[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


              A DISCUSSION WITH SBA ADMINISTRATOR ISABELLA CASILLLAS GUZMAN

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                           NOVEMBER 16, 2021

                               __________


[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                               
                               

            Small Business Committee Document Number 117-041
             Available via the GPO Website: www.govinfo.gov
             
                               __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
46-064 PDF                 WASHINGTON : 2022                     
          
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                   HOUSE COMMITTEE ON SMALL BUSINESS

                 NYDIA VELAZQUEZ, New York, Chairwoman
                          JARED GOLDEN, Maine
                          JASON CROW, Colorado
                         SHARICE DAVIDS, Kansas
                         KWEISI MFUME, Maryland
                        DEAN PHILLIPS, Minnesota
                         MARIE NEWMAN, Illinois
                       CAROLYN BOURDEAUX, Georgia
                         TROY CARTER, Louisiana
                          JUDY CHU, California
                       DWIGHT EVANS, Pennsylvania
                       ANTONIO DELGADO, New York
                     CHRISSY HOULAHAN, Pennsylvania
                          ANDY KIM, New Jersey
                         ANGIE CRAIG, Minnesota
              BLAINE LUETKEMEYER, Missouri, Ranking Member
                         ROGER WILLIAMS, Texas
                        JIM HAGEDORN, Minnesota
                        PETE STAUBER, Minnesota
                        DAN MEUSER, Pennsylvania
                        CLAUDIA TENNEY, New York
                       ANDREW GARBARINO, New York
                         YOUNG KIM, California
                         BETH VAN DUYNE, Texas
                         BYRON DONALDS, Florida
                         MARIA SALAZAR, Florida
                      SCOTT FITZGERALD, Wisconsin

                 Melissa Jung, Majority Staff Director
            Ellen Harrington, Majority Deputy Staff Director
                     David Planning, Staff Director
                           
                           
                           C O N T E N T S

                           OPENING STATEMENTS

                                                                   Page
Hon. Nydia Velazquez.............................................     1
Hon. Blaine Luetkemeyer..........................................     3

                                WITNESS

The Honorable Isabella Casillas Guzman, Administrator, United 
  States Small Business Administration, Washington, DC...........     5

                                APPENDIX

Prepared Statement:
    The Honorable Isabella Casillas Guzman, Administrator, United 
      States Small Business Administration, Washington, DC.......    49
Questions and Answers for the Record:
    Questions from Hon. Velazquez and Answers from Hon. Guzman...    59
    Question from Hon. Mfume and Answer from Hon. Guzman.........    65
    Questions from Hon. Carter and Answers from Hon. Guzman......    66
    Questions from Hon. Luetkemeyer and Answers from Hon. Guzman.    68
    Questions from Hon. Meuser and Answers from Hon. Guzman......    95
    Questions from Hon. Tenney and Answers from Hon. Guzman......    97
    Questions from Hon. Van Duyne from Hon. Guzman...............    99
Additional Material for the Record:
    AFSA - American Financial Services Association...............   122
    CUNA - Credit Union National Association.....................   124
    ICBA - Independent Community Bankers of America..............   126
    Letter from Hon. Angie Craig to Hon. Nancy Pelosi and Hon. 
      Steny Hoyer................................................   129
    Letter from Hon. Young Kim to Hon. Isabella Guzman...........   131
    Letter from Alfredo Ortiz, President and CEO of the Job 
      Creators Network to the Committee on Small Business........   133
    MHI - Manufactured Housing Institute.........................   135
    NAFCU - National Association of Federally-Insured Credit 
      Unions.....................................................   137
    U.S. Travel Association......................................   139
    Questions submitted for the record from the hearing dated May 
      26, 2021...................................................   140
    Questions submmitted for the record from the hearing dated 
      October 6, 2021............................................   154

 
      A DISCUSSION WITH SBA ADMINISTRATOR ISABELLA CASILLAS GUZMAN

                              ----------                              


                       TUESDAY, NOVEMBER 16, 2021

                  House of Representatives,
               Committee on Small Business,
                                                    Washington, DC.
    The committee met, pursuant to call, at 10:01 a.m., in Room 
2360, Rayburn House Office Building and via Zoom, Hon. Nydia 
Velazquez [chairwoman of the Committee] presiding.
    Present: Representatives Velazquez, Golden, Davids, Mfume, 
Phillips, Newman, Bourdeaux, Chu, Evans, Delgado, Houlahan, Mr. 
Kim, Craig, Luetkemeyer, Hagedorn, Stauber, Williams, Meuser, 
Tenney, Garbarino, Ms. Young Kim, Van Duyne, Donalds, Salazar, 
and Fitzgerald.
    Chairwoman VELAZQUEZ. Good morning. I call this hearing to 
order.
    Without objection, the Chair is authorized to declare a 
recess at any time.
    I would like to begin by noting some important 
requirements. Standing House and Committee rules and practice 
will continue to apply during hybrid proceedings. All Members 
are reminded that they are expected to adhere to these standing 
rules including decorum.
    House regulations require Members to be visible through a 
video connection throughout the proceeding, so please keep your 
cameras on. Also, please remember to remain muted until you are 
recognized to minimize background noise.
    In the event a Member encounters technical issues that 
prevent them from being recognized for their questioning, I 
will move to the next available Member of the same party and I 
will recognize that Member at the next appropriate time slot 
provided they have returned to the proceeding.
    For those Members and staff physically present in the 
Committee room today, in accordance with the attending 
physician's most recent guidance, all Members and staff who 
attend in person will be required to wear masks in the hearing 
room. With that said, Members will be allowed to briefly remove 
their masks if they have been recognized to speak.
    Now, let's turn to why we are here today--a discussion with 
the Small Business Administration Administrator. First, I would 
like to welcome Administrator Guzman. Thank you for being here 
today. We appreciate you coming in for another appearance 
before this Committee during your short time as administrator.
    Back in March when you were confirmed small firms were 
still reeling from 2020, a year when around 800,000 small 
businesses permanently closed their doors--roughly 30 percent 
more than in a typical year. Since then, you and the dedicated 
staff at the SBA have worked tirelessly to administer the 
relief programs that Congress created and help entrepreneurs 
get back on their feet.
    The work of the agency should not go unheralded today. 
Small firms across the country are in a better place thanks to 
the American Rescue Plan and the economic relief programs 
Congress passed. The economy has added an average of 620,000 
jobs per month since President Biden took office, and small 
firms are leading the way. These figures would not have been 
possible without the historic relief measures that this 
Committee put in place and the work of the SBA.
    In addition to massive demand for the relief programs, the 
agency has had to operate its traditional lending offerings and 
core programs. I was pleased to see your recent announcement 
that traditional SBA loan programs provided a record amount of 
funding to small firms in fiscal year 2021--$44.8 billion in 
financing through more than 61,000 loans, to be exact. These 
numbers are evidence of the extraordinary potential that the 
agency has to help entrepreneurs get back on track.
    I look forward to hearing more about your vision for the 
agency and how we can all work together to highlight efforts 
that have been successful and thoughtfully examine the programs 
that need improving. This will require a substantive, focused, 
and measured conversation on SBA's programs and the issues 
facing us today.
    America's small employers deserve nothing less. They do not 
have time for accusations, gotcha questions, and partisan 
bickering. They are 100 percent focused on their survival and 
future. I, too, want to look to the future. With COVID cases 
falling and vaccination rates rising, we are steadily putting 
COVID behind us. This new post-COVID economy may be unfamiliar 
for many entrepreneurs, but it also presents a great deal of 
opportunity.
    I believe these opportunities will only increase with 
President Biden's agenda to build back better and correct 
decisions made in the previous administration that has led to 
many of the crises we face today--such as inflation, workforce 
shortages, supply chain disruptions, inequity in health care 
and childcare, and worst of all a slow recovery. So much time 
was wasted last Congress but now we are course correcting to 
address many of these issues by investing in America.
    Earlier this month, House Democrats and a handful of our 
Republican colleagues finally delivered on the promises of 
infrastructure week by passing the Infrastructure Investment 
and Jobs Act. This legislation will rebuild roads and bridges, 
expand broadband access, and generally prepare the American 
economy to grow from the bottom up in the 21st century.
    The bill will also allow small firms to play a role in 
revitalizing American infrastructure by creating many good-
paying jobs that cannot be sent overseas. In fact, Republican 
Senator Rob Portman described these investments as adding ``to 
the supply side of the economy and will be counter-inflationary 
at a time of rising inflation.''
    Democrats are also busy providing small businesses with a 
substantial $5 billion investment through the Build Back Better 
Act. The bill will tackle core small business issues by 
improving access to capital, boosting underrepresented firms, 
and creating opportunities for small contractors. The 
legislation will pave the way for recovery in the short term 
and prosperity in the future.
    Taken together, the Infrastructure Investment and Jobs Act 
and the Build Back Better Act amount to a generational 
commitment to the success of American small businesses. You and 
the staff at SBA are a key component to these initiatives. I 
look forward to hearing your testimony and discussing these 
issues today.
    I now yield to the Ranking Member, Mr. Luetkemeyer, for his 
opening statement.
    Mr. LUETKEMEYER. Thank you, Madam Chair. Thank you for 
joining us in person today to discuss the current small 
business landscape.
    As you very well know, small businesses across the country 
have been facing a multitude of challenges, many of which have 
been caused by the overreaching grasp of the federal 
government. The Small Business Administration is tasked with 
assisting these struggling firms, especially in the wake of the 
pandemic. However, month after month, we have witnessed quite 
the opposite coming from this administration's SBA and other 
agencies.
    Treasury Secretary Yellen, who is legally required to 
testify before our Committee, continues to ignore us. It 
appears that she has time to do many events even on the 
campaign side and meet with a variety of people, but she still 
refuses to fulfill her legal duty to testify before this 
Committee. Secretary Yellen's inability to appear before us is 
an insult to small business owners across this nation. She is 
blatantly turning her back on a sector of the economy that 
produces nearly two out of every three jobs and contributes 
just under half this nation's gross domestic product. Small 
businesses, entrepreneurs, and startups are an essential factor 
to America's economy and she still refuses to testify. This is 
unacceptable.
    We are glad, however, that you are here representing the 
primary and sole federal agency that was created to defend and 
protect small businesses. It is no secret that the nation's 
smallest firms are still working tirelessly to recover from the 
everchanging and overreaching state and local shutdowns ordered 
during the pandemic.
    If it was not bad enough, now they are facing some of the 
strongest economic headwinds in recent memory with the Biden 
and the Democrats' massive spending agenda. As Members of the 
Committee, we hear from small business owners every day. When 
we are back in our home district, we visit with their 
storefronts and listen to their stories. Unfortunately, the 
reports coming from main street USA are far from positive. 
Prices are soaring at the sharpest rate in over 30 years. 
Supply chain disruptions are making it nearly impossible to 
obtain good and products. Americans are refusing to get back to 
work because the government is paying them to stay home 
creating a labor shortage crisis.
    Main street is still facing a looming vaccine mandate 
requirement for their already depleted worker pool, and now 
small business owners are being threatened with increased taxes 
due to the trillions of dollars this administration plans to 
spend at the expense of middle class Americans. These are 
monumental issues that deserve a full and comprehensive 
discussion.
    You can look at some of the recent small business surveys 
and they show the exact same thing. The top issue small 
businesses are struggling with today are the severe economic 
conditions that they face. Take for example the Job Creators 
Network Monthly Monitor Poll. Inflation is the top challenge 
reported by small business owners. Or the NFIB Jobs Report that 
shows 49 percent of small business owners cannot fill the open 
job positions they then have. These are fundamental and core 
issues to our country's distressed small business landscape.
    I ask that you put yourselves in the shoes of a small 
business owner just for a moment. Your inventory is low because 
your products are stuck on a ship that is sitting off the cost 
of Los Angeles. You are forced to raise prices during the 
critical holiday season, and you cannot find any workers. With 
all these issues combined, I do not see how small business can 
be successful.
    And what have we heard from the administration as a 
response? You plan to force through trillions of dollars in 
spending all on the back of small business owners. And as a 
reminder, a recent study from the left-leaning Tax Policy 
Center found that this administration's far-left spending spree 
would raise taxes on the middle class of our American friends 
and colleagues by 30 percent. Additionally, instead of allowing 
our small businesses to operate independently, this 
administration is imposing more mandates and regulations.
    So the question remains, who is actually standing up for 
the nation's job creators within the Biden administration?
    Ms. Guzman, that is your duty. The Small Business 
Administration has a duty to defend these small business 
owners. I plead with you to listen to them and hear what they 
have to say. These men and women are not asking for new 
programs so they can receive a direct loan from the federal 
agency. They want common sense, pro-growth policies that will 
provide them with the ability to run a well-rounded, efficient 
operation, free from the hand of government.
    Ms. Guzman, if you took the time to hear from small 
businesses in urban, suburban, and rural areas of the United 
State you would hear a lot and learn a lot.
    Today, I look forward to having a conversation on all of 
these topics and we expect our questions to be answered.
    Before we begin, I must note that simply saying that your 
agency will get back to us in writing will not stand.
    I would like to ask for unanimous consent to enter into the 
record more than 60 questions the Republicans submitted to 
Administrator Guzman after appearing before our Committee in 
May and more than 60 questions for the record the Republicans 
submitted to Administrator Mark Madrid after his appearance 
between our Committee in September.
    Chairwoman VELAZQUEZ. Without objection, so ordered.
    Mr. LUETKEMEYER. Thank you, Madam Chair.
    I will note for the record that we have not received an 
answer to any of these questions thus far. And it is not just 
our questions during Committee hearings that go unanswered. My 
colleagues have asked numerous questions posed to you on behalf 
of their small business constituents and they do not receive 
any responses. One of the many examples, questions about 
Economic Injury Disaster Loans go unanswered.
    If it is your desire for this administration to be a direct 
lender, why is your current direct lending tool such a 
disaster? Not only is EIDL a black hole when it comes to 
customer service, but it is also riddled with fraud according 
to the SBA Inspector General. I will say it again. The SBA, 
which pushed through approximately $1 trillion the last 18 
months had better wake up. If you ignore and refuse to answer 
the representatives' questions that we were sent here on behalf 
of our constituents and our small businesses to ask. You have 
refused to implement countless recommendations from the 
Inspector General and your actions do not match what the small 
businesses say are the top concerns facing their operations. 
Over $32 billion small businesses across the United States 
deserve better. Main street USA deserves better.
    And Madam Chair, with that, I yield back.
    Chairwoman VELAZQUEZ. Thank you, Mr. Luetkemeyer. The 
gentleman yields back.
    With that, I will now introduce our distinguished witness, 
the Honorable Isabella Casillas Guzman. Administrator Guzman is 
currently serving as the 27th administrator of the Small 
Business Administration. Her previous experience as director of 
the California Office of the Small Business Advocate, coupled 
with her position as senior advisor and deputy chief of staff 
at SBA make her uniquely qualified to take the helm. Not only 
does she have the knowledge needed to assist small businesses 
in their recovery, but as a former small business owner and 
advisor to entrepreneurs, she has the understanding to advocate 
on their behalf. Administrator Guzman earned a Bachelor of 
Science from the University of Pennsylvania Wharton School of 
Business.
    Welcome, Administrator Guzman. You are recognized for 5 
minutes.

