    [Senate Hearing 119-18]
    [From the U.S. Government Publishing Office]

                                                             S. Hrg. 119-18

                          NOMINATION OF THE HONORABLE
                       KELLY LOEFFLER TO BE ADMINISTRATOR
                       OF THE SMALL BUSINESS ASSOCIATION

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

                                    HEARING

                                   BEFORE THE

                          COMMITTEE ON SMALL BUSINESS
                              AND ENTREPRENEURSHIP

                                     OF THE

                              UNITED STATES SENATE

                        ONE HUNDRED NINETEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                JANUARY 29, 2025

                                   __________

          Printed for the use of the Committee on Small Business and
                                Entrepreneurship

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

            Available via the World Wide Web: http://www.govinfo.gov

                                   __________

                       U.S. GOVERNMENT PUBLISHING OFFICE
    59-472                  WASHINGTON : 2025

    -----------------------------------------------------------------------------------

               COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
                        ONE HUNDRED NINETEENTH CONGRESS

                                  ----------
                            JONI ERNST, Iowa, Chair
                EDWARD J. MARKEY, Massachusetts, Ranking Member
    JAMES E. RISCH, Idaho                MARIA CANTWELL, Washington
    RAND PAUL, Kentucky                  JEANNE SHAHEEN, New Hampshire
    TIM SCOTT, South Carolina            CORY A. BOOKER, New Jersey
    TODD YOUNG, Indiana                  CHRISTOPHER A. COONS, Delaware
    JOSH HAWLEY, Missouri                MAZIE K. HIRONO, Hawaii
    TED BUDD, North Carolina             JACKY ROSEN, Nevada
    JOHN R. CURTIS, Utah                 JOHN W. HICKENLOOPER, Colorado
    JAMES C. JUSTICE, West Virginia      ADAM B. SCHIFF, California
    JON HUSTED, Ohio
                    Meredith West, Republican Staff Director
                     Sean moore, Democratic Staff Director

                                C O N T E N T S

                                  ----------

                                    WITNESS

                                                                       Page
    The Honorable Kelly Loeffler of Georgia..........................    14
        Prepared statement...........................................    17

                                COMMITTEE INSERT

    Ernst, Senator Joni
        Letter dated January 21, 2025................................     4

                  ADDITIONAL LETTERS/STATEMENTS FOR THE RECORD

    Angel Capital Association
        Letter dated January 29, 2025................................    20
    Association of Women's Business Centers
        Letter.......................................................    21
    Economic and Community Development Institute
        Letter dated December 5, 2024................................    22
    Ernst, Senator Joni
        Minority Report dated November 14, 2023......................    23
    Georgia Public Policy Corporation
        Letter dated January 22, 2025................................    42
    Independent Community Bankers of America
        Letter dated January 14, 2025................................    43
    Independent Women's Voice
        Letter dated January 15, 2025................................    44
    International Franchise Association
        Letter dated January 21, 2025................................    45
    Job Creators Network
        Letter dated January 18, 2025................................    46
    Kemp, Governor Brian P., State of Georgia
        Letter dated January 29, 2025................................    48
    National Asian Pacific Islander American Chamber of Commerce and
      Entrepreneurship
        Letter dated February 3, 2025................................    49
    National Association of Development Companies
        Letter dated January 17, 2025................................    50
    National Association of Development Companies
        Letter dated January 21, 2025................................    51
    National Association of Government Guaranteed Lenders
        Letter dated January 20, 2025................................    52
    National Restaurant Association
        Letter dated January 24, 2025................................    53
    National Retail Federation
        Letter dated January 17, 2025................................    55
    National Small Business Association
        Letter dated January 28, 2025................................    56
    Small Business and Entrepreneurship Council
        Letter dated January 18, 2025................................    57
    Small Business Development Centers
        Letter dated January 13, 2025................................    59
    Small Business Investor Alliance
        Letter dated January 17, 2025................................    60
    Society for Human Resource Management
        Letter dated February 5, 2025................................    62
    U.S. Black Chambers, Inc.
        Letter dated December 9, 2024................................    64

                            QUESTIONS FOR THE RECORD

    The Honorable Kelly Loeffler of Georgia
        Responses to questions submitted by Chair Ernst, Ranking
          Member Markey, and Senators Risch, Young, Cantwell,
          Shaheen, Booker, Hirono, Rosen and Hickenlooper............    91

                               NOMINATION HEARING

                                  ----------

                          WEDNESDAY, JANUARY 29, 2025

                          United States Senate,
                            Committee on Small Business
                                          and Entrepreneurship,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 3:33 p.m., in
    Room 428A, Russell Senate Office Building, Hon. Joni Ernst,
    Chair of the Committee, presiding.
        Present: Senators Ernst [presiding], Risch, Scott, Young,
    Hawley, Budd, Curtis, Justice, Husted, Markey, Cantwell,
    Shaheen, Coons, Hirono, Rosen, Hickenlooper, and Schiff.

                   OPENING STATEMENT OF SENATOR ERNST

        The Chair. I call the Committee on Small Business and
    Entrepreneurship to order. I want to welcome everyone to the
    first hearing of the committee in this Congress. I am excited
    to assume the role of chair and serve as the voice for our
    small businesses.
        The purpose of today's hearing is to consider President
    Trump's nominee to lead the Small Business Administration,
    former Senator Kelly Loeffler. I'd like to welcome you here
    today and thank you for your willingness to serve.
        Senator Loeffler. Thank you very much, Senator.
        The Chair. I'm also delighted to welcome the committee's
    new Ranking Member, Senator Markey. He has been an esteemed
    member of the committee for nearly 12 years. We both recognize
    the importance of our nation's small businesses, innovation and
    promoting national security, particularly through the SBIR/STTR
    Program. And I'm excited to continue the bipartisan working
    relationship of our committee.
        I would also like to welcome back our returning members and
    provide a warm welcome to all of our new members to the
    Committee, Senators Curtis, Justice, Husted, and Schiff. I am
    looking forward to working with everyone, and I expect a very
    productive term, where we focus on the most pressing issues
    facing small businesses, including tax and regulatory relief to
    ensure entrepreneurs thrive.
        Just to give a quick run of show, I'm going to make a brief
    opening statement, then I'll turn to the Ranking Member Markey
    to do the same. Following that, we have Senator Scott and
    Senator Britt who will introduce our nominee. Then, we'll
    administer the oath, which is required. After the oath, Senator
    Loeffler will be recognized for an opening statement, followed
    by questions from our members, alternating between each side. I
    now recognize myself for five minutes for purposes of an
    opening statement.
        Senator Loeffler, as I already said, welcome to the
    committee and thank you for your willingness to serve in this
    role. I greatly appreciate the time you've spent meeting with
    me and my colleagues prior to this hearing.
        I want to take a minute to recognize some of your family
    here supporting you today. First, your husband Jeff. Thank you,
    Jeff, for being here. Next, your brother Brian and his family,
    who I understand traveled to Washington, DC from their farm in
    Illinois. And also, your parents, Don, and Lynda, who are
    watching the hearing from their home in Florida today. We
    appreciate you all making the trip here and tuning in to this
    important hearing.
        As a former member of this body, you understand the
    importance of the Senate's advice and consent process, and I
    appreciate that you have fully embraced the committee's
    standard, yet extensive, vetting of your experience and
    background in advance of today's hearing and our upcoming vote
    on your confirmation.
        As a successful businesswoman, it is abundantly clear that
    you truly understand what it takes to be an entrepreneur.
    Throughout your distinguished career, you've risen through the
    ranks of multiple companies due to your determination and grit,
    and you've started many successful businesses yourself.
        Most importantly, you understand what it means to be
    overrun by Washington's bureaucratic overreach, and the
    government must instead get out of business's way so they
    thrive. Small businesses and their advocates are excited for
    your leadership.
        The Committee has received several letters of support for
    Senator Loeffler's nomination. The mission of the SBA is to aid
    small businesses to ensure economic prosperity and free
    competition. Traditionally, SBA administrators' programs and
    services fall into three main buckets: there's counseling,
    contracting and access to capital.
        While SBA once may have been characterized as a smaller
    agency, Covid small business programs made SBA a household
    name, as the agency received a whopping $1.1 trillion in
    taxpayer funding to assist small businesses during the
    pandemic. With that funding came big responsibilities and our
    main concern, the SBA under the prior administration failed to
    live up to its mission. I believe substantial reforms must be
    made to get the SBA back in shape, and that is going to require
    strong leadership.
        The Biden Administration decided to turn a blind eye to
    Covid fraud and delinquencies refusing to properly collect
    outstanding debt and fraudulent funds, which has huge
    implications to the taxpayer. Reports have indicated SBA
    charged off about $18.6 billion worth of EIDL loans in fiscal
    year 2024. Not once during the Biden Administration was the SBA
    able to provide an accounting of their loans receivable and
    loans guarantees, which meant that the Government
    Accountability Office hasn't been able to even issue a
    financial audit of the agency since fiscal year 2020.
        SBA also completely mismanaged and misinformed Congress
    last year regarding its disaster loan account, resulting in a
    shortfall lasting 66 days. An unacceptable failure for the
    disaster victims in North Carolina, South Carolina, Georgia,
    Virginia, and Florida. I do appreciate that once the account
    was funded, SBA staff worked around the clock, including over
    the holidays to get the money out to disaster victims. But I
    never want to see that situation unfold again.
        While SBA is failing, it also appears that its workforce
    continues to stay at home, while it's more than 246,000 square
    foot, Washington, DC headquarters sits empty. The GAO found
    that even if everyone did show up to work in person, the SBA's
    building space would still only be 67 percent utilized, which
    is a complete waste of taxpayer money. That is why I introduced
    a bill to relocate 30 percent of the headquarters workforce to
    the SBA district offices across the country and cut 30 percent
    of office space.
        The SBA has been completely out of touch with the real-
    world challenges of entrepreneurs, and while the Biden
    Administration simultaneously let SBA employees stay home, they
    also added positions in Washington, DC, while stripping offices
    in Iowa, New Hampshire, Utah, and other states. I would like to
    work with you, Senator Loeffler, on ways to ensure SBA is
    effectively utilizing its personnel and ensuring that small
    businesses in all parts of America are able to access SBA
    programs if they need them.
        I've detailed these concerns and others regarding the mess
    you have to clean up from the Biden Administration, and
    potential landmines you will encounter in a letter to President
    Trump on day one of his new administration. I ask unanimous
    consent to enter this letter into the record. Without
    objection, so ordered.
        [The information referred to follows:]
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        The Chair. In Iowa, Main Street is in trouble, and I hear
    from my colleagues that this is true in their states across
    America. Small businesses are the lifeblood of our rural
    communities and for too long under the Biden Administration,
    they've been crushed with red tape and woke program
    requirements, with no one caring about how that affects the
    day-to-day operations.
        I see a great opportunity for the Trump administration and
    you Kelly, to revitalize small businesses in America. Thank you
    again for being here and I look forward to your testimony. I
    now recognize Ranking Member Markey for his opening statement.

