, I think a lot of it has
    to do with people today thinking more about what they can get
    instead of what they can give. And I think we, as Americans,
    need to be reminded of--what built this country was people's
    desire to be free from tyranny. And so we have to show up to
    work. We have to roll up our sleeves and put the work in.
        Mr. SCHWEIKERT. Okay. So you see a societal issue?
        Mr. JACKSON. Yes.
        Mr. SCHWEIKERT. Mr. Mills.
        Mr. MILLS. I agree. And I think it all started with
    participation trophies. You know, everybody----
        Mr. SCHWEIKERT. Sometimes that was the only way I got a
    trophy.
        Mr. MILLS. Everybody is a winner. We don't want to hurt
    anybody's feelings. I am sorry. There are winners and losers.
    And it is okay to lose. I have lost. In business, you lose all
    the time. I don't get every quarter that I quote, you know? Oh,
    okay. We move onto the next one. And, you know, you just don't
    take it personal. But that is where it started. It is a society
    change. And it all starts from home.
        And some of this, like I said, could actually work through
    the school system for us, again, if we can get, I think,
    business engaged in helping these kids, you know, really find
    their purpose.
        Mr. SCHWEIKERT. It is--look, we were in West Virginia a
    couple weeks ago. And we have also been digging into some of
    the data in my Phoenix area. And we have a genuine problem with
    a number of young people, substance abuse, other things going
    on. I don't know if that is permeated through this part of the
    country. I mean, this is a moral imperative. You have a society
    that needs people, but then people aren't showing up.
        Ms. Payne, any theories?
        Ms. PAYNE. Representative, I think more kids ought to be
    forced to haul hay during the hot summer.
        Mr. SCHWEIKERT. Yeah, yeah. When we walked through the
    stables back there--I spent my childhood shoveling horse
    stalls. I can smell that ammonia a mile away. And I am still
    doing it.
        How about in the oil patch, what do you see?
        Mr. BREVETTI. We see a lot of the same thing. It is
    difficult to find workers. You know, we have essentially what
    we call the great crew change or the great retirement. So a lot
    of our workers got to ages where, when the oil patch slowed
    during the pandemic, they were out of work and said, well, we
    are just taking early retirement or they were forced to take
    early retirement. In the past, those workers were replaced by
    the new crop. We don't have that number----
        Mr. SCHWEIKERT. Well, we have--the baby boomers are
    retiring.
        Mr. BREVETTI. Yeah. Baby boomers are retiring. We don't
    have as many coming up. But in the past history of our country,
    we brought in immigrants on a legal basis and gave them a work
    visa. We built this country with immigrants. My grandparents
    were immigrants from Italy. We need to do more of this. Let's
    not bring fentanyl across the border. Let's bring in people
    legally who want to work.
        Mr. SCHWEIKERT. Mr. Chairman, thank you for tolerating me.
        Chairman SMITH. Thank you, gentleman.
        As someone who hauled a lot of hay growing up, I love that
    comment.
        The gentleman from Kansas is recognized.
        Mr. ESTES. Thank you, Mr. Chairman, for holding this
    hearing outside of the D.C. Beltway. And thank you to all our
    witnesses for being here today.
        We are just a few short hours south of my home in Wichita,
    Kansas. And it is great to have my colleagues here in the
    heartland. You know, some of the folks and the D.C. bureaucrats
    and inside on the East and West Coast call this flyover
    country. But what we have seen here today, and many of us
    already knew, is that folks in Oklahoma and Kansas and other
    States here in the middle of the country are a more vibrant,
    hardworking, dedicated, and patriotic people in America.
        Agriculture is a major industry, and it is these men and
    women who feed, fuel, and clothe our country and the world. We
    are also home to a lot of manufacturers. In fact, just up I-35
    in South Central Kansas, we call it the air capital of the
    world. Here in Oklahoma City and throughout the Midwest,
    organizations of all sizes are building planes, earth-drilling
    equipment, ag products, and more.
        In 2017, Republicans overhauled our outdated tax code to
    benefit families, small businesses, and entrepreneurs. Our goal
    was to make sure we got the economy going. And in fact, it
    worked. What we have seen as well is that we have actually
    collected more taxes.
        So in 2022, just last year, we collected over 700 billion
    more dollars in taxes than the Congressional Budget Office said
    we would have done if we had not done the Tax Cuts and Jobs
    Act. And businesses actually paid 12 percent more in 2022 than
    they would have without the Tax Cuts and Jobs Act. It lowered
    the rates and ultimately got the economy going, which meant we
    collected more in taxes. And we have got the lowest
    unemployment rates, both pre-COVID as well as post-COVID, just
    because of having the economy going.
        Unfortunately, some of those provisions that were put in
    temporary place--in place temporarily are starting to expire.
    And one of those that really has had an impact on a lot of
    businesses is the median expensing of research and development
    cost. It expired last year.
        And I am working to reintroduce legislation that would help
    restore this crucial tax program so that small businesses here
    in the Midwest can continue expanding the research and
    development, creating more good-paying jobs in the United
    States. And this will help assure we have a strong economy and
    a strong America.
        Mr. Mills, can you tell us a little bit about the impacts
    you have seen of some good tax policies on your business?
        Mr. MILLS. They are absolutely critical. You know, I have
    said a long time just about to every elected official I can
    that, you know, just get out of our way and let us grow. Let us
    develop new product. We want to be a leader in the world like
    we used to be. Innovative. And here in Oklahoma, we are some of
    the most innovative people because we are resilient. And, you
    know, we know what it takes.
        But having the benefits of some tax, especially R&D, I
    mean, let's go make some new things. Let's develop. Let's be
    leaders again in expanding our economy. And get out of the way.
    Don't tax us. We are going to go out and create more jobs,
    create more taxes, to help fund and help people that need the
    help.
        You know, being just even an elected official on the local
    level, I saw where the tax dollars were going. I probably
    became a little bit more moderate when I became the mayor
    because I understood the poverty level in our communities and
    the people that really needed the help because I saw those
    agencies helping those people. So I know the need is there. But
    at the same time, you can't choke business down in order to get
    there. They are the people that are generating the jobs and the
    opportunity and the taxes.
        So let's look at this cycle. It is not very complicated.
    But those definitely have helped us. And R&D is huge. So I
    appreciate you doing that.
        Mr. ESTES. Thank you. And, you know, with a decent tax
    policy, we need to make sure we have good energy policy. I
    mean, we are suffering now from rising prices. Not just gas
    prices, but also heating a home and the impacts on businesses
    and families. And a lot of us do the bad policies coming out of
    the Biden administration to attack American energy policy.
        And in fact limiting or selling off our strategic reserve
    to countries like China. And then putting policies in place
    like marginal wells and some of those restrictions on oil
    production.
        Mr. Brevetti, I know I am running short on time here, but I
    did want to ask just a quick question about, what are the
    policies you think would be useful in the United States to
    implement to help restore and lower energy prices for American
    consumers?
        Mr. BREVETTI. Well, basically, we really need less
    regulation instead of more. Between the EPA that was mentioned
    earlier, we also have policies that have come down through
    WOTUS, the Waters of the U.S., the fish and wildlife, where,
    you know, the lesser prairie chicken and other endangered
    species--they became deaths by a thousand cuts. And this has
    become very difficult for many of us small energy producers to
    work. The more oil and natural gas we can produce, supply and
    demand, then the less it is going to be to the consumer.
        Mr. ESTES. Look, thank you.
        And thank you, Mr. Chairman. I yield back.
        Chairman SMITH. Thank you, sir.
        I would like to recognize the gentlelady from Wisconsin,
    Ms. Moore.
        Ms. MOORE of Wisconsin. Thank you so much. I don't think my
    mic is on. Is it on?
        Chairman SMITH. I don't think it is on.
        Ms. MOORE of Wisconsin. Can I reclaim my seconds?
        I just want to thank all of you. And, Mr. Chairman, thank
    you for inviting us to this field hearing. I am from Wisconsin,
    and so I share many of the experiences and concerns that you
    Oklahomans have.
        I just want to respond briefly to something that the
    chairman said in his opening statement with regard to the
    expiration of the standard deduction. I just want the panel to
    understand that the reason that that is happening is because of
    the construction of the tax cuts through the JOBS Act. The then
    Republican majority decided to prioritize cutting taxes for
    corporations, and they put in a provision that would make it
    expire for the people. And so we'll see what happens with that.
        I wanted to know from Mr. Mills and Mr. Jackson. I really
    do respect the fact that you have kept this business going for
    115 years, Mr. Mills. That is very impressive. I am wondering,
    did you benefit from the corporate tax cuts from 35 percent to
    21 percent in trying to meet some of your needs? You waxed on
    about the inflation and the numbers of other problems that
    you--I am wondering, did you benefit from that tremendous tax
    cut?
