[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
HOPE ON THE HORIZON: PRIORITIZING SMALL
BUSINESS GROWTH IN THE 119TH CONGRESS
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
FEBRUARY 5, 2025
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 119-001
Available via the GPO Website: www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
58-532 WASHINGTON : 2025
-----------------------------------------------------------------------------------
HOUSE COMMITTEE ON SMALL BUSINESS
ROGER WILLIAMS, Texas, Chairman
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
BETH VAN DUYNE, Texas
JAKE ELLZEY, Texas
MARK ALFORD, Missouri
NICK LALOTA, New York
BRAD FINSTAD, Minnesota
TONY WIED, Wisconsin
ROB BRESNAHAN, Pennsylvania
BRIAN JACK, Georgia
TROY DOWNING, Montana
KIMBERLYN KING-HINDS, Northern Marina Islands
DEREK SCHMIDT, Kansas
NYDIA VELAZQUEZ, New York, Ranking Member
MORGAN MCGARVEY, Kentucky
HILLARY SCHOLTEN, Michigan
LAMONICA MCIVER, New Jersey
GIL CISNEROS, California
KELLY MORRISON, Minnesota
GEORGE LATIMER, New York
DEREK TRAN, California
LATEEFAH SIMON, California
JOHNNY OLSZEWSKI, Maryland
HERB CONWAY, New Jersey
MAGGIE GOODLANDER, New Hampshire
Lauren Holmes, Majority Staff Director
Melissa Jung, Minority Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Roger Williams.............................................. 1
Hon. Nydia Velazquez............................................. 2
WITNESSES
Mr. Karl Hutter, Chief Executive Officer, Click Bond, Inc.,
Carson City, NV................................................ 5
Mr. Bill New, President and Owner, New Industries, Morgan City,
LA............................................................. 7
Ms. Alice Frazier, President and Chief Executive Officer, Bank of
Charles Town, Charles Town, WV................................. 8
Ms. Molly Moon Neitzel, Founder and Chief Executive Officer,
Molly Moon's Homemade Ice Cream, Seattle, WA................... 10
APPENDIX
Prepared Statements:
Mr. Karl Hutter, Chief Executive Officer, Click Bond, Inc.,
Carson City, NV............................................ 48
Mr. Bill New, President and Owner, New Industries, Morgan
City, LA................................................... 58
Ms. Alice Frazier, President and Chief Executive Officer,
Bank of Charles Town, Charles Town, WV..................... 61
Ms. Molly Moon Neitzel, Founder and Chief Executive Officer,
Molly Moon's Homemade Ice Cream, Seattle, WA............... 74
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
Associated Builders and Contractors (ABC).................... 76
Canada Prime Minister Document............................... 78
Defense Credit Union Council (DCUC).......................... 79
PIIE Document................................................ 81
Small Business Investor Alliance (SBIA)...................... 96
HOPE ON THE HORIZON: PRIORITIZING SMALL BUSINESS GROWTH IN THE 119TH
CONGRESS
----------
WEDNESDAY, FEBRUARY 5, 2025
House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 10:01 a.m., in Room
2360, Rayburn House Office Building, Hon. Roger Williams
[chairman of the Committee] presiding.
Present: Representatives Williams, Stauber, Meuser, Van
Duyne, Ellzey, Alford, LaLota, Finstad, Wied, Bresnahan, Jack,
Downing, King-Hinds, Velazquez, McGarvey, Scholten, McIver,
Cisneros, Morrison, Latimer, Tran, Simon, Olszewski, Conaway,
and Goodlander.
Chairman WILLIAMS. Before we get started, I want to
recognize Mr. Alford from the great State of Missouri to lead
us in the pledge and the prayer.
Mr. ALFORD. Thank you.
Well, God, we are just so thankful to be here today as a
Committee to just try to make America better through small
business.
I thank you for the witnesses who have come here today,
paid their own way to be here, to testify and to take
questions.
God, let us operate in a manner of civility and love.
And I just appreciate all the Members of this Committee and
the Ranking Member and the Chair for their dedication.
Just bless us, bless our time together, for the betterment
for the United States of America.
Through Jesus Christ, I pray.
Amen.
I pledge allegiance to the Flag of the United States of
America and to the Republic for which it stands, one nation,
under God, indivisible, with liberty and justice for all.
Chairman WILLIAMS. Good morning, everyone, and I want to
now call the Committee on Small Business to order.
Without objection, the Chair is authorized to declare a
recess of the Committee at any time.
I now recognize myself for my opening statement.
Welcome to the first Committee on Small Business hearing of
the 119th Congress.
I want to extend my gratitude to our witnesses for being
here also today. And I know many of you traveled to share your
experiences with us and your perspectives, and we deeply value
your time and your voice.
The Committee on Small Business is proud to represent the
hardworking men and women of Main Street America here in
Washington. Our mission today and every day is to listen,
learn, and better understand the challenges and the
opportunities impacting the American people, particularly those
who build and sustain small businesses nationwide.
Small-business owners are not just entrepreneurs; they are
job creators, community leaders, and the backbone of economic
opportunity for millions of Americans. Small-business ownership
reflects the very essence of the American Dream--the
opportunity for any person, from any background, to take a
risk, work hard, and build a better future for themselves and
their families.
Our economy depends on small businesses and the workers
they employ. From local manufacturers to retail employees,
service workers and bankers, they are the heartbeat of our
economy, shaping our communities through their dedication,
creativity, and resilience.
Over the past 4 years, Main Street America has faced
historic challenges--stifling regulations, record-breaking
inflation, supply-chain disruptions, high interest rates, and a
national labor shortage. Despite these challenges, the men and
women of main street have proven time and time again their
strength and ability to adapt. These individuals embody the
grit, the innovation, and perseverance that make the nation
great.
So this Congress, alongside President Trump, will once
again prioritize policies that support Main Street America,
strengthen economic opportunity, and create an environment
where small businesses can grow and create jobs.
Today, we celebrate the critical role each small business
plays in building and sustaining their communities. We look
forward to hearing from our witnesses on how increased small-
business optimism and a promising economic landscape will help
Main Street America.
There is hope on the horizon for small businesses, thanks
to President Trump's pro-business commitment to lowering taxes
and cutting regulations. It is time to turn the page on the
past 4 years and focus on the future for Main Street America
under President Trump.
I wanted this hearing to be the first of the 119th Congress
so we could shine a light on the great contributions and
sacrifices of Main Street America--those who dedicate their
days, their resources, and lives to make our nation strong.
Before we proceed, I would like to extend a warm welcome to
the new Members joining the Committee. We are thrilled to have
you as part of our team and look forward to working with you
this Congress. As Chairman, I am eager to work alongside all of
you as we help shape policies that put the needs of Main Street
America first.
Now, with that, I will yield to our distinguished and my
friend, the Ranking Member from New York, Ms. Velazquez.
Ms. VELAZQUEZ. Good morning. Thank you, Mr. Chairman.
Again, I want to express our condolences to you. We have you
and your family in our thoughts and prayers.
Chairman WILLIAMS. Thank you.
Ms. VELAZQUEZ. Good morning. Thank you, Mr. Chairman, for
holding this important hearing.
And thank you to the witnesses for being here today.
In just 4 short years, 22 million Americans took the leap
of faith and started a small business--a record high for a
single Presidential term. Our nation saw an unprecedented
small-business boom and economic comeback in the face of an
equally unprecedented global pandemic and recession.
Everyday Americans and entrepreneurs receive essential
investments from the American Rescue Plan Act, Bipartisan
Infrastructure Law, CHIPS and Science Act, and Inflation
Redaction Act--historic victories that laid a strong foundation
for our economic recovery. The data shows that this foundation
is fruitful. Annual inflation is at 2.7 percent, and real GDP
growth has accelerated to 3.1 percent in the last quarter.
Mr. Chairman, small business is not a Democratic or
Republican issue; it is an American issue. While we will work
with our Republican counterparts to find common ground and do
right by America's main streets, we will never weaken our
commitment to make life better for our nation's small-business
owners.
From the tech company that started as an idea in a garage
to more established main street retailers or the local
restaurant, all play an important role in generating employment
opportunities for our communities, whether they be in rural or
urban America.
That is the beauty of America. Anyone can have a dream and
make it a reality and that is what millions of entrepreneurs in
this country have done.
Many couldn't have done it without the assistance of one of
the SBA's programs. From lending to mentoring to marketing, the
SBA has remained a critical resource to those with a good idea
and employers hoping to expand.
There is more that this committee can do to continue our
efforts to grow the small-business economy, like investing in
childcare, healthcare, and developing the next generation of
workers.
That is why today's hearing is so timely. It will allow us
to gain valuable perspectives on how to best help entrepreneurs
continue to do what they do best--invest in themselves, their
communities, and their workers.
While we may not always agree with each other on the best
path forward, it is my hope that we will work together for the
betterment of small employers.
Today, we are joined by a distinguished panel of witnesses.
This hearing is an opportunity to listen to their insights into
the challenges facing small businesses and, specifically, how
Congress can prioritize their needs. I look forward to hearing
the witnesses' testimony.
And, with that, Mr. Chairman, I yield back.
Chairman WILLIAMS. The lady yields back.
And now I will introduce our witnesses.
Our first witness here with us today is Mr. Karl Hutter.
Mr. Hutter is the CEO of Click Bond, Inc., located in Carson
City, Nevada. Mr. Hutter joined Click Bond in 2000 and has held
various positions within the company, including the vice
president of sales and marketing, chief operating officer,
chief financial officer also. Before leading the sales team,
Mr. Hutter directed the company's business development and
applications engineering efforts across the Asia-Pacific
region.
Mr. Hutter is a certified airline transport pilot and a
passionate advocate for general aviation and the aerospace
industry as well as for American manufacturing. He also serves
several industry associations, such as the Aerospace Industries
Association Board of Governors, the National Association of
Manufacturers, and the General Aviation Manufacturers
Association.
Mr. Hutter holds a Bachelor of Science degree in systems
engineering and operations management from the School of
Engineering and Applied Science at Wharton Business School of
the University of Pennsylvania. He also is a graduate of Penn's
Jerome Fisher Management and Technology Program.
So thank you for joining us here today.
Our next witness is Mr. Bill New. Mr. New is the founder,
owner, and president of New Industries, LLC, located in Morgan
City, Louisiana. Mr. New has led the company since its founding
in 1985. Prior to that, he worked as a structural and project
engineer for Mobil Exploration and Production and Mobil
Research and Development.
Mr. New is an active volunteer, having served as president
of the Foundation for the Louisiana School for Math, Science,
and the Arts and currently as Co-Chairman of the Capital
Campaign. He also has been a Board Member of the Catholic
Foundation of South Louisiana and a longtime leader in the Boy
Scouts of America, where he earned the rank of Eagle Scout in
1973.
Mr. New currently resides in Louisiana with his family. Mr.
New holds a Bachelor of Science in ocean engineering from
Florida Atlantic University and completed the Owner/President
Management Program at Harvard Business School.
So thank you for being here today, Mr. New.
Our next witness is Ms. Alice Frazier. Ms. Frazier is
president and CEO of Potomac Bancshares and Bank of Charles
Town, located in Charles Town, West Virginia. Ms. Frazier has
more than 32 years of banking experience with Cardinal
Financial Corporation, BB&T, and Middleburg Financial
Corporation. Prior to that, she worked for 4 years in public
accounting with national and regional firms.
Ms. Frazier is currently serving as Vice Chairman of the
Independent Community Bankers of America and has previously
served as their Executive Committee as secretary. She also
serves on the Federal Reserve Bank of Richmond Board and is a
past Chairman of the Virginia Association of Community Banks.
Ms. Frazier has a Bachelor of Science degree from Radford
University and is a graduate of the Stonier Graduate School of
Banking and the USC Graduate School of Bank Investing.
Thank you for joining us today, again. And I look forward
to hearing from all of you.
And now I 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.
I would like to welcome Ms. Molly Moon Neitzel, the founder
and CEO of Molly Moon's Homemade Ice Cream, in the Seattle
region.
Molly Moon's opened in 2008 when Ms. Neitzel left her
career as a political consultant and founder of the nonprofit
Music for America to follow her dreams and her sweet tooth as a
main street businesswoman. Now, Molly Moon's has nine
locations, $12 million in revenue, accolades in national
publications, and a cult following in the Seattle area.
Ms. Neitzel is also a founding Member of Main Street
Alliance, a small-business coalition advocating for pro-small-
business policies, including healthcare, childcare investment,
paid family and medical leave, women's entrepreneurship
promotion, and capital access, among others.
Ms. Neitzel holds a bachelor's degree in journalism from
the University of Montana.
Welcome, and thank you for testifying today.
Chairman WILLIAMS. Thank you.
And we appreciate all of you being here today, again.
And so, before recognizing the witnesses, I would like to
remind them--we have some rules around here--that oral
testimony is restricted to 5 minutes in length. If you get over
that, you will hear a little of this--[gavel tapping]--and that
means that your time is up. And if you see the light turn red
in front of you, it means your 5 minutes has concluded and you
should wrap up your testimony.
So, with that in mind, I now recognize Mr. Hutter for his
5-minute opening remarks.
STATEMENTS OF KARL HUTTER, CEO, CHIEF EXECUTIVE OFFICER, CLICK
BOND, INC., ON BEHALF OF THE NATIONAL ASSOCIATION OF
MANUFACTURERS; BILL NEW, PRESIDENT AND OWNER, NEW INDUSTRIES,
ON BEHALF OF THE NATIONAL OCEAN INDUSTRIES ASSOCIATION; ALICE
FRAZIER, PRESIDENT AND CHIEF EXECUTIVE OFFICER, BANK OF CHARLES
TOWN, ON BEHALF OF THE INDEPENDENT COMMUNITY BANKERS
ASSOCIATION; AND MOLLY MOON NEITZEL, FOUNDER AND CEO, MOLLY
MOON'S HOMEMADE ICE CREAM, ON BEHALF OF THE MAIN STREET
ALLIANCE
STATEMENT OF KARL HUTTER
Mr. HUTTER. Good morning, Chairman Williams, Ranking Member
Velazquez, and Members of the Committee. My name is Karl
Hutter, and I am the CEO of Click Bond, an engineered products
company in Carson City, Nevada.