                      STATEMENT OF SENATOR MARKEY

        Senator Markey. Thank you, Madam Chair, and congratulations
    to you. And welcome, to everyone here. I'd like to take a
    moment to welcome the newest members of the committee, on the
    majority it's Senator Curtis and Justice and Husted.
    Congratulations. And on the minority is Senator Schiff from
    California. I look forward to working with all of you.
        Senator Schiff, I extend my sympathies to you and the
    people of California. It's devastating to see the horrific
    damage caused by recent fires in your state. We stand with you
    in these challenging times.
        But unfortunately, climate disasters like those in
    California and that damage that was caused by just Hurricane
    Milton and Hurricane Helene, in a three-week period, in
    September and October of last year, it caused--those three
    storms cost 500 billion dollars' worth of damage, much to small
    businesses. That's more than half of the defense budget of the
    United States. That's the damage caused by three storms in a
    very brief period of time and not counting all the other
    damages they have caused.
        And it's only going to get worse, and more expensive unless
    we invest in long-term solutions to keep communities safe. We
    need to provide resources for small businesses in places such
    as California and the southeastern states to recover, to adapt
    and to innovate. And I was looking forward to this hearing to
    discuss work together on behalf of America's 34 million small
    businesses, including more than 722,000 small businesses in
    Massachusetts. We have 7 million people in Massachusetts and
    722,000 small businesses. That's our state's identity, it is
    small businesses.
        However, we find ourselves in a new reality, where the
    programs across government can be cut in a moment's notice with
    a cryptic two-page memo, leaving lawmakers and American
    families alike scrambling, to figure out whether the government
    is open for business. Can a new business owner looking to open
    her beauty salon, expects to close on an SBA loan and get her
    money on schedule?
        Yesterday we heard conflicting answers out of the White
    House, and I can only imagine what that uncertainty does to a
    first-time small business trying to meet its expenses,
    unacceptable. We can't allow a plumber or a childcare provider
    in everytown America, someone that may have spent their entire
    life working for someone else and is ready to invest in
    themselves, to question whether their government will keep its
    word and stand behind them.
        Apparently, we also live in a new reality where more than a
    dozen Inspector Generals, can be fired without notice or cause,
    in clear violation of the law that required a 30 days' notice.
    Mike Ware, the Inspector General at SBA, was illegally fired by
    President Trump on Friday night while he was at dinner with his
    wife. Inspector General Ware has earned bipartisan respect for
    his candor, for his meticulousness, and his tireless work ethic
    over 34 years of service. And because of his work, he was
    elected to actually chair the governmentwide council of
    Inspectors General.
        Having independent oversight at SBA is more important than
    ever given the breadth of its work. And I might add here, that
    under Mike Ware's leadership as SBA's Inspector General, he
    collected $9 billion in Covid-related fraud. Mike Ware did that
    job, and he is the chair of all Inspectors General, for the
    record, and got fired on Friday night, illegally with no
    notice, just wrong.
        Our job on this committee is to support small businesses
    and create a ruthless Darwinian marketplace that would bring a
    smile to Adam Smith. Massachusetts is one of the wealthiest
    states in America per person. So, we believe in capitalism, but
    we also believe in fairness. I want to ensure that every
    enterprising kid with a million-dollar idea has the chance to
    fairly to compete in the marketplace.
        We can promote innovation and competition by strengthening
    programs like SBIR, or the Small Business Innovation Research
    program and STTR, the Small Business Technology Transfer
    Program, which help bring many innovative ideas to life.
        In Massachusetts, small businesses have won more than $8
    billion in SBIR awards and over $722 million in STTR awards. As
    Ranking Member, I want to work together with Chair Ernst to
    strengthen SBIR and STTR, keep businesses in Massachusetts and
    Iowa or across our country, keep them competitive and build on
    the small business boom that was created under the Biden Harris
    Administration.
        Under President Biden's leadership, we saw a record 21
    million new business applications, support for more than $1.2
    trillion in loans and grants, to more than 13 million small
    businesses, 13 million small businesses, and a record amount of
    federal contracting dollars for small businesses, including
    small disadvantaged businesses. We need to keep that momentum
    up, and I just am looking forward to these next couple of
    years.
        Senator Loeffler, thank you for joining us today and I know
    we share a belief that access to capital in underserved areas
    is vital and I look forward to hearing your vision for
    America's small businesses. In particular, I'm eager to hear
    how you plan to promote competition, innovation, and job
    creation. It's an absolute critical part of our economy and as
    we know, a vision without funding is an hallucination, so we
    just have to make sure that we keep these programs intact,
    protected and flowing for everyone. So, I thank you, Madam
    Chair. I look forward to this hearing.
        The Chair. Thank you, Ranking Member Markey. And next, I
    would like to recognize Senator Britt from the great State of
    Alabama to introduce our nominee. Senator Britt, you're
    recognized.

                       STATEMENT OF SENATOR BRITT

        Senator Britt. Thank you, Chair Ernst, and Ranking Member
    Markey, and members of the committee. It is an honor to be here
    with you today to introduce my friend. She's President Trump's
    nominee to be Administrator of the Small Business
    Administration, former United States Senator Kelly Loeffler. A
    prolific job creator, an entrepreneur, and a quintessential
    American success story.
        Kelly grew up on a family farm, became the first in her
    family to earn a college degree and worked her way up to the
    highest levels of business. She joined Intercontinental
    Exchange when it had under 100 employees, and then spent nearly
    20 years building it into a global powerhouse and a Fortune 500
    company.
        She went on to found Bakkt, and as its CEO and first
    employee, she laid the foundation to take the company public in
    just three years. Since leaving the Senate in 2001, she's
    devoted her time to running a voter registration nonprofit.
        To me, the most striking and most impressive part of
    Kelly's story is this; she gave up a successful career in the
    private sector to serve the Senate, and donated every single
    paycheck while she was here to charity. And now, that she's
    made the decision to serve the American people once again, when
    confirmed, if confirmed, which I believe you will be and
    strongly, hopefully in a bipartisan fashion. With her signature
    selflessness, she will once again donate her salary to charity.
        Kelly is the perfect choice to lead the SBA, and I want you
    to understand why this matters to me. First off, 99.4 percent
    of the businesses in the great State of Alabama are small. So,
    what you do matters. And I'm also the daughter of two small
    business owners, and so I have seen the struggles of my parents
    firsthand.
        You've seen that when people get in these rooms in DC and
    create big, burdensome regulation, the truth is they hit the
    little guy the hardest. And you get it, you've lived it and
    you're ready to fight for these individuals. You're ready to
    fight for the American dream, you have a proven track record in
    delivering efficiency, accountability, and results driven
    leadership. And she wants to empower every entrepreneur with
    the resources and support they need to pursue what they believe
    they can.
        In closing, I'd like to say I have absolute confidence in
    Kelly's ability to strengthen our main streets, to figure out
    how we get capital to underserved communities, to figure out
    how we roll back red tape and let people do what they do best,
    job creators soar and achieve the American dream. Helping our
    small businesses thrive like never before is what I'm confident
    she will do.
        So, thank you so much for the opportunity to speak to each
    and every one of you, and thank you for giving her the utmost
    credence because she's who we need in this role as the next SBA
    administrator. Thank you.
        The Chair. Thank you, Senator Britt. And next, we will have
    Senator Tim Scott here at the dais to introduce the Honorable
    Kelly Loeffler. And Senator Scott, you are recognized.

                       STATEMENT OF SENATOR SCOTT

        Senator Scott. Thank you, Chairwoman Ernst, Ranking member
    Markey and members of the committee. And it's my honor to be
    here today to introduce President Trump's nominee to serve as
    Administrator of the Small Business Administration, my friend
    Kelly Loeffler from the great State of Georgia. I agreed to
    introduce Kelly today because her path like mine, to success
    and the U.S. Senate defied all odds. She's standing before you
    because she loves the Lord, she has an amazing work ethic, and
    frankly, she loves her country as much as anyone I've ever met.
        Small business in rural America run through the thread of
    the Loeffler family. I love the story of her family. She's a
    fourth-generation farmer. Her grandfather had an eighth-grade
    education, her father a high school education. She worked so
    hard, that literally her hard work and her strong value system
    made her the first college graduate and then later she earned
    her MBA. Her story is frankly a story of remarkable success and
    one that we should all be thankful that America continues to
    create all across the country.
        And one of the things that we oftentimes think of when we
    think about success and the American dream is home ownership.
    For me, the American Dream was achieved through small business,
    of having someone to be the Administrator of the SBA who
    understands and appreciates small business, I have a great
    passion for people like that.
        Someone who's not only--you are at the top of the food
    chain in business, but frankly, I prefer the part of your story
    that starts with a woman working her way at minimum wage jobs
    and working your way up that ladder, that we spend so much time
    talking about the top of the ladder, that we forget that most
    of us have to climb that ladder rung by rung by rung. And
    you've done a marvelous job of doing that.
        One of the things I'd like to celebrate about her time in
    the United States Senate after being appointed in Georgia was
    that, during the pandemic we worked closely on relief for
    families and businesses across the South. We fought to improve
    access to the CARES funds to keep Main Street alive.
        You and I fought together to stop bad actors from taking
    advantage of fraudulent loans. And we backed President Trump's
    efforts to move supply chains from overseas, cut regulations,
    lower taxes, and empower American entrepreneurs to succeed. By
    the end of your term, you had passed half a dozen bills into
    law and delivered $47 billion of relief funds to Georgia, to
    their employees, and to their small businesses.
        Kelly's career has been nothing short of amazing, proving
    that the American dream can be achieved through hard work,
    faith, with the right leaders in place. Kelly Loeffler is the
    right leader to put in place as the Administrator at the SBA.
    Her proven track record is why we can have great confidence
    that the SBA will return to the gold standard under your
    leadership.
        I'll just stop there with my prepared remarks and simply
    say that as a small business owner for 15 years, I have great
    confidence in your ability to do the job. To my fellow members
    of this committee, I hope that you'll hear her out, but I'm
    also asking for you to vote for her, because it is time for us
    to right the ship, to focus on the underserved communities
    around this country, and to make sure that every single ZIP
    Code in this nation has strong, powerful, small businesses.
    Because without small businesses, we will have high
    unemployment and low enthusiasm. Thank you for your time.
        The Chair. Thank you, Senator Scott, for that kind
    introduction. Now, I will note that the vote has started. So,
    if we have members further down the dais that would like to go
    vote now, please do so. Ms. Loeffler, if you would, please
    rise. We'll swear you in.
        Okay. Ms. Loeffler, raise your right hand. And this is the
    tradition of the committee to swear in our nominees. So, we are
    swearing in today Kelly Loeffler to be Administrator of the
    SBA. Please answer the following questions. Do you solemnly
    swear to tell the truth, the whole truth, and nothing but the
    truth, so help you God?
        Senator Loeffler. I do.
        The Chair. Should you be confirmed as Administrator, are
    you willing to appear and testify before any duly constituted
    Committee of Congress when requested to do so?
        Senator Loeffler. Yes.
        The Chair. Good. Okay. Are you willing to provide such
    information as requested by any such committee?
        Senator Loeffler. I am.
        The Chair. Thank you. You may go ahead and take your seat,
    Ms. Loeffler, and you are now recognized for five minutes to
    provide your opening statement to the committee.

