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


                  BURDENSOME REGULATIONS: EXAMINING THE EF-
                    FECTS OF DOL RULEMAKING ON AMERICA'S 
                                JOB CREATORS

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

                                HEARING

                               BEFOROE THE
                               
                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                            OCTOBER 19, 2023

                               __________

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
                               

            Small Business Committee Document Number 118-031
             Available via the GPO Website: www.govinfo.gov
             
                               ________

                   U.S. GOVERNMENT PUBLISHING OFFICE                    
54-099                 WASHINGTON : 2024                    
          
-----------------------------------------------------------------------------------               
            
                   HOUSE COMMITTEE ON SMALL BUSINESS

                    ROGER WILLIAMS, Texas, Chairman
                      BLAINE LUETKEMEYER, Missouri
                        PETE STAUBER, Minnesota
                        DAN MEUSER, Pennsylvania
                         BETH VAN DUYNE, Texas
                         MARIA SALAZAR, Florida
                          TRACEY MANN, Kansas
                           JAKE ELLZEY, Texas
                        MARC MOLINARO, New York
                         MARK ALFORD, Missouri
                           ELI CRANE, Arizona
                          AARON BEAN, Florida
                           WESLEY HUNT, Texas
                         NICK LALOTA, New York
               NYDIA VELAZQUEZ, New York, Ranking Member
                          JARED GOLDEN, Maine
                         KWEISI MFUME, Maryland
                        DEAN PHILLIPS, Minnesota
                          GREG LANDSMAN, Ohio
                       MORGAN MCGARVEY, Kentucky
                  MARIE GLUESENKAMP PEREZ, Washington
                       HILLARY SCHOLTEN, Michigan
                        SHRI THANEDAR, Michigan
                          JUDY CHU, California
                         SHARICE DAVIDS, Kansas
                      CHRIS PAPPAS, New Hampshire

                  Ben Johnson, Majority Staff Director
                 Melissa Jung, Minority Staff Director
                            
                            
                            C O N T E N T S

                           OPENING STATEMENTS

                                                                   Page
Hon. Roger Williams..............................................     1
Hon. Nydia Velazquez.............................................     2

                               WITNESSES

Mr. Paul J. Ray, Director, Thomas A. Roe Institute for Economic 
  Policy Studies, The Heritage Foundation, Washington, DC........     3
Mr. Mario Burgos, Chief Strategy Officer, Prairie Band, LLC, 
  Albuquerque, NM, testifying on behalf of Associated Builders 
  and Contractors................................................     5
Mr. Ric Suzio, Vice President, The Suzio York Hill Companies, 
  Meriden, CT, testifying on behalf of the National Stone Sand 
  and Gravel Association (NSSGA).................................     6
Mr. Frank Knapp Jr., President & Chief Executive Officer, South 
  Carolina Small Business Chamber of Commerce, Columbia, SC, 
  testifying on behalf of the South Carolina Small Business 
  Chamber of Commerce............................................     8

                                APPENDIX

Prepared Statements:
    Mr. Paul J. Ray, Director, Thomas A. Roe Institute for 
      Economic Policy Studies, The Heritage Foundation, 
      Washington, DC.............................................    21
    Mr. Mario Burgos, Chief Strategy Officer, Prairie Band, LLC, 
      Albuquerque, NM, testifying on behalf of Associated 
      Builders and Contractors...................................    33
    Mr. Ric Suzio, Vice President, The Suzio York Hill Companies, 
      Meriden, CT, testifying on behalf of the National Stone 
      Stand and Gravel Association (NSSGA).......................    39
    Mr. Frank Knapp Jr., President & Chief Executive Officer, 
      South Carolina Small Business Chamber of Commerce, 
      Columbia, SC, testifying on behalf of the South Carolina 
      Small Business Chamber of Commerce.........................    48
Questions for the Record:
    Questions from Hon. Velazquez to Mr. Burgos and Answers from 
      Mr. Burgos.................................................    51
    Questions from Hon. Chu to Mr. Knapp and Answers from Mr. 
      Knapp......................................................    53
Additional Material for the Record:
    Engine.......................................................    55
    National Association of Realtors (NAR).......................    58

