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26–286 2017

MARKUP OF: BUDGET VIEWS AND ESTIMATES 

FOR FISCAL YEAR 2017 

HEARING 

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD 

MARCH 1, 2017 

Small Business Committee Document Number 115–005 

Available via the GPO Website: www.fdsys.gov 

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Congress.#13
(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

STEVE CHABOT, Ohio, Chairman 

STEVE KING, Iowa 

BLAINE LUETKEMEYER, Missouri 

DAVE BRAT, Virginia 

AUMUA AMATA COLEMAN RADEWAGEN, American Samoa 

STEVE KNIGHT, California 

TRENT KELLY, Mississippi 

ROD BLUM, Iowa 

JAMES COMER, Kentucky 

JENNIFFER GONZA ́ LEZ-COLO ́ N, Puerto Rico 

DON BACON, Nebraska 

BRIAN FITZPATRICK, Pennsylvania 

ROGER MARSHALL, Kansas 

VACANT 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

DWIGHT EVANS, Pennsylvania 

STEPHANIE MURPHY, Florida 

AL LAWSON, JR., Florida 

YVETTE CLARK, New York 

JUDY CHU, California 

ALMA ADAMS, North Carolina 

ADRIANO ESPAILLAT, New York 

BRAD SCHNEIDER, Illinois 

VACANT 

KEVIN FITZPATRICK, Majority Staff Director 

JAN OLIVER, Majority Deputy Staff Director and Chief Counsel 

ADAM MINEHARDT, Staff Director 

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C O N T E N T S 

OPENING STATEMENTS 

Page 

Hon. Steve Chabot ................................................................................................... 1 

Hon. Nydia Vela ́zquez ............................................................................................. 1 

APPENDIX 

Additional Material for the Record: 

SBC Majority Views and Estimates ................................................................ 5 

SBC Minority Views and Estimates ............................................................... 18 

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MARKUP OF: BUDGET VIEWS AND ESTIMATES 

FOR FISCAL YEAR 2017 

WEDNESDAY, MARCH 1, 2017 

HOUSE OF REPRESENTATIVES, COMMITTEE ON SMALL BUSINESS, Washington, DC. 

The Committee met, pursuant to call, at 11:00 a.m., in Room 

2360, Rayburn House Office Building. Hon. Steve Chabot [chairman of the Committee] presiding. 

Present: Representatives Chabot, Luetkemeyer, Brat, 

Radewagen, Knight, Kelly, Blum, Comer, Bacon, Fitzpatrick, Marshall, Vela ́zquez, Evans, Murphy, Lawson, and Adams. 

Chairman CHABOT. Good morning. Right on time. The Small 

Business Committee will come to order. 

And before we get on to any of our important business, we want 

to congratulate the gentleman from Mississippi. It happens to be 

his birthday today. He is 26, I think, if I am not mistaken. Something like that. All right. So let’s hear it for him. 

Ms. VELA ́ ZQUEZ. Where is the cake? 

Chairman CHABOT. Yeah, where is the cake? That is right. 

So we wish him a great day here today. We wish all of you a 

great day. 

So I will call the Committee on Small Business Budget Views 

and Estimates meeting to order. 

Today’s order of business is to consider the Views and Estimates 

on the priorities of the Committee on Small Business for fiscal year 

2018. And I believe we should be able to get through this relatively 

quickly, too. 

Since its founding, the United States has relied on small businesses. We are a nation of creators and inventors and risk takers. 

Our economy was structured to be driven by entrepreneurs and, in 

fact, most net job growth has been from small firms. In the past 

few years, the growing number in complexity of federal regulations, 

the healthcare law, and the tax code have made it increasingly difficult for small companies to compete and thrive globally, and to 

keep people employed locally. 

Although the economy is improving, small businesses still face 

rough waters. As a result, more small businesses are dependent on 

the programs of the SBA, the Small Business Administration, and 

it is essential that these programs be tailored to yield the most efficient and effective results. 

The Small Business Administration, or SBA, has a vital role to 

play in helping small business owners to expand our economy. 

SBA’s core functions make capital available, provide training, and 

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increase the use of small businesses as Federal Government contractors. However, multiple investigations by the Government Accountability Office, or GAO, and the SBA Inspector General, the 

IG, have revealed an agency that has misplaced priorities and 

management deficiencies. 

SBA’s first responsibility is to complete the task mandated by 

Congress before it expends funds on its own untested initiatives or 

entrepreneurial training that duplicates longstanding and proven 

programs operated by the SBA and its partners, such as the Small 

Business Development Centers and SCORE. SBA’s information 

technology has long been outdated, and was found by GAO and the 

SBA IG to be a critical vulnerability. 

