S.Hrg.119-18

1[Senate Hearing 119-18]2[From the U.S. Government Publishing Office]34                                                         S. Hrg. 119-1856                      NOMINATION OF THE HONORABLE7                   KELLY LOEFFLER TO BE ADMINISTRATOR8                   OF THE SMALL BUSINESS ASSOCIATION910=======================================================================1112                                HEARING1314                               BEFORE THE1516                      COMMITTEE ON SMALL BUSINESS17                          AND ENTREPRENEURSHIP1819                                 OF THE2021                          UNITED STATES SENATE2223                    ONE HUNDRED NINETEENTH CONGRESS2425                             FIRST SESSION2627                               __________2829                            JANUARY 29, 20253031                               __________3233      Printed for the use of the Committee on Small Business and34                            Entrepreneurship3536[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]3738        Available via the World Wide Web: http://www.govinfo.gov3940                               __________4142                   U.S. GOVERNMENT PUBLISHING OFFICE4359-472                  WASHINGTON : 20254445-----------------------------------------------------------------------------------4647           COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP48                    ONE HUNDRED NINETEENTH CONGRESS4950                              ----------51                        JONI ERNST, Iowa, Chair52            EDWARD J. MARKEY, Massachusetts, Ranking Member53JAMES E. RISCH, Idaho                MARIA CANTWELL, Washington54RAND PAUL, Kentucky                  JEANNE SHAHEEN, New Hampshire55TIM SCOTT, South Carolina            CORY A. BOOKER, New Jersey56TODD YOUNG, Indiana                  CHRISTOPHER A. COONS, Delaware57JOSH HAWLEY, Missouri                MAZIE K. HIRONO, Hawaii58TED BUDD, North Carolina             JACKY ROSEN, Nevada59JOHN R. CURTIS, Utah                 JOHN W. HICKENLOOPER, Colorado60JAMES C. JUSTICE, West Virginia      ADAM B. SCHIFF, California61JON HUSTED, Ohio62                Meredith West, Republican Staff Director63                 Sean moore, Democratic Staff Director6465                            C O N T E N T S6667                              ----------6869                                WITNESS7071                                                                   Page72The Honorable Kelly Loeffler of Georgia..........................    1473    Prepared statement...........................................    177475                            COMMITTEE INSERT7677Ernst, Senator Joni78    Letter dated January 21, 2025................................     47980              ADDITIONAL LETTERS/STATEMENTS FOR THE RECORD8182Angel Capital Association83    Letter dated January 29, 2025................................    2084Association of Women's Business Centers85    Letter.......................................................    2186Economic and Community Development Institute87    Letter dated December 5, 2024................................    2288Ernst, Senator Joni89    Minority Report dated November 14, 2023......................    2390Georgia Public Policy Corporation91    Letter dated January 22, 2025................................    4292Independent Community Bankers of America93    Letter dated January 14, 2025................................    4394Independent Women's Voice95    Letter dated January 15, 2025................................    4496International Franchise Association97    Letter dated January 21, 2025................................    4598Job Creators Network99    Letter dated January 18, 2025................................    46100Kemp, Governor Brian P., State of Georgia101    Letter dated January 29, 2025................................    48102National Asian Pacific Islander American Chamber of Commerce and103  Entrepreneurship104    Letter dated February 3, 2025................................    49105National Association of Development Companies106    Letter dated January 17, 2025................................    50107National Association of Development Companies108    Letter dated January 21, 2025................................    51109National Association of Government Guaranteed Lenders110    Letter dated January 20, 2025................................    52111National Restaurant Association112    Letter dated January 24, 2025................................    53113National Retail Federation114    Letter dated January 17, 2025................................    55115National Small Business Association116    Letter dated January 28, 2025................................    56117Small Business and Entrepreneurship Council118    Letter dated January 18, 2025................................    57119Small Business Development Centers120    Letter dated January 13, 2025................................    59121Small Business Investor Alliance122    Letter dated January 17, 2025................................    60123Society for Human Resource Management124    Letter dated February 5, 2025................................    62125U.S. Black Chambers, Inc.126    Letter dated December 9, 2024................................    64127128                        QUESTIONS FOR THE RECORD129130The Honorable Kelly Loeffler of Georgia131    Responses to questions submitted by Chair Ernst, Ranking132      Member Markey, and Senators Risch, Young, Cantwell,133      Shaheen, Booker, Hirono, Rosen and Hickenlooper............    91134135                           NOMINATION HEARING136137                              ----------138139                      WEDNESDAY, JANUARY 29, 2025140141                      United States Senate,142                        Committee on Small Business143                                      and Entrepreneurship,144                                                    Washington, DC.145    The Committee met, pursuant to notice, at 3:33 p.m., in146Room 428A, Russell Senate Office Building, Hon. Joni Ernst,147Chair of the Committee, presiding.148    Present: Senators Ernst [presiding], Risch, Scott, Young,149Hawley, Budd, Curtis, Justice, Husted, Markey, Cantwell,150Shaheen, Coons, Hirono, Rosen, Hickenlooper, and Schiff.151152               OPENING STATEMENT OF SENATOR ERNST153154    The Chair. I call the Committee on Small Business and155Entrepreneurship to order. I want to welcome everyone to the156first hearing of the committee in this Congress. I am excited157to assume the role of chair and serve as the voice for our158small businesses.159    The purpose of today's hearing is to consider President160Trump's nominee to lead the Small Business Administration,161former Senator Kelly Loeffler. I'd like to welcome you here162today and thank you for your willingness to serve.163    Senator Loeffler. Thank you very much, Senator.164    The Chair. I'm also delighted to welcome the committee's165new Ranking Member, Senator Markey. He has been an esteemed166member of the committee for nearly 12 years. We both recognize167the importance of our nation's small businesses, innovation and168promoting national security, particularly through the SBIR/STTR169Program. And I'm excited to continue the bipartisan working170relationship of our committee.171    I would also like to welcome back our returning members and172provide a warm welcome to all of our new members to the173Committee, Senators Curtis, Justice, Husted, and Schiff. I am174looking forward to working with everyone, and I expect a very175productive term, where we focus on the most pressing issues176facing small businesses, including tax and regulatory relief to177ensure entrepreneurs thrive.178    Just to give a quick run of show, I'm going to make a brief179opening statement, then I'll turn to the Ranking Member Markey180to do the same. Following that, we have Senator Scott and181Senator Britt who will introduce our nominee. Then, we'll182administer the oath, which is required. After the oath, Senator183Loeffler will be recognized for an opening statement, followed184by questions from our members, alternating between each side. I185now recognize myself for five minutes for purposes of an186opening statement.187    Senator Loeffler, as I already said, welcome to the188committee and thank you for your willingness to serve in this189role. I greatly appreciate the time you've spent meeting with190me and my colleagues prior to this hearing.191    I want to take a minute to recognize some of your family192here supporting you today. First, your husband Jeff. Thank you,193Jeff, for being here. Next, your brother Brian and his family,194who I understand traveled to Washington, DC from their farm in195Illinois. And also, your parents, Don, and Lynda, who are196watching the hearing from their home in Florida today. We197appreciate you all making the trip here and tuning in to this198important hearing.199    As a former member of this body, you understand the200importance of the Senate's advice and consent process, and I201appreciate that you have fully embraced the committee's202standard, yet extensive, vetting of your experience and203background in advance of today's hearing and our upcoming vote204on your confirmation.205    As a successful businesswoman, it is abundantly clear that206you truly understand what it takes to be an entrepreneur.207Throughout your distinguished career, you've risen through the208ranks of multiple companies due to your determination and grit,209and you've started many successful businesses yourself.210    Most importantly, you understand what it means to be211overrun by Washington's bureaucratic overreach, and the212government must instead get out of business's way so they213thrive. Small businesses and their advocates are excited for214your leadership.215    The Committee has received several letters of support for216Senator Loeffler's nomination. The mission of the SBA is to aid217small businesses to ensure economic prosperity and free218competition. Traditionally, SBA administrators' programs and219services fall into three main buckets: there's counseling,220contracting and access to capital.221    While SBA once may have been characterized as a smaller222agency, Covid small business programs made SBA a household223name, as the agency received a whopping $1.1 trillion in224taxpayer funding to assist small businesses during the225pandemic. With that funding came big responsibilities and our226main concern, the SBA under the prior administration failed to227live up to its mission. I believe substantial reforms must be228made to get the SBA back in shape, and that is going to require229strong leadership.230    The Biden Administration decided to turn a blind eye to231Covid fraud and delinquencies refusing to properly collect232outstanding debt and fraudulent funds, which has huge233implications to the taxpayer. Reports have indicated SBA234charged off about $18.6 billion worth of EIDL loans in fiscal235year 2024. Not once during the Biden Administration was the SBA236able to provide an accounting of their loans receivable and237loans guarantees, which meant that the Government238Accountability Office hasn't been able to even issue a239financial audit of the agency since fiscal year 2020.240    SBA also completely mismanaged and misinformed Congress241last year regarding its disaster loan account, resulting in a242shortfall lasting 66 days. An unacceptable failure for the243disaster victims in North Carolina, South Carolina, Georgia,244Virginia, and Florida. I do appreciate that once the account245was funded, SBA staff worked around the clock, including over246the holidays to get the money out to disaster victims. But I247never want to see that situation unfold again.248    While SBA is failing, it also appears that its workforce249continues to stay at home, while it's more than 246,000 square250foot, Washington, DC headquarters sits empty. The GAO found251that even if everyone did show up to work in person, the SBA's252building space would still only be 67 percent utilized, which253is a complete waste of taxpayer money. That is why I introduced254a bill to relocate 30 percent of the headquarters workforce to255the SBA district offices across the country and cut 30 percent256of office space.257    The SBA has been completely out of touch with the real-258world challenges of entrepreneurs, and while the Biden259Administration simultaneously let SBA employees stay home, they260also added positions in Washington, DC, while stripping offices261in Iowa, New Hampshire, Utah, and other states. I would like to262work with you, Senator Loeffler, on ways to ensure SBA is263effectively utilizing its personnel and ensuring that small264businesses in all parts of America are able to access SBA265programs if they need them.266    I've detailed these concerns and others regarding the mess267you have to clean up from the Biden Administration, and268potential landmines you will encounter in a letter to President269Trump on day one of his new administration. I ask unanimous270consent to enter this letter into the record. Without271objection, so ordered.272    [The information referred to follows:]273    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]274275    The Chair. In Iowa, Main Street is in trouble, and I hear276from my colleagues that this is true in their states across277America. Small businesses are the lifeblood of our rural278communities and for too long under the Biden Administration,279they've been crushed with red tape and woke program280requirements, with no one caring about how that affects the281day-to-day operations.282    I see a great opportunity for the Trump administration and283you Kelly, to revitalize small businesses in America. Thank you284again for being here and I look forward to your testimony. I285now recognize Ranking Member Markey for his opening statement.286287                  STATEMENT OF SENATOR MARKEY288289    Senator Markey. Thank you, Madam Chair, and congratulations290to you. And welcome, to everyone here. I'd like to take a291moment to welcome the newest members of the committee, on the292majority it's Senator Curtis and Justice and Husted.293Congratulations. And on the minority is Senator Schiff from294California. I look forward to working with all of you.295    Senator Schiff, I extend my sympathies to you and the296people of California. It's devastating to see the horrific297damage caused by recent fires in your state. We stand with you298in these challenging times.299    But unfortunately, climate disasters like those in300California and that damage that was caused by just Hurricane301Milton and Hurricane Helene, in a three-week period, in302September and October of last year, it caused--those three303storms cost 500 billion dollars' worth of damage, much to small304businesses. That's more than half of the defense budget of the305United States. That's the damage