 
  BURDENSOME REGULATIONS: EXAMINING THE EFFECTS OF DOL RULEMAKING ON 
                         AMERICA'S JOB CREATORS

                              ----------                              


                       THURSDAY, OCTOBER 19, 2023

                  House of Representatives,
               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 10:02 a.m., in Room 
2360, Rayburn House Office Building, Hon. Roger Williams 
[chairman of the Committee] presiding.
    Present: Representatives Williams, Luetkemeyer, Meuser, 
Salazar, Molinaro, Alford, Crane, Bean, Velazquez, Landsman, 
McGarvey, Scholten, Thanedar, and Davids.
    Chairman WILLIAMS. Before we get started today--first of 
all, good morning to everybody--I want to recognize 
Congresswoman Salazar from the great State of Florida to lead 
us in the pledge and the prayer. If you will all rise, please.
    Ms. SALAZAR. Thank you, Mr. Chairman.
    And, Dear Lord, we come to your throne in the name of 
Jesus. And we ask you to bring peace to Congress, to the 
Republican Conference, to Israel, to everything that is 
occurring in the Middle East, and to make this hearing a very 
successful one.
    We ask in your name, Jesus. Amen.
    Thank you.
    We pledge----
    All. I pledge allegiance to the flag of the United States 
of America and to the Republic for which it stands, one nation, 
under God, indivisible, with liberty and justice for all.
    Chairman WILLIAMS. Good morning, everyone. I now call the 
Committee on Small Business to order.
    Without objection, the Chair is authorized to declare a 
recess of the Committee at any time.
    I now recognize myself for an opening statement.
    And I want to welcome you to today's hearing, which will 
focus on examining the effects of the Department of Labor's 
rulemaking on Main Street America.
    First, I want to thank the witnesses, all of you, for being 
here today. I know you have traveled to be here with us this 
morning, and we appreciate you taking the time to do that.
    As our nation's job creators continue to fight difficult 
economic headwinds, agencies such as the Department of Labor 
continue to implement overreaching regulations that create 
expensive new compliance costs and make it harder for our 
nation's job creators to hire more workers and expand their 
operations.
    So, with that, I will yield to our distinguished Ranking 
Member from New York, Ms. Velazquez.
    Ms. VELAZQUEZ. Thank you, Chairman Williams, for convening 
this hearing so we can learn more about the impact that the 
Department of Labor's regulations are having on small 
businesses.
    I would like to take this opportunity to thank all of the 
witnesses for being here.
    Let me say at the outset that I understand that complying 
with federal, state, and local regulations can be onerous for 
small-business owners. Small businesses don't always have the 
resources that larger companies do to monitor regulatory 
actions.
    That is why Congress passed the Regulatory Flexibility Act, 
RFA, and created the Office of Advocacy. The Office of Advocacy 
serves as an independent voice for small businesses, and it 
works to educate agencies about the effect the rules have on 
small businesses. The office also seeks to find targeted 
solutions that are less burdensome while achieving the desired 
results.
    Ninety-nine-point-nine percent of all U.S. businesses today 
are considered small. Some of these small firms can have 1,500 
employees and up to $47 million in receipts, depending on the 
industry. That is why it is vitally important to make this 
distinction during our discussion today and make sure that big 
businesses are not hiding behind the guise of small businesses 
to promote an anti-regulatory agenda.
    Contrary to what we will hear today, federal regulations 
can and do benefit small businesses and boost our economy.
    I know that we are short on time, so let me say that the 
bottom line is this: smart, well-crafted, commonsense 
regulations have the potential to unleash innovation and 
provide critical health and safety protections.
    Thank you, and I yield back.
    Chairman WILLIAMS. Thank you.
    And I will now introduce our witnesses.
    Our first witness here with us today is Mr. Paul J. Ray.
    Thank you, Mr. Ray, for being here.
    Mr. Ray is the director of the Thomas A. Roe Institute for 
Economic Policy Studies at The Heritage Foundation, located 
here in Washington, D.C.
    So, Mr. Ray, again, thank you for joining us, being with 
us.
    Our next witness with us today is Mr. Mario Burgos. Mr. 
Burgos is the chief strategy officer at Prairie Band, LLC, 
located in Holton, Kansas. Prairie Band, LLC, was created in 
2010 by the Potawatomi nation to create economic stability by 
diversifying, managing, and expanding the economic interests of 
the nation.
    So, Mr. Burgos, thank you for joining us today. We 
appreciate that very much.
    Our next witness here with us today is Mr. Ric Suzio--I 
said it right, didn't I, Ric?--Suzio--who is vice president of 
The Suzio York Hill Companies, located in Meridian, 
Connecticut.
    The company got its start over a century ago when the L. 
Suzio Construction Company was founded by a Leonardo Suzio, an 
Italian immigrant, which we talked about. Great story. Now in 
its third generation, the company is still a family business, 
with his grandchildren playing an active role in management, 
including having over 33 years at his family's business 
himself.
    So I want to recognize and thank you very much for being 
here today.
    I now recognize the Ranking Member from New York, Ms. 
Velazquez, to briefly introduce our last witness.
    Ms. VELAZQUEZ. Thank you, Mr. Chairman.
    It is my pleasure to introduce Mr. Frank Knapp, the 
President and CEO of the South Carolina Chamber of Commerce.
    He also serves on the advisory board for the South Carolina 
Small Business Development Center and was recognized by the SBA 
as the 2014 South Carolina Small Business Financing Advocate of 
the Year.
    From 2015 to 2017, Mr. Knapp served on the SBA's Region IV 
Regulatory Fairness Board, an advisory body to the SBA Office 
of the National Ombudsman.
    Welcome, Mr. Knapp, and thank you for being here with us 
today.
    Chairman WILLIAMS. Thank you.
    And we appreciate all of you being here today. Again, I 
would like to say that.
    Now, before recognizing witnesses, I would like to remind 
them that their oral testimony is restricted to 5 minutes in 
length. If you see the light in front of you turn red in front 
of you, that means your 5 minutes is up and you have concluded, 
and you should wrap up your testimony shortly thereafter.
    With that in mind, I now recognize Mr. Ray for his 5-minute 
opening remarks.
    Mr. Ray?

   STATEMENTS OF PAUL J. RAY, DIRECTOR OF THE THOMAS A. ROE 
INSTITUTE FOR ECONOMIC POLICY STUDIES, THE HERITAGE FOUNDATION; 
 MARIO BURGOS, CHIEF STRATEGY OFFICER, PRAIRIE BAND, LLC; RIC 
SUZIO, VICE PRESIDENT, THE SUZIO YORK HILL COMPANIES; AND FRANK 
   KNAPP, JR., PRESIDENT AND CHIEF EXECUTIVE OFFICER, SOUTH 
          CAROLINA SMALL BUSINESS CHAMBER OF COMMERCE

                    STATEMENT OF PAUL J. RAY

    Mr. RAY. Thank you, Chairman Williams, Vice Chairman 
Leutkemeyer, Ranking Member Velazquez. It is an honor to be 
hear today with you. Thank you for the kind invitation.
    I don't need to tell the Members of this Committee about 
all the good things small businesses do for their owners and 
workers, their customers and communities, and our country. The 
small-business record speaks for itself.
    Almost half of all Americans work in a small business, and 
small businesses have created two of every three new jobs in 
the United States in the last 25 years. Small businesses are 
responsible for many of the breakthroughs that make American 
life what it is today and for the prosperity that even in our 
current business climate makes America the envy of the world.
    But a small business does not merely achieve results; it 
also opens a path for a dignified life of initiative, 
creativity, and service. Millions of Americans feel the desire 
to put their own ingenuity and initiative to work, making their 
communities and world a better place, and small business 
provides an opportunity to do just that.
    To do their important work, our small-business owners and 
workers need a legal and regulatory system that allows them to 
navigate the present and plan for the future. Unlike their 
larger peers, small businesses do not have armies of lawyers 
and compliance officers to analyze regulations; nor do they 
have squadrons of lobbyists to advise on how those regulations 
can change; nor do they often have large profit margins or cash 
reserves that let them respond with agility to surprising 
regulatory developments.
    This is why small businesses need regulatory stability, 
clarity, and certainty. But our regulatory system fails to give 
small businesses what they need.
    Consider stability. The American Founders placed an 
immensely high value on legal stability. As James Madison put 
it, quote, ``It will be of little avail to the people that the 
laws are made by men of their own choice if the laws undergo 
such incessant changes that no man who knows what the law is 
today can guess what it will be tomorrow,'' end quote. Madison 
knew that rapid legal change privileges ``the sagacious, the 
enterprising, and the moneyed few''--again Madison's words--
``over the industrious and uninformed mass of the people.''
    Unfortunately, today's regulatory system is subject to 
precisely the, quote, ``incessant change'' that Madison worried 
about. Agencies issue hundreds of pages of new regulations, 
amendments to regulations, and other administrative materials 
every business day.
    On many issues of importance to small business, such as 
labor and employment, regulations change dramatically with 
every change in White House control. There are now even 
Republican and Democratic versions of many important 
regulations which the agencies toggle between based on who is 
in power.
    But even when regulations hold steady, small businesses 
often have great trouble knowing what those regulations require 
of them. This is because federal regulations are many, complex, 
and obscure. The Code of Federal Regulations is over 185,000 
pages long and regulates everything from the electrical grid 
down to the diameter of spaghetti.
    To make matters worse, many important regulatory documents 
cannot even be found in the Code of Federal Regulations. 
Instead, they are scattered across agency websites or archives 
in the form of guidance, regulatory preambles, adjudicatory 
decisions, and other kinds of documents.
    It is hard for many small-business owners, busy enough just 
running their own businesses, to discover all the mandates they 
must comply with, let alone what those mandates mean for them.
    Even putting these issues aside, our regulatory system 
fails to give small businesses the certainty they need on 
account of the way the agencies enforce their regulations--an 
enforcement process that too often is worse than the penalties 
it threatens.
    Governing law leaves agencies enormous discretion in how 
they enforce the regulations they administer, and agencies too 
often have failed to conduct investigations or adjudications in 
a way that is fair, accurate, and prompt.
    Too often, agencies leave small-business owners in legal 
limbo, as they did to the poor Boucher family, Indiana farmers 
who cut down a few trees on their own land in 1994 and in 2019 
were still stuck in litigation against the USDA.
    Some of the problems small-business owners face are baked 
in to the way we regulate, but Congress could help. For 
instance, the REINS Act would impose more robust procedures on 
rulemaking and so slow the pace of regulatory change. The GOOD 
Act would demand that agencies make their regulatory materials 
more easily accessible by small businesses. And legislation 
after the pattern of Executive Order 13924, section 6, would 
require agencies to create and stick to fair and prompt 
procedures in investigations and adjudications.
    There are other measures, too, that Congress could take, 
which I would be happy to discuss in questions.
    Thank you.
    Chairman WILLIAMS. Thank you very much.
    And I now recognize Mr. Burgos for 5-minute opening 
remarks.