       TESTIMONY OF THE HONORABLE KELLY LOEFFLER, NOMINEE TO BE
              ADMINISTRATOR, SMALL BUSINESS ADMINISTRATION

        Senator Loeffler. Thank you, Chair Ernst. And let me just
    say it's a distinct honor to be here today. Chair Ernst,
    Ranking Member Markey, and members of the committee, it's truly
    an honor to be before you today as President Trump's nominee
    for the Administrator of the Small Business Administration.
        I'm as humbled to be here today as I was serving alongside
    many of you in the U.S. Senate, and I've appreciated the
    opportunity to meet with nearly every member of this
    distinguished committee in recent weeks.
        I'm especially grateful to President Trump for entrusting
    me with the privilege and responsibility of serving America's
    34 million small businesses. There is no stronger advocate for
    these job creators than our President, and I share his
    commitment. If confirmed, I will work tirelessly with him to
    make small business great again.
        I want to thank my incredible husband Jeff, my wonderful
    family and friends who have joined us here today and in person
    and via broadcast. Most importantly, I give all thanks and
    glory to God.
        As someone who has spent my life working in small
    businesses, starting them, growing them, and helping them
    succeed--I know that small business is big business for
    America. They comprise 99 percent of all businesses, they
    create two out of every three new jobs and employ nearly half
    of the private sector workforce. They are the opportunity and
    innovation engines that drive prosperity and growth and they
    power the American economy as much as they power the American
    dream.
        In his first term, President Trump made historic strides to
    empower job creators and job seekers alike, driving small
    business formation, a blue-collar boom. And through historic
    tax cuts, trade deals and deregulation, his agenda created 7
    million new jobs, delivered historically low poverty and record
    employment for minority communities.
        His first term accomplishments were so great that following
    the 2024 election, small business optimism recorded its largest
    jump since 1980. That was more than two months before he even
    took office.
        Small business is in my DNA. I grew up as the fourth
    generation on our family's farm in Illinois. My wonderful
    parents, Don and Lynda didn't have degrees, but they had faith
    and grit. They worked relentlessly to sustain our farm and
    small trucking company, risking everything to provide for us
    while navigating volatile commodity markets and complex
    regulations and facing countless day-to-day challenges.
        It's where my Midwestern work ethic was ingrained, working
    in our soybean fields, and waiting tables at local restaurants,
    preparing me for a lifetime of growing and starting businesses.
    I became the first in my family to graduate college, later
    earned my MBA and became the only CFA ever to serve in
    Congress.
        Since then, I helped grow a startup into a Fortune 500
    company. For 10 years, I co-owned a WNBA team. I later launched
    a financial tech company as the founding CEO and first
    employee. I recall managing budgets in excel spreadsheets,
    hiring my first team member and working with regulators, as
    much as I recall ringing the bell when two of those companies
    went public.
        In the Senate, I strongly supported President Trump's
    historic agenda and pandemic response. Having spent years as a
    small business owner, I made it my mission to serve as their
    voice. I spent much of 2020 delivering relief-traveling the
    state of Georgia and meeting with Main Street entrepreneurs
    like Eric and Rachel from Dockside Seafood in Savannah, they
    were struggling to navigate the PPP program. The loan that we
    helped them get didn't just save the restaurant, it saved the
    jobs of 35 Georgians. And I'm so proud to say that they're
    still in business today.
        Now, no matter the business, the challenges are
    consistent--from managing inflation and capital to hiring a
    skilled workforce and weathering uncertainty. Job creators in
    the last four years have faced rising demands to comply with
    new rules, often drafted with unknown cost and consequence.
    This regulatory complexity crushes growth, picks winners and
    losers, and denies opportunity to those who dare to dream of a
    better future.
        If I have the honor of being confirmed, I'll leverage my
    decades of business experience to champion America's
    entrepreneurs. We'll cut red tape and modernize this agency
    while restoring the accountability and transparency that
    taxpayers deserve. I will crack down on fraud with a zero-
    tolerance policy while shifting SBA's focus from Washington, DC
    back to Main Street, across America.
        And if confirmed, I'll collaborate across government and
    the private sector to deliver efficiency and results.
    Importantly, we will responsibly and urgently meet the
    challenge of disaster relief. I am committed to serving all who
    are impacted from North Carolina to California to Hawaii.
        Each taxpayer dollar entrusted to the SBA should have an
    economic multiplier effect, delivering productive capital to
    grow manufacturing, strengthen rural communities, create jobs,
    and develop critical technologies like AI and chips. I believe
    we must continue to empower entrepreneurs from all walks of
    life, including women and veterans.
        Above all, the SBA's founding mission needs urgent
    restoration: empowering small businesses, and growing our
    economy. That's exactly what the America First agenda does--by
    ending inflation, cutting taxes, unleashing American energy
    dominance, slashing regulation, and reining in waste, fraud,
    and abuse across government.
        In the last four years, small businesses have lost ground
    burdened by inflation, big government regulation and
    uncertainty that threatens the very existence of Main Street.
    President Trump's proven agenda will restore the small business
    economy marking a return to ``Made in America''--with a golden
    era of prosperity and growth.
        At the SBA, that means meeting today's dynamic challenges
    alongside America's entrepreneurs, not by sitting in Washington
    or working from home. We will honor their jobs by doing ours.
        Small businesses are the risk takers, job creators,
    taxpayers, innovators, and the providers of first jobs. To
    former waitresses like me, they represent the best of American
    free enterprise. Like President Trump, I've signed the front of
    a paycheck. We both understand there is nothing ``small'' about
    small business.
        Chair Ernst, Ranking Member Markey, and committee members:
    thank you for your dedication to small business. I welcome your
    questions and I would be honored to earn your support to serve
    as the next Administrator of the Small Business Administration.
    Thank you.
        [The prepared statement of Senator Loeffler follows.]
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        The Chair. Thank you, Senator Loeffler for your testimony.
    Before we move to questions, the committee has received several
    letters of support for Senator Loeffler's nomination, and I ask
    unanimous consent to enter into the record letters of support
    from the following organizations.
        America's Small Business Development Centers, Independent
    Community Bankers of America, Independent Women's Forum, Job
    Creators Network, National Association of Development
    Companies, National Retail Federation, Small Business Investor
    Alliance, Small Business and Entrepreneurship Council, National
    Association of Government Guaranteed Lenders, International
    Franchise Association, National Restaurant Association, Georgia
    Public Policy Foundation, Governor of Georgia--Brian Kemp,
    Association of Women's Business Centers, Economic and Community
    Development Institute, U.S. Black Chambers Incorporated, and
    the National Small Business Association.
        [The information referred to follows:]
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        The Chair. Without objection, so ordered.
        So, at this time, we will go ahead and move on to
    questions. So, I now recognize myself for five minutes of
    questions.
        Senator Loeffler, in our conversation, you made it clear
    that given your time in the Senate, you understand the role of
    Congress. You denoted given your business experiences, you'd
    view us as your board and the taxpayers as your shareholders,
    with responsibilities to all of us to ensure the SBA moves
    forward in the right direction.
        Unfortunately, the Biden Administration did not share this
    view. I repeatedly requested information and those requests
    were ignored or fumbled. Can you commit to provide this
    committee with the documents and information at requests in a
    timely manner?
        Senator Loeffler. Absolutely Chair Ernst. I look forward to
    a collaborative and responsive relationship.
        The Chair. Yes, and I think that is essential to a good
    partnership between Congress, the Small Business
    Administration, and our constituencies. That's who we serve.
    So, thank you for that.
        Last year, SBA failed to alert or provide the committee
    with information before the agency ran out of funding for its
    disaster assistance program. Can you commit to more
    transparent, timely, and forthright dialogue between the SBA
    and this committee should you become administrator?
        Senator Loeffler. Absolutely, Chair Ernst. This should
    never happen again under my watch, it will not and we will work
    to make sure that we have all the controls in place.
        The Chair. Thank you for that answer. I'd like to move on
    to your goals and vision for the agency. Now, we know that it's
    extremely important to me that we right size the SBA and get it
    on a clear course to deliver its mission. Within your first 100
    days as administrator, what would be your primary goals and
    objectives to get the SBA back on track?
        Senator Loeffler. Thank you for the question, Chair Ernst.
    And I too enjoyed the time that we were able to spend together
    with you and your staff. I think your leadership of this
    committee is critical and I appreciate the work that you've
    done to date.
        I look forward to working with this entire committee toward
    the aims of restoring the Small Business Administration, to
    serving small businesses and supporting economic growth in this
    country, that's our North Star. In order to do that, we must
    have accountability at this agency--it's in dire need of
    restoration, and that starts with shoring up the financial
    situation.
        The fact that this agency has not been able to pass an
    audit for four years is a disgrace. We must make sure that we
    are accountable to taxpayers, that our programs are solvent and
    working toward the aims of serving small businesses. So,
    obviously, we're going to get our financial house in order and
    do it quickly.
        And we're going to do that, in addition to making sure the
    programs are working for small businesses and taxpayers, we
    know that the core (7a) loan program is in need of oversight in
    terms of understanding the rising delinquencies and defaults.
    We will take a hard look at that. We will make sure that the
    disaster funds are resourced and accounted for, and that there
    are no more situations where Americans in a crisis are faced
    with months of not having disaster relief.
        And then finally, we are certainly going to get this agency
    back to work. I am grateful for President Trump's rapid action
    through his executive order to return to work. We're going to
    make sure that we have people at work committed to the success
    of small businesses that have a heart for small business, but
    also have that sense of accountability to taxpayers.
        The Chair. Thank you so much for that. And as you talk
    about the audit, we know that we need transparency within the
    Small Business Administration, and hearing that is music to my
    ears. I began my elected career representing the taxpayers of
    Montgomery County as their county auditor. And I'm just excited
    to know that you will follow through on that commitment.
        As you know, I also serve as the Chair of the Senate DOGE
    Caucus, and we have a public mandate and a very rare
    opportunity to expose and roll back programs for what they
    truly are, multimillion dollar boondoggles. SBA is not immune
    to this, which provides us extraordinary opportunity to
    streamline and disrupt the bureaucracies and their status quo.
    Will you commit to examining programs to root out fraudulent
    actors?
        Senator Loeffler. This is critical because we're over four
    years past Covid. The last administration took a pass on
    rooting out fraud in these programs. I appreciate your work and
    your legislation, continuing Covid collections to make sure
    that we go after those that want to defraud the government. As
    I said, we'll have a zero-tolerance policy toward fraud, but
    also toward waste and abuse. And we will root that out within
    the agency and those that seek to exploit the programs.
        The Chair. Very good. Thank you very much, Senator
    Loeffler. At this time, I will turn the gavel over to Senator
    Curtis while I go vote. And I will recognize Ranking Member
    Markey for your questions.
        Senator Markey. Thank you, Madam Chair, very much. On
    Monday night, President Trump's budget office issued a memo
    that directed agencies to cut off all federal spending outside
    of payments to individuals. The Trump Administration issued
    this order even though this spending was authorized and
    appropriated by Congress and intended to benefit the American
    people.
        So, my first question is very straightforward, do you
    believe that this action by the President to cut off federal
    funding, authorized and appropriated by Congress, was lawful?
        Senator Loeffler. Senator, I disagree with the premise of
    your question because the money was certainly with regard to
    the agency's discretionary in many cases. But I fully agree
    with President Trump's decision to stop wasteful spend
    spending, it resulted in a landslide victory that many
    Americans were waiting for relief against excessive government
    spending that has----
        Senator Markey. He froze all programs. He did not freeze
    programs that had waste, fraud, and abuse. He froze all
    programs. Do you think that's lawful that he can freeze all
    programs?
        Senator Loeffler. With all due respect, I completely
    disagree. Not all programs were frozen at all. He, specifically
    in the OMB, called out programs related to illegal DEI programs
    and programs that effectively linked to the Green New Deal that
    picks winners and losers. And so, I think Americans breathed
    the sigh of relief when they saw that the waste, fraud, and
    abuse is going to get out of this government.
        Senator Markey. Wait, no, no. On the next day, OMB did put
    out a statement saying, funds for small businesses are not
