Started. I want to recognize Congressman Brad Finstad from the great state of Minnesota to lead us in the Pledge of Allegiance and a prayer. Thank you, Father. We thank you for regulation to order. Without objection, the chair is authorized to declare a recess of the committee at any time. I now recognize myself for my opening statement. Welcome to today's hearing, which will focus on restoring the SBA to its original mission of serving Main Street America. First, I want to thank our witnesses, all three of you, for joining us today on your own time and your own dime. I really appreciate you being here. I hope this hearing will continue to be a productive dialogue on how we can ensure that the Small Business Administration returns to its mission to assist small businesses while increasing efficiency at the agency. Owning your own business is one of the most rewarding careers in our great nation. The SBA has dedicated resources to aid job creators who find themselves having a tough time navigating their entrepreneurial journey. Through the public-private partnership with the Small Business Development Center, small businesses at all stages can receive critical counseling and training. SBDCs have many solutions to support Main Street, from preparing loan applications to workforce development. Since we spend taxpayer dollars providing these resources to entrepreneurs, we must ensure that these programs operate effectively and efficiently. Importantly, these programs must be consistent with the intent and mission of the SBA. Unfortunately, during the Biden-Harris administration, the SBA strayed from its core mission and prioritized politics and misguided policies over American small business. An overall theme was the SBA's flawed operation that limited the agency's day-to-day work. Notably, the agency's work-from-home policy for SBA staff hindered its ability to execute its mission. Up until a few weeks ago, thanks to President Trump and our new administrator, Biden's SBA falsely claimed that it could operate remotely, but the reality was that the SBA was a ghost town. We saw it firsthand when members of this committee visited the SBA headquarters. We found rows of empty desks, calendars that had not been moved since 2020, and this was when they knew we were coming. The Biden SBA repeatedly failed to deliver for America's small businesses, while also failing to conduct sufficient oversight of its programs. Instead, they focused on turning the agency into a voter registration arm of the Biden-Harris reelection efforts. It is critical that we conduct the necessary oversight over the SBA's operations, especially for political initiatives like voter registration that were well outside the scope of the agency's core mission, providing support to America's small businesses. As I just mentioned, thanks to President Trump, steps to address these egregious failures and more are being taken with the new SBA administrator, Kelly O'Grady. During this hearing, we will dive into what went wrong. However, it's equally vital to focus on creating positive change. These efforts should begin with tapping the potential of the SBA Office of Advocacy, better known as just Advocacy. The Office of Advocacy is supposed to serve as the independent voice for small businesses within the federal government, monitoring and ensuring compliance with the Regulatory Flexibility Act and helping policymakers better understand issues confronting small business owners. Over the years, though, Advocacy has faced several challenges in advocating for small businesses. Of top concern, the Biden administration's refusal to even nominate an individual for the position of Chief Counsel of the Office of Advocacy, leaving the top small business advocate position vacant. Last Congress, a committee sent letters to then-President Biden calling on him to fill the position, but instead, reckless rulemaking followed while small businesses were forced to endure Biden's unprecedented onslaught of regulations. His administration shamefully did not prioritize appointing an independent voice for small businesses. These failures have shown just how out of touch the SBA had become. It's time. It's time to return the SBA to its core mission and finally meet the needs of Main Street America. And that is why I'm proud to announce that I have introduced The Returning SBA to Main Street Act in the U.S. House. The Returning SBA to Main Street Act was first introduced in the Senate by the Committee on Small Business and Entrepreneurship Chair, Senator Ernst. I'm honored to introduce the House companion bill to ensure that the SBA workforce is no longer centered around DC and will meet the needs of small businesses where they are, especially in rural communities in my district and Missouri's fourth district. Today, our office sent a letter to Administrator O'Grady requesting that the SBA's Kansas City Regional Office be moved to Columbia, Missouri, in accordance with her initiative to move SBA offices out of sanctuary cities. While Kansas City's policies are only sanctuary city adjacent, Columbia offers a far superior alternative, thanks to its closer proximity to the University of Missouri, Missouri Small Business Development Center, and the rural communities that reflect the heart of America. Again, I want to thank the witnesses for being here today to testify, and with that, I now recognize my friend and the distinguished ranking member from the great state of California, Mr. Tran, for his opening remarks.

Thank you, Chair Alford, and I'm pleased to have the opportunity to serve as the ranking member of this important subcommittee. I look forward to working with you throughout this Congress to conduct robust oversight of the Small Business Administration. Thank you to the witnesses for being here today. I hope to hear more today on how we can support our small businesses access the tools they need to launch and grow successful businesses. Let me begin by mentioning that under the Biden-Harris administration, more than 21 million business applications were filed, the largest number in a single presidential term in the history of our nation. Women, minorities, and immigrant entrepreneurs played a leading role in this historic surge. Business ownership doubled for Black households, while Latino and Asian-American households reached a 30-year high. More Americans than ever were able to pursue the American dream, and that is a milestone that we should be celebrating today. We should also be focusing on the achievements of the previous administration. In fiscal year 2024, SBA approved more than 76,000 loans in the 7(a) and 504 programs, providing $37.7 billion to small businesses. The microloan program, which provides loans up to $50,000, approved $94 million in new small dollar loans, meaning the smallest of the small businesses were able to access capital, which can be so hard to come by and can be a barrier for growth. The resource partners offered free and low-cost counseling to hundreds of thousands of entrepreneurs to help them tackle the challenges they face every day. And in part to SBA's efforts, federal agencies awarded 28.4% of federal contracting dollars, totaling $178.6 billion, to small businesses. The facts speak for themselves. Despite what you may hear today, SBA is committed to its mission of helping small businesses. That has been true under each administration, in large part because of dedicated civil servants. Their work should be applauded, not demonized. SBA employees work day in and day out, under the first Trump administration and through the Biden administration, to implement emergency COVID programs that meant the very survival of millions of small businesses and nonprofits in this country. I stand ready to work with everyone here to ensure the integrity of programs and efficient government, but it cannot come at the expense of SBA staff working diligently to serve small employers. Turning to the environment, today we are in the midst of troubling and chaotic times. In the roughly two short months of the Trump administration, we have lurched from one crisis to another. Late in the night on January 24th, President Trump fired SBA's Inspector General, Mike Wear, without the 30-day advance notice to Congress or a reason as required by law. Mr. Wear testified before our committee multiple times about the potential fraud in the pandemic relief programs and was praised by members on both sides of the aisle for his work to investigate and recover fraudulent pandemic funds, which I should note occurred mostly under the first Trump administration. A couple of days later, OMB released a memo requiring all agencies to freeze federal funding, which led to widespread confusion for small businesses, lenders, resource partners, and contractors. Small businesses rely heavily on SBA's counseling, contracting, and access to capital programs, and a disruption in funding, even for a short period of time, could impact the viability, cash flow, and services of small businesses. While the memo was supposedly rescinded the next day, the White House Press Secretary said the freeze remained in full force and effect. Needless to say, these actions caused undue confusion, chaos, and uncertainty. I, along with the ranking member, Rep. Nydia Velázquez, sent an oversight letter to the SBA expressing our concern over the administration's action to freeze federal funding and to obtain a list of any and all programs that may have been affected. Then, on February 3rd, we started hearing reports that Elon Musk and his Doge team infiltrated the SBA, gaining access to all of SBA systems, including human resources, contract, and payment systems. This breach has widespread implications for America's 35 million small businesses, potentially endangering their private information. Despite sending two letters to the SBA, SBA, along with all the Democratic members of the committee, we have yet to receive a legitimate response to our questions about Elon Musk and Doge team accessing the systems within SBA. On Friday, February 7th, hundreds of SBA employees received termination notices, leaving them and their supervisors scrambling for information. Then, on Monday, February 10th, SBA officials said it was a mistake, only to receive a termination notice again on Tuesday, February 11th, but this time the firings were for real and effective immediately. Not only was this incredibly confusing, but it was mean-spirited, cruel, and made clear that no meaningful thought went into the decision. And now, small firms and farmers all over the country are reeling from the back-and-forth nature of tariffs with Canada and Mexico. The uncertainty has left many struggling to keep up. We've seen this before. In June 2018, when the Trump administration launched a trade war with the EU over steel, America's small distilleries were hit by retaliatory tariffs and saw production costs rise. For example, Cedar Ridge Distillery in Iowa faced higher prices for the steel used in their aging barrels, which led to higher costs in production and forced them to end plans for expansion. Even the U.S. Chamber of Commerce has raised the alarm bells of small businesses scrambling to adjust to the current trade war. For example, take PL Inc., a Texas-based company that makes diaper changing tables. They're now forced to revisit their budget, allocating more for tariffs while cutting back on marketing. American small business cannot stomach the chaos, confusion, and uncertainty of a Trump administration, and they deserve better. It is time to work together and conduct real and meaningful oversight into the administration and the effect it's having on small businesses. I look forward to hearing from our witnesses today. Thank you, and I yield back.

