The purpose of the hearing is to examine the challenges faced by the SBA in response to "Superstorm" Sandy, including a discussion of a September 2014 report by the Government Accountability Office.
Chairman Steve Chabot (R-OH)
Additional Items:Read More
The hearing examined the General Services Administration's March 5, 2015 Proposed rule on transactional data reporting.
Chairman Richard Hanna ( R-NY)
Chabot on Supreme Court Obamacare Decision
WASHINGTON - Small Business Committee Chairman Steve Chabot (R-OH) made the following statement in response to the Supreme Court's decision on King v. Burwell:
"For last 5 years, Washington has tried to figure out what’s actually in Obamacare. If you really want to understand Obamacare, you don’t have to sift through the thousands of pages of poorly designed--and ineptly implemented law--you just have to look at your premium statement. You have to look at your health care bills. Americans and small businesses tell us every day how this law is burdening them. So while Washington continues to interpret, we will continue to act on solutions that empower families and American workers."
Senior VA Official Exposes Gross Mismanagement and Fraud
“Massive violations of public trust continue unabated”
WASHINGTON-At a joint hearing hosted by the Small Business and Veteran Affairs’ investigatory subcommittees held Tuesday, a senior official and whistleblower at the U.S. Department of Veteran’s Affairs (VA) revealed more details about how the Department broke the law in hiding billions in spending from the public and deprived small businesses of the opportunity to compete for contracts.
Mr. Jan Frye, the Deputy Assistant Secretary for Acquisition and Logistics at the Department of Veterans Affairs described the manipulation and misreporting of contract dollars as “one of the most deceptive schemes” he has seen in his 41 years of government service.Specifically, he alleged that $6 billion to $10 billion in procurements were being concealed in an attempt to inflate the Department’s small business goaling numbers. As a result of this fraud, the Department received an “A” rather than the “D” or “F” they earned using the actual numbers. Small businesses lost out on at least 200,000 contracts.
“VA senior leaders have willfully violated the public trust, debasing federal procurement and financial laws,” said Frye. “We have senior-leader integrity malaises [at the] VA. Like substance abusers before the journey to recovery, [the VA] will not be cured until we admit we have a disease… We are guilty… we have deceived the veteran-owned small-business community, while violating federal laws.” He also noted that these “massive violations of public trust continue unabated.”
Small Business Subcommittee Chairman Cresent Hardy (R-NV) issued the following after the hearing:“Based on what we heard today, it is evident that the VA and the Obama Administration have failed our veterans, small business owners and the American taxpayer. If the VA had followed the law, small businesses – including many veteran and service-disabled veteran-owned small businesses— would have had the opportunity to compete, which would have saved money and allowed more services to be provided to our veterans. Instead, the VA simply ignored the law.”
Mr. Thomas Leney, the Executive Director at the Office of Small and Disadvantaged Business Utilization at the VA disputed the allegations claiming that the department had not broken the law, but simply conducted “improper accounting.” Later, it was also revealed that Mr. Leney received nearly $9,000 in performance bonuses in Fiscal Year 2013 that were based on those misreported numbers.
“Because of this hearing, we now know that the VA awarded bonuses based on false pretenses – inflated numbers,” said Small Business Committee Chairman Steve Chabot (R-OH). “It’s no different than a student cheating on a test to get a better report card. Our committees will continue to investigate these issues so that we can hold those responsible for this fraud to account and improve the services earned by our veterans.”
Click HERE for more information on this hearing.
On Tuesday, June 23, 2015, at 4:00 p.m., the Committee on Small Business Subcommittee on Investigations, Oversight and Regulations with the Veterans Affairs Subcommittee on Oversight & Investigations held a joint hearing titled, "Manipulation and Fraud in the Reporting of VA Small Business Goals." The hearing was held in Room 334 of the Cannon House Office Building.
The purpose of the hearing was to examine manipulation and fraud in the reporting of VA Small Business Goals.
Chairman Cresent Hardy (R-NV)
Small Business Committee Welcomes New Member Trent Kelly
WASHINGTON—The newest member of the House of Representatives has joined the Committee on Small Business. Congressman Trent Kelly (R-MS) will serve on the Economic Growth, Tax, and Capital Access and Contracting and Workforce Subcommittees.
Chairman Steve Chabot (R-OH) welcomed Congressman Kelly to the Small Business Committee, saying, “Congressman Kelly knows what it takes to inspire and empower the next generation of innovators and leaders because that’s what he’s been doing for nearly three decades in the Mississippi Army National Guard. His service in the military and as a district attorney gives him a valuable and unique voice, and we’re lucky to have him.”