        Mr. MILLS. You know, I saw that question coming. And I
    actually asked my bookkeeper, and he said, well, that would
    have been beneficial if we were profitable.
        Ms. MOORE of Wisconsin. If what?
        Mr. MILLS. If we were profitable. So we were just really
    getting by because of the cost. So we were really operating at
    virtually a break even or slight loss. And so, unfortunately,
    we didn't get to see the benefits of that.
        Ms. MOORE of Wisconsin. Okay. So thank you for that. That
    is just good to know.
        You said that you hired some roustabouts. I looked that up.
    I didn't know what that was. I thought you were talking about
    my great-grandchildren. And that seems to be a very difficult
    job. I mean, to physically--having to workforce division. And
    that doesn't seem to be a job that, even 50 years ago, I
    personally would have been able to do. Just heavy lifting,
    digging ditches, holes.
        So, when you--you know, so fortunately, we haven't raised
    the--the minimum wage has not been raised around here. It is
    still $7.25--offering $18 an hour, which is, you know, only
    about 63 percent of the median income here in Oklahoma. How did
    you arrive at that?
        I was riding around yesterday with Uber drivers, and they
    said, you cannot live here without a car and get to your job,
    for example. The housing prices are high. We are talking about
    men working now, I think. So, I am not even going to get into
    childcare with you.
        Did you think about some sort of transportation program or
    housing assistance or anything, paid medical leave, any of
    these supports for your employees to offset that $18 an hour
    salary? Because after all, they can go work for Walmart as a
    packer and make $29 an hour.
        Mr. MILLS. We don't see much of that here in Oklahoma. I
    don't know about what the Walmart people are--I mean, everybody
    I talk to at Walmart are working part time with no benefits and
    things like that.
        Ms. MOORE of Wisconsin. Right. There is just sort of this
    notion that people are just lazy and they don't want to come to
    work. And I am just wondering, I mean, it costs money to go to
    work. And if you don't have a car, how do you get to your job?
    And then I heard that the jobs are, like, 12-hour long days. So
    I don't know who picks up the kids from school. How does any of
    that happen?
        Let me ask Ms. Kantz some questions here. I'm talking about
    the female employment. And you have already discussed the fact
    that there is a very high 20 percent child poverty rate, which
    concerns me. A very high incarceration rate among women here as
    well. So, I specifically want you to talk about how the Earned
    Income Tax Credit maybe does or does not void the plight of
    workers, particularly single workers? I want you to answer
    that, and then I want you to also talk about child poverty in
    the State.
        Ms. KANTZ. Thank you, Representative. For working families
    with children, the EITC or Earned Income Tax Credit is a
    powerful wage subsidy. It and the Child Tax Credit can offset
    their payroll tax liabilities and additionally supplement their
    earnings. The standard deduction, EITC, and Child Tax Credit
    are set at levels that ensure that families with children don't
    have net Federal tax liability if they earn poverty-level
    wages.
        Ms. MOORE of Wisconsin. Reclaiming my time. We have five
    seconds left.
        I just want to say that I was fact-checked once, and I want
    to put it in the record, Mr. Chairman. People are--low-wage
    workers are taxed into poverty because of the way the Earned
    Income Tax Credit is structured.
        Would you agree with that, Ms. Kantz.
        Ms. KANTZ. I would.
        Ms. MOORE of Wisconsin. All right. So I don't have much
    time, but I do want to make sure that, you know--that this
    committee revisits the Earned Income Tax Credit because it is a
    great program for helping people get out of poverty if it would
    actually do that.
        So I would like, Mr. Chairman, to enter into the record
    that fact check. And I also want to enter into the record
    something very disturbing to me about the incarceration rate of
    women in Oklahoma for child abuse. I mean, that includes not
    having enough money for food, rent. And I am very concerned
    that we are imprisoning women for being poor.
        Mr. Chairman----
        Chairman SMITH. Without objection----
        Ms. MOORE of Wisconsin. I yield back.
        Chairman SMITH. So ordered to put in the record.

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        The gentleman from Pennsylvania, you are recognized.
        Mr. SMUCKER. Thank you. Thank you, Mr. Chairman. Thanks for
    holding this hearing here.
        My District in Pennsylvania is an ag district as well. We
    have a lot more dairy cows than we have beef cattle, and a lot
    of egg-laying hens, but agriculture nonetheless. And then
    manufacturing as well. We like to call ourselves the snack
    capital of the world, both salty and sweet. We are close to
    Hershey's and Mars and many others.
        But I was a small business owner myself from the time I was
    17 years old out hanging drywall, and then I built a small
    business that still exists today with several hundred
    employees, a regional leader in commercial contracting. So I
    see the power of an economy that provides opportunity for
    people, and the power of jobs to provide opportunity for
    people.
        And in fact, I ran first for the State Senate and then for
    Congress to really work--I had seen the growth of government
    that really intruded in all aspects of our lives and made it
    much harder for a 17-year-old to run a business. And I really
    ran to kind of fight back against that, both at the State level
    and then at the Federal level. So I hear what you are saying
    and can relate to what you are saying.
        And I think the ranking member made a statement this
    morning that I think was important. And that is, we should be
    able to have discussions about what really works best to lift
    people out of poverty to help individuals achieve their own
    American dream. And we have differences of opinion in how--what
    is the best path forward. But we ought to be able to have these
    discussions. So I appreciate everyone being here in the room
    talking about this.
        But it is pretty clear there is a difference in how we as
    Republicans and how Democrats approach these issues. I think we
    can agree that, you know, we are all thankful that we live in a
    country--and to your point, Mr. Mills--that does help those who
    really need help. And you saw that as mayor. And I have seen
    that in my community, and I am grateful for that.
        And then beyond that, we talk about, what is the best way
    to lift people out of poverty? And I think, in general--and I
    am very much overgeneralizing some of the things you are
    hearing from the Democrat side today--rely more on government
    than what we prefer to. We believe that--in the power and the
    ingenuity of the American people.
        Wouldn't you all agree, and I am just curious, the best way
    to help people, lift people out of poverty, is to provide them
    with a job and to connect them to the job? Do you all agree
    with that? I see heads nodding.
        Mr. MILLS. I agree. And, you know, I was just thinking that
    same thing, when this question came out, that the path out of
    poverty is a job.
        Mr. SMUCKER. So how do we do that? Does the government
    create jobs or do businesses?
        Mr. MILLS. Well, you know, we have jobs. We need to help
    them with skills. And they need to have some basic skills.
        Mr. SMUCKER. Yeah.
        Mr. MILLS. But just like, you know, what has been mentioned
    here, a lot of times, we have someone with basic skills, and we
    can train them to do--because every company is different. We
    all do things a little differently. But we can help train them.
    We also send some of our workers into CareerTech to upscale
    their abilities. We have one of the best CareerTech systems in
    the world, really. People come here just to study our
    CareerTech system.
        Mr. SMUCKER. I agree. And I am going to run out of time. I
    want to make one additional point. And I appreciate your
    commitment. Because it is a really important function to find
    ways to ensure that individuals are prepared for the jobs that
    are available today. Nothing better than lifting people out of
    poverty than that.
        The ranking member also mentioned the success of the
    American Rescue Plan. And some of us believe that that created
    the inflation that has hurt everyday Americans in a degree that
    has been very, very harmful to families. And nowhere, I think,
    than during the discussion of that bill was our difference in
    approach more evident where the bill incentivized people to
    stay home, which I thought was terrible to put people in a
    position of earning more if they stay home. They had to make
    that tough decision. I am going to stay home so I can provide
    for my family.
        Our idea was to provide a $1,500 incentive to have people
    go back to work. What is your reaction to that? Do you think
    that would have worked better than what we have now?
        Mr. MILLS. I think that is a good start. I mean, you know,
    we have got to get something to get them moving. And I think
    we--I am trying to think if that happened here in Oklahoma. I
    know we talked about it. I know our governor talked about that,
    providing that incentive. I can't remember if it happened or
    not.
        But I think it worked because things have gotten a little
    bit better since then. We still are struggling to find those
    skilled workers. But, again, any incentive we can to get people
    back to work, it would be welcome.
        Mr. SMUCKER. Thank you. I am out of time.
        Chairman SMITH. I thank the Representative.
        I recognize the gentlelady from West Virginia, Mrs. Miller.
        Mrs. MILLER. Thank you, Mr. Chairman, and Ranking Member as
    well.
        Thank you all for being here today.
        I feel that policymakers don't always respect or truly
    understand what job creators, business people go through and
    the risk they take every single day when they open their door,
    whether it is a glass door, a fancy wooden door, or a truck
    door. You take risks every single day, and you care about your
    employees, because without them you can't do a good business.