Thank you, Mr. Tran. I now recognize the Chairman of the full committee from the great state of Texas, Chairman Roger Williams, for an opening statement.

Chair, thank you, Chairman Alford, and I'm pleased to announce the first hearing organized by the subcommittee on oversight, investigation, and regulations. It focuses on restoring the SBA to its foundational mission of serving Main Street America. And I also want to thank all the witnesses for being here today, too. Now, since the SBA's founding 70 years ago, its mission statement has remained the same, and that is to aid, counsel, assist, and protect the interest of small business concerns. Unfortunately, under President Biden, the SBA deviated from its core mission of helping America start, grow, and build resilient businesses. For example, instead of listening to the very real hardships experienced by Main Street, like access to capital, inflation, regulatory burdens, in 2024, the SBA entered into a memo of understanding with the Michigan Department of State, which allowed the SBA to register voters at its events in Michigan, and with a link to the SBA's website. Now, registering voters is undeniably irrelevant to the SBA's mission, and it's unconscionable that political activities were prioritized over the voices of small business owners. And further, the SBA has been operating both duplicative and unauthorized programs over the years. This is particularly troubling since the most important programs are performed on the ground where staffing and resources are already stretched very thin. And it has recently come to the attention of the committee that the SBA may have attempted to leverage the Small Business Development Centers to carry out duties that aligned with the Biden-Harris misguided policies and political initiatives, pulling them away from the counseling and training that programs at Main Street and small business owners need. Now, the oversight subcommittee, Chairman Alford, and the work of this subcommittee at large, we must make sure that they, we are both doing right by the taxpayer and entrepreneurs. At the SBA, programs are streamlined, effective, and efficient. Alongside President Trump and Administrator O'Grady, there is, as a committee, that we as a committee remain focused on putting Main Street first. And I'm glad to see Representative Alford introduce the House companion to Chair Ernst's Returning SBA to Main Street Act. This critical legislation will ensure that the needs of Main Street are met by relocating more of the SBA workforce to Main Street. In other words, in retail business, take the product to the customer. And ensuring that all SBA programs are running effectively is essential to meeting the needs of small businesses. And the idea shared today will help the SBA's future and right-size the agency. So, with that being said, I look forward to today's important conversation. Want to thank all of you again, and I yield back.

Thank you, Mr. Chair. It's now my honor to recognize the ranking member of the full committee from the great state of New York, Ranking Member Vasquez, for an opening statement.

Thank you, Mr. Chairman, and Mr. Tran. Thank you to the witnesses for being here today. The purpose of today's hearing is to restore the SBA and put Main Street America first. Well, we're going to have to sift through the rhetoric to find the facts. Let's begin by talking about the small business boom. More than 21 million small businesses were created during the Biden administration, and women and minorities led the way, starting more businesses, providing for their families, and creating economic growth in their communities. We should be building on the previous administration's efforts. Instead, this administration, in three short months, has opted to open one policy after another, injecting chaos, confusion, and uncertainty for small businesses. Let's focus for a minute on the president's on-again, off-again tariff war with Canada and Mexico. It's a white-whiplash for employers simply trying to run their business. The bottom line is consumer prices will surge. Even the U.S. Chamber of Commerce recognizes this and published a report entitled "Small Businesses Are Afraid." They are worried that the cost of tariffs will adversely impact their ability to remain competitive and turn a profit. Small businesses need certainty, and instead, they must adjust to chaotic economic policies. Turning to the SBA, we have a tech billionaire riffling through SBA data, and we cannot get a straight answer from the SBA as to what data has been accessed and why, or even why they need it. Democrats on this committee sent numerous letters that have gone unanswered. And while these letters have gone unanswered, the newly confirmed administrator wasted no time walking through the SBA, pointing out empty desks for a photo-op on her policy to end teleworking. What was not mentioned was the mass termination of hundreds of employees days before. In less than a week, hundreds of employees were fired, only to be told it was a mistake, and then they were fired again, effective immediately. We're still waiting for the agency to respond to requests detailing the impact and breadth of the termination so we can understand how it serves the SBA mission. And most concerning are the recent reports that employees of the SBA Fraud Risk Management Board, which was created in 2022 to root out fraud and abuse at the agency, have been terminated. And that is in addition to the president firing the SBA IG. How could we have spent two years in this committee talking about curbing fraud in the pandemic programs and sit idly by while the Trump administration is firing the key people who can investigate, prevent, and recover fraudulent funds? And now we are hearing, not being informed, that the new administrator is closing down six regional offices in Democratic cities, not less, with no plans to relocate them. I can only assume that this must be part of the reorganization, an effort to re-RF federal employees, all in the name of complying with immigration executive orders. I hope we get assurances this won't hinder the agency's mission to provide assistance to small employers in this city, as well as others. And while we are speaking of the SBA mission, which is to assist more small employers in accessing capital and entrepreneurial development, I am curious as to why Administrator O'Grady likes the idea of the SBA taking over the student loan process. Who's going to take care of this business, firing the workforce that works at the SBA, and where are the resources when they're cutting its budget? How does this fit the agency mission? That's the real question. While I appreciate the witnesses that are testifying today, I am frustrated that we do not have the SBA administrator here to speak directly to us. We must conduct real oversight of the SBA and bring the agency heads to shed light into what is going on behind closed doors. Thank you, and I yield back.

Thank you, Ranking Member. I will now introduce our witnesses for today. Our first witness is Mr. Ted J. Gutierrez. Mr. Gutierrez is the State Director of the Missouri Small Business Development Center in Columbia, Missouri, in the fourth congressional district. Mr. Gutierrez joined the Missouri Small Business Development Center in 2022, following years of experience at the Virgin Islands, St. Louis, and Southern Illinois University locations. Prior to that, Mr. Gutierrez worked as a banker at Mid-Country Bank and a managing director of the Jackson County Mass Transit District in Illinois. Mr. Gutierrez currently serves on the national board for America's Small Business Development Center and as an education director for the University of Missouri's Extension Business Development Program. Mr. Gutierrez holds a Master of Business Administration from the University of Redlands in Redlands, California, and a Bachelor of Science from the University of New Mexico in Albuquerque. Thank you for joining us today, sir. I'm looking forward to today's important conversation. Our next witness here is Mr. Alfredo Ortiz. Mr. Ortiz is the Chief Executive Officer of the Job Creators Network in Atlanta, Georgia. Mr. Ortiz joined the Job Creators Network in 2014. Prior to that, he served as Vice President of CSM Bakery Products Food Service Division and as a consultant for Boston Consulting Group in their Washington office. He's also worked in marketing, new product development, and corporate strategy for Georgia Pacific, Kraft, and others. Mr. Ortiz is currently a board member for the Georgia Chamber of Commerce and an advisory board member for the Cato Institute's Center for Monetary and Financial Alternatives. He's also the co-host of the Main Street Matters podcast. Mr. Ortiz holds a Master of Business Administration from the University of Michigan in Ann Arbor and a Bachelor's in Economics from Pomona College in Claremont, California. Thank you, sir, for being here today. I look forward to hearing your testimony and having a great conversation. We appreciate all of you being here today. And before we recognize the witnesses, I want to remind them that their oral testimony is restricted to five minutes, and our ranking member will now introduce the witness for the minority.