  STATEMENT OF ISABELLA CASILLAS GUZMAN, ADMINISTRATOR, U.S. 
                 SMALL BUSINESS ADMINISTRATION

    Ms. GUZMAN. Good morning, Chairwoman Velazquez, Ranking 
Member Luetkemeyer, and distinguished Members of the Committee. 
Thank you for the opportunity to be here to discuss the 
important work of the U.S. Small Business Administration and 
what we are doing to help America's 32.5 million small 
businesses and innovative startups continue to propel our 
economy forward.
    Though we have made considerable progress fighting COVID 
and reopening small business and our economy thanks to the 
American Rescue Plan, the Delta variant has lingering impacts 
and many small business still need the SBA's help as a result 
and we continue to deliver billions of dollars in relief. At 
the same time, the American entrepreneurial spirit is stronger 
than ever with more than 9 million new businesses applying for 
filing since January 2020. At the SBA, we are working hard to 
ensure small businesses continue to drive our economic 
recovery.
    Over the course of the pandemic, our agency has scaled from 
40 billion per year output to distribute more than $1.1 
trillion in emergency relief. Alongside our core programs, many 
of which have also delivered at record levels, today, the SBA 
is continuing to deliver for millions of small businesses. In 
the 8 months of my leadership, we have leveraged technology to 
streamline, automate, and deliver relief to small businesses 
with a customer service and an equity focus. We are working 
across our programs and services to better meet the needs of 
all small businesses, especially those that were left out of 
early rounds of relief, often our smallest businesses and those 
owned by women and people of color and other underserved small 
businesses.
    In 2021, we have made important gains. After making key 
programmatic changes to the nearly $800 billion Paycheck 
Protection Program, 96 percent of PPP loans went to small 
businesses with fewer than 20 employees with strong performance 
and low to moderate income communities and rural communities. 
In addition, a recent GAO report found that our reforms helped 
close those capital gaps in PPP. Now, we are delivering on the 
promise of forgiveness for PPP loans. We have ensured this 
process is being carried out at the highest standards and with 
utmost integrity.
    We launched the SBA PPP Direct Forgiveness Portal to offer 
a pathway to relief for the 6.5 million small business owners 
who took out loans of $150,000 or less.
    We have seen similar positive results with our reforms and 
improvements to the COVID Economic Injury Disaster Loan 
Program, the last and most flexible of our SBA COVID lifelines 
with billions more available. We have approved more than 3.8 
million COVID EIDL loans for a total of more than $295 billion, 
plus an additional $26 billion in COVID EIDL grants both 
targeted and supplemental. And we expanded our reach while 
protecting against fraud, waste, and abuse. We brought back tax 
record verification consistent with our historic approach. We 
have also implemented additional measures to help ensure good 
stewardship of this program's resources.
    We are taking steps to improve outreach across all of our 
programs to small businesses in every corner of the nation, 
including our underserved communities. We recently announced 
the Community Navigator pilot program grantee organizations, 
which will deploy trusted community partners in underserved 
communities to better connect small business owners to 
government resources.
    As the nation emerges from the COVID pandemic, the SBA will 
help try to path forward to a thriving and equitable economy 
that lifts all small businesses and innovative startups in 
communities across American building from the bottom up and the 
middle out to leave no one behind.
    Access to capital remains one of the most critical factors 
for small business success. Yet, small businesses, particularly 
those from underserved communities lack access to the small 
dollar loans they need to survive and grow. The president's 
Build Back Better framework will help us increase access to 
capital for small businesses by creating a direct lending 
product that leverages the strength of our incredible growing 
lender network. We are also working to close the opportunity 
gap by increasing the number of small businesses that do 
business with the federal government. The Build Back Better 
framework will help us build equity in government procurement 
with nationwide investments in business incubators and 
innovation accelerators and a specific program for veteran 
entrepreneurs. Now is the right time to ensure that more small 
businesses will be able to take part in the $1.2 trillion in 
historic investments in the rebuilding of our nation's 
infrastructure made possible through the bipartisan 
infrastructure deal.
    We know that many challenges remain. In the months ahead we 
will continue to harness the power of the entrepreneurial 
spirit to drive our economy and our nation forward.
    Thank you so much, Chairwoman Velazquez, Ranking Member 
Luetkemeyer, and distinguished Members of the Committee, for 
the opportunity to appear before you, and I look forward to 
your questions.
    Chairwoman VELAZQUEZ. Thank you, Administrator Guzman.
    Now we will turn to questions. I will recognize the 
gentleman from Maine, Chairman of the Subcommittee on 
Underserved, Agricultural, and Rural Business Development, Mr. 
Golden, for 5 minutes.
    Mr. Golden, you are muted. Mr. Golden, we cannot hear.
    I will then recognize the gentlelady from Kansas, Ms. 
Davids, Chairwoman of the Subcommittee on Economic Growth, Tax, 
and Capital Access.
    Ms. DAVIDS. Thank you, Chairwoman. And thank you for 
holding this hearing today.
    Administrator, it is good to see you. I appreciate you 
recently coming to visit the Kansas Third. You know, half of my 
job is spreading the good word of Kansas and so it was a 
pleasure to have you come visit alongside the First Lady where 
you heard firsthand stories of entrepreneurs and small business 
owners who are reeling from the effects of the pandemic.
    I think that there is a couple of things. One, I would be 
very curious, and we will follow up about the assertion that 
you have not responded to nearly 60 questions submitted by 
Members of the House. And we will follow up just to discuss 
that with you. Our experience in my office has been a lot of 
response whether we agree on the issues that we are dealing 
with or not.
    So I want to kind of turn to the programs that existed 
previously and the ones that we have seen emerge because of the 
pandemic, namely the Paycheck Protection Program. The SBA 7(a) 
and 504 loan programs have existed for a while and prior to the 
Paycheck Protection Program there were about 1,900 lenders 
engaged in those programs. With the Paycheck Protection Program 
coming online, we saw that there were 5,000 new lenders that 
participated in that.
    I am curious what ways you all are looking at to kind of 
leverage the increase in participation by lenders, by the 
private sector with this federal program, and just what we need 
to be thinking about as we move forward and how we can assist 
in leveraging that.
    Ms. GUZMAN. Thank you so much, Congresswoman, for the 
question.
    We do think it is a historic opportunity to take advantage 
of these expanded networks, not only in our lending circles but 
just broadly the attention on small businesses and that is what 
we have been focused on.
    Across our lending network, we have been able to really 
develop our relationships with community financial 
institutions, as well as community banks and others who require 
that technical assistance with the SBA as well. And so my 
Capital Access team stands ready to support them in using all 
of your products, transitioning from PPP to the 7(a) and 504 so 
that we can better distribute our loans into communities across 
the country. And we look forward if there are any lenders in 
particular that your office is focused on that we could pay 
attention to. It is partially why we launched the Director 
Forgiveness portal to simplify for those smaller banks that 
maybe did not have the technology to streamline processing of 
PPP so that they could take advantage of it and offer it to 
their constituents, their customers.
    Ms. DAVIDS. So that is the lender side. I am also curious 
about ways that additional engagement or support has been given 
to the new entrants into all of these programs across the board 
during what has been a pretty chaotic time, not just for the 
SBA but for lenders and the entrepreneurs and small business 
owners. I am curious what you all are doing to facilitate 
additional growth and leverage the new engagement that we are 
seeing.
    Ms. GUZMAN. It is definitely our goal to try to serve more 
of those 32.5 million small businesses. So across our network 
of resource partners, some of them have seen up to a 10x 
increase in the amount of businesses coming to them. We want to 
continue to direct individual businesses to them. We have 
recently launched the Community Navigator pilot program. Those 
grantees are trusted organizations that can authentically reach 
communities focusing on women, people of color, veterans, rural 
communities, and broadly try to further enhance our services, 
especially for these highly entrepreneurial communities that 
are starting up at the highest rates. And so we plan to expand 
those connections to small businesses, build more bridges so 
that they can work with the SBA. We want to be part of their 
team and let them know that resources are available to them.
    Ms. DAVIDS. Thank you, Administrator.
    And Madam Chair, I yield back.
    Chairwoman VELAZQUEZ. The gentlelady yields back.
    Now we recognize the Ranking Member, Mr. Luetkemeyer, for 5 
minutes.
    Mr. LUETKEMEYER. Thank you, Madam Chair.
    Just a quick housekeeping situation here. We have got two 
of my Members today actually have birthdays, Ms. Van Duyne and 
Mr. Fitzgerald. So congratulations. You made it to another 
momentous day here.
    Chairwoman VELAZQUEZ. Happy birthday. Yeah.
    Mr. LUETKEMEYER. With regards to Ms. Guzman, thank you for 
coming today.
    You and I had a conversation this last week and I am going 
to be true to my word here. We are very concerned about the 
kind of communications or lack thereof that we are getting out 
of your office. You seem to ignore our letters and requests. In 
fact, I got a letter yesterday to my requests already several 
months ago. Still missing one from April 16th. There is a 
letter that I asked. Still no response to that. I know some of 
our Members got letters yesterday to their letters which were a 
long time ago were asked. So apparently, we need to have you 
scheduled every week for 5 minutes before this Committee so we 
can get letters responded to from the previous week. Is that 
what is going to have to happen from now on?
    Ms. GUZMAN. I can assure you that my team is working 
diligently. We have had about 90 requests and have responded to 
80 of them and we continue to try to increase that pace as we 
do want you to have the information you need.
    Mr. LUETKEMEYER. Okay. Well, we need to increase it a 
little more because getting a letter 6 months late does not 
answer my question. That is not acceptable. You have got to do 
better than that.
    Also, from the standpoint that your testimony, we did not 
get it until 3 o'clock yesterday afternoon. And by the rules of 
this Committee, we are supposed to get it 72 hours. That is not 
acceptable either.
    Also, with regards to Ms. Yellen and my testimony, and I 
mentioned it to you the other day, what have you done to 
contact her to have her live up to her responsibilities? The 
PPP program is a Treasury program. She is in charge of that 
program. The banks are administered from the standpoint of 
executing the program and SBA is administering the program. 
Have you talked to her at all about showing up at this 
Committee?
    Ms. GUZMAN. We talk about small business issues. We have 
not talked about this----
    Mr. LUETKEMEYER. Why have you not addressed that issue that 
is by law she is required to show up?
    Ms. GUZMAN. Apologies. I know that the invitation went out 
to her and I am sure that her team will respond to you. I 
cannot respond on her behalf.
    Mr. LUETKEMEYER. Six and a half months now she is past due 
at showing up at this Committee. That is not going to get it, 
Ms. Guzman, saying that her team is going to take care of it. 
She has totally checked out. She is not going to come to this 
Committee. You, as the SBA Chairman, Administrator, need to 
contact her and say, Ms. Yellen, you need to show up here.
    Ms. GUZMAN. The SBA is working diligently to actually 
administer the PPP and the direct lending and so we can 
continue to report to you. I know that my team shares over 4 
weekly reports with the Committee, including on PPP 
forgiveness, and so we will continue to provide the information 
you need.
    Mr. LUETKEMEYER. Two more situations here.
    Number one, the IG report. And we had a meeting with the 
IG. And he indicated to us that even now a lot of the, you 
know, they gave you a lot of suggestions on how to clean up the 
mess, especially in the EIDL program. This direct lending is a 
disaster quite frankly and when you have 30 percent, almost 30 
percent of the program is fraudulent, that cannot happen. 
Cannot stand. And we do not need to put another direct lending 
program within your jurisdiction if that is what is going to 
happen to it as well.
    So one of the comments that he made to me in our little 
group when we were discussing it is that even though he puts 
these programs in place and suggestions in place and you say 
they are going to execute them, the staff does not execute on 
those recommendations. They refuse to do it. That is his words, 
not mine. How are you going to address that situation to get 
your staff to actually do their job to execute----
    Chairwoman VELAZQUEZ. Would the gentleman yield?
    Mr. LUETKEMEYER. Sure.
    Chairwoman VELAZQUEZ. So I----
    Mr. LUETKEMEYER. As long as it does not take away from my 
time.
    Chairwoman VELAZQUEZ. No, no, no. I will let you go on for 
a little more. We requested a bipartisan briefing with the IG 
and you did not accept that.
    Mr. LUETKEMEYER. We had our meeting with the IG, Madam 
Chairman.
    Chairwoman VELAZQUEZ. Yes, you did. The version that you 
are presenting here is totally different from the version that 
he presented to us. Let's bring the IG here and let's discuss--
--
    Mr. LUETKEMEYER. That would be great.
    Chairwoman VELAZQUEZ.--the fraud that occurred under the 
Trump administration. This is Administrator Guzman.
    Mr. LUETKEMEYER. That is not my point. The point is that we 
have SBA staff that do not adhere to the recommendations that 
the administrator accepts from the IG. And as a result, those 
things are not getting done. The safeguards that we need to put 
in place are not being put in place and executed. This cannot 
happen. There is a reason for those recommendations.
    Ms. GUZMAN. I meet biweekly with Inspector General Ware to 
ensure that we can be coordinated and that my team knows that 
we are sincere about implementing. We have satisfied multiple 
IG recommendations at this point and we continue to implement. 
And per the IG, the conversations I have had with him, we are 
making great progress towards that aim. And I will point out 
that COVID EIDL, specifically since you brought that up, 
previously in CARES the administration made decisions not to 
select 4506T transcripts. Those are the tax documents that we 
need to prevent fraud. Those have all been corrected per the 
IG's recommendation and thanks to the Economic Aid Act. And so 
I appreciate this Committee's advocacy to make sure we could do 
that.
    Mr. LUETKEMEYER. Along that line, the IG as of 11-15, this 
is their report. They have 35 recommendations and 20 of them 
still remain open. And it has been like this for months. So 
there has to be some execution on your part to get this done 
and have the staff execute as well.
    I have one more quick question before we leave you here.
    With regards to the portal. It is not a bad idea and it 
works if they want to take advantage of it. The problem is, one 
of your staff Members threatened--I have an email--threatened 
the bankers and said if you do not use this portal, we are 
going to have--what was his exact word here? We are going to 
threaten an enhanced audit of you if you do not use this. What 
do you think about that?
    Ms. GUZMAN. That was misconstrued. That was not a threat 
towards the bank.
    Mr. LUETKEMEYER. I read the email, Ms. Guzman. It was 
pretty explicit.
    Ms. GUZMAN. So what we have informed our banks is that we 
want to make sure that they are following the process and 
actually going through the forgiveness process for the loans. 
We saw some delays happening across our lending partners and we 
wanted to ensure that those delays were not impacting our small 
businesses and that they could process those forgiveness loans 
so we did not----
    Mr. LUETKEMEYER. Ms. Guzman, all of my questions and all my 
comments this morning point to a lack of leadership at the top 
with regards to communication and oversight over your staff 
that lends to one of two things. Either you have a disdain for 
us. We have somebody here that just commented they have 
responses from you. Our side does not get them. Is that what is 
going on here?
    Ms. GUZMAN. Absolutely not, Congressman.
    Mr. LUETKEMEYER. Either it is disdain for our side or it is 
incompetence. It is one of the two. You cannot continue to do 
this and be expected to get something done with this agency. 
This is an extremely important agency. Our job here is not just 
legislative, it is oversight. And from our standpoint of 
oversight, you have failed with a true F.
    I yield back.
    Chairwoman VELAZQUEZ. Your time has expired.
    Now we recognize the gentlelady from Illinois, Ms. Newman.
    Ms. NEWMAN. Thank you, Madam Chair. And thank you, Ranking 
Member. And thank you, Administrator Guzman. So good to see 
you.
    So first of all, thank you for all your leadership. I have 
seen a steady incline in activity and the information disbursal 
of various PPP issues and EIDL issues. So thank you for all 
your help. Have heard it across the board on both sides of the 
aisle by the way. And then secondly, I do have a question for 
you regarding the 504 program.
    So we know that a record has been made in 2021 that the SBA 
has approved $8.2 billion I believe in loan value in fiscal 
year 2021, exceeding the $7.5 billion cap. Is the $7.5 billion 
enough to meet the increased demand for the 504 loans? And if 
there is and if you can share a little bit of editorial around 
it that would be great. Thank you.
    Ms. GUZMAN. Thank you for that question.
    The 504 program is an important economic development 
program creating jobs. We have that $7.5 billion cap on the 
program and we exceeded it last year. So those additional 
loans, nearly a billion, did have to sit for up to 3 weeks 
waiting for us to enter into the new cycle. So we definitely 
feel that there is heightened demand on this product. It is a 
very popular product and our lenders are doing great work 
