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

                          A YEAR IN REVIEW: THE STATE OF SMALL
                                  BUSINESS IN AMERICA

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

                                    HEARING

                                   BEFORE THE

                          COMMITTEE ON SMALL BUSINESS
                                 UNITED STATES
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                  HEARING HELD
                               DECEMBER 12, 2023

                                   __________

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                Small Business Committee Document Number 118-033
                 Available via the GPO Website: www.govinfo.gov

                                   ________

                       U.S. GOVERNMENT PUBLISHING OFFICE
    54-517                    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 STATEMENT

                                                                       Page
    Hon. Roger Williams..............................................     1
    Hon. Nydia Velazquez.............................................     3

                                   WITNESSES

    Mr. James R. Thompson, President, Board of Directors, Pal-Con
      Ltd., Stephenville, TX.........................................     5
    Mr. Daniel A. Grech, Founder and Chief Executive Officer, BizHack
      Academy, Surfside, FL..........................................     7
    Mr. Nicholas Boyle, Chief Executive Officer, Northern Keystone
      Towing and Recovery, Tamaqua, PA...............................     8
    Dr. Tammira Lucas, Chief Executive Officer/Assistant Professor,
      The Cube Cowork/Coppin State University, Baltimore, MD.........    10

                                    APPENDIX

    Prepared Statements:
        Mr. James R. Thompson, President, Board of Directors, Pal-Con
          Ltd., Stephenville, TX.....................................    35
        Mr. Daniel A. Grech, Founder and Chief Executive Officer,
          BizHack Academy, Surfside, FL..............................    38
        Mr. Nicholas Boyle, Chief Executive Officer, Northern
          Keystone Towing and Recovery, Tamaqua, PA..................    67
        Dr. Tammira Lucas, Chief Executive Officer/Assistant
          Professor, The Cube Cowork/Coppin State University,
          Baltimore, MD..............................................    68
    Questions for the Record:
        None.
    Answers for the Record:
        None.
    Additional Material for the Record:
        Carol Roth, Member/Partner, Intercap Merchant Partners, LLC..    72

            A YEAR IN REVIEW: THE STATE OF SMALL BUSINESS IN AMERICA

                                  ----------

                           TUESDAY, DECEMBER 12, 2023

                      House of Representatives,
                   Committee on Small Business,
                                                        Washington, DC.
        The Committee met, pursuant to call, at 10:11 a.m., in Room
    2360, Rayburn House Office Building, Hon. Roger Williams
    [chairman of the Committee] presiding.
        Present: Representatives Williams, Stauber, Meuser, Van
    Duyne, Mann, Molinaro, Crane, Bean, Hunt, LaLota, Velazquez,
    Golden, Landsman, McGarvey, Gluesenkamp Perez, Scholten,
    Thanedar, Chu, and Davids.
        Chairman WILLIAMS. Okay. I would like to welcome everybody
    and first of all say Merry Christmas, Happy Holidays to
    everybody as we move into that season.
        Before we get started I will lead us in the Pledge of
    Allegiance followed by Representative Hunt from the great state
    of Texas to lead us in prayer.
        Would you please rise?
        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.
        Mr. HUNT. Please bow your heads.
        Heavenly Father, we are just truly grateful for the
    blessings of liberty and choosing our own way. We know, Lord,
    that it is not easy to have freedom, and we ask for wisdom and
    courage to do great things that we can just continue to live in
    a great country. We ask that those winds of freedom continue to
    blow around the world. We are with the people in Israel that
    are still suffering from just horrendous attacks, and so we are
    with them, and hostages and families. And we are grateful for
    those that help defend that freedom, and have defended that
    freedom, and will defend that freedom. So all this we ask in
    your name. Amen.
        Chairman WILLIAMS. Good morning to everybody. And I now
    call the Committee on Small Business to order.
        Without objection, the Chair is authorized to declare a
    recess at any time.
        I now recognize myself for my opening statement.
        Welcome to our last Small Business hearing of 2023. I want
    to thank our witnesses for being here today and I know all of
    you traveled a long way to share your stories with us and we
    greatly appreciate that.
        This Committee serves as the voice for Main Street America
    in Washington. The goal today and every day is to learn more
    about the current state of small business from the people who
    know it best, our nation's job creators. There is no doubt that
    in a year like this one they have experienced many ups and
    downs. Starting a small business is a definition of the
    American dream and any American from any background can take a
    risk, bet on themselves, and bring a new service or product to
    the marketplace. Our economy is dependent upon small businesses
    and our entrepreneurs should be celebrated every single day.
        As job creators, small businesses are the engines of our
    economy, accounting for over half of the payroll in half the
    entire country. More importantly, they are the beacon of light
    and extension of culture into each of our communities giving
    back selflessly through their businesses with many of their
    struggles often going unnoticed. I have been carrying on my
    family business for over 52 years and I understand the highs
    and the lows of being your own boss.
        America's entrepreneurs have had to confront historic
    challenges over the past few years--the COVID-19 pandemic, out
    of control inflation, broken supply chains, high interest
    rates, access to capital, and a national labor shortage. But as
    small businesses have done countless times before, they endure.
        Here on the Committee on Small Business, we have been
    working to create an environment where small businesses can
    thrive. Small business owners dedicate their lives and finances
    to the products and services they bring to the marketplace.
    Every business owner knows every extra hour of paperwork is one
    less hour they can tend to their business operations. Every
    inflated tax and extra dollar that could have gone somewhere
    else and every job vacancy is one more a small business owner
    must cover themselves.
        As we listen to the state of small business in America, we
    salute the entrepreneurs who continue to fight and give
    selflessly back to their communities. We are eager to hit the
    ground running in the New Year and enact policy solutions that
    will help pave a path toward success for both now and in the
    future.
        Today marks our 20th Full Committee hearing of the year and
    in each one we have heard about what small businesses are
    enduring at any given moment. I wanted to have this hearing
    today so we could specifically discuss the state of
    entrepreneurship as a whole and think about the bigger picture
    as we move forward in 2024. I am excited to have all of you
    here today with us. I am very much looking forward to today's
    hearing.
        I ask unanimous consent to add a statement for this record
    from a small business owner advocate entrepreneur and two-time
    New York best-selling author, Carol Roth.
        And without objection is so ordered.
        And lastly, I would like to welcome Ms. Celeste Maloy, from
    the great state of Utah, as the newest Member of the majority
    on our Committee. Congressman Maloy is a fighter and came to
    Congress to advocate on behalf of the district's families and
    small businesses. We are excited to have her on our team and
    look forward to working with her.
        With that I yield to our distinguished Ranking Member from
    New York, Ms. Velazquez.
        Ms. VELAZQUEZ. Thank you, Mr. Chairman. I'd also like to
    thank all of our witnesses for traveling across the country to
    be here with us today.
        It is important that on occasion we hold hearings like this
    to take stock and understand the landscape for small businesses
    and the impact of our policymaking.
        Over the last several years, small businesses have faced a
    series of cascading crises from the initial COVID shock that
    closed more small businesses than any other time in history, to
    the following years of rising costs, supply chain disruptions,
    and labor shortages. We understand that running a business has
    been no easy task.
        However, despite this array of challenges, our country's
    small businesses are more resilient than ever and they are
    helping to build a strong economy from the bottom up and the
    middle out.
        While there is no argument that many small businesses are
    struggling, we must also acknowledge the clear positive
    economic indicators we saw in 2023. First, we can all be proud
    of the ongoing small business boom. So far this year,
    entrepreneurs applied to start another 4,500,000 million
    businesses accelerating even more from the record-breaking
    years of 2021 and 2022.
        Second, we have seen a significant drop in inflation
    without a dramatic increase in unemployment--something that was
    unthinkable prior to this year and a step in the right
    direction toward a soft landing.
        As a matter of fact, we have had 22 straight months of
    unemployment under 4 percent, the longest stretch in 50 years.
    While prices remain elevated, consumers and small businesses
    are getting relief in key areas like gas prices. Hopefully,
    price stabilization will give business owners the confidence to
    make long-term investments and give the fed the wherewithal to
    lower interest rates next year.
        Finally, we cannot ignore last quarter's blockbuster
    growth, initially at 4.9 percent and recently advised upward to
    5.2 percent. The strength of our economy in the face of these
    challenges has been propelled by many of the investments made
    last Congress through legislation like the American Rescue
    Plan, the bipartisan Infrastructure Law, the CHIPS and Science
    Act, and Inflation Reduction Act.
        Despite this year being messy and chaotic on Capitol Hill,
    my hope is that this investment will give small firms the fuel
    they need to grow to their full potential.
        I would like to once again thank our witnesses for joining
    us today and I yield back.
        Chairman WILLIAMS. I will now introduce our witnesses.
        The first witness here with us today is a dear friend of
    mine and a true Texan, Mr. Randy Thompson. Mr. Thompson is the
    president of the Board of Directors for Pal-Con Ltd., located
    in Stephenville, Texas. Founded in 1995 by Mr. Thompson and his
    sister, along with their mother and father, Pal-Con specializes
    in manufacturing the services of gas turbine regenerators and
    recuperators. Since its finding in 1995, Pal-Con has worked to
    expand into new markets. In 2012, Pal-Con won the rising star
    award from the Stephenville Chamber of Commerce. Mr. Thompson
    graduated from Tarleton State University, home of the Texans.
    And thank you for joining us today and we look forward to this
    conversation ahead.
        Our second witness today is Mr. Daniel Grech. Mr. Grech is
    the founder and CEO of BizHack Academy located in Miami,
    Florida. BizHack Academy, founded by Mr. Grech in 2017, is a
    collective of marketing leaders who help businesses by
    equipping them with the skills required for digital success.
    Prior to founding his company, Mr. Grech was the VP of Digital
    Marketing and PR at OfferCraft, a small software startup in the
    hospitality industry. He also has years of journalism
    experience working as America's desk reporter for Marketplace
    at NPR from 2005 to 2009, and as a staff reporter at the Miami
    Herald from 2000 to 2004. Mr. Grech is a recipient of multiple
    awards including the PR News Platinum Award and his business,
    BizHack Academy is a Stevie Winner from the American Business
    as a Minority-Owned Small Business of the Year. Mr. Grech
    earned his bachelor of arts from Princeton University, his
    master's degree in Spanish language journalism while studying
    in Argentina, and his master of fine arts from Florida
    International University. Mr. Grech, thank you for joining us
    today, and we look forward to the conversation ahead.
        I now recognize my colleague, Representative Meuser, from
    the great state of Pennsylvania, to briefly introduce their
    constituent who is appearing before us today.
        Mr. MEUSER. Thank you very much, Mr. Chairman.
        It is my pleasure to introduce our next witness, my good
    friend, Mr. Nicholas Boyle, from Tamaqua, Pennsylvania. Mr.
    Boyle is the CEO of Northern Keystone Towing and Recovery
    located right outside of Tamaqua in Frackville, in the heart of
    Pennsylvania's Ninth Congressional. Mr. Boyle started his first
    company, Boyle Electro Mechanical in 2010, just a few years
    after graduating from high school. Today he continues to lead
    Boyle Electro Mechanical and operates seven specialized
    companies that range from information technology consulting to
    towing and recovery. Mr. Boyle is also a dedicated community
    volunteer serving on the Schuylkill County Planning Commission,
    and as Vice President and on the board of the Tamaqua Area
    School District. Really important roles being played in our
    community. Mr. Boyle graduated from Pennsylvania College of
    Technology, Penn Tech, great school in Williamsport within my
    district, where he earned his Bachelor of Science in
    Information Technology. Mr. Boyle embodies the spirit of the
    America entrepreneur. He is continually innovating, continually
    thinking, continually investing in his business and employees,
    while creating opportunities for those throughout our
    community. With such a diverse set of businesses and his years
    of experience, Mr. Boyle knows firsthand how today's economic
    headwinds are impacting small businesses like his across
    America and provide valuable insight into the current state of
    Main Street America.
        I want to thank you, Mr. Boyle, very, very much, and all of
    our witnesses for testifying before this Committee and I look
    forward to today's conversation.
        I yield back, Mr. Chairman.
        Chairman WILLIAMS. Thank you. I now recognize the Ranking
    Member from New York, Ms. Velazquez, to briefly introduce our
    last witness appearing before us today.
        Ms. VELAZQUEZ. Thank you, Mr. Chairman.
        Our final witness today is Dr. Tammira Lucas. Dr. Lucas is
    the Founder of the Cube Cowork, the largest black women-owned
    coworking space in the United States offering babysitting
    services. She is a strong advocate for women in business,
    especially moms, having cofounded the National Association for
    Mom Entrepreneurs. Dr. Lucas is an author, speaker,
    philanthropist, and Assistant Professor at Coppin State
    University. She holds three degrees in business, including a
    Doctorate of Business Administration. Thank you, Dr. Lucas, for
    joining us today.
        I yield back.
        Chairman WILLIAMS. Thank you, again. And we appreciate all
    of you being here today.
        Now, before recognizing the witnesses I would like to
    remind them that their oral testimony is restricted to 5
    minutes in length. If you see the light turn red in front of
    you it means your 5 minutes is up. You are done. Okay? As
    concluded and you should wrap up your testimony. So we will be
    aware of that. And if you hear this (gavel tapping) I am kind
    of giving you a little heads up you are getting close to 5
    minutes. Okay? All right.
        I now recognize Mr. Randy Thompson for his 5 minute opening
    remarks.
        Mr. Thompson?