Thank you, Mr. Chair. I am delighted to introduce Mr. Richard Trent, the Executive Director of Main Street Alliance. Mr. Trent had a dynamic career prior to joining the Main Street Alliance. As the Executive Director of Friends of Anacostia Park, Mr. Trent oversaw one of the East Coast's largest environmental restoration projects. Today, he's working every day to create a level playing field for Main Street small businesses. His work has helped uplift communities all across the country and in turn boost their local economies. I look forward to your testimony, which will reflect the voices of the mom-and-pop small businesses. Thank you for being here. Again, just for the witnesses, want to remind you, you have 5 minutes for your opening remarks. You'll see a red clock in front of you that's set to five minutes, and when your time has expired, we will gather you out and go to the next witness's remarks. So, thank you. I now recognize Mr. Gutierrez for his five-minute opening remarks, sir.

Good morning, Chairman Alford, Ranking Member Tran, members of the committee. Thank you for inviting me to testify today. My name is Theodore Ted J. Gutierrez, and I'm the State Director for the Missouri Small Business Development Center, hosted by the University of Missouri Extension. Our network is dedicated to supporting and advancing the success of Missouri's entrepreneurs and small businesses. We are a proud part of the nationwide Small Business Development Center system of 63 networks with over 900 locations and over 3,000 professional counselors, advisors, specialists, and support staff. For over 43 years, SBDCs have been providing one-on-one counseling services to small business owners and aspiring entrepreneurs at no cost. During that time, our member networks have developed a wide variety of services tailored to meet the needs of Main Street America. Some of the subject matter we counsel on and train include cybersecurity, export assistance, disaster recovery and resiliency, manufacturing, marketing, sales, e-commerce, accounting, financial statement analysis, business strategy development, business plan basics, credit practices, pre-business startup planning, existing business expansion, and of course, exit strategy and succession planning, and many more. As dictated by our statute, SBDCs continue to evolve to meet the needs of America's small businesses. We are tasked with providing almost every conceivable form of technical assistance to small businesses in our respective states. Each SBDC network is nationally accredited, which distinguishes us among available resources. Our networks leverage the accreditation to evaluate and update our services to meet the changing needs of our clients, who drive our services. Our economic impacts and performance numbers are based on attributed verified input from our clients. By sheer volume, locations, and economic impact, the SBDC program is the number one resource in the United States and its territories providing technical assistance and training for entrepreneurs and small businesses. In FY 2022-2023, Congressional funding or investment for America's SBDCs translated to $26.4 million federal revenues generated and $327.2 million in state revenues generated. Every federal dollar received rendered $159 in federal tax revenue and $2.40 in state tax revenue. A new job is created every 6.5 minutes. A new business is started every 33.3 minutes. Our clients experience an average of 15% annual sales growth compared to the national average of 6.2%, with $6.6 billion in sales. SBDCs provide 90% of SBA's access to capital assistance. SBDCs served 92% of SBA's technical assistance clients. Despite SBDCs' economic impact generation and ROI, here are a few challenges we face: funding priorities versus demand for our services, both federal and local political agendas which lead to mission drift, funding to bring on more staff with industry expertise, funding for technology and implementation in ways to reach traditional small businesses in need of help, especially in rural America, funding to provide disaster planning, resiliency, and recovery. Here are a few challenges faced by Main Street America: confusion of resources available, uncertainty of economic climate, I.E., high interest rates, taxes, supply chain disruption, increased costs of the workforce, minimum wage laws, finding and hiring people who are reliable and want to work, and of course, disaster recovery efforts, strategies for long-term recovery. SBDCs are the first responders to a natural disaster or disaster, and SBDCs are there during and after the disaster. So, you ask, how can the SBA be restored? Simply by putting Main Street America first. The SBA is responsible for dispersing the allocated Congressional funding and administration of our grant program. It is important to distinguish that the SBDC is not part of SBA, nor are we employees of SBA. Over the years, SBDCs have worked with SBA administrators from every administration. We do that because SBA is our partner, just as our host universities, states, banks, and economic development groups. The SBA is ready for clarity of purpose and vision to serve entrepreneurs and small businesses. The SBA should remain an advocate for the millions of small businesses in our country, not focused on political agendas. SBA has many fantastic tools and partners. They need to use them appropriately and efficiently to regain public trust in the SBA. It must focus on providing resources and collaborate with partner programs such as the SBDC so every entrepreneur can work towards achieving their dream and contribute to the overall well-being of our economy. Every entrepreneur from the wheat fields to the shops of Main Street America should have the same opportunity for success. This concludes my testimony. Once again, thank you, Chairman Alford, and the committee for allowing me to speak here today.

Great timing. Thank you. Let's go to Mr. Ortiz for his five minutes' remarks, sir.

Good morning, Chairman Alford and distinguished members of the Oversight, Investigations, and Regulations Subcommittee. Thank you for the opportunity to testify today on the vital topic of restoring the U.S. Small Business Administration. My name is Alfredo Ortiz, and I am the CEO of Job Creators Network, the nation's largest conservative small business advocacy organization. It's no secret that small businesses have faced historic challenges over the past few years. These include the COVID pandemic and the heavy-handed government response, as well as the weak economy characterized by high inflation and overregulation. The Biden administration implemented a nearly $2 trillion regulatory burden that disproportionately harmed small businesses. Now, more than ever, small businesses need an effective agency in Washington looking out for them. Unfortunately, the Small Business Administration has let American entrepreneurs down over the past few years. Under the Biden administration, it prioritized political activities such as voter registration and diversity, equity, and inclusion over the real concerns of small businesses. Ignoring repeated urging from Chairman Williams and the broader small business community, the Biden administration never even nominated a Chief Counsel for Advocacy, leaving a key office unfilled that could have acted as the voice of Main Street during this difficult period. The SBA also did not adequately require its staff to return to work, resulting in office vacancies of 90% by one estimate. No wonder American small businesses have lost faith in the SBA. That changes with the trusted and proven leadership of Administrator Kelly O'Grady. The SBA now has the opportunity to restore its core mission of helping small businesses. That means ending the agency's politization and bureaucracy, requiring staff to return to work, and engaging in rigorous oversight and accountability. Under the Chief Counsel for Economist, Casey Mulligan, who successfully led Trump's Council of Economic Advisers in his first term, the SBA's Office of Advocacy can finally get the leadership it needs to be small business's independent voice within the federal government. The Office of Advocacy plays an important role in ensuring compliance with the Regulatory Flexibility Act, which the previous administration routinely ignored to the detriment of small businesses. JCN is fighting to pass the PRO-GROWTH Act, which fulfills the intent of the Regulatory Flexibility Act and gives small businesses a seat at the rulemaking table. But until then, a strong Office of Advocacy can reduce red tape and stand up for small businesses in Washington. Once restored, the SBA can take steps to do even more good for small businesses. At the top of this list is prioritizing training programs to teach entrepreneurs the skills they need to survive and thrive, teaching small businesses how to fish so they can be successful for the long term. The SBA should harmonize existing private sector small business efforts by the likes of Goldman Sachs and American Express in a public-private partnership small business training program. This program will teach entrepreneurs the basics of succeeding in today's economy, including building a convincing business plan, identifying suppliers, and selling online. These efforts can significantly reduce the first-year small business failure rate, which currently stands at about 20%. Decreasing this failure rate to around 10%, let's say, would result in millions of more small businesses and millions of jobs over the years, significantly strengthening the American economy. A key component in this more effective SBA is heeding Chairman Alford's recommendation to move personnel to regional offices closer to the small businesses they serve. It's impossible for the Washington SBA to have its pulse on the needs of Main Street in communities from coast to coast. SBA loan making should also be conducted by third-party community banks with its lending expertise and community relationships. Under the leadership of Administrator O'Grady and Chief Counsel Mulligan, as well as the oversight of this committee, the SBA can be restored and reinvented into the agency that American small businesses want and need. Thank you very much for your time, and I'd be happy to answer any questions you may have.

Thank you, sir. I now recognize Mr. Trent for his five-minute opening remarks.