ensuring that their businesses are served, so we support the 
efforts to potentially increase the cap or have flexibility, 
just as we do on the 7(a) to adjust that if demand is increased 
towards the end of the year. And so we support both measures in 
terms of flexibility for the administration to adapt to the 
marketplace demands.
    Ms. NEWMAN. Thank you, and I yield back.
    Chairwoman VELAZQUEZ. The gentlelady yields back.
    Now, we recognize the gentleman from Texas, Mr. Williams, 
Vice Ranking Member of the Committee for 5 minutes.
    Mr. WILLIAMS. Thank you.
    Administrator, I am a small business owner currently. I am 
a main street America guy. I have got a few simple questions, 
yes or no.
    Number one, do you support the Bild Back Better Act?
    Ms. GUZMAN. Yes, I do.
    Mr. WILLIAMS. Do you support raising taxes on small 
businesses particularly as businesses continue to recover from 
COVID-19?
    Ms. GUZMAN. The Build Back Better Act does not raise taxes 
on small businesses.
    Mr. WILLIAMS. No, my question is do you support raising 
taxes on small businesses?
    Ms. GUZMAN. I support the Build Back Better's raising taxes 
on large corporations.
    Mr. WILLIAMS. Let the record show Administrator Guzman 
supports raising taxes.
    Ms. GUZMAN. On large corporations. Yes.
    Mr. WILLIAMS. Do you support President Biden's vaccine 
mandate on small businesses with over 100 employees?
    Ms. GUZMAN. Over 98 percent of businesses, small businesses 
would not be affected by that.
    Mr. WILLIAMS. Do you support that?
    Ms. GUZMAN. And yes, I do support----
    Mr. WILLIAMS. Yes or no, do you support that?
    Ms. GUZMAN. I do support that we should vaccinate as much 
as possible.
    Mr. WILLIAMS. Okay. Are the current supply chain 
disruptions having a negative impact on small businesses?
    Ms. GUZMAN. I am sorry; can you repeat the question?
    Mr. WILLIAMS. Supply chain. Is it having disruption, a 
negative disruption on small business?
    Ms. GUZMAN. Yes, supply chain is affecting small 
businesses.
    Mr. WILLIAMS. All right. Administrator Guzman, you are 
tasked with leading the SBA, yet you do not know what policies 
will hurt or help small businesses. You just showed that a 
minute ago. You continue to back the Biden administration's 
claim that the Build Back Better plan would not raise taxes on 
individuals earning less than $400,000 per year. However, a 
recent report by the bipartisan Joint Committee on Taxation 
debunked that pledge, exposing that this plan would have a 
significant tax increase for Americans of all income levels. 
Higher taxes force business owners to decide whether to reduce 
capital, lay off employees or pass the cost along to the 
consumers in order to offset increased costs and maintain 
profit margins. The bottom mathematics tells you 20 percent is 
more than 30 percent. So these are difficult decisions 
businessowners should not be forced to make and you should be 
protecting them.
    On top of the looming tax increases, the NFIB reports that 
49 percent of small business owners continue to struggle to 
find workers to fill open positions. Meanwhile, the Biden 
administration is imposing overreaching and unconstitutional 
vaccine mandates that will cause businesses to lose more 
employees. We are already facing a labor shortage and it hurts 
even more.
    So as the administrator of the SBA, you are charged with 
aiding, assisting, and advising small businesses across the 
country but at every juncture it seems, at every juncture you 
have imposed or supported policies like this Biden 
administration things that we see that let businesses down and 
make doing business even more difficult. This administration's 
actions will lead to more layoffs and more inflation. Your 
failure to quickly implement or roll out critical business-
saving programs like the Save Our Stages we talked about had 
dire consequences for main street businesses who had nowhere 
left to turn, and you continue not to assume any accountability 
for that failure. You have refused to respond in a timely 
manner we have heard today to Members of this Committee who 
have had urgent questions for businesses in their districts 
setting the tone that you and other bureaucrats that work at 
the SBA are above the taxpayers you represent is very poor 
service.
    So my last question, Administrator, why should America's 
small business owners like myself and others, why should we put 
our trust in the SBA or you even and believe you have their 
best interest in mind when you have not demonstrated a single 
action that serves their best interests while promoting higher 
taxes and bigger government? How can we rely on you?
    Ms. GUZMAN. The SBA has effectively delivered programs to 
small businesses that are helping them even navigate supply 
chain challenges, navigate the workforce issues that they are 
facing, as well as navigating the rising costs due to the 
pandemic. Further, we have been supporting them with access to 
markets, making sure that they can increase their revenues, 
access the federal government. So we believe the SBA is 
strongly positioned to help small businesses.
    Mr. WILLIAMS. The SBA believes that. Okay. So let me move 
on. The SBA believes that. Not small business. Not main street 
America.
    So, look. This Committee is charged with overseeing the 
SBA, and I strongly urge your administration to put the needs 
and concerns of America's small business first. And do what 
Chairman Luetkemeyer asked you to do. The SBA should be 
nonpolitical. It should be nonpolitical. You should be fighting 
every single day to cut taxes. You should be fighting every 
single day to cut regulations to help small business. It should 
be nonpolitical but you do not do that. Your support for the 
Biden administration's higher taxes, vaccine mandates and 
bigger government will shutter small businesses. We need to 
turn the SBA around before it is too late for main street 
America.
    You mentioned about history. History will show that this 
Small Business Administration gave small business and main 
street a gut punch when we needed a lift more than ever.
    I yield my time back.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    Now we recognize the gentlelady from Georgia, Ms. 
Bourdeaux, for 5 minutes.
    Ms. BOURDEAUX. Thank you, Chairwoman Velazquez. And thank 
you, Administrator Guzman, for taking the time to join us 
today.
    As we continue to recover from the COVID-19 pandemic, it is 
critical that SBA provide the resources and information 
necessary to support the growth of innovative job creating 
small businesses. I believe the Community Navigators program 
and its grantees will play a critical role in that and I really 
commend this Committee and Administrator Guzman for your 
leadership and the creation and implementation of that program. 
My district office has helped to recover over $15 million for 
constituent small businesses through diligent work with SBA's 
Georgia District Office. So thank you so much for that.
    We do have a concern that has come up. We have begun to 
hear in recent weeks from small businesses about the EIDL 
program. The deadline is approaching on December 31st, and so 
just a couple questions with respect to that.
    First of all, does SBA have a plan to process the EIDL 
applications which are pending in queue between now and 
December 31st? And will you continue to process the 
applications after December 31st? Additionally, we are seeing 
some problems where small businesses cannot apply because of 
holdups and delays in the IRS processing of their 2019 returns. 
So they are kind of caught in this bind so the other part of 
this is SBA working with the IRS to expedite the processing of 
these returns or is there something that Congress can do to 
ensure some small businesses do not miss out on this needed 
relief?
    Ms. GUZMAN. Thank you so much for the question.
    When I arrived, I looked at all of our programs from top to 
bottom just to see what improvements could be made, especially 
focusing on customer service technology for process 
improvements. COVID EIDL is a program that had challenges but 
has delivered nearly $300 billion to businesses across the 
country. It is affordable patient capital for our businesses. I 
have moved the COVID EIDL program to our Office of Capital 
Access to ensure that we could leverage industry best practices 
and improve the processing time. In fact, we went from 2,000 
processed applications a day to 37,000. Over the summer, as a 
result, we were able to clear 600,000 in backlogs on the COVID 
EIDL program. And further, we were able by the fall to clear a 
total of a million across the entire COVID EIDL package, 
including the grants and the loans. This program, 
unfortunately, was challenged with issues in terms of not only 
processing but in terms of fraud as was mentioned earlier and 
we were able to reinstate a lot of the policies that have been 
in the EIDL program, the traditional disaster loan program for 
years where we have successfully put out $67 billion of 
disaster loans over the years effectively without fraud. So we 
were very pleased to be able to reinstate these longstanding 
fraud controls onto our program and start to improve customer 
service as well, which speaks to your point in terms of being 
able to process the full demand by the end of the year. We feel 
good that we have billions available and that we will be able 
to distribute those effectively through the communities and we 
look forward to working with you and all your constituents in 
processing.
    We currently do not have a backlog. The challenges that are 
in the system for individual borrowers that you might be 
hearing from oftentimes are due to appeals, multiple appeals. 
They are oftentimes due to fraud flags. Again, we have 
instituted new fraud controls and so these people may have gone 
through the system previously without any fraud checks and so 
we are now going through that. So we do feel good about 
processing the applications. The will be allowed to apply 
through December 31st and then we will process them after that. 
So that is the deadline. The same for the targeted advance, 
that $10,000 grant. Businesses can apply all the way through 
December 31st. The supplemental targeted advance is the only 
one that will have to be processed and distributed before 
December 31st. So that means your constituents who are eligible 
for that additional $5,000 grant will need to apply by 
approximately December 10th.
    In terms of the IRS processing, we have, as I have said, 
cleared the backlog on this important program. And so we have 
effectively been able to administer it. We do feel that, 
unfortunately, for those who did not file 2019 taxes, the 
processing time for a paper application without errors is about 
30 days. We are seeing that that could be much longer, up to 20 
weeks if they have an amendment. So unfortunately for that, 
processing times, they are going to need to coordinate closely 
with the IRS and make sure that all their documents are in 
order, but if they have their 2019 taxes, we are able to 
process them efficiently thanks to the improvements and the 
gains that we have made on the program.
    Ms. BOURDEAUX. If we can continue to work with you on that 
because we are getting a ton of complaints into our office 
right now where people, I absolutely support the anti-fraud 
measures, of course, but also want to make sure we are actually 
able to get things done for the small businesses. But thank you 
so much for the answer.
    I yield back.
    Chairwoman VELAZQUEZ. The gentlelady's time has expired.
    Now, we recognize the Ranking Member of the Subcommittee on 
Underserved, Agricultural, and Rural Business Development from 
Minnesota, Mr. Hagedorn.
    Mr. HAGEDORN. Thank you, Madam Chair, and Ranking Member 
Luetkemeyer. I appreciate the hearing. Administrator, it is 
good to see you.
    I used to be a congressional relations officer for two 
nonpartisan Treasury agencies and I would always tell my boss, 
you know, before we go testify on Capitol Hill, let's make sure 
that we answer the questions of the Members that we are going 
to go testify in front of. What we actually tried to do was 
answer their questions. You did not do that. It looks like you 
did like kind of a data dump. You just got all of our letters 
that have been sitting around for months and months and then 
sent us back a form letter. I sent you a letter on May 20th 
talking about the Restaurant Revitalization program. A pretty 
important program which is still out there. A lot of America's 
restaurant owners are hurting. You did not send anything back 
talking about that. And then I asked, well, what is going on 
with this Biden Executive Order on equity? How are you going to 
be revamping things down at SBA in order to meet that? Again, I 
got nothing back. I got two paragraphs of just a bunch of form 
stuff.
    So Madam Chair, I would like to introduce these into the 
record if I could at this time.
    Chairwoman VELAZQUEZ. Without objection, so ordered.
    Mr. HAGEDORN. But I think what is going on here is I really 
do not probably need an answer anymore to figure out what is 
happening with the whole equity exercise down at SBA because 
the Restaurant Revitalization Fund was really the first part of 
the woke agenda. That was the fund where it was decided there 
were going to be about $28.5 billion for restaurant owners who 
were hurt during the COVID situation and the Democrats and 
Biden decided they were going to have a priority list. And 
everybody on the priority list could get their application in 
early and get their money first and the people who were not on 
the priority list, well, they had to wait in line and hopefully 
they get some money sometime. The people on the priority list 
were pretty much everybody but white males. And lo and behold, 
all sorts of applications came in, all sorts of money went out. 
A lot of people were paid, and of course, the monies ran out 
and Congress and the administration, nobody has done anything 
about it since. There are hundreds of thousands of people out 
there who own restaurants and bars who happen to be white males 
who never received any money.
    Now, the people who did receive the money on the priority 
list, and I am for that. I want them all to get the money, but 
everybody should be treated equally. We should not be 
discriminating one way or the other. Every person who is a 
restaurant owner should be treated the same way. I think that 
is what everybody wants. But the folks that did get the money, 
do you know what they used it for? They went out and hired 
staff. They fixed up their restaurants. They paid bills. They 
did a whole bunch of things. Maybe advertised. They did 
everything they could to bring the customers back in the store. 
The people who did not get the money, some of them might be 
across the street, they probably went broke. They are hurting. 
They do not have that money to lure in new staff, increase 
their wages and so forth.
    Do you think that is fair, Administrator, that people on 
the priority list were given this money and the people not on 
the priority list were not? Do you think that is fair?
    Ms. GUZMAN. Thank you, Congressman. And just to address the 
letter concern, we will definitely continue to be in 
correspondence with your office, and I welcome any calls that 
you want to place to me. I know that several of you have been 
connecting with my staff but I will definitely make sure that 
those are addressed.
    In terms of the Restaurant Revitalization Fund program, the 
SBA worked diligently to try to administer the program as 
quickly as possible working in close collaboration with key 
stakeholders like the NRA and others. We administered the 
program that was laid out by Congress.
    Mr. HAGEDORN. I asked you if it was fair. Is it fair that 
some restaurant owners were given money and other restaurant 
owners still do not have it? It is an unfair competition; 
right?
    Ms. GUZMAN. Well, my charge is to administer the programs 
that are given to me and ensure that----
    Mr. HAGEDORN. Okay. Well, part of your charge then was to 
put together a bill with the administration which had the 
priority list in there which gave people an advantage over 
other restaurant owners. Totally unfair. We do not need this in 
America. We want everybody to be treated equally. This whole 
equity stuff needs to go away. This woke stuff needs to go 
away. Treat every American citizen, every American business the 
same way. If you are going to be giving out government grants, 
let's make sure that everyone has the same opportunity. I think 
that is what America is all about. At least that is what I 
think.
    Now, you are traveling the country quite a bit; right? You 
are getting around. I am, too, in the district in Minnesota. 
Can you tell me any small business owners that have come up to 
you in the last 4 or 5 months about this Build Back Better bill 
that want higher taxes, more regulations, that want higher 
energy costs through this Green New Deal stuff that is coming 
along? Is anybody begging for that?
    Ms. GUZMAN. What small businesses are telling me is that 
they are having trouble finding workforce. That healthcare 
costs are high. Childcare costs are high. And Build Back Better 
will address those issues to try to help our small businesses 
with their workforce----
    Mr. HAGEDORN. Well, you have not heard any business owner 
say please raise my taxes, increase my regulations, and make my 
energy costs go up; correct?
    Ms. GUZMAN. Small businesses have not----
    Mr. HAGEDORN. Thank you. I yield back.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    Now, we recognize the Chairman of the Subcommittee on 
Oversight, Investigations, and Regulations from Minnesota, Mr. 
Phillips, for 5 minutes.
    Mr. PHILLIPS. Thank you, Madam Chair. And greetings, 
Administrator Guzman.
    I want to thank you for your work on behalf of small 
businesses. I know how tough these days have been for small 
businesses all around the country and for you and your team at 
the SBA. You have played an integral role in America's recovery 
from the pandemic and most of us are grateful, especially small 
business owners.
    I want to begin with the RRF, the Restaurant Revitalization 
Fund. When it was first opened to applicants as we all know, 
Congress reserved the first 21 days of the application period 
for priority groups, including women and veterans and socially 
and economically disadvantaged entrepreneurs, the people that 
needed the support the most. My colleague from Minnesota argues 
that we have got to get rid of equity. I just happen to believe 
that we should support those who have been denied access and 
opportunity. I think America is at its best when we support 
those who have big dreams, especially entrepreneurs, especially 
veterans. And when I talk about equity, not just economic and 
racial, but geographic, rural America. We should be supporting 
entrepreneurs in those parts of the country as well.
    And while the SBA, of course, succeeded in distributing 
billions of dollars to disadvantaged groups, we all know that 
the lawsuits ruled that those were unlawful, and 3,000 priority 
applicants were left in the cold due to depletion of the funds. 
I know that you were frustrated by this because, of course, the 
guiding purpose of the SBA in my estimation is to promote 