    STATEMENTS OF JAMES R. THOMPSON, PRESIDENT, BOARD OF DIRECTORS,
      PAL-CON LTD.; DANIEL A. GRECH, FOUNDER AND CHIEF EXECUTIVE
       OFFICER, BIZHACK ACADEMY; NICHOLAS BOYLE, CHIEF EXECUTIVE
      OFFICER, NORTHERN KEYSTONE TOWING AND RECOVERY; AND TAMMIRA
     LUCAS, CHIEF EXECUTIVE OFFICER/ASSISTANT PROFESSOR, THE CUBE
                     COWORK/COPPIN STATE UNIVERSITY

        STATEMENT OF RANDY THOMPSON, PRESIDENT OF THE BOARD OF
                        DIRECTORS, PAL-CON LTD.

        Mr. THOMPSON. Thank you for inviting me to testify in front
    of the Committee today on the state of small business from a
    Texan's point of view.
        Like the Chairman said, my name is Randy Thompson. I am the
    president of Pal-Con, Ltd. in Stephenville, Texas. We build a
    heat exchanger for improved fuel efficiency and auxiliary
    equipment for emissions control for natural gas transmission
    and the power generation companies. Our heat exchanger actually
    reduced fuel consumption by up to 40 percent when installed on
    a gas turbine. We are also proud to day that our heat exchanger
    is 100 percent American made.
        My company is strong. We have navigated all the challenges
    put in front of us in recent years, but we clearly have
    struggles we deal with every day--a workforce shortage, skilled
    labor shortage, supply chain issues, taxes, and regulations.
        We need workers. Erath County is home to about 44,000
    people and we have a 3.4 percent unemployment rate. That is
    nearly 1,500 people who are unemployed. There is no reason for
    one single person to be unemployed in Erath County. Why do the
    benefits of not working outweigh the benefits of working? That
    is a little messed up. There are over 5,000 jobs that could be
    done right now.
        When I was younger, if I did not work, I did not eat. We
    combatted some of our work issues using the USCIS program
    earlier this year which got us to properly vet and hire
    candidates from a couple other countries. That took about 30
    days. Well, it has been 9 months since we have been able to get
    anybody else so that did not work very well for us. So we have
    significantly had to increase our wages across the board in the
    last few years. Our payroll has increased over 40 percent since
    2020. We believe that as our employees go, so do we and vice
    versa. But sadly, increasing wages is not enough for us to win
    this war on higher prices.
        Being a small business owner in a thriving rural college
    town has its own issues, too. The lack of affordable housing in
    our area is often a deterrent for our candidates. We need all
    levels of government to put more emphasis on the need for
    affordable housing outside the metroplexes to draw in and keep
    more people in rural areas.
        The lack of skilled craftsmanship is going to be
    detrimental to the U.S. economy. Where are the incentives for
    students to learn a trade? All the years spent pushing college
    on students have resulted in an unappreciation for the trades.
    Pal-Con is roughly 90 percent blue collar workers and 80
    percent of them are skilled craftsmen. Trade schools need equal
    representation and the government needs to incentivize trade
    school attendance in the same manner as any other post-
    secondary education.
        On the supply chain issue, the U.S. raw materials market
    still seems to be lagging behind. Three years of COVID-related
    restrictions had a negative impact on all our metal suppliers.
    Most of our suppliers do not have any inventory to speak of,
    and if Amazon can get it, why cannot they? It really hurts us.
    We will not purchase foreign, inferior materials to make our
    products.
        I recently read that the U.S. metal fabrication industry is
    facing major hurdles. It is my understanding that the iron and
    steel manufacturing industry has declined nearly 40 percent in
    recent years. The United States needs to strive for self-
    reliance. We need to support domestic suppliers to support
    domestic manufacturers.
        Another issue is taxes. Small businesses and median income
    families pay the majority of the taxes. Companies like Pal-Con
    and our employees end up paying far more in taxes on a
    percentage basis. If large corporations paid their fair share,
    then median income families would pay far less. The current tax
    curve is misaligned; it needs to be reworked to reflect the
    current wages based on the current cost of living. The small
    business sector and the median income families are seriously
    underrepresented. We have no voice. We cannot afford lobbyists
    or advocates. Tax breaks and loopholes exist in excess for
    domestic and foreign-owned large companies while our clients
    are tasked with mitigating the barrage of regulations as we
    pressure with environmental, social, and government
    requirements, Pal-Con Ltd. is a family-owned business with
    family-based morals. We are currently being discriminated
    against for project opportunities for not being a minority-
    owned business. Race, ethnicity, gender, and so on should have
    no bearing in determining who does the better job. We have met
    all our clients' requirements over the years and we are
    affiliated with more associations----
        Chairman WILLIAMS. Time is up.
        Mr. THOMPSON. Okay.
        Chairman WILLIAMS. Thank you for your testimony.
        Okay. Thank you for your testimony.
        And I now recognize Mr. Grech for his 5 minute opening
    remarks.

        STATEMENT OF DAN GRECH, FOUNDER AND CEO, BIZHACK ACADEMY

        Mr. GRECH. Thank you, Mr. Chairman, and the Members of the
    House Committee on Small Business, for this opportunity to
    testify.
        My name is Dan Grech. I am the founder of BizHack Academy.
    We are a South Florida company that trains small businesses, to
    use modern marketing tools such as artificial intelligence and
    digital advertising. Our 10-year goal is to help 10,000 small
    businesses in the U.S. grow faster by 2027.
        The Japanese have a principle called ikigai. Ikigai is the
    intersection of four things: 1) what you love, 2) what you are
    good at, 3) what you can make money doing, and what the world
    needs.
        Your ikigai is essentially your professional sweet spot. I
    like to think of it as your professional love.
        The subject of this testimony is my decade-long journey to
    discover my ikigai and some of the lessons I learned along the
    way.
        I am a small business owner who serves small businesses. I
    am the son of an immigrant from Spain and a public school art
    teacher in Philadelphia. Eighty-seven percent of the business
    owners we train are people of color, and many of them are
    immigrants. We offer programs in English, Spanish, and Haitian
    Creole. My background is as a Pulitzer Prize-winning, NPR and
    PBS journalist. Ten years ago I lost my job in journalism. I
    was unable to find another job in the media. I had lost my
    first professional love. I had lost my ikigai.
        I found a glimmer of meaning when I started teaching a
    course in marketing at the local community college. Two years
    later I took the entrepreneurial leap. I quit my day job and
    started BizHack Academy. Over the past 7 years, we have taught
    700 businesses how to run online ads. One of our students was
    an 80-year-old CEO. I helped him log into Facebook for the very
    first time. Seven weeks later he was running sophisticated ads
    promoting his consulting business. Our average course
    participant earns $29 in revenue for every $1 spent in ads.
    Digital marketing is something every small business needs and
    my team has proven it is something every small business owner
    with the right support can do.
        The theme of today's hearing is resilience. Like many
    companies, BizHack went through a near-death experience at the
    start of the pandemic. Before COVID we only offered our
    training in person. After the lockdown we had to cancel all of
    our classes. Overnight we were essentially out of business.
        Today, BizHack has transformed itself into an online
    training academy. Despite the economic headwinds, BizHack is
    thriving. We offer free webinars on marketing to our community.
    We run a scholarship program that has given $400,000 in tuition
    relief to nearly 300 businesses. We launched a course on AI for
    marketing that features guests from Microsoft, Apple, and
    Disney. We received funding Miami-Dade County, an example of a
    win-win public-private partnership.
        On a personal level, the last few years have been trying
    for me and my family. The ups and downs have taken a toll on my
    health. It has made me less present for my wife and two kids.
        Fast federal aid in the form of PPP and EIDL were a
    lifeline to BizHack and so many other businesses. Thank you,
    Congress, for coming together to sustain small businesses that
    are the heart and soul of the American economy. We are so
    grateful for your support.
        I want to offer two recommendations to the Committee.
        First, the government has an essential role in ensuring
    that high quality and affordable training is available to every
    small business and their employees. Unfortunately, much of the
    current training that uses federal funds is either out of date
    or out of touch. This Committee should explore how the SBA and
    its educational arms can be modernized to meet entrepreneurs'
    evolving needs.
        Second, Congress must regulate generative AI to ensure that
    its negative impacts are minimized. This mandate was missed
    with social medial to disastrous consequences. When Congress is
    writing that legislation, however, it must give small
    businesses a seat at the table. Generative AI is the most
    powerful tool for small business growth in a generation. Small
    business advocates must help build the guardrails for AI so we
    don't inadvertently cut short its positive potential.
        I spoke earlier about searching for my ikigai, my
    professional sweet spot, and I found it. My ikigai is to
    partner with business support organizations, such as the SBA,
    to provide training and marketing to businesses that could not
    otherwise afford it. Six years in, BizHack is 2/3 of the way to
    our ambitious goal of transforming the lives and futures of
    10,000 small business owners. Thank you to the Committee for
    all that you do to support that mission.
        Chairman WILLIAMS. Thank you.
        And I now recognize Mr. Nick Boyle for his 5 minute opening
    remarks.

