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Luetkemeyer: Strengthening Job Creators and SBA Programs
WASHINGTON, D.C. – Today, the House Committee on Small Business is holding a hybrid markup of legislation to amend the Small Business Act and the Small Business Investment Act.
Ranking Member Luetkemeyer's opening statement as prepared for delivery:
Good morning and thank you, Madam Chair, for holding this markup on legislation that will help strengthen our nation’s job creators and the Small Business Administration’s programs.
The SBA, along with many other federal agencies, raced to assist the nation as COVID-19 descended upon America. Through the quick action taken by the Trump administration and Congress, numerous small business relief programs were created to help our nation’s smallest firms survive the pandemic as well as the state and local shutdown orders that followed.
Many of these programs, including the Paycheck Protection Program (PPP), proved to be a lifeline during many months of uncertainty. The PPP proved to be a major success due to its partnership with private sector lenders to get money to struggling small businesses more quickly and efficiently.
With that being said, while our country continues to move toward recovery, many of the SBA’s COVID relief programs are nearing completion. For example, the over 11 million loans disbursed under the PPP are now going through the PPP loan forgiveness process.
Although the PPP has been and continues to be successful through private sector lending, other programs have been hampered with countless instances fraud, bureaucratic delays, and constitutional questions.
According to the SBA’s Inspector General, the Economic Injury Disaster Loan (EIDL) program, which is a direct lending program through the SBA – not private lenders, has been subject to rampant levels of fraud and abuse.
Additionally, the Shuttered Venue Operators Grant (SVOG) program has been plagued with inexcusable delays while the Restaurant Revitalization Fund (RRF) has been ruled unconstitutional due to bias priority groups that Democrats created in the enacting legislation.
Nevertheless, our nation’s small businesses, entrepreneurs, and startups continue to face extreme obstacles throughout their recovery due to Democrat-induced inflation, a looming labor crisis, and the potential for increased taxes for the middle class. These headwinds are putting Main Street USA’s recovery in jeopardy. We must fix these issues to protect the American worker.
On that note, I look forward to working with all of my colleagues today and going forward to discuss pro-growth policies that will produce an environment where small businesses can operate independently, without the government standing in their way.
While we have these debates, it is critical that we also ensure the SBA’s traditional programs are operating efficiently and effectively. And that is what brings us to today’s markup.
In bipartisan fashion, Members on both sides of the aisle considered and have identified areas where this Committee can adjust existing SBA programs to better position small businesses. Many of these bills were in the works in previous sessions of Congress but some take a new approach to provide increased oversight of the SBA’s programs.
Within the SBA’s lending programs, the Small Business Investment Company (SBIC) program, continues to provide small businesses across the United States with access to capital. Today’s SBIC legislation will provide even more access to capital by examining the role of banks and other savings institutions within the program.
Beyond the SBIC program, we have two bills that examine the role of loan agents within the SBA’s 7(a) Loan Program. The 7(a) Loan Program is the SBA’s largest traditional lending tool and provides access to capital to small businesses that cannot find credit elsewhere.
As the SBA continues to use more loan agents within their programs, it is essential that the agency has a clear view of how these agents operate. According to an October 2020 report, the SBA’s Inspector General stated, “Previous OIG audits and investigations have shown SBA could not effectively identify and track loan agent involvement in its 7(a) and 504 loan portfolios and had outdated enforcement regulations. OIG investigations have also revealed a pattern of fraud by loan packagers and other fee-based agents in the 7(a) loan program, involving hundreds of millions of dollars.”
The bills before us by the gentleman from Pennsylvania, Mr. Meuser, and the gentleman from Minnesota, Mr. Phillips, will focus on loan agents and examine the SBA’s oversight capabilities. The discussion on loan agents will not end today. I look forward to exploring their role within this program and other SBA programs moving forward.
When it comes to our veterans, the Boots to Business program is an important resource available to the men and women who have valiantly served our country. I commend the gentleman from Texas, Mr. Williams, and the gentleman from Illinois, Mr. Schneider, for continuing the Boots to Business effort during the 117th Congress.
Lastly, the Committee will examine three separate cyber security bills that will address the needs of small businesses as well as ensuring that the SBA has a safe and sound cyber infrastructure network.
As we all heard at our cyber hearing last week, America’s smallest firms are increasingly vulnerable to the exploits of cyber criminals. Often, a cyberattack on a small business results in permanent operational damage to its ecosystem. We must have the structure in place to assist these small businesses through difficult times and educate small business owners on the tools available to protect them from these cyberattacks.