And Click Bond is a family business and one very much built
on innovation. My parents founded the company in 1987,
combining my dad's inventive genius with my mom's manufacturing
background and business acumen. And today our adhesive-bonded
fasteners are used in aviation, marine, defense, industrial
settings around the world and even beyond, in space. And like
many small and medium manufacturers, we are an integral part of
the manufacturing supply chain and, in our case, of the
nation's defense industrial base.
However, companies like Click Bond face significant
challenges, often stemming from Washington itself. American
businesses now shoulder a staggering $3 trillion annually in
regulatory costs, disproportionately impacting manufacturers.
Unfortunately, small companies get hit twice--first with
unworkable regulations that apply to us directly and then, as
well, with compliance and reporting requirements that larger
firms are forced to pass down.
Well, fortunately, Congress and the Trump administration do
have the opportunity to reverse course. You can do that with
commonsense reforms such as: unwinding outdated chemicals
reporting requirements that force us to look backwards in time
and deep into our supply chains; and preventing unnecessary EPA
roadblocks in State and local permitting; and in rolling back
costly energy and labor mandates. These policies would go a
long way toward lifting barriers on manufacturers and their
growth.
And, additionally, comprehensive permitting reform must be
a priority. A predictable, streamlined permitting process will
unlock manufacturing growth and drive new job-creating
investments across this country.
So, just as with regulations, our industry is facing
significant uncertainty, cost, and burden thanks to expiring
tax policies. To say the least, 2017 tax reform was rocket fuel
for Click Bond. The new 21-percent corporate tax rate allowed
us to raise wages for our production employees, invest in
capital equipment, strengthen our employee tuition support
program, and accelerate the timeline for constructing a new
facility. The new 20-percent pass-through deduction likewise
empowered our suppliers and partners to reinvest in their
businesses, readying them to support our growth.
But the key tax provisions began expiring in 2022 and 2023,
and this is already harming manufacturers. It is now more
expensive for Click Bond to conduct R&D, the very lifeblood of
both our product and our process innovation. It is more
expensive for us to purchase capital equipment, the very tools
that will unleash the productivity of our team. And it is more
expensive for us to finance job-creating investments, such as
that state-of-the-art sustainable manufacturing facility.
And more tax hikes are looming at the end of this year,
including the halving of the estate tax exemption, which will
force many family businesses to hold back on investments or
contemplate selling pieces of their company to satisfy an
unjust tax bill.
Recent National Association of Manufacturers research found
that failing to extend pro-manufacturing tax policies could
cost the U.S. nearly 6 million jobs and $1 trillion in lost
GDP. And that is an outcome, Mr. Chairman, that we can't
afford. If Congress wants to preserve American innovation,
ingenuity, and competitiveness, inaction is simply not an
option.
So, look, despite these challenges, I want to remain very
optimistic, as I am, about the future of Click Bond and
manufacturing in the United States, particularly for our small
businesses. At Click Bond, we are ready to seize this moment,
translating the pace of innovation and the strong global demand
for aerospace products into job growth and export
opportunities. The same story holds true for the small and
medium manufacturers across our supply chain.
As a family business, we are ready to invest--and to
reinvest--in growth, R&D, and capital equipment to generate
excellent careers that lift our communities, while deploying
modern, sustainable manufacturing processes.
And, finally, as a Member of our nation's defense
industrial base, we are proud to do this work in service of
strengthening our country's security and its readiness.
Congress has a critical opportunity to right-size the
regulatory landscape, put an end to permitting delays, and
protect manufacturers from devastating tax increases. I
encourage you to seize this opportunity, empower manufacturers,
and strengthen America. Because when manufacturing wins,
America wins.
Thank you, and I look forward to your questions.
Chairman WILLIAMS. Thank you very much, Mr. Hutter. Right
on time. Thank you.
And now I recognize Mr. New for your 5-minute opening
remarks.
STATEMENT OF BILL NEW
Mr. NEW. Thank you, Mr. Chairman, Ranking Member Velazquez,
and Members of the Committee. I appreciate the opportunity to
testify today.
This is my first time testifying in front of a
congressional committee, so I may stumble a little bit. Public
speaking is not one of my strong points.
But I am Bill New. I am the founder and the owner and the
president of New Industries. We are a south-Louisiana-based
steel fabricator. We build process equipment for the oil and
gas industry, subsea equipment for producing in deepwater. We
also build pressure vessels and things used in process plants,
refineries, petrochemical. And we also build some agricultural
processing equipment as well. So, basically, we cut, bend, and
weld the steel.
And, you know, I have been at it--I started the company in
1985, quit my job working for an oil company. I was 28 years
old. As most of us are when we are 28 years old, we think we
are bulletproof and we know everything. About 2 years later, I
figured out I didn't know anything. But, to that point, it was
too late, so--so, been at it ever since.
You know, I think a big misconception about the oil and gas
industry for most people, the general public certainly, is
that, when they think of oil and gas, they think of the
Chevrons and the Exxons and the Shells and the BPs, but, for
all those great big companies--and they are all customers of
mine--you know, there are a whole lot of companies like New
Industries, you know, small businesses that fabricate, that
build equipment, that provide services both on shore and
offshore. And that is really the heart of the oil and gas
industry, is those small businesses that make it all happen.
The oil companies, comparatively, don't actually employ
that many people. They spend the money, but sometimes they are
almost more like bankers than actually operators.
And so it is very important to, you know, encourage oil and
gas. You know, we have been through a period over the last 4
years of issues with permitting, with lease sales. And,
already, the new administration has already turned some of
those things around.
But it just takes time, you know. And the projects
typically--a lot of projects we work on have horizons of 5 and
10 years from the time they discover--even before they
discover, drill the first well, until it is on production, and
spend billions of dollars. And if we don't have consistency in
leasing and consistency in regulation, those projects never get
started.
Because if you award a lease to one of the major oil
companies today in deepwater, it will be at least probably 3
years before they actually drill a well, because there is a lot
of preliminary work to be done. And then, once that well is
drilled, assuming that it is a discovery, then it will be
several more years getting it developed, building the
equipment, building the facility. And so that consistency of
regulation is so important to the industry and certainly
important to New Industries.
Same thing with tax policy, you know. We certainly took
advantage of the accelerated depreciation when that was there.
We spent a lot of--invested a lot of money in equipment, big
equipment--cranes, plate rolls, you know, big pieces of
machinery. But it is a lot easier to pay for them when I can
deduct the full cost of depreciation in the first year. It
certainly helps pay for them.
So I urge you to just continue along this path. And I am
looking forward to the next 4 years. Our customers are much
more optimistic since the election. Projects that had been on
hold, I hear, now suddenly we are talking about moving forward.
And so, you know, we are a project-based business. If our
customers are not drilling new wells, developing new
facilities, building new process plants, adding on to process
plants, there is no work for us. You know, I am not like
Walmart; I can't generate incremental sales with price. I can't
put welders on sale this week and sell any more. I mean, if my
customers need one, you know, they will buy it; if they don't
need it, it doesn't matter what my price is.
And so we are looking forward to the next 4 years. I think
it is a pretty exciting time to be in our industry.
Thank you.
Chairman WILLIAMS. Thank you very much.
I now recognize Ms. Frazier for her 5-minute opening
remarks.
STATEMENT OF ALICE FRAZIER
Ms. FRAZIER. Thank you, Chairman Williams and Ranking
Member Velazquez and Members of this Committee.
I am Alice Frazier, CEO of Bank of Charles Town, a 154-
year-old community bank with $877 million in assets, serving
markets West Virginia, Maryland, and Virginia.
I testify today on behalf of the Independent Community
Bankers of America, where I am Vice Chairman.
This hearing is well-timed for the new Congress and
administration, which I can assure you has brought new hope for
the communities I serve. The optimism is unmistakable.
Small-business loans are almost 90 percent of our
portfolio. And, in aggregate, community banks extend a
disproportionate number of small-business loans, especially in
smaller markets. We serve small businesses with customized
products and personalized services that can only be provided by
locally-based, on-the-ground lenders. We lend based on
firsthand knowledge of our customers and our communities. That
is what sets us apart from larger, out-of-market competitors.
And, importantly, my bank is a small business, as defined
by the SBA, and within the jurisdiction of this Committee. We
are a small business helping small businesses. The same is true
of thousands of community banks, many of which are family-owned
just like the local coffee shop on main street.
Many community banks, like my bank, are also SBA lenders,
and we share with this Committee a commitment to protecting the
integrity of the SBA guaranteed loan programs with stability in
its products and services.
Today, I want to talk about the remarkable resilience and
the new optimism I am seeing in our markets and focus on a
couple of proposals from our agenda for the new Congress, which
is attached to my written statement.
You see, the phones are ringing again with small businesses
in my footprint eager to expand with community-bank credit. My
written statement contains a compelling story of a restaurant-
supply company seeking credit to meet demand from new and
upgrading restaurants. It is an example of growth based upon
business optimism.
And our small-business lending capacity could be further
enhanced by regulatory and tax relief. Today's market optimism
is based upon an expectation of new policies that will spur
economic growth and job creation. It is our job to deliver on
that expectation.
Top of mind for community banks and small-business
borrowers is the destructive impact of Section 1071 of Dodd-
Frank Act, which requires community banks to collect granular
and invasive data on small-business loan applicants.
Small-business lending is not and should not be a
commodity. Underwriting is based on numerous borrower
characteristics and market variables, and loans are typically
customized to give borrowers the best chance of success. The
data collected under 1071 will not reflect the full scope of
underwriting and may suggest discrimination where none exists.
Bank examiners are really best positioned to make this
judgment in the application of fair lending and CRA laws.
Section 1071 is simply the wrong tool for this job.
Lenders will respond by standardizing loan features to
protect themselves from charges of discrimination. But please
keep in mind, minority and women borrowers, whom this rule is
supposed to help, often benefit from that customized lending.
With the new Congress and administration, you have an
opportunity to revisit and this time fully repeal Section 1071.
ICBA strongly supports and thanks Chairman Williams for his
1071 Repeal to Protect Small Business Lending Act. We ask
Members of this Committee to support this critical bill.
A few other ICBA priorities for this Congress include
updating regulatory thresholds so that community banks are not
subject to regulations designed for the largest of banks. And
doing so will create regulatory relief that will allow us to
better serve our customers.
And in the coming tax debate, we urge permanent extension
of the deduction for pass-through business income under Section
199A. The loss of this deduction would amount to a steep tax
increase for the vast majority of small businesses, including
nearly 1,500 Subchapter S community banks.
Thank you for allowing the community-bank perspective, and
I am happy to answer any questions you may have.
Chairman WILLIAMS. Thank you very much.
And I now recognize Ms. Moon Neitzel.
And I heard, when the Ranking Member introduced you, ``$12
million worth of ice cream.'' That is a lot of ice cream. So I
am anxious to hear about that. Okay.
STATEMENT OF MOLLY MOON NEITZEL
Ms. NEITZEL. Thank you, Chairman.
Chairman Williams, Ranking Member Velazquez, and Members of
the Committee, I am honored to be here today.
My name is Molly Moon Neitzel, CEO of Molly Moon's Homemade
Ice Cream in Washington State. I am also a founding Member of
the Main Street Alliance, which represents over 30,000 small
businesses nationwide, and a proud Member of MomsRising.
At Molly Moon's, we employ about 200 people across 9 ice
cream shops, and our products are sold across our region. Next
week, we will begin construction on three more locations, in
part funded by SBA loans. We are a growing, thriving business.
Today, we have been asked to highlight some of the real
challenges facing small businesses and what you all can do to
improve the health of the small-business economy.
But the title of this hearing, ``Hope on the Horizon,'' and
this Committee's statement that President Trump's policies put
America first are at odds with the reality that the President's
current and proposed actions are gutting the engine of the
American economy--main street businesses.
His policies have disadvantaged small businesses against
our larger competitors in the Tax Code and created instability
for the nation's biggest and best job creators. Small
businesses created 65 percent of all new jobs in the past
decade. We are the foundation of the U.S. economy.
But there are concrete ways this Committee can support Main
Street America.
First, our Tax Code isn't working for main street
businesses. We need to fix the Tax Cuts and Jobs Act to target
199A deduction relief to smaller operators, not just big
corporations. And the IRS must be fully funded, not gutted, in
order to enforce the law and ensure the giant companies and the
wealthy people who run them pay their fair share.
Second, let's use the revenue from fair enforcement of the
Tax Code to invest in a national childcare system, paid family
and medical leave, and affordable healthcare.
At Molly Moon's, we invest $1,000 per month toward
childcare for each employee's child, and the returns have been
tremendous. Since launching this program, we have seen a rise
in parents able to work full-time and apply for promotions into
management because they can now afford the childcare to work
during our busiest hours. We have even had babies brought into
this world because women who worked for us realized they could
afford to grow their families with reduced childcare costs
factored in.
The ROI on this workforce stabilization has been huge--and
the babies are real cute--but, as much as I love leading on
this issue, we do it because Congress has failed to create a
childcare infrastructure that supports our nation's workforce.
Third, every small-business owner I know and every business
in America is incredibly concerned about a global trade war and
the general chaos-creation policies we have seen in the federal
government in the last few weeks. Being so worried about what
is coming next and trying to safeguard against it has negative
impacts on our operations, profits, and communities.
Small businesses depend on each other and many other
businesses around the world. We depend on a functional Small
Business Administration and sound economic policies.
But any tariffs--and even the threats of them--will
increase costs, raising prices even higher for families,
raising inflation again. This is the opposite of President
Trump's and many Republicans' campaign promises to America.
As just one example, a quarter of all the produce consumed
in the U.S. is grown in Mexico, and an ice cream shop,
restaurant, or grocery store will be devastated by a 25-percent
tax on those fruit and vegetable costs.
Extrapolate that one example over all small businesses,
most of whom operate in the global economy for ingredients,
parts, or their whole product, and we are driving toward
recession.
We don't need a global trade war to destabilize our economy
or more tax cuts for the biggest corporations. We need a fair
Tax Code, stable economic policies, and a healthy, available
workforce so that main street and small businesses can thrive.
With your help, I hope a bright future for small business is
possible.
Thank you, and I am happy to answer any questions from the
Committee.
Chairman WILLIAMS. The lady yields back.
We will now move to the Member questions under the 5-minute
rule, and I recognize myself for 5 minutes.
Ms. Frazier, small businesses have faced unprecedented
economic challenges, such as inflation and rising interest
rates, which threaten their ability to access capital. As you
all well know, access to capital is essential to any growing,
aspiring business.