caused by three storms in a306very brief period of time and not counting all the other307damages they have caused.308    And it's only going to get worse, and more expensive unless309we invest in long-term solutions to keep communities safe. We310need to provide resources for small businesses in places such311as California and the southeastern states to recover, to adapt312and to innovate. And I was looking forward to this hearing to313discuss work together on behalf of America's 34 million small314businesses, including more than 722,000 small businesses in315Massachusetts. We have 7 million people in Massachusetts and316722,000 small businesses. That's our state's identity, it is317small businesses.318    However, we find ourselves in a new reality, where the319programs across government can be cut in a moment's notice with320a cryptic two-page memo, leaving lawmakers and American321families alike scrambling, to figure out whether the government322is open for business. Can a new business owner looking to open323her beauty salon, expects to close on an SBA loan and get her324money on schedule?325    Yesterday we heard conflicting answers out of the White326House, and I can only imagine what that uncertainty does to a327first-time small business trying to meet its expenses,328unacceptable. We can't allow a plumber or a childcare provider329in everytown America, someone that may have spent their entire330life working for someone else and is ready to invest in331themselves, to question whether their government will keep its332word and stand behind them.333    Apparently, we also live in a new reality where more than a334dozen Inspector Generals, can be fired without notice or cause,335in clear violation of the law that required a 30 days' notice.336Mike Ware, the Inspector General at SBA, was illegally fired by337President Trump on Friday night while he was at dinner with his338wife. Inspector General Ware has earned bipartisan respect for339his candor, for his meticulousness, and his tireless work ethic340over 34 years of service. And because of his work, he was341elected to actually chair the governmentwide council of342Inspectors General.343    Having independent oversight at SBA is more important than344ever given the breadth of its work. And I might add here, that345under Mike Ware's leadership as SBA's Inspector General, he346collected $9 billion in Covid-related fraud. Mike Ware did that347job, and he is the chair of all Inspectors General, for the348record, and got fired on Friday night, illegally with no349notice, just wrong.350    Our job on this committee is to support small businesses351and create a ruthless Darwinian marketplace that would bring a352smile to Adam Smith. Massachusetts is one of the wealthiest353states in America per person. So, we believe in capitalism, but354we also believe in fairness. I want to ensure that every355enterprising kid with a million-dollar idea has the chance to356fairly to compete in the marketplace.357    We can promote innovation and competition by strengthening358programs like SBIR, or the Small Business Innovation Research359program and STTR, the Small Business Technology Transfer360Program, which help bring many innovative ideas to life.361    In Massachusetts, small businesses have won more than $8362billion in SBIR awards and over $722 million in STTR awards. As363Ranking Member, I want to work together with Chair Ernst to364strengthen SBIR and STTR, keep businesses in Massachusetts and365Iowa or across our country, keep them competitive and build on366the small business boom that was created under the Biden Harris367Administration.368    Under President Biden's leadership, we saw a record 21369million new business applications, support for more than $1.2370trillion in loans and grants, to more than 13 million small371businesses, 13 million small businesses, and a record amount of372federal contracting dollars for small businesses, including373small disadvantaged businesses. We need to keep that momentum374up, and I just am looking forward to these next couple of375years.376    Senator Loeffler, thank you for joining us today and I know377we share a belief that access to capital in underserved areas378is vital and I look forward to hearing your vision for379America's small businesses. In particular, I'm eager to hear380how you plan to promote competition, innovation, and job381creation. It's an absolute critical part of our economy and as382we know, a vision without funding is an hallucination, so we383just have to make sure that we keep these programs intact,384protected and flowing for everyone. So, I thank you, Madam385Chair. I look forward to this hearing.386    The Chair. Thank you, Ranking Member Markey. And next, I387would like to recognize Senator Britt from the great State of388Alabama to introduce our nominee. Senator Britt, you're389recognized.390391                   STATEMENT OF SENATOR BRITT392393    Senator Britt. Thank you, Chair Ernst, and Ranking Member394Markey, and members of the committee. It is an honor to be here395with you today to introduce my friend. She's President Trump's396nominee to be Administrator of the Small Business397Administration, former United States Senator Kelly Loeffler. A398prolific job creator, an entrepreneur, and a quintessential399American success story.400    Kelly grew up on a family farm, became the first in her401family to earn a college degree and worked her way up to the402highest levels of business. She joined Intercontinental403Exchange when it had under 100 employees, and then spent nearly40420 years building it into a global powerhouse and a Fortune 500405company.406    She went on to found Bakkt, and as its CEO and first407employee, she laid the foundation to take the company public in408just three years. Since leaving the Senate in 2001, she's409devoted her time to running a voter registration nonprofit.410    To me, the most striking and most impressive part of411Kelly's story is this; she gave up a successful career in the412private sector to serve the Senate, and donated every single413paycheck while she was here to charity. And now, that she's414made the decision to serve the American people once again, when415confirmed, if confirmed, which I believe you will be and416strongly, hopefully in a bipartisan fashion. With her signature417selflessness, she will once again donate her salary to charity.418    Kelly is the perfect choice to lead the SBA, and I want you419to understand why this matters to me. First off, 99.4 percent420of the businesses in the great State of Alabama are small. So,421what you do matters. And I'm also the daughter of two small422business owners, and so I have seen the struggles of my parents423firsthand.424    You've seen that when people get in these rooms in DC and425create big, burdensome regulation, the truth is they hit the426little guy the hardest. And you get it, you've lived it and427you're ready to fight for these individuals. You're ready to428fight for the American dream, you have a proven track record in429delivering efficiency, accountability, and results driven430leadership. And she wants to empower every entrepreneur with431the resources and support they need to pursue what they believe432they can.433    In closing, I'd like to say I have absolute confidence in434Kelly's ability to strengthen our main streets, to figure out435how we get capital to underserved communities, to figure out436how we roll back red tape and let people do what they do best,437job creators soar and achieve the American dream. Helping our438small businesses thrive like never before is what I'm confident439she will do.440    So, thank you so much for the opportunity to speak to each441and every one of you, and thank you for giving her the utmost442credence because she's who we need in this role as the next SBA443administrator. Thank you.444    The Chair. Thank you, Senator Britt. And next, we will have445Senator Tim Scott here at the dais to introduce the Honorable446Kelly Loeffler. And Senator Scott, you are recognized.447448                   STATEMENT OF SENATOR SCOTT449450    Senator Scott. Thank you, Chairwoman Ernst, Ranking member451Markey and members of the committee. And it's my honor to be452here today to introduce President Trump's nominee to serve as453Administrator of the Small Business Administration, my friend454Kelly Loeffler from the great State of Georgia. I agreed to455introduce Kelly today because her path like mine, to success456and the U.S. Senate defied all odds. She's standing before you457because she loves the Lord, she has an amazing work ethic, and458frankly, she loves her country as much as anyone I've ever met.459    Small business in rural America run through the thread of460the Loeffler family. I love the story of her family. She's a461fourth-generation farmer. Her grandfather had an eighth-grade462education, her father a high school education. She worked so463hard, that literally her hard work and her strong value system464made her the first college graduate and then later she earned465her MBA. Her story is frankly a story of remarkable success and466one that we should all be thankful that America continues to467create all across the country.468    And one of the things that we oftentimes think of when we469think about success and the American dream is home ownership.470For me, the American Dream was achieved through small business,471of having someone to be the Administrator of the SBA who472understands and appreciates small business, I have a great473passion for people like that.474    Someone who's not only--you are at the top of the food475chain in business, but frankly, I prefer the part of your story476that starts with a woman working her way at minimum wage jobs477and working your way up that ladder, that we spend so much time478talking about the top of the ladder, that we forget that most479of us have to climb that ladder rung by rung by rung. And480you've done a marvelous job of doing that.481    One of the things I'd like to celebrate about her time in482the United States Senate after being appointed in Georgia was483that, during the pandemic we worked closely on relief for484families and businesses across the South. We fought to improve485access to the CARES funds to keep Main Street alive.486    You and I fought together to stop bad actors from taking487advantage of fraudulent loans. And we backed President Trump's488efforts to move supply chains from overseas, cut regulations,489lower taxes, and empower American entrepreneurs to succeed. By490the end of your term, you had passed half a dozen bills into491law and delivered $47 billion of relief funds to Georgia, to492their employees, and to their small businesses.493    Kelly's career has been nothing short of amazing, proving494that the American dream can be achieved through hard work,495faith, with the right leaders in place. Kelly Loeffler is the496right leader to put in place as the Administrator at the SBA.497Her proven track record is why we can have great confidence498that the SBA will return to the gold standard under your499leadership.500    I'll just stop there with my prepared remarks and simply501say that as a small business owner for 15 years, I have great502confidence in your ability to do the job. To my fellow members503of this committee, I hope that you'll hear her out, but I'm504also asking for you to vote for her, because it is time for us505to right the ship, to focus on the underserved communities506around this country, and to make sure that every single ZIP507Code in this nation has strong, powerful, small businesses.508Because without small businesses, we will have high509unemployment and low enthusiasm. Thank you for your time.510    The Chair. Thank you, Senator Scott, for that kind511introduction. Now, I will note that the vote has started. So,512if we have members further down the dais that would like to go513vote now, please do so. Ms. Loeffler, if you would, please514rise. We'll swear you in.515    Okay. Ms. Loeffler, raise your right hand. And this is the516tradition of the committee to swear in our nominees. So, we are517swearing in today Kelly Loeffler to be Administrator of the518SBA. Please answer the following questions. Do you solemnly519swear to tell the truth, the whole truth, and nothing but the520truth, so help you God?521    Senator Loeffler. I do.522    The Chair. Should you be confirmed as Administrator, are523you willing to appear and testify before any duly constituted524Committee of Congress when requested to do so?525    Senator Loeffler. Yes.526    The Chair. Good. Okay. Are you willing to provide such527information as requested by any such committee?528    Senator Loeffler. I am.529    The Chair. Thank you. You may go ahead and take your seat,530Ms. Loeffler, and you are now recognized for five minutes to531provide your opening statement to the committee.532533   TESTIMONY OF THE HONORABLE KELLY LOEFFLER, NOMINEE TO BE534          ADMINISTRATOR, SMALL BUSINESS ADMINISTRATION535536    Senator Loeffler. Thank you, Chair Ernst. And let me just537say it's a distinct honor to be here today. Chair Ernst,538Ranking Member Markey, and members of the committee, it's truly539an honor to be before you today as President Trump's nominee540for the Administrator of the Small Business Administration.541    I'm as humbled to be here today as I was serving alongside542many of you in the U.S. Senate, and I've appreciated the543opportunity to meet with nearly every member of this544distinguished committee in recent weeks.545    I'm especially grateful to President Trump for entrusting546me with the privilege and responsibility of serving America's54734 million small businesses. There is no stronger advocate for548these job creators than our President, and I share his549commitment. If confirmed, I will work tirelessly with him to550make small business great again.551    I want to thank my incredible husband Jeff, my wonderful552family and friends who have joined us here today and in person553and via broadcast. Most importantly, I give all thanks and554glory to God.555    As someone who has spent my life working in small556businesses, starting them, growing them, and helping them557succeed--I know that small business is big business for558America. They comprise 99 percent of all businesses, they559create two out of every three new jobs and employ nearly half560of the private sector workforce. They are the opportunity and561innovation engines that drive prosperity and growth and they562power the American economy as much as they power the American563dream.564    In his first term, President Trump made historic strides to565empower job creators and job seekers alike, driving small566business formation, a blue-collar boom. And through historic567tax cuts, trade deals and deregulation, his agenda created 7568million new jobs, delivered historically low poverty and record569employment for minority communities.570    His first term accomplishments were so great that