Chairman Alford and Ranking Member Tran, thank you for the opportunity to testify today. I'm Richard Trent, the Executive Director of Main Street Alliance, representing over 30,000 small business owners nationwide. Our members span industries, but they share a fundamental need: a stable, predictable economy that allows them to plan, invest, and grow. Unfortunately, that stability is being undermined, not by market forces alone, but by reckless decision-making that injects uncertainty into the economy and disrupts small businesses' ability to operate. While some argue that regulations are the biggest burden on small businesses, our members tell us otherwise. Their greatest concerns aren't red tape; they're instability at key agencies, policy reversals, and economic disruptions that shake their ability to plan for the future. Today, I want to focus on three urgent issues that are fueling uncertainty and putting small business survival at risk. First, SBA instability is hurting our entrepreneurs. The Small Business Administration is a lifeline for 35 million small businesses, yet recent mass firings, sudden program changes, and bureaucratic delays have thrown thousands of entrepreneurs into limbo. Patrick Dula, owner of Salvatore's Tomato Pies in Madison, Wisconsin, is actively repaying an Economic Injury Disaster Loan that kept his doors open during COVID. If the U.S. enters a downturn, the SBA's ability to offer hardship waivers will be critical, but staffing cuts raise serious concerns about whether those safeguards will still exist. Shannon Burns, an entrepreneur and consultant in Alexandria, Minnesota, helps new small businesses craft business plans. With 20 million new businesses launched since 2020, SBA's resources are needed more than ever, yet reduced staffing will limit access to these vital services. Molly Moon Neitzel, who testified here a few weeks ago, owner of Molly Moon's Ice Cream in Seattle, Washington, was expanding her business when she learned of leadership changes and staffing cuts at the SBA. She had contracts signed and investments made, and any delay in finalizing her loan would have been devastating for her. Decentralization must be strategic and planned, not weaponized in ways that create chaos for businesses. All of this is happening against a backdrop of inflationary pressures and market uncertainty. The trade war escalations and erratic tariff policies are already impacting small businesses. Two weeks ago, a Dodge Ram truck cost $80,000; now it's $100,000. If that's what's happening to trucks, imagine the impact on restaurants, grocery stores, and retailers that rely on imports. Ballooning deficits and corporate tax loopholes put upward pressure on interest rates. Second, it's important to note that federal funding freezes and data breaches are direct attacks on small business stability. When federal funding is frozen or misused, the first to feel the impact are small business owners who rely on these funds to keep employees on payroll and communities thriving. A tech entrepreneur in Utah lost multiple contracts when the freeze stalled nonprofit sales, disrupting her revenue pipeline. A Wisconsin child care provider feared delays in state block grant funding would leave her unable to pay staff. And a researcher in Oak Ridge, Tennessee, had her federally funded project suspended overnight, leaving her uncertain about her income and career. These aren't abstract concerns; they're real businesses, real jobs, and real consequences. And when federal funds stop flowing, they don't just delay government projects; they slow down entire economies. And beyond funding freezes, the Doge seizure of sensitive IRS data is an existential threat. One of the world's richest men now has access to bank statements, tax records, and competitive financial data of millions of businesses, including his own competitors. This is not draining the swamp; it's stocking it with more crocodiles. No CEO in America should have access to that kind of intelligence, which destroys fair competition and erodes trust in government institutions. The third thing I'll bring up is just that SBA office relocations in the ER bill will hurt local economies. We've seen what happens when abrupt agency relocations gut institutional knowledge and destabilize communities. In 2019, the USDA moved two research agencies from DC to Kansas, and 75% of employees resigned, stalling grants, research, and hurting local businesses that relied on federal contracts. Now, the administrator's memo mandates that SBA regional offices relocate from sanctuary cities, turning thriving small business hubs like Boston, Atlanta, Denver, and Seattle into collateral damage for political posturing. I urge this committee to focus on practical, bipartisan solutions in light of the current economic uncertainty: fully staff the SBA so it can meet the needs of entrepreneurs, unfreeze critical funding that small businesses rely on, block corporate access to sensitive financial data to preserve fair competition, and reject policies that inject instability into the economy and instead strengthen Main Street's ability to compete. Thank you, and I look forward to your questions.

Thank you, Mr. Trent. Well done. We now move to member questions under the five-minute rule. I recognize myself for five minutes. Mr. Gutierrez, this morning I was proud to introduce the Returning SBA to Main Street Act, companion bill to Chairwoman Ernst's bill in the U.S. Senate. Mr. Gutierrez, over the past four years, you've had firsthand experience working to fill the gap, somewhat a big gap, left by a political SBA. Can you speak to us about how an SBA that is actually focused on Main Street could actually help small businesses?

Thank you for the question, Congressman. You know, having SBA focus on what the mission and values of SBA should be on supporting small businesses is crucial. I know that several SBA field offices are short on staff. I know that many of them were not necessarily available to help as soon as help was needed. Therefore, we were able to fill the gap along with some other resource partners as well. But SBA essentially just needs to focus on what it is they're doing and serving the small businesses, relying on its partners to work and to help on the front lines. Having SBA in the field would be a tremendous asset to small businesses, particularly in throughout the Midwest, of course, working with the community bankers. Having those subject matter experts in the field would be amazing. Over the past few years, we've had one SBA representative in the field in Missouri, down in Springfield, and the others were located in both St. Louis and Kansas City. So that's simply just not enough assistance from SBA throughout the state. And of course, anytime that assistance was needed, they typically referred them out to the partners such as SBDCs, the Women's Business Centers, the Veterans Business Outreach Centers, and SCORE as well. So, what would it mean if we ended up moving the Kansas City SBA office to Columbia? Well, Columbia would be very excited to have SBA presence there again. I believe that during COVID, the SBA office was removed at that time, and so just having that local presence, that local subject matter would do wonders because it would mean more availability to community bankers. Being central to the state would be more access throughout the state, within five, six hours' drive anywhere across the state, and it would just serve as a signal that SBA is here and ready to help serving the communities.

Mr. Ortiz, SBA Administrator O'Grady is echoing the president's return-to-office mandate. SBA staff are now required to be in the office five days a week. While this is a great start, you have further recommended that funding regional initiatives like entrepreneur centers would be a more efficient use of taxpayer dollars. Please explain your reasoning for that recommendation, sir.

Thank you, Chairman Alford, for the question. Having education and innovation centers, I think, regionally, closer to where our small business owners are, would be extremely well-received by our small business owners. I doubt that there are too many small business entrepreneurs out there, let's say in Des Moines, Iowa, that decide, "Hey, I want to start my own small business. Let me get on a plane, fly up to DC, and enter the halls of SBA to help me do that." They need them there, where they are, where the ideas are. We need to bring those resources to the people where the people are, not here in DC. One of the recommendations I had made is, let's just close down the DC offices. I don't see why we would need that. I think we need those resources out in the field. We need support for folks like Mr. Gutierrez here, and we need to be able to support our small business owners where they are, which is in the field. They're not in DC. And so I think having the opportunity to do that, I think would make, you know, the $1.4 billion roughly that's allocated for the department much more effective and more efficiently.

Thank you, sir. Mr. Gutierrez, back to you. Through the COVID-19 pandemic, it was declared over in '23. Community Navigators programs continue well into 2025. Fact, that program is set to sunset nine months from now. Some people call it "walking around money" for Biden-preferred organizations. It seems that Community Navigators has a reputation for not being very efficient. Can you walk us through how the Community Navigators program duplicated efforts already done by SBDCs?

My understanding with the Community Navigators program is that each state was allocated a certain amount of funding, and it was granted towards a certain NGO or nonprofit. And to be quite honest with you, the SBDCs in several states actually hosted the Navigators program. In the state of Missouri, we did not. We were actually never contacted by the Navigator program. I cannot speak to any type of results or any type of information produced by the Navigators program other than we knew they were there somewhere in Missouri, and I don't even know if they're staffed anymore. So, as far as duplication of efforts, we were doing that all along for 43 years. We'll be doing it for another 43 years. Thank you.

I now recognize the ranking member for five minutes of questions.

Thank you, Mr. Chairman. In less than a week, between 400 to 700 SBA employees were terminated with notice, then informed the terminations were a mistake, and then fired effectively immediately, effective immediately. Many of these employees were veterans, injured or disabled workers, and workers with years of service. Mr. Trent, can you please share how these terminations will affect small businesses who rely on these employees for loans, disaster aid, and small business assistance?

Well, I can say that well over half of our 30,000-plus membership have applied for funding through the SBA, and a significant portion actually rely on different loan products or technical assistance. Over the last couple years, the SBA has offered, honestly, a real bespoke service to small business owners. We've got members in our cohort who speak directly to regional officers, loan officers that help them drive business sustainability. So, the mass firing of between 400 and 700 people will inevitably have a direct impact on entrepreneurs' ability to successfully navigate the challenges that present themselves every single day as a small business owner.