Yet, instead of helping Main Street America, under the
Biden administration, the CFPB implemented the 1071 rule, which
you mentioned, which put an even heavier burden on small
financial institutions that were struggling to keep up with
rising interest rates.
So I recently introduced the 1071 Repeal to Protect Small
Business Lending Act, which would immediately repeal CFPB's
small-business-killing rule.
How would an immediate repeal of the 1071 rule ensure that
community banks can continue providing affordable lending
options to small-business owners?
Ms. FRAZIER. Thank you, Mr. Chairman. I can give you an
example of the impact.
There are over 81 different data decision points that we
would need to collect and decide upon in evaluating or just
taking the application. And when I think about my bank and the
number of loans that were small businesses in the past 2 years,
it was over 237 loans, for $140 million. Multiply that, each
one, by 81 points that we need to first make a decision upon
and collect and then report upon.
And so the only way that that could be possible is to
continue to evaluate technology and use of AI, which then
doesn't focus us on the conversations or building the
relationships or giving the advice and counsel many small
businesses need.
So I hope those give you some illustrations of what that
impact would do for us.
Chairman WILLIAMS. Absolutely.
Mr. New, in the final days as President, President Biden
sought to ban offshore oil and gas leases in vast offshore
areas. If not for President Trump issuing several executive
orders on his first day in office to repeal these efforts, the
ban would have covered more than 625 million acres,
representing the largest withdrawal of offshore oil and gas
leases in U.S. history.
So how will President Trump's actions help your industry
thrive and meet the demands of the offshore oil and gas sector?
Mr. NEW. Thank you, Mr. Chairman.
You know, it is really about having access to lands to
drill. Unlike onshore, where a lot of the oil and gas
production is on private land, in the federal offshore waters
it is all federal lands. So it depends on the federal
government to basically be the landowner, the judge, the jury,
and the executioner. So, when there are not leases available,
my customers don't have opportunities to drill.
And, you know, I say it is a pipeline. So it is not just
the lease today. Because if you lease today, it is going to
be--you know, it may be 10 years before there is production.
But there are a lot of activities that have to go on to get to
that stage. And if we are not leasing today, we are not going
to have those activities over the next 10 years and that
production.
Chairman WILLIAMS. Great.
I have a limited amount of time, so, Mr. Hutter, let me
just ask you a short question here. Can you explain how
dangerous and overbearing regulations have impacted your
business?
Mr. HUTTER. So I think that one of the things to always
remember for our smaller businesses particularly is, certainty
goes a long, long way. And while, I think, you know, we don't
argue against regulations that make the rules clear and, you
know, work toward goals of making our people safer and the
impacts that we make on our communities only positive ones, I
would say, generally, regulations need to be thought of in
terms of their clarity, in terms of their workability, and in
terms of making sure we don't put in constraints on things that
get out over the skis of science.
And let me explain real quickly on that one. When it comes
to things like materials--PFAS restrictions, for example, I
think is a good one--there are things in our defense supply
chain that simply don't have substitutes. In the healthcare
sector, it would be similar to the ethylene oxide restrictions
that are being considered, right? There is no similar
disinfectant gas.
And when you talk about products that have a certification
cycle that lasts the better part of a decade, having a sudden
need to swap a key component or material in your product and
then put the recertification and test requirements on top of
that that are necessary to ensure that, well, if you are making
something that is going in an aircraft engine to a civil
airliner, that we are all safe and secure aboard that airplane,
look, there are things that make that nearly impossible.
So I would just really say that it is important to be very
clear on what the reality science- and technology-wise is
before we go and put forward a regulation demanding the
impossible.
Chairman WILLIAMS. Thank you.
My time is up.
I now recognize the Ranking Member for 5 minutes of
questions.
Ms. VELAZQUEZ. Thank you, Mr. Chairman.
Ms. Neitzel, President Trump reentered office on promises
to immediately lower egg prices. However, in the past week, the
national average warehouse delivery price for conventional
large white eggs rose to $6.70 per dozen from $5.87 on January
20th when he took office.
Any comments on that?
Ms. NEITZEL. Yes. Egg prices have risen. There is also an
egg shortage in America.
The instability in food prices is only going to get worse
as we understand more about the trade war. And restaurants and
ice cream shops and grocery stores operate on the thinnest
margins of most main street businesses. We simply can't afford
prices to increase in any of our cost of goods.
Ms. VELAZQUEZ. Thank you.
On Saturday, President Trump enacted a 25-percent tax on
goods from our trade allies Canada and Mexico and a 10-percent
tax on goods from China. The nonpartisan Peterson Institute
reports that these taxes will spike up our inflation and cut
our GDP over the next few years.
Mr. Chairman, I request unanimous consent to enter the
report into the record.
Chairman WILLIAMS. So ordered.
Ms. VELAZQUEZ. Ms. Neitzel, you state that these tariffs
will cost you $100,000 extra on ice cream cups and containers
alone. Will you be forced to pass this cost on to consumers?
Ms. NEITZEL. Yes. If these tariff go through, I will have
to raise my prices.
Ms. VELAZQUEZ. And we all know that, 2 business hours into
Monday, President Trump paused his tariffs on Mexico.
Was that chaotic for your business? How harmful was that
tariff?
Ms. NEITZEL. Yeah, that was very chaotic. We are wondering
where fruit and paper products are going to come from and how
we will make up the costs.
Ms. VELAZQUEZ. Ms. Neitzel, President Trump is placing the
richest man in the world and the owner of several large tech
corporations, Elon Musk, in charge of the federal government
without the guardrails of typical federal employment.
Do you think this will make federal agencies pay more
attention to the needs of small businesses like yours or
bigger, wealthier corporations?
Ms. NEITZEL. It will absolutely make the federal government
pay more attention to bigger corporations.
Ms. VELAZQUEZ. Mr. Musk had the highest-ranking civil
servant at the Treasury Department removed for their reluctance
to give him unrestricted access to a sensitive payment system
used to pay out more than $6 trillion a year in Social
Security, Medicare, government contract payments, and tax
reforms.
Are you comfortable letting this unelected man have this
data on federal payments to you and your fellow Americans?
Ms. NEITZEL. No. Every person I have talked to in the last
2 weeks and especially the last 2 days--every American is
scared of Elon Musk being given the keys to our government.
Ms. VELAZQUEZ. Thank you.
The federal government has increasingly used continuing
resolutions to fund vital programs, rather than more stable
yearly budgets. As a small-business owner who receives services
from the SBA, is this approach to public-service funding
helpful?
Ms. NEITZEL. No.
Ms. VELAZQUEZ. Why not?
Ms. NEITZEL. I wish that Congress could work together to
pass real budgets that are longer-term and intentional, with
the priorities of main street businesses at the heart of the
concern.
Ms. VELAZQUEZ. So here we are. We always say that certainty
is so important for small businesses in order to plan ahead,
and yet the federal government cannot provide that certainty.
Regarding the type of immigrants who have work permits, the
President issued an executive order to deport those immigrants.
What effect will that have on main street small businesses?
Ms. NEITZEL. Losing farmers who have work permits in the
United States will devastate the food system in America. We
need those workers in order to feed our families and our
children.
Ms. VELAZQUEZ. Thank you.
I yield back.
Chairman WILLIAMS. Thank you, Ms. Velazquez.
She yields back.
And now I now recognize Ms. Van Duyne from the great State
of Texas for 5 minutes.
Ms. VAN DUYNE. Thank you very much, Mr. Chairman.
And I want to thank all of our witnesses for joining us
today.
Mr. Chairman, I ask for unanimous consent to submit for the
record the Prime Minister of Canada's statement announcing
border protections in direct response to President Trump's
proposed tariffs.
Chairman WILLIAMS. So ordered.
Ms. VAN DUYNE. We have heard some conversation this morning
how bad tariffs are, but the fact is that what we have seen
over the last several days is that we have had countries--
Canada, Mexico, Colombia--that have actually agreed now to help
us, the United States, with a number of different things, from
securing our borders to preventing fentanyl deaths. I think
those are really important, as opposed to just looking at how
much we are going be able to save on a grapefruit.
You know, I have heard some criticisms this morning on Musk
and how he is not running our typical federal government
programs. I am going to ask anybody: Have our typical federal
programs and how we have typically been running the federal
government helped any of your businesses? Or has it gotten us
into $36.22 trillion of debt and a $2 trillion deficit?
We added $1.4 trillion of regulations the last 4 years onto
our small businesses. And, Ms. Moon, I am assuming that you
appreciate the additional $1.4 trillion of extra money that
businesses are having to spend, including and especially small
businesses.
I have also heard how dangerous it is that Mr. Musk, who is
an advisor to an elected President, how dangerous his
regulations are and because he is an unelected person.
Does anybody know how many bureaucrats in our government,
in our agencies that are making these decisions, how many of
them are elected?
Ms. Moon?
Ms. NEITZEL. He has not been confirmed by Congress.
Ms. VAN DUYNE. He is an advisor to the President. It is not
part of the Cabinet, not necessary for confirmation.
But even people who are confirmed are not elected. But what
we have seen is, so many of these bureaucrats over and over
again are making the decisions. And, a lot of times, we pass
laws but the regulations that these agencies are putting out
don't even reflect the intent and sometimes are in direct
conflict with our laws. And none of them are elected.
And I think what you have seen is the American public is
sick of it. They want to have a difference in how government is
typically run, for those exact reasons.
I appreciate you being here. Look, I love ice cream, and I
am happy that you are contributing, you know, to our economic
growth. But I think we also need to get real here. And as we
kick off the 119th Congress, we have an incredible opportunity
right now to undo many of the harms that have been done to
small businesses by the Biden-Harris administration and we can
enact meaningful pro-growth reforms.
And, you know, we saw a recent report from the National
Association of Manufacturers that revealed that if the Trump
tax cuts are not renewed, that in Texas's 24th District alone
27,000 jobs and $2.6 billion in wages and $5.3 billion in GDP,
just in Texas's 24th District, are at risk.
So, Mr. Hutter, as the CEO of a manufacturing company, what
tax policies are most important to small businesses like yours?
Mr. HUTTER. Sure. No, thank you for the opportunity.
I think I would choose to focus first on something that
demands immediate attention because it has already expired, and
it is the inability to no longer expense--the inability to any
longer expense research and development.
It is important for everyone to remember that R&D, while we
tend to think about that as being the research behind the
amazing new products that America is famous for, it is really
also about the amazing new processes that America is famous
for. And one of the things that we are absolutely best at and
makes this country the most competitive is our innovation
around manufacturing.
And so, at a time when we really are enjoying low
unemployment and we have an opportunity to get even greater
value deployed for our country through the amazing talent on
our teams, what do we need? We need to have the ability to
invest in capital equipment that unleashes their capability and
puts new productivity in the hands of our people. And we need
to have incentive--or, at least, the removal of disincentive--
to invest in that very research and development that creates
the new processes that will utilize that equipment, those
tools, and enable that talent.
The upshot of all of this is not just continuing to
preserve and strengthen American competitiveness economically,
supporting our defense industrial base--always something I am
happy to talk about--but, most importantly of all, it is an
opportunity to raise wages, to actually raise the value of the
work that great American talent is doing.
Ms. VAN DUYNE. Oh, I love that. And nowhere in there did I
hear you say that we needed to have more regulations.
Mr. HUTTER. No.
Ms. VAN DUYNE. In a response to concerns that I have heard
from small businesses in north Texas and actually around the
country, I reintroduced yesterday the Small Business Regulatory
Reduction Act. And I am looking forward to looking at those
costs of regulations to small businesses and require that the
SBA ensure that the regulations are cost-neutral.
And, with that, I yield back.
Chairman WILLIAMS. The lady yields back.
And I now recognize Mr. McGarvey from the great State of
Kentucky for 5 minutes.
Mr. MCGARVEY. Thank you, Mr. Chairman. I appreciate that.
Mr. Chairman, let me also start off by offering my
condolences and our prayers to you and everything you are going
through. We have been thinking about you a lot. It is good to
be back here.
Ms. Moon, appreciate you being here today. In 1942, it was
Winston Churchill who wrote to the British Wartime Minister of
Food that Americans are, quote, ``great addicts of ice cream,
which is said to rival alcoholic drinks.'' I am born and raised
in Kentucky, and I would just say, why can't we love both?
But I think there has been a lot of really good points
brought up here today, and I want to address a few of those.
Because, in this particular instance, I do think there is a
link between what you are experiencing with your ice cream
business and what we are seeing at our distilleries in Kentucky
as a result of the Trump tariffs and the chaos that he has
thrown the economy into.
There is--in Kentucky right now, we see it--bourbon has to
be made in America. Ninety-five percent of the world's bourbon
is made in Kentucky, but it just has to be made in America. We
also get 100 percent of the good stuff. But it is not going to
incentivize new manufacturing in America to do this.
We saw this in the first round of tariffs. The retaliatory
tariffs placed on American products like bourbon cost hundreds
of millions of dollars to my State.
These don't just impact a company's bottom line. This is
everybody, from the farmers who grow the corn, the coopers who
put it in the barrel, the union workers who put it in the
bottle, the truck drivers who take it to the store, the stores
like yours that sell the product, the consumers who buy it. It
is harmful to everyone down the line.
And what we are seeing right now with these tariffs and
what they have resulted in, throwing our economy into--it is
not over. It is not over. It is just a pause right now. There
are people who are going to bed in Kentucky going, what is
going to happen to the economy? What is going to happen to our
business?
And what do we get for it? All the reports are really
modest, not much. Donald Trump has erased billions of dollars
in market capitalization, throwing districts like mine into
chaos, with these tariffs, but there is not a lot of actual,
real new behavior from a place like Canada. Canada seized 43
pounds of fentanyl on the border last year. The Canadian papers
and other places are sort of running that we lost the deal on
this.
What we want in this Committee and what I have enjoyed
about the nature of this Committee is the bipartisan nature of
it, that we actually want our small businesses to flourish.
What every congressional district here has is an economy that
is driven by small businesses. We want those to work.
So, when we talk about these tariffs and the impact that
they have on small businesses--you started to hit on this. I
know you get a lot of your products locally sourced from the
Pacific Northwest, but you can't get it all from there,
correct?
Ms. NEITZEL. Correct.
Mr. MCGARVEY. And so do you have to buy coffee or chocolate
or other things from other countries?
Ms. NEITZEL. We buy sugar, chocolate, coffee and tea, and
paper products from outside of the United States.