    subject to the order. So, he did not single out all these
    programs, initially. They were under this cloud of freezing all
    programs, it had to be clarified. And that's good for small
    businesses, but only for now. This uncertainty, the cloud,
    which was placed over the head of small businesses across the
    country, that could return at any moment. It's just a dangerous
    precedent that the President set.
        I hope that you would hold President Trump to upholding the
    law. And if President Trump asked you to do anything illegal or
    unconstitutional in your role as SBA administrator, would you
    say no?
        Senator Loeffler. Ranking Member Markey, the President is
    not going to ask me to do that. I'm not going to create a
    hypothetical situation here. I will faithfully uphold the law
    and President Trump is fighting for Americans.
        Senator Markey. The President has already acted illegally
    twice in the last five days. He fired Inspector----
        Senator Loeffler. I respectfully disagree.
        Senator Markey. He fired the Inspector General, that was
    illegal under the law. He froze all funding on Monday night,
    that was also against the law. So, it's not as though he won't
    ask you to do something illegal, unconstitutional. He's been
    doing it all week. And this is the first week. So, let me move
    on. Since its creation in 1982----
        Senator Loeffler. Ranking Member, Markey, if I could, just
    for the record, note that these were not illegal actions. I
    support the President's actions, it's in his right to select
    the members of the executive branch, that's what he was doing
    and he certainly is in the right to stop wasteful spending as
    the President.
        Senator Markey. No, no. The President violated a statute by
    firing the Inspector General. It requires 30 days' notice, it's
    a statute passed by Congress, signed by a President. It's a
    violation of law. He does not have the ability to be a King, or
    a dictator. He has to follow the law, Senator.
        Senator Loeffler. I believe there's precedent for this in
    his right as the head of the executive.
        Senator Markey. Now, let me move on to SBIR which has had
    staggering success across the country and especially in
    Massachusetts. Overall, Massachusetts has received over 26,000
    SBIR and STTR awards, $9 billion in funding. And I strongly
    believe in these programs and their potential for just
    supercharging our economy as those programs have in
    Massachusetts and states all across the country.
        And when I met with you, you mentioned that SBIR awards
    should be awarded on a merit basis. And I agree wholeheartedly
    that merit drives innovation. So, will you commit to working
    with me and the committee to ensuring that any SBIR/STTR
    reauthorization effort maintains a merit-based process and does
    not limit innovation?
        Senator Loeffler. Absolutely, Ranking Member, Markey, if I
    have the honor of being confirmed, I will look forward to
    working with you. And I know we have a lot of common ground in
    support of small businesses, particularly the SBIR. And for
    those watching, it's the Small Business Innovation Research
    program that allows the United States to be at the forefront of
    technological, biomedical, and other types of national security
    related technology research and innovation that is so important
    to this country. Thank you.
        Senator Markey. Okay. Thank you.
        Senator Curtis [presiding]. Thank you. And now I will yield
    five minutes to myself. And I'm so pleased, Senator to have you
    with us and we'll call you Senator, at least for now. When you
    came into my office, I really appreciated the connection we
    made about small businesses in our own lives, and in your
    family's lives.
        And like many of the members here, we can all identify with
    the statistics in our state, I don't think they're very
    different, in mine, its 99 percent are small business, over
    half of all the employees in the state are small business. And
    it's such an important part of our economy, yet they often lack
    resources and don't have some of the advantages of larger
    businesses.
        And one of the things we discussed when you were in my
    office is how to best hook up the resources of your
    administration with those small businesses in our state. You
    were generous, if I remember correctly, to offer to come out to
    our state, and I'm getting a nod ahead, so I'm going to take a
    yes for that. And I think as part of that, not just you coming
    out, but helping educate my small businesses about what's
    available to them and how they can access those. So, we'll look
    forward to your visit.
        Senator Loeffler. Thank you, Senator. I'm very excited
    about visiting your town, I'm excited to have you in the Senate
    and appreciated meeting with you and your staff in the basement
    office. I used to have a basement office. It's a great way to
    start. [Laughter.]
        Senator Curtis. It's like a small business, right?
        Senator Loeffler. That's right. It's a small business.
        Senator Curtis. I think we talked about--I had a small
    business before I came here. My father was a small business
    owner. My grandfather was a small business owner. My daughters
    and children have small businesses. And one of the things that
    I don't think America realizes is that most of these small
    businesses struggle just to keep the lights on, right? It's
    hard paycheck to paycheck.
        They don't have a lot of money to do a lot of things other
    people do. Part of that is they don't have the money for
    lawyers and attorneys to deal with the excessive regulations
    that sometimes we can put on them here from Washington, DC. And
    as a result, I believe regulations are disproportionately hard
    on small businesses.
        So, share with me for a minute what you can do to lighten
    this burden and how do we make sure here in Washington that
    we're not the biggest problem with small businesses?
        Senator Loeffler. Senator, thank you for recognizing that
    vital issue to America's 34 million small businesses many who
    have fewer than nine employees. And, you know, in answering
    your question, I'd like to speak to small businesses in saying
    you have someone that, if confirmed, will understand what it's
    like to have a small business--to worry about meeting payroll,
    let alone paying the bills for the small business, particularly
    with the setbacks that small businesses have had in the last
    four years, losing about 10 percent on the top line revenue
    while seeing their costs increase by 20 percent due to
    inflation.
        So, small businesses have lost ground. Now, the SBA can be
    a way of helping small businesses combat what has been a tough
    four years if we deploy the resources appropriately and
    prudently so that the small businesses who need it most have
    access to that, be it through capital, be it through technical
    assistance or other ways of supporting entrepreneurship in this
    country, which is so vital to our advancement on a global
    stage, but also within our local communities.
        These are the businesses that sponsor the softball teams.
    These are the businesses that provide that first job, and
    they're the ones that never work from home. They show up, they
    turn out their commitments to their customers, and that's
    absolutely what we're going to do at the SBA.
        Senator Curtis. Great. I appreciate that. Looking forward
    to working with you on that. Kind of a sister to that would be
    just federal policy in general and we know we're going to be
    talking about tariffs in the upcoming days. Once again, these
    are disproportionately hard on small businesses, and we had
    this conversation in my office too, would love to invite you to
    work with the administration and the Senate as we move into a
    world where tariffs are real reality, to figure out how to help
    small businesses accommodate better to those tariffs', things
    like a different runway timeframe and when those hit the small
    businesses.
        Can you just comment on how we can deal with our small
    businesses and what might be one of their most difficult
    challenges?
        Senator Loeffler. Thank you, Senator. If I have the honor
    of being confirmed, I will be a voice for small business. But
    let me assure you, there is no bigger small business champion
    than President Trump. He will make sure that small business has
    a voice at the table. But I also think it's important that we
    look at the data and not the hyperbole that happens sometimes
    in the media.
        President Trump was successful in implementing tariffs in
    his first term, but also successful at keeping inflation right
    around that 2 percent mark, which really, you know, some facts
    that the media always overlooks. So, you have my commitment
    that small businesses will be considered in all the decisions
    we make. And that's something that I know firsthand from
    President Trump. He is their biggest advocate.
        Senator Curtis. I think I should yield my time. Thank you.
    [Laughter.]
        The Chair. And thank you Senator Curtis for manning the
    chair. I now recognize Senator Hirono.
        Senator Hirono. Thank you, Madam Chair. Mrs. Loeffler,
    welcome. As part of my responsibility as a member of this
    committee, as well as all the other committees on which I sit,
    I ask the following two initial questions of all nominees who
    come before any of my committees. So, I'll ask you, since you
    became a legal adult, have you ever made unwanted requests for
    sexual favors or committed any verbal or physical harassment or
    assault of a sexual nature?
        Senator Loeffler. No, Senator.
        Senator Hirono. Have you ever faced discipline or entered
    into a settlement relating to this kind of conduct?
        Senator Loeffler. No, Senator.
        Senator Hirono. During the pandemic, you opposed Planned
    Parenthood Health Centers receiving PPP Loans for ideological
    reasons even though, like other nonprofits, they were eligible
    for loans as later determined by SBAs own inspector general.
    Last week, the President fired the IG without proper notice as
    required by law. And it's clear that President Trump believes
    he can do whatever he wants. As the Administrator, should you
    be confirmed, would you commit to implementing SBA programs in
    a fair and impartial manner?
        Senator Loeffler. Senator Hirono, let me first say, I hope
    that we could be able to meet, I'd requested several meetings.
    I keep the people of Maui in my prayers. I know that they're
    still struggling through the disaster that occurred about 18
    months ago, and I hope that we can work together.
        But let me correct with all due respect both premises of
    your question. I objected to the Planned Parenthood receipt of
    Covid relief loans because they did not fit the parameters of
    the program because of the affiliation----
        Senator Hirono. Actually, Mrs. Loeffler, you do know that
    the IG took a contrary position. So, all I'm asking is whether
    you can be fair and impartial in being the administrator of
    SBA, a very important position. As you say, there are so many
    small businesses throughout our country. So, just a simple
    affirmation that you can do so is what I'm asking.
        Senator Loeffler. Senator, I will faithfully uphold all of
    the laws and ethics rules.
        Senator Hirono. Well, the thing is that, as I mentioned
    with President Trump, the laws that he likes are the ones he
    likes, and then the ones he doesn't like, he considers them to
    be illegal. But I will move on.
        As a Senator, you co-sponsored the resolution, recognizing
    Brian Sicknick, the U.S. Capitol police officer, who was
    brutally attacked during the January 6th insurrection and who
    later died. As a result, last week, the President issued
    blanket pardons for the January 6th Insurrectionists, including
    those responsible for attacking Officer Sicknick. Do you agree
    with the President's decision to pardon these violent
    offenders? Yes, or no?
        Senator Loeffler. Yes, Senator. I strongly support
    President's pardon. These individuals were denied due process
    and it's time to get past political persecution in this
    country. That's what Americans voted for.
        Senator Hirono. Mrs. Loeffler, they were not denied due
    process because they were tried and found guilty, and some of
    them even admitted their guilt. So, I am disappointed that you
    agree that these violent, basically criminals, should be
    pardoned.
        Then, we get to the Lahaina Wildfire. In 2023, Lahaina
    experienced wildfires that devastated the entire community,
    including schools, homes, businesses, and more. Key to their
    recovery has been what I've described as the federal family of
    agencies, which of course includes FEMA and SBA.
        Last week, the President proposed eliminating FEMA and he
    said, ``Let the states take care of the tornadoes and the
    hurricanes and all of the other things that happen''. So, I
    have seen the devastation in Lahaina and the rural FEMA and SBA
    played in the recovery. The SBA itself provided hundreds of
    millions of dollars in loans to help the Lahaina recover. It
    would be a huge mistake to eliminate SBAs role in disaster
    response and relief, and have states fend for themselves.
        Do you agree with the President's recent comments that
    states should be left to fend for themselves during and after
    natural disasters? That's another yes or no question.
        Senator Loeffler. Senator, I disagree with the premise. The
    President strongly supports disaster relief. He was on the
    ground just last week in North Carolina.
        I also mentioned Hawaii in my opening remarks, that we do
    support the continued relief there.
        Senator Hirono. So, you support the continuing involvement
    of the SBA in recovery.
        Senator Loeffler. Yes. And the President's been clear that
    individual assistance will not be paused.
        Senator Hirono. I'm glad you do and that you support the
    continuing role, important role of SBA. When you were running
    for U.S. Senate, you----
        The Chair. The Senator's time has expired,
        Senator Hirono. Time flies. Are you having a second round?
        The Chair. We can do a second round. Yes.
        Senator Hirono. If not, I'll certainly submit questions for
    the record. Thank you.
        The Chair. Thank you, Senator Hirono. Next, I will
    recognize Senator Budd for five minutes of questions.
        Senator Budd. Thank you, Chair, Senator Loeffler,
    congratulations on your nomination. Thanks to your family and
    your friends for being here and for leaving your role in
    private work twice to serve our country. So, thank you for what
    you're willing to do.
        Your state and my state and several others have gone
    through quite a lot since late September with Hurricane Helene.
    In the moments where I wasn't in Western North Carolina myself,
    I was able to see--if I was able to look up and see a
    television. It was you standing there, I believe it was in
    Valdosta with President Trump, committing that if he were