      STATEMENT OF NICK BOYLE, CEO, NORTHERN KEYSTONE TOWING AND
                                RECOVERY

        Mr. BOYLE. First I would like to express how grateful I am
    to sit here before you today. As an American patriot, this is
    an amazing honor to testify before you and I thank you for the
    invitation.
        With the help of an amazing management staff, partners, and
    supportive family, I operate seven businesses in Pennsylvania.
    Those businesses cover a broad range of industries from
    information technology consulting, long-term property rentals,
    towing and transportation, excavating, equipment and tool
    leasing, and land and project development. We have operated
    such diverse companies out of my paranoia that in the event of
    a shaky economy the fork would not fall out from beneath all of
    them.
        This Committee represents the backbone of the American
    economy, and I hope today I can provide you with some good
    information for future legislation.
        I would like to cover two topics today, one being
    interstate commerce and real estate revitalization.
        Our towing company is in its infancy. We are coming up on
    our 2-year anniversary and we are currently operating eight
    trucks delivering customers safely back home all over the
    northeastern United States. The biggest hinderance in the
    business is the interstate commerce regulations. I am an
    advocate for state rights but sometimes the federal government
    can do a better job. Interstate commerce is one of those areas.
    It would be impossible for someone to start up one of these
    businesses without having a large amount of capital because of
    these regulations. I learned this quickly as we had a truck
    stopped in New York State and we were lacking a New York State
    fuel tax sticker. The truck was stopped. We had to get another
    towing company to finish the job. The next day we hired an
    attorney to review all the rules and regulations from our
    neighboring states that we operated in. At the end of this we
    end up with a truck plastered with seven different stickers and
    numbers representing all the states and federal regulations, a
    $1,000 fine for a $2 sticker for the State of New York, and an
    attorney with a new vacation house.
        I would propose that this Committee investigate combining
    all the state and federal reports under one number, one simple
    form that any American who has a dream of becoming an owner-
    operate can understand and complete without paying a third
    party.
        The next area that I would like to talk about is the real
    estate market. I am happy to report to you that despite the
    high interest rates that Americans are facing, the real estate
    market is very strong. We are seeing houses sell for record
    prices in our area. Long-term rental prices are up because of
    supply and demand as well as the highest interest rates that is
    keeping families from home ownership.
        Short term rentals will have a major issue in the next 18
    months as those properties were overvalued during COVID.
    However, you will not see what we have seen in 2008. We will
    not see a flood of housing hitting the market. Americans are
    not going to give up those 3 percent fixed mortgages.
    Legislation that would help this sector of small business
    should come in the form of grants or low interest loans to
    revitalize America's uninhabitable downtown apartment
    buildings. In my hometown of Tamaqua, we have about a mile of
    main street that has potential for major revitalization. The
    problem is that the projects are massive and the return on
    investment is too long or not at all. With proper funding these
    buildings could provide affordable housing to Americans and
    make it appealing for investors and property owners to bring
    these buildings back to livable standards. Unfortunately, this
    is going to be a very unpopular opinion, but the legislation
    that we would need would have to limit the prevailing wage
    which keeps these existing grants from being used. Currently,
    Tamaqua is sitting on a $1,000,000 grant that has not been used
    in over 2 years because of how the grant is written and the
    requirements of the prevailing wage. With revitalization of
    these buildings we will be able to have more affordable housing
    bringing more workers available to help all small businesses in
    that community.
        I want to thank you again for having me here today.
        Chairman WILLIAMS. Thank you.
        And I now recognize Dr. Tammira Lucas for her 5-minute
    opening remarks.