entrepreneurship and help underserved small businesses, the 
very ones that were denied funds.
    So my first question is a simple one. Should we consider 
additional financial relief to the most hard-hit industries and 
small businesses in categories that have been denied funding?
    Ms. GUZMAN. With similar programs like the Restaurant 
Revitalization Fund, the Shuttered Venues Operator Grant that 
we have been able to effectively distribute over $12 billion in 
relief, these hard-hit industries do need additional 
assistance. As I am meeting with businesses around the country, 
they still need relief, which is why we are thankful that we 
have the COVID Economic Injury Disaster Loan to offer them but 
this is a loan, not a grant. And so we continue to try to 
support them though with resources and these loan offerings. 
And if Congress were to fund hard-hit industry grants, SBA 
would focus on effectively distributing them as equitably as 
possible.
    Mr. PHILLIPS. Okay. And Administrator, do you know how much 
additional funding would be necessary to fully replenish the 
RRF and ensure that those that were denied funding that 
otherwise qualified can still receive it?
    Ms. GUZMAN. Within the RRF, we still had a pending of over 
$44 billion, $44.1 billion of requests within the system.
    Mr. PHILLIPS. So theoretically, small businesses that 
qualified but simply were denied because we did not allocate 
enough; is that fair?
    Ms. GUZMAN. We did not finish processing all of those 
applications.
    Mr. PHILLIPS. Okay.
    Ms. GUZMAN. And so those are the pending, what we deem, 
what we can guess at eligible businesses that were not 
immediately remoted.
    Mr. PHILLIPS. Okay. With my remaining couple of minutes, 
Administrator, I want to acknowledge in a very bipartisan 
fashion that one of our fundamental responsibilities on this 
Committee is oversight, especially considering the size of the 
support programs that Congress has initiated during the 
pandemic and the ones that you are administering. Every 
fraudulent dollar that goes out is one less that we can 
allocate to businesses that qualify. We would all agree with 
that.
    So what can our Committee do to support oversight of the 
SBA programs, especially the recent pandemic programs, whether 
that be congressional directives or additional resources?
    Ms. GUZMAN. SBA has been able to utilize administrative 
funding to continue to try to build in strong processes and 
technologies as well as controls to make sure that these funds 
get into the hands of the businesses it was intended to serve. 
We will continue to work with the IG closely and the GAO to 
make sure that we are implementing the remainder of the 
recommendations that are in place across our COVID EIDL, PPP, 
and all of our relief programs, as well as our CORE programs. 
And so that continued support and collaboration is what we deem 
necessary to continue to support anti-fraud measures.
    Mr. PHILLIPS. Okay. And we all know that, of course, you 
are working hard and others to identify fraud and those who 
inappropriately received funding. What is the current process 
and what is the timeline for clawing back those fraudulent 
loans and disbursements?
    Ms. GUZMAN. My apologies. Is that on a specific program, 
Congressman or just----
    Mr. PHILLIPS. More of a broad question because I know there 
is fraud in a variety of programs.
    Ms. GUZMAN. Yes.
    Mr. PHILLIPS. But just in broad strokes, especially through 
the more recent programs.
    Ms. GUZMAN. Thank you, Congressman. Yes, we are working 
closely with the IG and the Department of Justice to make sure 
that if there is identified fraud that they are able to fully 
prosecute and recover those funds. The IG has already worked to 
recollect millions of dollars across the PPP program and the 
COVID EIDL program and we continue to support their work as 
they do so across all of our programs.
    Mr. PHILLIPS. Thank you. I see my time has expired. I yield 
back. Thank you so much.
    Chairwoman VELAZQUEZ. The gentleman's time has expired.
    We recognize the gentleman from Minnesota, Mr. Stauber, for 
5 minutes.
    Mr. STAUBER. Thank you very much, Madam Chair.
    Administrator Guzman, thank you for being here to testify. 
I have to say it has been difficult getting some response from 
you or your office.
    But as you recall, back in May, when you were in front of 
this Committee over 6 months ago, I asked you a series of 
questions regarding the Biden administration's small business 
tax increase proposals that you could not answer. You said to 
me in this Committee at the time that you would follow up with 
my office with answers to my questions. It has been 6 months. 
No follow up to me or my staff. So at that time I was asking 
you about proposals but now we have in writing the tax increase 
the Biden administration plans to impose on small businesses. 
Given you have had 6 months to figure out a response, I am 
going to ask you once again these questions.
    How many small businesses are organized as a subchapter C 
corporation?
    Ms. GUZMAN. The majority of businesses are not organized as 
C corporations. I do not have the exact number of those 
businesses.
    Mr. STAUBER. Does the Build Back Better legislation 
increase the corporate tax rate?
    Ms. GUZMAN. The Build Back Better framework actually 
focuses on leveling the playing fields. And I agree with the 3/
4 of small businesses polled who want to see large corporations 
pay their fair share. And so the Build Back Better framework 
focuses on that, making sure that our large corporations, those 
that pay zero including are the ones who are covering for this.
    Mr. STAUBER. The question was does the Build Back Better 
legislation increase the corporate tax rate?
    Ms. GUZMAN. It provides for a minimum corporate tax rate of 
15 percent that will affect less than 200 large corporations so 
it will not affect our small businesses.
    Mr. STAUBER. It will not affect the small businesses at 
all?
    Ms. GUZMAN. It will affect less than 200 of the largest 
corporations, the 15 percent corporate tax. Correct.
    Mr. STAUBER. So the Build Back Better legislation is going 
to increase the corporate tax rate as you just said on small 
businesses subchapter C. According to the Tax Foundation, this 
tax increase is going to reduce the GDP and cost about 25,000 
jobs. How many small businesses are organized as pass-through 
businesses?
    Ms. GUZMAN. Many more are pass-through entities. A majority 
of them are.
    Mr. STAUBER. So the majority, 95 percent?
    Ms. GUZMAN. I do not have those exact numbers.
    Mr. STAUBER. Well, the answer is nearly 95 percent of all 
small businesses that you oversee in this country are pass-
throughs.
    Does the Build Back Better legislation increase taxes on 
pass-through taxes?
    Ms. GUZMAN. President Biden's plan never focused on the--I 
am assuming you are talking about the 199A. And no, it did not 
ever propose that. President Biden's proposal in this current 
framework does not include the 199A either.
    Mr. STAUBER. So you are telling us that legislation will 
not increase taxes on 95 percent of the businesses that are 
pass-through; is that correct?
    Ms. GUZMAN. The current BBB proposal does not increase--
does not affect the 199A. So small businesses will not be 
affected by that.
    Mr. STAUBER. According to the Tax Foundation, this tax 
increase is going to eliminate 16,000 jobs. Do you agree with 
that?
    Ms. GUZMAN. I know that economists are still debating what 
those final impacts are. We believe strong that the Build Back 
Better plan will actually crease jobs and will help small 
businesses, especially when it comes to their workforce, 
educating their workforce, creating workforce development 
opportunities, lowering the cost of childcare so we can get 
more people back to work. Those are really important things to 
small businesses, as well as the cost of healthcare which is 
rising and this Build Back Better framework will decrease those 
costs.
    Mr. STAUBER. Have you ever owned a small business?
    Ms. GUZMAN. I have, yes.
    Mr. STAUBER. As a pass-through?
    Ms. GUZMAN. Yes; correct.
    Mr. STAUBER. Okay. Do you still own it?
    Ms. GUZMAN. No, I do not.
    Mr. STAUBER. Okay. Another thing I would like to have a 
short conversation with you. You were in our great state of 
Minnesota just a few months ago and we appreciate that. You 
came with my democratic colleagues to Minneapolis. There are 
two of us that sit on this Committee that were not invited. Was 
it for political reasons that we were not invited to celebrate 
and encourage small businesses in the state of Minnesota? Can 
you tell us why you did not reach out to us?
    Ms. GUZMAN. Congressman, I would welcome a visit with you. 
And if an invitation is extended, I would love to travel with 
you to meet with your small businesses and see how we can 
further help them.
    Mr. STAUBER. Did you even think about inviting us in rural 
Minnesota? You talk about rural America. We represent rural 
Minnesota. We were not even invited by somebody such as your 
stature to come into Minnesota and celebrate small businesses. 
Would you agree maybe that was a misstep on your part by not 
inviting us, two Members of the Small Business Committee?
    Ms. GUZMAN. While I was not in your district? I would 
welcome the opportunity to extend my stay or go directly just 
with you in the future.
    Mr. STAUBER. Last thing is--okay, my time is up. I yield 
back. Thank you, Madam Chair.
    Chairwoman VELAZQUEZ. The gentleman's time has expired.
    Now we recognize the gentlelady from California, Ms. Chu, 
for 5 minutes.
    Ms. CHU. Administrator Guzman, I believe that the Build 
Back Better bill will truly help small businesses. And in fact, 
I am proud that it includes $275 million for the authorization 
and funding for the Community Advantage program. We know that 
Community Advantage is an effective tool for increasing access 
to capital for underserved small businesses with SBA data 
showing that the program reaches significantly more female and 
minority businesses. That is because Community Advantage 
lenders have the necessary relationships within their 
communities to facilitate lending to the small businesses that 
need it most. These mission-driven lenders are not only skilled 
inn localized character-based lending but also provide hands-on 
coaching to borrowers, many of whom are overlooked by big 
banks.
    Can you talk about how you see Community Advantage figuring 
into SBA's long-term recovery plans, particularly your plans to 
improve capital access for underserved businesses?
    Ms. GUZMAN. Yes. Thank you so much for that question.
    Community Advantage is an important pilot program that the 
Office of Capital Access administers and it does allow us to 
better reach those underserved communities through great 
community financial institutions like the CDFIs. We want to 
continue to expand all of our lending partnerships as we have 
been able to during PPP and continue to grow that. Permanence 
of the Community Advantage program will mean certainty for 
these lenders and that is what they need to continue to expand 
in the program and we look forward to Build Back Better's 
proposal to do that as well as fund it for a 10-year basis and 
definitely support our smallest entities and those underserved 
communities and have a far reach within every corner of our 
nation. In addition, that actually also helps us to fortify 
those banking relationships which we rely on to distribute our 
loans. They were great partners for us during PPP with the 
acceptance of fees and as we look towards direct lending we 
will rely on that strong network of community financial 
institutions to deploy small dollar loans into communities 
across the country.
    Ms. CHU. Thank you for that. And there is another very 
positive thing that Build Back Better does for our small 
businesses and that is provide $60 million to improve the 
program's outreach with the Small Business Investment Company 
or SBIC program. And I am proud that my legislation to allow 
more bank capital to be invested in SBICs, the Investing in 
main street Act did pass the House earlier this month and, in 
fact, would enable these banks to invest up to 15 percent of 
their capital and surplus in SBA licensed small business 
investment companies which will significantly help startups 
that have grown into companies like Tesla and Apple.
    So could you talk about how the SBIC program can help our 
small business recovery and discuss how the Build Back Better 
Act's investment can strengthen the program over the long-term?
    Ms. GUZMAN. Thank you. Yes, we believe that the Build Back 
Better will strengthen our SBIC program. Right now we have 300 
private SBICs distributing capital across the nation to our 
small businesses. We really want to focus on making sure small 
businesses outside of those venture capital rich areas of the 
nation and private equity rich areas have access to capital 
through our SBICs. And so with emerging managers as well as 
micro funds, we will be able to further expand our SBIC 
pipeline of strong private equity and venture firms to be able 
to support our small businesses with leverage from the federal 
government.
    Ms. CHU. And finally, let me ask about the Community 
Navigator program. I understand that the grants have been 
awarded to 51 HUB organizations but it was very competitive. 
And I have heard from disappointed organizations like community 
groups and mission-based lenders who were not selected but 
remain eager to contribute to the program. I know that the 
Community Navigator program relies on community groups that can 
reach the hardest to reach businesses. Can these mission-based 
lenders still be part of the Community Navigator program?
    Ms. GUZMAN. Thank you. Yes, we received over 700 
applications for the Community Navigator pilot program and I 
think that really is exciting because it speaks to the 
heightened attention on small business development across our 
cities and counties and nonprofits across our ecosystems. We 
believe that we can continue to integrate all partners within 
that hub and spoke framework, whether they are working directly 
as a spoke with one of those grantee organizations or as part 
of an ecosystem leveraging any of our programs, whether it is 
the capital programs or other grant programs. So we look 
forward to continuing to build that out with all of those 
community financial institutions and others.
    Chairwoman VELAZQUEZ. The gentlelady's time has expired.
    Now, we recognize the gentleman from Pennsylvania, the 
Ranking Member of the Subcommittee on Economic Growth, Tax, and 
Capital Access, Mr. Meuser for 5 minutes.
    Mr. MEUSER. Thank you very much, Madam Chairwoman. And 
thank you to our Ranking Member Luetkemeyer. Thank you, 
Administrator, for being here.
    So small businesses are struggling. In spite of the high 
level of consumer spending that is taking place, small 
businesses are making less. They are dealing with inflation. 
All this should be nothing new to you. Organizations like the 
NFIB are stating this as loudly as they can to the 
administration. There are workforce shortages. Serious 
workforce shortages. Every small business I walk into, and I am 
sure you, too, is beside themselves with being so busy and 
making less and trying to figure things out. Supply shortages. 
Their shelves, their inventory, their warehouses are much less 
than they would prefer. Energy costs are baffling them. 
Gasoline prices, heating, you name it for their trucks, for 
their deliveries. Everything is going up. Wages are going up. 
That is usually a good thing but in this case it is going up a 
little bit too fast. These mandates that are being discussed 
are very, very unclear and it is really making many businesses 
very, very nervous as to what to do. You know all this. 
Potential tax increases.
    Now, Administrator, you said small businesses will not be 
facing any tax increases. That just is not accurate. The 3.8 
percent Medicare surtax, which expands the Medicare surtax to 
invest in individuals actively involved in S corporations or 
partnerships. So in other words, if a company with 50 employees 
was bringing in $10 million in revenues, they will maybe net $1 
million at the end of the year. They will be paying 3.8 percent 
on that $600,000, the delta between the 400.
    So, now it is a pass-through. So that business will be 
paying that extra. Now, he might be paying himself, or she, 
$100,000, $200,000, $250,000, $350,000 a year but they are 
still being taxed as a pass-through business. So stating that 
small business is not paying more tax--and by the way, that is 
a big number. That 3.8 percent, if I believe offhand, that is 
in the neighborhood of $300 billion of new taxes, of revenues. 
So I do not know how we can say small business is not getting 
any new taxes when you are scoring it at $300 billion.
    And then, of course, NOL is being changed. The IRS 
enforcement. That is going to be wonderful for small business. 
I was former revenue secretary of the Commonwealth of 
Pennsylvania. The last thing you do without making it a higher 
quality level of information for those auditors to work off of 
is just add 87,000 new people and think they are going to go 
out and shotgun approach on small business because they are the 
easiest victims, to go in and audit them randomly. And the idea 
that it would raise $400 billion is absolutely nonsense. Come 
on. You went to the Wharton School of Business. I mean, it just 
came back CBO I think said $120 billion. That is about right. 
So there is a lot of phony-baloney stuff in here.
    So I just want to ask you, do you advocate for small 
businesses? When you talk to the president, do you say, Mr. 
President, these taxes, inflation, gasoline prices, you know, 
you have your spokesperson Jen Psaki and a new potential 
controller of the banks saying how it is a great thing to ruin 
fossil fuel companies and oil companies and gasoline companies. 
Somehow that is a good thing because then we move into green 
energy. I mean, do you say, hey, we have got to rethink some of 
these things, Administrator?
    Ms. GUZMAN. My responsibility is to, of course, administer 
the programs of the SBA as well as visit with these businesses 
and hear their concerns which, of course, I agree with you the 
supply chain and the workforce issues have been challenging for 
them. We have been focusing on getting them support so that 
they can navigate these issues.
    In terms of some of the specific issues that you addressed, 
like the Medicare tax loophole, that really again is still 
focused on those individuals making more than $400,000. So the 
majority of small businesses will not be affected and that 
really what it does is focus on making sure that investments 
are treated the same way as your business income. And so 
whatever the issue might be, the note that this Build Back 
Better agenda is focused on leveling the playing field and that 
is where small businesses have free----
    Mr. MEUSER. I do not think it held any ROI whatsoever for 
the economy and you have got economists agreeing with me. The 
lending product you bring up. Now, we had two test programs, 
the RRF and the EIDL, all run by the SBA. And I think you have 
got a good staff. In Pennsylvania you have got a good staff. 