The Views and Estimates recommend increasing the number of 

personnel assisting small government contractors to compete in the 

nearly $500 billion federal procurement marketplace. They recommend establishing a more transparent regulatory process for 

SBA’s lending partners, strengthening enforcement so only eligible 

small businesses participate in SBA programs, reallocating funds 

from SBA’s own initiatives to the modernization of SBA’s loan 

management system, and reducing agency information technology 

vulnerabilities. The end result would be a better SBA, one that delivers results for America’s small businesses and for taxpayers. 

At this point I will yield to the Ranking Member, Ms. Vela ́zquez, 

for any comments she may have on the Committee’s Views and Estimates. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. 

Consideration of this year’s Views and Estimates comes before 

we have a proposed budget to examine. While submission of this 

document to the Budget Committee is an important aspect of the 

Committee’s work, doing so without an actual budget to inform us 

is a questionable exercise. In the absence of a budget, we are making up a broad document that focuses on improving program functions at the Small Business Administration. This is consistent with 

the Committee’s previous work. 

As a result, we agree with the chairman on a number of issues. 

For example, recommending SBA takes steps to better manage its 

capital access, procurement, and entrepreneurial development programs is prudent governance. Doing so advances SBA’s mission to 

assist small businesses and better protect taxpayers. But I just 

want to make clear, we have to provide the resources that will enable the Small Business Administration to do its work. We just 

cannot come here and criticize the Small Business Administration 

for not doing their job while cutting their budget. We cannot do 

more with less. 

We also agree with the chairman that SBA has repeatedly failed 

to properly evaluate its pilot programs. Both the GAO and this 

Committee have found that many of these are largely ineffective 

and divert resources from proven programs. The agency’s funding 

of these initiatives, without a specific authorization, is not in the 

best interest of taxpayers or small businesses. 

Additionally, we again concur with the chairman that SBA 

should strengthen oversight of its lending programs. The agency is 

guaranteeing record levels of investment in our small business 

community while also reducing loan defaults, but it is important 

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that loans in the 7(a) and other programs are targeted to businesses who need it the most, particularly those that have been unable to secure capital through private channels. To this point, we 

must ensure that those businesses that receive loans truly cannot 

receive ‘‘credit elsewhere’’ as required under law. 

Despite my agreement in so many areas, there is one issue where 

the chairman and I do not see eye to eye, and this is in the area 

of the Regulatory Flexibility Act which we share jurisdiction of 

with the Judiciary Committee. Yes, I am open to investigating 

ways to better tailor regulations for the small business community 

and reducing compliance costs. However, I cannot support efforts 

that will halt broad health, safety, and environment protections. 

That said, I look forward to finding common ground with the chairman in the area of regulatory policy, as we have done with so many 

other policy issues. 

The success of the American economy depends on small businesses leading the way, and the SBA is a vital part of this formula. 

I thank the chairman for holding this markup and look forward to 

continuing our work together to make the SBA an even better resource for America’s small businesses. 

With that, I yield back the balance of my time, and I thank you. 

Chairman CHABOT. The gentlelady yields back, and I thank her 

for her remarks. 

Are there any other members who wish to be recognized for a 

statement on the Views and Estimates on the priorities of the Committee for fiscal year 2018? 

Okay. Seeing no members, the Committee now moves to consideration of the Views and Estimates. The clerk will read the title 

of the document. 

The CLERK. Views and Estimates of the Committee on Small 

Business. 

Chairman CHABOT. I ask unanimous consent that the Views 

and Estimates be considered as read and open for amendment in 

its entirety. 

Does any member seek recognition for the purpose of offering an 

amendment? 

Seeing no amendments, we will move on. And the question is on 

adopting the Views and Estimates on the priorities of the Committee for fiscal year 2018. 

All those in favor, say aye. 

Those opposed, no. 

In the opinion of the chair, the ayes have it. The ayes have it 

and the Views and Estimates are agreed to. 

I will now recognize the ranking member for the purpose of making a motion. 

Ms. VELA ́ ZQUEZ. Mr. Chairman, pursuant to House rules, I 

would like to give notice that the Committee Democrats will be 

submitting additional views to the Committee on the budget. 

Chairman CHABOT. Thank you. 

Without objection, so ordered. 

And the Committee is authorized to make technical and grammatical corrections to the Views and Estimates. 

And I believe that concludes the business before the Committee 

today. So if there is no other business other than to wish everybody 

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a very, very merry Trent Kelly birthday today, we hope you have 

a great day. 

And if there is no further business to come before the Committee, 

we are adjourned. Thank you. 

[Whereupon, at 11:10 a.m., the Committee was 

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