    reelected, he would support. He's lived up to that. He's been
    back to Western North Carolina. I believe he's our rebuilder-
    in-chief.
        So, one of the things that we saw was that the SBA under
    President Biden, it failed to notify Congress in a timely
    manner about the depletion of the Disaster Relief Fund and
    didn't fulfill their reporting requirements along the way. So,
    if confirmed, how would you ensure timely and accurate
    reporting to Congress regarding disaster loan account balances
    and funding needs? And how would you address the transparency
    failures that we saw during the Biden Administration?
        Senator Loeffler. Thank you for this important question,
    Senator. And let me assure you, my prayers are with the people
    of Western North Carolina. I know the President was there
    recently, and is truly the rebuilder-in-chief, as are many
    private enterprises in your own state, Samaritan's Purse, and I
    thank them for their dedication across the Southeast. And my
    prayers are with the people of Georgia and all impacted.
        But let me say what happened on October 15th, when Congress
    was shocked by the news that despite assurances two days
    earlier, the disaster relief funding had run out. Now, in
    business, this would never be tolerated. And we see examples of
    this everywhere within this agency that I know we're all trying
    to get our arms around and make a quick correction on.
        You have my commitment that we will ensure that disaster
    relief funding is there for hardworking Americans when they
    need it. And I look forward to your feedback on how the
    response has been so that we can strengthen the program and
    having the transparency so that this committee is routinely
    apprised of the status of the agency across all vectors that
    we're serving the American people on.
        Senator Budd. Thank you for that. So, the SBA disaster loan
    program, you know, it's critical in supporting small
    businesses, as you've mentioned in a few of your earlier
    remarks and also being there to help communities during crises.
    But we have recent disasters like Hawaii or for us, Helene,
    that really revealed a lot of real shortcomings in the SBAs
    management and oversight of its disaster loan portfolio.
        So, these have led to funding shortfalls, lack of
    transparency, administrative inefficiency that really hindered
    a timely disaster response and recovery. The people of Western
    North Carolina, I know of North Georgia as well, they felt
    these failures firsthand when they needed assistance. Most
    instead, they were left waiting due to the SBA's mismanagement
    during a time of dire need.
        So, Senator, will you commit to working with my office, and
    this committee to address these shortcomings and ensure that
    the SBA is fully prepared to respond effectively to the needs
    of businesses in North Georgia, Western North Carolina, and the
    other states that are in need from disasters?
        Senator Loeffler. Absolutely Senator, you have my
    commitment. Thank you.
        Senator Budd. Senator, the numbers paint a troubling
    picture for small businesses. You know, there was a survey from
    2023-2024. It was the Intuit QuickBooks Small Business Index,
    and it says that small businesses employment declined over
    51,000 jobs. And it also said that revenue fell on average for
    those businesses about $12,000, that's a lot for a small
    business. So, and that's also the steepest year over year
    decline since the Obama administration of 2015.
        That same time, the 2024 Goldman Sachs 10,000 Small
    Business Voices survey revealed that 77 percent of small
    businesses are deeply concerned about their ability to access
    the capital that they need to operate reliably. So, as you
    know, small businesses, it makes up the bulk of our economy. I
    think President Trump has said small business is big business.
    So, and this level of decline is, I would imagine, you would
    think as well is it's unacceptable. So, under President Trump's
    leadership, how can we expect to see a new golden age for our
    small businesses?
        Senator Loeffler. Absolutely. Thank you for that question,
    because President Trump is restoring the golden era for all
    Americans by strengthening our economy, making our country more
    safe and secure, and ensuring wasteful taxpayer spending is not
    driving up inflation. Inflation is the number one problem, not
    only facing families, but small businesses. They're looking at
    20 percent higher costs on at least 10 percent lower revenues.
    That's an unsustainable situation for our employers who are
    putting it all on the line. And small businesses have my
    commitment that I will have their back.
        The Chair. Thank you, Senator Budd. I now recognize Senator
    Schiff for five minutes of questions.
        Senator Schiff. Thank you, Madam Chair. It's an honor to
    serve on this committee and represent California's 4.2 million
    small businesses, including tech, startups, nonprofits,
    childcare centers, rural businesses, the arts and entertainment
    industry, and women and minority owned businesses. That number
    is growing daily, and I am very proud to represent these
    incredible business owners, innovators, and hardworking
    employees. Senator Loeffler, I appreciated the conversation
    that we had last week. I think it was last week. The weeks have
    seemed endless these days.
        As you know very well, horrific wildfires and high winds
    have ravaged California over the last month, displacing
    thousands of families and destroying homes, schools, community
    centers, places of worship, and countless small businesses. As
    these fires have impacted the livelihood of innumerable
    Californians, it is crucial that we know California will have
    the full support of the federal government to respond, to
    recover, and to rebuild. And we must rebuild resiliently.
        The SBA provides disaster assistance for homeowners,
    renters, nonprofits, and businesses of all sizes affected by
    natural disasters. I got to see this really in operation,
    visiting the Discovery Resource Centers in Los Angeles, in
    Westwood, and in Pasadena. SBA was on hand in large numbers to
    help small business owners and homeowners find what resources
    were available to them to help them recover and rebuild.
        I do want to echo the concern raised by my colleague,
    Senator Markey, about the freeze on federal funding. I know
    there has been a subsequent statement saying that the freeze
    order has been lifted, but not the freeze. None of us really
    know how to make heads or tails of that. But what concerns me
    is that even if the administration says that help to
    individuals will not be affected by this, if federal funding to
    SBA is curtailed, then it means SBA cannot make loans to
    individuals and to small businesses. And at a time when
    California's desperately need that help, any delay, any
    uncertainty will just add additional injury.
        I've also been distressed by some of the calls to condition
    funding to California. California has contributed more to the
    recovery of other states than any other state of the Union. And
    I want to ask you, first of all, to recommit to something we
    discussed privately, and that is to ensuring if confirmed, that
    all states, not just California, but all states, receive speedy
    relief for disaster victims and survivors without regard for
    whether a state is red or blue, or green, or yellow, or
    anything else. Are you committed to in a colorblind political-
    affiliation blind way, make sure that SBA assistance is
    speedily provided to small businesses in every state?
        Senator Loeffler. Senator, I appreciated our time in being
    in your office and discussing this important matter. Obviously,
    my prayers are with California, but our efforts will be there,
    as well as President Trump demonstrated by his first official
    trip.
        Typically, Presidents might fly outside the country. He
    went to California. He immediately appointed a task force,
    getting the very capable, Rick Grenell, involved. I think the
    President's actions have demonstrated his support for disaster
    relief. He's done it effectively in in his last term, and I
    will support his efforts and leadership to ensure the people of
    California have the resources they need under President Trump's
    leadership.
        Senator Schiff. Well, let me just say I was grateful the
    President came to Los Angeles. I felt that if he saw the
    damage, he could not help but be moved, and I think and hope
    that he was. I am concerned, though, about some of the
    statements he has made about tying disaster assistance to the
    passage of completely unrelated voter ID laws, or frankly, any
    other unrelated policy matter.
        Let me also raise the need to, not just with respect to the
    disaster in California, but elsewhere, make sure that the SBA
    is proceeding a pace with a sense of urgency, that it is
    efficiently and effectively processing loan applications. I
    realize the balance is difficult because you have to avoid
    fraud, and there was massive fraud among some who were applying
    for Covid relief. We do not want to see that repeated, but
    nevertheless, we don't want to see excessive delays either.
        Frankly, I think firing the inspector general harms the
    ability to fare out waste, and fraud, and abuse. But are you
    committed to doing everything you can to provide speedy
    attention to SBA applications while providing at the same time
    safeguards to avoid fraud?
        Senator Loeffler. Yes, I am Senator. Thank you.
        Senator Schiff. Thank you, Madam Chair--or Mr. Chairman?
        Senator Hawley [presiding]. Thank you very much, Senator.
    On behalf of the chair, I'll recognize myself. Senator
    Loeffler, it's great to see you. Thank you for being willing to
    do this job. As you and I discussed when we met in my office, I
    loved serving with you. You were a terrific Senator, and I'm
    just so glad that you're willing to do this job. It's going to
    be a great, great service to our country.
        Let me just ask you a question or two, to start with, about
    the priorities at SBA. I noticed that on day one of his
    administration, the last President issued an executive order
    directing federal agencies to adopt a broad racial equity
    agenda. And that was particularly a focus of SBA over the last
    four years.
        In fact, according to one report, by far, the largest
    program that uses racial preferences in the federal government
    is the 8(a) Program run by SBA. To be eligible for it,
    companies had to show various racial and other characteristics
    in order to access funding. A federal court in Tennessee ruled
    it unconstitutional. Another federal court struck down a
    similar requirement, also administered by SBA, the Restaurant
    Revitalization Fund.
        Here's my question to you. President Trump has now,
    thankfully, with his own executive order, said we're going to
    put a stop to these DEI programs. How do you see implementing
    that at SBA, and will you get SBA refocused on actually helping
    small businesses no matter who the owner is, no matter where
    they are? There'll be no tipping of the scales in order to fit
    some bureaucrat's agenda. We're going to help those in need,
    get them stood up. We're going to execute on the mission of
    SBA. Tell us what you'll do about that?
        Senator Loeffler. Senator, thank you. Thank you, and I
    appreciate the time we spent in your office discussing these
    matters. Importantly, President Trump's EO overturns a divisive
    and illegal DEI program that was spread throughout the
    government, and particularly within the SBA. This will allow us
    to reduce the burdens on small business for costly
    implementation of needless programs.
        But moreover, I think the best way we can serve small
    businesses is making SBA lending available to all who qualify,
    as opposed to picking winners and losers, and pitting Americans
    against one another. So, you have my full commitment that we
    will root that out and make sure that it is broadly available
    to all who qualify.
        Senator Hawley. That's a fantastic answer. I'm glad to hear
    it. And let me just ask you about another priority. While the
    last administration's Small Business Administration was focused
    on this DEI agenda, what it was not doing was helping people in
    rural areas of the country, like most of my state.
        In Fiscal Year 2024, just to take one example, SBA made
    103,000 loans. Only 12,000 of those went to rural businesses.
    That's just over 12 percent of SBA's $56 billion in capital
    last fiscal year. Only $6 billion went to rural businesses.
    That's just 11 percent there. You want to talk about inequity?
    There's an imbalance between urban and rural.
        And listen, we've got urban centers in my state as well.
    I'm all for small businesses in urban centers getting what they
    qualify for. But would you agree with me that our small
    businesses in rural America are extremely important? They're
    often the lifeblood of our communities. Like, the small town
    where I grew up, 4,000 people, relies on small businesses.
        What will you do to make sure that small business in rural
    America is a priority? That they're getting access to the funds
    that they qualify for, and we're doing everything we can to
    help these small businesses revitalize these communities?
        Senator Loeffler. Well, Senator, not only do I agree with
    you, I've lived it. I was raised in a family of fourth
    generation small business. My nearest town had 600 people in
    it, and my high school had 8 small towns. Many of my fellow
    students, parents, were small business owners. I saw the hard
    work that they did, the complexity of dealing with increased
    federal regulation even back then.
        And we have to ensure that small businesses in rural
    communities are getting the support they need. I understand it
    firsthand. And I know that we can do better, and we will do
    better because this is an area that we can grow in terms of
    bringing manufacturing, ``Made in America'', again, can come
    back driven by rural America and paying attention to people
    that have been forgotten about. That's what President Trump
    does. He remembers the forgotten men and women working so hard
    in this country to make it work.
        Senator Hawley. Fantastic. Well, I welcome your focus on
    this. I look forward to working with you. Let me ask you just
    about fraud, and waste, and abuse. And you've talked about this
    some. I think your answers have been very heartening. You
    remember, in fact, you referenced it at the height of the
    pandemic. Congress enacted this so-called CARES Act to provide
    very necessary relief to millions of Americans. We also, at the
    same time, created, however, a Special Inspector General to
    monitor any fraud and abuse in that program.
        Now, for reasons that continue to elude me, the last
    administration, the last President when he came to office,
    almost immediately limited the remit of this Special Inspector