Thank you, Mr. Trent. Last Thursday, Administrator O'Grady announced that she's relocating six regional SBA offices away from sanctuary cities. Can you describe the effect the closure of these offices will have on Main Street businesses in urban areas?

Well, it's really unfortunate because what it means is that you've got honest, hardworking entrepreneurs that are now caught in the middle of a game of political football that none of them wanted to have anything to do with in the first place. I'll say that the example from 2019, the relocation of the USDA offices, is a good example of what happens when the USDA office was moved from DC to Kansas back in 2019, 75% of the workforce left. The local shops that depended on that regular foot traffic languished. And Chief of Staff Mick Mulvaney at the time was actually caught saying that this was all designed just to fire people, essentially. So, it'd be good, I think, if we talked about it in those sort of blunt terms, is just like, yeah, we wanted, we'd like to get rid of folks at the SBA, but this is a PR slight of hand that's really disadvantaging folks, and the local economies that are that thrive on that foot traffic in Atlanta and Boston and Denver are certainly going to feel the effects of it.

Thank you for that. And then, on March 3rd, 2025, the U.S. Chamber of Commerce published a report titled "I'm Afraid: Small Businesses Speak Out on Tariffs." The report found that tariffs will have a real devastating impact on thousands of small businesses across the nation and on all Americans in the form of higher prices. What are you hearing from the small businesses in the Main Street Alliance?

I have an inbox filled with terrified messages, phone calls, and text messages from small business owners that aren't really sure how they're going to continue operating if some of these tariffs go through. I mean, we saw a report released from NFIB, historically the conservative voice for small business America, just came out and showed that in February, 12% of small business owners thought it was a good time to expand their business. That's a 5% drop from the previous month, the largest drop in that indicator since April 2020, when COVID struck. So, you've got folks that are really scared out here, and it's no laughing matter.

Thank you, Mr. Trent. I'm going to shift to you, Mr. Gutierrez. SBDCs have received level funding over the years, yet you're being asked to do more and more with less and less. Can you please share the importance of full funding for the SBDC and how does lurching from one continuing resolution to another hurt SBDCs' ability to counsel small businesses?

Thank you for the question. So, when a CR happens, it, to be quite honest with you, it doesn't affect us because we'll have to do what we do on a daily basis, and that's serve our clients. What it does is it promotes the reliance on our host universities to help or to offset any type of potential funding slowdown. And as far as SBDCs being out there and doing the things that we do, we just keep our head down, focus on serving those small businesses, and make sure that we're able to do what is asked of us, what's tasked of us through the grant program that we're tasked with. So, thank you. Chairman, I yield back.

Thank you, Ranking Member. I now recognize Mr. Finstad from Minnesota for five minutes.

Thank you, Mr. Chairman, and thank you for holding this important subcommittee hearing today, and thank you to our witnesses for taking time to be with us. Over the past four years, small businesses across our country have been struggling to keep their doors open with the impacts of record-high inflation, supply chain disruptions, and burdensome regulations hindering their growth. I've heard firsthand from small businesses across my district about the impact that they've felt over the last few years here and what it's meant to their businesses and opportunities or lack of opportunities across southern Minnesota. So, that being said, I want to go to Mr. Ortiz. As President and CEO of the Job Creators Network, you know the important role the SBA plays in supporting small business owners. One of the things that I've seen in past experience working in federal government is the ability to meet the customer's needs, and that's usually a relationship-based, face-to-face, "How can I help you?" kind of situation. And so, I'm really happy to hear that Administrator O'Grady has returned the SBA to in-person work. And so, just want to know from you, what do you believe this move will improve the services at SBA?

Congressman, thank you for the question. I believe the face-to-face is critical for the interaction for small business owners, for their success. I still would say that we have to get more people out to the field, to the resources, where our small business owners are. It's great that there are some small businesses here in the DC area serving the community and serving Congress, but that's not where the bulk of our small businesses are. It's out in the field, it's out in Pella, Iowa, and Portland, Oregon, all across the country. That's where they need to be, and that's where the resources need to be allocated. And so, I think we, it's a great step in the right direction, but I think we need to go further, and we need to reallocate those resources out to the field.

Thank you for that.

Uh, all I would say is preach, keep preaching. And I represent a district of 21 counties, pretty rural, uh, Southern Minnesota. And a lot of times, these counties feel like they're fly over for, uh, organizations like the SBA. And so, uh, I completely agree with you.

Um, moving a little bit, uh, in February, I was proud to reintroduce, for the second time, the House passed Prove It Act. And the Prove It Act, it received the Job Creators Network endorsement. And this bill would give our small businesses a voice in the regulatory process as they work to serve their communities and pursue the American Dream. What impact, uh, Mr. Ortiz, do you think that the passage of this legislation would have on small businesses in navigating the regulatory environment?

Thank you again, uh, for the question. Congressman, this is a game-changer for small businesses, no doubt about it. And, uh, we're, we're glad to see that, uh, Senator Ernst also introduced companion legislation in the United States Senate on this. This is critical. I think for too long, agencies have been given a pass, uh, in terms of trying to do what they're supposed to do, which is show the impact of small businesses on regulations. Uh, too many waivers have been signed to basically say, "No, it's actually fine," and small businesses have been hurt all along the way. They don't have the resources to come and bring all their lawyers and, you know, 12 lawyers and all everything else that they need at the end of the legislative process to try to challenge stuff and go to the Supreme Court. They don't have the resources to do it. They're trying to run their businesses 24/7. And so, having the opportunity to, you know, finally force agencies to actually consider the effect of regulation on small business is critical. And having, uh, the opportunity to have a seat at the table at the beginning of the process rather than the end of the process is absolutely critical. Um, again, this is a game-changer, and, uh, I think we need to do everything we can to make sure that it passes quickly, swiftly, and in this Congress.

I appreciate those comments, and I couldn't agree more with you. It, it is, uh, you know, really a dereliction of duty from Congress because we pass these good-intended laws, we leave it up to the regulatory state to create all the hoops and loops and bells and whistles and the rules and regulatory climate that our businesses have to live under with no opportunity to weigh in on, "Wait a minute, you know, this is going to impact us." And to your point, small businesses don't have stables of lawyers and compliance officers and, uh, and so giving them, uh, more power in the in in the regulatory process is something I'm going to work hard for. So I appreciate your support on that.

Uh, one last question here for Mr. uh, Gutierrez. Uh, as Missouri's SBDC director, you, uh, more than likely have a great pulse for what's impacting small businesses across your state. How has the regulatory environment impacted small businesses in your community, and what can we do here in Congress to ensure Main Street businesses have the ability to grow and prosper?

Sure. One big topic, uh, for a lot of small businesses, well, for most small businesses, has been the Corporate Transparency Act. Um, that was introduced, I believe, last year, and then rescinded, and then paused, and and going back and forth. Um, that's put some very, very tough situations.

Gentleman's time has expired. I now recognize Mr. Cisneros from California for five minutes.

Thank you, Mr. Chairman. Uh, the inclusion of the majority's hearing memo included, um, you know, the SBA's Mr. Ortiz testimony, included ending the agency's politicization. Mr. Gutierrez shared that the SBA should not focus on political agendas. Mr. Trent, you highlighted to us that this shouldn't be about partisanship. We all agreed, and we should not be politicizing the SBA. And this committee has passed multiple bipartisan pieces of legislation unanimously so far. Today, we heard the SBA should go to where the people are, put Main Street America first. Yet, we have an Administrator and SBA Administrator targeting major cities led by Democratic Mayors as she seeks to close SBA regional offices in Boston, Seattle, Chicago, Atlanta, New York City, and Denver. And it's probably not long before my area of Los Angeles County is on that list as well. So, Mr. Trent, in your view, how does the brazen politicization of the SBA to close offices in major metropolitan areas impact small businesses?