Mr. MCGARVEY. And you said this would have a $100,000
impact on your business alone in selling ice cream.
Ms. NEITZEL. That is just if there were tariffs on our
paper products. Yes.
Mr. MCGARVEY. Just on the paper products. Expanding beyond
that, it is going to be even more of an impact.
Ms. NEITZEL. Correct.
Mr. MCGARVEY. A question I honestly don't know the answer
to: Do you think--you talked about you would have to pass this
on to the consumers. What does that actually do to your
business? Do the consumers absorb all that cost?
Ms. NEITZEL. Yeah. So, when food prices are higher in
America, it makes people go out to eat less often. I am very
dependent on people going out to dinner and then walking down
to the ice cream shop afterward. The small-business economy is
especially intertwined with each other. So vegetable costs at
the restaurants down the street matter just as much to me as my
own cost of goods. And I am extremely worried about
restaurants.
Mr. MCGARVEY. Yeah. And so I think we see the impact, the
ripple effect this has and will have on your employees.
And, of course, I love what you are doing with childcare. I
truly wish we were doing more with childcare in Congress. We
need to. That is absolutely an economic development tool as
well as a crisis that we have in this country, not having
enough childcare.
But when this impacts a business like yours, it impacts
other businesses, it impacts your employees, it impacts the
childcare you are providing, and I think we see the ripple
effects. So I appreciate that and hope we can continue to
provide some relief for small businesses up here.
Mr. Chairman, I yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Ellzey from the great State of Texas
for 5 minutes.
Mr. ELLZEY. Thank you, Mr. Chairman. And I send my
condolences to you and your family, as well, for the loss of
your bride.
Mr. Hutter, welcome to our hearing. As an aviator myself,
would you tell me what exactly--let's say, what is your premier
part that goes into an aircraft that we would all know?
Mr. HUTTER. Well, we manufacture about 5,000 parts that go
into the engine, the cells of every Boeing 737 and Airbus A320,
Boeing 787 and A350. Of course it contains and surrounds the
engines.
Mr. ELLZEY. And you created this part and are the sole
proprietor of it as a small business. Nobody does what you do.
Correct?
Mr. HUTTER. You know, we are proud to have quite a few
things that have been both IP-protected but also trade-secret-
protected. And we maintain those positions by just being the
best.
Mr. ELLZEY. Okay.
So what is an example of a regulation that has held back
your business from growing? Because aviation is highly
regulated, because it is all about safety. We are not going to
discuss what has happened in the last week. But that is why the
regulations are so high. Are there some that are unnecessary
and too cumbersome for you?
Mr. HUTTER. Yeah, no, it is a great question. Of course,
you know, thank you for the reference to the tragedies of the
last week. It was a reminder of why regulations not only are
not all bad, they are really critical for us to deliver the
safety record that we have in this country.
But there are some that, as I mentioned earlier, just don't
make sense or are pretty unworkable, if not impossible, for
small businesses. You know, our businesses are small, but they
are great ones, too, if we can be allowed to get to the work
that we have been set out to do. And there are a great number
of regulations--and I am thinking of some that even are born of
SEC regulation----
Mr. ELLZEY. Uh-huh.
Mr. HUTTER.--okay? Previously we had the conflict-minerals
source tracing. We have the opportunity to potentially see
something similar in some of the greenhouse-gas-emissions
regulations. It is the chance to let's, you know, get this
stuff right and do it in a way that is workable.
And where I am headed here is, you have got regulations
that are targeted at and made the responsibility of publicly
traded companies or large companies like our customers, and
whether they are right, wrong, or indifferent at that level,
here is what happens at my level: The reporting requirements,
the data collection requirements that come rolling down through
the supply chain--and 60 to 70 percent of the aerospace supply
chain, civil and defense, is not at those big names that you
see on the stock ticker; they are at companies like ours, small
businesses. And just the effort to go get the data and feed it
back upstream to serve those compliance needs requires, you
know, a team that I don't have.
And the people that would go to do that kind of analytical
and research work are the very same talent on my lean, mean
team that would otherwise be focusing their efforts on
improving our production and scheduling, our reliability, our
economy, maybe even our direct impact to our employees around
safety or around environmental responsibility. And, instead,
they are off on this, you know, research project supporting a
regulation that I don't even know that the government knows
what it is going to do with the data.
Mr. ELLZEY. And they don't know the second-, third-order
effects. If you go out of business, we don't make 737s. It is
as simple as that.
Mr. HUTTER. No, sir. And I think that that reaches across
some of these things like availability of certain materials,
the stability of energy supply.
Mr. ELLZEY. Yeah.
Mr. HUTTER. We had better understand what we are doing
before we shut off the tap on something that could bring things
to a stop real fast.
Mr. ELLZEY. It sounds a lot like the banking for the
community banks. I mean, if you just changed the wording just a
little bit, it sounds exactly the same way.
And, Mr. New, we are just about out of time. So it sounds
like--I know, in your industry, this same kind of regulations
have an effect.
Ms. Neitzel, I want to thank you for being here. I am an
addict of ice cream. I can't wait to try the Yeti.
I just want to point out that--you are talking about a
shortage of eggs. The Trump administration has been in power
for less than 2 weeks. There is no shortage of eggs because of
Donald Trump. It is bird flu and the requirement to kill a lot
of chickens that has caused a shortage that has been ongoing
for several years in the United States now. It has nothing do
with tariffs--which, I might add, are not actually in effect.
It was a negotiating point.
But I would also like to add: Let's be clear, I mean, I am
extremely impressed with your desire to start a business. I
wish I could start an ice cream business. But keep in mind,
there are consequences for choices that you make. For instance,
you know, you don't--do you allow police in your store if they
are armed?
Ms. NEITZEL. I do.
Mr. ELLZEY. You do? But you didn't in 2020, correct?
Ms. NEITZEL. Correct.
Mr. ELLZEY. Okay. Well, there are consequences for not
allowing cops in the CHOP area, which ended up devastating your
business. So I think we ought to keep in mind cause and effect
in small businesses, and some of those choices you made prove
to harm your own business.
So thank you.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mrs. McIver from New Jersey for 5 minutes.
Mrs. MCIVER. Thank you so much, Chair and Ranking Member.
And thank you to all of the witnesses for being here today.
And, Mr. Chair, I offer my condolences to you and your
family as well and my prayers to you all.
We all know that small businesses are the backbone of the
American workforce and the driving force behind the American
Dream. We have heard many of our witnesses talk about that
today and many Members of Congress talk about that. In my
district alone, thousands of small businesses thrive, employing
tens of thousands of hardworking individuals, many from
minority, women, and immigrant communities.
Just 2 weeks ago, one of my small businesses experienced an
unjust raid by ICE agents, resulting in the arrest of three
employees and the detention and questioning of several others.
This raid created widespread fear within the entire community,
disrupted business operations, and imposed undue hardship on
the establishment and the dedicated workers there.
I spoke to this community this morning, the leader, one of
my council members and mayor of this community, and they
indicated to me that about a 25-percent to 30-percent drop they
have seen in the small business--in the small businesses--you
know, folks coming in to support small businesses and shops and
the locals there, which speaks to this is a very thriving
community on small businesses. It is definitely a hardship. I
mean, it has created so much of a fear that people are scared
to come outside in this community.
And, Ms. Neitzel, you talked about it when our Ranking
Member asked you about what does it mean when, you know,
immigrants are not showing up to work on farms and they are not
coming to work, and you talked about, you know, the impact it
would have on our food systems.
But can you elaborate a little bit more on what the profit
margins would be--the impact on the profit margins themselves
for small businesses because of such?
Ms. NEITZEL. If farmers can't get their employees to come
to work because they are so scared of ICE raids, then
restaurants and grocery stores and ice cream shops won't have
the produce that we need to make our products. If we don't have
what our customers want, like that Yeti ice cream, we are not
going to have customers walking in our doors. It will bring the
entire small-business economy to a halt.
Mrs. MCIVER. Correct. Thank you for that. And I am sure,
like I mentioned about my East Ward community in the city of
Newark already experiencing that, when folks are not coming in
to shop and support small businesses.
I just want us all to think about this from both sides of
the aisle as we begin our work here in this new Congress--that
seems like it has already been 25 years in this new Congress
already, but only a couple of weeks in--that it is imperative
that we prioritize the protection of all businesses and the
individuals who contribute to their success.
Safeguarding their well-being is essential to maintaining
the strength of our local economies and preserving the
opportunities that small businesses provide.
So thank you so much.
And with that, I yield back.
Chairman WILLIAMS. The lady yields back.
I now recognize Mr. Alford from the great State of Missouri
for 5 minutes.
Mr. ALFORD. Thank you, Mr. Chair. Again, our sympathies to
you and your great family down in Texas, running a great small
business there, for the loss of your Patty.
Thank you to our witnesses for being here today. Appreciate
that.
This committee stands as a staunch advocate for Main Street
America. If we do not champion main street interests, we risk
losing the small businesses that are integral, part of the
fabric of America.
Small businesses spent the last 4 years under attack from a
lethal combination of inflation and overregulation. This
committee is here to assure small business owners that these
attacks are over. The Trump administration and a unified
Republican Congress are here to fight for you, to ensure that
everyone can live the American Dream.
Throughout President Biden's term, federal agencies
finalized more than 1,000 regulations, costing small businesses
more than $1.7 trillion--$1.7 trillion. That is the same as the
entire federal discretionary budget for fiscal year 2023.
It is unacceptable that federal agencies can put this
burden on the taxpayers of this country. And with Elon Musk in
charge of the Department of Government Efficiency, we will end
the federal government's attack on businesses.
Through a letter dated February 3, and here in this very
committee room, Ranking Member Velazquez and committee
Democrats have raised concerns about DOGE being granted access
to Small Business Administration systems. Well, with all due
respect to the Ranking Member, who is now leaving this
committee room, this is exactly what Americans voted for last
November 5.
The American people are sick and tired of unelected and
unaccountable bureaucrats wasting billions of dollars--taxpayer
dollars. The PPP and EIDL programs wasted hundreds of billions
of dollars in potentially fraudulent COVID loans. Estimates
vary, but most agree that over $200 billion was fraudulent.
The American people elected President Trump to clean up the
corruption and waste in Washington. Maybe, just maybe, if
committee Democrats joined the majority last Congress in
investigating SBA's lax fraud controls and nearly nonexistent
efforts to reclaim taxpayer dollars, then DOGE would not need
to now go inside the SBA.
I am also enthused that President Trump has ordered federal
workers back to their desks in the offices just down the street
here. As we saw on our visit to the SBA more than a year ago,
employee attendance was meager at best. As Chairman of the
Subcommittee on Oversight, I will be working with Ranking
Member Tran to ensure maximum efficiency and transparency by
the SBA.
With 2 minutes left, Ms. Moon Neitzel, a couple of
questions for you.
How much is the price of an ice cream cone in your shop, a
small one? Let's just start with a small one.
Ms. NEITZEL. A single scoop is $6.95.
Mr. ALFORD. $6.95. If the tariffs go into effect, what is
the estimated price increase you will have to make on that
product?
Ms. NEITZEL. I have no idea, because I----
Mr. ALFORD. Can you take a guess?
Ms. NEITZEL. Nope.
Mr. ALFORD. $7.25? Is it going to go up a dollar?
Ms. NEITZEL. Could be.
Mr. ALFORD. A dollar.
Do you know why the tariffs are being used right now as a
tool by President Trump? It is to shut down the illegal and
illicit fentanyl that is coming to our country from Mexico and
Canada that is killing more than 300 of our fellow citizens
each and every year.
Ms. NEITZEL. All 43 pounds of it from Canada.
Mr. ALFORD. I would submit to you that the threat of a
tariff to stop this illegal drug trade--and, yes, most of it is
coming from Mexico--is worth the added cost of an ice cream
cone in America.
Ms. Moon Neitzel, do you hire any illegal aliens?
Ms. NEITZEL. I don't know.
Mr. ALFORD. You don't know? You could be hiring illegal
aliens?
Ms. NEITZEL. We check the paperwork as per regulation.
Mr. ALFORD. But you think some of them might be illegal,
here illegally?
Ms. NEITZEL. I don't know.
Mr. ALFORD. Why should any employee or any illegal alien be
working in America to begin with?
Ms. NEITZEL. Every American deserves a job.
Mr. ALFORD. Every U.S. citizen or every person who lives in
the Americas?
Ms. NEITZEL. Every American deserves a job, sir.
Mr. ALFORD. I will take that as a U.S. citizen.
Why should anyone who is here with legal status be fearful
of any ICE raids?
Ms. NEITZEL. The fear and intimidation of these ICE raids
reaches to every American citizen, as well as the folks they
are looking for.
Mr. ALFORD. Well, I think, if you are here legally, you
have no reason to be fearful. And I do believe that a small
increase in the price of ice cream is worth an American life.
So thank you. And I yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Cisneros from the great State of
California for 5 minutes.
Mr. CISNEROS. Thank you, Mr. Chairman. And I, as well, want
to send along my sympathies to you and your family for your
loss.
Chairman WILLIAMS. Thank you.
Mr. CISNEROS. January 24 the SBA updated its small business
contracting goals for the fiscal year 2025. Under President
Trump, SBA requires agencies to award at least 5 percent of all
contracts to small disadvantaged businesses. That is down 15
percent from the Biden administration.
Other Trump administrative targets include 5 percent for
all federal prime contracts going to women-owned small
businesses and 5 percent to--all federal prime contracts going
to service-disabled veteran-owned small businesses, 5 percent
of all prime contracts going to a HUBZone, historically
underutilized business zones, 3 percent. These HUBzones are in
my district, including the cities of El Monte, Covina, Azusa,
La Puente, and more.
So, Ms. Frazier, given these decreased targets, what advice
would you have for a small business--small disadvantaged
business--looking to secure capital, as well as for veteran-
owned small businesses and women-owned small businesses?
Ms. FRAZIER. Thank you.
I would like to think that there are opportunities
continued beyond maybe just those contracts. We actually are a
bank for government contractors. Many of them do take advantage
of the 8(a) and are able to use that to grow their revenues.
And some also partner up with some that are not 8(a) to be able
to deliver their services and their products from that
perspective. So while the numbers may be down, I think the
opportunities for revenues continue to grow.