                   STATEMENT OF MARIO BURGOS

    Mr. BURGOS. Chairman Williams, Ranking Member Velazquez, 
and Members of the U.S. House Committee on Small Business, 
thank you for the invitation to testify this morning on the 
Department of Labor's rulemaking and what impact it is having 
on the job creators across the country and the concerns that 
the recent surge of federal regulations have raised during my 
own personal small-business journey.
    My name is Mario Burgos, and until July of this year I was 
the president and CEO of Burgos Group, headquartered in 
Albuquerque, New Mexico. This is a company I founded in 2006 
and grew, along with my brother, as a small-business federal 
prime contractor. We primarily focused on general and 
electrical construction.
    And in July of this year, we made the decision to sell our 
company to Prairie Band, LLC, a company which was founded in 
2010 to contribute to the long-term economic stability of 
Prairie Band Potawatomi nation, located in the State of Kansas. 
I now serve as the chief strategy officer of Prairie Band, LLC.
    To understand why we chose to exit our business, the 
business that we labored to build over a decade and a half, I 
think it is important to provide you with some background.
    In 2009, at the height of the Great Recession, our family 
business--we pivoted. We pivoted to focus on the federal 
construction opportunities made possible under the American 
Recovery and Reinvestment Act, which was signed into law by 
President Barack Obama. Our company became a vehicle for 
realizing the American Dream of two brothers who are first-
generation Americans. Our father emigrated from Ecuador.
    Under the Obama and Trump administration, our company grew 
from the two brothers to 195 employees, with a track record of 
completing over 100 projects doing sustainability, renovation, 
modernization. These projects were done for 13 different 
federal agencies from coast to coast.
    Our growth landed us on the Inc. 5000 Fastest-Growing 
Private Companies--on that list 6 years in a row. Now, that is 
something that less than 3 percent of those companies that are 
on that list ever make.
    We were recognized in 2015 as the SBA Small Business Prime 
Contractor of the Year for Region VI, which is the region with 
Texas and the States that surround it. And in 2017, I was 
honored to be the SBA Small Business Prime Contractor of the 
Year--I am sorry--Small Business Person of the Year for the 
State of New Mexico.
    Unfortunately, the number of rapidly changing and ever-
increasing federal and state regulatory requirements affecting 
the construction industry led us to conclude that our most 
prudent action would be to exit the business that we had 
labored to build.
    The recent Department of Labor updates to the regulations 
implementing the Davis-Bacon and related acts is just the 
latest example of additional burdens and barriers being erected 
that make it difficult for small businesses to participate in 
the economic investments of the bipartisan Infrastructure 
Investment and Jobs Act or to support our nation's essential 
national defense missions.
    In my written testimony, I have provided specifics on how 
requirements for the construction under the Davis-Bacon and 
related acts have harmed my business by creating significant 
confusion and costing critical dollars.
    The construction industry now grapples with an avalanche of 
new and impending regulations, most of which have either been 
finalized or are poised for imminent execution, effectively 
creating a new tax on countless businesses that now must choose 
to either struggle to comply, sell, or cease operations.
    It is my sincere hope that this Committee will consider the 
testimony that I am making and take the actions that will 
remove barriers and simplify compliance for America's small 
businesses.
    Thank you again for the opportunity to serve as a witness 
for this hearing, and I look forward to answering any questions 
you may have.
    Chairman WILLIAMS. Thank you very much.
    And I now recognize Mr. Suzio for 5-minute opening remarks.

                     STATEMENT OF RIC SUZIO

    Mr. SUZIO. Chairman Williams, Ranking Member Velazquez, and 
distinguished Members of the Committee, thank you for having me 
today. I am Ric Suzio, representing both The Suzio York Hill 
Company and the National Stone, Sand, and Gravel Association.
    NSSGA is the leading voice and advocate for the aggregate 
industry, representing over 450 producers of crushed stone, 
sand, and gravel across the United States as well as the 
equipment manufacturers and service providers that support 
these industries. We are essential to the growth of our nation, 
providing 2.5 billion tons of materials needed to build 
communities, homes, deliver clean water, produce energy, and 
modernize our transportation networks, as well as providing 
good-paying careers.
    I am privileged to work for my family company, which has 
deep roots in Connecticut's construction history for over 125 
years. Our story is not just about construction; it is about 
being deeply embedded in the community.
    I am here to represent hundreds of small producers, 
bringing forth concerns and triumphs of countless businesses 
like mine. We have great concern with the ever-changing 
regulatory environment which poses challenges to small 
businesses. We often lack the resources to interpret, comply, 
and adapt to these regulations, leading us to hire expensive 
consultants.
    Many times, these regulations are solutions looking for a 
problem and do nothing to address actual challenges we face, 
like finding the skilled workforce needed to build our nation's 
infrastructure.
    Over time, this financial burden risks driving 
consolidation within our industry, overshadowing the essential 
role of small businesses.
    The Suzio York Hill Company is a multigenerational family 
operation founded in 1898 that boasts a dedicated team of 93 
employees. We are proud to have second-generation coworkers 
with unmatched loyalty and dedication. Several of our coworkers 
have retired after serving the company for over 40 years. We 
are engaged with the International Union of Operating 
Engineers' Apprenticeship Training Program, showcasing our 
commitment to professional growth and training.
    In my full testimony, I highlighted eight new policies that 
are making it hard for our industry to build America's 
infrastructure and communities, but I would like to take this 
time to highlight two acute challenges.
    The Mine Safety and Health Administration is working to 
update the existing occupational exposure limit for silica, 
reducing it to the Occupational Health Safety Administration's 
2016 standard.
    While a safe silica exposure limit is paramount to 
protecting miners, we are concerned that the proposed rule 
establishes a new one-size-fits-all regulatory criteria that 
will result in the misallocation of limited resources and fails 
to adequately protect the health of many of our nation's 
miners.
    The vast majority of mining in America occurs in above-
ground, non-metal mines, where there is little risk of 
exposure. However, MSHA's rule seems to apply new standards in 
reporting that is meant to address challenges faced in 
underground coal-mining, which accounts for a small percentage 
of overall mining operations.
    As the rule is finalized, we need more flexibility for 
metal/non-metal and the MSHA rule to confirm with OSHA 
standards that are already in place and working.
    Historically, small businesses have relied on the 
flexibility of hiring independent contractors, not just to 
manage their costs but to effectively adjust to the dynamic 
market demands. The simpler criteria provided by the 2021 
independent contractor rule gave clarity and certainty to these 
businesses.
    With its potential repeal, many small enterprises face the 
dual challenges of increased costs and bureaucratic 
complexities. In the aggregates industry, where independent 
contractors are integral, businesses frequently mobilize such 
contractors daily. Imposing more rigid classification leads to 
added taxes, fees, and administrative burdens, increasing the 
cost of essential materials during an already-inflationary 
period.
    In conclusion, I would like to extend my gratitude to the 
Committee Members for allowing me the opportunity to testify on 
these issues, and look forward to your questions. Thank you.
    Chairman WILLIAMS. Thank you very much.
    I now recognize Mr. Knapp for opening remarks.
    Mr. Knapp?