Yeah, it impacts them, uh, directly. And listen, I, I feel for and have thousands of small business owners in rural areas, Minnesota, Wisconsin, um, and I hear from them. You know, it's absolutely, it can be tough to access some of these SBA resources. And, you know, what, it's okay to talk about maybe moving a couple staff to parts of the country to, to, to have more direct service for, for rural entrepreneurs. But, uh, the truth is that, uh, you've got hundreds of thousands of entrepreneurs concentrated in Atlanta, in Denver, in Boston, that are going to feel the effects, uh, of, of sort of this, this move away, uh, from these, from these entrepreneurship hubs. Um, and, uh, it's, it's really unfortunate. I'd say, and, and we can already feel the rumblings, and it adds to this environment of uncertainty for, for entrepreneurs that are going to have to take on more cost, frankly, just to meet basic technical assistance needs.

Thank you for that answer. Um, again, Mr. Trent, you represent a nationwide network of over 30,000 small business owners, many of which depend on the SBA. In your testimony, you urged the committee to reject policies that that inject instability into the economy, as we have seen with the Trump tariffs. The Pres, the President is on again, off again, based on whoever is in, in his ear at that given moment. Main Street's getting whiplash. How important is it for small businesses to have stability?

It's unbelievably important. Uh, so around 50% of small businesses across the country are operating with about a month of operating reserves. So we've got to be making decisions that are reflective of the fact that we respect these small business owners, we respect where they are, right, with with that little operating reserve. And the uncertainty around the tariffs, the, the will they, won't they soap opera, uh, it, it affects budgeting for entrepreneurs, it affects planning, it affects, uh, the way that they're thinking about growing their teams, uh, in the year ahead. And so there are the direct impacts as, as tariffs start to to come into play, but then there are the knock-on effects that we're really not going to be able to know the full extent of the problem until six months, a year from now.

Thank you. According to the SBA's own website, the Office of the Inspector General provides independent, objective, and timely oversight to improve the integrity, accountability, and performance of the SBA and its programs for the benefit of the American people. Uh, the SBA Administrator on day one said, "From day one, the SBA will uphold the highest standards of accountability, performance, and integrity." Mr. Trent, how can the SBA have the highest standards if the office tasked to provide oversight is vacant? Did President Trump's illegal firing of the Inspector General already undermine the Administrator's will, the Administrator wanting to uphold the highest standards of accountability and integrity?

Uh, it's, it's going to be tough without someone in that office. Uh, as that Inspector General is, is not just the main person investigating a lot of fraud and abuse within the agency, but also a sounding board for, for thousands and thousands of entrepreneurs across the country. Uh, so with that, with that post vacant, that's an ally for small business owners that is, is not there, uh, right now. And, and frankly, it's, it's going to be, uh, it's going to be scary for, for, for our entrepreneurial class.

All right. Well, thank you for your testimony, and I yield my time back.

Thank you, Mr. Cisneros. I now recognize Chairman Williams from the great state of Texas for five minutes.

Thank you, Mr. Chairman. And Mr. Trent, on a side note, thanks for being here.

Absolutely. Thanks for having me.

You're saying Dodge pickups went up from $18,000 to $20,000, $80,000 to $100,000?

Yeah, I'm a Dodge pickup dealer. It's a good truck.

And Tech us, and we're selling for $70,000. That sounds like a, sounds like a good get down there and see me. Uh, uh, Mr. Gutierrez, as we've been discussing, bloated and duplicative SBA programs waste taxpayer dollars and undermine the efficiency and the effectiveness of services provided to small business. Could you elaborate on ways the committee can streamline SBA programs?

Sure. I, I love the idea of having, uh, more SBA, um, presence in, in the field, uh, to serve the rural communities. Um, I, I believe that there, there are a lot of programs that, um, were created to duplicate some of the services that we've been doing for over 40 years. For example, I believe the Navigators program was designed to, um, reach those underserved, um, populations. We are already there. We're already serving the underserved populations from rural America to, uh, to, um, Main Street St. Louis, Main Street Kansas City, to down in, in Missouri. We do all that sort of stuff. So to have that money duplicated to a whole, or a whole new agency or, or, um, organization, you're recreating the wheel. We've been doing it for, for, like I mentioned, over 40 years. During the time that, uh, there was KAC money, we were allocated a large amount of money. Our results doubled, or sometimes tripled in some of the areas. When that funding did go away, we were left with, we called what, uh, we believe would have been the COVID cliff, where the money dried up, but the demand for our service didn't. We're still at an all-time high. So the services that we provide, um, we often have up to two weeks before someone can come in and see one of our business counselors in the rural area. But as far as duplication in a process, we are the ones, the first ones here, will be the last ones out the door because we're here every day doing what we need to do to serve, serve Main Street America.

Thank you. Mr. Ortiz, as you mentioned in your testimony, assessing the performance of SBA programs is important to maximize the utility of taxpayer resources in aiding and supporting small business. So my question to you would be, what performance metrics would you suggest the SBA consider implementing to maximize the effectiveness of the SBA programs?

Chairman Williams, thank you very much for the question. Um, in this era of Dodge, uh, I think trying to achieve that combination of effective and efficient is what we need to do here. And with the SBA, that's one of the things we need to do as well. Um, I think it's important that we set metrics to know that we are successful. One of the biggest metrics that I see that we can do, and this is a very, very tangible one, is the failure rate of small businesses. For example, the failure rate for small businesses in the first year is about 20%. And when you look into the number one reason why, it's because they don't know how to create a business plan. So again, I go back to, teach the fisherman how to fish. Let's actually teach them how to create business plans. Imagine if we could reduce that failure rate in four years from 20% to 10%. You have 33 million small business owners. One could actually conceive that you create another 15 million small businesses by doing so. And if each small business employs two people, you've just added 30 million more American small, uh, businesses or jobs to those small businesses. And so there's an important metric there that we need to take into account. Establishing, I guess, this effective and efficient combination of a $1.5 billion agency, it's not necessarily about saving money, it's just about making those dollars work hard for American taxpayers.

Well, that's great. And we know that small business is the backbone of our country. 99% of the businesses are small businesses. 75% of the workforce and payrolls are done by small business.

That's correct.

And we've got to keep risk and reward in their life all the time where they can take some risk and get reward, not be burdened by regulations in the federal government. Easier to compete against each other than to compete against the federal government.

That's correct.

I think every single day. Uh, with that, Mr. Chairman, they've never been cheaper than they are today. Mr. Trent, let me tell you that. Okay. And, uh, it's, thank you for letting me have fun with you. Okay. I yield my time back.

Thank you, Mr. Chair. I now recognize Ms. McMorris Rodgers from Washington for five minutes.

Thank you, Chairman and Ranking Member for having this hearing, and thank you to our witnesses for joining us today. This hearing could not come at a better time, considering the rapid changes occurring at the Small Business Administration. SBA's work has helped, has helped turn the dreams of countless everyday entrepreneurs into reality and has helped thousands climb up the socioeconomic ladder in America. My home district, the 10th District in the great state of New Jersey, is proud to host the SBA New Jersey Regional Office, providing important services all over the Garden State. For years, SBA employees have worked hard for the American people, and we owe it to them to ensure that they are treated fairly while performing their work for our communities. As mentioned in this committee hearing today, we've heard over and over again about the reckless firings of hundreds of employees at the SBA, including probationary employees, which is why I introduced the Merit Act to ensure that these employees are granted back their jobs immediately and the back pay. I've heard from many of you today about the strains on the department, which obviously trickle down to the businesses and the support that they're able to get. So for each of the witnesses today, I would like to ask, do you support the firing of these hundreds of hundreds of employees? We can start with Mr. Gutierrez.

Under the current direction of the administration, um, I, I would say yes. It's funny because in your opening statement, you said that they were short-staffed. So, I mean, the SBA is already short-staffed. But you support the firing of these hundreds of employees that were just recently fired?

I would say that the majority of the of the firings, from what I understand, and what I've read, um, are out of the DC area, as opposed to what's going on in the field. Um, I know that the field has been really underrepresented, and I believe that when you have any type of transition like this that could lead to potentially more, um, um, stability down the line, that's something that from a private standpoint, that's that goes to efficiency. So, so yes, I understand that there's been lots of jobs left or lost, um, but, uh, to like to my point earlier, um, those jobs were never out in the field, and they were never really affecting a lot of the, uh, the regions that they were in.

Do you know that for sure?

Well, I can speak, uh, uh, directly to the Missouri and the Kansas City District, but not for the entire, not for every office, or every, of course not. I can't speak for.