But they are completely understaffed. They have nowhere near 
the IT systems and the RRF was a disaster. Let's face it. And 
the EIDL had $67 billion plus in fraud and yet you are saying 
you want a self-run, internally run lending product within the 
SBA to add onto what we know is already a disaster?
    Ms. GUZMAN. The SBA has been doing direct lending for over 
68 years. We have had a $67 billion portfolio within our 
disaster products without these incidences of fraud. These are 
unique to the COVID EIDL product as a result of the CARES Act 
requiring that the SBA not collect tax documentation.
    Mr. MEUSER. I am sorry, I have to yield back. But a joint 
partnership with banks and the SBA clearly worked a lot better.
    I yield back, Madam Chairwoman.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    Now we recognize the gentlelady from Pennsylvania, Ms. 
Houlahan for 5 minutes.
    Ms. HOULAHAN. Thank you, Madam Chair. And thank you very 
much for being here as well.
    My question is going to be forward-looking at a future 
program I am hoping and I very much thank you for being with me 
in our community. The last time we saw one another we were 
walking in the streets of Philadelphia and we were talking to 
small business owners back there. Sadly, since then, since your 
visit, my district was hit hard not just by the pandemic and 
supply chain constraints which I know a lot of folks have been 
hitting on today but also by Hurricane Ida, and we are under a 
federal state of emergency.
    So today, I want to talk about relief for our small 
businesses and owners who have been impacted by natural 
disasters that are not pandemic. Following this devastating 
storm, I heard from many of our small businesses in our 
community who are continuing to recover through no fault of 
their own from the pandemic and now from this natural disaster. 
One of these businesses was Animated Brewing, a brewery in 
Coatesville. And during the visit to their business, the co-
owners expressed their hesitancy around applying for an SBA 
loan. While they very much appreciated a low or no-interest 
option, they simply did not have the capacity at that time to 
pay it back. Their losses from the storm were too great and 
their losses from pandemic as well. And another business 
similarly informed my office that they would rather be closing 
their doors in the coming months rather than incurring yet 
another bill to pay.
    These businesses represent nationwide concerns with the 
lack of direct aid that is available to small businesses that 
follow a natural disaster. Natural disasters, as we have 
mentioned, are not dissimilar to the shocks such as a pandemic 
and according to the Federal Emergency Management Agency, 
almost 40 to 60 percent of small businesses are never able to 
reopen their doors after such a disaster.
    Which leads me to a question that I have heard over and 
over again since Hurricane Ida has hit my region. Why can there 
no be a loan forgiveness or grant program available similar to 
PPP to help small businesses recover from natural disasters 
just as Congress has provided to respond to the public health 
crisis of COVID? Given the anticipated increase in frequency of 
climate change-related natural disasters such as Hurricane Ida, 
I am interested in this concept and interested in your 
response. Do you think that the status quo is sufficiently 
meeting demand for natural disaster experiences by small 
businesses? Should the SBA play a bigger role in supporting 
small businesses that are recovering from a natural disaster 
beyond low interest rate loans?
    Ms. GUZMAN. Thank you. Yes, we do agree that recovery is a 
long tail for communities and for businesses, and I would like 
to see the SBA engaging more in that recovery and providing 
support, whether it is connecting to affordable capital, if 
that is the right fit, or providing some other technical 
assistance to help those communities recover.
    Ms. HOULAHAN. Or potentially similar to PPP loan programs 
that become grants with certain conditions met.
    So Congress set up a PPP program in recognition of the 
importance to small businesses to the overall economy of 
communities nationwide and to the unique and historic nature of 
the pandemic. Perhaps maybe there could be a federal emergency 
protection program similarly that parallels something like 
this. Do you see the parallels that exist between incidents of 
climate-related disasters or natural disasters and pandemic?
    Ms. GUZMAN. Businesses are dramatically affected during 
disasters. I mean, the FEMA data shows that if they do not 
reopen in 5 days, 80 percent chance that they will be closed 
within a year. So the effects are devastating which is why it 
is so important to invest in climate solutions and why we would 
want to continue to support our small businesses with whatever 
tools Congress provides to us.
    Ms. HOULAHAN. Thank you. And what are the biggest lessons 
you think that we learn from PPP that could be considered when 
crafting a similar program for natural disasters?
    Ms. GUZMAN. Well, one thing that we found is 11 million 
loans, and seen a lot of sole proprietors especially come into 
the program in 2021 and small employers, 20 and under that were 
not served previously. We think that those are key lessons 
learned to demonstrate that there is a demand out there for 
capital and that businesses can leverage capital to grow 
effectively which is why direct lending is such an important 
product because we are seeing that there is a decline in small 
dollar loans out there available to our smallest entities and 
we would like to try to solve for some of those huge market 
gaps.
    Ms. HOULAHAN. Administrator Guzman, one of the things that 
I was struck by with the crisis of pandemic and with the PPP 
having been stood up so rapidly but also expanded as you 
mentioned to a vast array of businesses that would not have 
historically been considered in these sorts of opportunities 
and programs, we have created the neuropathways and the memory 
mechanisms. We have created the business banking relationships 
that small businesses now have with each other. We have also 
created the relationships that the SBA now has with the banking 
industry. We really ought to be able to take advantage of this 
and pivot this to what will be inevitably in the future 
increasingly more and more natural disasters and more people 
needing help with this.
    Thank you so much once again for visiting our community and 
I yield back.
    Chairwoman VELAZQUEZ. The gentlelady yields back.
    Now we recognize the gentlelady from New York, Ms. Tenney, 
for 5 minutes.
    Ms. TENNEY. Thank you, Madam Chairwoman. And also to the 
Ranking Member. And thank you, Administrator, for being here 
today. I did send you a list of questions in May and I am 
hoping that at some point you will follow up since I have not 
received an answer yet. I know you are getting yourself 
organized in the position but we really have pressing questions 
that we need to ask.
    My first question I want to ask you is during your 
confirmation hearing in the Senate, you promised to investigate 
why the SBA wrongfully approved small business loans for 
multiple Planned Parenthood affiliates. However, since the SBA 
has proceeded to confirm an additional six loans for Planned 
Parenthood affiliates, including $10 million for Planned 
Parenthood of Greater New York. As you are aware, and as this 
legislation states, federal funds cannot be used to pay for 
abortions and all applicants for PPP loans must abide by 
affiliation rules and size standards. Since Planned Parenthood 
has over 16,000 employees nationwide that makes them 
ineligible. Has the SBA forgiven any of the PPP loans that have 
gone to Planned Parenthood?
    Ms. GUZMAN. I do not have a status on individual loans to 
share with you.
    Ms. TENNEY. Have any of them that you know generally been 
forgiven?
    Ms. GUZMAN. That I am not aware of. I know that we have 
continued to process those loans in the order. And as you know, 
borrowers attest under PPP for their eligibility.
    Ms. TENNEY. Will you forgive those loans? I started to 
reclaim my time. But will you forgive those loans at this 
point? Is that a policy that you are taking?
    Ms. GUZMAN. Fortunately, it is not up to me to determine 
individuals loans. There is a process in place for all loans.
    Ms. TENNEY. But you as the administrator have the ultimate 
say. Will you actually not allow those loans, not allow their 
forgiveness, and will you ask them to pay the money back?
    Ms. GUZMAN. They will be processed according to the rules 
that were administered by the SBA that have been made public 
and that have been shared with our lenders.
    Ms. TENNEY. So what you are saying is that based on the 
rules and based on the rules of the legislation that you will 
be denying that forgiveness and you will also be requiring them 
to pay back based on a rules based?
    Ms. GUZMAN. I am not speaking to any individual PPP 
eligibility.
    Ms. TENNEY. But can you say that based on the rules that we 
just outlined, the fact that they are not eligible, that you 
would say in a reasonable estimate that those loans would not 
be forgiven and therefore, you would ask for that money to be 
paid back?
    Ms. GUZMAN. I am not the one who individually investigates 
specific eligibility.
    Ms. TENNEY. I am asking you as the administrator. You 
obviously have a position. You would ultimate make this 
decision if it came to your desk; right?
    Ms. GUZMAN. My positions and my political choices are not 
at play here. It is really just the process and the rules that 
are in place for both the borrowers to attest to their 
eligibility and for the lenders to determine if they will 
process based on that eligibility and that attestation.
    Ms. TENNEY. Right. And so----
    Ms. GUZMAN. Further----
    Ms. TENNEY. Can I just add?
    Ms. GUZMAN. Sure.
    Ms. TENNEY. I do not mean to harp on this but if it was 
determined by your people and the people that work under you 
that they were actually forgiving the loans, would you overrule 
that decision because it is not based on the rules that are set 
forth in the statute?
    Ms. GUZMAN. I would not overrule the processing that is in 
place that is abiding by the rules. So the process does abide 
by the rules and determines eligibility. Again, the borrower 
attests to the eligibility. The bankers are then processing 
those PPP loans.
    Ms. TENNEY. Do you know the rules that say that they are 
not eligible. Is that something you are aware of?
    Ms. GUZMAN. I know our affiliation rules broadly but I have 
not investigated any particular loans of the 11 million loans 
that we have processed at the SBA.
    Ms. TENNEY. Okay. Just one more question because I have a 
little time left.
    In your remarks, you talked about gaps in access to capital 
and you make no mention of SBA initiatives addressing the fact 
that most venture capital and early stage funding flows to just 
a few cities around the country and many are left behind, 
including my upstate rural suburban district. And you make no 
mention of the fact that very little investment, including 
SBA's own programs goes to innovative capital-intensive 
businesses that are in the manufacturing sector that once 
supported our middle class. Is that something you are going to 
be considering as adding more options and supporting the 
legislation that I have and others that would give more loans 
to businesses that have long-term prospects, long-term 
manufacturing, and would rebuild and reindustrialize the 
regions such as mine that were once the home of the beginning 
of the industrial revolution?
    Ms. GUZMAN. Yes. We completely support building up a 
manufacturing base in America. The Made in America initiative 
focuses on that and we have key programs to support that, 
whether it is on our lending program or encouraging 
manufacturing support within our SBIC program.
    Ms. TENNEY. One last thing that my colleague alluded to. 
The current nominee for control of the currency is talking 
about ending private bank accounts and putting them in the 
hands of the federal reserve. Do you support that initiative?
    Ms. GUZMAN. I just support that small businesses have 
options to find banking institutions that can support them or 
lenders that support them and my job as the administrator is to 
make sure that those----
    Ms. TENNEY. So you do not support them giving their bank 
accounts over to the federal reserve?
    Ms. GUZMAN. I do not have information on that to share 
anything further.
    Ms. TENNEY. Thank you.
    Chairwoman VELAZQUEZ. The gentlelady yields back.
    Now, we recognize the gentleman from New Jersey, Mr. Kim, 
for 5 minutes.
    Mr. KIM. Thank you. Thank you, Madam Chairwoman. 
Administrator, thank you for coming today.
    I hope you take away from this hearing that there is a lot 
of bipartisan engagement when it comes to our restaurants. That 
this is something that I think we need to make sure that we are 
prioritizing to the level that we are hearing. I want you to 
know that from my district that is still the number one issue 
that I hear about when it comes to small businesses. And the 
job is not done. I wish we were able to put in additional funds 
into the Restaurant Revitalization Fund. I certainly supported 
that from the outset to avoid the problem that we had that was 
foreseeable. We knew there was going to be a challenge there. 
And I want to find a way to fix it. But you know, you have 
talked about this already, but we talked about it in terms of 
the amount of money to be able to put in. And I certainly 
support funding this more. But I also wanted to ask you what 
flexibility does SBA need from Congress in statute if we were 
able to provide additional funding for the Restaurant 
Revitalization Fund. We want to make sure that we ensure that 
no applicant at the end of the queue is left off without relief 
again. My understanding it is not just about the funding; that 
there are other elements here that we need to be considering 
here. So I just wanted to get your take on this.
    Ms. GUZMAN. Congress would need to fully fund the 
Restaurant Revitalization Fund program so that we could support 
the remainder of the restaurants who have applied or put a cap 
on the program so that whatever the funds allocated to lessen 
the $44.1 billion would be enough to cover those applications 
in the pool. We would be happy to work with you to further look 
at those numbers.
    Mr. KIM. Yeah. Because I think we are hearing, again, in a 
bipartisan way a desire to make sure that our restaurants and 
our communities are getting that kind of support. And I hope 
that my colleagues across both parties work together to be able 
to do that. I certainly stand ready to do that myself.
    What I also wanted to talk to you about is just as you were 
talking to my colleague about sort of the long road to recovery 
head that we have when it comes to small businesses. And I 
agree with you that right now we are certainly having a crisis 
point. But I think we understand that this is not going to just 
go away overnight. This is going to be a long road to recovery. 
So I guess I wanted to just get a sense from you how you see 
this unfolding here. There are particular industries and small 
businesses that you think are going to have a longer road to 
recovery and a tougher time. How do you sort of see this 
unfolding over the course of the next few years, over the 
course of the next couple years of this administration for 
instance?
    Ms. GUZMAN. Small businesses polled, as well as those that 
I meet with project that there will be months of uncertainty 
still remaining for them as we fight the pandemic. The number 
one thing is to fight the pandemic and make sure that we can 
get more people vaccinated so that people start to consume 
services as much as they have been consuming our products and 
goods. And so that first and foremost has to be the priority. 
Saving our small businesses means vaccinating and implementing 
strong protocols to help recover from the pandemic which is 
underlying as economists agree the supply chain challenges and 
the workforce challenges that including our small businesses 
are facing.
    So as we move forward, we really believe that we need to 
have the tools in place around access to capital to make sure 
that we are supporting small businesses, especially those 
startups, those over 9 million business applications I 
referenced earlier. We want to make sure that they can be 
equipped with the technical assistance, the capital, and the 
access to markets that they need to grow strong businesses for 
our communities and for our economy.
    Mr. KIM. Look, I am glad to hear that, and the reason why I 
mentioned this question is I was reading through your testimony 
and you used a phrase to describe SBA. You said it was first 
responders. And I understand what you are getting at with that, 
saying that SBA is the first responder in terms of this crisis 
and certainly the struggles that have been there. But I think I 
would like to push back with you a little bit on that. What I 
have heard from the small businesses in my district is that it 
is about a relationship. It is about a deeper engagement. A lot 
of the small businesses in my community up until the last 18 
months had very little, if any, connection with SBA. Had very 
little understanding of what SBA, what tools you had and things 
like that. You now have an opportunity here not just to connect 
with them for the Restaurant Revitalization Fund or the 
Paycheck Protection Program, but I urge you to build off of 
that. Now that you have connected with so many small businesses 
in their time of need, build off of that in terms of letting 
them know what next. As a first responder, yes, you provide 
that kind of initial support but I do not want you to think 
that they are just going to then move on off and that is not 
your responsibility. And I just want to make sure that we are 
engaged on that over the course of the long term. Thank you. I 
yield back.
    Ms. GUZMAN. Yes. I would be happy to do that.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    Now we recognize the gentleman from New York, Mr. 
Garbarino, for 5 minutes.
    Mr. GARBARINO. Thank you, Madam Chair. Thank you, 
Administrator, for being here today.
    I have been watching the hearing in my office and I walked 
over. My colleague before had asked you if you had spoken to 
the president and let them know whether you agree with some of 
the policies that are coming back in BBB and your answer was 
your job is to administer programs and to meet with small 
businesses and hear their concerns. So what do you do with 
those concerns after you hear them? Where do they go? I mean, 
you are hearing their concerns. Do you just not share them with 
the president or----
    Ms. GUZMAN. No, that was perhaps taken out of context or 
not fully communicated properly. But yes, of course, I share 
what I am hearing in the field from our small businesses, from 
our district offices, from our resource partners to relay that 
they are having supply chain concerns. That they are having 
workforce challenges. This is a whole of government approach to 
fighting this pandemic and making sure that we implement 
solutions to help our small businesses, as well as our economy 