                 STATEMENT OF FRANK KNAPP, JR.

    Mr. KNAPP. Thank you, Chairman Williams, Ranking Member 
Velazquez, and Members of the Committee.
    I am Frank Knapp, the president and CEO of the South 
Carolina Small Business Chamber of Commerce. We are a statewide 
advocacy organization working at both the State and federal 
levels with 5,000-plus supporters.
    I co-founded our organization over 23 years ago, and good 
regulations at the state and federal level has long been an 
issue we have championed. Nine years ago, my organization 
worked to pass our State's Small Business Regulatory 
Flexibility Act, modeled after the federal law.
    I am also a small-business owner, and, from 2015 to 2017, I 
served on the SBA Regulatory Fairness Board, which advises the 
SBA National Ombudsman on matters of federal regulatory concern 
to small businesses.
    I want to be very clear: We expect every federal agency to 
fully comply with the law. That is the way we make sure that 
real small businesses have their voices heard and considered 
when new rules are being made.
    No one wants to unnecessarily burden small businesses in 
order to comply with regulations. If there are less onerous 
ways of achieving the goals of new regulations, then those ways 
should be adopted.
    But make no mistake about the need for regulations. They 
are the rules that give small businesses a level playing field 
to compete with each other and with big businesses. They help 
protect our environment so all of us can have healthier lives. 
They protect a small business's most precious asset, their 
employees, who we don't have enough of today. And they try to 
protect our economy to avoid cataclysmic events.
    I have never heard an entrepreneur say that they decided 
not to start a business because of federal regulations. Now, 
this doesn't mean that new federal regulations might not put 
some financial burden on existing real small businesses. But 
big cost estimates have been generated for years for their 
shock value and dire warnings that federal regulations are 
crushing small businesses. However, the definition of what 
constitutes a small business ends up showing that 99 percent of 
all businesses are small businesses, even some with up to 1,500 
employees. We and I believe most people recognize businesses 
with less than 100 employees as real small businesses, and 
those are the ones the RFA should focus on.
    Plus, all we hear about is the cost of proposed 
regulations; we never hear about the benefits. We don't get 
real regulatory analysis in which benefits are supposedly taken 
into consideration. All of us should understand that proposed 
regulations have benefits; otherwise, they wouldn't be 
proposed.
    Regulations address the health and well-being of workers, 
the local community, and the entire country. This creates a 
healthier economy for small and all businesses to prosper. Good 
regulations create opportunities for entrepreneurs and small 
businesses to innovate and grow by creating new products and 
services, which create new jobs.
    These benefits might be difficult to quantify, but totally 
ignoring them only serves the purpose of those who oppose 
regulations or those who want to cast aspersions on an 
administration acting responsibly.
    Our nation's economy is strong. The Federal Reserve has 
been trying to slow its growth. The problems that small 
businesses have had with growth have been due to the lack of 
workers and access to capital, not federal regulations.
    But we do need improvements in the rulemaking process if we 
are serious about agencies proposing good regulations with 
minimal cost to small businesses.
    Agencies should do a better job of reaching out to small 
businesses across the country and not just talk with 
Washington-based trade associations often controlled by big 
businesses.
    Agencies should project costs for real small businesses 
with fewer than 20 employees and fewer than 100 employees. 
Agencies should project direct benefits of proposed regulations 
to the impacted small businesses and local economy.
    If agencies need more resources to implement these 
recommendations, they should get them.
    And one more thing: With all this concern about proposed 
new regulations, there is far too little concern with helping a 
small business comply with existing federal regulations, a 
process that is intimidating, confusing, and too time-
consuming. All of those who have testified here have expressed 
concern about this issue.
    Let's simplify this process by having one federal agency be 
a resource for all small businesses regarding regulatory 
compliance concerns, an agency that could work with the 
appropriate federal agency and ensure that the concerns have 
been successfully addressed.
    The SBA National Ombudsman's Office is already set up for 
this responsibility and has a successful track record of this 
regulatory compliance assistance. Empower and fund this office 
for a more efficient and small-business-friendly process. 
Legislation has previously introduced in Congress to do just 
this. There may be some coming down the road this session. And 
I recommend that such a bill be passed.
    Thank you for the opportunity to speak before you today, 
and I welcome any questions the Committee may have.
    Chairman WILLIAMS. Thank you very much.
    And we will move into Member questions now, but I would ask 
the Members, since we are under a timeframe here, let's keep 
our questions limited so we can hear answers from the 
witnesses.
    Mr. Ray, during your time as the Administrator of OIRA, 
your office played an important role with the Trump 
administration to reduce the regulatory burden on America's 
creators.
    So my question is, can you describe how the regulatory 
process could be improved so we can better take small-business 
interests into account?
    Mr. RAY. Thank you, Mr. Chairman. I appreciate the 
question.
    Yes. So I think it is very helpful to break the question 
down into two parts: how the regulatory process can be improved 
with respect to individual rulemakings and how it can be 
improved with respect to the regulatory system writ large.
    I recall one of the most interesting conversations I had as 
Administrator during the Trump years with a representative of 
the small-business community. I asked him: Which rulemaking has 
been most helpful for your Members, unlocking their potential 
to thrive and create jobs and economic growth?
    And he said: Well, it is not any one regulation that has 
been so helpful; it is the knowledge that there is stability 
and certitude across the board. Our Members know that we are 
not going to face new regulations coming down the pike, 
changing the rules of the game, so we don't have to hold, 
basically, cash reserves in place to respond to new regulatory 
developments.
    And I thought it was a very interesting comment.
    It seems to me that the best thing that could be done to 
make the regulatory process as a whole more responsive to the 
needs of small business would be to slow the pace of regulatory 
growth across the board.
    So one thing the Trump administration did to do that was, 
of course, the Two-for-One Executive Order as well as the 
provision of the same order that required cost caps.
    I think the most important thing that could be done to the 
regulatory process with respect to small business is to slow 
the growth across the board and create greater stability.
    Chairman WILLIAMS. Okay. Thank you.
    Mr. Burgos, you have talked about you ultimately decided to 
sell the business that you created with your brother after 
regulations became too costly to deal with.