Thank you. Mr. Ortiz, I worked at a, uh, consulting agency called Boston Consulting Group. This is something that we used to do day in and day out is trying to make sure that we have an organization that is more effective and efficient. For, uh, in this particular case, it's not an organization, but it's an agency that works for the federal government, that actually is taxpayer-funded. We have a responsibility to our small business owners to make sure that we have the most effective and efficient, not only agency but people working for it. I was a small business owner, and I will tell you that I bet everything I had on my small business, and I want to make sure that every small business owner that goes to the SBA knows that they have the most effective and efficient people working in it. Yes or no, Mr. Ortiz, that's my answer, ma'am. So you don't, it's yes or no, do you support the firings of those people?

I support a more effective and efficient agency.

Okay. Next, Mr. Trent.

No, um, thank you. Yeah. Uh, I mean, I, I come at this work as a, as a veteran family, uh, and so when I think of SBA, I think of veteran entrepreneurs. My grandfather served in World War II. My brother's both in the Army, one went to, was deployed to Iraq. You've got thousands and thousands of veteran entrepreneurs who started businesses. That growth rate, and, and veteran-owned businesses doubled in the first two years of the Biden administration. Now you've got those same veterans who served our country defending the freedoms that a lot of us take for granted, who have had the rug pulled out from under them as a result of these mass firings. It's, it's shameful.

Thank you so much for that. I, I want to thank the witnesses, even those who kind of skated around the question. But the point of the matter is, is we have to make it make sense. We cannot sit up here and say that, you know, it's, we need a more efficient, we need to, um, have more help at SBA. We hear from different businesses all the time about the delay in assistance that they can get from SBA sometimes. So saying sitting up here saying that we support the firings or we don't support, or there's not enough staffing, it's just not all making sense. And we should be supporting our small businesses and making sure we're delivering to them as much assistance that we can do. That is our job here, not to be making things harder for them. Thank you. With that, I yield back.

Thank you. I ask unanimous consent from Mr. Wenstrup from Wisconsin to waive onto this hearing. Without objection, so ordered. I now recognize Mr. Wenstrup for five minutes.

Thank you, Mr. Chairman, for allowing me to speak in today's hearing, and thank you to the witnesses who came here to share their experiences with us. Northeast Wisconsin is home to a wide variety of small businesses who have faced economic uncertainty due to an overreaching and overtaxing federal government. As a former small business owner myself, I know the challenges you must overcome to operate and grow a successful small business. Under this previous administration, small businesses across the country faced increased regulatory burdens, which made starting, running, and growing a small business more difficult. At the same time, the Small Business Administration enacted policies such as allowing its employees to work from home that negatively impacted small businesses. It's important that as a committee, we address these broken and burdensome policies and make Main Street America great again. My first question is for Mr. Ortiz. In your opening statement, you spoke about the additional $2 trillion of regulatory burdens levied on businesses during the Biden administration. Having fewer employees and less financial services, small businesses bear an increased burden of these additional regulations. As members of the Small Business Committee, what should our top priority be to reduce these regulations and provide immediate regulatory relief to small businesses?

Uh, thank you very much for the question, Congressman. Uh, the, um, one of the hardest things, uh, during the past four years under the Biden administration for small businesses was the regulatory environment that existed. About $1.8 trillion dollars that was placed on our, uh, businesses across the country, um, and also inflation. When you take those two together, it was a huge burden for our small businesses. Um, and, and, and quite frankly, um, when you look at it compared to our large corporations, it, it, it was extreme danger, really, for our small businesses on Main Street. And so we have to make sure that we reduce that regulatory environment. I heard, uh, the, uh, Congressman on this side talk about 21 million small business applications, for example, filed. In our cursory review of those 21 million small business applications, those are actually gross applications. So, for example, they're not actually net applications. So, for example, if I had a business in, uh, New York, and I'm trying to flee New York to go to Florida because there's less taxes and less a regulatory environment there, that, uh, Joe's Pizza Place that moves from from Texas, excuse me, from New York down to Florida is considered a new business according to the Biden administration numbers of those 21 million, 21 million applications. And so when we look at the net applications, actually small businesses didn't grow in those four years of the Biden administration, they shriveled because of that regulatory environment and because of high inflation. So we've got to make sure that we address those too. And the last I checked, the SBA is not a jobs bank. It's an environment, it's an agency that needs to serve the American small business owner, and there's 33 million of them that are struggling right now.

Thank you. All right, thank you. I yield back.

Thank you, Mr. Wenstrup. I now recognize Ms. Simon from California for five minutes.

Thank you, Chair, and thank you to the witnesses. Uh, we don't have to argue that small businesses are the backbone of our economy. I love this committee because we, we consistently lift that up. You know, there are many issues that have been covered in this hearing, and I will repeat some of them. You know, my concern, the concern of many, is that we have come together as a committee with a profound mission of advancing opportunities for small businesses in this country. You know, just in the last few days, we know that 401ks and 403bs have been thrown out of the window for folks. Folks have lost so much. We also know that in this committee, we have said together, cross-aisle, we will make a commitment to disabled folks, to our veterans, to women-owned businesses on Main Street, on Telegraph Street, on Broadway streets. And here we are having a conversation trying to figure out how to advance our way forward. I think we all know what we want. We want a more efficient sector. We want a government agency that can show up at the doors, where the websites work. Within the last two weeks, hundreds of SBA workers have been fired. Fired. We are talking about closing down six agencies in major cities in this country. So I want folks who are watching to know, the dry cleaner, the auto repair dealer, the barber shop, the woman who called my office yesterday who's starting a home care business to make sure that our elders have trained, wonderful caregivers at their homes every single day, doing work that many of us have never done. Where is she going to go? She's called from outside of my district to get support. You know, she'll be on the phone for hours. The websites, they were already difficult to access three administrations ago, four administrations ago. What are we doing? What are we doing? And now we have this conversation that has become real, that tariffs have met the doors of our small businesses. We know that entrepreneurs are already working day and night to keep their doors open. We also know that the cost of doing business in the last couple of weeks has shot up. These policies are cruel. They're cruel, and they don't focus on low-income and middle-income and working-class people who are trying to get off a government dole, who want to make good for themselves and offer the folks in their communities and their sons and their daughters jobs. They want to send their kids to college. We are kicking them in the ribs, not only the folks who work for the Small Business Agency but the folks who are on the ground. You hire an Inspector General and you fire them. You fire tons of workers, hundreds of workers, and then we have a policy that chooses to enact tariffs that will destabilize this country. It's cruel, and we know that we don't have to litigate that. Any one of us who've run small businesses, who've run payrolls, I've run payrolls since I was 19 years old. I've hired hundreds of workers. I've trained workers to leave incarceration and the streets and foster care to get jobs, whether they're doctors or lawyers or medical providers. I've done that work. I know how hard it is to keep an institution alive when you're by yourself. Fine. Close six agencies and see what happens to our economy. We'll see. We'll see. When you fire IRS workers, when you fire frontline workers in communities that are helping small businesses, I have to ask, do we care? Do we truly care about folks on the ground? You know, I have one quick question, which I think I know the answer to. You know, with, with all that we're talking about, I, I want to say before I ask my question, it will be quick. This fiscal year alone, in my district, our local SBA office has served, served on the like, literally on the front lines, 822 small businesses, offering $351 million of direct loans to keep businesses afloat. If we care, we would advance those opportunities, not take them away. You're automating support through these actions. You know, Mr. Trent, I only have a couple of seconds left. How can having field offices near metro areas be a strategic choice and also an effective use of taxpayer dollars to serve small businesses? How can having these offices near metro areas be a strategic choice to support small businesses?

Just a quick answer. I just quickly say that because a lot of these city centers are hubs for entrepreneurship where there's a preponderance of of small business activity.

The gentlewoman's time has expired. The Chair now recognizes Mr. Downing from Montana for five minutes.

Uh, thank you, Mr. Chairman, and thank you to the witnesses. Uh, under the Biden administration, the SBA suffered from serious mismanagement that, uh, hindered the agency's ability to support small businesses. You know, through irresponsible work-from-home policies, DEI mandates, and voter registration efforts, Biden's SBA prioritized politics and bureaucracy over the interests of Main Street America. First, Mr. Gutierrez, your testimony demonstrates the power of Small Business Development Centers, or SDCs, to assist small businesses and, you know, produce a return on taxpayer investment. So, from your experience as the Director of Missouri's SBDC, how do they help support rural businesses, which very often lack access to the information and training needed to to thrive?