broadly recover from COVID. And of course, I share as much as I 
can in terms of that outreach that I have been doing and the 
results that I receive.
    Mr. GARBARINO. So with Build Back Better coming and as you 
said, small businesses are coming out of COVID, one of the 
increases in taxes which small businesses are going to see even 
though they are saying there is going to be no increase on 
small businesses is the permanent extension of the loss 
limitation deduction. I mean, that is something that right now 
it is law but this would extend that. And spend $167 billion by 
extending this permanently. How is that not seen as a tax 
increase, especially for businesses that are coming out of this 
COVID debacle which everything was shut down and they could not 
make any money. They have probably taken tons of losses. How is 
making this loss limitation deduction permanent not an increase 
on taxes on small businesses, something that they were probably 
planning on getting back?
    Ms. GUZMAN. Businesses will definitely continue to be able 
to take their business losses against their business. This was 
dealing with investments specifically. And the most important 
thing is that this is broadly about leveling the playing field 
for our small businesses and they do agree that large 
corporations, those 55 large corporations, profitable 
corporations that paid zero was just not enough. They would 
like to see parity and I agree that that should be the case 
that everyone pays their fair share and that we are able to 
ensure that the resources are available to support our 
infrastructure as well as build back better with strengthening 
our care economy and fighting climate change. And so I believe 
wholeheartedly that small businesses will benefit greatly from 
Build Back Better and that they will not see the effect. They 
will see a level playing field instead.
    Mr. GARBARINO. So you do not think raising taxes on certain 
corporations which other small businesses do business with, 
whether it is energy or transportation, that when these 
businesses have to pay more in taxes, these major corporations 
you call them have to pay more in taxes, you do not think they 
are going to have to pass that down to the small businesses and 
increase their costs for those small businesses that do work 
with them or that do business with them in addition to taxes 
and not having a loss deduction which we are making permanent 
here and some other things? They are already dealing with 
inflation. They are already dealing with high cost of products 
going up, supply chain issues. Now, their business partners, 
whether they deal with energy or transportation issues, those 
costs are going to go up with these additional taxes. Are they 
not concerned about that? Or have they not shared their 
concerns with you about that?
    Ms. GUZMAN. I have not heard those concerns and I know that 
there are even large corporations that will be affected that 
believe that this could still, nonetheless, be a strong 
positive impact on our economy because they know that it will 
strengthen the people. It will strengthen the workforce. It 
will strengthen care economy and healthcare economy as well. So 
I know that that 15 percent corporate minimum tax is, again, 
only affecting less than 200 corporations and those are not 
small businesses and they will not be impacted.
    Mr. GARBARINO. Okay. You talk about the workforce and 
strengthening the workforce. In your meetings with all the 
small businesses, I am sure you have heard about how they 
cannot hire people, they cannot get the proper workforce to do 
the jobs. Has anybody brought up to you their concerns about 
the new OSHA ruling? And I know you do not oversee OSHA with 
the vaccine mandates, but you deal with small businesses. You 
said yourself you meet with them daily, or weekly, or whenever. 
They have to be concerned about what this is going to do to 
small businesses and the fact that they already cannot staff, 
they are already having trouble staffing their businesses, this 
additional vaccine requirement of OSHA, what are you hearing 
and what are you sharing with the president about maybe this is 
not the best idea right now?
    Ms. GUZMAN. Well, I mean, first to consider is that 98 
percent of the businesses would not be affected because of that 
100 employee rule. So your mom and pops, your main street 
businesses, you know, those businesses also, and for the most 
part small businesses support vaccine mandates. They support 
facemasks. They want to keep their employees safe. They want to 
also attract customers who want safe environments. And so I 
think that from the majority of what we have heard is that 
small businesses support this. They know that we need to fight 
the pandemic and that this is the way to do that.
    Mr. GARBARINO. I think we are talking to different small 
businesses but I will yield back because I am out of time.
    Ms. GUZMAN. Thank you.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    Now, we recognize the gentleman from Pennsylvania, Mr. 
Evans, for 5 minutes.
    Mr. EVANS. Thank you, Madam Chair. Thank you for this 
opportunity to talk to the administrator.
    The question I would like to ask earlier this month, the 
Committee held a hearing on entrepreneurship, and we learned 
that the applications to start new businesses increased 
significantly in 2020, more than any other year over the past 
50 years. As someone who is on the ground talking with new 
businesses every day, what happened during the pandemic that 
led to so many people starting a new business?
    Ms. GUZMAN. I believe it was a mixture of both opportunity 
entrepreneurship, as well as necessity entrepreneurship. For 
those who were either part of that, either decided to go on a 
different course and wanted to find a different opportunity as 
so many people left their professions. And so amongst this 
group though, we are still seeing high trends across women and 
people of color starting businesses at really high rates and it 
is across the country.
    Mr. EVANS. How can SBA and Build Back Better programs help 
those budding entrepreneurs survive and thrive in a post-
pandemic economy?
    Ms. GUZMAN. Access to capital is always one of the top 
issues that small businesses share and is a challenge for them. 
Obviously, they are trying to expand and grow and enter new 
markets and so they need not only the capital but also the 
technical assistance and SBA is uniquely positioned to support 
these small businesses as they start up and launch their firms 
with capital and as well as technical assistance. Better 
connecting, especially through the Community Navigator pilot 
program small businesses to resources that exist strengthening 
local ecosystems so small businesses can be supported. So the 
SBA is working hard to make sure that we are building those 
relationships extensively across the country to support 
especially underserved businesses who have not been able to 
necessarily connect in the same way, and we are trying to 
expand our product pool as well so that we can fill some of the 
market gaps that we see out there especially in small dollar 
loans or in investment capital as we see these businesses and 
know that they are going to need support to create the jobs 
that they do. They create 2/3 of net new jobs and 40 percent of 
our output and we need to continue to support them with that 
charge.
    Mr. EVANS. I would like to also thank you for the visit 
that you did to Philadelphia and talking down 52nd Street was a 
very important part. A lot of things have happened in that 
neighborhood just recently, along with an organization called 
Phila TEC entrepreneur Della Clark, along with Wells Fargo Bank 
that like rebuilding the businesses on the corridor. And 
certainly, your presence was very important just to show 
people, to give a sense of hope and optimism. So again, I thank 
you for your leadership of coming down and walking down the 
street. So I want to personally say on record thank you.
    And I yield back, Madam Chairperson.
    Chairwoman VELAZQUEZ. The gentleman yields back.
    Now we recognize the gentlelady from California, Mrs. Young 
Kim, Ranking Member of the Subcommittee on Innovation, 
Entrepreneurship, and Workforce Development.
    Mrs. YOUNG KIM. Thank you, Chairwoman Velazquez, and 
Ranking Member Luetkemeyer, and Vice Ranking Member Williams. 
Thank you very much for holding this hearing. I would like to 
thank Administrator Guzman for joining us today.
    Yesterday, California gas prices hit yet another record 
with $4.70 per gallon. This is the highest in the country. To 
further compound the higher prices facing Californians in my 
district, our country is confronting a deep labor shortage and 
a supply chain crisis disrupting small businesses' inventories 
and pushing prices even higher.
    Administrator Guzman, with your main function as the most 
important small business advocate in the Biden administration, 
how often are you in direct communication with President Biden 
to counsel him and with the White House staff regarding some of 
the challenges small businesses are facing with labor shortages 
and an inflation rate not seen in 31 years? And does your 
office perform economic analyses of how different policies 
impact small businesses?
    Ms. GUZMAN. We are coordinating with the White House on a 
daily basis across various taskforces and communicating to the 
National Economic Council and the Domestic Policy Council 
regularly in terms of the programs that we see that could help 
on our supply chain or on workforce issues. So that----
    Mrs. YOUNG KIM. When you say regularly, how often is that--
weekly, daily?
    Ms. GUZMAN. Daily. Daily we have been communicating with 
the White House, various components because there are so many, 
of course, important issues and taskforces that we are trying 
to----
    Mrs. YOUNG KIM. What about the economic analysis?
    Ms. GUZMAN. The Office of Advocacy within the SBA conducts 
economic analysis and research on a regular basis. And we rely 
on them for those insights. And so they regularly publish with 
notices the intended economic research so that different 
institutions can fulfill that and they publish those results.
    Mrs. YOUNG KIM. Well, thank you.
    President Biden's supply chain announcement mentioned his 
commitments from large companies like UPS, FedEx, Walmart, and 
Target to use expanded hours to move those goods. As you know, 
small businesses lack the pricing flexibility and purchasing 
power to compete with the big businesses. And so from the small 
trucking companies, supply houses, small business operations 
and storefronts, small businesses continue to be harmed and 
left out in times of supply chain shortages. So what solutions 
are you offering small businesses during these disruptions? And 
how are we using the entrepreneurship programs to help small 
businesses navigate through the supply chain crisis?
    Ms. GUZMAN. On the capital front that is really key for 
businesses to navigate disruption. As an example, a Texas 
manufacturer that was able to secure our loan to acquire a 
manufacturer because the part that they were getting from 
abroad was taking too long. And so they built that and had 
actually 30 percent savings and that was as a result of an SBA 
loan. Another aerospace exporter in the Northeast was able to 
use one of our loans recently to be able to drive down that 
price because they were able to, with our export financing, 
prepay for goods and so that enabled them to get the goods 
faster. So capital is really important, as well as entrepreneur 
development. And SCORE chapters, SBDCs, WBCs have been 
increasing their support around vendor relationships and 
financial management and supply chain.
    Mrs. YOUNG KIM. Thank you.
    I want to turn my attention to another matter. Last month, 
this Committee passed reconciliation instructions that included 
$2 billion funded over the next 10 years to allow SBA to offer 
direct lending options. Can you talk to the Committee about the 
intent of the program? And my question is more, why are we 
moving away from a public-private lending partnership that we 
know is more efficient in preventing fraud than direct lending 
programs like EIDL?
    Ms. GUZMAN. SBA would not move away from its current 
programs. The 7(a) and 504 portfolios are strong programs and 
we will continue to work with our direct lenders. Where we see 
gaps is on small dollar loans. Note that less than 50 percent--
I think it is 43 percent of businesses have been able to access 
a bank loan when seeking capital. You see people going more and 
more to online fintech lenders for financing. There are gaps in 
this marketplace of small dollar loans and the direct lending 
program focuses on addressing those gaps. Even within our 
lending programs, although we had a record year of $44 billion, 
we only did 18,000 loans under $150,000. Our own SBA loans are 
in decline and there are less lenders willing to do those 
loans.
    Mrs. YOUNG KIM. Well, thank you, but when SBA lowers 
interest rates, it is unfair competition if the government is 
offering lower interest rates and is putting smaller local 
lending institutions out of business. So I would urge you to 
analyze the direct lending provisions and its impact on smaller 
businesses before considering its implementation.
    And thank you for joining us today.
    Ms. GUZMAN. Thank you. Thank you.
    Chairwoman VELAZQUEZ. The gentlelady yields back.
    Now we recognize the gentlelady from Texas, Ms. Van Duyne, 
Ranking Member of the Subcommittee on Oversight, 
Investigations, and Regulations.
    Ms. VAN DUYNE. Thank you very much for your time.
    It seems like you have been all around the country with my 
Democrat colleagues. You have visited their areas. You have 
talked to their small businesses. You have taken their 
questions and you have answered them. I appreciate that for 
those folks. But I am going to take you up on your officer. I 
have offered this before numerous times. Come to my district. 
Come talk to the businesses that I am talking to. Listen to 
what their concerns are. Because from your testimony here today 
and your testimony in the past, I have no idea who it is that 
you are talking to because it is not what I am hearing.
    On Friday, I had over 30 small businesses come at a 
roundtable and tell me about what they are experiencing right 
now. Their number one complaint was the blockades that the 
federal government continues to put in their way as they are 
trying to open back up. You said that you saw that most small 
businesses are supportive of the vaccine mandate. Are you aware 
that 90 percent of small business employers are concerned that 
they are going to have to actually lose workers? Workers are 
going to quit over the vaccine mandate? Are you aware of that?
    Ms. GUZMAN. Well, 98 percent of those businesses would not 
even be affected by the mandate, so----
    Ms. VAN DUYNE. Ninety percent of small businesses are 
concerned that they are going to lose employees because of this 
vaccine mandate. Forty-nine percent of small business employers 
have job openings that they cannot fill. We have lost 5 million 
people out of the workforce in the last several months. Five 
million. We are at what, 61 percent now. Have you done any kind 
of impact about what this vaccine mandate is going to mean to 
small businesses?
    Ms. GUZMAN. And I appreciate the invitation to come to your 
district. And yes, my understanding is that 98 percent of all 
the----
    Ms. VAN DUYNE. No, no, I am asking has the SBA done any 
kind of a fiscal impact report on what the vaccine mandate will 
mean to small businesses?
    Ms. GUZMAN. Our Office of Advocacy has not yet done that 
analysis.
    Ms. VAN DUYNE. Okay. So we are already starting about 
putting this in and we have not even given any advice. We have 
no idea what the financial impacts are going to be.
    Supply chain. Ninety percent of small businesses are 
impacted by supply chain shortages right now. What we are 
looking at is an administration who is supporting killing our 
energy industry and increasing those costs, a vaccine mandate 
that is actually going to get truckers and folks who are 
delivering packages and logistics even later. I mean, those are 
businesses that have been dying for workers. Cannot find them 
now and we are going to fire them. Have you done any fiscal 
impact statements on what the supply chain effects are going to 
be on small businesses?
    Ms. GUZMAN. SBA, specifically, no. But of course, the 
Biden-Harris administration has economists----
    Ms. VAN DUYNE. I have not seen them. Have you seen them? 
Because we wrote to your office and we asked. And we have not 
gotten a response back.
    Ms. GUZMAN. Well, economists have weighed in that, in fact, 
the bipartisan infrastructure deal is going to make huge 
impacts in terms of improving our supply chain.
    Ms. VAN DUYNE. Huge. Do we have any numbers?
    Ms. GUZMAN. Well, I mean, that still does not apply to the 
immediate needs that I know small businesses are strained with. 
And so I think it speaks back to what the SBA can do around 
capital access----
    Ms. VAN DUYNE. It would be great if we knew this. If we 
actually knew the numbers.
    So the newest spending spree is going to be about $400 
billion in taxes on small businesses. That is going to result 
when you look at all the increases of a top federal tax rate 
increase of approximately 50 percent. Fifty percent. Are you 
aware that small businesses actually purchase regular gas and 
that has gone up 50 percent in costs?
    Ms. GUZMAN. I am aware. I am----
    Ms. VAN DUYNE. Trucks rentals are up almost 40 percent. 
Energy costs are up almost 30 percent. We have seen the highest 
inflation level in over 30 years. Inflation is taxation. And 
yet, from the SBA, we still cannot get any reports on what 
those impacts are going to be to small businesses.
    Ms. GUZMAN. We know that pandemic-induced inflation is 
affecting our small businesses. And economists largely agree 
that this is something that will go away in the coming months 
and we continue to try to implement----
    Ms. VAN DUYNE. And I hear that and I appreciate that. The 
last time you were here I asked you a number of questions about 
what the financial impacts were going to be on small businesses 
and you told me that you would get back with me. You have not. 
What you told me over and over again, and we have heard from 
other people from this administration, is that none of these 
effects are supposed to be on anybody over than $400,000 or 
large businesses. The fact that the SBA has not even looked 
into the fiscal impacts shows how completely out of touch you 
are with the needs of the small businesses and the impacts, the 
consequences that are going to happen with these fiscal 
policies that continue to go down. And I have to ask, if you 
cannot give me those answers, who is advising this 
administration on what costs their policies are having on small 
businesses?
    Ms. GUZMAN. The analysis, I continue to share information 
about our small businesses and the impacts that----
    Ms. VAN DUYNE. Information is great, but fiscal impacts are 
important. And if you, as the administrator of the SBA, do not 
have the answers to these immensely significant questions, who 
in the administration does? Who is advising the president of 