following571the 2024 election, small business optimism recorded its largest572jump since 1980. That was more than two months before he even573took office.574    Small business is in my DNA. I grew up as the fourth575generation on our family's farm in Illinois. My wonderful576parents, Don and Lynda didn't have degrees, but they had faith577and grit. They worked relentlessly to sustain our farm and578small trucking company, risking everything to provide for us579while navigating volatile commodity markets and complex580regulations and facing countless day-to-day challenges.581    It's where my Midwestern work ethic was ingrained, working582in our soybean fields, and waiting tables at local restaurants,583preparing me for a lifetime of growing and starting businesses.584I became the first in my family to graduate college, later585earned my MBA and became the only CFA ever to serve in586Congress.587    Since then, I helped grow a startup into a Fortune 500588company. For 10 years, I co-owned a WNBA team. I later launched589a financial tech company as the founding CEO and first590employee. I recall managing budgets in excel spreadsheets,591hiring my first team member and working with regulators, as592much as I recall ringing the bell when two of those companies593went public.594    In the Senate, I strongly supported President Trump's595historic agenda and pandemic response. Having spent years as a596small business owner, I made it my mission to serve as their597voice. I spent much of 2020 delivering relief-traveling the598state of Georgia and meeting with Main Street entrepreneurs599like Eric and Rachel from Dockside Seafood in Savannah, they600were struggling to navigate the PPP program. The loan that we601helped them get didn't just save the restaurant, it saved the602jobs of 35 Georgians. And I'm so proud to say that they're603still in business today.604    Now, no matter the business, the challenges are605consistent--from managing inflation and capital to hiring a606skilled workforce and weathering uncertainty. Job creators in607the last four years have faced rising demands to comply with608new rules, often drafted with unknown cost and consequence.609This regulatory complexity crushes growth, picks winners and610losers, and denies opportunity to those who dare to dream of a611better future.612    If I have the honor of being confirmed, I'll leverage my613decades of business experience to champion America's614entrepreneurs. We'll cut red tape and modernize this agency615while restoring the accountability and transparency that616taxpayers deserve. I will crack down on fraud with a zero-617tolerance policy while shifting SBA's focus from Washington, DC618back to Main Street, across America.619    And if confirmed, I'll collaborate across government and620the private sector to deliver efficiency and results.621Importantly, we will responsibly and urgently meet the622challenge of disaster relief. I am committed to serving all who623are impacted from North Carolina to California to Hawaii.624    Each taxpayer dollar entrusted to the SBA should have an625economic multiplier effect, delivering productive capital to626grow manufacturing, strengthen rural communities, create jobs,627and develop critical technologies like AI and chips. I believe628we must continue to empower entrepreneurs from all walks of629life, including women and veterans.630    Above all, the SBA's founding mission needs urgent631restoration: empowering small businesses, and growing our632economy. That's exactly what the America First agenda does--by633ending inflation, cutting taxes, unleashing American energy634dominance, slashing regulation, and reining in waste, fraud,635and abuse across government.636    In the last four years, small businesses have lost ground637burdened by inflation, big government regulation and638uncertainty that threatens the very existence of Main Street.639President Trump's proven agenda will restore the small business640economy marking a return to ``Made in America''--with a golden641era of prosperity and growth.642    At the SBA, that means meeting today's dynamic challenges643alongside America's entrepreneurs, not by sitting in Washington644or working from home. We will honor their jobs by doing ours.645    Small businesses are the risk takers, job creators,646taxpayers, innovators, and the providers of first jobs. To647former waitresses like me, they represent the best of American648free enterprise. Like President Trump, I've signed the front of649a paycheck. We both understand there is nothing ``small'' about650small business.651    Chair Ernst, Ranking Member Markey, and committee members:652thank you for your dedication to small business. I welcome your653questions and I would be honored to earn your support to serve654as the next Administrator of the Small Business Administration.655Thank you.656    [The prepared statement of Senator Loeffler follows.]657    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]658659    The Chair. Thank you, Senator Loeffler for your testimony.660Before we move to questions, the committee has received several661letters of support for Senator Loeffler's nomination, and I ask662unanimous consent to enter into the record letters of support663from the following organizations.664    America's Small Business Development Centers, Independent665Community Bankers of America, Independent Women's Forum, Job666Creators Network, National Association of Development667Companies, National Retail Federation, Small Business Investor668Alliance, Small Business and Entrepreneurship Council, National669Association of Government Guaranteed Lenders, International670Franchise Association, National Restaurant Association, Georgia671Public Policy Foundation, Governor of Georgia--Brian Kemp,672Association of Women's Business Centers, Economic and Community673Development Institute, U.S. Black Chambers Incorporated, and674the National Small Business Association.675    [The information referred to follows:]676    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]677678    The Chair. Without objection, so ordered.679    So, at this time, we will go ahead and move on to680questions. So, I now recognize myself for five minutes of681questions.682    Senator Loeffler, in our conversation, you made it clear683that given your time in the Senate, you understand the role of684Congress. You denoted given your business experiences, you'd685view us as your board and the taxpayers as your shareholders,686with responsibilities to all of us to ensure the SBA moves687forward in the right direction.688    Unfortunately, the Biden Administration did not share this689view. I repeatedly requested information and those requests690were ignored or fumbled. Can you commit to provide this691committee with the documents and information at requests in a692timely manner?693    Senator Loeffler. Absolutely Chair Ernst. I look forward to694a collaborative and responsive relationship.695    The Chair. Yes, and I think that is essential to a good696partnership between Congress, the Small Business697Administration, and our constituencies. That's who we serve.698So, thank you for that.699    Last year, SBA failed to alert or provide the committee700with information before the agency ran out of funding for its701disaster assistance program. Can you commit to more702transparent, timely, and forthright dialogue between the SBA703and this committee should you become administrator?704    Senator Loeffler. Absolutely, Chair Ernst. This should705never happen again under my watch, it will not and we will work706to make sure that we have all the controls in place.707    The Chair. Thank you for that answer. I'd like to move on708to your goals and vision for the agency. Now, we know that it's709extremely important to me that we right size the SBA and get it710on a clear course to deliver its mission. Within your first 100711days as administrator, what would be your primary goals and712objectives to get the SBA back on track?713    Senator Loeffler. Thank you for the question, Chair Ernst.714And I too enjoyed the time that we were able to spend together715with you and your staff. I think your leadership of this716committee is critical and I appreciate the work that you've717done to date.718    I look forward to working with this entire committee toward719the aims of restoring the Small Business Administration, to720serving small businesses and supporting economic growth in this721country, that's our North Star. In order to do that, we must722have accountability at this agency--it's in dire need of723restoration, and that starts with shoring up the financial724situation.725    The fact that this agency has not been able to pass an726audit for four years is a disgrace. We must make sure that we727are accountable to taxpayers, that our programs are solvent and728working toward the aims of serving small businesses. So,729obviously, we're going to get our financial house in order and730do it quickly.731    And we're going to do that, in addition to making sure the732programs are working for small businesses and taxpayers, we733know that the core (7a) loan program is in need of oversight in734terms of understanding the rising delinquencies and defaults.735We will take a hard look at that. We will make sure that the736disaster funds are resourced and accounted for, and that there737are no more situations where Americans in a crisis are faced738with months of not having disaster relief.739    And then finally, we are certainly going to get this agency740back to work. I am grateful for President Trump's rapid action741through his executive order to return to work. We're going to742make sure that we have people at work committed to the success743of small businesses that have a heart for small business, but744also have that sense of accountability to taxpayers.745    The Chair. Thank you so much for that. And as you talk746about the audit, we know that we need transparency within the747Small Business Administration, and hearing that is music to my748ears. I began my elected career representing the taxpayers of749Montgomery County as their county auditor. And I'm just excited750to know that you will follow through on that commitment.751    As you know, I also serve as the Chair of the Senate DOGE752Caucus, and we have a public mandate and a very rare753opportunity to expose and roll back programs for what they754truly are, multimillion dollar boondoggles. SBA is not immune755to this, which provides us extraordinary opportunity to756streamline and disrupt the bureaucracies and their status quo.757Will you commit to examining programs to root out fraudulent758actors?759    Senator Loeffler. This is critical because we're over four760years past Covid. The last administration took a pass on761rooting out fraud in these programs. I appreciate your work and762your legislation, continuing Covid collections to make sure763that we go after those that want to defraud the government. As764I said, we'll have a zero-tolerance policy toward fraud, but765also toward waste and abuse. And we will root that out within766the agency and those that seek to exploit the programs.767    The Chair. Very good. Thank you very much, Senator768Loeffler. At this time, I will turn the gavel over to Senator769Curtis while I go vote. And I will recognize Ranking Member770Markey for your questions.771    Senator Markey. Thank you, Madam Chair, very much. On772Monday night, President Trump's budget office issued a memo773that directed agencies to cut off all federal spending outside774of payments to individuals. The Trump Administration issued775this order even though this spending was authorized and776appropriated by Congress and intended to benefit the American777people.778    So, my first question is very straightforward, do you779believe that this action by the President to cut off federal780funding, authorized and appropriated by Congress, was lawful?781    Senator Loeffler. Senator, I disagree with the premise of782your question because the money was certainly with regard to783the agency's discretionary in many cases. But I fully agree784with President Trump's decision to stop wasteful spend785spending, it resulted in a landslide victory that many786Americans were waiting for relief against excessive government787spending that has----788    Senator Markey. He froze all programs. He did not freeze789programs that had waste, fraud, and abuse. He froze all790programs. Do you think that's lawful that he can freeze all791programs?792    Senator Loeffler. With all due respect, I completely793disagree. Not all programs were frozen at all. He, specifically794in the OMB, called out programs related to illegal DEI programs795and programs that effectively linked to the Green New Deal that796picks winners and losers. And so, I think Americans breathed797the sigh of relief when they saw that the waste, fraud, and798abuse is going to get out of this government.799    Senator Markey. Wait, no, no. On the next day, OMB did put800out a statement saying, funds for small businesses are not801subject to the order. So, he did not single out all these802programs, initially. They were under this cloud of freezing all803programs, it had to be clarified. And that's good for small804businesses, but only for now. This uncertainty, the cloud,805which was placed over the head of small businesses across the806country, that could return at any moment. It's just a dangerous807precedent that the President set.808    I hope that you would hold President Trump to upholding the809law. And if President Trump asked you to do anything illegal or810unconstitutional in your role as SBA administrator, would you811say no?812    Senator Loeffler. Ranking Member Markey, the President is813not going to ask me to do that. I'm not going to create a814hypothetical situation here. I will faithfully uphold the law815and President Trump is fighting for Americans.816    Senator Markey. The President has already acted illegally817twice in the last five days. He fired Inspector----818    Senator Loeffler. I respectfully disagree.819    Senator Markey. He fired the Inspector General, that was820illegal under the law. He froze all funding on Monday night,821that was also against the law. So, it's not as though he won't822ask you to do something illegal, unconstitutional. He's been823doing it all week. And this is the first week. So, let me move824on. Since its creation in 1982----825    Senator Loeffler. Ranking Member, Markey, if I could, just826for the record, note that these were not illegal actions. I827support the President's actions, it's in his right to select828the members of the executive branch, that's what he was doing829and he certainly is in the right to stop wasteful spending as830the President.831    Senator Markey. No, no. The President violated a statute by832firing the Inspector General. It requires 30 days' notice, it's833a statute passed by Congress, signed by a President. It's a834violation of law. He does not have the ability