    So I am looking forward to hearing more from you on your ideas.
        Mr. Brevetti, thank you for being here. You know, the
    independent oil and gas producers are so essential to securing
    our American energy and our way of life. Without producers like
    you, it would be much more costly for Americans to keep their
    lights on and our cars powered.
        The Democrats in Congress have consistently used the Tax
    Code to discriminate against American energy producers, from
    attacking deductions for intangible drilling costs to propping
    up unreliable green energy through billions of dollars of
    subsidies. Democrats have shown that they are more willing to
    pick winners and losers.
        Can you explain how higher taxes on America's most abundant
    energy resources, like coal, oil and gas, impact the price for
    our consumers?
        Mr. BREVETTI. Yes, I can. Thank you, Representative Miller.
        Every dollar that you pay in taxes is $1 less you are
    investing into your business, and in our case, our business is
    very risky. All ventures don't work. You are at the vagaries of
    mother nature in the sense that when you--you put a dollar in
    the ground you get $2 back, $3 back or you get none back.
        So punitive tax codes do no good. We should be encouraged
    to take these risks and invest the money, and the benefits are
    twofold: There is benefits to the consumer, you know, the more
    hydrocarbons we can produce in this country, the lower the
    costs are going to be to the consumer; and the other benefit is
    the tax revenues that are going to come from that.
        And those tax revenues are going to come not just from the
    production of the oil and natural gas and our business but from
    the taxes that all of the workers pay that go into the hundreds
    that are needed for every well that is drilled and completed.
        Mrs. MILLER. Well, you know, President Biden, when he
    decided to release millions of gallons of oil from the
    strategic petroleum reserve in a failed attempt to artificially
    lower our prices, how can small producers, like Charter Oak,
    compete against the Federal government in pricing oil?
        Mr. BREVETTI. That is on outstanding point and a great
    question, because I believe the amount of oil released
    initially was 180 million barrels, and then I think it was
    followed up with another 23 million barrels this year. That is
    over 1 million barrels a day. To put that in perspective, that
    is about just almost 10 percent of U.S. production.
        So it would have been--it was not for any sort of national
    emergency. It merely affected the economy. It did temporarily
    drive the prices down, but even if the strategic petroleum
    reserves are never replaced, that million barrels a day of
    production is off of the U.S. market. So now, the demand hasn't
    changed, so us producers have to now come up with that extra
    million barrels a day. That is probably going to raise the
    price of oil to all consumers in the U.S.
        Mrs. MILLER. And it will continue to do so.
        Mr. Jackson, when you spoke, I am sitting here going, boom.
    I enjoyed hearing everything that you had to say. I have a very
    small farm near Milton, West Virginia, and I raise grass-fed
    bison. At one time, I had as many as 100 animals, which is
    pretty tiny to a lot of you, and we are down to about 30 now,
    since I have been in Congress for the last 4 plus years,
    because we just can't, you know, handle what we do. I still
    warm the animals three times a year, and it is a three
    generational thing. It is really cool to see my 13- and 15-
    year-old grandsons finally strong enough to pull those gates
    when those animals are, you know, trying to get through.
        So you built your business during one of the most
    challenging economic times our country has faced. Have things
    gotten better or worse for you since you started your business,
    and what is your biggest challenge?
        Mr. JACKSON. I would say, our number one challenge is
    definitely labor, and it was challenging. And speaking of
    bison, that is why we had to reinforce our facility more just
    so we could handle those bigger animals. It gets your
    adrenaline going, working those, but they are definitely
    majestic creatures.
        I would say, if I could offer one idea though for how to
    entice people to come to work though, it would be to offer them
    hope. That is what we need as a Nation is for people to hope
    that things can get better. And I think we owe it to each other
    to share that knowledge of what we have learned so people can
    walk in the door with zero experience. They can learn some
    tangible, vocational skills, things that we had to learn on the
    fly that we couldn't go to a school for and walk away with some
    real skills they can use somewhere else.
        And that is empowering for people to have that, to know
    they have hope that they can make their life better for their
    family. And then with that, we have to coach and mentor. We
    have to have people grow in their jobs. And we look at it more
    as not transactional, but it has to be relational. And we
    benefit from that as a small business to see firsthand people's
    lives, what they struggle with, and then help as best we can
    from our vantage point to make their life better.
        Mrs. MILLER. Thank you.
        Ms. Payne, I do have to tell you that I processed all of
    our animals. I was always in there when we did it. Thank you.
        Chairman SMITH. I want to thank the gentlelady, and
    recognize the representative from Michigan, Mr. Kildee.
        Mr. KILDEE. Thank you, Mr. Chairman. Can you hear me? Okay.
        And thanks to the witnesses for your testimony, to all of
    you for your service to our country, Mr. Jackson, you in
    particular. One of the great experiences all of us get to have
    is to travel to West Point or to any of the academies and meet
    the young people that we nominate to those institutions. And I
    just want to say to you how much I enjoy that and appreciate
    it, particularly appreciate your willingness to serve our
    country in the fashion that you have.
        You know, driving out here or riding out here on the bus,
    it looked like I was in any part of my district. A lot of
    folks, you know, have an impression about the district I
    represent because of my hometown getting some of the attention
    that it does. I am from Flint, Gwen. But most of the people and
    most of the district that I represent looks just like the
    country that we drove through. I have conversations just like
    this one in my district every single week. I represent a lot of
    growers, a lot of folks in agriculture, and I appreciate the
    perspective that you bring, and it is an important one.
        I also think, you know, the institution of Congress can do
    better in terms of having civil dialogue. I wax nostalgic
    thinking about Mr. Lucas when he was the chair of the
    Agriculture Committee and how during that period of time,
    despite the fact that we had differences, we were able to come
    together on a farm bill that was good for Americans, good for
    the American economy.
        And I just hope that as we go into another year writing a
    farm bill that we are going to be able to draw on that example
    that you set, along with our friend from Minnesota, who is no
    longer in Congress. That is an important statement.
        And I just want to say that out loud, because listening to
    the dialogue here one might get the impression that there is
    two distinct un-overlapped philosophies of government. That is
    just not true. We all have different perspectives, we come from
    different life paths, but we have a lot in common, and we ought
    to not allow our differences, as significant as they may be,
    cancel our areas of agreement. And as I said, Mr. Lucas showed
    that when he was the chair of the Ag Committee. I hope we can
    find a path forward in that same light.
        I would like to emphasize and ask Ms. Kantz a question. You
    know, one of the challenges that we face, and I know this is
    true here in Oklahoma, is that our Tribal Nations, sometimes it
    is going to operate in two distinct spheres. There is an
    impression over the last few decades that Tribal Nations have
    done extraordinarily well. Well, that is not true entirely.
    Some of the highest poverty rates, some of the most difficult
    challenges around health, around income, around economic
    disparity is found in Indian country.
        One of the things that Congress has failed to do is to
    create parity for our Tribal Nations when it comes to the use
    of those tools of the Tax Code that do--I am sorry. I guess you
    couldn't hear me. I won't start over, although I could. The
    tools of the Tax Code, which is the mechanism for incentives
    for private investment are not equally available in Indian
    country.
        Something as simple, for example, is the ability to issue
    tax-exempt bonds the way every government pretty much finances
    large infrastructure improvements, which is a key to economic
    development, is locked away from those Tribal governments.
    Other uses of the code regarding housing policy are not readily
    available. And I wonder if you just might comment on how that
    impacts the economy and what difference it would make if this
    committee and Congress could get together, as Republicans and
    Democrats now have expressed, and share those tax benefits with
    Indian country.
        Ms. KANTZ. Well, thank you, Representative, and I agree
    with you. I think in any chance we get that we can put our
    people over politics we should be doing that, so thank you for
    those words.
        But I think, just to be very blunt, we need to be talking
    to our Tribal Nations. We need to talk to the 38 federally
    recognized Tribes that are in Oklahoma and listen to them and
    hear what the challenges are. Similar to, why is our workforce
    not coming to work? Are we talking to them? Are we asking them
    what is keeping you from work? So how would that participation
    look for the Tribes.
        This is a space where the United States should honor the
    sovereignty of the Tribal Nations and have good-faith
    negotiations to ensure that all parties can agree on equitable
    approaches to strengthening economic conditions for not just
    Oklahoma citizens and U.S. citizens but Tribal Nation citizens.
    I have got dual citizenship as I sit here, as a Cherokee Nation
    citizen and as an American citizen. And the Tribes do have a
    huge impact on our economy, and it really has proven that when
    we work together we are better.