    General, then tried to effectively defund it. And now, we find
    out hundreds of billions of dollars were wasted or fraudulently
    dispersed, or not properly paid back under these programs.
        Would you agree with me that we need the Special Inspector
    General, SIGPR, we need that office to be properly funded. We
    need it to be given the jurisdictional authority that it
    deserves. Senator Ernst has a bill to make sure that SIGPR gets
    that jurisdictional authority. Would you support that? And can
    you talk to us about the need to be rooting out fraud, and
    abuse, and corruption?
        Senator Loeffler. Absolutely. Senator, if I'm confirmed, I
    look forward to working with this committee to have a higher
    standard of accountability, to act with more urgency, to have a
    zero-tolerance policy with regard to fraud, and to making
    taxpayers whole. We have to get back to that accountability and
    getting those funds back into taxpayer hands as soon as
    possible.
        Senator Hawley. Very good. Thank you. And now, I'll
    recognize Senator Shaheen.
        Senator Shaheen. Thank you. Congratulations, Senator
    Loeffler on your nomination, and thank you for your willingness
    to serve. Welcome to all your family and friends who are here
    with you this afternoon.
        New Hampshire, like many of the states represented on this
    committee, has over 99 percent of its businesses who are small
    businesses. I certainly agree with the fact that small
    businesses are the lifeblood of this country. Two-thirds of
    jobs are created from small businesses. My favorite statistic
    about our small businesses is that they create 16 times more
    patents than large businesses. So, it's critical that we
    provide assistance to ensure that they thrive.
        Now, I heard from one of our businesses in New Hampshire
    yesterday that sells agricultural equipment to universities,
    and they help research feed efficiency to help farmers. He was
    worried about the halt to funding this week. So, the order that
    freezes spending caused him to worry about his businesses. So,
    what would you say to that business owner so that they're
    reassured that their orders are going to continue?
        Senator Loeffler. Senator, I appreciated the chance to meet
    with you in your office, and with your staff, and your
    leadership in this committee as well.
        Certainly, the facts are that no individual assistance was
    or is part of that pause. What the President is rightfully
    doing is fulfilling his commitment that overwhelmingly
    Americans agree with, which is to root out waste, fraud, and
    abuse in spending programs. And it's not uncommon for
    Presidents to come in and put a pause on agency discretionary
    funds that could be contributing to the problems we have with
    debt, with inflation.
        And there's no bigger champion of small businesses than
    President Trump. He's told me, personally, that small business
    is big business and he gets it. So, small businesses can be
    assured that they will have a champion in me as well. Having
    been raised in a small family business, I know the risks that
    small business operators bear every day, and we will ensure
    that they have a voice in this administration, and they do.
        Senator Shaheen. Well, I certainly agree that it's
    reasonable to review how programs are working, and that we all
    should be in favor of getting rid of waste, fraud, and abuse.
    That doesn't help anybody. I think what's unprecedented about
    the current situation is the uncertainty that it creates for so
    many of the people who benefit from those programs, and the
    fact that it's so broad and far-reaching.
        I enjoyed the opportunity to meet with you, and thank you
    for coming in and talking. One of the things that we discussed
    was the importance of our field offices within the SBA. And I
    was pleased that Chair Ernst mentioned the importance of
    ensuring that we keep people in the field offices and not
    reduce those staff members, because that's where so much of the
    help for our small businesses comes from.
        So, can you reassure us that you will focus to make sure
    that the district offices have the support they need and are
    able to staff up in the way that helps our small businesses?
        Senator Loeffler. Absolutely. Senator, if confirmed, I can
    assure you, we will put an emphasis on the field. And we have
    in the SBA 10 regional offices and then 68 field district
    offices. And the great aspect of this is we can be out with our
    entrepreneurs, with our small businesses, not only delivering
    capital, but the technical support and counseling that they
    need to succeed. Because we know that when small businesses
    have the counseling and mentorship that they need to fill in
    any gaps, they are more successful.
        And I've heard so many great stories from small businesses.
    I know you hear them every day who rely on just that extra
    little help to become successful. I've seen them in our own
    community. So, you have my commitment. I look forward to
    visiting your state as well.
        Senator Shaheen. Good. Thank you. We look forward to having
    you come to New Hampshire. One of the most important roles you
    will have is as a spokesperson for small businesses. I was
    pleased that President Trump continues to maintain the SBA
    administrator as a member of his cabinet. I think that's very
    important.
        And one of the issues that I've been proud to work on that
    I think we need to continue to focus on for our small
    businesses is helping them access foreign markets. Because so
    many, 99 percent of markets, are outside of the United States,
    but only about 3 percent of small and medium-sized businesses
    do business outside of the United States.
        I was proud to help create the State Trade Expansion
    Program, the STEP program. I would hope that, again, you would
    commit to continuing to support that program and helping our
    small businesses get into those international markets.
        Senator Loeffler. Certainly. The STEP program is a very
    appealing program to understand how we can broaden our work
    with exports, and small businesses can play a tremendous role
    there. I look forward to working with you and the entire
    committee to see where we can broaden the export program and
    make this more efficient, and to deliver more wins for small
    businesses.
        Senator Shaheen. Thank you. Thank you, Madam Chair.
        The Chair [presiding]. Thank you, Senator Shaheen. I'll
    recognize Senator Young for five minutes.
        Senator Young. Thank you, Madam Chair. Welcome, Senator
    Loeffler. It's great to see you here today. And congrats once
    again on this nomination. It's good to see your husband, Jeff,
    a Hoosier, fellow mid-westerner behind you as well.
        When my father heard not only that I was elected to the
    United States Senate, but that I was going to sit on the Small
    Business Committee in the U.S. Senate, I can't tell you how
    excited he was. He perhaps perceived this to be known as the
    most powerful committee in the U.S. Senate. It's not always
    known for that, but it was the most important committee to my
    dad. Because when my dad was getting started in the business,
    he relied on SBA support loans in particular to help him grow
    his business. And for him, this was the most important
    committee.
        And there's a certain wisdom to that as you travel around.
    As we travel around our various states, we see that most jobs
    these days are actually created, not by large enterprises,
    because those come and those go--they're great for ribbon
    cutting sometimes--but it's usually the smaller enterprises.
        And to the extent we can optimize our policies so that more
    people will start these small businesses and they grow into
    larger businesses, that's kind of the key to economic
    development. So, really important post you're going to be
    occupying here. If confirmed, how are you going to work to keep
    our small businesses competitive today and resilient tomorrow?
    Kind of an open-ended question.
        Senator Loeffler. Thank you, Senator. And I agree with your
    dad. I think I couldn't be more humbled by this awesome
    responsibility for small businesses that power our local
    communities, that do create two out of every three new jobs in
    America. That's incredibly powerful.
        So, I think there's a number of things we can do to make
    small business more competitive. First of all, respecting that
    small business is about free enterprise and it's not about the
    government. So, we have to look at ourselves and say, what are
    we doing within this agency to make it harder for small
    businesses to access capital, to access perhaps government
    contracting or counseling.
        Are we there for them? A big part of that is getting
    everyone back in the office, off the golf course, into the
    office, being aligned with our small businesses where they are
    on Main Street and not K Street. So, my focus is certainly
    going to be on the field activity. Making sure everyone in the
    agency's accountable, and making sure the programs actually
    work for small business. We'll be doing a deep dive.
        Senator Young. So, I think, directionally, you're
    absolutely on the right course, and that's the most important
    thing, at this point. Do you have specific ideas about how SBA
    might be modernized and improved under your leadership?
        Senator Loeffler. Well, certainly, I don't want to get
    ahead of myself. If I have the honor of being confirmed, I
    would look at a broad range of efficiency, both cost and
    technological efficiencies that could be gained. I'll be
    looking at organizational design. I'll be looking at skill sets
    and training that might be needed to deliver our services to
    increase our response times to small businesses. And we'll be
    metrics driven. We'll have goals, and we'll be reporting that
    out to this committee.
        Senator Young. Well, I think there are members of this
    committee, count me in, who want to help you and the rest of
    the administration be successful as it relates to small
    businesses and the Small Business Administration.
        One of the things that you might consider doing is
    prioritizing an incentive for new businesses and small
    businesses to adopt the latest technologies. I just had a great
    exchange with Howard Lutnick, the Secretary of Commerce
    nominee, and we emphasized the importance of digital trade,
    which he strongly supports, unlike unfortunately, the previous
    administration. But I think that's encouraging.
        But I've related to the Small Business Administration, I
    found that many Hoosier small businesses rely on digital tools,
    but the law doesn't clearly state if these costs qualify within
    the 7(a) loan program. So, if someone wants to buy an AI
    technology, for example, it's unclear if the law will include
    that. So, I've introduced legislation along with Senators
    Rosen, Budd, and Shaheen, the Small Business Technological
    Advancement Act that would clarify and promote the purchase of
    digital tools with small businesses. If confirmed, would you be
    willing to work with me on this topic?
        Senator Loeffler. Senator Young, absolutely. If confirmed,
    I would be. AI is at the forefront of both as President Trump
    said, a wakeup call to American innovation, but potentially as
    tools for automating small businesses, making them more
    efficient. And whether it's things like co-pilots or agents, I
    would support looking at that as a solution.
        Senator Young. Well, thank you. And I will be submitting a
    question for the record on another important topic I know to
    you in our small businesses about how you intend to address
    bolstering SBA's cybersecurity infrastructure. Thanks so much.
        The Chair. Very good. Thank you, Senator Young. Senator
    Coons.
        Senator Coons. Thank you, Chair, and thank you, Senator.
    Great to be with you, and thank you to your family and those
    who are here to support you. As I hope you know, your
    predecessor in the this position, in the previous two
    administrations, I've had a particularly strong working
    relationship with. SBA Administrator McMahon came to visit
    Delaware several times. We worked well together.
        I would agree, my dad said the same thing, to Senator
    Young's comment. My dad started and ran a small manufacturing
    business, and he thought this was the most exciting committee I
    could possibly be on. And it has been in the past, a very
    productive committee. My hope is that we will get back to
    churning out legislation that works with you, that we will
    appropriately authorize and appropriate funds, review funds and
    programs.
        When we had a chance to meet two weeks ago, one of the
    programs I brought up was SCORE, which I suspect everyone
    knows, was founded in Wilmington, Delaware, thus, my obsession
    with SCORE. But I think one of the highest, federally-
    appropriated dollar for actual impact programs in history.
    There's more than 10,000 volunteers through SCORE who deliver
    roughly 4 million hours a year of free business plan
    consulting.
        SCORE clients return $59 in tax revenue for every dollar
    appropriated to SCORE. It needs to be reauthorized. We need to
    look at it to ensure it's operating well and that there's
    accountability. Would you support SCORE and its
    reauthorization, and work with me to achieve a bipartisan
    reauthorization, if confirmed?
        Senator Loeffler. Senator Coons, I thank you for the time
    shared in your office. I was also just delighted to hear now
    about your dad's sentiments. I agree. And I look forward to
    working with you to review SCORE, see how it can be made more
    robust, and to evaluating the program, and sharing all of that
    data with this committee so that we have a very collaborative
    approach to ensuring our efforts are making a difference for
    small businesses.
        As you note, it's definitely had an impact, and we want to
    make sure that programs that work are made available to more
    entrepreneurs.
        Senator Coons. Well, those 10,000 volunteers help more than
    300,000 entrepreneurs, so I'm very hopeful we can work together
    on that.
        A piece of legislation, Senator Rubio and I, now Secretary
    Rubio, and I worked on for several Congresses was to help make
    sure that SBIR grantees actually produce commercialized
    technology. About half of SBIR awards lead to commercialize
    technology, but half don't. And this would specifically
    authorize some of the pre-market scale up costs through SBIR.
    It's called the RAMP for Innovators Act.
        The SBA plays a critical role in coordinating SBIR
    activities across the whole government. I'd be interested in
    what your priorities would be for SBIR as a program, and
    whether you would help work with us on reauthorization and
    ensuring that it doesn't just fund endless research, but
    actually funds the leap to the marketplace.
        Senator Loeffler. Absolutely, Senator. I think the Small
    Business Innovation Research grants are critical to solving