to be a King, or835a dictator. He has to follow the law, Senator.836    Senator Loeffler. I believe there's precedent for this in837his right as the head of the executive.838    Senator Markey. Now, let me move on to SBIR which has had839staggering success across the country and especially in840Massachusetts. Overall, Massachusetts has received over 26,000841SBIR and STTR awards, $9 billion in funding. And I strongly842believe in these programs and their potential for just843supercharging our economy as those programs have in844Massachusetts and states all across the country.845    And when I met with you, you mentioned that SBIR awards846should be awarded on a merit basis. And I agree wholeheartedly847that merit drives innovation. So, will you commit to working848with me and the committee to ensuring that any SBIR/STTR849reauthorization effort maintains a merit-based process and does850not limit innovation?851    Senator Loeffler. Absolutely, Ranking Member, Markey, if I852have the honor of being confirmed, I will look forward to853working with you. And I know we have a lot of common ground in854support of small businesses, particularly the SBIR. And for855those watching, it's the Small Business Innovation Research856program that allows the United States to be at the forefront of857technological, biomedical, and other types of national security858related technology research and innovation that is so important859to this country. Thank you.860    Senator Markey. Okay. Thank you.861    Senator Curtis [presiding]. Thank you. And now I will yield862five minutes to myself. And I'm so pleased, Senator to have you863with us and we'll call you Senator, at least for now. When you864came into my office, I really appreciated the connection we865made about small businesses in our own lives, and in your866family's lives.867    And like many of the members here, we can all identify with868the statistics in our state, I don't think they're very869different, in mine, its 99 percent are small business, over870half of all the employees in the state are small business. And871it's such an important part of our economy, yet they often lack872resources and don't have some of the advantages of larger873businesses.874    And one of the things we discussed when you were in my875office is how to best hook up the resources of your876administration with those small businesses in our state. You877were generous, if I remember correctly, to offer to come out to878our state, and I'm getting a nod ahead, so I'm going to take a879yes for that. And I think as part of that, not just you coming880out, but helping educate my small businesses about what's881available to them and how they can access those. So, we'll look882forward to your visit.883    Senator Loeffler. Thank you, Senator. I'm very excited884about visiting your town, I'm excited to have you in the Senate885and appreciated meeting with you and your staff in the basement886office. I used to have a basement office. It's a great way to887start. [Laughter.]888    Senator Curtis. It's like a small business, right?889    Senator Loeffler. That's right. It's a small business.890    Senator Curtis. I think we talked about--I had a small891business before I came here. My father was a small business892owner. My grandfather was a small business owner. My daughters893and children have small businesses. And one of the things that894I don't think America realizes is that most of these small895businesses struggle just to keep the lights on, right? It's896hard paycheck to paycheck.897    They don't have a lot of money to do a lot of things other898people do. Part of that is they don't have the money for899lawyers and attorneys to deal with the excessive regulations900that sometimes we can put on them here from Washington, DC. And901as a result, I believe regulations are disproportionately hard902on small businesses.903    So, share with me for a minute what you can do to lighten904this burden and how do we make sure here in Washington that905we're not the biggest problem with small businesses?906    Senator Loeffler. Senator, thank you for recognizing that907vital issue to America's 34 million small businesses many who908have fewer than nine employees. And, you know, in answering909your question, I'd like to speak to small businesses in saying910you have someone that, if confirmed, will understand what it's911like to have a small business--to worry about meeting payroll,912let alone paying the bills for the small business, particularly913with the setbacks that small businesses have had in the last914four years, losing about 10 percent on the top line revenue915while seeing their costs increase by 20 percent due to916inflation.917    So, small businesses have lost ground. Now, the SBA can be918a way of helping small businesses combat what has been a tough919four years if we deploy the resources appropriately and920prudently so that the small businesses who need it most have921access to that, be it through capital, be it through technical922assistance or other ways of supporting entrepreneurship in this923country, which is so vital to our advancement on a global924stage, but also within our local communities.925    These are the businesses that sponsor the softball teams.926These are the businesses that provide that first job, and927they're the ones that never work from home. They show up, they928turn out their commitments to their customers, and that's929absolutely what we're going to do at the SBA.930    Senator Curtis. Great. I appreciate that. Looking forward931to working with you on that. Kind of a sister to that would be932just federal policy in general and we know we're going to be933talking about tariffs in the upcoming days. Once again, these934are disproportionately hard on small businesses, and we had935this conversation in my office too, would love to invite you to936work with the administration and the Senate as we move into a937world where tariffs are real reality, to figure out how to help938small businesses accommodate better to those tariffs', things939like a different runway timeframe and when those hit the small940businesses.941    Can you just comment on how we can deal with our small942businesses and what might be one of their most difficult943challenges?944    Senator Loeffler. Thank you, Senator. If I have the honor945of being confirmed, I will be a voice for small business. But946let me assure you, there is no bigger small business champion947than President Trump. He will make sure that small business has948a voice at the table. But I also think it's important that we949look at the data and not the hyperbole that happens sometimes950in the media.951    President Trump was successful in implementing tariffs in952his first term, but also successful at keeping inflation right953around that 2 percent mark, which really, you know, some facts954that the media always overlooks. So, you have my commitment955that small businesses will be considered in all the decisions956we make. And that's something that I know firsthand from957President Trump. He is their biggest advocate.958    Senator Curtis. I think I should yield my time. Thank you.959[Laughter.]960    The Chair. And thank you Senator Curtis for manning the961chair. I now recognize Senator Hirono.962    Senator Hirono. Thank you, Madam Chair. Mrs. Loeffler,963welcome. As part of my responsibility as a member of this964committee, as well as all the other committees on which I sit,965I ask the following two initial questions of all nominees who966come before any of my committees. So, I'll ask you, since you967became a legal adult, have you ever made unwanted requests for968sexual favors or committed any verbal or physical harassment or969assault of a sexual nature?970    Senator Loeffler. No, Senator.971    Senator Hirono. Have you ever faced discipline or entered972into a settlement relating to this kind of conduct?973    Senator Loeffler. No, Senator.974    Senator Hirono. During the pandemic, you opposed Planned975Parenthood Health Centers receiving PPP Loans for ideological976reasons even though, like other nonprofits, they were eligible977for loans as later determined by SBAs own inspector general.978Last week, the President fired the IG without proper notice as979required by law. And it's clear that President Trump believes980he can do whatever he wants. As the Administrator, should you981be confirmed, would you commit to implementing SBA programs in982a fair and impartial manner?983    Senator Loeffler. Senator Hirono, let me first say, I hope984that we could be able to meet, I'd requested several meetings.985I keep the people of Maui in my prayers. I know that they're986still struggling through the disaster that occurred about 18987months ago, and I hope that we can work together.988    But let me correct with all due respect both premises of989your question. I objected to the Planned Parenthood receipt of990Covid relief loans because they did not fit the parameters of991the program because of the affiliation----992    Senator Hirono. Actually, Mrs. Loeffler, you do know that993the IG took a contrary position. So, all I'm asking is whether994you can be fair and impartial in being the administrator of995SBA, a very important position. As you say, there are so many996small businesses throughout our country. So, just a simple997affirmation that you can do so is what I'm asking.998    Senator Loeffler. Senator, I will faithfully uphold all of999the laws and ethics rules.1000    Senator Hirono. Well, the thing is that, as I mentioned1001with President Trump, the laws that he likes are the ones he1002likes, and then the ones he doesn't like, he considers them to1003be illegal. But I will move on.1004    As a Senator, you co-sponsored the resolution, recognizing1005Brian Sicknick, the U.S. Capitol police officer, who was1006brutally attacked during the January 6th insurrection and who1007later died. As a result, last week, the President issued1008blanket pardons for the January 6th Insurrectionists, including1009those responsible for attacking Officer Sicknick. Do you agree1010with the President's decision to pardon these violent1011offenders? Yes, or no?1012    Senator Loeffler. Yes, Senator. I strongly support1013President's pardon. These individuals were denied due process1014and it's time to get past political persecution in this1015country. That's what Americans voted for.1016    Senator Hirono. Mrs. Loeffler, they were not denied due1017process because they were tried and found guilty, and some of1018them even admitted their guilt. So, I am disappointed that you1019agree that these violent, basically criminals, should be1020pardoned.1021    Then, we get to the Lahaina Wildfire. In 2023, Lahaina1022experienced wildfires that devastated the entire community,1023including schools, homes, businesses, and more. Key to their1024recovery has been what I've described as the federal family of1025agencies, which of course includes FEMA and SBA.1026    Last week, the President proposed eliminating FEMA and he1027said, ``Let the states take care of the tornadoes and the1028hurricanes and all of the other things that happen''. So, I1029have seen the devastation in Lahaina and the rural FEMA and SBA1030played in the recovery. The SBA itself provided hundreds of1031millions of dollars in loans to help the Lahaina recover. It1032would be a huge mistake to eliminate SBAs role in disaster1033response and relief, and have states fend for themselves.1034    Do you agree with the President's recent comments that1035states should be left to fend for themselves during and after1036natural disasters? That's another yes or no question.1037    Senator Loeffler. Senator, I disagree with the premise. The1038President strongly supports disaster relief. He was on the1039ground just last week in North Carolina.1040    I also mentioned Hawaii in my opening remarks, that we do1041support the continued relief there.1042    Senator Hirono. So, you support the continuing involvement1043of the SBA in recovery.1044    Senator Loeffler. Yes. And the President's been clear that1045individual assistance will not be paused.1046    Senator Hirono. I'm glad you do and that you support the1047continuing role, important role of SBA. When you were running1048for U.S. Senate, you----1049    The Chair. The Senator's time has expired,1050    Senator Hirono. Time flies. Are you having a second round?1051    The Chair. We can do a second round. Yes.1052    Senator Hirono. If not, I'll certainly submit questions for1053the record. Thank you.1054    The Chair. Thank you, Senator Hirono. Next, I will1055recognize Senator Budd for five minutes of questions.1056    Senator Budd. Thank you, Chair, Senator Loeffler,1057congratulations on your nomination. Thanks to your family and1058your friends for being here and for leaving your role in1059private work twice to serve our country. So, thank you for what1060you're willing to do.1061    Your state and my state and several others have gone1062through quite a lot since late September with Hurricane Helene.1063In the moments where I wasn't in Western North Carolina myself,1064I was able to see--if I was able to look up and see a1065television. It was you standing there, I believe it was in1066Valdosta with President Trump, committing that if he were1067reelected, he would support. He's lived up to that. He's been1068back to Western North Carolina. I believe he's our rebuilder-1069in-chief.1070    So, one of the things that we saw was that the SBA under1071President Biden, it failed to notify Congress in a timely1072manner about the depletion of the Disaster Relief Fund and1073didn't fulfill their reporting requirements along the way. So,1074if confirmed, how would you ensure timely and accurate1075reporting to Congress regarding disaster loan account balances1076and funding needs? And how would you address the transparency1077failures that we saw during the Biden Administration?1078    Senator Loeffler. Thank you for this important question,1079Senator. And let me assure you, my prayers are with the people1080of Western North Carolina. I know the President was there1081recently, and is truly the rebuilder-in-chief, as are many1082private enterprises in your own state, Samaritan's Purse, and I1083thank them for their dedication across the Southeast. And my1084prayers are with the people of Georgia and all impacted.1085    But let me say what happened on October 15th, when Congress1086was shocked by the news that despite assurances two days1087earlier, the disaster relief funding had run out. Now, in1088business, this would never be tolerated. And we see examples of1089this everywhere within this agency that I know we're all trying1090to get our arms around and make a quick correction on.1091    You have my commitment that we will ensure that disaster1092relief funding is there for hardworking Americans when they1093need it. And I look forward to your feedback on how the1094response has been so that we can strengthen the program and1095having