“I am proud to have the opportunity to represent the First District of Mississippi on the House Small Business Committee,” said Congressman Kelly. “It is vital to our economy that small businesses have the tools they need to spur economic growth and increase job creation in our communities. I look forward to being a voice for Mississippi on the Economic Growth, Tax and Capital Access and Contracting and Workforce Subcommittees to promote policies that reduce burdens on small businesses and make it easier for American families to successfully start and run a business. I thank Chairman Chabot for this opportunity, and I look forward to working with him and the members of the committee.”
Who’s in-charge of overseeing the SBA? An Interview With Chairman Chabot
by Marc Prosser
The House Small Business Committee oversees the Small Business Administration. Recently, the Committee acquired a new Chairman, Congressman Steve Chabot of Ohio. While new to the chairmanship, Congressman Chabot has been serving on the Committee for 19 years.
I had the chance to interview the Chairman on a late Friday afternoon. As I am not a reporter from a big national publication or a local Ohio news outlet, the very fact that the Chairman wanted to do the interview suggests how important communication with the small business community is to him.
The responses below are from the Congressmen. Text in italics are not from the Congressman but provide context for the question or remarks.
In our conversation, the Congressman talked about the frustration of his constituents with the SBA loan application process. He mentioned that many of his constituents had to spend days putting together the application, and then wait weeks or even months to hear back on the status of their application.
SBA loan processing is time and labor intensive, but it doesn’t need to be. We live in a time when technology is making things more efficient every day. The SBA needs to work with our Committee to modernize and improve its processes. Take for example, electronic signatures. It wasn’t until this past January that the SBA started accepting electronic signatures, which means that if you applied for an SBA loan this time last year, hard copy signatures were required for all their documents – and there are a lot of documents. So upgrading the way we handle basic processes like this can impact the ability of a lender to engage an entrepreneur that they may not have otherwise. Making the process less bureaucratic, and more business friendly is the goal, and the Committee is actively looking at ways to make that happen.
Congressman Chabot is known to be a fighter against wasteful government spending. I asked him if the SBA loan programs cost the taxpayers money. He provided two answers to this question. The one below (that the SBA loan program does not technically cost the taxpayer money) and a more nuanced answer. He noted that there is an opportunity cost to the loan program. When the government guarantees tens of billions of dollars of loans, it creates a potential future liability if those loans default. In other words, the program does not cost the taxpayer money currently, but there is the potential for it to cost taxpayers in the future, which is why he stressed responsible oversight of the programs is critical.
Currently all those programs operate at zero cost. The SBA loan programs are designed to operate at zero cost to the taxpayer, because the cost of administering the programs is collected in fees from borrowers and lenders, which achieve the zero subsidy rate. In FY 2015, the 7(a) loan program actually operated at a negative subsidy rate, meaning it brought in more money than was necessary to cover the cost of the program. When this happens, Congress has the flexibility to actually lower rates for the program, which is exactly what we did for veterans this week.
During our discussion Section 179 of the tax code came up. This section of the tax code enables businesses to deduct the purchase of assets like heavy machinery and trucks at an accelerated rate. Basically, it more closely ties when the business spends money on these purchases and when the business can deduct the purchase as a business expense. Unfortunately, this provision of the tax code expired recently, and many small business owners did not know if it would be renewed retroactively. As a result, many small business owners held off on purchases and potentially missed out on getting better deals on the purchase of equipment.
Uncertainty is the biggest impediment to growth in my opinion. When a business owner doesn’t know what their tax liability will be next year or even this year, they cannot plan for the future. The Small Business Committee understands this and is working on policies that will restore some certainty for small business owners. For example, earlier this year, the House of Representatives passed H.R. 636, the Small Business Tax Relief Act. This bill makes Section 179 of the tax code permanent, so that small businesses can expense up to $500,000 of investments in new equipment and property per year. This simple provision is often passed at the 11th hour, and applied retroactively, which completely defeats the purpose of having the incentive in the first place. This bill has not yet passed the Senate, but I am hopeful it will, and I encourage all of your readers to voice their support for this measure.- See more at: http://fitsmallbusiness.com/whos-in-charge-of-overseeing-the-sba/#sthash.1UMRduG0.dpuf Read More
WASHINGTON—Small businesses hoping to play a role in international trade achieved victory today with the passage of the Trade Priorities and Accountability Act of 2015. This legislation aims to bring clarity and communication to American trade deals, chiefly trade promotion authority (TPA).