    So can you walk us through, quickly, how you came to this 
conclusion? You talked a little bit about it, but remind us 
again what made you come to the conclusion to sell the family 
business.
    Mr. BURGOS. Yes, Mr. Chairman. So the biggest reason was, 
we had an experience where we were a subcontractor on one of 
the border-wall projects in Arizona.
    And at the end of December, right before Christmas, we 
received a note from DOL saying that they had been directed to 
audit all border-wall subcontractors and contractors, and they 
gave us a list of 15 documents that we needed to provide. And 
of those 15 documents, we had until January, the first week in 
January, to provide them.
    To respond to those 15 documents, just to give everybody an 
idea of what the burden of paperwork is, it required us to put 
together 800 pages of documentation--800 pages of 
documentation.
    So we provided those 800 pages of documentation. And this 
went on until April of 2022, is when the decisions were finally 
decided.
    And during that time, we had interesting conversations with 
the Department of Labor. They came back and they told us, for 
example, 5 months later: Hey, this is great. You guys are 
obviously a good contractor. You put together all this 
documentation. You put it together--you didn't do a data dump. 
You actually put it together in a nice order for us to review. 
Unfortunately, did you call the union before you decided how to 
comply with the Davis-Bacon wage rates?
    And we said: No, we didn't call the union. I have been 
doing this for a long time, and the Davis-Bacon wage rates 
spell out exactly how you go about doing this, and I wasn't 
aware that you needed to call the union.
    And they actually said: Well, you don't, but, 
unfortunately, even though the Davis-Bacon wage rates say that 
there is a pipe-layer category--which is somebody who touches 
pipe; and conduit is what we were putting in the ground, which 
is pipe--they said: Unfortunately, the electricals union 
prevailed over the laborers union, and, therefore, you needed 
to pay everybody on your job site as an electrician.
    And then they turned around and told us that was $685,000 
that we owed in back wages, and they would be happy to hold 
that in trust in order to continue having discussions with us. 
Then they increased it to $950,000 several months later, almost 
a million.
    And then when we asked them, how are you coming up with 
this, they kept changing what the rules were. And, ultimately, 
they said the analysis was that they looked at our contract and 
our contract noted that we were going to have switchgear and 
transformers and light poles and pull wire. And we had that 30 
percent of our labor force were electricians and 70 percent 
were ``other''--operators and laborers and other designations 
that were on the wage rate determination.
    And so we said, that is correct. And in January the 
President issued his executive order stopping our work. And in 
April we took delivery of the switchgear and the transformers 
and the rest of the wire and the other things that were 
electrical components.
    And they said: Oh. Okay. Well, then we will reconsider 
that.
    And ultimately we settled for 300-and-some-odd-thousand 
dollars. And we just can't continue to afford to do that.
    Chairman WILLIAMS. Thank you.
    My time is up. I now recognize the Ranking Member for 5 
minutes of questions.
    Ms. VELAZQUEZ. Thank you, Mr. Chairman.
    Mr. Knapp, the size standard for some industries allows 
small firms to have receipts up to $47 million and 1,500 
employees. In regard to the Regulatory Flexibility Act, are 
these size standards overly broad?
    Mr. KNAPP. Absolutely. The criteria for a small business 
can go up to 1,500 employees, and that means 99 percent of all 
businesses in the country are considered a small business. The 
term becomes useless.
    Ms. VELAZQUEZ. Should there be specific changes to the RFA 
or the Office of Advocacy to better address the concerns of the 
smallest of small businesses?
    Mr. KNAPP. Yes, absolutely. Congress passed laws to protect 
small businesses. If most small businesses--well, half of them 
have four or fewer employees. Eighty-five percent probably have 
less than 20 employees. I would like to say a small business is 
up to 100 employees. That is where Advocacy and the RFA should 
focus.
    Ms. VELAZQUEZ. Should the RFA be amended to require the 
Office of Advocacy to take into consideration the benefits of 
regulations on small businesses?
    Mr. KNAPP. Absolutely they should. If Advocacy is only 
looking at the cost, they are missing the big business picture. 
And if they are making recommendations based just on cost and 
not on a true cost-benefit analysis, then the recommendations 
and comments to you as decision-makers is not all the 
information. You can't make a good decision unless you know 
really what the cost-benefit is.
    Ms. VELAZQUEZ. Can you give us some of the benefits of 
these Labor rules on small businesses?
    Mr. KNAPP. Well, yes. The rules are there to protect 
employees. They are there to have a healthier workforce. Every 
business wants a healthier workforce, no question about that, 
and regulations strive for that.
    They also create the lay of the land, the playing field, 
this level for everybody to compete. If you don't have rules--
if you don't have rules, if football games don't have rules, it 
is a mess, and it is unfair, and it gives the advantage to 
people who are willing to do unsavory things.
    So thank you.
    Ms. VELAZQUEZ. Thank you.
    You are based in South Carolina, right?
    Mr. KNAPP. I am.
    Ms. VELAZQUEZ. How important is outreach by federal 
agencies to ensure agencies hear directly from small businesses 
rather than Washington trade groups?
    Mr. KNAPP. Yeah, look, the agencies need to get out of 
Washington. They need to quit relying just on trade 
associations that often are controlled by big businesses. They 
need to get out there and to talk to these gentlemen here about 
how this is going to affect you, before the rule goes into 
place.
    That is how you are going to collect good information. The 
people out in the field, the small-business owners, they are 
the experts. Ask them. Ask them for their input. Listen to what 
they say.
    Ms. VELAZQUEZ. Thank you.
    Mr. Suzio, it is important for the Office of Advocacy and 
the Office of the Ombudsman to travel throughout the country to 
hear directly from small businesses like yours.
    Can you share instances when the Department of Labor 
conducted similar outreach around the country? And did it lead 
to positive changes within your business?
    Mr. SUZIO. Actually, with the Department of Labor, I can't 
address that, but what I can say is, we had a very good 
experience with MSHA.
    Several years ago, there was quite a few fatalities in our 
industry, and MSHA went around and did a ToolBox Talk, coffee-
hour talk, with our employees. It wasn't punitive. It was 
educational and informative. And it was very helpful to us and 
them. And it built a great rapport, where no one felt 
threatened.
    Ms. VELAZQUEZ. Thank you.
    Mr. Paul Ray brought up the issue of certainty for small 
businesses. Do you agree that a government shutdown is bad for 
small businesses and that it will delay critical Infrastructure 
Investment and Jobs Act funding for your industry?
    Mr. SUZIO. Without a doubt. And we rely on federal funding. 
The States have matching funds. They will not release work 
until they know that there is a secure package. And the short-
term CRs kill our industry and keep us from building roads for 
the citizens of America.