     STATEMENT OF DR. TAMMIRA LUCAS, CEO, CUBE COWORK/COPPIN STATE
                               UNIVERSITY

        Ms. LUCAS. Good morning, Chairman Williams, Ranking Member
    Velazquez, and Members of the Committee. Thank you for the
    opportunity to testify.
        I am Dr. Tammira Lucas, CEO of the Cube Cowork, the largest
    black women-owned coworking space that provides onsite
    babysitting services in the United States which supports over
    250 local women entrepreneurs in Baltimore. I am also an
    assistant professor in the College of Business at the esteemed
    HBCU, Coppin State University.
        There are a few obvious why supporting and establishing
    policies that directly positively impact small businesses
    should not be an option but instead a priority.
        As I am sure you have all heard several times before, small
    businesses are the heartbeat of our communities. They are
    founded by local entrepreneurs who made the conscious effort to
    bet on themselves to build wealth for their families. They are
    maintained and fed by local residents of the community.
        Main Street Alliance reports everywhere that small
    businesses thrive, poverty rates fall and property value rises.
    This investment in local communities is the backbone of the
    American economy where small businesses create 64 percent of
    all new jobs in the nation. In 2023, small businesses,
    especially minority-owned businesses in Baltimore City and
    County are still struggling to survive financially and growing
    their receipts significantly due to a myriad of reasons.
        According to the McKinsley Institute for Black Economic
    Mobility, market barriers result from unaddressed needs often
    related to changes of access to capital expertise, and
    services. Sociocultural barriers encompass the bias and
    exclusionary ways in which black entrepreneurs are more likely
    to be blocked from gaining social capital such as relationships
    that make up business networks. Finally, institutional barriers
    are supported by the systems in which black-owned businesses
    operate and include factors a basic as their location.
        As I speak in front of you today, I want to highlight many
    of the issues that entrepreneurs in Baltimore and similar
    cities around the country continue to face preventing them from
    achieving business sustainability, wealth creation, job
    creation, and crime reduction.
        Maryland has the highest rate per capital of women-owned
    businesses in the United States. Maryland has 42 minority-owned
    businesses for every 100,000 residents, and 17.5 businesses
    owned by women per 100,000 residents.
        Those that have acquired student loan debt are less likely
    to assume the risk of starting a business due to the lack of
    financial stability and the burden of the debt. As a business
    professor, I could constantly see students deciding to obtain
    careers that do not align with their goals or values to tackle
    their student loan debt. They also desire, like me, to start a
    business but understanding the realities of debt will not allow
    them to indulge themselves fully in the world of
    entrepreneurship. Affordable education is essential to the
    growth of our economy. The average black bachelor's degree
    holder has an average of 52,000 of student loan debt with an
    average salary of $49,000 after graduation.
        Student loan debt forgiveness would immediately increase
    the wealth of black Americans up by 40 percent. If new
    businesses do not continue to start, our overall economy will
    be negatively impacted. More than half of the households in
    Baltimore City are run by single mothers who are living below
    the poverty level. However, this same demographic are the ones
    who are using their talents and nonexistent finances to start
    businesses to increase the household income and to employ
    individuals in their community.
        Not only are they dealing with the lack of capital but they
    are also dealing with the major barriers, like the lack of
    affordable childcare, high student loan payments, and
    inflation. We continue to expect constituents in low-income
    areas to do miracles with very little.
        In 2023, interest rates were at an all-time high. This rise
    impacted the amount of disposable income directly impacting
    small business owners' success.
        I want to emphasize the importance of finding solutions
    specifically for entrepreneurs to access affordable childcare
    while starting or growing a business. Currently, our system is
    designed to only focus on providing childcare subsidies to
    women who are in the workforce. Entrepreneurship in the eyes of
    the system is not considered a workforce activity. However,
    entrepreneurs are creating the workforce. Aspiring or current
    entrepreneurs should not be forced to make a decision on
    whether they will start a business or go into the workforce due
    to the lack of affordable quality childcare. I want Congress to
    imagine living below the poverty level paying $15,000 a year
    per child for childcare while trying to start or scale a
    business. Mothers should not have to choose their
    entrepreneurial dreams over their children. The American Rescue
    Act childcare support ended September 30th threatening for
    continued existence of a third of the nation's childcare
    centers for quality and more on the 3,000,000 American
    children.
        I have more to say but thank you.
        Chairman WILLIAMS. We will now move to the Member questions
    under the 5 minute rule.
        I now recognize myself for 5 minutes.
        Before I was elected to Congress I served as Secretary of
    State of Texas in Governor Rick Perry's administration. The
    state wanted to undertake a lot of different infrastructure
    projects but we quickly realized we had a problem. We could not
    find enough welders in the state to compete with some of the
    other projects and that was an eye-opening experience for me
    that showed we had some serious workforce issues that still
    have not been fixed all these years in Texas.
        So we continue to hear similar stories from many small
    businesses, especially in the manufacturing industry. Not only
    is it hard to find new talent but you have to pay top dollar to
    keep the good employees happy.
        So Mr. Thompson, can you talk about some of the workforce
    issues you have been seeing in rural Texas and how have you
    been trying to recruit and retain top talent as lack of workers
    held back many of your business expansion plans?
        Mr. THOMPSON. That is a good question.
        You know, I am actually a welder by trade myself, and these
    boys that are trying to get in the welding business right now,
    they have no way to get there. Most of them are low-income
    families. They cannot get student loans for some of these trade
    schools like a kid going to college. And I also think our high
    schools, especially in the State of Texas--I cannot speak for
    anybody else--I do not think we are pushing enough vocation. We
    are just pushing college in the high schools and not helping
    these kids learn what is out there, whether it be a welder,
    whether it be air conditioning or electrician or anything like
    that.
        Chairman WILLIAMS. Before I move on to someone else, Mr.
    Thompson, can you briefly tell us about some of the regulations
    that are hurting your business?
        Mr. THOMPSON. I think there's really too many to answer.
    But a lot of it has got to do with minority owned. I mean, I
    have had one of my major clients tell us that we are going to
    probably lose some of the work from them just because we are
    not minority owned.
        Chairman WILLIAMS. Okay. Mr. Boyle, you own and operate
    seven different businesses in different industries as you have
    explained. You are the definition of an entrepreneur and you
    have to fix problems, you see the marketplace rather than just
    sit on the sidelines. So it is my hope that this level of drive
    can be installed in more young people across our country. We
    have too many umpires and not enough people willing to play the
    game.
        So Mr. Boyle, what advice would you give to someone who is
    looking to take the leap of faith and invest in themselves by
    starting their own businesses but might not be sure where to
    start?
        Mr. BOYLE. I would have to give the advice as to do it.
    When I started out I was a junior in college and I did not know
    what I was going to do post-grad. And it was a scary work
    environment in 2010, locally anyhow. So I would give any advice
    to start a new business up is to take the bull by the horns and
    get it down, and push through it. There are going to be some
    hurdles as with anything else but you could definitely make it
    happen.
        Chairman WILLIAMS. Well, risk and reward has always been
    what this country is about. Take a little risk, get some
    reward; right?
        Mr. BOYLE. Absolutely.
        Chairman WILLIAMS. That a boy.
        So let me, just to follow up, can you speak to your
    business on how you have been navigating these fuel costs that
    go up and down?
        Mr. BOYLE. The fuels costs, fuel surcharges, they have
    definitely been negatively impacting our clients. I have seen,
    we do some aggregate hauling for quarries and I have seen them,
    they set the fuel surcharge rate. And I have seen that as high
    as 27 percent which I could not imagine being able to operate
    with a 27 percent surcharge on aggregate.
        Chairman WILLIAMS. Real quick, Mr. Grech, while I have got
    the remaining time, in a few words, how can digital tools help
    small businesses better succeed in the current economic
    environment that we see?
        Mr. GRECH. Thank you for the question, Mr. Chairman.
        Mr. Thompson was describing the difficulty in finding
    skilled workers when it comes to manual labor like welding. And
    I basically want to echo that that is exactly what many
    businesses are experiencing when it comes to knowledge work.
    And I think that there is an incredibly important role that the
    federal government has in helping subsidize a future ready
    workforce, whether it is a welder, or someone working on
    marketing inside of a company. Artificial intelligence tools,
    digital advertising, digital marketing in general are areas
    that knowledge workers need to understand in order to succeed.
        Chairman WILLIAMS. Okay. Thank you.
        I now recognize the Ranking Member for 5 minutes of
    questions.
        Ms. VELAZQUEZ. Thank you, Mr. Chairman.
        Dr. Lucas, you mentioned the pivotal role of single mothers
    in the Baltimore economy despite the significant barriers that
    they face. How do you think expiring support for things like
    childcare will impact the ability of mothers to run a business
    in the coming months?
        Ms. LUCAS. That is a good question. It is negatively going
    to impact new business creation for mom-owned businesses
    specifically because of the lack of affordable--not just
    affordable childcare but quality childcare as well. None of us
    would be here without our mothers, yet there are very small
    services that are geared to supporting moms and businesses and
    we have to really reevaluate how would the world actually run
    without a mother.
        Ms. VELAZQUEZ. The Small Business Administration has made a
    concerted effort to expand SBA resource partners to
    historically black college and universities. How was your
    experience with the Morgan State Women's Business Center?
        Ms. LUCAS. That is an amazing question. The Morgan State
    Women's Business Center has been an amazing partner with our
    coworking space in deploying resources directly to the
    communities in Baltimore City and County and the surrounding
    areas. We have been able to really offer workshops, educational
    resources, and financial resources to really help sustain
    minority, women-owned businesses.
        Ms. VELAZQUEZ. So you think that efforts such as this one
    will close the gap in terms of disparities?
        Ms. LUCAS. Absolutely. I think that those services and
    resources that are deployed into women's business centers
    should definitely increase to continue to support.
        Ms. VELAZQUEZ. Thank you.
        Mr. Thompson, you expressed your commitment to locally
    manufacturing and sourcing your products. What are the broader
    benefits of domestic manufacturing, specifically for the
    surrounding communities and small businesses?
        Mr. THOMPSON. How do I explain this? For like us, we want
    to do American. We can go offshore with supply and get it a lot
    cheaper but then you lose the quality and then, I am sorry but
    I am patriotic. I am an American and I am a Texan and so we try
    to help each other. That is just----
        Ms. VELAZQUEZ. Thank you.
        Mr. THOMPSON.--the American way.
        Ms. VELAZQUEZ. Mr. Grech, having worked for and with many
    Latino-owned businesses, can you talk about the importance of
    entrepreneurship in the immigrant community and how these
    businesses benefit the communities they serve.
        Mr. THOMPSON. Thank you very much for the question.
        I am the son of an immigrant and more than 2/3 of the
    people who live in my immediate county are immigrants. Most of
    them are from Spanish-speaking countries. And most of them,
    many of them are entrepreneurs of need. Essentially, they come
    to this country penniless and with no networks and they have to
    essentially work to eat. And they are often the best of their
    home countries. The most ambitious, the ones with the greatest
    drive, and frankly, the biggest get up and go because there is
    nothing like leaving everything to start over. And these folks
    just need a leg up. They are documented immigrants and future
    American citizens. Their children are American citizens. And
    they struggle. They struggle so much. And so Miami-Dade County
    is funding a number of programs that we run in English and
    Spanish and Creole to help give them access to education. One
    of the biggest issues that we face is that they do not know
    that that training exists. And they were preyed upon by
    charlatans that take advantage of their newness and ignorance
    of the way things work and where help is available. So there is
    a huge role for the SBA and its funders, the organizations it
    funds to just spread the word that there is some really good
    and valuable training out there to help them.
        Ms. VELAZQUEZ. Thank you.
        Dr. Lucas, access to healthcare remains a barrier to
    entrepreneurship for many people with dreams of starting their
    own businesses. How does a universal system benefit small
    business owners?
        Ms. LUCAS. A universal system allows small businesses to
    really access affordable healthcare. I want to be very clear. I
    am a professor but that was not a decision just based off of my
    expertise, education, and love for education. It was because I
    suffer from a health condition that I need affordable
    healthcare. And so we have to think about how do we really
    provide that to all.
        Ms. VELAZQUEZ. Thank you.
        I yield back.
        Chairman WILLIAMS. I now recognize Ms. Van Duyne from the
    great state of Texas for 5 minutes.
        Ms. VAN DUYNE. Thank you very much, Mr. Chairman.
        This year we heard countless stories on how this
    administration has hampered the ability of small businesses to
    grow due to their reckless spending, and quite honestly,
    overregulation which is part of the reason why earlier this
    year this Committee passed my bill, the Small Business
    Regulatory Reduction Act. This bill requires the SBA to ensure
    for each fiscal year the cost to the Small Business
    Administration's rulemaking is not greater than zero, which
    also is requiring the SBA to issue a report on any regulations