Small Business Committee Chairman Steve Chabot (R-OH) said: “Better trade agreements mean small businesses will be able to access new customers, offer their products more easily, and that more products will be built and sold. When that happens, jobs are created, wages are lifted, and more opportunity is available to all.”
Chabot added, “TPA will ensure communication between the people negotiating trade deals and the people representing small businesses at home: Congress. Put an American worker against anyone in the world and I’ll take that bet every day of the week and twice on Sunday. But we can’t get there without TPA.”
Over the last few months, Chairman Chabot and members of the Small Business Committee have heard from small business owners and operators about the need for TPA. Chairman Chabot shared these view in a speech on the House floor:
Michael Stanek, VP & Chief Financial Officer of Hunt Imaging, Berea, OH – May 20, 2015
“Free trade agreements are extremely important as they lower foreign barriers to our exports and produce a more level playing field. Without TPA, the U.S. is relegated to the sidelines as other nations negotiate trade agreements without us – putting American workers and companies – especially small ones – at a competitive disadvantage.”
Dyke Messinger, President of Power Curbers, Inc., Salisbury, N.C. – May 20, 2015
“Passage of TPA, which lapsed in 2007, is critical to restore U.S. leadership on trade…Manufacturers in the U.S. face steeper trade barriers abroad than virtually any other major country, including Mexico, China and Europe, largely because those countries have entered into more market-access agreements that the United States. Trade and foreign markets are critical for small business like Power Curbers.”
Brian Bieron, Executive Director of the Global Public Policy Lab for eBay – May 20, 2015
“Through our experience, we have found that technology is transforming trade by allowing Main Street businesses to directly take part in globalization, reaping the benefits of markets previously only open to the largest global companies. This is good economics because it means more growth and wealth, and it is good for society because it means a more inclusive form of globalization.”
Kevin Severns, Owner of Severns Farm, on behalf of California Citrus Mutual, Sanger, CA – June 11, 2015
“Without [TPA] critical negotiations with some of our key export markets may well stall. My understanding is that on average, U.S. citrus exports to the countries included in the Trans-Pacific Partnership can currently face tariffs as high as 40 percent. Given that 35 percent of California’s citrus crop is exported around the world, access to these markets is vital to us.”
For more on the Small Business Committee’s recent trade hearing, click here. For recent Small Business Committee trade legislation, click here and here. For Chairman Chabot’s recent op-ed in the Washington Examiner on small business and trade, click here.
On June 11, 2015 at 10:00 a.m., the Small Business Subcommittee on Agriculture, Energy and Trade held a hearing titled, Squeezed: Current Challenges for Small Citrus Operations in Room 2360 of the Rayburn House Office Building.
The hearing examined challenges affecting small growers and other small businesses in the citrus industry.
Carlos Curbelo (R-FL)
Small Business Subcommittee Examines Challenges Facing Citrus Industry
WASHINGTON -- On Thursday, the Small Business Subcommittee on Agriculture, Energy, and Trade examined the challenges affecting small growers and other small businesses in the citrus industry.
“Florida is one of the top producers of citrus in the world,” said Subcommittee Chairman Carlos Curbelo (R-FL). “It has a significant impact on our economy and for many growers and their families, it is a way of life, passed down from one generation to the next. However, the U.S. citrus industry is facing significant challenges, such as HLB disease in Florida, the Mexican fruit fly in Texas, and a prolonged drought in California. All these factors have decreased acreage and production while increasing operating costs for small citrus growers which comprise 90% of citrus farms. I’d like to thank the Small Business Committee for the opportunity to highlight these challenges and the witnesses for sharing their perspectives.”
Full Committee Chairman Steve Chabot (R-OH) praised Subcommittee Chairman Curbelo for calling attention to these threats:
“Today’s hearing revealed the challenges facing an industry that reaches every American family’s breakfast table: small citrus growers. I want to thank him for his leadership in bringing these issues into focus. Mr. Curbelo said it best: ‘This Committee cares about small business, which means we care about families and the people they employ.’ Our Committee will continue to work with the family businesses in this industry towards solutions that protect this economically and culturally significant crop.”