        The Tribes have very much--I can speak from personal
    experience from the help with school supplies, the help with
    housing, the help with healthcare that we have received, as for
    my family for Tribes, it matters and it makes a difference in
    Oklahoma.
        And there is so much impact that these Tribes are having in
    rural Oklahoma especially. I know the Chickasaw Nation, the
    Cherokee Nation, they are really working to reach those folks
    who are outside the metros that are struggling.
        So I do think that we have to work together. We are all so
    wonderful, smart, innovative folks in this room, and if we put
    our politics aside and do what is best for just working-class
    Americans that don't maybe have the privilege or the advantage
    that we were born with or that we were provided, then we are
    all going to do better.
        Mr. KILDEE. Thank you.
        Thank you, Mr. Chairman.
        Chairman SMITH. Thank you, Representative.
        I recognize the gentleman from Tennessee, Mr. Kustoff.
        Mr. KUSTOFF. Thank you, Mr. Chairman, for convening us
    here, and to all members who have appeared, and certainly to
    the witnesses who are here with us today. I think we have
    learned a lot so far from your testimony.
        If I could, Mr. Mills and maybe Mr. Jackson, you have
    talked about the challenges with labor. Mr. Mills, I think you
    talked about the incentivizing or maybe the decentivizing, from
    the hiring and retaining of employees, which are two distinctly
    different things. If I could, Mr. Mills, maybe anecdotally, can
    you tell the committee what you have heard from potential
    employees when you tried to hire them and had trouble and maybe
    also what you have heard when you have had challenges retaining
    those employees?
        Mr. MILLS. You know, one of the problems is getting them to
    come to an interview, just showing up. I mean, you know, you go
    out there and advertise or work with Indeed or whatever and
    they make an appointment to come and they just don't show up.
        Mr. KUSTOFF. Do you have an opinion why?
        Mr. MILLS. No. I wish I knew, because, you know, you have
    this--the job is clear, the pay is clear, and they just don't
    show up. And then, you know, you try to get ahold of them, and
    they just don't answer. So I wish I knew. I don't have the
    answer for that, but, you know--so you just continue to--we
    just keep going until you find someone that does show up, and I
    don't have the benefit of that knowledge.
        Mr. KUSTOFF. You had those challenges before COVID. Those
    challenges have been exasperated after COVID. Is that fair?
        Mr. MILLS. That is fair to say. We had some of that problem
    before, but it has gotten way worse, and I don't know why. I
    wish I knew the answer if we need to do something different. I
    don't know what it is personally. So I don't have an answer. I
    am sorry.
        Mr. KUSTOFF. Thank you, Mr. Mills.
        Mr. Jackson, what are some of the things you have heard as
    either you have tried to hire employees and maybe they don't
    take the job or they won't show to work and also about
    retaining some of those employees?
        Mr. JACKSON. The hardest thing I think, and I share in that
    same frustration, is people sometimes have someone else come
    pick up an application for them. They don't return the
    application. If they do come to the interview, they don't show
    up on their first day of work. So there is a series of
    challenges that we have leading up to someone starting on their
    first day, and I think that is attributed to just a lack of
    desire on the part of people to put the work in that is needed
    to actually show up to work.
        And we have even had some employees that they have left on
    their own accord, they have quit, and then a week later I
    receive a call from the organization asking about SNAP, EBT
    benefits, because the person says they were terminated instead
    of quitting. So I deal with that often, in addition to issues
    with child support of delayed payment because of a lag, and
    those agencies knowing where people are. And so I handle a lot
    of paperwork in terms of helping them try to play catchup with
    that, so there is a lot of different things that we deal with
    that are outside of the actual production of work.
        Mr. KUSTOFF. Thank you, Mr. Jackson, and thank you for your
    service to our Nation.
        Ms. Payne, if I could with you, I would like to follow up
    maybe in a different way from what Mr. Lucas asked you, and
    that is about waters of the U.S. You testified about that in
    your testimony. You are speaking to the Nation. This hearing is
    being broadcast. You are obviously speaking to people who live
    outside of rural America. Can you talk about, from your
    standpoint as a rancher, as a grower, what the practical,
    pragmatic effects of the waters of the U.S. would be if
    implemented, how that affects you and other ranchers and
    growers?
        Ms. PAYNE. Thank you for the question. I can speak
    specifically to our operation. Our southern border of our farm
    ranch is a river, the South Canadian River, easiest place in
    the world to find. Most people drive by it on a regular basis.
    I am in Oklahoma City limits. We have a ditch in the front of
    our--in our yard. Now, it is dry. When we flooded, which is
    what brought us out of the last drought over 10 years ago,
    water, water everywhere.
        It will affect everything that we do from a sprain, which
    we haven't been able to do, low lying areas. Our soil has
    changed during this drought. It changes every time. Water will
    stand where it wouldn't have stood before. There is nothing
    good that comes of this, in my opinion.
        Mr. KUSTOFF. Thank you. My time is expired. I will yield
    back. Thank you.
        Chairman SMITH. Thank you, Representative.
        I would like to recognize the gentlelady from New York, Ms.
    Tenney.
        Ms. TENNEY. Thank you, Mr. Chairman, and thank you to the
    witnesses. This has been tremendous.
        And I just want to follow up on something that Mr. Hern
    said. He said that--how many people talk about things they
    don't know about, and I want to add that as a small business
    owner, how many of these people don't even try to find out the
    answers.
        And so I thank the chairman for doing this and hearing
    directly from you about what your issues are as small business
    owners and the struggles that you face. And my business was
    started 77 years ago by my grandfather.
        And we have similar issues in New York, but I will tell
    you, if you want to know about killing prosperity, this story
    of New York is how one party, Democrats, socialists rule,
    destroyed the State of New York. And I say that for a reason,
    because this isn't the days of Reagan-O'Neill that we once
    enjoyed as a country. There is a certain element in New York
    State particularly that is hurting our country and hurting our
    State in terms of regulations.
        And I agree that there is a middle ground. We do need--and
    the mayor, thank you for saying this. We do have to care for
    the truly needy people in our communities. That is an
    obligation we have, and it is something that we all have a
    mission to do. But there is a middle ground between are we
    helping, hurting, and are we hurting our small business owners
    and our taxpayers.
        And so I like when you said, when you were asked the
    question, how are your profits. That is a huge question in New
    York. Most of us don't have any profits. Boy, would I love to
    have profits. The only problem is when you get profits you
    issue dividends and you get taxed twice, so that is something
    that I haven't had the joy of experiencing.
        But I wanted to just go back and just ask you a little bit
    about dealing with some of the issues as an employer, and I
    wanted to actually start with Mr. Jackson and go down the line.
    We really appreciate your service. West Point is wonderful in
    New York. My son is a Naval Academy graduate, so I appreciate
    the rivalry, but wonderful institution as well. So thank you so
    much for your service and honorable service.
        But, you know, in terms of small business, you mentioned
    something, and this is something that when I go back to whether
    it is entitlements, one of the issues we face as an employer is
    many of our employees, our boomers who are coming back to work
    and many of them are already getting some kind of public
    assistance, so they are asking us to actually pay them less or
    to get less hours so that they can continue to work. Is that
    something that you are facing in your business, Mr. Jackson?
        Mr. JACKSON. I am sorry, could you phrase the question
    differently so I can understand what you are asking?
        Ms. TENNEY. Yeah. Are you having employees come in that
    don't want to work as many hours and are reaching a limit where
    they would not be eligible for some of the entitlements they
    may be getting, maybe in the case of seniors who are collecting
    Social Security don't want to, you know, impede or impinge on
    their Social Security or other people are receiving other types
    of benefits because they don't want to get to that level?
        Mr. JACKSON. Absolutely, we have seen that.
        Ms. TENNEY. Okay. How about Mr. Mills, with your
    organization?
        Mr. MILLS. Yeah, we have seen the same thing. And, you
    know, my greatest--I have people ask me all the time--I am at
    retirement age, and they say, well, when are you going to
    retire? And I said, and do what? I like what I do. I am not
    just going to sit at home and die. I have to be doing something
    constructive.
        My greatest fear is the employees that I have that have
    been with me 30 years, and I have many of those, 25 and 30
    years, I am really more worried about them retiring. So I am
    doing all I can to work with them to keep them. They are my
    brain trust. And so these are concerns, because you have to--
    you know, I am on--you know, I have had to already apply,
    because I am 66, I will just tell you. But----
        Ms. TENNEY. You don't look it.
        Mr. MILLS. Thank you. I am concerned about my employees
    really facing those same things of not being able to make as
    much money in order to draw their Social Security. And so it is
    a concern, and it should be a concern for a lot of people in
    the workforce because these are people we depend on. They have
    so much experience.
        Ms. TENNEY. Thank you.