    Ms. VELAZQUEZ. Well, sir, here we are, only 29 days before 
a shutdown, and we still don't have a Speaker.
    I yield back.
    Chairman WILLIAMS. Thank you, Ms. Velazquez.
    I now recognize Chairman Luetkemeyer from the great State 
of Missouri for 5 minutes.
    Mr. LUETKEMEYER. Thank you, Mr. Chairman.
    And thank all of you for being here today, especially our 
small-business owner for taking time away from your businesses.
    One of the things that concerns me is that, since President 
Biden took office, 677 final rules have passed. This has cost 
American businesses $430.5 billion.
    Now, this figure is come up with by adding the cost--every 
time they do a rule, the government is supposed to also put a 
cost to implementing that rule. So this isn't my number. This 
isn't the Chairman's number. This is the government agency's 
number, themselves, when they initiate a rule.
    $430 billion in a little over 2.5 years, and 215 million 
(ph) hours of paperwork. In fact, as projected, President 
Biden's current regulatory framework will cost Americans $1.5 
trillion over the next decade.
    Mr. Burgos, you talked about this in your testimony with 
regards to the cost of continuing to comply, continuing to go 
through the rigmarole of trying to be compliant with the new 
rules and regulations and moving of the goalposts and the 
moving targets that they are continuing to go after.
    You know, Mr. Knapp talked about the benefits of these 
rules and regulations. There may be some. But when you weigh 
all this, your testimony tells me that there is not a lot of 
benefits to some of this stuff here if you are going to keep 
moving the goalposts on folks.
    Would you like to comment on that?
    Mr. BURGOS. I would. And thank you very much.
    It is impossible for a small business to comply when the 
regulations are constantly being changed. And I would actually, 
respectfully, say that the cost to small business and business 
in general is much, much higher.
    For example, for the Department of Labor's newest revisions 
to the Davis-Bacon and related acts, they estimate it is going 
to cost, I believe, $255 for a business to comply. So, if you 
take that number, just as an example, what they say is, 
essentially, it is 5 hours of a human-resource person to read 
the 800 pages of documentation----
    Mr. LUETKEMEYER. Speedreader, huh?
    Mr. BURGOS. That is correct, sir. It would take you 16-plus 
hours if you read at a--at a pace. And then trying to 
understand it. It is all in legalese. So the additional cost of 
that.
    You know, $50 an hour? I have yet to find an attorney that 
will work for me for $50 an hour. I have looked. I can't find 
one. They cost several hundred dollars now. And they don't 
charge you 1 hour to read 800 pages.
    Mr. LUETKEMEYER. One of the concerns that I have--and I 
have been here a long time, and I have seen these rules and 
regulations go on. And one of the biggest problems that I have 
with them is this power grab by the bureaucracy to take more 
power to themselves and away from all of you small-business 
guys. They want to control what you do even more. And 
unfortunately for small business, it doesn't level the playing 
field. It makes an unlevel playing field.
    Mr. Suzio, would you like to comment on that from the 
standpoint of you having to compete as a small business against 
the big guys with regards to these rules and regulations? It is 
costing numerous--those guys can spread this cost out over a 
lot more revenue compared to what a small business can do.
    Mr. SUZIO. Correct, sir, without a doubt. And the margins 
in our industry are so minimal that, when I ask friends of mine 
or other counterparts around the country why they chose to no 
longer be a family-owned business, the number-one answer I get 
is there was no succession plan or the family was fighting, but 
close right behind it is we could not compete anymore.
    And that is why the big boys keep getting bigger. Because 
companies like ours, we don't have an engineer, we don't have a 
legal department. We rely on our national associations to bring 
a lot of this forward to us. And it is just impossible to 
compete. And, as I said, the large companies have a huge 
advantage over those of us that truly are small, family-owned 
businesses.
    Mr. LUETKEMEYER. It seems to me that you need a tiered 
system here. If you have a small business, you need to have a 
different set of rules that you have to comply with versus the 
big guys. Otherwise, the little guys are never going to be able 
to compete.
    Mr. SUZIO. Yes.
    Mr. LUETKEMEYER. One of the things that concerns me is--I 
have been here, again, a long time, and this particular 
administration continues to weaponize guidance. And it just 
drives me up the wall, from the standpoint of: You have laws, 
and you have rules to implement the laws, and you have guidance 
to clarify the rules. Guidance is not enforceable. It is not 
enforceable, period.
    And yet this administration continues to allow its 
bureaucracies to go out here and intimidate the business 
community by issuing guidance and then trying to go out and 
enforce it and threaten them with lawsuits if they don't comply 
with their guidance.
    Have you guys seen that kind of activity in your world, Mr. 
Burgos or Mr. Suzio?
    Mr. SUZIO. Yes, we have. And we don't mind when government 
comes in in a cooperative way to educate us and be a resource. 
But when they automatically come in and are punitive or looking 
for fault within an organization that tries to do everything 
right, it is very frustrating.
    Mr. LUETKEMEYER. Thank you, gentlemen, very much. 
Appreciate your time here. And when you are away from your 
business, I know it is a sacrifice. Thank you so much.
    Mr. Chairman, I yield back.
    Chairman WILLIAMS. I now recognize Representative McGarvey 
from the great State of Kentucky for 5 minutes.
    Mr. MCGARVEY. Thank you, Mr. Chairman.
    Thank all of you guys for being here today.
    I want to reframe a little bit about what we are doing. 
Because, actually, what you see in this Committee is a whole 
bunch of people who are interested in helping small businesses 
succeed. They are the backbone of the economy in all of our 
districts.
    And as we talk about this process, sure, we have heard 
about overreach. We want to be able to help our small 
businesses with that. But let's also talk about the process of 
rulemaking and how and why it is important.
    Not every rule is overreach. Not every rule is unnecessary. 
You know, I believe that our workers deserve fair compensation. 
I believe that our workers deserve a safe working environment. 
And I don't think it is in any way radical to propose 
legislation in this environment that makes that possible.
    Just look at my district in Kentucky. Just recently, the 
DOL's Wage and Hour Division uncovered a company that was 
employing 11- and 13-year-olds at a distribution center and 
allowing them to work the forklift. Just recently in my 
district, in Louisville, Kentucky, Wage and Hour Division 
discovered 10-year-olds working until 2:00 a.m. at a 
McDonald's, with one operating the deep fryer. And what made 
that crackdown possible? This process here.
    And so I have always been a believer. And what we are doing 
here today is important, because we want our small businesses 
to succeed. You can be pro-worker without being anti-business.
    So, Mr. Knapp, you touched on how well-crafted regulations 
have the ability benefit the economy by leveling the playing 
field, incentivizing innovation, and protecting health. Can you 
give us some examples of regulations that do that?