Mr. CISNEROS. Well, but the likelihood is, is that if these
small disadvantaged businesses are not going to receive as many
contracts, then banks are probably going to be less likely to
lend to them, right? The same thing as well as our women-owned
businesses and veteran-owned businesses, if they are not going
to get as much government contract business as they did in the
past possibly. There is that possibility as well.
Ms. FRAZIER. I think the loans that they apply for are also
relevant to the size of their business at the time. And so
sometimes--all government contractors ebb and flow with their
revenues and the contracts that they win, and so loan sizes
also increase and decrease relative to that.
Mr. CISNEROS. Well, but I think, again, as it goes, the
least likely of their business decreasing because, as we said,
if they are going to get less business, the chance of them kind
of having to downsize means the possibility of less capital for
their businesses.
But with that, I will move on.
Ms. Neitzel, I just want to commend you for your commitment
to childcare. The investment that you have made with your
business to benefit your employees I think should be commended,
and it should really be a model for other businesses.
So how could we as a committee, how can we as a Congress
help you and other businesses like you that are making this
investment? And as you stated in your testimony, I do think we
need to invest in childcare across the country.
But how can we help small businesses like you help their
employees to make them better businesses?
Ms. NEITZEL. You can help by creating a national childcare
program that is cost saving because of scale.
Putting a child in daycare in Seattle costs between $2,500
and $3,000 a month. That is far more than most of my employees
pay in rent or mortgage payments. So me investing $1,000 a
month isn't even covering their costs.
But if we had a national childcare system that provided
subsidies or a robust childcare facility system like most other
developed nations, we could scale the--lower the cost per
child, scale the program, and stabilize the entire American
workforce, allowing more women, in particular, to fully
participate in the American economy.
Mr. CISNEROS. Thank you for that answer. And as you stated
also, the tariffs, the negative effect it is going to have on
your business, with the raising of prices. And my State of
California and my community down in southern California have
been devastated by fires.
Many of the businesses--one of the businesses in my
district relies on products that they have to come from other
countries, one of them being Canada, the other being Mexico.
This is going to hurt their business. Lumber, a large amount of
lumber that is now going to be needed to rebuild southern
California, the cities of Altadena, Pacific Palisades, that is
going to hurt the builders.
And with that, I yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Finstad from the great State of
Minnesota for 5 minutes.
Mr. FINSTAD. Thank you, Chairman Williams, for holding this
important hearing today.
And thank you to the witnesses for taking time and being
here.
I would also like to take a moment, Mr. Chairman, to extend
my condolences to you on the loss of Patty, and just I want you
to know that I continue to pray for you and your family.
I am honored to serve here on the Small Business Committee
for the 119th Congress. As a small business owner myself and
one of the very few real farmers that gets to serve in
Congress, I know firsthand the impact that heavy-handed,
burdensome regulations have on our small business owners.
Over the last 4 years, main street businesses have been
fighting to keep their doors open, dealing with the impacts of
inflation, misguided regulations, supply chain issues, and an
administrative state that does not put their priorities first.
I am looking forward to the opportunity to make lasting
changes that will allow our communities in southern Minnesota
and across the country to thrive.
With that being said, Mr. Hutter, you talked in your
testimony about the regulatory state, permitting reform
possibly needed. And last Congress, I was proud to have led the
passage of a bipartisan bill called the PROVE IT Act, which
gives our small businesses a seat at the table and a voice in
the regulatory process.
Do you feel like right now you have a voice in that
process? Do you have an opportunity as we pass these well-
intended laws in Congress, the administrative state implements
their rules and regulations, and they come to you and say here
are the hoops and loops you have to jump through and walk
through and hide under to comply, do you have a voice in that
process? Do you have an opportunity to express your additional
cost and the burdensome regulatory state that that puts on your
business? Do you have a voice at that table?
Mr. HUTTER. Well, first off, I apologize, I am not familiar
with the act, but it sounds like a good one in the sense of
giving that input.
We really rely largely on our manufacturers associations,
our aerospace industries association to try to be the
interlocutor.
We would love to have more of a direct line of sight to
that. And I think a good place where that shows up are things
where we see that expansion and that rollout of more and more
on the regulatory side.
We are keeping a close eye, I should say, on some of the
EPA regulations, particularly around the New Source Review. And
I just choose that one because as we look to revolutionize and
modernize and grow our manufacturing processes, you have a
scenario that traditionally was pretty lean and mean where
these types of small emitter permitting would happen at the
local level, the municipal level.
And now we are seeing potentially the EPA nose under the
tent to get involved in things that are only going to add a
federal layer to that as well in a scenario that seems
completely unwarranted.
So there is an example of something I would raise my hand
and say: Is this really a good idea?
Mr. FINSTAD. Yeah. Thank you for that.
And so, as you know, business owners across the country
have been tasked to comply with numerous regulations, and it
has had a major impact on their bottom line. As has been stated
earlier, $1.7 trillion over the last 4 years affecting small
businesses.
With your business specifically, can you give us a rough
estimate of how much time and resources have you had to
allocate towards compliance efforts in the last 4 years?
Mr. HUTTER. Well, the irony, of course, being that taking
even more time to calculate that just puts bad on top of bad.
But it is hundreds of thousands of dollars a year.
And I say it is not just the dollars, it is the scarce
resources for talent who have to be redeployed to doing these--
I call them intern projects, if you will--as opposed to really
working on the business. But for a company our size, it
actually, we would say, over the last 4 years, ranges into the
millions, to be sure.
Mr. FINSTAD. Yeah. So as a small business owner myself, I
don't have a stable of lawyers or compliance officers or
regulatory experts to help me through that, so it definitely
costs our family business money.
So with what you have just stated, what would you do in
your small business with those dollars if you were able to
deploy them in other ways?
Mr. HUTTER. That is pretty simple. We are heavy believers
in reinvestment, and those dollars that weren't going to hiring
an outside consultant or distracting our folks to go run the
compliance activity would be going into direct impact for
either our team and our business actually working on improved
safety, working on improved quality, working on improved
productivity and efficiency that is going to win tomorrow.
So the dollars would be put as direct lead on target for
the things that matter to make us more competitive and more
successful in our mission.
Mr. FINSTAD. Yeah. Thank you for that.
And, Ms. Neitzel, I just have to say thank you on behalf of
the dairy farmers in southern Minnesota and across this
country. Keep selling ice cream.
And, Mr. Chairman, this body was built on ice cream and bad
decisions.
So with that, I yield back.
Chairman WILLIAMS. From what I can see, I think you are
right.
[Laughter.]
Chairman WILLIAMS. Next, I would now recognize Mr. Tran
from the great State of California for 5 minutes.
Mr. TRAN. Thank you, Mr. Chairman. And I, too, would like
to share my condolences with you and your family on your loss.
I look forward to working on this committee under your
leadership and the Ranking Member's leadership and working with
my colleagues here on this committee.
I grew up with a small business background. My parents had
their own corner market. So the small business and being part
of this committee is very important to me, so important that I
believe that small businesses are the heart and soul of our
community and the heart and soul of our economy.
I started a pharmacy and my own law practice, a small
business, before coming to Congress. So appreciate being on
this committee.
So my first question goes to Ms. Neitzel.
Access to health care is still a barrier to
entrepreneurship for Americans looking to take a leap of faith
and start a small business. How would you expand healthcare
through Medicaid and the ACA? How do you think that would help
inspire entrepreneurs to join the business community?
Ms. NEITZEL. Thank you for the question.
I do a lot of mentoring of young women and young people in
general looking to start their own companies, and a huge
barrier to starting innovative and helpful new businesses in
our economy is that the entrepreneurs who have the great ideas
can't leave their jobs because of healthcare.
If we had a national single-payer system that took care of
every American, it would free up that intellectual and
inspirational sort of heart of the American Dream.
Mr. TRAN. Thank you.
Ms. Frazier, can you discuss what your financial
institution is doing to help close racial and gender
disparities in access to small business capital?
Ms. FRAZIER. Oh, I would be happy to. Thank you.
We actually work together with three other financial
institutions to start what we called a Banking on Diversity
loan program. Well, it actually ended up only being three
institutions, not four altogether. One was purchased.
Ultimately, we put out into the marketplace $1.5 million of
zero interest rate loans to help minorities and those that were
early stage businesses overall. So revenues were under a
million. Most of the businesses were under a year old. And to
date, I am really excited at the success of that program and
how those businesses have grown.
Mr. TRAN. Thank you for that.
Mr. Hutter, you have previously spoken about the shortage
of skilled workers in this country, and your firm has partnered
with local community colleges to operate jobs training
programs.
Can you discuss the importance of career and technical
education in addressing that shortage?
Mr. HUTTER. Sure. Absolutely. And it is part of our story
of really being a high-tech manufacturer coming to northern
Nevada in the late 1980s and a community that built its economy
on gaming and tourism at that time, and we have been proud to
be part of that revolution. And part of the key to making that
happen has been the partnership with our local educational
institutions.
And I will say, as important as it is in our business to
have bachelor's degreed and advance degreed folks, particularly
in the technical side of things, it is even more fundamental to
have folks with the skills to be able to serve at kind of the
technician level. And we really turn to those partnerships with
our local community colleges for that, and they are essential.
Mr. TRAN. Thank you.
As a follow-up to that, do you think that more investment
is needed in trade education, STEM education, to maintain and
expand the workforce?
Mr. HUTTER. Yes, I do believe that that is critical, and it
can come from a few different directions. But a key aspect of
that is really being done in a context of engagement with
industry.
So we make sure that the investment in curriculum and the
investment in laboratories and whatever it may be actually
matches the needs of business, and we have found that to be a
really great partnership. But we definitely support them.
Mr. TRAN. Thank you so much.
Mr. Hutter, Mr. New, Ms. Frazier, Ms. Neitzel, thank you so
much for being here with us.
And with that, Mr. Chairman, I yield back.
Mr. LALOTA. [Presiding.] The gentleman yields.
I now recognize Mr. Downing from the great State of Montana
for 5 minutes.
Mr. DOWNING. Thank you, Mr. Chairman.
And thank you to our witnesses here.
So over the past 4 years, Montantans have watched as the
Biden administration did everything it could to put energy
producers in our State and around the country out of business.
They almost succeeded. Coal, oil, natural gas producers
have been holding on by a thread as radical Green New Deal
activists and the EPA and BLM revoked leases for mines and
extraction facilities. They closed off vast swaths of federal
land to energy production and introduced rules and regulations
specifically tailored to shut down these companies.
Now, this anti-energy stance had a negative impact outside
of the energy sector. Small businesses, especially in
manufacturing, require reliable access to cheap energy to make
their products and operate successfully.
Now we are entering into a brave new world as
cryptocurrency, blockchain, artificial intelligence integrate
further into every sector of the economy. Our energy
infrastructure and production capacity are nowhere near the
size they need to be to manage this technological expansion.
Now, unleashing American energy production is a priority
for the Trump administration, and I look forward to working
with them to do just that.
So my first question to Mr. New--and thank you for being
here--over the past 4 years have you seen a decline or a
slowing of growth in your business due to the anti-oil-and-gas
leasing policies of the Biden administration?
Mr. NEW. Certainly our customers have slow-walked projects,
they have canceled some projects because they couldn't get
permits. They were uncertain about the future and didn't--
wouldn't invest.
And today, just this morning, I read one of our customers,
a project that they have been talking about for about 5 years
now, they just announced that they are probably not going to go
ahead with that project now because it drug out so long that
this was an oil export terminal--their main customer bailed out
because it was taking so long.
Mr. DOWNING. So would approving more leases for oil and gas
production in the Gulf of America, as the Trump administration
has promised, improve your potential for growth?
Mr. NEW. Absolutely. Our customers have to have access to
leasing.
Mr. DOWNING. Okay. Mr. New, access to capital is a
significant issue for many small businesses, especially in the
energy sector.
Now, have you seen a decrease in capital access for your
business or others in the energy sector due to a lack of
regulatory certainty? And, if so, how has this regulatory
uncertainty affected your business?
Mr. NEW. Yes, I have seen it directly, particularly in some
of the larger banks. Banks that I have done business with for
many years basically told me that: Bill, we love you, we love
your business, you do a great job, but you are an oil and gas
business, we can't lend to you anymore.
Mr. DOWNING. Yeah. Thank you, sir.
Mr. Hutter, thank you for being here.
Joe Biden and Gary Gensler's SEC and woke reinsurance
companies have tried to shut down companies through the back
door rather than the front door using ESG to restrict access to
capital at the expense of small business.
Now, how has this harmed your business? And how can
Congress make improvements?
Mr. HUTTER. I am not really in a position to comment on
that directly because we haven't experienced the effects of
that.
I know that we have small businesses, smaller than us by
far, in our supply chain, and I would just broadly say that
their access to capital and their access to the things that
make them successful are critical to me as well. But no direct
experience.
Mr. DOWNING. Well, thank you.
I just, as a former securities and insurance regulator,
have seen a lot of this happening, so I appreciate that.
So I just want to thank you all for your testimony.
The past 4 years have been a relentless struggle for
American energy producers. But with the Trump administration
prioritizing domestic energy dominance there is a reason for
renewed optimism.
And the testimonies today have made it clear: Energy
security is economic security. It is national security. And
moving forward, we must cut through the regulatory red tape
stifling small business, especially those in manufacturing and
energy production.
Now, I look forward to working alongside my colleagues in
Congress and the Trump administration to get this done.
Thank you. I yield my time.
Mr. LALOTA. The gentleman yields.
I now recognize the gentleman from Maryland, Mr. Olszewski,
for 5 minutes.
Mr. OLSZEWSKI. Thank you very much.
I first want to just join this committee and all the
Members in sharing my condolences with the Chair and
surrounding he and his family in our prayers.
Thank you all for making the time to travel.
Ms. Neitzel, I am looking forward next time for you
bringing samples for us to have while we are here, please.
I just want to open, I have had a chance to listen quite a
bit, just two quick observations.
I know there has been a lot of back-and-forth about
unelected bureaucrats both Democrats and Republicans have
leveraged here. I just hope that as we go about our work that
we can agree on things like Congress' fundamental power of the
purse, our legal authority to establish change and eliminate
departments.
And I just hope that as we have those conversations,
conversations that I welcome, that we do it through the well-
established democratic processes that this country has been
founded on for a very long time.