        I.am going to reclaim my time because I want to save a
    question for Mr. Brevetti. All great witnesses. But, you know,
    Joe Biden said in his State of the Union address that we only
    have about 10 years left of fossil fuels. I would like you to
    address what that would do to the economy since there are a lot
    of taxes on gas and other things that fuel our economy, run our
    infrastructure, our transportation. But also, would your
    community benefit most from a tax credit to help buy an $80,000
    luxury electric vehicle or from policies that reduce gas
    prices? Can you kind of hit those two--two-sided question
    there.
        Mr. BREVETTI. Well, I will address the first question about
    Biden's 10-year comment. Even the most liberal energy policy
    group, which I believe personally is the International Energy
    Agency, okay, the IEA, I think they show us using almost the
    same amount of oil in 2050 as we are using today. It kind of
    continues to rise little beaks and drops.
        So oil is not going away. Its products are used in so many
    things besides for transportation, you know, tires on vehicles.
    Natural gas, of course, has so many other products. Fertilizer
    for our farms. I don't see us running tractors out of anything
    other than diesel, and if you are going to mine lithium and
    strategic metals, that is all going to be done with equipment
    that is going to be using diesel most likely. So I don't see
    that going away.
        In the aspect of renewables, when the wind quits blowing,
    which it occasionally does in Oklahoma, you have to immediately
    come on with a backup power supply. So for every megawatt of
    wind you have got about an equivalent megawatt of natural gas
    combined cycle turbines that spool up. So that is not going
    away.
        To the aspect of your second point on the electrification--
    --
        Ms. TENNEY. Tax credit for an $80,000----
        Chairman SMITH. We need to wrap it up.
        Mr. BREVETTI. Yeah, tax credits for $85 dollar bills, yeah,
    the people who buy those are wealthy. They don't need a tax
    credit. And, you know, in much of the country the world will
    electrify and is, but in much of the country it is not there
    yet. You know, you couldn't drive across the State of Oklahoma
    and not even to mention----
        Chairman SMITH. Thank you all very much.
        Ms. TENNEY. Thank you so much. I yield.
        Chairman SMITH. Mr. Schneider, you are recognized.
        Mr. SCHNEIDER. Thank you, Chairman Smith. I thank you and
    Ranking Member Neal for this opportunity to talk about the
    state of the American economy and how we are trying to help
    American businesses flourish and the American economy continue
    its strong growth.
        I also want to thank the witnesses for offering your
    testimony on what workers and business owners need to thrive in
    this modern economy. Many of the things we have talked about
    today are echoed with what I hear from my home district in
    Illinois. And personally, I am excited to be here in Oklahoma.
    Much of my father's family traced their roots to this State.
    Having worked on a horse ranch in Colorado 40 years ago, it
    feels like coming home to be in this building.
        I only wish we could have been here longer, had time to
    explore and learn and understand both the challenges and
    opportunities that the hardworking people of Oklahoma are
    pursuing and do much. That said, we all talk about government
    spending, and I wonder if spending a few hours in a rather cold
    room without time to actually tour the area or to meet and
    speak directly with the people is our best use of public
    precious resources of taxpayer funds.
        Mr. Chairman, I would like to submit for the record an
    article from the New York Times talking about the impact of
    these road shows on committee budgets.
        Chairman SMITH. Without objection, so ordered.
        [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. SCHNEIDER. Thank you.
        And, Mr. Mills, I started my career in the oil and gas
    industry back in the mid-1980s, early 1980s doing accounting
    software. I very well understand the boom/bust cycle. I
    remember the bust of 1986. I wouldn't want to ever experience
    that again. And that was, I would argue, one of the toughest
    times this industry ever faced.
        But I later spent much of the last 30 years afterwards
    working with private businesses advising mostly family
    businesses. I know that only one in three family businesses
    make it to a second generation, one in ten to a third. The fact
    that you are still in business after 108 years is really
    extraordinary and to be celebrated, and I wish you--or 115
    years, since 1908--a lot there.
        I also know from my experience that there are four key
    factors that businesses depend on for growth. One is a business
    model. Government has no role in that. That is up to each of
    you to decide the best model. But beyond that, it is access to
    talent, it is access to capital, and it is a stable business
    and political environment. Businesses thrive when they can make
    long-term decisions to make decisions into the future,
    confident that they are not going to see the pendulum swing, in
    particular in government, whether it is at the State house or
    in Washington.
        That said, we also hear, and everywhere we go I am hearing
    about the challenges with labor. You all have touched on that.
    Every company I talk to, small, medium, large size, high-tech,
    the service industry says we are having a hard time finding
    people. And this is something we have seen over the last--more
    than 2 decades, a decline in workforce participation and people
    coming there.
        There are things we can do. We need to educate our
    workforce. We need to make sure we have workers coming up. And
    I think the government does have a role in that. In particular,
    I applaud in my district the community colleges, College of
    Lake County is one example that is working very hard to do
    that, but we can promote that training.
        In the coming days, one of the bills that I have been
    working on and will reintroduce is the Veterans
    Entrepreneurship Training Act.
        And, Mr. Jackson, thank you for your service. My son is a
    Navy veteran. I represent Naval Station Great Lakes, so every
    recruit going into the Navy comes through my district, so I am
    in every way possible a Navy dad.
        Our bill codifies and expands the successful Boots to
    Business program offered by the Small Business Administration.
    This is a program that provides entrepreneurship courses to
    people coming out of service, transitioning back into civilian
    life. And I am proud to be working across the aisle with the
    Small Business Committee Chairman Roger Williams in introducing
    this, and across the Capitol with Senators Durbin and Ernst in
    the Senate.
        So, Mr. Jackson, I will turn to you. You served our country
    heroically. You came back. You are working in your community.
    You are making a difference. You have talked about the ups and
    downs, both personal and business. And you are working as a
    career coach with Federadi.
        Can you share a little bit about your experience, what you
    have learned and what you wish lessons you could have been
    provided along the way, and how some of the challenges the
    veterans you are working with, what they face and how we can
    better export them.
        Mr. JACKSON. I appreciate that question. I know we are
    short on time, but there are three things that I would want to
    highlight there. One is, I wish I had known when I was
    transitioning that there were more things available for people
    who wanted to start a small business. Most of what we were told
    about was vocational type training that was available.
        So I would recommend maybe in partnership with the VA
    maybe--in partnership with the VA, maybe working with different
    ways to allow veterans to know what is out there, either
    vocational training to be a good employee or to start a
    business, so they know what tools are able to help them succeed
    outside the military.
        Another way might be to have small business loans that
    would help with operating capital through SBA. That would be
    another helpful way.
        And then we also have existing organizations that do a
    great job, Veterans of Foreign Wars, American Legion, things
    like that that are in place right now at no cost to veterans
    that are very helpful.
        Mr. SCHNEIDER. Great. Thank you. And, again, thank you for
    your service.
        Chairman SMITH. I want to thank the representative.
        I recognize the gentleman from Utah, Mr. Moore.
        Mr. MOORE of Utah. Thank you, Chairman.
        Mr. Mills, as a father of four boys, 10 and under, I want
    to say how much I appreciate your comments about participation
    trophies, and wondering if you would be interested in a little
    league coaching job in northern Utah by any chance. I
    appreciate that, and I like that sentiment about labor.
        I commend my colleague from Wisconsin for asking a very
    skilled and somewhat risky question to one of the majority
    witnesses. I am going to do the same risk by asking a question
    to the minority witness here, Ms. Kantz, and hope to see--I
    appreciated Mr. Mills' candor and hope the same from you as
    well. Would you say that you are at least, you know, supportive
    of the 2017 provision that doubled the child tax credit?
        Ms. KANTZ. I would, yes.
        Mr. MOORE of Utah. Thanks. So my point with that is, 2017
    Tax Cut and Jobs Act, I was way on the sidelines, nowhere near
    Congress at the time. And I saw it, and I didn't know all of
    what to think about it. I wasn't dug into the details on it. It
    didn't fix a lot of our spending issues, but what it did was
    grow our economy. And is any bill in Congress perfect? No. But
    that bill grew our economy, and it strengthened, I believe, the
    American workforce.
        And what we have seen since then--and I remember saying
    this when I was on the campaign trail in 2020, which was not a
    fun time to run for Congress. Hopefully it is the only time I
    ever have to first run for Congress. But as COVID was starting
    and ramping up, I remember saying to folks, we have the bones
    of a strong economy and will recover quickly from this. And I
    firmly believe that the 2017 Tax Cut and Jobs Act was a strong
    reason why we were able to bounce back, right.
        We had Republican majorities with the White House in 2017;
    Democrats had the same in 2021. We do our priorities, right,
    and we try to get things done. We have a sincere effort, right.