    issued by other federal agencies that impact small businesses.
    I look forward to working with this Committee next session to
    ensure that Congress is reigning in the power of out-of-control
    regulatory glutton executive branch and I look forward to
    continuing the work on this Committee to see that my bill moves
    forward and to work to strengthen the small businesses across
    the country.
        You brought up some excellent points, Mr. Thompson, about
    workforce development and the lack of focus on trades. And if
    you think about it, in the last couple of years, trades is
    really where it is at. Once you have that knowledge, once you
    have that experience, you can basically charge anything you
    want. And trust me; I have been trying to get some folks to the
    house. It is a very, very competitive market and not enough
    people are doing it.
        Last summer we worked with our high school and our junior
    high counselors, our middle school counselors, on getting them
    access to businesses that were willing to work with them to
    introduce their trades to students. We focused on things like
    healthcare. We focused on law enforcement. We focused on
    aviation. It was a great experience because the counselors had,
    to your point, been really pushing for 4-year degrees and for
    kids to take out these massive loans to get a college
    education. When we introduced and we worked with some of the
    businesses who we had met with in roundtables who had told us
    they were having a very difficult time hiring, the introduction
    was phenomenal.
        Are you doing any of those types of things? Are you working
    with some of the middle schools or some of the high schools to
    actually introduce what you do so that the students know that
    within their very city, their very locale that they have
    opportunities once they graduate?
        Mr. THOMPSON. Yes, ma'am. We are working with Stephenville
    High School. They have come and toured our facility. We have
    went and had some roundtable meetings and offered our
    expertise.
        Part of our problem in our area is there is not enough
    people out there to teach some of these vocations because there
    is such a demand for it out in the workforce that they would be
    crazy to go from $75 an hour to teachers' wages. So you know,
    that is something that we need to look at is increasing
    teachers. Because without teachers we would be a bunch of
    idiots to tell you the truth. So, you know, it is hard. That is
    the hard part is getting teachers for it.
        Ms. VAN DUYNE. Yeah, that is a good point.
        Mr. Grech, are you doing anything with your local middle
    schools or high school students?
        Mr. GRECH. Yeah. BizHack primarily works with the community
    college and university level but, you know, community college
    in many ways is sort of the pathway into knowledge work for
    many immigrants and poor folk. And Miami-Dade College which
    actually where BizHack got its start, that was where I was
    teaching in their Entrepreneurship Center, many of those are
    folks that are kind of striving for the middle class. And what
    we have seen is that the need for workforce development,
    whether it is nursing, manual labor, or knowledge work is vast.
    And because higher education has gotten so, so expensive, I
    really do think there is a needed role for the government to
    subsidize some of this training so that we can stay competitive
    locally and globally.
        Ms. VAN DUYNE. And I know that we have actually been
    fighting for that. We have introduced a number of bills that
    would do that.
        Mr. BOYLE. Yeah. So I am the vice president of our local
    school district and I can tell you that we have a great
    outreach program with the high school. Many programs allow
    students to go to school till about noon and then they end up
    coming to the workforce. Our demographic of employees really
    are all local. Some of these guys have worked for me since they
    were 14 years old. They are now in their mid-20s buying houses.
    So we definitely, the outreach to the local schools is always
    important and it is always good to do that outreach to build
    back up small town American. So yeah, it is probably one of the
    most important things that we do.
        Ms. VAN DUYNE. I appreciate all of your testimony, and I
    yield back.
        Chairman WILLIAMS. I now recognize Mr. McGarvey from the
    great state of Kentucky for 5 minutes.
        Mr. MCGARVEY. Thank you, Mr. Chairman.
        Mr. Boyle, I appreciated your comments about your hometown
    in Pennsylvania having a great main street. I have got to brag
    about my main street in Louisville, Kentucky, where we just
    have incredible buildings. We have a great collection of the
    cast iron buildings that rivals, you know, New York and
    Portland, Oregon, in terms of its beauty and amount of
    buildings we have got there. From First Street to Ninth Street
    it is incredible. But then you get to Ninth Street and there is
    literally a physical barrier. The Ninth Street ramp comes off
    the expressway and separates east from west Louisville. Of
    course, that is also a mark of segregation in my community and
    it separates a largely historically black area from a more
    white area. And what you see then through redlining, through
    other practices over the years is you see a lack of
    opportunity, a lack of grocery stores, a lack of access to
    capital for a lot of these small businesses. And that is why I
    will say I am thankful for the work that we have done on the
    infrastructure law because, you know, my community is going to
    get $3,600,000,000 for projects like Reimagine Ninth Street
    which I really hope will open up opportunity which will open up
    entrepreneurship, which will open up opportunity for economic
    growth for everyone in Louisville, not leaving anybody behind.
        Dr. Lucas, you stated we continue to expect constituents in
    low-income areas to do miracles with very little. I could not
    agree more. And I think it is incumbent upon us as policymakers
    to recognizes this fact.
        So Dr. Lucas, how can the SBA lower barriers to entry and
    make resources more accessible to all to receive them,
    particularly in areas where our constituents are being asked to
    do a whole lot with very little?
        Ms. LUCAS. That is a good question and thank you for asking
    that.
        One of the things that I want to really highlight is that,
    you know, when you are implementing literally like tax
    incentives for small businesses, small business owners, we
    desire to pay living wages; right? However, it is impossible
    for many of us with inflation and so it is essential for our
    federal government leaders to create policies that will
    incentivize small business owners to pay living wage to their
    employees. It is also to identify that there is a gap as you
    said. There is a world, right, it is two different worlds out
    there and we have to really get down to making sure that we are
    addressing those needs and being very strategic on how we are
    placing capital in the hands of minority and women-owned
    businesses. At the end of the day there is a huge gap that has
    existed forever just because of the color of their skin or just
    because of, you know, them being identified as a woman. And so
    we have to really be honest with ourselves and deploy resources
    to mitigate that gap.
        Mr. MCGARVEY. That is right. Initially, that gap was
    provided for in policy. I will state that was a decision and we
    have got to do what we can to reverse that.
        I will ask you another question, Dr. Boyle--not Dr. Boyle.
    I am sorry. Dr. Lucas. I will get to you next, Mr. Boyle. I
    promise.
        As we get ready to wrap up the year, what are some of the
    biggest challenges you notice that small business owners and
    aspiring entrepreneurs faced in 2023?
        Ms. LUCAS. Great question. Again, access to capital. Access
    to social capital. Really being able to implement some of the
    information that they are receiving from many of the resources,
    like the women's business center or any of the supportive
    services that the SBA does. There is a lack of workforce. I
    totally agree with that and that comes with many of the other
    issues that have not been talked about outside of me addressing
    them as far as like childcare. Women are typically the ones
    that are working in the workforce but yet we are not really
    deploying those affordable resources to help them be in the
    actual workforce and support their families.
        Mr. MCGARVEY. As one who dropped our youngest off at
    preschool before getting on the flight yesterday to Washington
    I appreciate that comment.
        Mr. Boyle, I will get to you last.
        You found a number of successful businesses and, you know,
    this Committee does great work because we all know the
    importance of entrepreneurship and small business. You get the
    last word. Same question. What challenges emerged in 2023 and
    what would you like to see?
        Mr. BOYLE. I would, definitely going back, you know, 2023
    start off pretty good and now I am seeing that the end of the
    year that lack of capital. Just like the good doctor here has
    just stated. I would like to see some better programs that are
    going to be out there to help the small businesses out because
    I feel like we are just starting the storm and 2024 is, I
    think, going to be a big challenge for small businesses.
        Mr. MCGARVEY. Thank you very much.
        I yield back.
        Chairman WILLIAMS. The gentleman yields back.
        And I now recognize Mr. Mann from the great state of Kansas
    for 5 minutes.
        Mr. MANN. Thank you, Mr. Chairman, for having this
    important hearing. Thank you for our witnesses for being here
    today.
        I am Congressman Tracey Mann and I represent the Big First
    District of Kanas, which is 60 primarily rural counties in the
    western and central part of Kansas. The Big First is home to
    more than 20,000 small businesses and more than 80 percent of
    the employees in my district are employed by small businesses
    which help drive our economy and define the American dream.
        Unfortunately, as this hearing has highlighted, the dream
    is becoming farther and farther out of reach for especially our
    rural small businesses who continue to face unprecedented long-
    term challenges brought on in large part by Washington's
    addiction to spending and overregulation. After more than 2
    years of near record inflation, high interest rates, regulatory
    burdens, and workforce challenges, rural America is hurting.
    But we have a saying in Kansas, our state moto, Ad Astra per
    Aspera, To the Stars Through Difficulty.
        I am proud of the work House Republicans have done on this
    Committee to reign in the overregulation, out of control
    spending, and inflation-raising policies of the Biden
    administration to make it easier for small businesses to expand
    and grow their operations. But more importantly, I am proud of
    family farmers, aerospace startup entrepreneurs, and every
    rural weedkiller and restaurant owner, all the folks in my
    district who harness their God-given gifts and entrepreneurial
    spirit to produce a better future for their communities and our
    country despite and through all these challenges. We can and
    must do more for our rural communities in Congress and I am
    committed to doing just that.
        A few quick questions. First for you, Mr. Thompson, you
    specifically mentioned in your testimony the important role
    your company plays in rural communities. Can you speak a little
    bit more to the broad impact that you see that your company has
    on the lives of folks in your rural community?
        Mr. THOMPSON. Well, like I said, I live in a town of about
    44,000 in our county, and we are probably the fifth largest
    company. We have got, of course, Tarlton State being the
    biggest. And our employees are our family. I mean, we have got
    right at 200 employees. I would say about 150 of them worked
    for us for 10 years or longer. We would have probably another
    100 if we could get, you know, we supported our athletic
    department at Tarlton and at Stephenville High School. And you
    know, if we were not there where would they, you know, where
    would they work? Because, like I said, I mean, we are the fifth
    largest probably.
        Mr. MANN. That is tremendous.
        Mr. Thompson, what can Congress do to encourage the next
    generation of rural entrepreneurs? You know, we need more folks
    like you starting and building businesses in our rural
    communities. What aught Congress do or think about to have more
    rural entrepreneurs?
        Mr. THOMPSON. You know, there are a lot of them there in
    Stephenville that would like to start their own business but
    the problem is, again, education as far as, you know, like
    there are four AC companies. There are five electricians. And
    they are so backed up and everything. Well, these kids are
    actually working for them. They are scared to go out and get it
    because, one, the interest rates are crazy. And they cannot
    afford it. Not starting out. I mean, you have got to have a
    little nest egg to start a company. I do not care who you are.
    There is nobody who started a company broke.
        Mr. MANN. Yeah. Yeah. That is right.
        I appreciate that. I appreciate you bringing up interest
    rates, which is my next topic for you, Mr. Grech. I know you
    work with thousands of small businesses. Explain to this
    Committee the impact of these interest rate increases that we
    have seen over the last couple of years and what that really
    means for our small businesses, urban and rural.
        Mr. GRECH. Absolutely. Thank you for the question.
        I just wanted to actually address one of the things that
    you had talked about, about what we can do with our rural
    workforce. One of the benefits of being in a remote workplace
    environment is that folks who live in lower cost of living
    locations actually have an incredible advantage when it comes
    to being hired as a knowledge worker. So I think another
    approach perhaps to rural employment issues, a way that will
    allow people to work for companies that are not local and also
    make a living or better than living wage is to train them in
    disciplines like digital marketing and then try to get them
    connected to companies that are maybe not necessarily directly
    inside of their community.
        Now, to address your question, right now in addition to
    high interest rates, small businesses are facing a ton of
    headwinds--inflation, supply chain issues, a lack of skilled
    staff which we have talked a lot about. And I think there is
    just an incredible need and role for this Committee to help.
    Because I think 2024 will be another challenging year.
        Mr. MANN. Thanks, Mr. Chairman.
        Chairman WILLIAMS. Thank you.
        I now recognize Ms. Chu from the great state of California
    for 5 minutes.
        Ms. CHU. Thank you, Mr. Chair.
        As we near the end of the first session of the 118th
    Congress, I want to acknowledge the hard work of this Committee
    to pass 22 bipartisan bills out of markup. And already we have
    passed 10 of those bills on the House floor, including my bill,
    the Investing in Main Street Act. This bill simply amends an
    outdated law to allow financial institutions to invest up to 15
    percent, triple the current amount of 5 percent, other capital
    and surplus into SBA certified small business investment
    companies (SBICs) that specialize in high potential startup
    companies that need this capital. This common sense change
    would help to close the gap and access to capital which
    continues to be a challenge for small businesses. The Investing