    some of the challenges America has in scaling our technological
    innovations quickly. The program gives more dry powder and
    runway to these important technological breakthroughs, whether
    in the area of bioscience technology, AI, drones, mission-
    critical things to our national defense. That would not be
    possible without the support of research institutions.
        So, I look forward to collaborating with this entire
    committee on the reauthorization and reviewing the program for
    where it can be strengthened to produce more efficient results,
    and to highlighting some of the wins to ensure that these are
    wins that generate a powerful return on taxpayer investments.
        Senator Coons. Another concern I've expressed in previous
    Congresses is the amount of federal contracting money that's
    going to small businesses. Small businesses continue to get a
    robust piece of the total federal pie. I think it's 28 percent,
    which exceeds the target, but it's for a smaller and smaller
    number of larger and larger small business firms.
        I'd also be interested in working with you to make sure
    that we actually are contracting, federally, as broadly as
    possible to as many small businesses as possible. I think as
    literally every colleague has referenced, 98 percent of the
    businesses in my state, even in the State of Delaware, which
    has a whole lot of incorporation are small businesses.
        Would you work with me to make sure that we achieve those
    goals in terms of small business contracting?
        Senator Loeffler. Absolutely. Senator, I've confirmed I
    would like to work with you on that. I do agree that this
    program is vital for small businesses to have an awareness of
    and to have access to the program. If the programs become too
    complex that only a select few can find their way in, that
    voids the program's foundational beginnings.
        So, I would look forward to working with the entire
    committee to ensure small businesses have an additional path to
    success. And I also wanted to acknowledge Administrator McMahon
    and her great work. And I hope that we can have the same
    constructive, collaborative great relationship working for
    small businesses. Thank you.
        Senator Coons. I look forward to it. Thank you, Senator.
        The Chair. Thank you, Senator Coons. Senator Husted.
        Senator Husted. Thank you, Chair Ernst, and Ranking Member,
    and my fellow colleagues. Great to join you on the Small
    Business Committee. And, Senator Loeffler, congratulations on
    your nomination, and look forward to supporting you when your
    nomination comes to the Senate floor.
        I know you are entering this job at a difficult time in the
    sense that there have been a lot of questions about fraud that
    occurred and loss of money that has occurred during the
    pandemic. And there will be an expectation of accountability,
    which there should be for every tax dollar we spend.
        But at the same time, we know that speed is--you know, time
    is money in business, and small businesses, particularly during
    a time of natural disaster or when they're just really trying
    to be able to make ends meet, to keep the business open and
    they may need help from the SBA. So, that time is also so very
    important.
        So, just give me some insights and to the committee as to
    how you expect to balance that accountability and speed?
        Senator Loeffler. Thank you, Senator. And thank you for
    making time to meet in your first week here in the Senate. I
    enjoyed our conversation and know that small businesses have a
    champion based on your work in Ohio for them.
        You ask a critically important question about
    accountability of these programs. Americans are expecting them
    to be there when they need them. When they're not, it creates
    yet another layer of uncertainty at a time of devastation, or
    at least uncertainty if you're forming a small business.
        So, certainly, what we need to do is have a review of these
    programs, what's working, what's not working, and make sure
    that it's data-driven. That we look holistically across the
    7(a) program, the Disaster Relief Program, and understanding
    what went wrong. What are the parameters of the program? Where
    have we gone outside the parameters and why, and what work we
    might do with Congress to strengthen these programs so that
    they're accessible.
        Obviously, Chair Ernst has pointed out rising delinquencies
    in the 7(a) loan program, rising delayed payments or early
    defaults. And these are the types of things that red flags
    should be put up sooner. We need greater accountability in this
    agency, and certainly we can't find out two days later when we
    had assurances that there was a disaster fund ready for
    hurricane victims, that it's actually dry. That's an abuse of
    taxpayer dollars and of the program, and we need to get to the
    bottom of it.
        So, you have my assurance that if confirmed, we will work
    closely to be a steward of taxpayer dollars be accountable to
    this committee. And I know President Trump strongly supports
    the small business community having the resources they need in
    an efficient manner that respects taxpayer dollars.
        Because, let's face it, the 7(a) loan program, the bread-
    and-butter loans that small businesses use to start, is meant
    to operate at a zero subsidy. Meaning, taxpayers do not fund
    these programs. They should pay for themselves when they
    operate appropriately, and they generally do that. But we're in
    a position right now as this year starts that that may not
    happen. So, we need to investigate that.
        Senator Husted. Great. One more thought. One of the things
    that I always talk to my team about is customer service. How do
    we serve people well? Are we listening to our customer? And
    then, what are they telling us, and how are we turning that
    information back to into change enhancements? Things like that,
    that we can do.
        So, I'm interested in your thoughts on how you intend to do
    that, and then encourage you to let us know what you learn so
    that we can be better in what we do and how we serve those same
    customers.
        Senator Loeffler. This is an area that I really look
    forward to getting into. The field program, the field operation
    that SBA has could be incredibly powerful to increasing
    responsiveness, to tailoring programs that are more efficient,
    to deliver resources to small businesses in a way that the
    original formation of the agency's attempt was meant to do.
        So, I think, first of all, getting people back to work,
    getting people out in the field, tracking the data, and using
    that feedback loop. Looking at how long our case times are
    open, how long is a case open when someone comes to us with a
    question? How long do they have to wait on the phone for
    someone to answer it? When you're a small business person, you
    don't have any extra time. And I think what small businesses
    want to know is that there are people at this agency that
    understand the challenges and the complexities that they
    already deal with. And this agency doesn't need to be one of
    them. So, we want to be part of the solution, not the problem.
        Senator Husted. Great. Thank you.
        The Chair. Wonderful. Thank you, and welcome to the
    committee. Senator Rosen, five minutes, please. Thank you.
        Senator Rosen. Thank you, Chair Ernst, Ranking Member
    Markey, for holding this hearing. And Senator Loeffler, when
    you came to the Senate, your office was a cross of mine from
    Russell. And I appreciate your service to the nation. You know
    how this place works and your willingness to serve again. And
    I, too, have had a great relationship with all the past
    administrators under both administrations because small
    business matters, and I look forward to having the same ones
    with you.
        In our discussions, we talked about the challenges and the
    resources and just being able to get to the people who need it
    and help them do what is their dream or their idea, really
    important. So, Chair Ernst and I, we've had a bill out there
    for a while we talked about a little bit, too. It's on
    childcare, because childcare is so important and the rising
    cost of childcare, severe shortage of affordable options,
    they're really financially squeezing. Not just Nevada families,
    I would say families all over this country, urban and rural.
        And lack of access to childcare. It's really a problem for
    small business and parents alike. And it creates barriers for
    people who want to start or even grow their business, right?
    And it makes it difficult for small businesses sometimes to
    retain employees because they struggle to find affordable
    childcare. So, this is why we know this crisis demands action.
        And, yesterday, we reintroduced our bill, again, Chair
    Ernst and I, the Small Business Childcare Investment Act. Our
    bipartisan bill will increase the availability of affordable,
    high-quality childcare for working families by allowing
    nonprofits, your boys and girls clubs, your YMCA, your church,
    your mosque, your synagogue, whatever that is. I've even talked
    to senior centers in rural areas. They have a big footprint
    commercial kitchen. They said we're a place where the
    community, we could put up childcare, right?
        And so, this program doesn't cost anything. It just lets
    down the guardrail so that nonprofits have the opportunity to
    apply for the same resources. And now they can put this
    affordable childcare. They're nonprofit, they don't need to
    make a profit. And we look forward to getting it over the
    finish line as quickly as possible.
        And so, can you discuss a little bit how you feel about the
    childcare crisis, how it impacts small business, and are you
    open to SBA expanding access to resources and loans to
    nonprofits?
        Senator Loeffler. Senator, thank you for the question, and
    appreciated our time together in your office to hear more about
    Nevadans' needs and how the SBA can be part of it. And I think
    childcare is a relevant issue in every single state across this
    country. Small businesses, particularly given the need to
    provide for childcare for the owner--like, if you're a small
    business owner or an employee, it cuts across every single
    person that touches a small business.
        And I think small businesses can be part of the solution.
    And I'd love to work with you and Chair Ernst to review this
    potential solution and to look at other ways that the SBA might
    support parents and children as they work in small businesses.
    So, I look forward to those conversations and the input of the
    rest of the committee as well.
        Senator Rosen. Thank you. And something we had a great talk
    about was our veterans and how entrepreneurial they are, and
    how much they take the things that they've learned at the
    military, and they can translate those to things when they come
    home.
        And so, Nevada, we are home to over 200,000 veterans and
    over 23,000 veteran-owned small businesses. And despite this,
    Nevada was without, for the longest time, a dedicated in-state
    Veterans Business Outreach Center, easier to say VBOC, until
    2023, when at my urging, we pushed the administration to have
    Nevada have its first SBA VBOC. And our veterans, our
    transitioning service members, they receive that tailored
    support they need. And like I said, we talked about it with
    your own dad and how he started his business. It was such a
    great story. So, I appreciate you shared that with me.
        So, in the Fiscal Year 2025 budget, SBA requested an
    increase for veterans' outreach underscoring the importance of
    VBOCs and helping ease the transition from active duty to
    civilian life. So, under your leadership what do you see as the
    future for the Veterans Business Outreach Center and how it
    helps?
        Senator Loeffler. Senator, I couldn't agree more. Our
    veterans need the support of the SBA. And if confirmed, I would
    love to work with all of you on how do we better support our
    veterans. As I mentioned, my father learned truck driving
    skills in the Air National Guard that resulted in our small
    trucking business. We know that veterans have untapped
    potential that we can help unleash. I will commit to working
    with this committee and even across this administration with
    Secretary Collins to ensure that our veterans have the
    resources that they so deserve.
        Senator Rosen. Thank you. And I'll submit the rest of my
    questions for the record, but they're mostly on workforce
    development. We had a good chance to talk about how we train
    people right where they are, to give them the skills they need
    to stay in their communities and build back those
    neighborhoods, and diners, and all of that, wherever they are,
    and how important it is. So, I look forward to hearing back
    from you and working with you.
        Senator Loeffler. Thank you, Senator Rosen.
        Senator Rosen. Thank you, Madam Chair.
        The Chair. Thank you, Senator Rosen. And we will start a
    second round of questions. I believe Senator Markey, our
    ranking member, has another question. Thank you.
        Senator Markey. Thank you. And one of the benefits of being
    Chair or Ranking Member is all the other members leave, and
    they don't even know that there's a hearing that continues, and
    we get to ask more questions.
        So, earlier, one of the Republican Senators asked you,
    Senator, about the DEI executive orders and mentioned the 8(a)
    business development program for socially and economically
    disadvantaged small businesses, that it was deemed
    unconstitutional. It was not deemed unconstitutional. The
    application process had to change and the program continues.
        So, with that clarification, earlier, you said, Senator,
    that President Trump's executive order overturned DEI SBA
    programs. And, again, 8(a) for socially and economically
    disadvantaged small businesses, it's codified. So, in your
    opinion, does an executive order overturn a law that was put on
    the books by this committee on a bipartisan basis?
        Senator Loeffler. Ranking Member Markey, thank you for the
    question. I think the important thing to note here is I support
    President Trump's executive order overturning DEI programs, but
    I've also committed----
        Senator Markey. But can an executive order overturn----
        Senator Loeffler [continuing]. To following the law----
        Senator Markey. I'm sorry. Please, go on.
        Senator Loeffler. Yes. I've committed to following the law.
    We will work with the administration to ensure that all
    Americans have access to the programs that exist in the Small
    Business Administration under the law, and we'll continue to
    keep this committee updated as to any modifications as we go.
        Senator Markey. So, do you believe the law does, in fact--
    an executive order does, in fact, overturn a law passed by the
    House and Senate, and signed by a President? Is that your
    conclusion that President Trump is right and that all DEI
    programs are now removed?