    I will obviously, you know, lean towards a conservative point
    of view, and when those majorities existed that is what my
    focus is on.
        But we right now as a committee have an opportunity to do
    something that I appreciate Chairman Smith's focus on and that
    is small business. And many of these tax provisions are set to
    expire, you know, have already expired, and we are working on
    figuring out what is the most important thing to do and what do
    we need to do to make sure that you all, many of you small
    business owners, have what you need to thrive.
        So I would like to submit for the record, Mr. Chairman, a
    statement by Darrell Wilkerson, the owner of Wilkie
    Manufacturing, LLC, in Oklahoma City, Oklahoma, describing how
    soaring costs, supply chain issues, and labor shortages have
    severely hurt small businesses' ability to operate in today's
    economy.
        Chairman SMITH. Without objection, so ordered.
        Mr. MOORE of Utah. Thank you.
        I have one simple question, and I am going to ask all of
    you to respond to it: What would you have us focus on with
    respect to making sure that your small business could thrive?
    What is one, maybe two things, just topically, and we will dig
    into the minutia of the tax provisions and all that, but what
    would you have us focus on?
        Mr. JACKSON. I would say, being a new business, the biggest
    help we could have is probably better access to operating lines
    of credit for our cash flow situation. And then beyond that,
    just help us feel more empowered so that we can focus on
    helping our employees grow and bringing in and retaining that
    top talent, not worrying about how to pay our bills and things
    like that, but instead focusing on how we can make other
    people's lives better, the people we bring in the door, and
    help them then impact the community.
        Mr. MOORE of Utah. Coach.
        Mr. MILLS. You know, I raised two girls, so I didn't have
    to worry too much about little league stuff, so it might be
    kind of new for me. Although, I had my first grandson, so I may
    be getting involved in that. Thank you.
        You know, everything, again, for me focuses back on
    workforce, because that is kind of what I have been involved in
    for a long time. And, you know, anything that you guys can do
    to continue to support the Workforce Act, you know, that is
    good Federal dollars that come down to the States and actually
    go help people, up-skill, you know, and relocate, you know. If
    they are dislocated workers, they are able to be relocated into
    jobs. But that is one of the great programs, I think, that
    continues to work here. So I would encourage you to continue to
    develop those programs and workforce.
        Mr. MOORE of Utah. Thank you.
        Ms. Payne.
        Ms. PAYNE. Yeah. Just watching the time, I would mirror
    their comments but also just minimal regulation. Let us work,
    let us create, let us prosper.
        Mr. MOORE of Utah. Mr. Brevetti.
        Mr. BREVETTI. Agree with the other comments, and, you know,
    please let us deduct our expenses when we spend them. You know,
    let's preserve the EIDC.
        Mr. MOORE of Utah. Ms. Kantz.
        Ms. KANTZ. I would dig into the barriers keeping people
    from work. What are we doing to get them to the job, and are
    they jobs that are going to be able to pay the bills?
        Mr. MOORE of Utah. Thank you.
        Thank you, all. Mr. Chairman.
        Chairman SMITH. Thank you, Representative.
        I recognize the gentlelady from California, Ms. Steel.
        Mrs. STEEL. Thank you, Chairman Smith, for this important
    field hearing to learn more about the state of the American
    economy. Thank you for our guests for taking time away from
    their busy jobs to discuss how they have been dealing with the
    economic downturn for the last 2 years.
        I represent southern California. California farmers and
    other small businesses have been facing supply chain issues and
    port delays raising production costs, including higher expenses
    for fertilizer and fuel, mega drought, and now unusual weather
    events. My congressional district has a front row seat to the
    port backlogs, which at its peak witnessed more than 174 idling
    and anchored ships off the southern California coast. I
    introduced the Supply Chain Task Force Act that would create an
    interagency task force to immediately work on addressing the
    backlog, and this was included in the NDAA.
        I want to ask Mr. Mills and Ms. Payne, many families that
    run businesses in my district have shared the concerns with the
    future of their businesses. California progressive regulations
    have made it difficult for them to succeed. I always tell
    everybody, whatever you do exactly opposite of what California
    does, you are going to be successful. What obstacles are you
    currently facing and expect to face if we stay on the current
    track?
        Mr. MILLS. If we stay on this current track, we are going
    to survive but we are going to be impaired, and it is going to
    be difficult to grow. You know, I just can't explain how
    painful the price increases have been and how hard it is to
    sell product, and especially worldwide to sell that product,
    you know. And, again, all this, to me, still goes back to
    workforce, because everyone down the supply chain has the same
    problem.
        So to me it is really simple about supply and demand. You
    know, we have still great demand but less supply, so the prices
    are going to continue to go up. And despite the feds continuing
    to raise the interest rates, the pain has evidently, pain
    threshold has not been reached yet, I suppose.
        But we are going to see continued problems here because of
    these escalating prices. At some point, we are going to hit
    that tipping point where my customers are going to say, I am
    not paying that and, you know, then things are going to stop,
    things are going to crash. And that is where I see us going.
        Mrs. STEEL. Ms. Payne.
        Ms. PAYNE. Thank you. The farm that we are so proud of,
    that has been in our family for 5 generations, is not good for
    anything but what it is being used for, and that is growing
    grass for cattle. The portion of the farm that is certified for
    agritourism is on a bluff, and we could actually grow something
    there, fruits and vegetables.
        What we are seeing though and what concerns me, we provided
    a food source by growing crops for fruits and vegetables with
    this agritourism venue so that there is fresh, wholesome food
    in our community. If people can't afford to buy that, it
    doesn't matter if we grow 70,000 acres of it. And that is a
    real concern for me with the cost of everything--I mean, my
    input costs are going up. We all shop at a grocery store. And
    what happens when we can't afford to put food on our tables? It
    doesn't matter what I grow, I can't give it away.
        Mrs. STEEL. Thank you. Related to that, I hear a lot about
    workforce shortages from my constituents. How can we, the
    future generation, develop skills and succeed in the workforce,
    and how are you going to bring them back? Because, you know,
    right now they are always asking for flexible hours, more
    money, and they are not ready to work. I am not talking about
    everybody. I am talking about those people that we try to
    interview and try to bring them in.
        You know what, I am a first-generation Korean American, I
    used to work 18 hours a day, and I still work 7 days a week and
    more than 12 hours a week--I mean a day. So what challenges are
    we seeing and then how to fix it?
        Mr. JACKSON. I appreciate you mentioning being Korean
    American. I had many classmates from West Point who were first-
    generation immigrants from Korea who were representing their
    family well with a lot of dignity and honor.
        Mrs. STEEL. Thank you for your service.
        Mr. JACKSON. Thank you. I would say, there is two things as
    a veteran that I learned that would help people be better
    empowered to be better employees: One would be discipline, and
    the other would be extreme ownership. So with discipline, it is
    seeing the job through with quality and consistency. And as far
    as ownership goes, whatever you see you own. And as a business
    owner, I have learned that everything that goes wrong is my
    fault, either failure to communicate or to train my people.
    Anything that goes well is the result of them doing a great job
    as a team.
        Chairman SMITH. I want to thank the gentlelady.
        Mrs. STEEL. Thank you. I yield back.
        Chairman SMITH. Thank you.
        I recognize the gentleman from California, Mr. Panetta.
        Mr. PANETTA. Thank you, Mr. Chairman.
        Appreciate that, Ranking Member.
        Mr. Hern, Mr. Lucas, thank you for this opportunity to be
    here in Oklahoma, in your State. I appreciate that.
        Again, my name is Jimmy Panetta. I come from the central
    coast of California, where we do have a lot of beauty as you
    can imagine, but we have also got a lot of bounty. Agriculture
    is my number one industry in that area. In fact, with
    redistricting I actually gained the largest cattlemen's
    association in California, in northern San Luis Obispo County.
    And then of course, we have our specialty crops. So I am
    hearing a lot of the same concerns today that I hear in my
    district, obviously especially when it comes to water and
    workers.
        Now, I have got to say, we don't hear much about oil and
    gas in my district. And when it comes to regulations, let me
    just tell you, the people in agriculture in my State would
    think of Oklahoma as Disneyland, okay. Let me just make that
    clear, all right, so take that for what it is worth.
        Now, obviously when it comes to the two issues that I hear
    most about from my ag people, water and workers, you know,
    technology is playing a big part in that. Obviously with water,
    we are seeing that when it comes to recycling and recharge and
    even diesel to a certain extent.