    in Main Street Act passed the house in January on an
    overwhelming bipartisan vote just as it has in the previous
    three Congresses. I urge the Senate to finally take up this
    important legislation so we can get it signed into law. And
    there is a potential of having three times as much capital for
    these types of businesses.
        And now I would like to ask Dr. Lucas, in 2021, democrats
    provided an historic $24,000,000,000 in funding for childcare
    as part of the American Rescue Plan. This funding is estimated
    to have kept 80 percent of childcare centers in the U.S. afloat
    as we continue to recover from the pandemic. But that lifeline
    expired in October of this year and democrats in Congress are
    pushing to secure President Biden's request of $16,000,000,000
    in additional childcare funds.
        Dr. Lucas, based on your experience working with mom
    entrepreneurs, can you elaborate on how devastating the current
    childcare funding cliff is for the small business community,
    both for entrepreneurs themselves as well as for their
    employees who are parents? What will happen to small businesses
    in this country if parents lose access to childcare?
        Ms. LUCAS. Thank you for that question.
        So many childcare providers actually have already begun to
    lay off their workers and raise fees to make up for the loss of
    the federal funding. And without affordable care, many women
    will be forced to scale back at work or quit all together. We
    know that women, especially black women, are the largest
    consumer groups. So in other words, we keep the economy
    flowing. If you do not invest in us, you are going to see an
    economy that is not going to continue to flow. You are going to
    see small businesses not continue to be created. And there is
    going to be a hinderance overall. And so affordable childcare
    is much bigger than what we probably see on the surface. Think
    about being a mother or being a woman and deciding whether you
    can actually have a child for the first time and/or start your
    business. I do not think that any American should have to
    choose between the two. That you should have the option to do
    both, and you should have the option to do both well.
        Ms. CHU. Thank you for that answer.
        Well, Dr. Lucas, democrats have been fighting for so long
    to finally pass a national paid family leave and medical leave
    policy so that parents do not have to choose between earning a
    paycheck and caring for their children. As part of the American
    Rescue Plan of 2021, Democrats created a temporary paid sick
    and family leave tax credit specifically to help businesses
    with fewer than 500 employees provide paid leave for their
    workers. That program expired in September 2021 but it was
    enormously helpful both for employers who claimed the credits
    and workers who were able to take off the time they needed to
    care for themselves and their families without losing their
    jobs or their paychecks.
        Dr. Lucas, given your experience working with mom
    entrepreneurs, many of them single parents, can you speak to
    how important a permanent paid leave policy would be for
    helping small businesses attract and retain talented workers,
    especially mothers?
        Ms. LUCAS. Absolutely. So our labor market is driven by
    working mothers; yet, we as a country do not effectively
    support the cycle of life by supporting moms in the workforce.
    Workers without access to paid leave are more likely than
    workers with paid leave to experience the financial and
    material hardships, including being more than twice as likely
    unable to pay their rent, utilities, and twice as likely to
    experience food insecurities.
        Ms. CHU. Thank you for that and I yield back.
        Chairman WILLIAMS. The gentlelady yields back.
        I now recognize Mr. Stauber from the great state of
    Minnesota for 5 minutes.
        Mr. STAUBER. Thank you, Chairman Williams and Ranking
    Member Velazquez for holding this hearing today. And thanks to
    our witnesses for taking the time out of your busy schedules to
    help us shed light on these important topics.
        Since President Biden took office, over 700 regulations
    have been passed, costing nearly $440,000,000,000 and adding
    more than 236,000,000 hours of paperwork to small businesses.
        Over the next decade, compliance with Biden's regulations
    will cost Americans more than $1,500,000,000,000. Regulations
    such as these are unacceptable as families struggle to make
    ends meet between choosing food, medicine, or even purchasing
    Christmas gifts for their children. We must do better for the
    small businesses in our communities.
        As the backbone of our economy, it is no surprise small
    businesses bear the majority of this burden. It is clear; this
    administration's burdensome regulatory regime has only made
    life even more difficult for Main Street America this year.
    Small businesses are hurting enough from inflation, supply
    chain, and workforce challenges. They do not need the added
    burden of federal regulations.
        Mr. Thompson, you mentioned in your testimony some of the
    issues your small business has faced this year. Can you speak
    to the regulations or policies that have affected your business
    this year specifically?
        Mr. THOMPSON. Well, like I had mentioned, we actually got
    involved with the immigration to bring over some people to help
    us alleviate the employees. And you know, for some reason all
    of a sudden now we have red tape. Like I said, from the time we
    started to the time the boys were at our shop was 30 days. It
    has been 9 months and I will not say we have got an order for
    but we have been working with 60 more men to come over. And
    like I said, it has been 9 months. Have not heard anything
    because of the red tape.
        Mr. STAUBER. On the regulatory side, what sort of
    additional costs have you experienced this past year?
        Mr. THOMPSON. Most of that has trickled down from our
    suppliers. As far as regulations on us it has not been that bad
    I will have to admit.
        Mr. STAUBER. Supplier, supply chain?
        Mr. THOMPSON. Yes.
        Mr. STAUBER. What is your increase in cost reference to
    supply chain do you think, a good estimate?
        Mr. THOMPSON. It was around, the last time I checked it was
    around 35 percent.
        Mr. STAUBER. Bidenomics coupled with this regulatory agenda
    is hurting small businesses. The government should be in the
    business of ensuring the economy works for Americans and our
    small businesses and does not hamstring our job creators. If we
    cannot find a way to help small businesses we must get out of
    their way.
        One way the federal government seeks to help small
    businesses is through the SBA and their training programs.
        Mr. Grech, from your experience, is the federal government
    and the SBA providing enough training and tools to help small
    businesses succeed?
        Mr. GRECH. The SBA is filled with dedicated employees who
    really have the best interest of the small businesses at heart.
    But like any organization, they can do more and they can do
    better. Unfortunately, a lot of the training that is being
    provided is out of touch with what the cutting edge of
    technology is, and there is an incredible opportunity for a
    public-private partnership with frankly training academies like
    mine that are on the cutting edge to leverage federal funds to
    build the workforce of the future. This is imperative. It is
    not only required for us to survive in the U.S. economy but to
    be competitive globally.
        Mr. STAUBER. Do you, in your experience, is a 4-year degree
    necessary?
        Mr. GRECH. You know, I am the beneficiary of a 4-year
    degree and two masters. And the one thing I will say is that
    there is no better investment than in educating yourself. And
    whether it is a trade school to become a welder or to get a
    master's degree to become a tenured professor, the best money
    you will ever spend is in educating yourself no matter what
    destination you have.
        Mr. STAUBER. You have obviously a lot of experience. I
    think you alluded to training to meet the demands and needs of
    today rather than yesterday and I really appreciate those
    comments. You know, we must allow our small businesses to
    endure and innovate. It is so important that the federal
    government really in many ways get out of your way and let you
    succeed and I think it is important.
        Mr. Chair, I commend you for holding this hearing. This is
    really important.
        And I yield back.
        Chairman WILLIAMS. The gentleman yields back.
        I now recognize Ms. Gluesenkamp Perez from the great state
    of Washington for 5 minutes.
        Ms. GLUESENKAMP PEREZ. Thank you, Mr. Chairman. And thank
    you to all the witnesses for being here today.
        So when I talk to small business owners back home, one of
    the things that almost always comes up as a barrier to growth
    is access to affordable housing for their workforce.
        Mr. Thompson, first, I would also like to congratulate you
    on the most magnificent facial hair I have seen in this
    Committee hearing. I do not know if anyone----
        But in your testimony you mentioned the lack of affordable
    housing in your area as a deterrent for candidates. And like
    you, I live in a rural community and I hear from small business
    owners all the time about one of the biggest challenges to
    their growth. So earlier this year I had a constituent from
    Ilwaco, Washington come to speak to the Committee for the
    hearing on rural entrepreneurship and he talked to the
    Committee about how he had to lobby his city council
    extensively to be able to get zoning changes to allow him and
    his business partner to live in their commercial building
    because there was literally no other place for them to live.
    And it is a real challenge to get people to move to rural
    areas. And even if there is a good job, if you cannot have a
    house there, right, you have to figure out where you are going
    to live if you are going to take the job. And so that part of
    your testimony really resonated for me.
        Could you, Mr. Thompson, expand a bit more about how this
    lack of affordable housing impacts your business in your
    opinion? What could we be doing better to incentivize people to
    move and stay in rural communities?
        Mr. THOMPSON. As far as, you know, that is like in
    Stephenville an average house is renting for about $2,500 a
    month. Now, most of my employees on average, and this is on
    average, make about $60,000 to $70,000 a year. That is tough.
    As far as, you know, back to interest rates, it is kind of hard
    to go out there and spend the money to buy a couple of lots and
    build a house to rent or to live in when the interest rate is
    crazy right now. I mean, I think we will have that problem of
    not being able to afford the cost of living in Stephenville
    until we get the interest rates down. And like I said, all my
    employees make pretty good money but still, it is getting taken
    away in other ways, so.
        Ms. GLUESENKAMP PEREZ. Yeah, housing stock is a real
    problem and you know, we are blessed in my county with a great
    building inspector who is a reasonable man but it is a
    challenge in so many communities.
        Mr. Boyle, your testimony also mentioned barriers to
    housing development. Could you elaborate on the challenges you
    see facing access to affordable housing and how that impacts
    businesses like yours?
        Mr. BOYLE. So in our small community we have an old main
    street where there is tens, hundreds of thousands of square
    feet that are no longer being used. Back in the early 1900s,
    probably up to the 1950s or `60s, they were all apartments. Now
    they have gone into disrepair. Those buildings are constantly,
    you know, for sale and they are getting flipped and then I
    think the new buyers realize that they got themselves into a
    big project. I think the federal government, you know, could
    definitely help us out in bringing more apartments to the
    market thus lowering the cost of affordable housing. The
    biggest challenge is that federal money is always tied in to
    this prevailing wage. And what happens is the prevailing wage
    is so expensive that the return on investment on these
    properties are so far out that it never gets used. Like I said
    before, we have $1,000,000 in Tamaqua for that kind of work. It
    does not get used. We have looked at it doing two or three
    projects and we have not used it. We have gone out of pocket
    for all of our product so far. That is how unattractive those
    programs are.
        Ms. GLUESENKAMP PEREZ. Thank you so much for your
    testimony.
        Mr. Chairman, I yield back.
        Chairman WILLIAMS. The gentlelady yields back.
        I now recognize Mr. Meuser from the great state of
    Pennsylvania for 5 minutes.
        Mr. MEUSER. Thank you, Chairman Williams, very, very much.
    Thank you to our witnesses, particularly to my constituent, Mr.
    Boyle. I appreciate it.
        So Mr. Boyle, I appreciate your comment earlier where you
    talked about paranoia. I spent some time, over 20 years, we
    built a small business into a large business. I used to try to
    call it healthy paranoia but sometimes it was not all that
    healthy. It was kind of unhealthy. But you persevere.
        You know, one thing I do know is that government does not
    create jobs. Government's role is to create an atmosphere where
    you create the jobs. The worst thing that government can do is
    affect the opposite. Create atmospheres that make it more
    difficult to create jobs. Like a good ump in a baseball game I
    sometime analogize it, call the balls and strikes, which is
    following laws and the constitution which is our rule book, but
    outside of that be as unnoticed as possible. It seems that
    government has gotten very noticeable in our economy and
    negative affecting small businesses.
        Let's take Bidenomics quickly. I mean, from energy to
    pending, to the regulations. What, $300,000,000,000 since they
    have been in office. Spending of over $6,000,000,000,000,
    $7,000,000,000,000. Where is it? I do not know if you all see
    it on your streets or in your towns but it has caused inflation
    which has done nothing but damage small businesses. Caused
    interest rates to go up. We have got pending taxes because the
    TCJA that our colleagues on the other side of the aisle, and
    certainly in the White House say was some sort of giveaway to
    the reach when meanwhile it enormously stimulated small
    businesses.
        So, as a matter of fact, this year sales for small
    businesses may be up in some cases but profits are down. And I
    know to some profits is an ugly word but profits are what
    income taxes are paid upon. Do you know that the passthrough
    businesses income tax levels for the federal government are
    down 280, maybe 300,000,000,000? We will see what the final
    numbers are. $280,000,000,000 down from one year to the next
    causing huge deficits. Right? So here we have the revenue loss
    and then throw in because of the interest rates and the
    excessive spending our service on our debt since Biden has come
    into office is up $320,000,000,000 from 275 to 645, so actually
    350. So those two factors combined have added $650,000,000,000
    to our deficit this year. Is that not just wonderful? Besides
    that Bidenomics is fantastic.
        But anyway, Mr. Boyle, what is your biggest challenge? I
    know you have been expressing it very well. Is it the
    regulations? I think they are. You expressed that in your
    opening. Give me an example of what is hurting your business,
    what you would like to overcome, and perhaps even what is