Notable quotes include:
“Nature has created the current crisis but neglect and unbalanced environmental policies have made it a true disaster. The way the Endangered Species Act is currently being implemented has, as many farmers would attest, put many a family farmer in the category of endangered. If we don’t find a more balanced approach to the ESA, not only will fish be endangered, but many smaller family citrus farms will become extinct.” - Mr. Kevin Severns, Owner, Severns Farm, Sanger, CA (testifying on behalf of California Citrus Mutual)
“The citrus industry is a core part of America’s agricultural heritage. 62,000 Floridians produce a nutritious product that is part of a healthy diet. The industry is comprised of small family farms and associated businesses. The industry also supports many associated businesses, ranging from vehicle and farm equipment dealers, banks, insurance companies, etc. Our industry has experienced challenges before, most weather related. I am confident our industry will manage through the current crisis and emerge as an even stronger industry.” -Mr. N. Larry Black, Jr., General Manager, Peace River Packing Company, Fort Meade, FL (testifying on behalf of Florida Citrus Mutual)
“In short, the United States citrus industry as you know it, is in extreme trouble. We are fighting to preserve our very way of life and are doing everything in our power to prevent total eradication of an essential U.S. industry. With agency collaboration and much needed support, it is our hope that we will soon be able to eradicate [Asian Citrus Psyllid] and [Huanglongbing] from our vocabulary entirely.” -Mr. Dale Murden, President, Texas Citrus Mutual, Mission, TX
More information on this hearing can be found HERE.
Chabot: Small Businesses Need Trade Priorities and Accountability
As seen in the Washington Examiner
Ninety-nine percent of American companies are actually small businesses, and they employ over half of the entire American workforce. When you stop and consider the fact that only two out of every 100 of those companies participate in international trade, it's obvious we're just not thinking big enough anymore.
The Trade Priorities and Accountability Act doesn't just help us think bigger, it compels to us to do so.
Trade today already supports about one in five American jobs. More than 1.5 million people in my state of Ohio have jobs because of trade. The Trade Priorities and Accountability Act gives further international trade agreements their rightful place at the top of our national agenda and lifts the ceiling on American job creation. Since about seven of every 10 new jobs come from a small business, it's pretty clear who can benefit the most from more trade.
I consider myself lucky to have been a member of the Small Business Committee, which I now chair, since I first came to Congress. Years of small business visits, roundtables and hearings have given me an invaluable education in how ideas become innovations and then jobs. Every member of Congress gets this opportunity, and I don't know anyone on either side of the aisle that hasn't been changed, energized and inspired by it.
That's why Congress should be setting the rules for any administration that sets out to negotiate with our trade partners. Small businesses need a better way into the global market, and Congress can make sure they get it.
Since we're the ones hearing directly from those who can benefit the most from trade, it would only make sense that we should be able to read the negotiating text for trade agreements, provide guidance for those negotiating for us in the executive branch, and get the chance to review trade deals before they become official. The Trade Priorities and Accountability Act paves the way for public engagement on these deals and gives Congress the ability to throw up speed bumps if we end up on the track to a raw deal.
The Trade Priorities and Accountability Act will require communication between the people negotiating trade deals and the people representing small businesses at home. Without it, we might as well be taking a shot in the dark and hoping for the best. That's not how jobs are created, families are provided for, or communities thrive.
Every small business starts with an idea. Those ideas become services or products, and then they become livelihoods for the people connected with them. Before long, those ideas are small businesses that not only support but also define our local communities.
Because of small business, it's our local communities, whether they realize it or not, that have the most to gain from better trade agreements. That's why your representatives in Congress have to be at the table from the outset, and that's why American small businesses need Congress to pass the Trade Priorities and Accountability Act.
Steve Chabot, who represents Ohio's first congressional district, is chairman of the House Committee on Small Business.
Small Business Committee Advances Four Bills in Bipartisan Markup
WASHINGTON—Today, the Small Business Committee passed four pieces of legislation on a bipartisan basis that now await action in the House of Representatives:
· H.R. 2499: "Veterans Entrepreneurship Act of 2015" (Passed by voice vote)
· H.R. 208: "Superstorm Sandy Relief Act of 2015" (Passed by voice vote)
· H.R. 1023: "The Small Business Investment Company Capital Act of 2015" (Passed by voice vote)
· H.R. 2670: "Microloan Modernization Act of 2015" (Passed by voice vote)
At the start of today’s markup, Chairman Steve Chabot (R-OH) noted the connection between all four pieces of legislation considered by the committee. “I want to emphasize the importance of moving forward on these common sense reforms to Small Business Administration’s access to capital and disaster loan programs,” Chabot said. “When we improve these programs, we are stimulating the American economy by allowing our nation’s job creators, small businesses, greater access to a basic fundamental business need – capital.”