        And when it comes to workers, it is obviously trying to
    replace not labor but the lack of labor. Now, be it COVID or
    preCOVID, that has always been the number one issue, especially
    with my specialty crops, and how difficult it is to replace the
    human discernment when it comes to actually bending over,
    looking at a strawberry plant, and deciding what is an
    aesthetically pleasing, safe, ripe, and clean strawberry and
    actually taking the time and technology to pack it in a clam
    shell. Technology is just not there, so you need humans to do
    that type of work, especially right now. Maybe 1 day we will
    get there, but not right now.
        Now, fortunately we have people who are willing to come to
    this country and do that type of work. Let me tell you, no
    American is doing that type of work. They are just not doing
    it. And therefore, we need the same people that have come
    throughout the history of this country to come here to
    contribute here, to work here, and to ensure that basically we
    continue to go forward and be that number one agriculture, not
    just State of California but number one agriculture producing
    nation in the world.
        And so obviously, it is this reliance on foreign workers to
    do that type of tough work is what it has come down to. And so
    I was wondering, I hadn't heard much talk about that in your
    lines of work. I mean, do you have foreign workers who are
    coming in and filling those tough jobs that no Americans are
    willing to do?
        Mr. Mills.
        Mr. MILLS. You know, we do, and of course, I see more of it
    in the construction industry around me. And I actually have a
    friend that runs a--he is construction and he does lawn care
    and things like that, and he has mainly Mexican workers. But
    they all come in legally and, you know, send money home and
    whatever. But, you know, personally I think that we need to
    bring more immigrant workers in, legally is the key though. I
    welcome, you know, hey, if you will come in and be productive
    citizens of our society, pay your share, welcome, open the
    doors.
        Mr. PANETTA. Right. Mr. Mills, are you familiar with the H-
    2A system?
        Mr. MILLS. I am.
        Mr. PANETTA. Okay. And would you encourage an increasing of
    that system?
        Mr. MILLS. I would. I think it is a good program.
        Mr. PANETTA. All right. Thank you.
        And then, Mr. Jackson, obviously in your line of work you
    rely on foreign workers?
        Mr. JACKSON. We do not. And most of our work is done by
    hand, so I would be in favor of anything that would help
    increase automation to better train those employees, but also
    to help us be more efficient as the large packers are able to
    do.
        Mr. PANETTA. Understood. Thank you.
        Let me just pivot over to Ms. Kantz. Obviously, Mr.
    Schweikert alluded to this in his questioning in regards to
    some of the issues keeping people out of work, and that being
    opioids. It is, you know, what I has caused, I think, what now,
    80,000 lives in 2021. So, Ms. Kantz, you know, when it comes to
    opioids, I know that in my district they want to increase
    access to medication-assisted treatment, specifically,
    Buprenorphine, also known as Suboxone. I know a lot of my
    doctors have asked for that. How does access to that
    medication-assisted treatment impact communities in Oklahoma,
    including the workforce?
        Ms. KANTZ. I think any time we can help our workforce
    access care, any type of care that they need, I don't think it
    is our job to regulate what care they are getting within the
    doctor's office. So I think anytime they can access that care
    we are supportive of it, and I do believe that there is some
    mental health pieces there that need to be lifted up, that
    there is a lot of--there is a lack of care in Oklahoma
    specifically around opioids and substance abuse.
        Mr. PANETTA. Thank you. I yield back.
        Chairman SMITH. Thank you, Representative.
        I recognize the gentleman from Iowa, Mr. Feenstra.
        Mr. FEENSTRA. Thank you, Chairman Smith.
        And I want to also say thanks to Congressman Hern and Lucas
    for having us here in Oklahoma. This is quite an amazing State.
        I also want to thank our witnesses, and your testimony is
    very impressive.
        In 2017, we passed a significant Tax Cut and Jobs Act, and
    it affected virtually everyone in the heartland. When I talk
    about the heartland, I talk about Oklahoma, I talk about my
    State also, Iowa. You know, we are the bread basket to the
    world, and it goes somewhat unnoticed. You know, I never hear
    from President Biden about, well, all the food that we are
    creating and that we are exporting, and yet we do it and we
    work hard, and we are very happy about doing these things.
        In that Tax Cut and Jobs Act, section 199(a) allowed
    farmers and small businesses to take a deduction, up to 20
    percent of their qualified income. This is very significant. It
    allowed small businesses and farmers to compete on the global
    stage.
        And so, Mr. Mills, I want to ask you a question. In your
    testimony, you noted when you are able to negotiate lower
    prices for materials you pass these savings along to your
    customers. How about when the government helps and gives you a
    tax reduction, is that the same thing? Does that apply?
        Mr. MILLS. Yeah, I would think it would apply. You know,
    and it is--to me, of course, my best investment is my business.
    So any advantage I would get would be invested back into my
    business to hire more people, develop new product, and, you
    know, that is how we would, you know, use an incentive like
    that.
        Mr. FEENSTRA. So what you are saying is, it goes two ways.
    When you lower taxes you can either pass it on to your customer
    or you can grow your business as an investment. Is that a fair
    statement?
        Mr. MILLS. That is fair. And the statement I was making
    there was, as we see--you know, it is actually interesting that
    almost everything has gone up with our bar material and tube
    material. Just recently we have seen a reduction in steel
    plate, and so that's a big part of what we buy. So we are going
    to readjust our pricing back down to be more--to make our
    customers more competitive. And, you know, if things go up,
    they have to share the cost; if things go down then, you know,
    we go down too. We don't just say, oh, we are going to make
    more money.
        Mr. FEENSTRA. That is exactly right.
        Mr. MILLS. We don't look at it that way.
        Mr. FEENSTRA. Exactly. Thank you for those comments, Mr.
    Mills.
        Ms. Payne, as you know, you are a part of the farming
    community, just like I am in Iowa. Nine out of every ten
    farmers are small businessmen and women. We are either LLCs,
    partnerships, you know, sole proprietors, S-corps. We are not
    big corporations, right. We are small. So how does--when I
    start talking about tax reduction 199(a), where you get a 20
    percent deduction on your qualified business income, how does
    that affect you? And by the way, it is going to go away. It is
    shocking, but in 2025 it is going to sunset. So how does the
    uncertainty affect you when you see something that you have
    today, but it is going to be gone tomorrow?
        Ms. PAYNE. That is a very fair question, and I think there
    is more and more of that. As I mentioned earlier, a lot of
    times, especially in cattle industry, we are working for one
    paycheck. We will get that check once a year. And so we are
    always looking further on down the line.
        Like right now, I don't have anything at the house, but I
    am planning for 3 years from now--hopefully we will have
    pasture--about what I can stock that place with. Within that
    planning is also going to require some financial management, so
    we like to be able to count on certain things. I can't discount
    my livestock. This is not a cash sale like that, but I want to
    be able to plan to be able to buy overhead bin or any of the
    tractors, any of the things that I would need.
        Mr. FEENSTRA. Taking away from that, Mr. Mills, if you
    could further expound on that. You know, right now we have a
    thing called 139 depreciation, which you can fully depreciate
    an asset in 1 year, a bonus appreciation the same way. But that
    is going to go away. It is going down from 100 percent to 80
    percent to 60 percent.
        So when you buy capital equipment, and all of a sudden now
    you can fully depreciate it, but it is going away, this year it
    is gone, it is slowly going down, how does that affect you? If
    I had to guess, that would also affect your future decision-
    making.
        Mr. MILLS. Well, you know, first of all, you have to have
    some cash flow to make that happen, that is number one. And
    right now, because of what we are having to expend on buying
    additional materials, we are not even looking at buying
    anything equipment wise. We are really just pulling back and
    going, okay, let's see what happens because, again, our best
    investment is to go out and invest in those materials,
    controlling that cost, make it competitive for our customers.
        Mr. FEENSTRA. Thank you.
        And I just want to note to everybody, that is what
    inflation does, by the way, people, just what he said. Thank
    you, and I yield back.
        Chairman SMITH. Thank you, Representative.
        I would like to recognize the gentlelady from New York, Ms.
    Malliotakis.
        Mr. MALLIOTAKIS. Thank you, Mr. Chairman. And I will say,
    as a New Yorker and Yankee fan, it is exciting to be here in
    the birthplace of Mickey Mantle.
        You know, when we talk about Made in America we are talking
    about you, right, American manufacturers, American farmers,
    food producers, American energy producers. And we have a
    President that talks a lot about Made in America, but what I am
    hearing today is that the policies, there is a real disconnect
    between what he says and the policies that are coming from this
    administration.
        Because what I have heard today is that higher taxes,
    burdensome regulations, permitting delays, the disincentivizing
    of work have all made it more difficult for you to create jobs.
    It has made it more difficult for you to create American jobs,
    let's be specific, and produce more American goods forcing us
    to rely on foreign countries, particularly as it pertains to
    energy. And I want to focus on the energy policy because we
    rely on energy for everything, to manufacture, to transport
    goods and food, to have a quality of life where we can have
    electricity that is reliable.