As it relates to tariffs, I just want to remind, especially
relative to Canada, we are talking about in fiscal year 2024,
1.5 percent of all apprehensions at the border were on the
northern border, just 1.5 percent. The last 3 fiscal years, the
amount of fentanyl that came from the northern border was less
than 1 percent of all fentanyl seized.
And so if we are willing to exchange a 25 percent increase
on goods for that, I guess we should expect those numbers being
zero in the upcoming year, but we will see what happens there.
Mr. Hutter, I know on Congressman Tran's question you spoke
about and I really appreciate your engagement with community
colleges and STEM and job training programs. Clearly, you see
the value in those investments.
I really appreciate also your conversation about engagement
with industry. Prior to coming to Congress, as Baltimore County
executive, we both made our community colleges absolutely free
to any family making $150,000 or less.
We also partnered with the nursing and healthcare industry
to create a nursing pipeline program that actually, for
Democrats, we would say we knocked down barriers to
opportunity, we invested in things like childcare,
transportation, and housing. Perhaps from a Republican
perspective you can say we helped people pull themselves up by
their bootstraps.
But would you say that if we engage in those conversations
and find those gaps, those are the kinds of investments that we
in Congress might want to continue to make to help make more
opportunities for your workforce?
Mr. HUTTER. Yeah. I think yes. And I would want to make
sure to capture that this is as much or more also an obligation
and responsibility of business itself. And it has been very
much that partnership of the investment we put into our own
training and development for folks, and I think it is a key
piece that differentiates us and makes us a great place to work
and attracts the best talent.
But that happens in a context where we want to hire from
our community versus draw people in from far and far away. We
want to build our community as we go.
And so I do think that it is all in the doing. But from a
concept standpoint, of course, having a strong commitment in
the community to the education and the training and, I would
say, the overall uplift in the tone around the nobility of
skilled trades is really critical.
Mr. OLSZEWSKI. That is great. I appreciate that question
and hope to bring that forward as my time here in Congress
continues.
And then, Ms. Neitzel, I just will conclude with a question
for you.
Congratulations on the new shops that are coming. I know
that they, as you have testified, are funded in part with SBA
loans.
I just wanted to give you a minute, minute and a half here.
Any feedback that this committee might have in terms of what
your interaction has been like, what we might want to know to
help make sure that other businesses who are looking to do
similar work can have access to it?
Ms. NEITZEL. This was my first time using this SBA loan
program. I started my company with sort of friends and family
investors and have just gone through a community bank without
the guarantee of the SBA to grow my company for the last 17
years. So this is my first experience, and it has been fine.
I was listening to Ms. Frazier's testimony and thinking
there are opportunities, I think, for us to chat about ways
that both Main Street Alliance and Ms. Frazier and her banking
organization could talk about bipartisan ways to maybe make it
a little smoother.
It has been a very complicated process, and I loved her
comment about the 81 data points. I have felt each of those 81
questions deeply.
But the access to the capital and a stable SBA have been
critical to my business' next phase of growth.
Mr. OLSZEWSKI. That is great.
Well, I welcome the opportunity to work with both of you if
we can find those improvements in the years ahead.
With that, I yield. Thank you.
Mr. LALOTA. The gentleman yields.
I now recognize Ms. King-Hinds from the beautiful Northern
Mariana Islands for 5 minutes.
Ms. KING-HINDS. Thank you, Mr. Chairman. And I join the
Members in expressing my condolences to the Chairman.
Thank you to all the witnesses for your testimony today and
for making time to be with us.
Under SBA definitions, all businesses in my district, the
Northern Mariana Islands, are small businesses. That is why I
am so grateful to serve on this important committee, so I can
speak about their challenges here in the 119th Congress.
Businesses in my district operate in one of the most remote
parts of our country. This geographic isolation drives up
operating costs, limits access to customers and capital. And in
recent years, we have seen a growing sense of hopelessness--
some would say straight-up despair--because our primary
industry, which is tourism, has yet to recover from the impacts
of COVID-19.
Testimonies today cited a 2023 study of the National
Association of Manufacturers which found that federal
regulations cost an estimated $12,800 per employee across all
sectors of the U.S. economy, and this highlights some of our
challenges.
To put that figure in perspective, in my district, that
would suggest that the cost of regulatory compliance in the
Northern Marianas is 38 percent of our total gross domestic
product and 25 percent of all business revenue made in the
islands.
What makes this so challenging is, despite the many one-
size-fits-all regulations, there is no one-size-fits-all
application of benefits for small businesses in my district.
For example, while SBA has made significant investments in the
CNMI in response to natural disasters and the pandemic, in
programs like the SBA's Restaurant Revitalization Fund, my
district had the lowest approval rate in the nation, with
nearly 90 percent of applications denied.
Despite the dire need for capital among entrepreneurs,
participation in SBA's flagship 7(a) Loan Guarantee Program is
far below national averages.
It is clear that the federal government must do more to
recognize and address the realities of businesses in isolated
communities like mine. National policies already create
challenges for small businesses, but for places like the CNMI
these challenges are magnified.
As this committee looks to support President Trump's effort
to unleash small businesses in our community, I ask that we
take a critical look at how Congress can do more to support the
unique needs of these businesses in areas like the CNMI and do
our part to break away from one-size-fits-all policies on
funding, capital access, labor, and market access.
It is around 2 a.m. now from where the people that I
represent live. We are 15 hours ahead of Washington, D.C. And
when the sun comes up in the mainland it is nighttime back
home.
In many ways, our horizons are different. I have seen the
data that many businesses in the United States have rebounded
from the pandemic and have grown beyond it. Unfortunately, the
same cannot be said for the Northern Marianas.
I do believe, however, that hope is on the horizon, and I
ask for this committee's partnership to make sure that despite
the distance and the obstacles, when hope does make it over the
horizon it is something that we can all celebrate.
So I am here trying to be a better champion for the people
in my community, and I guess I am looking to champion policies
that address rural, isolated communities like mine. And so this
question is to you, Ms. Frazier.
One of the biggest issues for businesses in my district is
access to capital. Traditional banking models often struggle to
serve high-cost, low-volume markets in sparsely populated areas
like the CNMI.
In your experience, how can federal policy better support
community banks in small population centers so they can extend
capital to businesses that are viable but geographically
disadvantaged?
Ms. FRAZIER. Thank you for that question. I am going to
answer that with two fronts, if I may.
You spoke about the one-size-fits-all regulation and how it
impacts the small businesses, and it impacts us when banking
regulations are one-size-fits-all, and it puts us in boxes and
makes us have to operate very similar to much more out-of-
market, larger competitors.
What you have indicated is your businesses need that
personal relationship. They need that ability to have a banker
that they can work with and help them with a customized
product.
SBA, with a guarantee or not, it is how do those cash flows
come into that business, how can the bank help them support it
when they need it the most. So the tiered regulation,
recognizing thresholds, would be critically important for us.
And I am going to go back to the 1071, because if applied
the way it is intended or the way it is now currently written,
forget the 81 data points. It says that we have to separate the
person from the decision. And so the person that is actually
working with the client, understanding their business, is not
part of the decision, and that can really impact the ultimate
outcome.
Ms. KING-HINDS. Thank you for that.
Going back to these one-size-fits-all regulations, do you
see a disproportionate impact with regards to rural banks in
your experience?
Ms. FRAZIER. I do. I have the great benefit of visiting
several States over the past year and meeting a lot of bankers,
and I have met a bank that is running off of seven employees.
Imagine trying to implement these regulations with seven
employees, but they are serving a tiny, tiny community with all
that they need. And so it is unbearable for them to bear that.
Ms. KING-HINDS. All right. Thank you.
Thank you, Mr. Chairman. I yield back.
Mr. LALOTA. The gentlelady's time has expired.
I now recognize the gentleman from New Jersey, Dr. Conaway,
for 5 minutes.
Mr. CONAWAY. Thank you, Mr. Chairman.
And thank you, witnesses, for presenting yourself to us
today.
As I have listened to the comments today, I have to say I
am a little bit surprised about the criticisms of the prior
administration with respect to job growth. We have 21 million
businesses that were created, the largest number in any single
Presidential term, 440,000 establishments per month, 90 percent
faster than during the pre-pandemic era.
We have growth--I know this is of concern to some in the
administration--but business ownership among Black households
doubled, a 30-year high business ownership for Latinos, a 30-
year high in business ownership for Asian Americans as well.
And we have seen that, while certainly inflation was a
challenge, it is--well, you have to except food and energy
now--we are getting down to more normalized inflation in this
country as well.
So things are pretty strong. When you compare us to Europe,
we are well ahead of them. Our economy is the envy of the world
when you compare it to other people. In fact, China is
experiencing deflation now.
And so I think certainly we want to make sure that our
small businesses continue to thrive. Ninety percent of the jobs
are created by small businesses in this country; they are, and
we hear it all the time, the backbone of our economy. Forty-six
percent of all employees are employed by small business,
probably more than that. And certainly a great contribution to
new job growth.
So small business is rightly the concern of the American
people and certainly, rightly, the concern of the Congress.
I wanted to make a comment. We have heard about tariffs
this morning as well. And tariffs, whether they have gone into
effect fully yet or not, we have already seen that businesses
have taken steps. Some have raised prices because of the
instability caused by the back-and-forth over tariffs, and
those prices of course drive inflation.
We have heard already from our witnesses today and others
who have spoken from the dais about the costs of inputs that
will go up.
California needs to be rebuilt. We heard that from the Vice
Ranking Member about the need to rebuild California, and the
wood and the materials that are going to be needed to get that
job accomplished under a system of the tariffs that are
proposed, if they go through, are going to raise the cost of
housing once again. Of course, housing inflation was a huge
issue for Americans in this last issue.
In my own State alone, when you look at our relationship,
trading relationship with Canada, Canada is responsible for
$17.5 billion to our economy in New Jersey. It is a huge--
through the bilateral trade agreements and interaction with
Canada each year in New Jersey alone.
So a tariff on Canada, which will certainly impact our
economy in the State of New Jersey, and we certainly don't want
to see that.
And, indeed, we have not quite as much with Mexico, but we
know tariffs are little more than a tax on the American people,
will raise costs at a time when they are very concerned about
costs, they want to see costs down.
This is a promise, I think--I don't want to talk about what
people voted on this last election. They voted on the promise
of the government taking on inflation. I don't know how you do
that exactly in an economy that is not controlled.
But anyway, that is the promise that was made. People voted
on that. And let's just hope that we, as we move forward in
these next 4 years, keep the job growth going and get inflation
under control.
Ms. Neitzel, can you speak to us--and you have probably
done some of this already, and I am sorry if I am repetitive
here--but you run a small business. You get inputs from in
country and overseas. Can you perhaps elaborate more or
reemphasize the impact of tariffs on your own business and the
cost of your inputs?
Ms. NEITZEL. Yes. I have spoken a little bit about that.
But as I said, our paper products all come from overseas, as do
sugar, coffee, chocolate.
Another concern that I have is the dairy farm where I buy
all of our milk and cream is a fantastic family-owned farm that
is so far north that when I go visit those cows my cell phone
connects to the Canadian cell towers.
They grow some of their feed for those dairy cows, and they
trade constantly with Canada. Our farmers in the Pacific
Northwest have wonderful long-lasting relationships, trade
relationships, with our friends and allies to the north.
Mr. CONAWAY. Thank you, Mr. Chairman.
Mr. LALOTA. Thank you. The gentleman's time has expired.
I now recognize Mr. Bresnahan from the great State of
Pennsylvania for 5 minutes.
Mr. BRESNAHAN. Thank you, Mr. Chairman, and to Ranking
Member Velazquez, who I am so elated to see that finally cares
about egg pricing in the United States on day 16.
But my first question actually is a little bit off of the
cuff and is for Ms. Moon.
Ms. Moon, you made reference earlier about the amount of
fentanyl that was seized at the southern border. What was that
number again? The northern border.
Ms. NEITZEL. Forty-three pounds from Canada, sir.
Mr. BRESNAHAN. Are you aware of how many people would be
killed if they consumed 43 pounds of fentanyl?
Ms. NEITZEL. This isn't about fentanyl with Canada; it is
about bullying and chaos creation.
Mr. BRESNAHAN. Well, to me, it is about the 12 million
people that 43 pounds of fentanyl would kill, which is more
than the population of the State of Ohio, specifically coming
from someone who lost a 16-year-old cousin because of a
fentanyl-related situation. So----
Ms. NEITZEL. I am sorry for your loss.
Mr. BRESNAHAN. Thank you. And I think when you are talking
and make comments that it is only 43 pounds, I find that
incredibly disheartening.
My next comment would be on the community banking side. I
come from a small business background. My family was very
involved in a community bank, and something that really allowed
our small business to grow was because of our relationships
with small community banks, having the lending officer, the
person who truly understands your business, what you are going
through during the good and the bad.
What are the biggest risks to community banks right now
that you would see?
Ms. FRAZIER. The ongoing regulation. And a couple of the
points I have talked about is just the impact of not
recognizing the differences between the banks and the ones that
you just mentioned that were so important, that tiered
regulation is critically important, that 1071.
While I have touched on the data points, I have touched on
the separation of the decision, it just forces those loans to
be put much more into more of a database, an AI decision, and
commoditizing, which I think is really, really impactful and
hurtful to small businesses, because we do spend quite a bit of
time coaching, counseling, and helping many of them grow from
the infancy of an idea all the way through to something much
larger.
Mr. BRESNAHAN. Well, I definitely appreciate the role
community banks play in the entrepreneurship ecosystem. It is
something that I struggle with and advocated for through
various different nonprofits that I was involved in through
tecBridge, which is an entrepreneurship-based board in Junior
Achievement. And it is those new businesses that are starting
don't have access to capital.
And I have had so many entrepreneurs come to me in my last
life--33 days ago--saying: How do I get a line of credit? If
they don't have a history of credit they are financing their
small businesses on top of credit cards.
What can Congress do to improve the accessibility of
capital to that startup entrepreneur, truly the American Dream?
Ms. FRAZIER. We really need to stabilize the impact of
changing minds and thought processes around the SBA as well for
those startup businesses, and to also consider through that
process that the best people, the best way to get those dollars
implemented are through the community banks, where the
relationships can be formed, and not through an online business
that can fulfill the need to get capital but they are not
helping them grow their business, et cetera. I would say that
is one way.
Another way is also improving community banks' access to
capital, because anytime we raise a dollar, that is ten times
we can put out, $10 we can put out into the community. So any
opportunities to impact our access to capital, whether it is
changing the accredited investor regulations and allowing it to
be a million dollars, including the house, or in a Sub S, where
1,500 banks are Sub S, allowing more investors into those.