the transparency so that this committee is routinely1096apprised of the status of the agency across all vectors that1097we're serving the American people on.1098    Senator Budd. Thank you for that. So, the SBA disaster loan1099program, you know, it's critical in supporting small1100businesses, as you've mentioned in a few of your earlier1101remarks and also being there to help communities during crises.1102But we have recent disasters like Hawaii or for us, Helene,1103that really revealed a lot of real shortcomings in the SBAs1104management and oversight of its disaster loan portfolio.1105    So, these have led to funding shortfalls, lack of1106transparency, administrative inefficiency that really hindered1107a timely disaster response and recovery. The people of Western1108North Carolina, I know of North Georgia as well, they felt1109these failures firsthand when they needed assistance. Most1110instead, they were left waiting due to the SBA's mismanagement1111during a time of dire need.1112    So, Senator, will you commit to working with my office, and1113this committee to address these shortcomings and ensure that1114the SBA is fully prepared to respond effectively to the needs1115of businesses in North Georgia, Western North Carolina, and the1116other states that are in need from disasters?1117    Senator Loeffler. Absolutely Senator, you have my1118commitment. Thank you.1119    Senator Budd. Senator, the numbers paint a troubling1120picture for small businesses. You know, there was a survey from11212023-2024. It was the Intuit QuickBooks Small Business Index,1122and it says that small businesses employment declined over112351,000 jobs. And it also said that revenue fell on average for1124those businesses about $12,000, that's a lot for a small1125business. So, and that's also the steepest year over year1126decline since the Obama administration of 2015.1127    That same time, the 2024 Goldman Sachs 10,000 Small1128Business Voices survey revealed that 77 percent of small1129businesses are deeply concerned about their ability to access1130the capital that they need to operate reliably. So, as you1131know, small businesses, it makes up the bulk of our economy. I1132think President Trump has said small business is big business.1133So, and this level of decline is, I would imagine, you would1134think as well is it's unacceptable. So, under President Trump's1135leadership, how can we expect to see a new golden age for our1136small businesses?1137    Senator Loeffler. Absolutely. Thank you for that question,1138because President Trump is restoring the golden era for all1139Americans by strengthening our economy, making our country more1140safe and secure, and ensuring wasteful taxpayer spending is not1141driving up inflation. Inflation is the number one problem, not1142only facing families, but small businesses. They're looking at114320 percent higher costs on at least 10 percent lower revenues.1144That's an unsustainable situation for our employers who are1145putting it all on the line. And small businesses have my1146commitment that I will have their back.1147    The Chair. Thank you, Senator Budd. I now recognize Senator1148Schiff for five minutes of questions.1149    Senator Schiff. Thank you, Madam Chair. It's an honor to1150serve on this committee and represent California's 4.2 million1151small businesses, including tech, startups, nonprofits,1152childcare centers, rural businesses, the arts and entertainment1153industry, and women and minority owned businesses. That number1154is growing daily, and I am very proud to represent these1155incredible business owners, innovators, and hardworking1156employees. Senator Loeffler, I appreciated the conversation1157that we had last week. I think it was last week. The weeks have1158seemed endless these days.1159    As you know very well, horrific wildfires and high winds1160have ravaged California over the last month, displacing1161thousands of families and destroying homes, schools, community1162centers, places of worship, and countless small businesses. As1163these fires have impacted the livelihood of innumerable1164Californians, it is crucial that we know California will have1165the full support of the federal government to respond, to1166recover, and to rebuild. And we must rebuild resiliently.1167    The SBA provides disaster assistance for homeowners,1168renters, nonprofits, and businesses of all sizes affected by1169natural disasters. I got to see this really in operation,1170visiting the Discovery Resource Centers in Los Angeles, in1171Westwood, and in Pasadena. SBA was on hand in large numbers to1172help small business owners and homeowners find what resources1173were available to them to help them recover and rebuild.1174    I do want to echo the concern raised by my colleague,1175Senator Markey, about the freeze on federal funding. I know1176there has been a subsequent statement saying that the freeze1177order has been lifted, but not the freeze. None of us really1178know how to make heads or tails of that. But what concerns me1179is that even if the administration says that help to1180individuals will not be affected by this, if federal funding to1181SBA is curtailed, then it means SBA cannot make loans to1182individuals and to small businesses. And at a time when1183California's desperately need that help, any delay, any1184uncertainty will just add additional injury.1185    I've also been distressed by some of the calls to condition1186funding to California. California has contributed more to the1187recovery of other states than any other state of the Union. And1188I want to ask you, first of all, to recommit to something we1189discussed privately, and that is to ensuring if confirmed, that1190all states, not just California, but all states, receive speedy1191relief for disaster victims and survivors without regard for1192whether a state is red or blue, or green, or yellow, or1193anything else. Are you committed to in a colorblind political-1194affiliation blind way, make sure that SBA assistance is1195speedily provided to small businesses in every state?1196    Senator Loeffler. Senator, I appreciated our time in being1197in your office and discussing this important matter. Obviously,1198my prayers are with California, but our efforts will be there,1199as well as President Trump demonstrated by his first official1200trip.1201    Typically, Presidents might fly outside the country. He1202went to California. He immediately appointed a task force,1203getting the very capable, Rick Grenell, involved. I think the1204President's actions have demonstrated his support for disaster1205relief. He's done it effectively in in his last term, and I1206will support his efforts and leadership to ensure the people of1207California have the resources they need under President Trump's1208leadership.1209    Senator Schiff. Well, let me just say I was grateful the1210President came to Los Angeles. I felt that if he saw the1211damage, he could not help but be moved, and I think and hope1212that he was. I am concerned, though, about some of the1213statements he has made about tying disaster assistance to the1214passage of completely unrelated voter ID laws, or frankly, any1215other unrelated policy matter.1216    Let me also raise the need to, not just with respect to the1217disaster in California, but elsewhere, make sure that the SBA1218is proceeding a pace with a sense of urgency, that it is1219efficiently and effectively processing loan applications. I1220realize the balance is difficult because you have to avoid1221fraud, and there was massive fraud among some who were applying1222for Covid relief. We do not want to see that repeated, but1223nevertheless, we don't want to see excessive delays either.1224    Frankly, I think firing the inspector general harms the1225ability to fare out waste, and fraud, and abuse. But are you1226committed to doing everything you can to provide speedy1227attention to SBA applications while providing at the same time1228safeguards to avoid fraud?1229    Senator Loeffler. Yes, I am Senator. Thank you.1230    Senator Schiff. Thank you, Madam Chair--or Mr. Chairman?1231    Senator Hawley [presiding]. Thank you very much, Senator.1232On behalf of the chair, I'll recognize myself. Senator1233Loeffler, it's great to see you. Thank you for being willing to1234do this job. As you and I discussed when we met in my office, I1235loved serving with you. You were a terrific Senator, and I'm1236just so glad that you're willing to do this job. It's going to1237be a great, great service to our country.1238    Let me just ask you a question or two, to start with, about1239the priorities at SBA. I noticed that on day one of his1240administration, the last President issued an executive order1241directing federal agencies to adopt a broad racial equity1242agenda. And that was particularly a focus of SBA over the last1243four years.1244    In fact, according to one report, by far, the largest1245program that uses racial preferences in the federal government1246is the 8(a) Program run by SBA. To be eligible for it,1247companies had to show various racial and other characteristics1248in order to access funding. A federal court in Tennessee ruled1249it unconstitutional. Another federal court struck down a1250similar requirement, also administered by SBA, the Restaurant1251Revitalization Fund.1252    Here's my question to you. President Trump has now,1253thankfully, with his own executive order, said we're going to1254put a stop to these DEI programs. How do you see implementing1255that at SBA, and will you get SBA refocused on actually helping1256small businesses no matter who the owner is, no matter where1257they are? There'll be no tipping of the scales in order to fit1258some bureaucrat's agenda. We're going to help those in need,1259get them stood up. We're going to execute on the mission of1260SBA. Tell us what you'll do about that?1261    Senator Loeffler. Senator, thank you. Thank you, and I1262appreciate the time we spent in your office discussing these1263matters. Importantly, President Trump's EO overturns a divisive1264and illegal DEI program that was spread throughout the1265government, and particularly within the SBA. This will allow us1266to reduce the burdens on small business for costly1267implementation of needless programs.1268    But moreover, I think the best way we can serve small1269businesses is making SBA lending available to all who qualify,1270as opposed to picking winners and losers, and pitting Americans1271against one another. So, you have my full commitment that we1272will root that out and make sure that it is broadly available1273to all who qualify.1274    Senator Hawley. That's a fantastic answer. I'm glad to hear1275it. And let me just ask you about another priority. While the1276last administration's Small Business Administration was focused1277on this DEI agenda, what it was not doing was helping people in1278rural areas of the country, like most of my state.1279    In Fiscal Year 2024, just to take one example, SBA made1280103,000 loans. Only 12,000 of those went to rural businesses.1281That's just over 12 percent of SBA's $56 billion in capital1282last fiscal year. Only $6 billion went to rural businesses.1283That's just 11 percent there. You want to talk about inequity?1284There's an imbalance between urban and rural.1285    And listen, we've got urban centers in my state as well.1286I'm all for small businesses in urban centers getting what they1287qualify for. But would you agree with me that our small1288businesses in rural America are extremely important? They're1289often the lifeblood of our communities. Like, the small town1290where I grew up, 4,000 people, relies on small businesses.1291    What will you do to make sure that small business in rural1292America is a priority? That they're getting access to the funds1293that they qualify for, and we're doing everything we can to1294help these small businesses revitalize these communities?1295    Senator Loeffler. Well, Senator, not only do I agree with1296you, I've lived it. I was raised in a family of fourth1297generation small business. My nearest town had 600 people in1298it, and my high school had 8 small towns. Many of my fellow1299students, parents, were small business owners. I saw the hard1300work that they did, the complexity of dealing with increased1301federal regulation even back then.1302    And we have to ensure that small businesses in rural1303communities are getting the support they need. I understand it1304firsthand. And I know that we can do better, and we will do1305better because this is an area that we can grow in terms of1306bringing manufacturing, ``Made in America'', again, can come1307back driven by rural America and paying attention to people1308that have been forgotten about. That's what President Trump1309does. He remembers the forgotten men and women working so hard1310in this country to make it work.1311    Senator Hawley. Fantastic. Well, I welcome your focus on1312this. I look forward to working with you. Let me ask you just1313about fraud, and waste, and abuse. And you've talked about this1314some. I think your answers have been very heartening. You1315remember, in fact, you referenced it at the height of the1316pandemic. Congress enacted this so-called CARES Act to provide1317very necessary relief to millions of Americans. We also, at the1318same time, created, however, a Special Inspector General to1319monitor any fraud and abuse in that program.1320    Now, for reasons that continue to elude me, the last1321administration, the last President when he came to office,1322almost immediately limited the remit of this Special Inspector1323General, then tried to effectively defund it. And now, we find1324out hundreds of billions of dollars were wasted or fraudulently1325dispersed, or not properly paid back under these programs.1326    Would you agree with me that we need the Special Inspector1327General, SIGPR, we need that office to be properly funded. We1328need it to be given the jurisdictional authority that it1329deserves. Senator Ernst has a bill to make sure that SIGPR gets1330that jurisdictional authority. Would you support that? And can1331you talk to us about the need to be rooting out fraud, and1332abuse, and corruption?1333    Senator Loeffler. Absolutely. Senator, if I'm confirmed, I1334look forward to working with this committee to have a higher1335standard of accountability, to act with more urgency, to have a1336zero-tolerance policy with regard to fraud, and to making1337taxpayers whole. We have to get back to that accountability and1338getting those funds back into taxpayer hands as soon as1339possible.1340    Senator Hawley. Very good. Thank you. And now, I'll1341recognize Senator Shaheen.1342    Senator Shaheen. Thank you. Congratulations, Senator1343Loeffler on your nomination, and thank you for your willingness1344to serve. Welcome to all your family and friends who are here1345with you this afternoon.1346    