the financial impacts of these fiscal policies? Who is 
advocating for the 31 million small businesses across the 
country? These are basic questions. Trillions of dollars are 
being spent and they are being shoved down the throats of small 
businesses and we cannot even tell you what the impacts are 
going to be.
    Ms. GUZMAN. The Department of Treasury has analyzed. And 
again, the largest corporations, those less than 200, will be 
impacted.
    Ms. VAN DUYNE. Fifty percent. Fifty percent.
    I yield my time. Thank you.
    Chairwoman VELAZQUEZ. The time has expired.
    Now we recognize the gentlelady from Minnesota, Ms. Craig, 
for 5 minutes.
    Ms. CRAIG. Thank you so much, Madam Chairwoman. It is a 
real honor to be back here in the Committee room and thank you, 
Administrator Guzman, for your testimony today, and for your 
dedicated service to America's small business owners.
    You and I had a chance to visit together with 
Representative Phillips in Minnesota this summer, and we were 
able to get together several small business owners from across 
our districts to hear about the struggles that they have 
continued to face. I would just pause to make sure that my 
colleagues across the aisle understand that 98 percent of small 
businesses are fewer than 100 employees. Ninety-eight percent. 
So I appreciate your tolerance of some of the past testimony 
here today.
    Look, we have worked tirelessly to keep small businesses 
open and frankly, on a bipartisan basis over the last couple of 
years. I am very grateful to see that we have had such strong 
take up of the Shuttered Venues Operator grant program. I know 
we talked a lot about that when you were in Minnesota. That 
program, quite frankly, had a bit of a rough start and I was 
glad to see the administration worked to tirelessly to get that 
on a better path. That program has been an absolute lifeline 
for many, many of our small businesses. But there is a clear 
need to do more, and I want to make sure that this Committee 
understands that COVID is not over. The way we get to COVID 
being over is COVID is still here. Minnesota has some of the 
highest positivity rates in the country right now. In fact, 
yesterday, I think we were the highest. And our businesses are 
just going to extraordinary lengths to keep my constituent safe 
on a day-to-day basis.
    But I am hearing from business owners and local leaders in 
the district about those businesses that have been left out of 
the recovery. It is not any fault of their own but it is really 
important that the Small Business Committee not choose winners 
and losers. So I really do hope, Madam Chair, that this 
Committee can come together in a bipartisan manner again just 
like we did under the previous administration, to make sure 
that we do not lose any more of our small businesses that make 
up really the fabric of our local communities.
    And I will pause here to say 98 percent of small businesses 
are less than 100 employees. Just yesterday, I sent a letter to 
House leadership urging support for a small business relief 
package to come together for businesses that have been left out 
of our previous efforts and to replenish other programs like 
the Restaurant Revitalization Fund. There were some of us on 
this dais today who said that the amount of money in the 
American Rescue Plan was never going to be sufficient for the 
demand and the cost.
    So Administrator, if you have been touring the country, I 
am sure you have heard from businesses that are saying the same 
thing as you heard in Minnesota's 2nd District. Do you see need 
for further action from Congress to ensure businesses are not 
left out of these programs, especially as the holiday season 
comes into full swing?
    Ms. GUZMAN. We would welcome the opportunity to continue to 
work with you and your district to make sure that the COVID 
EIDL program in particular and those grants that are available 
for small businesses get into the hands of those who have not 
been able to benefit from recovery and we are making great 
efforts to try to increase our outreach on those programs in 
particular. We know that there was unmet demand with the 
Restaurant Revitalization Fund. It looks like Shuttered Venues 
will have enough funding for not only the initial grants but 
also the supplemental, but we know that these high-impact 
industries are still being impacted and we would happily 
administer any program that Congress would see fit to pass.
    Ms. CRAIG. Let me just make sure I make the point that the 
support we gave to the economy, to small businesses on a 
bipartisan basis, as well as Americans under the CARES Act, the 
previous administration, as well as the American Rescue Plan, 
that is one of the reasons why we are seeing such a strong 
recovery of demand. People are out trying to spend their money. 
And, of course, we have seen a once in a lifetime global 
pandemic which has disrupted our supply chains. Can you say a 
little bit more about what the administration is doing to help 
with those supply chain disruptions, the increased gas prices, 
more expensive shipping and overhead costs like rent and 
utility increases? We have to be honest with ourselves in that 
we have a challenge here. We have got a lot of demand and we do 
not have the supply to meet it right now.
    Ms. GUZMAN. We have definitely had global pandemic shifts 
in our supply chain that have affected our small businesses and 
their ability to get inventory. And as well, of course, 
influencing inflation and the demand, the prices, rather. So 
for our small businesses, obviously, they fit within the 
overall administration's priorities of trying to improve the 
supply chain, the investments in the bipartisan infrastructure 
deal that will be made over the year will go a long way to 
improving, of course, some of those bottlenecks, our ports and 
our roads and our bridges. And so we are looking forward to 
those key investments. On an immediate basis, of course, the 
administration took immediate action to try to solve some of 
those bottlenecks as well.
    Ms. CRAIG. Sadly, my time is expired so I will yield back.
    Chairwoman VELAZQUEZ. The gentlelady yields back.
    Now we recognize the gentleman from Florida, Mr. Donalds, 
for 5 minutes.
    Mr. DONALDS. Thank you, Madam Chair. Thank you, Ranking 
Member Luetkemeyer, and the Committee for this important 
hearing.
    Real quick a couple things. It has kind of been debated 
amongst the Members about how 98 percent of the 31 million 
small businesses in our country are less than 100 employees. 
Obviously, that is true. But also, the other truth is that with 
the OSHA mandate, which is unconstitutional, by the way, this 
OSHA vaccine mandate being pushed by the administration would 
start at 100 employees. The administration has already signaled 
that they want to push it to all small businesses, not just 
stopping at those with 100. So let's be very clear for the 
record what the intention of Joe Biden and his presidency is. I 
actually want to thank the 5th Circuit and any other courts 
that have struck down that mandate because it is 
unconstitutional. Congress never gave OSHA any authority 
whatsoever to tell employers what they must require employees 
to inject into their body. We have such a thing called HIPAA in 
the United States. It is surprising to me that we have 
forgotten our HIPAA laws considering the fact that we are 
largely dealing with COVID-19 in the best possible ways.
    Secondarily, I think it is also important to note that any 
president that has the authority to make you take an injection 
is frankly a totalitarian president and that flies in the face 
of our constitution the way it was written, the way it was 
drafted, the way it was conceived. Even the very framework of 
our nation. So it is unconstitutional. That thing is going to 
go away. Hopefully, the courts continue to do that and the 
Supreme Court follows suit in short order.
    Real quick, Administrator Guzman, thanks so much for 
coming. I do appreciate you being here. You mentioned earlier 
you believe inflation is pandemic induced. Do you hold the view 
that it is purely pandemic induced? Can you explain that?
    Ms. GUZMAN. I am relying on our economists who are sharing 
with us and most agree that the pandemic is causing these 
supply chain disruptions globally.
    Mr. DONALDS. Do you think it is that the pandemic is 
causing it or do you believe that it is now work-related issues 
associated with massive social spending and also in conjunction 
with environmental policy in the State of California which has 
made it harder for truckers to access the ports of Long Beach 
and Los Angeles?
    Ms. GUZMAN. The pandemic is underlying all of the 
inflation. Yes.
    Mr. DONALDS. Is there any reason why the social spending 
that frankly this Congress and this president started back in 
February, if we did not actually continue that social spending, 
do you think that we would have employees basically sitting at 
home or taking less hours?
    Ms. GUZMAN. What I am hearing from small businesses and I 
am not sure what you are hearing in your district, but their 
workers are staying out because of care issues, because of 
healthcare concerns. Because there also was----
    Mr. DONALDS. So quick question. When a local 7-Eleven down 
the street from my house has in the window that they want to 
give somebody a $500 signing bonus to come to work, that is 
because they are concerned about care issues or is it because 
they are concerned about money? Or is it that there is now a 
bargaining chip from the federal government that gives them 
more money than actually going in and taking more hours at 
work? Which one is it?
    Ms. GUZMAN. What I was about to say as well is the final 
thing is, you know, what I heard recently when I was convening 
a group of resource partners at the Institute for Veterans and 
Military Families that there is this great resignation as well 
and people are shifting careers. So these are the more dominant 
factors that are affecting our workforce. And yes, they are in 
control in terms of the opportunity that they have to demand 
higher wages.
    Mr. DONALDS. Let me ask you this question because I know 
you said earlier you support obviously the budget 
reconciliation package, Build Back Better, Build Back Broke. 
You know, everybody likes their little acronyms. Come on. This 
thing is building us back broke. You can acknowledge that. But 
I digress.
    Do you think that the social spending aspects of that bill 
will make it easier or harder for small business owners to find 
employees?
    Ms. GUZMAN. I think actually it will make it easier. And 
there are key investments within the Build Back Better 
framework that involve workforce development, apprenticeships, 
as well as----
    Mr. DONALDS. I almost gave you a title increase.
    Administrator, can we honestly have a conversation and sit 
here that if you do something like Child Tax Credit which will 
give people $300 per child that that is going to make it easier 
for them to go back to work or is it going to make an economic 
decision where they are going to make the choice of, you know 
what, maybe I do not need the additional 5 hours. If you 
cascade that through an economy across the 31 million small 
businesses in the United States, do you think it is going to be 
easier or harder for small businesses to staff their companies 
in order to be effective for their customers?
    Ms. GUZMAN. As President Biden says----
    Mr. DONALDS. Well, we all know President Biden does not 
know much about the economy. We know this.
    Ms. GUZMAN.--against the American people and workers who 
want to work, who want to have the protections in place and the 
care for their elders or for their children that is 
affordable----
    Mr. DONALDS. Administrator Guzman, the President of the 
United States has never worked a day in his life outside of 
Washington, D.C. You have done more than he has. Come on now. 
You were a small business owner. If the federal government was 
providing outside spending that competed directly with your 
ability to pay people to come to work, do you think it would 
make it harder for you as a small business owner which you 
were, not an administrator now in the administration, would it 
make it easier or harder for you to keep people under your 
employ?
    Ms. GUZMAN. Again, these investments in Build Back Better 
will strengthen----
    Chairwoman VELAZQUEZ. If you will excuse me.
    Ms. GUZMAN. Apologies.
    Chairwoman VELAZQUEZ. Decorum is important in this 
Committee and respecting----
    Mr. DONALDS. Madam Chair, I was just referring to the 
president----
    Chairwoman VELAZQUEZ. Respecting the President of the 
United States is part of that.
    Mr. DONALDS. Madam Chair, the President of the United 
States has never worked in our economy. Those are facts. That 
is not about decorum. That is the truth of the matter. He has 
never worked a day in our economy. He has always worked in 
Washington, D.C. So to point out that fact, and to illustrate 
the fact that we are talking about major economic policies that 
do impact the 31 million small business owners in our country 
is not about decorum. I did not trash the man. I am just 
speaking facts.
    Chairwoman VELAZQUEZ. Your time has expired.
    Mr. DONALDS. I yield.
    Chairwoman VELAZQUEZ. Now we recognize the gentlelady from 
Florida, Ms. Salazar.
    Ms. SALAZAR. Thank you. Thank you, Chairman Velazquez and 
Ranking Member Luetkemeyer, for holding this necessary hearing. 
And I also want to thank you, Administrator Isabella Guzman, 
for being present and willing to answer our questions. Because 
unfortunately, Madam, your people, the SBA office in my 
district just do not answer the phones. And I have consulted 
with other congressional offices and the same thing. A small 
business owner is desperate looking for a loan and he just 
cannot get through.
    Let me just give you an example. His name is Marquis 
McLemore. He lives in South Miami and he finally reached a 
human being, not a machine. The SBA lady who answered the phone 
was unaccountable and unable to answer basic questions. And I 
know the situation very well, Madam Guzman, because in my 
district office I created a division called the Prosperity 
Center to help my people achieve the American Dream, and for us 
immigrants it is to have their own business. And you know the 
SBA is instrumental for that Prosperity Center.
    There are other scenarios. When an individual who has been 
able to start the process, thank God, but gets stuck in the 
middle of it because every time they call there is a new person 
to talk to, they have to re-explain their problems, they have 
to reupload the documents. You know, Madam, SBS is not a 
MasterCard or a Visa to be bouncing people around. People have 
a choice to get another credit card but in this case there is 
no other SBA for small business. And your agency can make it or 
break it for millions and millions of small businesses in 
America.
    Let me tell you so bad that my congressional office and my 
Prosperity Center has a hard time getting information from your 
agency. So just imagine if a congressional office cannot get 
through, what about Rosa Lopez from Little Havana or John 
Rogers from Cutler Bay?
    Madam Guzman, I understand that you are responsible for 
this and I also understand that this is uncomfortable, very 
uncomfortable for you for what I am describing but it is more 
painful to lose your business because of a bureaucrat. And I am 
sure you agree with me. These are real people and these are 
real life-changing problems.
    Let me just give you one more piece of information and then 
maybe you can answer me. There are 2 million small business 
owners in South Florida. Two million. There is one office. One 
office that serves 2 million people. During the pandemic, as 
you have said, the SBA received 3 billion to hire more people 
and provide a better service.
    Now, let me ask you something. How many people have you 
hired in the last 10 months? How many of those in South 
Florida? How many new call centers and how many of them are 
bilingual?
    Ms. GUZMAN. Thank you for that. We do value customer 
service experience and that has been a priority of mine since I 
came in which was what instigated our overhaul. And I think you 
are referencing mostly to the COVID EIDL program where it has 
been very challenging to get answers. So we have----
    Ms. SALAZAR. So you know that we have a problem with 
customer service?
    Ms. GUZMAN. We completely agree with you and we are trying 
to fix it. And what we have done so far is we have three times 
the amount of customer service resources that we have 
available. We have switched vendors as well and we have, of 
course, bilingual capacity is available within this network. We 
have also tried to increase in the field and so we will take 
back your concerns about the Florida District Office in 
particular.
    Ms. SALAZAR. Thank you.
    Ms. GUZMAN. We have also tried to increase the district 
connection to our platform. Previously, they did not have----
    Ms. SALAZAR. I am going to get back to you in 30 days and I 
am going to tell you if my Small Business Administration office 
in South Florida is working according to what you are telling 
me.
    Let me just give you one more concern. A month ago, and 
this is even worse, a month ago the General Inspector, or 
Inspector General I should say, the Inspector General found 
that women and minorities, you and me, women and minorities are 
not getting their fair share of receiving small business 
government contracts. For me that is lethal because I promised 
this to my constituents through my Prosperity Center and I have 
to deliver, Madam. And the SBA has to help me because it is 
instrumental. My question is how are you going to fix this, 
that we do get the fair share of what we need? Women and 
minorities.
    Ms. GUZMAN. Thank you for the question. Yes, government 
contracting is a priority and equity across our programs. We 
want to make sure all of our small businesses access the 
federal government. And right now we have seen over the past 10 
years a decline of 40 percent.
    Ms. SALAZAR. Those are stats. What are you going to do in 
order to right now under your administration being able to, for 
women and minorities, to get more government contracts?
    Ms. GUZMAN. So we have a multi-prong approach. The first is 
working collaboratively with the White House and OMB on the 
policies like category management and other policies to make 
sure that businesses can access all contracts across the 
federal government. We have increased the budget for the 
president's request for an increase on the government 
contracting business development teams resources so that we can 
increase outreach and get more----
    Ms. SALAZAR. Can you give me in 30 days a report of what 
have you done in South Florida in order to improve the access 
for these women and minorities?
    Ms. GUZMAN. We would be happy to sit down with you and your 
team to go over specific initiatives that we can implement.
    Ms. SALAZAR. To help my constituents. Thank you, Madam.
    Chairwoman VELAZQUEZ. Time has expired.
    Now we recognize the gentleman from Wisconsin, Mr. 
Fitzgerald, for 5 minutes.
    Mr. FITZGERALD. Thank you, Madam Chair. And thank you, 
Administrator Guzman.