    Mr. KNAPP. Let me first say, on your comments regarding 
some of your businesses in your State, those people are 
breaking the rules, right? And, therefore, they have an unfair 
advantage in competition with other small businesses. And that 
is why rulemaking is important. Because they do level--if 
everybody has to follow the same rules, then it does create 
that level playing field.
    Even things that--there was an NPR story the other day 
about the climate rule changes. A company called Corteva in 
Indiana, they make seeds and chemicals, and here was their 
comment: ``There is money to be made producing things like 
biofuels to power ships and airplanes with less climate 
pollution. Often, rules then inspire innovation, and they 
inspire a different process of delivering services that moves 
everything forward and benefits all of us.''
    Mr. MCGARVEY. I appreciate that.
    And you are right; it does give an unfair advantage 
sometimes when people break the rules, and why some of this is 
necessary.
    One of the things I would love to have a conversation about 
in this Committee is about how we can improve the rulemaking 
process. Because, again, we don't want unnecessary burdens on 
our small businesses. We want our small businesses to succeed. 
But we also know that rules are necessary and part of that.
    So, Mr. Burgos, I understand your concerns with the updated 
Davis-Bacon regulations. And I understand that a lot of those 
concerns, based on what you have told us today, are on 
compliance costs. And I get that. If I find an attorney for 
$50, I will send him your way, but you might not want to use 
him.
    So is there a way for us to reduce burdens on businesses 
while still carrying out the intent of Davis-Bacon, which is 
higher wages for our construction workers?
    Mr. BURGOS. Absolutely. The simplest way is to streamline 
the paperwork requirements.
    The examples you provided, for example, in Kentucky, I am 
pretty sure those examples are against the law already. That is 
very simple to--so it doesn't require a Davis-Bacon wage-rate 
revision.
    As far as--and the other thing we need to do is remove the 
subjective nature. So, as my testimony, my written and verbal 
testimony demonstrated, there is a subjective nature. There is 
not a clear-cut rule.
    If there was a clear-cut rule that said--which we did, for 
example, in our issue, is follow the Davis-Bacon wage rate and 
pay the wage rate that was determined. But then there are other 
things like the Frye act that was passed--that was a court case 
from the 1970s. DOL's response, when I said, ``Well, I don't 
know what that is,'' they said, ``Well, Google it from the 
1970s,'' and it doesn't apply, and it is not answered in the 
revisions that were done and put out.
    So, if we really want to make a difference, we would take 
800 pages and put it down to very simple rules. ``Here is the 
wage rate''--for example, ``Minimum wage, here is the wage rate 
you are going to pay.'' That is, like, one line. It doesn't 
require a whole lot of--800 pages of narrative to support.
    Mr. MCGARVEY. No, I appreciate that input from you.
    And my time is going to run out. I would love to ask 
another question about how we could do that, whether the 
Ombudsman could be more involved with the SBA's Regulatory 
Fairness Board, how we could work that process together, but I 
have 6 seconds left.
    And, Mr. Chairman, I yield back.
    Chairman WILLIAMS. All right.
    I now would like to recognize Representative Crane from the 
great State of Arizona for 5 minutes.
    Mr. CRANE. Thank you, Mr. Chairman.
    As a small-business owner myself and somebody who 
represents a bunch of small businesses in Arizona's Second 
Congressional District, I, too, am concerned about the 
overreach and the increasing size of the bureaucracy.
    And, Mr. Burgos, as I listen to your story, it really 
bothers me to hear that. To listen to how you came here, you 
and your brother started this company, and then you grew it 
to--what did you say? 190 employees?
    Mr. BURGOS. 195.
    Mr. CRANE. That is impressive, sir. Congratulations.
    And then to hear that you ended up deciding to sell your 
company because of all the red tape and regulation, it is 
completely disappointing, to say the least.
    What year, sir, were you guys audited, and what year did 
the overreach begin that you were talking about?
    Mr. BURGOS. It was December '20 is when we were--so right 
before Christmas.
    Mr. CRANE. Can you talk about the impact to the employees 
that you had and their families when you guys started going 
through--you know, had to file that 800-page document to answer 
these questions.
    Mr. BURGOS. The impact was twofold.
    First off, first was, the President's executive order 
required us to lay off 135 employees. It stopped our work. And 
we were under a pay-when-paid contract, which really put a lot 
of fiscal strain on our company. Because, to date, the agencies 
are still negotiating with the prime contractors. Which, all 
prime contractors had a 35-percent-or-greater small-business 
subcontracting requirement, and those subs often weren't paid 
unless the prime contractor is paid, and they haven't been paid 
yet.
    And so that required additional layoffs at our company----
    Mr. CRANE. Yeah.
    Mr. BURGOS.--while we were also then turning around and 
taking our dollars to spend with attorneys to go ahead and 
ultimately settle with the Department of Labor.
    Mr. CRANE. Yeah.
    Another thing that one of my colleagues pointed out a 
second ago is how sometimes these bureaucracies can become 
weaponized. Have you seen that as well, sir?
    Mr. BURGOS. I have. Because, in this case, there was no 
individual who had--Department of Labor was very clear, there 
was not an individual who said we were not paying the correct 
rates. At no point during the investigation did they come up 
with anything that said that. What it was was, ``Hey, we have 
just determined that you need to pay more.''
    And I found it interesting that I have done over 100-plus 
projects and this one was selected because it was tied to the 
border wall.
    Mr. CRANE. Yeah. So it was political, wasn't it.
    Mr. BURGOS. I couldn't say who directed the Department of 
Labor.
    Mr. CRANE. Yeah.
    Mr. BURGOS. I just have never been told that----
    Mr. CRANE. Well, it is funny, because I have my own 
experience with that. I ran a small business for about a 
decade, a veteran-owned small business, where we manufactured 
our products in the United States of America. And the very week 
I announced that I was running for Congress, I was driving to 
work, I got a call from one of my employees, and he said, 
``Hey, you need to get down here ASAP. OSHA is down here to do 
a surprise inspection.'' Never happened before. Never happened 
before.
    And that is one of the things that American citizens, they 
are terrified about. They are seeing this government that is 
supposed to protect them and represent them become weaponized 
against them.
    And so I do agree with what my colleague, I think Mr. 
McGarvey, said, that you can be pro-worker and also pro-
business at the same time, but you also--we also have to 
recognize how things play out.
    Like, I have seen a lot of my colleagues fight for 
standardizing minimum wages, right, and saying that that is 
pro-worker. But what they don't realize is, often, if they 
don't increase the amount of profits that a business owner is 
making, often regulations like that negatively impact workers. 
Because employers are like, ``Well, you are saying I have to 
pay these guys more money now, but you are not increasing the 