Mr. BRESNAHAN. Thank you for that. I think that is going to
be something that I would like to focus on and inspiring the
next generation of entrepreneur, but that barrier to enter into
those markets and grow and expand, just like I am sure Ms. Moon
had gone through when you were first starting your first ice
cream shop.
But that is the American Dream, and it should be
incentivized. And the burden, the red tape to create your own
destiny is a very challenging and scary concept sometimes.
Mr. Hutter, I also come from the highway infrastructure
background. How have you been able to adapt to tool up with the
next generation of workforce? And are you seeing a pipeline of
qualified individuals to offset your growth and operation?
Mr. HUTTER. Well, the top talent in the world is always
going to be hard to come by, and we need to make more of it in
the States. And I think, more directly, we need to unlock it
more readily.
Every American talented worker who is in my plant needs to
benefit from immediate permitting reform, immediate regulatory
rollback, so that we can actually get their talents out there
on the shop floor in larger, more capable facilities that can
allow them to do more for our economy and for their families.
Mr. BRESNAHAN. Thank you. I yield back.
Mr. LALOTA. The gentleman's time has expired.
I now recognize Ms. Goodlander from the great State of New
Hampshire for 5 minutes.
Ms. GOODLANDER. Thank you, Mr. Chairman. I am so thrilled
to be a part of this committee.
I am grateful to you all for being here today. I am
grateful to be part of this committee and excited because I
really do believe that small businesses are one of the most
hopeful expressions of the American Dream.
And I say that as the great granddaughter of a family
farmer, the granddaughter of a serial entrepreneur who started
out selling airplane rides at the Nashua Airport right down the
road from where I grew up, and the daughter of a small business
entrepreneur.
I have just come back from 9 days all around the great
State of New Hampshire. And thank you for recognizing it is a
great State. My district spans from my hometown Nashua all the
way up to what we call the North Country, the Canadian border,
nine counties that stretch across my district.
I spent a lot of time talking to small businesses. And one
of the throughlines in this hearing so far has been the need
for certainty for small businesses.
You said it well, Mr. Hutter, that certainty, it goes a
long way, and it is mission critical for so many small
businesses in my State and across this country.
From the last 2 weeks, one of the big sources of
uncertainty for small businesses has been the threats of
federal funding freezes, including following last week's
memorandum from the Office of Management and Budget to other
executive actions that have been taken that have really called
into question the availability of lawfully enacted federal
funding that reaches our communities.
This hasn't been abstract. I am hearing from small
businesses and nonprofit organizations, from mayors, from
police chiefs, from fire chiefs all across our communities who
continue to face uncertainty in accessing the federal funding
that is promised to the people of New Hampshire.
And so one of the questions I want to ask each of our
witnesses is, you all rely on and work closely with the Small
Business Administration and with other federal agencies.
Starting with you, Ms. Neitzel, could you just tell us what
communication, if any, or guidance you received from the Small
Business Administration, or any other federal agency for that
matter, that helped you navigate questions around the
availability of federal funding and federal programs?
Ms. NEITZEL. We work with a small community bank called
Peoples Bank in Washington State, and all of our communication
has been with them. We had a really productive conversation
with the regional small business administrators at the
beginning of our loan process who were very informative.
One of the things I want to address about the federal
funding freeze is that many childcare providers in our
community are extremely worried about the federal funding
freeze and worried about being able to pay childcare providers.
If workers in Seattle and across Washington State can't send
their kids to those childcare centers, the economy stops.
Ms. GOODLANDER. I heard from many childcare providers who
were facing enormous uncertainty from small businesses across
my district.
Another source of uncertainty is the threat of a trade war.
And you have spoken to the real cost of that uncertainty for
small businesses.
Look, I believe tariffs are an important tool that can
create competition in our economy and can do a lot of good, but
the uncertainty that this has caused for small businesses
across New Hampshire is just unacceptable.
I want to turn to something where I think we can all agree
on. And I was really grateful for your written testimony, in
particular you, Ms. Frazier, what you wrote about the
importance of competition in the American economy.
I spent a good deal of time serving in the Antitrust
Division of the Department of Justice, and I am very hopeful
that this is going to be an area where we can agree across the
ideological spectrum on the need for competition in the
American economy.
In your written testimony, you spoke a bit about the
impacts of consolidation, the impacts on community banks. Could
you say a bit more about the importance of competition and what
it does for the bottom line for the American people?
Ms. FRAZIER. Well, the competition between the banks, I
think what you find in community banks is that we are all
working together to better the communities. And if regulation
continues to persist and grow and grow, it makes it harder and
harder for community banks to survive and thrive. And
oftentimes there does continue to be consolidation, and that is
where I believe communities are really impacted.
Ms. GOODLANDER. I think it is true across the board, from
our defense industrial base to, I am sure, the market for ice
cream in the United States. I see monopolies everywhere, and I
think this is an area where this committee can do a lot of good
for small businesses and the American people.
So with that, I yield back, Mr. Chairman.
Chairman WILLIAMS. [Presiding.] The lady yields back.
I now recognize Mr. Meuser from the great State of
Pennsylvania for 5 minutes.
Mr. MEUSER. Thank you, Mr. Chairman.
Thank you very much to our witnesses. Appreciate you being
here.
So I think it was you, Mr. Hutter, that said there is a
renewed sense of optimism, thankfully. Over the last 4 years,
we dealt with inflation in excess of 20 percent, gasoline
prices through the roof, literally bringing people to tears. An
overall energy crisis. Prohibitions, some in Pennsylvania, on
the exporting of LNG for no particular reason.
Meanwhile, we had a President that thought he only asked
for a survey to be taken as opposed to a complete prohibition.
A border crisis that is an absolutely unmitigated disaster
that includes human trafficking, rape, all kinds of horrible
things--I have been to the border four times--drugs, death.
Hundreds of thousands of young people in particular lost their
lives. Human trafficking even throughout my rural district.
Wars. Thousands and thousands, tens of thousands of Ukrainians
and Russians dying. Unrest in the Middle East to no end.
Small businesses--bringing it back home--small businesses
having some of the worst times ever, from uncertainty, loss of
tax relief, the uncertainty of losing the 199A.
Certainly, if there would have been a different President
there, it would have been gone. No question about it. Let's
face it. That is what they stated.
Manufacturing is on the decline in the United States. It is
on the upswing in China and other places.
So all of this going on, and it just can't help but be
startling to hear my good friends on the other side of the
aisle talk about how wonderful things used to be and how
horrible they are going to be, and yet these tariffs haven't
even gone into effect yet. And yet there is chaos and
everything else taking place.
I will tell you what has gone into effect: responses from
Trudeau and Sheinbaum in Mexico as to correcting some of those
horrible problems that have occurred. So that has taken place.
And you know what is also startling to me? And I was in
international business. I was in business over 20 years. How
somehow taxing those small companies that became big
companies--and that makes them evil, by the way--is okay, but
put a tariff on a small or large business overseas, that is
awful. That is going to create all kinds of worldwide
instability and global unrest.
I think most of us will pay a little more for ice cream and
guacamole if we have less human trafficking and overdose deaths
in the United States of America. I think that was resounding in
the most recent election.
So let's focus on common sense rather than nonsense
political posturing that we are hearing here: the importance of
keeping the Tax Cuts and Jobs Act.
You, Mr. Hutter, mentioned right at the very beginning
bonus depreciation is on its way out, it is on the decline.
199A is gone at the end of this year. And we probably won't get
Democrat support there. That is why we need to do it in
reconciliation, which is an outrage.
The R&D tax credit is on its way--it is gone, completely
gone. And by the way, China has re-upped their R&D tax credit,
which you are nodding, you are aware of. They call it a super
deduction of 200 percent.
So America first doesn't mean America alone. America first
means: Why don't we start looking after our American businesses
as opposed to being this global charity which only weakens our
United States of America.
So, Mr. New, we are talking taxes, regulations, and we are
talking banking. Tell me how important the 199A is, how
important taxes relief is to you.
And, Ms. Frazier, I would like you to either tell me as
soon as we are done here how much of a problem the CFPB has
been to you--or were they wonderful and they showed up in your
bank.
I will start with you, if you don't mind, Ms. Frazier.
Ms. FRAZIER. Given the size of my bank, they didn't show up
in my bank. We are under $10 billion. But their new
regulations, their laws have been quite discerning and quite
costly to us, as we look at everything. Our compliance
department overall--we looked at a budget--is over a million
dollars a year.
Mr. MEUSER. Great.
Ms. FRAZIER. Can't pass that along.
Mr. MEUSER. Do you think the plan moving forward is going
to help your businesses, gentlemen, or be detrimental?
Mr. NEW. Well, certainly the lower tax rates and----
Chairman WILLIAMS. The gentleman's time is up.
Mr. MEUSER. I yield back, Mr. Chairman.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Ms. Morrison from the great State of
Minnesota for 5 minutes.
Ms. MORRISON. Thank you, Mr. Chair. And, Mr. Chair, I would
also like to offer my condolences and deep sympathy for your
loss.
Thank you to all the testifiers for being here today. And
congratulations to all of you for your successful small
businesses and the important addition that they are making to
the success of the American economy.
You know, I am excited to be on this Committee because it
is known as one of the less partisan committees and more
focused on problem-solving. And that is why I came to Congress,
because I want to solve problems. And I hope that, going
forward, we continue to have a future-oriented problem-solving
lens as we proceed.
Mr. Hutter, sincere gratitude to you for helping secure our
nation's safety through much of the work that your business
does.
I hear and appreciate the frustration that comes with
regulations and administrative burden. I am a physician by
trade, and I am very familiar, the pain of administrative
burden that is heaped on physicians, frankly, primarily from
the private sector.
So, as we look to streamline the regulatory burden on small
business, I hope we can agree that a balance has to be struck
between keeping our people safe by protecting and doing what we
can to keep our air, land, and water clean.
You know, Mr. Hutter, you mentioned PFAS, which I think is
a great example. Because, as we learn new things, we have to
adapt, we have to be nimble, sometimes we have to change the
way we do things. And I think most of us agree that we want to
minimize the amount of PFAS that we continue to pour into our
water and our land and, by extension, our bodies.
You mentioned that there aren't good current substitutions
for some of the PFAS chemicals, some of the properties that
they have. So, in the short term, I think we need targeted
exceptions to some of the bans that certain States have been
enacting--and there is legislation at the federal level as
well--that gives, you know, time for our innovative research
universities and entrepreneurs to develop alternatives.
And I don't expect you to define the specifics around PFAS,
but I was wondering if you could comment on that balance
between regulations that protect public health while allowing
and encouraging businesses to thrive.
Mr. HUTTER. Sure. And I like the way you framed that.
I think the key thing that I could say here is:
predictability, clarity, and workability. And we need to have
that renovation--revolution, if necessary--to our regulatory
scheme right now.
You know, the gentleman, the doctor, mentioned, you know,
we have had a great recovery--in job growth; manufacturing has
enjoyed that. Let's not trip ourselves at the starting line
here, because what comes next is going to define the next 50
years.
So we have to--and I call upon all of you, let's really
auger in on this and find the balance between--I mean, it is
not a balance. I don't think it is a compromise. We all want
the same outcomes here. In fact, let's make sure that industry
is best enabled to invest into the solutions. Let's trust our
companies to actually put money and talent and innovation
behind the problems and help us solve them together.
So I think that if we can agree on some clear, actionable
regulations, in place of a meandering, ever-growing kind of
miasma of unclear, unpredictable, ``I don't know if I can
invest into this cloud or not,'' we are going to see a lot more
progress a lot faster.
Ms. MORRISON. Thank you, Mr. Hutter.
Mr. Chair, I yield back.
Chairman WILLIAMS. The lady yields back.
I now recognize Mr. Jack from the great State of Georgia
for 5 minutes.
Mr. JACK. Well, thank you very much, Mr. Chairman.
And I want to thank the witnesses for testifying today.
I am a freshman, and during my last campaign, or, rather,
my first campaign for office, deregulation was by far and away
one of the most important things that I heard over and over
across my district.
And I have a unique background. From the first day to the
last day of President Trump's first administration, I worked in
his White House. And one of the things that he tasked me with
doing was working across his administration to achieve the two-
for-one deregulatory cuts that he pledged during his campaign.
And, of course, he superseded that; he had eight for one. And
as you may have seen, he signed an executive order, I think
last week, noting that he wants to do 10-for-1 cuts. For every
regulation on the books, he wants to cut 10 existing
regulations.
So I want to applaud you for walking us through some of the
areas in which we can focus our deregulatory agenda to achieve
the economic success that we had in the first administration.
I want to start, if I could, to Mr. Hutter.
In your testimony, you referred to the 2017 Tax Cuts and
Jobs Act. And I know my distinguished colleague from
Pennsylvania, Mr. Meuser, touched on it just a moment, but you
mentioned specifically that it was rocket fuel for
manufacturers like Click Bond. And you also mentioned that the
pro-manufacturing incentives in the TCJA were key to innovation
and capital investment.
And thanks to Chairman Williams for appointing me the
Chairman of our Subcommittee on Innovation, Entrepreneurship,
and Workforce Development, I want to highlight that innovation
component. And I just want to know, could you reiterate the
importance of the TCJA incentives for small businesses like
Click Bond in investing in next-generation manufacturing and
workforce training?
Mr. HUTTER. Sure.
Well, the TCJA--like I said, rocket fuel. And we need to
focus on getting those extensions enacted immediately where
they did incentivize the very investments in our companies and
in our capital equipment that puts, really, those effective
tools in the hands of our talent.
But I want to go beyond TCJA to say, you know, the R&D
expensability expiration is an aspect of TCJA, okay? It was
something we enjoyed for 70 years. And when it comes--prior to
TCJA.
So it is not just really the effort to ensure that we
extend and keep in place those amazing investment incentives
and the predictability that allowed us to make those
investments into the long term; we need to bring back the
expired provisions that have already gone out, especially
around R&D expensing.
And if we can do this in a way that, again, delivers that
in a consistent, reliable way without a bunch of sunsets, we
are actually going to get to the place where people can invest
with confidence not just over a couple quarters or a couple
years but at generational level. And that is what is really
going to carry this country and our manufacturers forward.
But we have to get on it right now. Let's not trip at the
start line, like I said.