        And I am from New York City, and sometimes in New York City
    we don't always think about where that energy comes from,
    right. We just turn on the lights, we pull up at the gas pump,
    we go in the store, we buy our food. We never think about where
    it is actually produced or how it is produced.
        But lately my constituents are paying a lot more attention
    because they are getting those higher utility bills, they are
    seeing that, you know, gas prices are more today than they were
    2 years ago, and they are seeing that, you know, that
    transportation of food is actually driving the price of their
    products up at the supermarket.
        So I would love to ask, Mr. Brevetti, if you can comment on
    how much more is the potential for American energy production
    here in Oklahoma and America, how much more potential is there
    for us to be energy independent, and as you said, not rely on
    adversaries? It is important for our national security, it is
    important for our independence, and it is important to reduce
    prices for American families.
        And my second question would be, how are Biden's policies
    hindering that production and in the end increasing the cost of
    energy and food for my constituents back home in New York?
        Mr. BREVETTI. Both great questions. And, you know,
    typically we recover about 20 percent of the oil in place. We
    maybe get a little bit more an natural gas, you know, 50 to 75.
    So we are leaving a lot of hydrocarbons in the ground, and
    technology will help us recover though. So it is not going to
    go away. We are going to be able to develop that, and that is
    going to be able to help the consumer.
        From the standpoint of your second question, what can be
    done, I mean, you know, one of the things is pipelines, you
    know. I think your home State has blocked pipelines going
    through them, and we have such tremendous gas reserves that are
    in the Appalachian area, and so that gas has to come here. That
    gas comes through. And Oklahoma gas has to compete for space in
    the pipelines, whereas that gas could go to the East Coast and
    be made into LNG, sent overseas. It could be used to heat the
    homes there and help people flourish.
        Mr. MALLIOTAKIS. You mentioned something interesting. When
    you mentioned pipeline, I automatically thought about the
    Keystone Pipeline, right, which would have created thousands of
    jobs, including here in Oklahoma. How is the cancellation of
    the Keystone Pipeline affecting American workers here, and how
    is it also sending a message that disincentivize private
    investment to expand the energy industry here?
        Mr. BREVETTI. Well, it did all that. It was a job killer,
    as we are aware, the cancellation of the Keystone. It also kind
    of slapped one of our best allies, our closest--our neighbor to
    the north in the face. You know, there was so much investment
    done. This was a way for Canada to be able to market their
    products to a place where they have a product, we have
    consumers. And I will point out that there is not a safer way
    to move oil than in a pipeline. I think we have seen what has
    happened with the railroads here lately. A lot of oil gets
    moved by railroads, and that is not safe, so, yes.
        Mr. MALLIOTAKIS. Is American energy or American oil, I
    should say, is it dirtier than Russian oil or Venezuelan oil or
    Saudi Arabian oil, Iranian oil?
        Mr. BREVETTI. You know, that is a good question. Without
    getting down into the weeds, most of American crude being
    produced right now is what is called fairly light and sweet. It
    is low in H2S, which makes it sour. It is also fairly light
    compared to those countries you mentioned, such as Venezuela.
    And when you produce crude in a foreign country, it is not
    produced as clean and safely, but now you have to move it on
    tankers and that has a carbon footprint for sure.
        Mr. MALLIOTAKIS. So American oil is cleaner, and it costs
    less to transport and it is cleaner to transport?
        Mr. BREVETTI. Cleaner, safer, and nobody produces
    hydrocarbons in a more environmentally and greener fashion than
    U.S. producers.
        Mr. MALLIOTAKIS. Thank you.
        Chairman SMITH. I want to thank the gentlelady.
        I recognize the gentleman from Ohio, Mr. Carey.
        Mr. CAREY. Thank you, Mr. Chairman.
        I want to thank the ranking member as well for having this
    bipartisan hearing today.
        I think it is great to be in Oklahoma. We had a great time
    in West Virginia.
        I want to follow up on a couple of issues as it relates to
    energy, following along the questioning. But looking at
    Oklahoma, and I know the Chairman Lucas and Mr. Hern has
    pointed this out, as well in your testimony, but there were
    $64.9 billion in the State's gross domestic product that came
    from the oil and gas industry. $2.5 billion in taxes, 27
    percent of Oklahoma's State GDP comes from the oil and gas
    industry. 16.7 percent of the State is tied working to the oil
    and gas industry.
        The other thing that you mentioned briefly in your
    testimony but I think it is important to note, that over $2
    billion, $2 billion were returned to property owners in terms
    of royalties. That is major. The other issue is that for every
    one oil and gas producing job in the State of Oklahoma and for
    the rest of the United States, there are roughly two other
    spinoff jobs.
        So why did I want to put out all those numbers? While we
    were going through the testimony, I wanted to pull up the top
    oil producing, oil and gas producing States. And they are not
    red States. They are not blue States. They are red, white, and
    blue States. Texas is number one, New Mexico is number two,
    North Dakota was number three, Alaska was number four, Oklahoma
    was number five.
        And we saw what a big portion of Oklahoma's economy is
    derived from oil and gas production. Number six was Colorado.
        My dear friend across the aisle, you will be surprised,
    California was actually number 7, Wyoming number 8, Utah number
    9, Louisiana number 10, Kansas 11. My State of Ohio with the
    Utica Shale reserves were making the charts, up to 12, and
    then, of course, following with Montana. What we have seen, of
    course, is that oil and gas, oil and gas spin-up jobs are
    domestic, they grow the economy, and I think in your testimony
    you mentioned that you had positions up to $100,000 that you
    just can't fill.
        The other thing I want to point out is part of oil and gas,
    I am a firm believer if something is not grown it is mined. And
    so if you look in terms of what does that mean for oil
    production, there is a lot of moly that goes into that, borate
    goes into that, phosphate mining goes for fertilizer, all of
    these, and they have an average income of about $85,000 for
    every one of those people that mines those products.
        So saying all those things, one other thing I want to point
    out to my colleague here to the left mentioned the price going
    up. Some interesting numbers. In December of 2020, dollars per
    thousand cubic feet of natural gas--listen to these numbers--
    December of 2020, $4.11. Today--or in December of just a couple
    months ago, $8.23. It has doubled. So we have a misguided
    energy policy, and I am so glad that we are here talking about
    the things that are really affecting the American public.
        I am going to ask you a question just real quick on the oil
    and gas side of things if you don't mind, because I like many
    of--Mr. Hern pointed out people that don't know a lot. I come
    from the energy production side of things in my private career.
    Can you explain, and I think you mentioned it in your
    testimony, but you explain the percent depletion and how that
    relates to smaller oil and gas producers and why it is so
    important.
        Mr. BREVETTI. Yes. Certainly. I am not an accountant. I am
    an engineer. However, we depend upon our participants who co-
    invest with us. They depend upon certain things. And we
    mentioned about the IDCs, which is the intangible drilling
    costs. But there is also a depletion allowance. And there is
    cost depletion up front. But there is also percentage
    depletion. So percentage depletion--which I think has been in
    question and has been on the crosshairs of some people.
        Percentage depletion, if you think about it this way, when
    you plant a crop one year, you can go back and replant it the
    next year. But with our industry, what we pull out of the
    ground this year is gone. It is like if you had a closet filled
    with some type of asset. You know, make them gold bars, or make
    them Bitcoins. You are pulling them out. They are not there
    once you pulled them out. So that is what the depletion
    allowance addressed.
        Mr. CAREY. You are constantly using your asset. You are
    depleting your asset.
        Mr. BREVETTI. You are using up your assets. At some point,
    it is gone. So the depletion allowance, I view it as not a--it
    is not a handout. It is saying, hey, wait a minute. What you
    had to start with, you don't have anymore. So we are going to
    let you take the deduction for that. You know, you are selling
    off an asset.
        Mr. CAREY. Thank you.
        Mr. Chairman, I yield back.
        Chairman SMITH. Thank you, Representative.
        I want to thank the witnesses again for your testimony and
    for being here. I want to thank express ranges--Express
    Clydesdales for hosting the event. I want to thank you, Ranking
    Member, for your attendance. And I want to thank every member
    for your attendance.
        These field hearings, I believe, are a great way for us to
    get closer to different areas of the country that we typically
    wouldn't see when we are in Washington. And so I appreciate the
    time and commitment that each and every one of these 24 members
    took to be here.
        Please be advised that members have two weeks to submit
    written questions to be answered later in writing. Those
    questions and your answers will be made part of the formal
    hearing record.
        With that, the committee stands adjourned.
        [Whereupon, at 11:03 a.m., the committee was adjourned.]

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