    stimulating your business besides you and your staff.
        Mr. BOYLE. I could tell you going back to the regulations
    of the transportation side of the business. Government for some
    reason has to duplicate efforts. We have a USDOT number. It is
    in its name, US. But yet we have an MC number for interstate
    commerce. Why do we need two different numbers? Why do we need
    filings? The amount of money that we pay to lawyers and third
    parties could provide another job and a half to our towing
    company putting another truck on the road and providing more
    work for local families. That is one thing that government
    needs to clean up is the overregulation. And we are constantly
    filing these reports that does anybody actually look at them?
        Mr. MEUSER. Well, they do. We have got thousands and
    thousands of employees that look at it.
        The access to capital issue, how is the access to capital
    these days on main street?
        Mr. BOYLE. I would say it is starting to dry up. We have
    seen on the real estate side of it, we were seeing 20-year
    notes with 20 percent down on the acquisition of new
    properties. We are now seeing our 15-year notes with 25 percent
    down. So now the banks are obviously getting a little nervous
    on it and it is taking young entrepreneurs that want to go and
    get that capital, now it is going to be harder for them to
    attain that.
        Mr. MEUSER. Yeah, but more so in community banks and small
    businesses.
        I have only got 13 seconds left but the Tax Cuts and Jobs
    Act, I would love to hear from all of you, perhaps afterwards
    or even perhaps submit in writing your thoughts if those
    provisions do get phased out.
        Go ahead, Mr. Grech.
        We are out of time.
        Thank you, Mr. Chairman. I yield back. We will talk after.
        Chairman WILLIAMS. The gentleman yields back.
        I now recognize Ms. Scholten from the great state of
    Michigan for 5 minutes.
        Ms. SCHOLTEN. Fantastic. Thank you so much, Mr. Chair.
    Thank you to all of our witnesses for taking the time to come
    before us on this really important hearing. It is just so
    critical that we take stock of what we have been able to
    accomplish and just how much we have yet to do when it comes to
    supporting small businesses across the United States of
    America.
        You know, it is a challenging time in the United States
    Congress but I think in this Committee, we pride ourselves on
    still being able to move things forward for our small business
    owners. I know small businesses are the lifeblood of the
    economy in West Michigan and it is so important to me to
    support them.
        I also want to thank this Committee for passing H.R. 5424,
    the Main Street Competes Act. Grateful that this Committee
    again came together in a bipartisan fashion to pass meaningful
    bipartisan legislation that will help promote the
    competitiveness of our nation's small businesses.
        My first question is for you, Dr. Lucas. You have been able
    to grow a thriving business that supports women entrepreneurs
    by incorporating childcare services into your business model.
    Of course, great testimony on that here today. As a working mom
    myself, I know how important this is.
        Back in May during National Small Business Week, I sat down
    with many small business owners from my district. While their
    businesses were diverse, all of the owners I spoke to shared
    how a lack of stable childcare impacted not only them but their
    ability to hire and retain employees.
        How can Congress help address this unique issue that are
    faced by women business owners and male business owners, as
    well as their staff who are also working parents?
        Ms. LUCAS. Thank you for asking that. I did not get to my
    recommendations so I appreciate that.
        I think that Congress should bring forth a policy allowing
    mom entrepreneurs to access childcare subsidies that will
    enable them to receive the assistance that they need for
    childcare to start and scale their businesses. And this should
    also include alternative childcare options to help bridge the
    gap of the lack of quality childcare facilities. So our space,
    we do not offer formal childcare but we offer babysitting
    services similar to the gym. And so our coworking members are
    able to access that resource so if they are working 3 to 6
    hours they have 3 to 6 hours of uninterrupted time while their
    child is in a supervised play area. Being able to access a
    service and a resource like that is invaluable. We know as
    moms, I cannot speak upon a dad because I am not one, but as
    moms, if we are getting 3 to 6 hours of uninterrupted time we
    can literally change the world. And so resources and
    alternatives like that is important as well as, you know,
    having access to resources for moms who are looking to be
    entrepreneurs as a subsidy and not just for the workforce. You
    know, workforce subsidy childcare is important. I do think that
    it needs to increase, and not just increase on the person that
    is getting the subsidy but also the childcare centers. The
    problem is also the lack of affordable quality childcare
    centers in the United States, period.
        Ms. VAN DUYNE. I hear that.
        In Kent County we recently had a survey and there is close
    to 70,000 spaces of need that are currently being unmet. And
    you hit it right on the head. You know, it is not only just a
    box to check. Parents are often making that decision whether
    they are going to reenter the workforce or not based on the
    quality of the place that they can leave their children. So
    thank you for that attention to detail.
        With such great recommendations I am going to ask you for
    some more. Childcare impacts mothers and fathers alike but
    specifically, I have a question for you about how we can best
    support our women entrepreneurs in particular. The number one
    driver of small businesses that got off the ground in the last
    5 years, what can we do to increase accessibility of services
    and resources for these women entrepreneurs?
        Ms. LUCAS. Great question.
        One of the recommendations that I have is to ensure that
    the women's business centers are funded, you know,
    exceptionally funded. The services that these women are
    receiving is invaluable and really do help create that
    financial stability for their business but also create that
    social capital that you actually need that is outside of access
    to financial capital. That social capital is invaluable. And as
    women owned businesses, whether we want to believe it or not,
    more than half of women-owned businesses are mom-owned, I mean,
    are moms. And so we are still dealing with that barrier of
    balancing our families and our businesses. Sorry.
        Ms. VAN DUYNE. Thank you.
        I yield back, Mr. Chairman.
        Chairman WILLIAMS. Yields back.
        I now recognize Mr. Molinaro from the great state of New
    York for 5 minutes.
        Mr. MOLINARO. Well, based on some of the testimony today
    the great state might be the overregulated state of New York we
    recognize. But to that said, Mr. Chairman, thanks very much for
    the hearing today. And of course, we recognize the benefits and
    the challenges facing small businesses. Eighty percent of new
    jobs created by existing small businesses across the country.
    In Upstate New York, in the 11 counties I represent, workforce
    recruitment and retention remains one of the biggest
    challenges. Earlier this year Mr. Bruno Schickel from Tompkins
    County, New York, from my district came to testify and he spoke
    very clearly about the one challenge that he faced even in an
    environment overregulated and overtaxed like New York is, has
    been workforce recruitment and retention.
        Mr. Thompson, I was here for your testimony. I know that
    you had some more things to say so I want to add to your
    opportunity to do so. Would you share with us specifically some
    of the challenges that you and businesses like you face in
    recruiting skilled workers, especially as that might relate to
    rural communities?
        Mr. THOMPSON. Well, like I said earlier, a lot of it has
    got to do with, well, there is just not enough skilled people
    out there and I think a lot of it has got to do with our
    failing the young school kids. Them not being able to even
    realize there is such a thing as an electrician. You know, a
    lot of people do not realize it. They are young kids. They just
    think the lights come on.
        Mr. MOLINARO. Do you think there is value earlier on in
    public education or K-12 to identify vocational education as
    part of the traditional educational path?
        Mr. THOMPSON. I think it is very important.
        Mr. MOLINARO. And giving those opportunities to young
    people early on? My stepdad was a great mechanic, a brilliant
    mathematician so long as his head is under the hood of a car.
    But the second he had to take a test he probably would not have
    done so well. I suspect you think that vocational education
    early on might help address at least the desire among some
    young people to find a path toward success.
        Mr. THOMPSON. Oh, definitely. When I was young,
    Stephenville was real big into vocational. You know, we had
    building trades where the boys learned how to build houses.
    Electrician. All that stuff. And that is who actually builds
    the houses in Stephenville now is my generation of the guys
    that were in vocational back when I was in high school. That is
    your electricians and everything.
        Mr. MOLINARO. They are folks that build the houses in
    Upstate New York, too, thanks in part to apprenticeship
    programs, too, for those once they are out of the K-12
    educational path.
        Mr. Grech, I think you said it best. Small businesses
    recognize they must adapt or die. The SBA and the federal
    government obviously play an integral role in facilitating
    training programs to help and recruit, recruit and retain
    qualified workers. In your testimony you point out that the
    Committee should explore how the SBA, and in particular SBDCs,
    can demodernize to do a better job.
        Could you speak to that a bit more broadly? And be specific
    about some of the steps that SBDCs should be required to take
    and opportunities they should be required to provide?
        Mr. GRECH. Thank you for the question.
        I want to share a perspective that has not been talked
    about yet which is the past year for my company since the
    advent of ChatGPT on November 30, 2022, has been the most
    exciting and exhilarating year in small business training in my
    company's history. I can watch in real time as small businesses
    use these productivity tools to do more, better, faster. My
    average training participant is saving tens of thousands of
    dollars within 6 weeks of starting our work with them. There
    has never been a tool in my lifetime that has the amount of
    productivity potential as AI.
        That said, it still must be regulated because it has
    tremendous downside risks related to job loss, inventing false
    narratives, deep takes, and causing a lot of disruption. And so
    one of the things that I want to urge this Committee is to
    participate in regulating it but with a small business
    perspective in mind so that we can continue to reap its
    benefits.
        The SBDCs and other local training arms of the SBA are
    essential partners for unlocking the potential, positive
    potential of this tool.
        Mr. MOLINARO. I appreciate that. With my time running short
    I just want to say that many times here in Washington, and I
    heard it coming in, the debate is just give more money to WBDCs
    and SBDCs. I do not think they are underfunded. I think they
    need to be modernized and there needs to be a demand for
    greater efficiency. I did not have a small business but I
    served in local government. And local government gets stuck
    with more and more regulation, more and more burden and we have
    to do more and more with less and less. And we do so by
    modernizing, leaning on technology, and empowering the people
    who work for us.
        Thanks, Mr. Chairman.
        Chairman WILLIAMS. The gentleman yields back.
        I now recognize Ms. Davids from the great state of Kansas
    for 5 minutes.
        Ms. DAVIDS. Thank you, Chairman. Thank you to the Chairman
    and Ranking Member for holding this hearing today. Thank you to
    all our witnesses for joining us and sharing both successes and
    challenges that you all are dealing with.
        I would say first of all there has, of course, been an
    impressive rate of small business creation of the last few
    years. Entrepreneurs across the country have been stepping up
    to the plate. But also still facing some unique challenges,
    including affordable housing. So I want to kind of come back to
    the affordable housing component. I know Mr. Thompson shared a
    bit about that in the written testimony about a lack of
    affordable housing, pushing away or restricting prospective
    employees. And in the Kansas Third that I represent, Panasonic,
    which is of course not a small business, is building this
    massive battery factory in one of our smaller towns, De Soto
    and it is just outside of Kansas City and what people usually
    think of as Kansas City. And again, Panasonic is not a small
    business but this new plant is going to generate the
    possibility in a landscape for tons of small businesses.
    Grocery stores, gas stations, childcare facilities, so many
    other things. And I have been having all these conversations
    with folks at home about this and about the investments that
    are needed and how we prepare for such a big project that
    really is going to change kind of the landscape of our region.
    And affordable housing comes up in every single conversation.
    And I think when we are looking at an area that is mostly
    suburban but has a lot of rural parts we want to make sure that
    the housing is going up but that it is not too expensive for
    folks to be able to afford. And you know, I have been excited
    to work with folks on both sides of the aisle, including some
    of the folks you guys got to meet today on the Affordable
    Housing Credit Improvement Act which is a bipartisan piece of
    legislation. It strengthens tax credits for affordable housing
    and will boost housing construction nationwide. Just in Kansas,
    we need about 6,200 more affordable homes. For probably the
    great state of New York that does not maybe sound like very
    many but for us it is a lot.
        Mr. Thompson, I know that you spoke a little bit about
    affordable housing challenges. I wanted to see if other folks
    wanted to chime in on whether or not you are seeing the impact
    of not whether or not but how are you seeing that play out in
    your areas?
        Mr. GRECH. Sure. Thank you for the opportunity to speak
    about affordable housing. I live in South Florida which has
    seen some of the highest percentages of housing as a percentage
    of income. We are a very poor large city made up of folks who
    are increasingly unable to afford to buy a house. In fact, my
    own family cannot afford to purchase a home in the area where
    we want to live.
        This is obviously a huge issue for small business owners.
    Many of the small businesses that BizHack serves are really
    subsistence businesses. We are working in our business. It is
    our job. And we are scraping by. And so there is absolutely a
    role for the government at all levels to provide affordable
    housing so that our small business owners and their employees
    can afford to live in the communities where we are serving.
        Ms. LUCAS. I will go. Affordable housing continues to be an
    issue even in cities and counties in Baltimore. And what I will