New Hampshire, like many of the states represented on this1347committee, has over 99 percent of its businesses who are small1348businesses. I certainly agree with the fact that small1349businesses are the lifeblood of this country. Two-thirds of1350jobs are created from small businesses. My favorite statistic1351about our small businesses is that they create 16 times more1352patents than large businesses. So, it's critical that we1353provide assistance to ensure that they thrive.1354    Now, I heard from one of our businesses in New Hampshire1355yesterday that sells agricultural equipment to universities,1356and they help research feed efficiency to help farmers. He was1357worried about the halt to funding this week. So, the order that1358freezes spending caused him to worry about his businesses. So,1359what would you say to that business owner so that they're1360reassured that their orders are going to continue?1361    Senator Loeffler. Senator, I appreciated the chance to meet1362with you in your office, and with your staff, and your1363leadership in this committee as well.1364    Certainly, the facts are that no individual assistance was1365or is part of that pause. What the President is rightfully1366doing is fulfilling his commitment that overwhelmingly1367Americans agree with, which is to root out waste, fraud, and1368abuse in spending programs. And it's not uncommon for1369Presidents to come in and put a pause on agency discretionary1370funds that could be contributing to the problems we have with1371debt, with inflation.1372    And there's no bigger champion of small businesses than1373President Trump. He's told me, personally, that small business1374is big business and he gets it. So, small businesses can be1375assured that they will have a champion in me as well. Having1376been raised in a small family business, I know the risks that1377small business operators bear every day, and we will ensure1378that they have a voice in this administration, and they do.1379    Senator Shaheen. Well, I certainly agree that it's1380reasonable to review how programs are working, and that we all1381should be in favor of getting rid of waste, fraud, and abuse.1382That doesn't help anybody. I think what's unprecedented about1383the current situation is the uncertainty that it creates for so1384many of the people who benefit from those programs, and the1385fact that it's so broad and far-reaching.1386    I enjoyed the opportunity to meet with you, and thank you1387for coming in and talking. One of the things that we discussed1388was the importance of our field offices within the SBA. And I1389was pleased that Chair Ernst mentioned the importance of1390ensuring that we keep people in the field offices and not1391reduce those staff members, because that's where so much of the1392help for our small businesses comes from.1393    So, can you reassure us that you will focus to make sure1394that the district offices have the support they need and are1395able to staff up in the way that helps our small businesses?1396    Senator Loeffler. Absolutely. Senator, if confirmed, I can1397assure you, we will put an emphasis on the field. And we have1398in the SBA 10 regional offices and then 68 field district1399offices. And the great aspect of this is we can be out with our1400entrepreneurs, with our small businesses, not only delivering1401capital, but the technical support and counseling that they1402need to succeed. Because we know that when small businesses1403have the counseling and mentorship that they need to fill in1404any gaps, they are more successful.1405    And I've heard so many great stories from small businesses.1406I know you hear them every day who rely on just that extra1407little help to become successful. I've seen them in our own1408community. So, you have my commitment. I look forward to1409visiting your state as well.1410    Senator Shaheen. Good. Thank you. We look forward to having1411you come to New Hampshire. One of the most important roles you1412will have is as a spokesperson for small businesses. I was1413pleased that President Trump continues to maintain the SBA1414administrator as a member of his cabinet. I think that's very1415important.1416    And one of the issues that I've been proud to work on that1417I think we need to continue to focus on for our small1418businesses is helping them access foreign markets. Because so1419many, 99 percent of markets, are outside of the United States,1420but only about 3 percent of small and medium-sized businesses1421do business outside of the United States.1422    I was proud to help create the State Trade Expansion1423Program, the STEP program. I would hope that, again, you would1424commit to continuing to support that program and helping our1425small businesses get into those international markets.1426    Senator Loeffler. Certainly. The STEP program is a very1427appealing program to understand how we can broaden our work1428with exports, and small businesses can play a tremendous role1429there. I look forward to working with you and the entire1430committee to see where we can broaden the export program and1431make this more efficient, and to deliver more wins for small1432businesses.1433    Senator Shaheen. Thank you. Thank you, Madam Chair.1434    The Chair [presiding]. Thank you, Senator Shaheen. I'll1435recognize Senator Young for five minutes.1436    Senator Young. Thank you, Madam Chair. Welcome, Senator1437Loeffler. It's great to see you here today. And congrats once1438again on this nomination. It's good to see your husband, Jeff,1439a Hoosier, fellow mid-westerner behind you as well.1440    When my father heard not only that I was elected to the1441United States Senate, but that I was going to sit on the Small1442Business Committee in the U.S. Senate, I can't tell you how1443excited he was. He perhaps perceived this to be known as the1444most powerful committee in the U.S. Senate. It's not always1445known for that, but it was the most important committee to my1446dad. Because when my dad was getting started in the business,1447he relied on SBA support loans in particular to help him grow1448his business. And for him, this was the most important1449committee.1450    And there's a certain wisdom to that as you travel around.1451As we travel around our various states, we see that most jobs1452these days are actually created, not by large enterprises,1453because those come and those go--they're great for ribbon1454cutting sometimes--but it's usually the smaller enterprises.1455    And to the extent we can optimize our policies so that more1456people will start these small businesses and they grow into1457larger businesses, that's kind of the key to economic1458development. So, really important post you're going to be1459occupying here. If confirmed, how are you going to work to keep1460our small businesses competitive today and resilient tomorrow?1461Kind of an open-ended question.1462    Senator Loeffler. Thank you, Senator. And I agree with your1463dad. I think I couldn't be more humbled by this awesome1464responsibility for small businesses that power our local1465communities, that do create two out of every three new jobs in1466America. That's incredibly powerful.1467    So, I think there's a number of things we can do to make1468small business more competitive. First of all, respecting that1469small business is about free enterprise and it's not about the1470government. So, we have to look at ourselves and say, what are1471we doing within this agency to make it harder for small1472businesses to access capital, to access perhaps government1473contracting or counseling.1474    Are we there for them? A big part of that is getting1475everyone back in the office, off the golf course, into the1476office, being aligned with our small businesses where they are1477on Main Street and not K Street. So, my focus is certainly1478going to be on the field activity. Making sure everyone in the1479agency's accountable, and making sure the programs actually1480work for small business. We'll be doing a deep dive.1481    Senator Young. So, I think, directionally, you're1482absolutely on the right course, and that's the most important1483thing, at this point. Do you have specific ideas about how SBA1484might be modernized and improved under your leadership?1485    Senator Loeffler. Well, certainly, I don't want to get1486ahead of myself. If I have the honor of being confirmed, I1487would look at a broad range of efficiency, both cost and1488technological efficiencies that could be gained. I'll be1489looking at organizational design. I'll be looking at skill sets1490and training that might be needed to deliver our services to1491increase our response times to small businesses. And we'll be1492metrics driven. We'll have goals, and we'll be reporting that1493out to this committee.1494    Senator Young. Well, I think there are members of this1495committee, count me in, who want to help you and the rest of1496the administration be successful as it relates to small1497businesses and the Small Business Administration.1498    One of the things that you might consider doing is1499prioritizing an incentive for new businesses and small1500businesses to adopt the latest technologies. I just had a great1501exchange with Howard Lutnick, the Secretary of Commerce1502nominee, and we emphasized the importance of digital trade,1503which he strongly supports, unlike unfortunately, the previous1504administration. But I think that's encouraging.1505    But I've related to the Small Business Administration, I1506found that many Hoosier small businesses rely on digital tools,1507but the law doesn't clearly state if these costs qualify within1508the 7(a) loan program. So, if someone wants to buy an AI1509technology, for example, it's unclear if the law will include1510that. So, I've introduced legislation along with Senators1511Rosen, Budd, and Shaheen, the Small Business Technological1512Advancement Act that would clarify and promote the purchase of1513digital tools with small businesses. If confirmed, would you be1514willing to work with me on this topic?1515    Senator Loeffler. Senator Young, absolutely. If confirmed,1516I would be. AI is at the forefront of both as President Trump1517said, a wakeup call to American innovation, but potentially as1518tools for automating small businesses, making them more1519efficient. And whether it's things like co-pilots or agents, I1520would support looking at that as a solution.1521    Senator Young. Well, thank you. And I will be submitting a1522question for the record on another important topic I know to1523you in our small businesses about how you intend to address1524bolstering SBA's cybersecurity infrastructure. Thanks so much.1525    The Chair. Very good. Thank you, Senator Young. Senator1526Coons.1527    Senator Coons. Thank you, Chair, and thank you, Senator.1528Great to be with you, and thank you to your family and those1529who are here to support you. As I hope you know, your1530predecessor in the this position, in the previous two1531administrations, I've had a particularly strong working1532relationship with. SBA Administrator McMahon came to visit1533Delaware several times. We worked well together.1534    I would agree, my dad said the same thing, to Senator1535Young's comment. My dad started and ran a small manufacturing1536business, and he thought this was the most exciting committee I1537could possibly be on. And it has been in the past, a very1538productive committee. My hope is that we will get back to1539churning out legislation that works with you, that we will1540appropriately authorize and appropriate funds, review funds and1541programs.1542    When we had a chance to meet two weeks ago, one of the1543programs I brought up was SCORE, which I suspect everyone1544knows, was founded in Wilmington, Delaware, thus, my obsession1545with SCORE. But I think one of the highest, federally-1546appropriated dollar for actual impact programs in history.1547There's more than 10,000 volunteers through SCORE who deliver1548roughly 4 million hours a year of free business plan1549consulting.1550    SCORE clients return $59 in tax revenue for every dollar1551appropriated to SCORE. It needs to be reauthorized. We need to1552look at it to ensure it's operating well and that there's1553accountability. Would you support SCORE and its1554reauthorization, and work with me to achieve a bipartisan1555reauthorization, if confirmed?1556    Senator Loeffler. Senator Coons, I thank you for the time1557shared in your office. I was also just delighted to hear now1558about your dad's sentiments. I agree. And I look forward to1559working with you to review SCORE, see how it can be made more1560robust, and to evaluating the program, and sharing all of that1561data with this committee so that we have a very collaborative1562approach to ensuring our efforts are making a difference for1563small businesses.1564    As you note, it's definitely had an impact, and we want to1565make sure that programs that work are made available to more1566entrepreneurs.1567    Senator Coons. Well, those 10,000 volunteers help more than1568300,000 entrepreneurs, so I'm very hopeful we can work together1569on that.1570    A piece of legislation, Senator Rubio and I, now Secretary1571Rubio, and I worked on for several Congresses was to help make1572sure that SBIR grantees actually produce commercialized1573technology. About half of SBIR awards lead to commercialize1574technology, but half don't. And this would specifically1575authorize some of the pre-market scale up costs through SBIR.1576It's called the RAMP for Innovators Act.1577    The SBA plays a critical role in coordinating SBIR1578activities across the whole government. I'd be interested in1579what your priorities would be for SBIR as a program, and1580whether you would help work with us on reauthorization and1581ensuring that it doesn't just fund endless research, but1582actually funds the leap to the marketplace.1583    Senator Loeffler. Absolutely, Senator. I think the Small1584Business Innovation Research grants are critical to solving1585some of the challenges America has in scaling our technological1586innovations quickly. The program gives more dry powder and1587runway to these important technological breakthroughs, whether1588in the area of bioscience technology, AI, drones, mission-1589critical things to our national defense. That would not be1590possible without the support of research institutions.1591    So, I look forward to collaborating with this entire1592committee on the reauthorization and reviewing the program for1593where it can be strengthened to produce more efficient results,1594and to highlighting some of the wins to ensure that these are1595wins that generate a powerful return on taxpayer investments.1596    Senator Coons. Another concern I've expressed in previous1597Congresses is the amount of federal contracting money that's1598going to small businesses. Small businesses continue to get a1599robust piece of