[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
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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
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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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