amount of money I am making,'' so they end up having to lay off 
people.
    Have you seen anything like that, Mr. Burgos, in your 
business experience?
    Mr. BURGOS. There is absolutely an impact when we just 
continually raise rates. It has an impact on what benefits we 
are able to offer.
    And I think what everybody needs to remember is, in a 
family-owned business like the one I had, you know, our 
employees are also part of that family.
    Mr. CRANE. Yeah.
    Mr. BURGOS. I mean, we are not a large, huge company. Even 
at 195 employees, I was in the field to make sure that our 
business didn't fail.
    Mr. CRANE. Thank you.
    I yield back, Mr. Chairman.
    Chairman WILLIAMS. Thank you very much.
    I now recognize Representative Meuser from the great State 
of Pennsylvania for our final questions.
    Mr. MEUSER. I appreciate that, Mr. Chairman.
    Yeah, unfortunately, all, we have to get to another 
meeting, but greatly appreciate you all coming in and sharing 
your stories.
    I do apologize for missing some of your opening, but I will 
read it, because what you have to say is very compelling and 
very important. We are here as the Small Business Committee to 
serve as your advocates, your voice in Congress, and I hope we 
can keep the dialogue going.
    You know, you have all been dealing with Bidenomics, you 
know, not to get political about it, but, I mean, let's face 
it. The highest inflation in our lifetimes, or some of us 
anyway, since the 1970s. Energy--losing our energy 
independence. Gasoline, groceries are certainly affected.
    Interest rates have an enormous effect on small businesses. 
I mean, I had a small business recently, and this company did 
about $75 million in sales, but their line of credit was about 
$15 million. And the interest-rate increases have added almost 
$2.5 million to their bottom line. And their margins, their net 
income, is barely $3.5 million. So, you know, either they are 
engaged in inflation raising prices; meanwhile, they are trying 
to compete--it is an American-based company--you know, with the 
rest of the world. So some serious issues there.
    And, by the way, from the federal government standpoint, 
less net income means less net revenue in taxes, right? And 
what a big surprise. Look at our revenues for personal income 
tax, for passthroughs. It is enormously down. In fact, we are 
going to be down as a federal government about $100 billion 
just in small-business income tax because of that inflationary 
squeeze.
    So your sales are up; your net revenues are down. You are 
dealing with--and now we throw, you know, all the regulations--
not just throw them in. That is what this hearing is about.
    So, as Mr. Luetkemeyer brought up, it is not a fair playing 
field. And I know it very well. Over 20 years in business, we 
went from a small business to a larger business. And, you know, 
from the 1990s to the early 2000s or even late 2000s, the 
2010s, the level of compliance and regulations, we had a 
roomful of people. If we would have had to do that in the late 
1980s or early 1990s, we never would have gotten off the 
ground. So it is getting a lot worse.
    And as our colleague brought up a little while ago, he was 
talking about underage workers and people being forced to, you 
know, work extended hours. Those laws have been on the books 
for 80, 90 years against that, okay? We are not talking--that 
is an enforcement issue, okay, and, clearly, a bad apple 
running that company.
    So, quickly--I promised our Chairman I was going to be 
quick--federal or state, which are more of a problem to you, 
from a regulatory standpoint?
    Mr. Suzio?
    Mr. SUZIO. I would definitely say federal, because they are 
more overbearing and, also, they tend to pass it with a 
paintbrush for all businesses, whereas at the State they are 
more looking at the local and the size and the reactions to 
them.
    Mr. MEUSER. Who do you call when you are running into these 
federal issues? Largely, you probably handle it yourselves, or 
you have your compliance guy or, you know, whoever it might 
be--environmental. Who do you call?
    Mr. SUZIO. In our case, we call our national associations. 
That is who have the resources to help us, guide us through it. 
If we did not have them, we would not be sitting here today.
    Mr. MEUSER. I am going to have to yield back. Thank you 
very much.
    Chairman WILLIAMS. Thank you.
    And I will yield a minute, 17 to my colleague from 
Michigan.
    Mr. THANEDAR. Thank you, Chairman. Thank you so much for 
your kindness. I will just be quick and not take much time.
    I just wanted to know--we are less than 30 days away from a 
possible government shutdown. And I just want to know, any 
witnesses, how they perceive a likely shutdown will impact our 
hardworking small businesses.
    Mr. SUZIO. In our case, being a construction materials 
supplier that does work with the State of Connecticut, it will 
affect us tremendously and adversely affect our employees with 
the number of hours they can work. Because the State will not 
let any work out unless they have a true funding mechanism. And 
CRs are not reliable and are inconsistent, and they lead to 
stagnation in our industry.
    Mr. THANEDAR. Thank you.
    Chairman WILLIAMS. Anybody else?
    Mr. THANEDAR. I yield back, Chair.
    Chairman WILLIAMS. All right.
    I now yield the time to Ms. Scholten, 1 minute, from the 
great State of Michigan.
    Ms. SCHOLTEN. Thank you. Thank you so much, Mr. Chair, I 
really appreciate it.
    And thank you so much to the witnesses today. I have read 
and reviewed your testimony. Incredibly important to the work 
that we are trying to do today.
    And I thank my Republican colleagues for holding such an 
important hearing.
    I hear consistently from small businesses across west 
Michigan and throughout our State. They are the backbone of our 
economy in west Michigan. Most small businesses don't have 
attorneys, accountants, other resources to learn every federal 
regulation and figure out how to be competitive in this space.
    I am the Ranking Member on the Government Contracting 
Subcommittee. I am going to take my response for the record, 
because I know we are limited in time. But, Mr. Burgos, in 
particular, in your testimony, you mentioned that the lack of 
small contractors in the defense industry is a national 
security issue. I couldn't agree with you more.
    What regulatory reforms do you think could increase the 
competitiveness of small businesses versus larger businesses 
with advantages in this space?
    Mr. BURGOS. So we have set-asides already. What we need now 
is we need the burdensome nature of the regulations to be 
streamlined so that businesses can understand.
    Next week, I am going to actually be speaking to the 
Hispano Chamber, to those small businesses that are interested 
in entering the small-business sector. And what they are is 
overwhelmed by how to go ahead and enter the sector, and we 
need to streamline that.
    Ms. SCHOLTEN. Thank you.
    Thank you.
    Chairman WILLIAMS. Thank you very much.
    I would like to thank our witnesses here today. We have a 
last-minute scheduling problem. As you know, we have to elect a 
Speaker. But we will have to adjourn the meeting a little 
earlier. But I want to thank all of the witnesses for taking 
time to be up here today.
    And all Members will have 5 legislative days to submit any 
questions that were not asked in writing to the witnesses.
    And, with that being heard, this hearing is adjourned. 
Thank you.
    [Whereupon, at 11:02 a.m., the Committee was adjourned.]
                           
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