    Back in I think it was February-March timeframe, we started 
to get some numbers back on just exactly what did the PPP loan 
program look like and hindsight is 20/20. I think you would 
find agreement that there was a lot of successes and may have 
saved main street.
    Also, obviously, at the same time we were getting the 
reports that the direct loans made by the SBA were not only a 
high percentage that resulted in fraud and that money that was 
being distributed after individuals--crooks--I do not know how 
else to explain this--had gotten into the portal and obviously, 
you know, put in bogus facts and figures and got a check in the 
mail. We then had discussions with the IG and with others in 
law enforcement saying that they were working on claw backs and 
that SBA was working on claw backs and that also there had been 
some individuals ultimately who had been charged for fraudulent 
activities.
    So like I said, hindsight is 20/20. We learned our lesson. 
We kind of know, we have always known, that direct loan 
programs by the federal government result in a high percentage 
of fraudulent claims. So as we move forward and after this 
Committee was involved in, and this was referred to by some of 
the other Members here today, when the SBA got the $2 billion 
in loans directly to the borrower, you said earlier that 
financial institutions do not necessarily want to get involved 
with loans of 150 or less, but I am not finding that that is 
the case. Just a couple of weeks ago, Wisconsin Bankers 
Association, I think the credit unions are saying, whoa, whoa, 
whoa. Time out. Why would we not be involved in this, 
especially because the due diligence was done by those 
financial institutions and we now know that that makes for a 
much more legitimate process. And it seems like you are 
abandoning that and it does not make much sense to me right 
now.
    Ms. GUZMAN. Thank you so much for that. Well, one of the 
first things, just to mention on COVID EIDL and the fraud that 
the IG had outlined, that was all affecting, that was all 
reviewing 2020 loans. And so controls have been restored thanks 
to the Economic Aid Act. The SBA was given again the right to 
collect tax documents, which we have. And so we have $67 
billion in disaster portfolio over the years of SBA that does 
not have high incidence of fraud. So our direct lending 
programs across EIDL programs broadly do not suffer from that 
same effect and that is specifically to deal with COVID EIDL 
and the restrictions that were placed on the Agency at the time 
and the administration's choices.
    Mr. FITZGERALD. So do you believe that, in fact, there were 
vulnerabilities that now have been addressed and if we get 
together a year from now that you will be able to say that 
stuff was fixed and that is not going to be the case again?
    Ms. GUZMAN. Yes. And we have been working with the IG 
closely to make sure that we are implementing all the 
recommendations. So not just the tax document collection but 
other identity verifications across the COVID EIDL program. And 
we are making great progress.
    Within the direct loan proposal specifically, some banks 
are still doing those loans. I said 18,000 within the SBA's 
portfolio last year. We just continue to see large gaps. Of 
course, we have 32.5 million small businesses and especially as 
we have seen the footprint of so many banks shrink across the 
country where there are actual banking deserts, half of them in 
rural communities, we need to make sure that there are 
alternatives and that all our small businesses can connect to 
capital. And so we believe that SBA has a role to play to work 
with the lending partners similar to how we did with PPP, and 
with a fee-based program, distribute these loans through our 
lenders as well as directly.
    Mr. FITZGERALD. Let me shift gears real quick for a final 
question.
    There has been a lot of discussion about the vaccines and 
the 100-person mandate. What is the magic behind 100 employees? 
I have not been able to figure this out. I have been lectured. 
Everyone in America has been lectured about follow the science, 
follow the science. What is the 100-person threshold? And if we 
have an employer that has got 105 employees and another one 
that has got 95 and they are side by side, some of them would 
be subject to fines and others would not. I mean, what is the 
logic behind that?
    Ms. GUZMAN. Of course, with the proposed rule there will be 
comments and so we will find out more about how people feel 
about that analysis but my understanding was that it was done 
based on where they thought a company of that size would have 
the capacity to be able to administer a program like that and 
be able to comply. That is my understanding.
    Mr. FITZGERALD. So it has nothing to do with health or 
COVID itself or science?
    Ms. GUZMAN. As well as that. Yes, correct. You are correct, 
sir, that there is, of course, you know, in larger.
    Mr. FITZGERALD. I do not get it. I do not understand why 
100 is the magic number.
    Ms. GUZMAN. In larger facilities there have been, you know, 
of course there are more concerns of COVID outbreaks and so 
being able to control for vaccines and that matter would be 
helpful.
    Mr. FITZGERALD. Okay. I yield back.
    Chairwoman VELAZQUEZ. Time has expired.
    Now I will be asking questions. I will recognize myself for 
5 minutes.
    Ms. Guzman, the Department of Defense administered 17 
different vaccines and children are required to get vaccines 
prior to enroll in school. I just cannot see what the issue is 
with the vaccine mandate when we know that because of it we 
have been able to control the spread of COVID-19. Also, when 
people use the argument that it is impacting small businesses 
more than any other sector, 98 percent of small businesses are 
exempt from the 100 employee rule. There are other issues that 
were raised and I just want to give you an opportunity to 
answer.
    Administrator, since you have been in office as the head of 
the SBA, have you refused to provide access to data or 
information requested by the IG?
    Ms. GUZMAN. We have a very transparent and collaborative 
relationship with the IG and our teams meet regularly and we 
have disclosed all information that they have requested.
    Chairwoman VELAZQUEZ. When people talk about fraud in the 
EIDL program, that fraud was connected to the fact that the 
guardrails and protections under the previous administration 
were lowered. What steps have you taken to put those guardrails 
in place?
    Ms. GUZMAN. Yes. The IG report was focused on 2020 where 
the guardrails did not exist. We have implemented the 
collection of tax documents across the portfolio as well as 
implemented additional identity measures to make sure that our 
overall fraud control framework is in place and that we are 
following suggestions of the IG and the GAO.
    Chairwoman VELAZQUEZ. Let's talk about taxes and how in the 
BBB Act it impacts small businesses. People this morning have 
been referring to the tax provision under the Build Back Better 
Act and how those provisions will be impacting small 
businesses. I have here the Committee's Ways and Means section 
by section of the bill and I invite my colleagues to read it so 
that we can make the statement or the questions related to 
small businesses. I want to know how many small businesses will 
be impacted by the provision of the 15 percent corporate 
minimum tax to those businesses that are making $1 billion a 
year in profits. How many small businesses? How many businesses 
are operating overseas because of the global minimum tax for 
large multinational corporations, and how many small businesses 
will be impacted by that provision? How many businesses that 
have income over $25 million will be impacted with the 
surcharge of the wealthiest .02 percent of businesses? How many 
small businesses have a structure where they do corporate stock 
buybacks? Nowhere in this bill can you find where corporate or 
individual tax rates have been modified or will be modified.
    Let's go to the print so that we can say and have an honest 
discussion as to how those provisions will be impacting small 
businesses. Then, the Medicare surcharge closes the loophole 
that allows some wealthy taxpayers to avoid paying the 3.8 
Medicare tax on their earning. Those are not pass-through. 
Let's go to the source because it seems to me that people are 
discussing a bill that does not exist. Let's go now to some of 
the programs under SBA and the Build Back Better Act.
    Administrator, you discussed how the data shows small 
dollar loans have declined significantly as a share of the 7(a) 
portfolio with loans of less than $150,000 down by almost 53 
percent over the past years. The average 7(a) loan has more 
than doubled over a decade. Do you agree that a direct loan 
product will help fill this gap in the 7(a) program? Are you 
confident that the agency will be able to stand up and deliver 
this product in a timely manner?
    Ms. GUZMAN. Yes. We definitely have seen that gap in the 
marketplace and we believe the SBA is equipped, especially 
having learned from the great lessons of PPP and EIDL and 
implemented some incredible private sector best practices and 
expanded our network. We do have the tools to implement this 
effectively.
    Chairwoman VELAZQUEZ. What steps will you take to cure 
potential fraud in a direct loan program?
    Ms. GUZMAN. As we have on our previous disaster loan 
programs a $67 billion portfolio where fraud was not an issue, 
we will continue to follow those great standards as well as 
implementing new technologies as fraud evolves to make sure 
that we are fighting fraud on a regular basis and getting the 
funds into the hands of those businesses it was intended for.
    Chairwoman VELAZQUEZ. The USDA Business and Industry Loan 
program--and this is an important topic for me--so the USDA 
Business and Industry Loan program does not require co-ops to 
provide a personal guarantee but the SBA still does which 
prevents them from getting 7(a) loans. Instead of requiring a 
personal guarantee, USDA requires co-op Members to sign a 
profit nondistribution covenant. If this works for USDA issued 
work for the SBA, why will the SBA not provide this option for 
co-ops?
    Ms. GUZMAN. I know that, you know, thanks to your main 
street Act we have been exploring the options to expand the use 
of the 7(a) products across our ESOPs and our worker 
cooperatives broadly. I am happy to explore this a little bit 
further. We have made some changes within the program to open 
it up to ESOPs and co-ops and we have committed to making sure 
that we can continue to see how those loans perform and make 
additional changes.
    Chairwoman VELAZQUEZ. Will you commit to working with this 
Committee to ensure co-ops can access 7(a) loans?
    Ms. GUZMAN. Yes. I think it is a priority for us to make 
sure that there are options for especially exiting businesses 
to have a success plan that can work.
    Chairwoman VELAZQUEZ. Data shows that Black and Hispanic 
borrowers only received 3 and 6 percent of 7(a) dollars lent in 
2021, respectively. CDFIs and MDIs are better able to reach 
small businesses owned by people of color. They are recording 
that PPP is the latest example. How do you plan to bring more 
CDFIs and MDIs into the 7(a) program?
    Ms. GUZMAN. The Community Advantage pilot program that 
would be made permanent within the Build Back Better will help 
create certainty within a program that attracts our CFIs and 
enables them to leverage our 7(a) portfolio. We would use that, 
as well as other tools, to make sure that we are engaging with 
them and continuing the relationships fortified during PPP.
    Chairwoman VELAZQUEZ. Thank you.
    Every Member has had their 5 minutes. I just want to really 
thank you. I am looking forward to working with you and the 
Committee in terms of how we can strengthen the programs we 
have under SBA and the new programs that will be implemented. I 
really want to thank you and your staff for your service on 
behalf of American small businesses. I also appreciate your 
willingness to appear before and work with this Committee. 
Transparency, accountability, and responsiveness are critical 
to a positive working relationship between the agency and this 
Committee. When I say ``this Committee,'' I mean all of the 
Members of this Committee. Everyone in the room today has the 
same goal--to help our main street employers. I look forward to 
collaborating with you and all of the Committee Members as we 
work to get small businesses to full recovery. This is not a 
small task. We have laid out complicated issues today that need 
addressing. Given the monumental obstacles that SBA has 
overcome over the past 18 months, I am confident that you can 
correct these problems and make these programs better serve 
entrepreneurs.
    I ask unanimous consent that Members have 5 legislative 
days to submit statements and supporting materials for the 
record.
    Mr. LUETKEMEYER. Madam Chair?
    Chairwoman VELAZQUEZ. Yes, sir.
    Mr. LUETKEMEYER. You went over 2 minutes and 34 seconds and 
now you have had a closing statement. I think I get time to be 
able to rebut that.
    Chairwoman VELAZQUEZ. To rebut what?
    Mr. LUETKEMEYER. To rebut your 2 minutes and 34 seconds 
versus my 5. And now you have had a closing statement so I have 
another closing statement.
    Chairwoman VELAZQUEZ. I always give a closing statement. 
You never have.
    Mr. LUETKEMEYER. That was a lengthy closing. It is one 
thing to do 30 seconds but that was about 2 minutes worth of 
closing statement.
    Chairwoman VELAZQUEZ. I am the Chair of this Committee. I 
run this Committee and I try to run this Committee in a 
bipartisan way. I did it with Mr. Chabot. I have got to tell 
you, this has been the most partisan Committee ever, and I 
resent that because I try to be fair and balanced.
    Mr. LUETKEMEYER. Well, Madam Chair----
    Chairwoman VELAZQUEZ. I have always made a closing 
statement. As Chair, I have----
    Mr. LUETKEMEYER. That is wonderful you made a closing 
statement but I think if you are going to have a lengthy one--
it is one thing to say thank you to the witnesses and just a 
recap, a small recap, but for----
    Chairwoman VELAZQUEZ. Reclaiming my time, sir, I have 
always given a closing statement. It does not have to be 2 
minutes long or 3 minutes long or 1 minute long. I just 
simply----
    Mr. LUETKEMEYER. If you have a closing statement of a 
significant length, I have the option to be able to have a 
closing statement as well.
    Chairwoman VELAZQUEZ. You are not the Chair.
    Mr. LUETKEMEYER. That is in the rules. That is not the 
Chair's prerogative. It is in the rules.
    Chairwoman VELAZQUEZ. You are not the Chair. So----
    Mr. LUETKEMEYER. So you are going to do it because you can. 
Is that what you just said?
    Chairwoman VELAZQUEZ. Well, I am the Chair, sir. I am the 
Chair. Mr. Chabot never gave----
    Mr. LUETKEMEYER. So next term, whenever I am the Chair, you 
are going to sit here and we will just make sure you have 5 
minutes and not go on for 20. Is that what you just said?
    Chairwoman VELAZQUEZ. I gave you the right to run your 
minority Members. I give you access in terms of your budget. I 
am the Chair. I give a closing statement and that has always 
been the tradition of the Committee.
    Mr. LUETKEMEYER. Madam Chair, with all due respect, there 
are rules in place to allow each----
    Chairwoman VELAZQUEZ. You want to give an opening? You want 
to give a closing statement? Make a closing statement, sir. You 
are recognized.
    Mr. LUETKEMEYER. Okay. Very good.
    Chairwoman VELAZQUEZ. You are recognized.
    Mr. LUETKEMEYER. Thank you.
    We could have been out of here 5 minutes ago if we would 
have just recognized it right off the bat but here we are.
    Chairwoman VELAZQUEZ. You know----
    Mr. LUETKEMEYER. Again, going through some of the last 
comments by the Chairman, the vaccine mandate, I think Ms. 
Guzman, you said 98 percent of small businesses are exempt. The 
problem is only about 40 percent. About 35 to 40 percent of the 
people are going to be exempt from that. There is about 60 to 
65 percent according to what our information is that are going 
to be affected by the vaccine mandate. So let's be honest about 
your statistics here.
    The Chairman talked about guardrails on things and I think 
that is great. We need to have guardrails on what is going on, 
especially in the EIDL program and some of the direct lending 
programs. The program is the staff do not follow the 
guardrails. The IG report says that this is happening so 
therefore, we need to make sure that the staff does its job, 
which is to adhere to the new challenges, new guardrails, new 
protocols that are in place. That is your job, Madam 
Administrator.
    One of the things that is frustrating to me is when you 
make these wild statements about we are going to raise taxes on 
the wealthy, in this BBB there is a huge tax break for the 
wealthy. It is called SALT. You cannot take on one side and 
give on the other and get away with just saying part of what is 
going on and not explain what is going on on the other side of 
this argument. So it is very frustrating to see that a lot of 
the information is not necessarily given in a frank form for 
both sides to understand the depth and problems that we have.
    Again, I thank you for being here, Ms. Guzman. I think that 
you have got a large job ahead of you. I think you found this 
morning the concerns that we have on this side of the aisle 
with regards to the inability to answer questions, the 
inability to provide studies to show that you are actually 
doing your job and making sure that the information you are 
giving us is actually done by a think tank or a study of some 
sort, that you can verify and back up what you are saying. This 
is very important. You talk about the COVID thing and right 
here I have got something from the Job Creators Network that 
says higher prices inflation by 40 percent versus 14 percent is 
the number one issue for small businesses. I hope that you have 
information like that because that is what you need to be able 
to make good decisions. So I am very concerned with the 
direction that we are going. This Committee hearing has not 
allayed my fears and we are going to be watching very carefully 
and providing what we are supposed to do, oversight.
    Thank you for being here, and with that, Madam Chair, I 
yield back.
    Chairwoman VELAZQUEZ. Yes. Let me remind the gentleman that 
almost every economist in this country is saying, including 
Senator Portman yesterday in his speech, that when it comes to 
inflation, no better to make investment in the infrastructure 
of this country. You know what is the problem here? That for 
the last 40 years America has been expecting an infrastructure 
bill. People and previous presidents make pronouncements of 
infrastructure bills and this one delivered. The President of 
the United States delivered yesterday.
    I ask unanimous consent that Members have 5 legislative 
days to submit statements and supporting materials for the 
record.
    Without objection, so ordered.
    If there is no further business to come before the 
Committee, we are adjourned. Thank you.
    [Whereupon, at 12:29 p.m., the committee was adjourned.]
                            
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