the total federal pie. I think it's 28 percent,1600which exceeds the target, but it's for a smaller and smaller1601number of larger and larger small business firms.1602    I'd also be interested in working with you to make sure1603that we actually are contracting, federally, as broadly as1604possible to as many small businesses as possible. I think as1605literally every colleague has referenced, 98 percent of the1606businesses in my state, even in the State of Delaware, which1607has a whole lot of incorporation are small businesses.1608    Would you work with me to make sure that we achieve those1609goals in terms of small business contracting?1610    Senator Loeffler. Absolutely. Senator, I've confirmed I1611would like to work with you on that. I do agree that this1612program is vital for small businesses to have an awareness of1613and to have access to the program. If the programs become too1614complex that only a select few can find their way in, that1615voids the program's foundational beginnings.1616    So, I would look forward to working with the entire1617committee to ensure small businesses have an additional path to1618success. And I also wanted to acknowledge Administrator McMahon1619and her great work. And I hope that we can have the same1620constructive, collaborative great relationship working for1621small businesses. Thank you.1622    Senator Coons. I look forward to it. Thank you, Senator.1623    The Chair. Thank you, Senator Coons. Senator Husted.1624    Senator Husted. Thank you, Chair Ernst, and Ranking Member,1625and my fellow colleagues. Great to join you on the Small1626Business Committee. And, Senator Loeffler, congratulations on1627your nomination, and look forward to supporting you when your1628nomination comes to the Senate floor.1629    I know you are entering this job at a difficult time in the1630sense that there have been a lot of questions about fraud that1631occurred and loss of money that has occurred during the1632pandemic. And there will be an expectation of accountability,1633which there should be for every tax dollar we spend.1634    But at the same time, we know that speed is--you know, time1635is money in business, and small businesses, particularly during1636a time of natural disaster or when they're just really trying1637to be able to make ends meet, to keep the business open and1638they may need help from the SBA. So, that time is also so very1639important.1640    So, just give me some insights and to the committee as to1641how you expect to balance that accountability and speed?1642    Senator Loeffler. Thank you, Senator. And thank you for1643making time to meet in your first week here in the Senate. I1644enjoyed our conversation and know that small businesses have a1645champion based on your work in Ohio for them.1646    You ask a critically important question about1647accountability of these programs. Americans are expecting them1648to be there when they need them. When they're not, it creates1649yet another layer of uncertainty at a time of devastation, or1650at least uncertainty if you're forming a small business.1651    So, certainly, what we need to do is have a review of these1652programs, what's working, what's not working, and make sure1653that it's data-driven. That we look holistically across the16547(a) program, the Disaster Relief Program, and understanding1655what went wrong. What are the parameters of the program? Where1656have we gone outside the parameters and why, and what work we1657might do with Congress to strengthen these programs so that1658they're accessible.1659    Obviously, Chair Ernst has pointed out rising delinquencies1660in the 7(a) loan program, rising delayed payments or early1661defaults. And these are the types of things that red flags1662should be put up sooner. We need greater accountability in this1663agency, and certainly we can't find out two days later when we1664had assurances that there was a disaster fund ready for1665hurricane victims, that it's actually dry. That's an abuse of1666taxpayer dollars and of the program, and we need to get to the1667bottom of it.1668    So, you have my assurance that if confirmed, we will work1669closely to be a steward of taxpayer dollars be accountable to1670this committee. And I know President Trump strongly supports1671the small business community having the resources they need in1672an efficient manner that respects taxpayer dollars.1673    Because, let's face it, the 7(a) loan program, the bread-1674and-butter loans that small businesses use to start, is meant1675to operate at a zero subsidy. Meaning, taxpayers do not fund1676these programs. They should pay for themselves when they1677operate appropriately, and they generally do that. But we're in1678a position right now as this year starts that that may not1679happen. So, we need to investigate that.1680    Senator Husted. Great. One more thought. One of the things1681that I always talk to my team about is customer service. How do1682we serve people well? Are we listening to our customer? And1683then, what are they telling us, and how are we turning that1684information back to into change enhancements? Things like that,1685that we can do.1686    So, I'm interested in your thoughts on how you intend to do1687that, and then encourage you to let us know what you learn so1688that we can be better in what we do and how we serve those same1689customers.1690    Senator Loeffler. This is an area that I really look1691forward to getting into. The field program, the field operation1692that SBA has could be incredibly powerful to increasing1693responsiveness, to tailoring programs that are more efficient,1694to deliver resources to small businesses in a way that the1695original formation of the agency's attempt was meant to do.1696    So, I think, first of all, getting people back to work,1697getting people out in the field, tracking the data, and using1698that feedback loop. Looking at how long our case times are1699open, how long is a case open when someone comes to us with a1700question? How long do they have to wait on the phone for1701someone to answer it? When you're a small business person, you1702don't have any extra time. And I think what small businesses1703want to know is that there are people at this agency that1704understand the challenges and the complexities that they1705already deal with. And this agency doesn't need to be one of1706them. So, we want to be part of the solution, not the problem.1707    Senator Husted. Great. Thank you.1708    The Chair. Wonderful. Thank you, and welcome to the1709committee. Senator Rosen, five minutes, please. Thank you.1710    Senator Rosen. Thank you, Chair Ernst, Ranking Member1711Markey, for holding this hearing. And Senator Loeffler, when1712you came to the Senate, your office was a cross of mine from1713Russell. And I appreciate your service to the nation. You know1714how this place works and your willingness to serve again. And1715I, too, have had a great relationship with all the past1716administrators under both administrations because small1717business matters, and I look forward to having the same ones1718with you.1719    In our discussions, we talked about the challenges and the1720resources and just being able to get to the people who need it1721and help them do what is their dream or their idea, really1722important. So, Chair Ernst and I, we've had a bill out there1723for a while we talked about a little bit, too. It's on1724childcare, because childcare is so important and the rising1725cost of childcare, severe shortage of affordable options,1726they're really financially squeezing. Not just Nevada families,1727I would say families all over this country, urban and rural.1728    And lack of access to childcare. It's really a problem for1729small business and parents alike. And it creates barriers for1730people who want to start or even grow their business, right?1731And it makes it difficult for small businesses sometimes to1732retain employees because they struggle to find affordable1733childcare. So, this is why we know this crisis demands action.1734    And, yesterday, we reintroduced our bill, again, Chair1735Ernst and I, the Small Business Childcare Investment Act. Our1736bipartisan bill will increase the availability of affordable,1737high-quality childcare for working families by allowing1738nonprofits, your boys and girls clubs, your YMCA, your church,1739your mosque, your synagogue, whatever that is. I've even talked1740to senior centers in rural areas. They have a big footprint1741commercial kitchen. They said we're a place where the1742community, we could put up childcare, right?1743    And so, this program doesn't cost anything. It just lets1744down the guardrail so that nonprofits have the opportunity to1745apply for the same resources. And now they can put this1746affordable childcare. They're nonprofit, they don't need to1747make a profit. And we look forward to getting it over the1748finish line as quickly as possible.1749    And so, can you discuss a little bit how you feel about the1750childcare crisis, how it impacts small business, and are you1751open to SBA expanding access to resources and loans to1752nonprofits?1753    Senator Loeffler. Senator, thank you for the question, and1754appreciated our time together in your office to hear more about1755Nevadans' needs and how the SBA can be part of it. And I think1756childcare is a relevant issue in every single state across this1757country. Small businesses, particularly given the need to1758provide for childcare for the owner--like, if you're a small1759business owner or an employee, it cuts across every single1760person that touches a small business.1761    And I think small businesses can be part of the solution.1762And I'd love to work with you and Chair Ernst to review this1763potential solution and to look at other ways that the SBA might1764support parents and children as they work in small businesses.1765So, I look forward to those conversations and the input of the1766rest of the committee as well.1767    Senator Rosen. Thank you. And something we had a great talk1768about was our veterans and how entrepreneurial they are, and1769how much they take the things that they've learned at the1770military, and they can translate those to things when they come1771home.1772    And so, Nevada, we are home to over 200,000 veterans and1773over 23,000 veteran-owned small businesses. And despite this,1774Nevada was without, for the longest time, a dedicated in-state1775Veterans Business Outreach Center, easier to say VBOC, until17762023, when at my urging, we pushed the administration to have1777Nevada have its first SBA VBOC. And our veterans, our1778transitioning service members, they receive that tailored1779support they need. And like I said, we talked about it with1780your own dad and how he started his business. It was such a1781great story. So, I appreciate you shared that with me.1782    So, in the Fiscal Year 2025 budget, SBA requested an1783increase for veterans' outreach underscoring the importance of1784VBOCs and helping ease the transition from active duty to1785civilian life. So, under your leadership what do you see as the1786future for the Veterans Business Outreach Center and how it1787helps?1788    Senator Loeffler. Senator, I couldn't agree more. Our1789veterans need the support of the SBA. And if confirmed, I would1790love to work with all of you on how do we better support our1791veterans. As I mentioned, my father learned truck driving1792skills in the Air National Guard that resulted in our small1793trucking business. We know that veterans have untapped1794potential that we can help unleash. I will commit to working1795with this committee and even across this administration with1796Secretary Collins to ensure that our veterans have the1797resources that they so deserve.1798    Senator Rosen. Thank you. And I'll submit the rest of my1799questions for the record, but they're mostly on workforce1800development. We had a good chance to talk about how we train1801people right where they are, to give them the skills they need1802to stay in their communities and build back those1803neighborhoods, and diners, and all of that, wherever they are,1804and how important it is. So, I look forward to hearing back1805from you and working with you.1806    Senator Loeffler. Thank you, Senator Rosen.1807    Senator Rosen. Thank you, Madam Chair.1808    The Chair. Thank you, Senator Rosen. And we will start a1809second round of questions. I believe Senator Markey, our1810ranking member, has another question. Thank you.1811    Senator Markey. Thank you. And one of the benefits of being1812Chair or Ranking Member is all the other members leave, and1813they don't even know that there's a hearing that continues, and1814we get to ask more questions.1815    So, earlier, one of the Republican Senators asked you,1816Senator, about the DEI executive orders and mentioned the 8(a)1817business development program for socially and economically1818disadvantaged small businesses, that it was deemed1819unconstitutional. It was not deemed unconstitutional. The1820application process had to change and the program continues.1821    So, with that clarification, earlier, you said, Senator,1822that President Trump's executive order overturned DEI SBA1823programs. And, again, 8(a) for socially and economically1824disadvantaged small businesses, it's codified. So, in your1825opinion, does an executive order overturn a law that was put on1826the books by this committee on a bipartisan basis?1827    Senator Loeffler. Ranking Member Markey, thank you for the1828question. I think the important thing to note here is I support1829President Trump's executive order overturning DEI programs, but1830I've also committed----1831    Senator Markey. But can an executive order overturn----1832    Senator Loeffler [continuing]. To following the law----1833    Senator Markey. I'm sorry. Please, go on.1834    Senator Loeffler. Yes. I've committed to following the law.1835We will work with the administration to ensure that all1836Americans have access to the programs that exist in the Small1837Business Administration under the law, and we'll continue to1838keep this committee updated as to any modifications as we go.1839    Senator Markey. So, do you believe the law does, in fact--1840an executive order does, in fact, overturn a law passed by the1841House and Senate, and signed by a President? Is that your1842conclusion that President Trump is right and that all DEI1843programs are now removed?1844    Senator Loeffler. Ranking Member Markey, I've committed to1845you that I will uphold the law in all the programs, and we will1846communicate any changes to the programs to this committee.1847    Senator Markey. You believe that, therefore, that you're1848authorized to change DEI programs because of an executive1849order, even though it's statutorily mandated that those1850programs are on the books?1851    Senator Loeffler. I support President Trump's executive1852orders, and