    say is it does hinder the opportunity to have the wealth that
    you need in order to invest in an actual business. There are
    many ways that you can leverage home ownership, and
    unfortunately those that are coming from low income areas that
    desire to do that do not have the opportunity because of the
    non-affordable housing.
        Ms. DAVIDS. Thank you. And----
        Mr. GRECH. I am sorry to interrupt. There is one other
    affordable housing issue which has not been brought up which is
    increasingly our homes are also our workplaces. Home-based
    businesses need to market themselves more than storefronts and
    main street businesses because otherwise no one will know they
    exist. And so one of the things that I am seeing is that in
    addition to having an affordable house, think of it as their
    workplace and that they need to market themselves so people
    know that they exist.
        Ms. DAVIDS. Thank you.
        I yield back, Chairman.
        Chairman WILLIAMS. The gentlelady yields back.
        I now recognize Mr. Hunt from the great state of Texas for
    5 minutes.
        Mr. HUNT. Thank you, Chairman. Thank you, Ranking Member as
    well. I thank the witnesses for being here today. Greatly
    appreciate it.
        We have had a very good year. Sorry, I am a bit under the
    weather so please kind of excuse my voice.
        We have had a very good year fighting for the continued
    success of our American small businesses. And here in this
    Committee we shall be very proud of the work that we have done
    thus far.
        In the Subcommittee on Rule Development, Energy, and Supply
    Chains, which I Chair, we have looked at the importance of
    small businesses and the scope of securing domestic energy
    production and the long-term goal of American energy
    independence for all of our communities in this country.
        We are at the doorstep of the next step forward in the
    development of America's energy future and our small businesses
    are at the front leading the way for that.
        The first question is for you, Mr. Thompson. Thank you for
    being here, sir. Welcome to D.C.
        As a fellow Texan I would like to compliment you on your
    dedication to the community. I have been watching from the TV
    in my office and having being Made in America a priority and
    focusing on building up your business with the focus of your
    employees, I really appreciate all you have done in that
    capacity.
        My question for you is do you believe that your business is
    in a stronger pathway financially today than it was before this
    current administration? And can you speak to some of the
    challenges that you have encountered in your businesses over
    the course of the past 2 years to stay competitive?
        Mr. THOMPSON. No, I do not believe my business is what it
    was 4 years ago. The profits are down. We cannot get employees.
    I had a guy the other day ask me how Pal-Con is doing, were we
    busy? I said, we are as busy as we can be. And anytime you are
    busy as you busy as you can be that is not good. You want to be
    busier than you can be. And a lot of the regulations that they
    have put on our electric in Texas, you know what happened to us
    last winter.
        Mr. HUNT. Yes, sir.
        Mr. THOMPSON. You know, I just do not own Pal-Con. I own a
    ranch and I have got cows and they did rolling blackouts on me.
    You know, I had to haul water to my cows because everything
    froze because they shut my electricity off.
        Mr. HUNT. Right.
        Mr. THOMPSON. So you have got farmers and ranchers all over
    the state that because of the regulations they have got on
    electric sides put is in a bind. And like I said it is not
    just, you know, it is the whole state pretty well.
        Mr. HUNT. So what you are saying is you have seen an
    increase in regulation. That is what hurt your business over
    the course of the past 4 years. You could see a demonstrative
    difference between the way it was 3 years ago juxtapose to the
    way it is right now?
        Mr. THOMPSON. Yes.
        Mr. HUNT. You could speak to that. And not just for your
    business but also for your ranch?
        Mr. THOMPSON. Yes.
        Mr. HUNT. Where is your ranch located, sir?
        Mr. THOMPSON. Bluff Dale, Texas.
        Mr. HUNT. Bluffdale. Have you had any encounters with
    illegal immigration there or anything like that, has that
    impacted your ranch as well?
        Mr. THOMPSON. No.
        Mr. HUNT. It has not?
        Mr. THOMPSON. No.
        Mr. HUNT. I ask that question because a lot of people that
    live in my district have ranches near the border as well and
    they are speaking about finding dead bodies on their ranches
    every single day because of the border crisis.
        Mr. THOMPSON. Mine is actually up by Stephenville.
        Mr. HUNT. It is further. It is by Stephenville so it is
    further north?
        Mr. THOMPSON. Yeah. So yeah, we are, you know, quite a ways
    from the border.
        Mr. HUNT. Yes, sir.
        My next question is for you Mr. Grech. We are watching with
    the increase of the use of AI, I am a millennial. I love it. I
    think it is great. I think it makes our lives easier. I think
    it makes our lives better. However, we are kind of getting to
    the tipping point here to where when is too much going to be a
    problem? And how do we regulate the increases of AI without
    impeding the progress of what it can potentially be?
        Mr. GRECH. Your colleague, Mr. Meuser said it beautifully
    that the government----
        Mr. HUNT. He is okay. Just joking.
        Mr. GRECH.--from the great state of Pennsylvania where I am
    a native. The government role is to be invisible. But to create
    the rules of the game and the guardrails to protect us, AI has
    a lot of risks associated with it. I think we are going to see
    in this upcoming presidential election some of the downside
    risk of deep fakes and fake news and misinformation and
    disinformation. It is a very powerful tool for our rivals
    overseas in terms of disruption.
        But it is also extraordinary. You know, when I train these
    small businesses we have what we call an AI moment when it is
    like (finger snap) and you realize that there is a before and
    after in your life when it came just through the roof. We call
    it 1,000X productivity. Ten times faster, 10 times better, 10
    times more. So the balance that we need to do, and we need to
    do this in a bipartisan way, is how do we mitigate the risks
    and unleash the potential.
        Mr. HUNT. And I think this is actually a bipartisan issue
    that we could all figure out a way to work together on because
    we definitely need to continue to progress in this manner but
    we have to be very careful with how we do it.
        So thank you for being here. I thank the witnesses so much
    for being here. I greatly appreciate it.
        I yield back my time.
        Chairman WILLIAMS. The gentleman yields back.
        I now recognize Mr. Thanedar from the great state of
    Michigan for 5 minutes.
        Mr. THANEDAR. Thank you, Chairman. And thank you for
    holding this hearing. Thank all the witnesses for being here
    and your wisdom.
        I am an immigrant and I came here, got a Ph.D. in
    chemistry, got an MBA. I wanted to start my own business and
    struggled through getting financing. Struggled through getting
    bank loans. And one of the things that helped me was getting a
    504 loan from the Small Business Administration. And that is
    how I bought my first building to help me grow my business.
        So I faced my own challenges as an immigrant coming here as
    an adult to start my businesses. Now I live in Detroit and I
    represent a city that is 78 percent African American. And I see
    many businesses struggle. Small women-owned businesses, black,
    brown businesses that struggle with all kinds of things,
    whether it is childcare issues, whether it is affordable
    housing for their employees, whether it is access to capital.
    And small business ownership still remains a struggle and
    beyond reach for many black and brown families.
        How can we make it better? Dr. Lucas, how can we make this
    better, increase the number of people at the bottom of the
    economic ladder, low-income families to have their American
    dream, to have their dream of owning businesses? And make much
    more of a level playing field for all so that we can encourage
    entrepreneurship for all?
        Ms. LUCAS. Thank you for asking that question. And you kind
    of took the words out of my mouth of we need to make sure that
    it is an equal, level playing field. It is highly unfair to
    struggle as a small business owner because of the color of your
    skin and where you are geographically located. There needs to
    be more capital infused in various areas in order to see that
    level playing field happen. It is not just giving minority-
    owned businesses money, but it is also how do we make
    affordable housing available? How do we make affordable and
    quality childcare available? How do we make those resources,
    those educational resources available so that those individuals
    do not have to acquire high student loan debt and make the
    decision to just go in the workforce when that is not their
    American dream.
        Mr. THANEDAR. Thank you. Thank you.
        How does public transportation figure into it? And also,
    other Members of the panel, if you have any thoughts on my
    first question.
        Mr. GRECH. I am the son of an immigrant. My father came
    here from Spain when Spain was a very poor country under the
    leadership of a dictator. He does not have a college degree. He
    worked as a traveling clothing salesman for most of his career
    and he sent his son, you know, I went through public schools
    and then I went to Princeton University. And I am a very proud
    first generation American.
        The number one equalizer to give a quality of opportunity
    to immigrant-owned businesses is education. And you are a
    beautiful example of that. You have a Ph.D. The key here is
    that the federally funded training must come in the different
    languages of origins of our immigrant populations and with
    different levels of sophistication so that we can meet
    entrepreneurs where they are.
        What I learned when I taught an 80-year-old how to run ads
    on Facebook is that the capabilities of our entrepreneurs are
    endless with the right support.
        Mr. THANEDAR. Thank you.
        And Mr. Chair, I yield back.
        Chairman WILLIAMS. The gentleman yields his time.
        I now recognize Mr. Crane from the great state of Arizona
    for 5 minutes.
        Mr. CRANE. Thank you, Mr. Chairman. I appreciate the
    opportunity to be here. Thank you to everybody on the panel who
    showed up today.
        Mr. Thompson, I want to go back to some of the testimony I
    heard you giving earlier. You were saying that in the last
    couple of years when asked if you were in a better spot today,
    that your profits are down, you are as busy as you can be, you
    want to be busier than you can be and regulations are
    strangling your business, you have got rolling blackouts out
    there, can you tell us about any work shortages that you are
    having because of some of the regulations?
        Mr. THOMPSON. Really, the work shortage is not due to so
    much regulations as like I earlier testified that we have had a
    couple tell us that because we are a minority--or that we are
    not minority owned that we are going to miss out on some
    projects?
        Mr. CRANE. How does that make you feel, sir?
        Mr. THOMPSON. Well, at the end of the day all us Americans
    are in this together. I do not know why we cannot just get
    along. I do not care what color, creed, or ethnicity you are,
    we all got to eat. We got to get along.
        Mr. CRANE. Does it seem wrong to you that when we start
    talking like that it feels like the federal government starts
    picking winners and losers based on skin color and race and
    ethnicity?
        Mr. THOMPSON. Definitely. Yeah.
        This question is for the rest of the panel. How is the rest
    of your businesses doing under this economy right now?
        Start with you, Mr. Grech.
        Mr. GRECH. BizHack Academy is thriving. We are thriving
    because the need and the demand for cutting edge training and
    marketing has never been greater. This is largely spurred by
    the advent of generative AI through ChatGPT and other tools.
    And so as a result, we are seeing more participants in our
    training than we have ever seen. We ran a series of 11 master
    classes on AI for marketing and sales that averaged more than
    350 live attendees per session, more than three times what we
    had seen prior to that.
        Mr. CRANE. Do the rest of you guys down there want to take
    that one? How are your businesses fairing right now?
        Mr. BOYLE. I would say all our businesses are thriving to
    the point that we are making money. We are not making money
    that we made the past couple of years and we are seeing that.
    We are planning right now for the next year that we are going
    to be investing less and less into those businesses and trying
    to keep some cash capital reserve back just in case we do come
    into a rough patch in the economy.
        Mr. CRANE. Thank you.
        Ma'am, at the end?
        Ms. LUCAS. Well, thank you to services like the Women's
    Business Center at Morgan State University. Our business is
    actually thriving. I cannot say we started out thriving
    because, of course, we are black women-owned business and we
    typically do not get the resources and support and financial
    capital we need to survive.
        Mr. CRANE. Interesting.
        You know, I am an entrepreneur myself. I find the best
    entrepreneurs that I know regardless of where they come from or
    what color their skin is or anything like that, the ones that
    tend to be the most successful, they are not focused on where
    they started from. They are focused on where they are going and
    how to solve problems.
        Mr. Grech, you said your father is an immigrant as well. Is
    that correct?
        Mr. GRECH. Yes, sir.
        Mr. CRANE. Do you think your father believes in equal
    opportunities or equal outcomes?
        Mr. GRECH. My father is an incredible believer in
    education. He does not have a college degree, yet he is the
    most educated man I know. And what he instilled in me is a love
    of books and a love of learning. And I have made a study of
    entrepreneurship. I have read every book there is about
    entrepreneurship. The one thing is there is no substitute for
    lived experience. And so when we train businesses, we always
    train them in what we call real life campaigns. Nothing is
    theoretical. And so it is this combination of best practices
    that you can learn at a university with real world experience
    applying these in real life situations is where the real rubber
    hits the road and how we get the results that we get with the
    companies we train.
        Mr. CRANE. Thank you.
        Mr. Chairman, I yield back.
        Chairman WILLIAMS. The gentleman yields back.
        I would like to thank our witnesses for their testimony
    today
        And for appearing before us today. And I hope when you
    leave here you will see that not everything in Washington is
    locked down. We agree on a lot, especially when it comes to
    Main Street America.
        Without objection, Members have 5 legislative days to
    submit additional materials and written questions for the
    witnesses to the Chair which will be forwarded to the
    witnesses. I ask the witnesses to please respond promptly.
        If there is no other further business, without objection
    the Committee is adjourned.
        [Whereupon, at 12:02 p.m., the Committee was adjourned.]

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