Mr. JACK. I completely agree.
And if I could, in my remaining time, turn to Mr. New.
I was encouraged by your opening testimony talking about
permitting. Again, I recall very fondly working on trying to
accelerate our permitting process. And I took great delight
when I saw the previous administration take credit for many of
the permitting leases that we pushed forward during President
Trump's administration from 2017 to 2021. To your point, it
takes 3 to 4 years sometimes for some of these projects to come
on line. We want to accelerate that as much as we can.
So, with what time I have left, I am curious, how can
Congress legislate safeguards to prevent future regulation
efforts in your industry specifically?
Mr. NEW. Well, certainly, you know, executive orders are
fine, but, you know, we see that, you know, one administration
comes in and they write a bunch of executive orders, the next
administration comes in and immediately reverses all those, and
so it is kind of whipsawed back and forth.
But if you can enshrine some of those changes--like changes
in the Outer Continental Shelf Lands Act, this withdrawal of
areas for leasing--if you can enshrine some of that, where it
is not subject to executive order, then we don't have that
whipsaw back and forth, constantly changing every 4 years when
there is a change in administration.
Mr. JACK. And I also took note, during your opening
testimony, you talked about how it is challenging, if you are
running a business, when you have this ever-shifting regulatory
landscape, it is really challenging to project your growth.
I am just curious. In all of your years in your industry,
which administration have you seen as the most successful at
moving forth on deregulatory efforts?
Mr. NEW. Well, certainly, the previous Trump
administration, I would say, is probably the most successful in
the deregulatory area.
You know, and I am--I would think like a lot of small
businesses, I am not looking for a handout. I am just looking
for a level playing field, and then get out of my way. I will
do the work, I will invest the money, I will push it forward,
but just get out of my way. Don't stifle me every time I turn
around.
Mr. JACK. Well, I appreciate that, sir.
Thank you to each and every one of our witnesses for
testifying today.
And I yield back to our distinguished Chairman, Mr.
Williams.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Ms. Scholten from the great State of
Michigan for 5 minutes.
Ms. SCHOLTEN. Thank you so much, Mr. Chairman.
And thank you so much to our witnesses for joining us here
today.
I want to revisit an important conversation that we have
been having here about the tariffs. And I know that, you know,
we have covered a lot of it today, but one thing I really
wanted to focus in on is this 30-day pause.
And, you know, while it has given businesses a little bit
of reprieve, to me and what I have heard from small-business
owners back home: That is not much time to plan, when who knows
what is at the other end of those 30 days. You know, so many of
our small businesses and entrepreneurs are trying to compete in
an increasingly unstable marketplace, and these tariffs could
really throw them into a tailspin.
Ms. Neitzel, I wonder, can you speak to how this impending
change impacts your business operations and how you are
navigating through this on such short notice and, you know,
particularly to the 30-day piece?
Ms. NEITZEL. Sure. Yeah, the uncertainty has, you know, put
myself and my CFO in a pinch to figure out, if we did have to
pay, say, $112,000 more for our cost of goods because of these
tariffs, we don't have a plan for how to sell, you know, a
million dollars more of ice cream to make up that profit. That
is not something that I can do [snaps fingers] like that.
It is incredibly difficult, and it is unnecessary. It is
fearmongering. It is bullying. It is playing with the hearts of
small-business owners across America who do not need this. We
have been doing well and growing for the last 4 years.
Ms. SCHOLTEN. Thank you so much for sharing that.
My district covers much of west Michigan. Kent County, the
most populated county in my district, is home to almost 60,000
immigrants. That is almost 9 percent of the county's
population. Suffice it to say, these folks are a real source of
influence in our community. They contribute culturally,
socially, and certainly have a significant economic impact, a
strong presence in our local workforce.
Many of our constituents are worried about the potential
for mass deportations having a ripple effect on a lot of
industries. I believe that such actions could cause a real
strain on our workforce. We know that mass deportations that
don't necessarily target only a specific individual can cause
individuals to even not show up to work if they themselves even
have status but happen to be married to someone who doesn't or
have someone in their family who doesn't.
Would mass deportations make it more difficult for
businesses like yours to find workers or to navigate or the
impact that it--speak about the impact that that would have.
Ms. NEITZEL. I am extremely fearful for mass deportations'
effect on farms in Washington State.
I think that, yes, it creates so much fear, not just for
adults, not just for people who do have legal status, but also
for children and for schools. I have received many emails from
folks in Washington State about planned and threatened and
rumored ICE raids in our public schools in suburbs outside of
Seattle.
And kids just need to go to school. Kids are going to grow
up and start businesses. And we need to stop threatening all of
these families with the fear tactics.
Ms. SCHOLTEN. Thank you. As a mom of two school-aged kids
and someone who has heard just awful stories from around our
district, I share those concerns, and we hear it.
I want to use just the last few minutes here to get into,
staying on the topic of kids and childcare, institutions like
Head Start, which provide educational support services to young
children and families. Over 12 locations in Kent County in my
district, as I mentioned. Due to the federal funding freeze
last week, they are struggling to draw down payments that they
need to continue their critical services. Even after the
memorandum has been rescinded, we are still seeing roadblocks.
As an employer who helps their workers access childcare--
and kudos to you--would your businesses be impacted if those
childcare providers had to discontinue their services?
Ms. NEITZEL. Yes. A threat to the childcare system in our
region and everywhere is a threat to workers being able to show
up and do their jobs, and it is a threat to us being able to be
open.
Chairman WILLIAMS. The lady's time is up.
Ms. SCHOLTEN. Thank you.
I yield back. Thank you, Mr. Chairman.
Chairman WILLIAMS. The lady yields back.
I now recognize Mr. Stauber from the great State of
Minnesota for 5 minutes.
Mr. STAUBER. Thank you, Mr. Chair, for holding this
important hearing today.
You know, during the past 4 difficult years under the Biden
administration, over 1,100 regulations were added--I will
repeat that: over 1,100 regulations were added--putting an
enormous pressure on our small businesses, costing nearly $1.8
trillion, adding more than 356 million hours of paperwork.
You know, as we look forward to the future, we have to
support policies that support small businesses and the growth
of our small businesses. It is important to understand the
hurdles that still remain.
Mr. New, what are some of the most challenging regulations
that you have faced when servicing the offshore oil and gas
industries?
Mr. NEW. There is a number of regulations that apply
directly--not directly to us but to our customers that increase
their costs of doing business, doesn't permit them to do
projects because the permitting timeline is drawn out. And that
directly impacts us in the fact that our business is totally
dependent on our customers developing facilities and building
new equipment, and if they are not doing that, then there is no
work for us. And that certainly--you know, obviously, it makes
it a struggle to maintain our employment.
And, you know, on the tax side, you know, particularly the
accelerated depreciation allows me to invest in new equipment.
What that does in the long run--I mean, that makes us more
productive, but what that does is that allows our employees to
be more productive.
Mr. STAUBER. Yeah.
Mr. NEW. And that is the one area where you have lasting
wage growth, is, if my employees are more productive, I can pay
more.
Mr. STAUBER. Yeah.
Mr. NEW. And that is really--when you look from an economic
side, that is the only place that can come from.
Mr. STAUBER. Right.
Mr. NEW. It has to come from enhanced productivity.
Mr. STAUBER. Mr. Hutter, same question. What are some of
the most challenging regulations that you have faced in your
industry?
Mr. HUTTER. Well said, Mr. New.
I would like to really focus that on permitting, if I may,
because I think that we are in a scenario right now where, to
secure the strategic materials that we need, especially in--I
look at that through the defense supply chain--we need to have
sensible mining permitting, right? We need to keep moving on
this to secure the materials we need for our power supply. Now,
we are not extremely energy-intensive ourselves, but we use
input materials that need to be made here in the United States
that require reliable and sizable energy inputs too create
them--alloyed metals, thermoplastics, coming from Bill's side
of the world.
And I just would highlight, on that permitting side, that
really we are talking about infrastructure of all sorts here,
whether it is minerals extraction or whether it is power plants
or whether it is distribution and other infrastructure.
And so, when I think about the opportunities for power
sources of the future, okay--modern advanced nuclear,
windmills, solar panels--all of these things have to be
connected to the grid using infrastructure that has to be
permitted. We have to seize this moment here for this country,
and we have to make that sensible and get going on it.
And one of the things that I really look forward to, that I
get to see in my slice of the world, are the opportunities for
advanced aerial mobility, okay? Electrified or hydrogen-enabled
clean transportation for the future. Well, how are we going to
distribute that electricity to airports and rooftops where they
have never been before? How are we going to develop that
hydrogen infrastructure?
All of this is only going to move at the speed of
permitting. And so we need to clean that up now.
Mr. STAUBER. I really appreciate that, the permitting and
the NEPA regulations, what are stifling growth. I mean, you
look at an average mine opening in the United States of America
is 29 years?
Mr. HUTTER. Sure.
Mr. STAUBER. The only country that is longer is the country
of Zambia. Give me a break, right? We need these minerals. And
we know right now China is using that against us. They are
stopping their exporting of antimony and other critical
minerals that we need.
Okay. With a simple ``yes'' or ``no,'' would you agree that
extending the Tax Cuts and Jobs Act tax provisions would have a
positive impact on your ability to reinvest in your workforce?
Mr. Hutter?
Mr. HUTTER. Absolutely.
Mr. STAUBER. Mr. New?
Mr. NEW. Absolutely.
Mr. STAUBER. Ms. Frazier?
Ms. FRAZIER. Absolutely.
Mr. STAUBER. We have heard loud and clear that these tax
credits are a lifeline for small businesses. My colleagues on
the other side of the aisle should remember this when they
vote, because standing in the way of these policies means
standing in the way of Main Street America.
Small businesses, we have always said, are the engine of
our economy. We have to protect them and allow them to grow and
prosper on the streets of this great nation.
Mr. Chair, I yield back.
Chairman WILLIAMS. The gentleman yields back.
And I now recognize Ms. Simon from the great State of
California for 5 minutes.
Ms. SIMON. Thank you so much.
And, Mr. Chair, like others on this Committee, I offer my
condolences from a very deep place, also having lost my
husband. I am hoping that Members in this building continue to
shed love and prayers on you forever. And thank you for leading
today.
I also want to thank you, Mr. Chair, for working with my
office to submit a bill that would protect small-business
owners from the waste and abuse of criminals who did the wrong
thing during the pandemic and took advantage of this Committee
and of our federal government.
There are small businesses around the country that know
that they serve as the lifeblood of their communities, and they
deserve ongoing support. In fact, you know, last week, during
my first workweek, I was able to meet with the field
representatives in the Small Business Administration's field
office in the Bay Area. Wonderful folks, who literally that
morning learned that all of the resources that they had for the
thousands of small businesses in my community, they were on
freeze.
Nevertheless, they were willing to work with my office and
my newly hired, very excited staff to go door to door in the
seven cities that I represent to ensure that we were still
going to work and that we cared that employment rates would
continue to rise. We wanted to make sure that our small
businesses were paying taxes to support our police and fire.
And yet, only hours later--only hours later--we got a call
from the young woman that I was talking to who worked at the
Small Business Administration saying that she got a letter
asking for her resignation.
We are in trouble.
So I have one quick question--and thank you for opening up
an ice cream store. As a widow and a single mom, sometimes one
of the small luxuries that I had in the darkest days was going
to a small business and just being able to sit and talk to a
small-business owner. I can't wait to taste your product at
some point.
I know I missed a lot of this hearing, because I am outside
trying to defend this democracy as it continues to fall down. I
am curious: In your speaking with other small-business owners,
what has been some of the fallout and anxiety over this chaos,
over this freeze?
One day we are hearing one thing, and the other day we are
hearing another. The portals are closed. Phones aren't being
answered. Folks are trying to employ real people in communities
and pay their rents.
Can you give me a number of examples, in the 2 minutes that
I have left, about what this fallout really means for real
communities in terms of public safety and employment?
Ms. NEITZEL. Well, many of the people that we have heard
from at Main Street Alliance run childcare centers who are very
scared of the funding freeze. So those are big examples. And
one childcare center may take care of 45 or even 100 children.
That is 100 or 200 parents who now can't go participate in the
economy. So that has been a pretty huge one.
Another thing----
Ms. SIMON. May I ask a question?
Ms. NEITZEL. Yes.
Ms. SIMON. When a student, particularly a community college
student, a poor single mother, let's say, like a teen mom, like
I was, who went to community college and who used the
neighborhood daycare center that got federal funds--now I have
a master's degree--what happens when a single mother doesn't
have childcare?
Ms. NEITZEL. Well, if she can't go to work, she may lose
her job.
Ms. SIMON. And what happens when she loses her job?
Ms. NEITZEL. If women and parents are losing their jobs
because of a lack of childcare, it is sending them into a
spiral to poverty quickly. If they can't feed their children
because they can't work and they can't pay their rent--we have
an endemic of homelessness in this country, many of which are
children, and things like this only push us closer to more of
that.
Ms. SIMON. Ma'am, so are you alluding to what may in fact
be--could be fact, that the EOs and that this very
disillusioned communication from our administration about
freezes and payouts could in fact cause our communities to be
less safe, cause our single mothers to be less employed, folks
may in fact have to drop out of college? Is that what you are
implying, ma'am?
Ms. NEITZEL. Yeah. The federal funding freeze is going to
cause people to lose their jobs and push us toward recession.
Ms. SIMON. But, ma'am, in my last 15 seconds, the
administration says that the freeze is only--it may only be for
a few seconds, a few days, a few weeks. What are the
implications? And after your answer, I will yield.
Ms. NEITZEL. The chaos is deafening for the small-business
community in every way.
Ms. SIMON. Thank you.
I will yield back.
Chairman WILLIAMS. The gentlelady yields back.
And I would like to say something just real quick that I
should have said, I failed to talk about when we started the
hearing, is that you will periodically see many of us--you have
seen it today--leave, come in, go back, go forth. You have seen
Ranking Member do it; you have seen me do it. We are going to
other committee hearings that we have. We are not mad at you or
whatever. But I do want to make that--because that sometimes
confuses people, that we all come and go and so forth. So that
is what you saw there today.
I want to say thank you to the witnesses for their
testimony and for appearing before us today.
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.
And if there is no further business, without objection, the
Committee is adjourned.
[Whereupon, at 12:26 p.m., the Committee was adjourned.]
A P P E N D I X
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
[all]