we will ensure that we follow the law in the1853administration of this SBA.1854    Senator Markey. Okay. Well, the Small Business1855Administration administers a number of programs that aim to1856level the playing field for entrepreneurs from underserved1857communities that have faced historical barriers to small1858business ownership due to discrimination and prejudice.1859    The programs that this committee has put on the books1860include the service-disabled, veterans-owned small businesses,1861women's business centers, and 8(a) business development1862programs for the disadvantaged. And these programs, and many1863others like them, are codified into statute, and recent actions1864by President Trump seek to rescind these so-called DEI1865initiatives.1866    But as Administrator, President Trump's executive order1867would also direct you to terminate diversity, equity,1868inclusion, and accessibility positions at SBA. And in light of1869that, we just have to remember that executive orders cannot1870change or rescind Congressional mandates. We are the Article 11871branch of government.1872    When those red coats were going down Massachusetts Avenue1873in Massachusetts, and the Minutemen and women came out in1874Lexington and Concord, they were saying no taxation without1875representation. They already had a King. They could pick a1876Prime Minister or a President, but they were going to have a1877House and Senate, which is why we're Article 1 in the1878Constitution. That's what the Minutemen and women all across1879our country were fighting for.1880    And so, Trump might think he can overturn what we do here,1881but that's what the revolution was all about. It was about1882having representation on this committee. And you may say that1883you're going to support him and that he's the law, but he's not1884the law. And I just want to continue this conversation with you1885because I just think that there has to be an understanding that1886supporting women-owned businesses----1887    Senator Loeffler. Senator, I can assure you I will1888support----1889    Senator Markey. Do you believe supporting women-owned1890businesses is DEI?1891    Senator Loeffler. Senator, I've never said that. Senator, I1892can assure you that I will uphold the law. I was a women-owned1893business. I had a majority, minority women-owned business for a1894decade. I understand the importance of it. By having a well-1895functioning agency is the best way that we can assure that1896there is more access to these programs by a diverse range of1897communities without picking winners and losers. That's what the1898American people want. That's why President Trump won in a1899landslide, because the American people want fairness and merit1900brought back. And you and I have discussed that in your office.1901That's what this country's about.1902    Senator Markey. But you do understand that it has to be the1903Congress that changes the laws, it can't be done by executive1904order?1905    Senator Loeffler. Yes, Senator, I will uphold the law.1906    Senator Markey. Okay. Thank you.1907    The Chair. Thank you, Ranking Member Markey. And I'll make1908some comments to this discussion as well. And we know that1909there are many programs that are codified. They are in law. And1910you will uphold the law, and I appreciate that answer.1911    Unfortunately, what we did see during the Biden1912Administration was through a lot of supplemental movement from1913the administration, they did put into place different DEI1914programs within the SBA. So, the executive order is likely to1915immediately roll back the Biden era DEI mandates that were1916supplemental, but those that are not legally binding.1917    So, yes, I anticipate that you will follow the law, Senator1918Loeffler, should you be confirmed, and you're well on your way.1919I will assume your confirmation, not you. But again, there are1920many things that President Biden took within his own action,1921his own prerogative, within the SBA, that was not codified nor1922approved by this committee.1923    So, we will ensure that you follow the law, Senator1924Loeffler. But certainly, we can roll back the things that were1925unilaterally done by President Biden in the SBA. Thank you. And1926I will recognize Senator Cantwell for five minutes.1927    Senator Cantwell. Thank you, Chair Ernst, and1928congratulations on taking over the chairmanship. Great to see1929you there, and look forward really. Such a big integration1930between small businesses in the State of Washington, and our1931military and Hanford cleanup. And so, really great lessons that1932I think could be applied broader to other areas of the1933government.1934    And great to see our new Ranking Member, Senator Markey. I1935know I probably feeling ancient at the moment, but it's not1936that long ago when Senator Kerry was the chair of this1937committee, and he brought a lot of energy to the SBIR and other1938important technology startup issues that were a big part of the1939discussion at that time. So, look forward to working with both1940of you on the committee.1941    And it's good to see my former colleague again,1942congratulations on your nomination. You and I had a chance to1943talk briefly in the office. I wanted to bring up a couple of1944things. One, we had this question to Mr. Lutnick today at our1945Commerce hearing, but do you support the Minority Business1946Development Authority?1947    Senator Loeffler. Senator, thank you for your time in your1948office. I enjoyed our conversation. Certainly, I appreciate1949that program that the Commerce Department runs and see that1950there's potential for collaboration between SBA. I really do1951support working across the administration to ensure our1952resources are utilized and we don't have overlap in our1953programs, and that they're serving Americans who need those1954services the most.1955    Senator Cantwell. Thank you. And will you work with me to1956make sure that the Department of Agriculture meets this same1957small business, set aside challenge that DOD has so1958successfully done, but in this case, the Department of1959Agriculture really isn't giving our small mills the access that1960they need. And so, will you work with me to make sure that1961those important SBA issues are addressed at the Department of1962Ag?1963    Senator Loeffler. Senator, I appreciate our conversation1964about your timber business. I think, if confirmed, I would look1965forward to working with Secretary Rollins to ensure that we1966have a collaborative relationship. I understand there was1967previously an MOU with the Department of Agriculture and hope1968that we can collaborate to support small businesses in that1969regard as well.1970    Senator Cantwell. Thank you so much. I appreciate that. And1971when it comes to--let's just carry that on. One of the reasons1972why we want this infrastructure is because if you think about1973reducing the fuel that we need, and some of the ideas like1974cross-laminated timber, you need to have the mills in those1975regions. And so, to get the mills, you have to have the1976agreement that you're going to give them some supply.1977    But now, look at the disaster we just saw in, you know,1978California. And we realized the situation is--we already knew1979this in the Northwest, we've had our share of pretty big1980dramatic fires. But there was a border crossing issue in Sumas1981where a town was flooded, and then a town of Malden where a1982fire wiped through the town. You know, over 300,000 acres1983burned in wildfires in my state, just in 2024.1984    So, how do we make sure that we keep politics--I feel like1985so much politics happened on federal funding in the last few1986years. How do we keep the politics out of it and disagreements,1987and make sure--there was a case on the Malden Fire where it was1988delayed for months about a disagreement between the President1989then and our governor. And it took a new administration. And1990this was even though Cathy McMorris Rodgers and I were working1991together to say, let's do these funds. And how will you help us1992make delivering disaster assistance urgently without all this1993noise that we're hearing?1994    Senator Loeffler. Senator, I appreciate the question. And I1995think, certainly, your state has had its share of disaster. You1996had the bomb cyclone in November and ongoing recovery from1997that. I think Americans were stunned by the politization of the1998hurricane response under FEMA where they refused to go to homes1999with Trump support, Trump signs in the front yards.2000    Americans want to see the end to that. We should not be2001politicizing our disaster response. I think that that's2002something that we have to restore confidence in. And certainly,2003the SBA will be working with the Trump Administration to2004restore integrity to the relief efforts.2005    Senator Cantwell. I don't know whether the chair has had2006this issue, but probably because there's disasters everywhere.2007And that is this whole debate about the way the funding model2008works currently in taking care of communities who've2009experienced disasters.2010    The urban communities, because they have density, are taken2011better care of. And the rural areas--although a rural community2012is a rural community, Sumas is an example. It's right by the2013border. It hangs together. If Sumas isn't there, I'm not sure2014we can sustain that border. What'll happen is it'll get closed2015down. And then what? All the traffic will then have to go down2016I-5. So, it's a bad idea. Or in the Mukilteo, we had an economy2017that was devastated and people were like, ``No, we're not going2018to help you because you don't really have the same ratio.'' I'm2019like, it's a juggernaut of an economy. Just because it doesn't2020have density doesn't mean that it isn't a big problem.2021    So, the GAO concluded that the SBA needs to recognize that2022rural communities experience disasters differently--not really2023differently. They're devastated, just they're not in the same2024density. So, as we consider how to make SBA loans for small,2025vulnerable, rural communities more viable, do you think2026businesses and homeowners--we want them to return to these2027areas. We don't want to see a community--in our case, these are2028communities that sit on close proximity to the Cascades, but2029they're a huge tourism economy for the whole state. So, they2030have a big footprint.2031    So, what are your thoughts on how we implement this SBA2032change, working with our colleagues to get a better recognition2033of the economic impact that disadvantages rural communities?2034    Senator Loeffler. Well, Senator, I would love to work with2035you on that, to visit your state, to understand the dynamics2036there. I grew up in a rural community. I understand the unique2037characteristics of delivering relief. I mean, we lived in the2038heartland, lived through tornadoes, hailstorms, and other2039devastating efforts that of recovery together as a community.2040And often, the TV cameras weren't there. You're recovering on2041your own.2042    So, how can we better ensure that disaster relief isn't2043based on, as you mentioned, any politics or media profile, but2044where the relief is sorely needed to prop up and strengthen the2045economic stability of that tax base of the community, the2046culture, the people, the generations that live there, and the2047industry that it supports. So, I'd love to work with you on2048that, if confirmed,2049    Senator Cantwell. Thank you. Is my time expired, Madam2050Chair?2051    The Chair. Yes.2052    Senator Cantwell. Thank you so much. Sorry to go on. But2053those are very important issues, and I so appreciate the2054opportunity to ask them and look forward to working on these2055with you.2056    The Chair. No, thank you, Senator Cantwell, and I would2057enjoy working with you on that as well. Because, yes, in the2058State of Iowa, we have had challenges with disaster recovery2059and the cost to benefit ratio. We have struggled this with this2060for a very long time because of our rural areas.2061    And just for the audience, if I can take the chair's2062prerogative here and share with you. We have many disasters,2063flooding, in particular in Iowa, where many restaurants and2064downtown rural communities are destroyed. But the cost to2065benefit ratio is never high enough for the federal government2066to come in and provide that level of assistance.2067    However, if a restaurant on an Eastern or Western Coast,2068you know, along the ocean is destroyed, well, of course the2069cost to benefit ratio is going to be higher. The cost of that2070restaurant is much higher. So, they are the ones that are2071likely to receive the disaster assistance, but not those of us2072that are in the Midwest.2073    A home of one size in Iowa is much cheaper than a home on2074the coast, but it's still someone's home. It's still someone's2075business. So, I think that we have a lot of work to do in this2076area, and I'd be happy to partner with you on that, Maria.2077    Senator Cantwell. Well, thank you, Madam Chair. And I think2078the added thing that people don't realize is that it also is a2079economy that generates a lot of revenue for absolutely your2080state. It could be an Ag economy, it could be a tourism2081economy, it could be a community that offers something2082different.2083    But if you take that out of the middle of your state or2084wherever it is because the ratio just hasn't been addressed2085correctly, then we're losing out on that big economic picture.2086So, we have to get people to realize that that relationship to2087the state overall should somehow be considered in the ratio.2088    The Chair. Yeah, absolutely. Thank you for that input,2089Senator Cantwell. And a number of issues were addressed today2090during this really productive hearing. And thank you for being2091here, and I want to thank President Trump for your nomination2092to the Small Business Administration. I look forward to working2093with you upon your confirmation into this position. And because2094there are no other questions, I again want to thank you very2095much for your willingness to serve, and to be here today, and2096for your family's support of you in this position.2097    We are going to leave the record open until close of2098business tomorrow at 5:00 p.m. Thursday, January 30th, for2099members to submit questions for the record. And we will keep2100the record open for two weeks to edit statements, and submit2101letters, and any other relevant materials. Without objection,2102so ordered. Senator Loeffler, we would appreciate your prompt2103response to any additional questions that are submitted. With2104that, the Committee on Small Business and Entrepreneurship2105stands adjourned.2106    [Whereupon, at 5:29 p.m., the hearing was adjourned.]2107   [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]21082109                           [all]