Again, I would like to thank the Chair for bringing these bills through the Committee. I support the approach taken by Committee Members in addressing these issues, and I yield back.
Ranking Member Luetkemeyer's opening statement as prepared for delivery:
Good morning and thank you, Madam Chair, for holding this markup on legislation that will help strengthen our nation’s job creators and the Small Business Administration’s programs.
The SBA, along with many other federal agencies, raced to assist the nation as COVID-19 descended upon America. Through the quick action taken by the Trump administration and Congress, numerous small business relief programs were created to help our nation’s smallest firms survive the pandemic as well as the state and local shutdown orders that followed.
Many of these programs, including the Paycheck Protection Program (PPP), proved to be a lifeline during many months of uncertainty. The PPP proved to be a major success due to its partnership with private sector lenders to get money to struggling small businesses more quickly and efficiently.
With that being said, while our country continues to move toward recovery, many of the SBA’s COVID relief programs are nearing completion. For example, the over 11 million loans disbursed under the PPP are now going through the PPP loan forgiveness process.
Although the PPP has been and continues to be successful through private sector lending, other programs have been hampered with countless instances fraud, bureaucratic delays, and constitutional questions.
According to the SBA’s Inspector General, the Economic Injury Disaster Loan (EIDL) program, which is a direct lending program through the SBA – not private lenders, has been subject to rampant levels of fraud and abuse.
Additionally, the Shuttered Venue Operators Grant (SVOG) program has been plagued with inexcusable delays while the Restaurant Revitalization Fund (RRF) has been ruled unconstitutional due to bias priority groups that Democrats created in the enacting legislation.
Nevertheless, our nation’s small businesses, entrepreneurs, and startups continue to face extreme obstacles throughout their recovery due to Democrat-induced inflation, a looming labor crisis, and the potential for increased taxes for the middle class. These headwinds are putting Main Street USA’s recovery in jeopardy. We must fix these issues to protect the American worker.
On that note, I look forward to working with all of my colleagues today and going forward to discuss pro-growth policies that will produce an environment where small businesses can operate independently, without the government standing in their way.
While we have these debates, it is critical that we also ensure the SBA’s traditional programs are operating efficiently and effectively. And that is what brings us to today’s markup.
In bipartisan fashion, Members on both sides of the aisle considered and have identified areas where this Committee can adjust existing SBA programs to better position small businesses. Many of these bills were in the works in previous sessions of Congress but some take a new approach to provide increased oversight of the SBA’s programs.
Within the SBA’s lending programs, the Small Business Investment Company (SBIC) program, continues to provide small businesses across the United States with access to capital. Today’s SBIC legislation will provide even more access to capital by examining the role of banks and other savings institutions within the program.
Beyond the SBIC program, we have two bills that examine the role of loan agents within the SBA’s 7(a) Loan Program. The 7(a) Loan Program is the SBA’s largest traditional lending tool and provides access to capital to small businesses that cannot find credit elsewhere.
As the SBA continues to use more loan agents within their programs, it is essential that the agency has a clear view of how these agents operate. According to an October 2020 report, the SBA’s Inspector General stated, “Previous OIG audits and investigations have shown SBA could not effectively identify and track loan agent involvement in its 7(a) and 504 loan portfolios and had outdated enforcement regulations. OIG investigations have also revealed a pattern of fraud by loan packagers and other fee-based agents in the 7(a) loan program, involving hundreds of millions of dollars.”
The bills before us by the gentleman from Pennsylvania, Mr. Meuser, and the gentleman from Minnesota, Mr. Phillips, will focus on loan agents and examine the SBA’s oversight capabilities. The discussion on loan agents will not end today. I look forward to exploring their role within this program and other SBA programs moving forward.
When it comes to our veterans, the Boots to Business program is an important resource available to the men and women who have valiantly served our country. I commend the gentleman from Texas, Mr. Williams, and the gentleman from Illinois, Mr. Schneider, for continuing the Boots to Business effort during the 117th Congress.
Lastly, the Committee will examine three separate cyber security bills that will address the needs of small businesses as well as ensuring that the SBA has a safe and sound cyber infrastructure network.
As we all heard at our cyber hearing last week, America’s smallest firms are increasingly vulnerable to the exploits of cyber criminals. Often, a cyberattack on a small business results in permanent operational damage to its ecosystem. We must have the structure in place to assist these small businesses through difficult times and educate small business owners on the tools available to protect them from these cyberattacks.
Again, I would like to thank the Chair for bringing these bills through the Committee. I support the approach taken by Committee Members in addressing these issues, and I yield back.
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