        Senator Loeffler. Ranking Member Markey, I've committed to
    you that I will uphold the law in all the programs, and we will
    communicate any changes to the programs to this committee.
        Senator Markey. You believe that, therefore, that you're
    authorized to change DEI programs because of an executive
    order, even though it's statutorily mandated that those
    programs are on the books?
        Senator Loeffler. I support President Trump's executive
    orders, and we will ensure that we follow the law in the
    administration of this SBA.
        Senator Markey. Okay. Well, the Small Business
    Administration administers a number of programs that aim to
    level the playing field for entrepreneurs from underserved
    communities that have faced historical barriers to small
    business ownership due to discrimination and prejudice.
        The programs that this committee has put on the books
    include the service-disabled, veterans-owned small businesses,
    women's business centers, and 8(a) business development
    programs for the disadvantaged. And these programs, and many
    others like them, are codified into statute, and recent actions
    by President Trump seek to rescind these so-called DEI
    initiatives.
        But as Administrator, President Trump's executive order
    would also direct you to terminate diversity, equity,
    inclusion, and accessibility positions at SBA. And in light of
    that, we just have to remember that executive orders cannot
    change or rescind Congressional mandates. We are the Article 1
    branch of government.
        When those red coats were going down Massachusetts Avenue
    in Massachusetts, and the Minutemen and women came out in
    Lexington and Concord, they were saying no taxation without
    representation. They already had a King. They could pick a
    Prime Minister or a President, but they were going to have a
    House and Senate, which is why we're Article 1 in the
    Constitution. That's what the Minutemen and women all across
    our country were fighting for.
        And so, Trump might think he can overturn what we do here,
    but that's what the revolution was all about. It was about
    having representation on this committee. And you may say that
    you're going to support him and that he's the law, but he's not
    the law. And I just want to continue this conversation with you
    because I just think that there has to be an understanding that
    supporting women-owned businesses----
        Senator Loeffler. Senator, I can assure you I will
    support----
        Senator Markey. Do you believe supporting women-owned
    businesses is DEI?
        Senator Loeffler. Senator, I've never said that. Senator, I
    can assure you that I will uphold the law. I was a women-owned
    business. I had a majority, minority women-owned business for a
    decade. I understand the importance of it. By having a well-
    functioning agency is the best way that we can assure that
    there is more access to these programs by a diverse range of
    communities without picking winners and losers. That's what the
    American people want. That's why President Trump won in a
    landslide, because the American people want fairness and merit
    brought back. And you and I have discussed that in your office.
    That's what this country's about.
        Senator Markey. But you do understand that it has to be the
    Congress that changes the laws, it can't be done by executive
    order?
        Senator Loeffler. Yes, Senator, I will uphold the law.
        Senator Markey. Okay. Thank you.
        The Chair. Thank you, Ranking Member Markey. And I'll make
    some comments to this discussion as well. And we know that
    there are many programs that are codified. They are in law. And
    you will uphold the law, and I appreciate that answer.
        Unfortunately, what we did see during the Biden
    Administration was through a lot of supplemental movement from
    the administration, they did put into place different DEI
    programs within the SBA. So, the executive order is likely to
    immediately roll back the Biden era DEI mandates that were
    supplemental, but those that are not legally binding.
        So, yes, I anticipate that you will follow the law, Senator
    Loeffler, should you be confirmed, and you're well on your way.
    I will assume your confirmation, not you. But again, there are
    many things that President Biden took within his own action,
    his own prerogative, within the SBA, that was not codified nor
    approved by this committee.
        So, we will ensure that you follow the law, Senator
    Loeffler. But certainly, we can roll back the things that were
    unilaterally done by President Biden in the SBA. Thank you. And
    I will recognize Senator Cantwell for five minutes.
        Senator Cantwell. Thank you, Chair Ernst, and
    congratulations on taking over the chairmanship. Great to see
    you there, and look forward really. Such a big integration
    between small businesses in the State of Washington, and our
    military and Hanford cleanup. And so, really great lessons that
    I think could be applied broader to other areas of the
    government.
        And great to see our new Ranking Member, Senator Markey. I
    know I probably feeling ancient at the moment, but it's not
    that long ago when Senator Kerry was the chair of this
    committee, and he brought a lot of energy to the SBIR and other
    important technology startup issues that were a big part of the
    discussion at that time. So, look forward to working with both
    of you on the committee.
        And it's good to see my former colleague again,
    congratulations on your nomination. You and I had a chance to
    talk briefly in the office. I wanted to bring up a couple of
    things. One, we had this question to Mr. Lutnick today at our
    Commerce hearing, but do you support the Minority Business
    Development Authority?
        Senator Loeffler. Senator, thank you for your time in your
    office. I enjoyed our conversation. Certainly, I appreciate
    that program that the Commerce Department runs and see that
    there's potential for collaboration between SBA. I really do
    support working across the administration to ensure our
    resources are utilized and we don't have overlap in our
    programs, and that they're serving Americans who need those
    services the most.
        Senator Cantwell. Thank you. And will you work with me to
    make sure that the Department of Agriculture meets this same
    small business, set aside challenge that DOD has so
    successfully done, but in this case, the Department of
    Agriculture really isn't giving our small mills the access that
    they need. And so, will you work with me to make sure that
    those important SBA issues are addressed at the Department of
    Ag?
        Senator Loeffler. Senator, I appreciate our conversation
    about your timber business. I think, if confirmed, I would look
    forward to working with Secretary Rollins to ensure that we
    have a collaborative relationship. I understand there was
    previously an MOU with the Department of Agriculture and hope
    that we can collaborate to support small businesses in that
    regard as well.
        Senator Cantwell. Thank you so much. I appreciate that. And
    when it comes to--let's just carry that on. One of the reasons
    why we want this infrastructure is because if you think about
    reducing the fuel that we need, and some of the ideas like
    cross-laminated timber, you need to have the mills in those
    regions. And so, to get the mills, you have to have the
    agreement that you're going to give them some supply.
        But now, look at the disaster we just saw in, you know,
    California. And we realized the situation is--we already knew
    this in the Northwest, we've had our share of pretty big
    dramatic fires. But there was a border crossing issue in Sumas
    where a town was flooded, and then a town of Malden where a
    fire wiped through the town. You know, over 300,000 acres
    burned in wildfires in my state, just in 2024.
        So, how do we make sure that we keep politics--I feel like
    so much politics happened on federal funding in the last few
    years. How do we keep the politics out of it and disagreements,
    and make sure--there was a case on the Malden Fire where it was
    delayed for months about a disagreement between the President
    then and our governor. And it took a new administration. And
    this was even though Cathy McMorris Rodgers and I were working
    together to say, let's do these funds. And how will you help us
    make delivering disaster assistance urgently without all this
    noise that we're hearing?
        Senator Loeffler. Senator, I appreciate the question. And I
    think, certainly, your state has had its share of disaster. You
    had the bomb cyclone in November and ongoing recovery from
    that. I think Americans were stunned by the politization of the
    hurricane response under FEMA where they refused to go to homes
    with Trump support, Trump signs in the front yards.
        Americans want to see the end to that. We should not be
    politicizing our disaster response. I think that that's
    something that we have to restore confidence in. And certainly,
    the SBA will be working with the Trump Administration to
    restore integrity to the relief efforts.
        Senator Cantwell. I don't know whether the chair has had
    this issue, but probably because there's disasters everywhere.
    And that is this whole debate about the way the funding model
    works currently in taking care of communities who've
    experienced disasters.
        The urban communities, because they have density, are taken
    better care of. And the rural areas--although a rural community
    is a rural community, Sumas is an example. It's right by the
    border. It hangs together. If Sumas isn't there, I'm not sure
    we can sustain that border. What'll happen is it'll get closed
    down. And then what? All the traffic will then have to go down
    I-5. So, it's a bad idea. Or in the Mukilteo, we had an economy
    that was devastated and people were like, ``No, we're not going
    to help you because you don't really have the same ratio.'' I'm
    like, it's a juggernaut of an economy. Just because it doesn't
    have density doesn't mean that it isn't a big problem.
        So, the GAO concluded that the SBA needs to recognize that
    rural communities experience disasters differently--not really
    differently. They're devastated, just they're not in the same
    density. So, as we consider how to make SBA loans for small,
    vulnerable, rural communities more viable, do you think
    businesses and homeowners--we want them to return to these
    areas. We don't want to see a community--in our case, these are
    communities that sit on close proximity to the Cascades, but
    they're a huge tourism economy for the whole state. So, they
    have a big footprint.
        So, what are your thoughts on how we implement this SBA
    change, working with our colleagues to get a better recognition
    of the economic impact that disadvantages rural communities?
        Senator Loeffler. Well, Senator, I would love to work with
    you on that, to visit your state, to understand the dynamics
    there. I grew up in a rural community. I understand the unique
    characteristics of delivering relief. I mean, we lived in the
    heartland, lived through tornadoes, hailstorms, and other
    devastating efforts that of recovery together as a community.
    And often, the TV cameras weren't there. You're recovering on
    your own.
        So, how can we better ensure that disaster relief isn't
    based on, as you mentioned, any politics or media profile, but
    where the relief is sorely needed to prop up and strengthen the
    economic stability of that tax base of the community, the
    culture, the people, the generations that live there, and the
    industry that it supports. So, I'd love to work with you on
    that, if confirmed,
        Senator Cantwell. Thank you. Is my time expired, Madam
    Chair?
        The Chair. Yes.
        Senator Cantwell. Thank you so much. Sorry to go on. But
    those are very important issues, and I so appreciate the
    opportunity to ask them and look forward to working on these
    with you.
        The Chair. No, thank you, Senator Cantwell, and I would
    enjoy working with you on that as well. Because, yes, in the
    State of Iowa, we have had challenges with disaster recovery
    and the cost to benefit ratio. We have struggled this with this
    for a very long time because of our rural areas.
        And just for the audience, if I can take the chair's
    prerogative here and share with you. We have many disasters,
    flooding, in particular in Iowa, where many restaurants and
    downtown rural communities are destroyed. But the cost to
    benefit ratio is never high enough for the federal government
    to come in and provide that level of assistance.
        However, if a restaurant on an Eastern or Western Coast,
    you know, along the ocean is destroyed, well, of course the
    cost to benefit ratio is going to be higher. The cost of that
    restaurant is much higher. So, they are the ones that are
    likely to receive the disaster assistance, but not those of us
    that are in the Midwest.
        A home of one size in Iowa is much cheaper than a home on
    the coast, but it's still someone's home. It's still someone's
    business. So, I think that we have a lot of work to do in this
    area, and I'd be happy to partner with you on that, Maria.
        Senator Cantwell. Well, thank you, Madam Chair. And I think
    the added thing that people don't realize is that it also is a
    economy that generates a lot of revenue for absolutely your
    state. It could be an Ag economy, it could be a tourism
    economy, it could be a community that offers something
    different.
        But if you take that out of the middle of your state or
    wherever it is because the ratio just hasn't been addressed
    correctly, then we're losing out on that big economic picture.
    So, we have to get people to realize that that relationship to
    the state overall should somehow be considered in the ratio.
        The Chair. Yeah, absolutely. Thank you for that input,
    Senator Cantwell. And a number of issues were addressed today
    during this really productive hearing. And thank you for being
    here, and I want to thank President Trump for your nomination
    to the Small Business Administration. I look forward to working
    with you upon your confirmation into this position. And because
    there are no other questions, I again want to thank you very
    much for your willingness to serve, and to be here today, and
    for your family's support of you in this position.
        We are going to leave the record open until close of
    business tomorrow at 5:00 p.m. Thursday, January 30th, for
    members to submit questions for the record. And we will keep
    the record open for two weeks to edit statements, and submit
    letters, and any other relevant materials. Without objection,
    so ordered. Senator Loeffler, we would appreciate your prompt
    response to any additional questions that are submitted. With
    that, the Committee on Small Business and Entrepreneurship
    stands adjourned.
        [Whereupon, at 5:29 p.m., the hearing was adjourned.]
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