[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
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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
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COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
ONE HUNDRED NINETEENTH CONGRESS
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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
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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:]
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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:]
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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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