For more on the markup, amendments offered, and vote tallies, please click here.
The purpose of this hearing was to examine the SBA's implementation of Section 1661 of the National Defense Authorization Act of 2013.
The Road Ahead: Small Business and the Need for a Long-Term Surface Transportation Reauthorization
WASHINGTON – Today, House Small Business Committee members led by Chairman Steve Chabot (R-OH) held a hearing titled, “The Road Ahead: Small Businesses and the Need for a Long-Term Surface Transportation Reauthorization,” where they heard from small business voices about the direct and indirect impacts of America’s weakening surface infrastructure on productivity.
“There are lots of projects throughout our nation that I could cite as examples of why our infrastructure is important, but none that is closer to home for me than the Brent Spence Bridge. This is a bridge that connects Ohio to Kentucky; the Midwest to the South. It carries 172,000 cars and $1 billion in commerce every day, yet it is considered functionally obsolete,” Chabot said. “Improving our infrastructure is about making American businesses more competitive and making sure we have access to the goods and services we use every day, and keeping them affordable for American families.”
Matt Davis, Director, Build Our New Bridge Now Coalition based in Cincinnati, also emphasized the importance of restoring subpar infrastructure, particularly the Brent Spence Bridge. “[The Brent Spence Bridge] serves as a major artery in our national highway system, carrying the equivalent of 4 percent of the nation’s GDP every year and connecting Michigan to Miami, servicing many companies, both small and large,” Davis said. “In order for their businesses to stay afloat, small businesses need reliable roads, bridges, waterways, airports and railways to move employees and goods from place to place as safely as possible.”
Also among those who testified was William Schmitz, Vice President of Sales and Quality Control at Gernatt Asphalt Company in Collins, NY, who spoke on behalf of the National Stone, Sand and Gravel Association. “In the absence of a long-term plan, my customers are telling me they are not sure what the next years are going to bring them, thereby causing me to withhold investment in plants and new machinery for the foreseeable future,” Schmitz said. “It is increasingly difficult to do long range workforce planning due to uncertain demand.”
Members also heard from Don Shilling, President of General Equipment and Supplies in Fargo, ND, who testified on behalf of the Associated Equipment Distributors. Shilling attested to the complications that are arising from uncertainty in infrastructure investment. “The detrimental impact of the uncertainty surrounding the Highway Trust Fund isn’t unique to General Equipment & Supplies,” Shilling said. “As Congress delays addressing the country’s drastic needs, the public is paying the price in lost productivity and vehicle repairs.”
Chairman Chabot and members of the Committee shared the witnesses’ concerns for America’s state of decay.
“If we want to do something positive for the millions of Americans that rely on small businesses to put food on the table, we have to get projects like the Brent Spence Bridge done,” Chabot said. “We owe it to the American people to invest in those projects that produce long-term savings, keep us competitive, and most importantly, create American jobs. “
For full witness testimonies and footage of today’s hearing, click here.
House Panel Examines SBA’s Failure to Implement Congressional Direction on Size Standards
WASHINGTON – Today, the House Small Business Subcommittee on Contracting and Workforce convened a hearing on small business size standards and the Small Business Administration’s (SBA) failure to implement bipartisan Congressional reforms signed into law on January 2, 2013.
Subcommittee Chairman Richard Hanna (R-NY) issued the following statement at the conclusion of the hearing:
“Federal size standards determine whether a firm can compete for a federal contract or qualify for other federal programs, so it is critical that we get this right. And when the SBA fails to implement bipartisan reforms to those standards, they are not just failing to implement the law – they are failing the millions of Americans who work for small businesses.”
Fellow Small Business Committee Member Rep. Mike Bost’s (R-IL) proposed solution to this problem, H.R. 1429, the Stronger Voice for Small Business Act of 2015, was incorporated in this year’s National Defense Authorization Act, which passed the House in May. Witnesses from the Small Business Value Added Reseller Consortium, the American Institute of Architects, and others expressed support for H.R. 1429 during the hearing.
Witnesses and Testimony:
The purpose of the hearing was to examine the rise of peer-to-peer lending platforms that seek to satisfy that seek the demand for debt capital that is currently not being met by banks and other conventional lenders.
The purpose of the hearing was to examine the current state of Cyber-Security for small firms and steps that can strengthen their efforts in information protection.
2361 Rayburn HOB
Washington, DC 20515