Thank you for the question. So the Missouri SBDC serves all 114 counties and the city of St. Louis. It's a large footprint across the state with, uh, 18 business service centers and two satellite locations with a staff of 33 full-time, uh, folks. That's simply just not enough, right? Um, unfortunately, um, we are not able to have a physical presence. However, with the introduction of different technologies such as Zoom, Teams, things with that nature, we're able to reach more folks. Um, we try to, uh, uh, set up regional meetings where we're meeting with several different counties at once. We set up a revolving schedule to meet with different cities, so we're there, um, on a regular basis. But simply the fact is that we're stretched thin, just like many of our other partners in the field that are frontline. And, um, it's, we're doing as, as best as we can. Um, I mentioned earlier that sometimes because of staffing, uh, issues and funding issues, uh, it could take up to two weeks before they're able to see anybody in person at one of our rural business centers. We're just trying to do a lot with, uh, with little.

Well, thank you. So how did the SBA's work-from-home policies under the previous administration negatively impact your SBDC?

Quite honestly, they didn't impact us at all because we were on the ground. We were meeting with the businesses on a regular basis. We knew that the SBA offices were there. We helped support them whenever, uh, possible. But, um, uh, during the last three or four years, uh, we often found that, uh, traveling, uh, to the SBA offices in both, uh, Kansas City and St. Louis, unfortunately, the, the personnel was not there. I remember showing up for a meeting, um, and nobody was there with a meeting, uh, with our SBA, uh, representative. So, it's just a matter of, you know, we're doing the best we can to meet the the needs of small business in rural America and, of course, obviously Main Street America as well.

Thanks. Uh, according to a 2024 report from this committee, the Biden administration attempted to leverage SBDCs to promote voter registration activities. Were you ever approached by the Biden administration to support their voter registration efforts?

Fortunately, in the state of Missouri, we were not.

Do you believe the administration would have approached you if Missouri were a more competitive state in presidential politics?

I would like to think that we would not have been approached, but I can't answer that hypothetical.

Thank you, sir. Uh, moving on, Mr. Ortiz, in your testimony, you emphasized the truly egregious nature of SBA's political activities under the Biden administration. How have these activities damaged SBA's reputation as a reliable partner for small businesses across our country?

Thank you, Congressman, for the question. Unfortunately, uh, small business owners just don't believe and trust in the SBA anymore. I think they look to other partners outside of the SBA. And quite frankly, there are a lot of great partners out there. Golden Sachs, American Express, for example, run some fantastic small business programs. Sir, Mr. Gutierrez runs great programs as well. So I think what we need to do is we need to restore confidence in the SBA. And, and what do you, what steps can the SBA take to restore confidence with small business?

Well, I mentioned already in the testimony, I think part of it is we got to move resources out to the field, better resources, more effective resources. Um, I think, uh, you know, certain folks were let go. I would question and make the question is, maybe they were, maybe they should have been let go because they weren't exactly the most effective, uh, resources for our small business owners. We need to make sure that we ensure people who have the experience to be able to make, uh, suggestions, for example, on how to create small business plans for small business owners. We talk a lot about, and the left talked about, the Democrats talked a lot about, uh, establishing, uh, small businesses need certainty. For example, well, if they needed certainty, I wonder why they didn't vote, for example, in the last, uh, budget, you know, the, the budget bill. None of them voted for a budget that included the extension of the Tax Cuts and Jobs Act. And how important do you think that is for Main Street America?

The Tax Cuts and Jobs Act, it, it's hugely important. In 2017, with the Tax and Jobs Act, that provided the impetus for the successful economy that we had. The two biggest parts of the small business needs were the tax deduction and immediate.

Gentleman's time has expired. We now recognize Ms. Goodlander from New Hampshire for five minutes.

Thank you, Mr. Chairman, and thank you, Ranking Member. I really believe deeply in the work of the Oversight Subcommittee. We all swore, one thing that unites us all in this committee and in Congress is we all swore an oath to protect, protect and defend this important document, the United States Constitution. And one of the core responsibilities of Congress is oversight. It's because oversight is about transparency, which is essential to public trust. Oversight is essential to cracking down on waste, fraud, and abuse, which I'm deeply committed to. Oversight is about making sure that our government works for hardworking people, and that we give the American people and our small businesses the certainty that they need and deserve. Another core constitutional responsibility of Congress is the power of the purse, the power to direct and control federal spending. And that's because we live in a democracy, and not in a monarchy. And so what we've seen in the last 51 days is an unprecedented assault on this power of Congress. It's an assault that is lawless, it's dangerous, and it has had a really bad impact on so many of our small businesses and workers, uh, across this country and across New Hampshire. Mr. Trent, you, you testified that federal funding freezes are a direct attack on small businesses, on the stability that small businesses need, and that's certainly what I'm hearing from small businesses across New Hampshire who are unsure about whether they can keep workers on payroll, who aren't sure how they're going to provide healthcare to those workers. I, I wondered if you could say more about what you're seeing from federal funding freezes across the country.

So, uh, we've got hundreds of members that were directly impacted by those funding freezes, and the impact ripples throughout their own local, uh, economy. Uh, one member in New Glarus, Wisconsin, runs a child care facility, worried about state block grant funding. She thought that she might not be able to make payroll the next month and would have to fire half of her team. We have, uh, in Oak Ridge, Tennessee, a member, uh, who does groundbreaking research for the government. She logs into her, her fund portal one morning and finds that, uh, the funding that was supposed to be powering her work was nowhere to be found, totally, totally frozen. We've still got folks, um, who are wrestling with these freezes, and everyone is just told to, uh, to be excited about the incoming, you know, deregulation regime, regime. And so it's, it's, it's really unfair. And we're certainly hearing from most of our members that this is something that's impacting them every single day. Well, I should say also, the impact, um, of these freezes has been on SBA workers in the state of New Hampshire. It's not just here in the capital, it's across the country in field offices, which, which is harming our small businesses too.

Mr. Trent, you, you wrote about a subject that I care deeply about, fair competition. And I think it's, it's another issue that should unite us all here in Congress. Our antitrust and consumer protection laws are as old, the ideas in them are as old as America. It's about checking power. And here on the Small Business Committee, we're, we're about bringing power back to our small businesses at a time when the American economy has never been more consolidated. You wrote about the impact of the unprecedented access that an unelected billionaire in the White House has to the sensitive data of small businesses and of people across the United States. You, you, you testified that this destroys fair competition. Alongside the destruction of public trust, can you say more about that?

So there's a reason why, you know, Walmart doesn't have access to the books of the mom-and-pop stores right down the street from it. There's a reason why no other CEO in this country has access to the bank statements, taxpayer data, of small businesses, because it's an unbelievably unfair advantage. And this includes the, the taxpayer data and bank statements of some of Elon Musk's actual competitors. And so we need to be doing everything in our power to make sure that the playing field is level for, uh, for small businesses to compete. And I'll just respond by respectfully disagreeing with some statements around deregulation and tax code that have been made. With deregulation, deregulation can be good, but very often the benefits accrue to the largest companies in the world. The repeal of Dodd-Frank, and the, the lessening of restrictions around capital requirements inevitably led to the fallout of Silicon Valley Bank. JP Morgan was quick to gobble up thousands and thousands of depositors, while many, a lot of different small banks languished. Right? The tax code, 82% of surveyed small business owners believe that the tax code is currently rigged against them, favoring large corporations. So you've got a growing sentiment among small business owners that things aren't fair, and we need to do something to fix that.

The gentlewoman's time has expired.

All right, thank you so much. I want to personally thank each and every one of you, Mr. Gutierrez, Mr. Ortiz, Mr. Trent. It was a fascinating conversation today. Thank you for your testimony and your investment in small businesses and our future. I want to thank Ranking Member Tran, and all the members of this subcommittee, and also the staff, which really is the impetus and the hard work behind what goes on here. So thank you, staff. Without objection, members have five legislative days to submit additional materials and written questions for the witnesses to the Chair, which will be forwarded to the witnesses. I ask the witnesses to please respond promptly to those. If there is no further business, without objection, the committee is adjourned.

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House Hearing on SBA Supporting Small Businesses

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