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[Senate Hearing 113-385]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 113-385
 
                  NOMINATION OF MARIA CONTRERAS-SWEET 
        TO BE ADMINISTRATOR, U.S. SMALL BUSINESS ADMINISTRATION 

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON SMALL BUSINESS
                          AND ENTREPRENEURSHIP
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 12, 2014

                               __________

    Printed for the Committee on Small Business and Entrepreneurship
         Available via the World Wide Web: http://www.fdsys.gov

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            COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP

                    ONE HUNDRED THIRTEENTH CONGRESS

                              ----------                              
                   MARY L. LANDRIEU, Louisiana, Chair
                 JAMES E. RISCH, Idaho, Ranking Member
CARL LEVIN, Michigan                 DAVID VITTER, Louisiana
MARIA CANTWELL, Washington           MARCO RUBIO, Florida
MARK L. PRYOR, Arkansas              RAND PAUL, Kentucky
BENJAMIN L. CARDIN, Maryland         TIM SCOTT, South Carolina
JEANNE SHAHEEN, New Hampshire        DEB FISCHER, Nebraska
KAY R. HAGAN, North Carolina         MICHAEL B. ENZI, Wyoming
HEIDI HEITKAMP, North Dakota         RON JOHNSON, Wisconsin
EDWARD J. MARKEY, Massachusetts
CORY A. BOOKER, New Jersey
                Jane Campbell, Democratic Staff Director
           Skiffington Holderness, Republican Staff Director

                            C O N T E N T S

                              ----------                              

                           Opening Statements

                                                                   Page

Landrieu, Hon. Mary L., Chair, and a U.S. Senator from Louisiana.     1
Feinstein, Hon. Dianne, a U.S. Senator from California...........     1
Risch, Hon. James E., Ranking Member, a U.S. Senator from Idaho..     3

                               Witnesses

Contreras-Sweet, Maria, Nominee to be Administrator of The Small 
  Business Administration, Washington, DC........................     3

          Alphabetical Listing and Appendix Material Submitted

Boxer, Hon. Barbara
    Prepared statement...........................................    30
Cantwell, Hon. Maria
    Questions for the record.....................................    32
Contreras-Sweet, Maria
    Opening statement............................................     3
    Prepared statement...........................................     6
Endorsements and Letters of Support of the Nominee...............    52
Feinstein, Hon. Dianne
    Opening statement............................................     1
Landrieu, Hon. Mary L.
    Opening statement............................................ 1, 23
Palomarez, Javier
    Prepared statement...........................................    83
Risch, Hon. James E.
    Opening statement............................................     3
    Questions for the record.....................................    38
Shaheen, Hon. Jeanne
    Prepared statement...........................................    28
    Questions for the record.....................................    47
Small Business Majority
    Prepared statement...........................................    85

  NOMINATION OF MARIA CONTRERAS-SWEET TO BE ADMINISTRATOR, U.S. SMALL

                        BUSINESS ADMINISTRATION

                              ----------                              

                      WEDNESDAY, FEBRUARY 12, 2014

                      United States Senate,
                        Committee on Small Business
                                      and Entrepreneurship,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:38 a.m., in 
Room 428A, Russell Senate Office Building, Hon. Mary Landrieu, 
Chairman of the Committee, presiding.
    Present: Senators Landrieu, Levin, Cantwell, Cardin, 
Booker, Risch, and Fischer.

HON. MARY L. LANDRIEU, CHAIR, AND A U.S. SENATOR FROM LOUISIANA

    Chair Landrieu. Good morning everyone, and welcome to our 
confirmation hearing on Mrs. Maria Contreras-Sweet. We are so 
happy to have Senator Dianne Feinstein joining us this 
morning--welcome, Senator--for the introduction of our nominee.
    Because of the difficulty of scheduling with our ranking 
member, Senator Feinstein, and other members, we are going to 
go in a little different order. I am going to save my remarks 
until the end to accommodate the schedules of other members 
that are here. But let me just say it is an honor to have 
served as the Chair of this Committee, and I am leaving it in 
excellent hands to Senator Maria Cantwell, who will be joining 
us, I believe, shortly.
    It has been a pleasure to work with my partner, Senator 
Risch, for several years passing major pieces of legislation 
and conducting really important roundtables on issues that 
have, I think, strengthened the entrepreneurial spirit of the 
United States.
    Let me turn it over now to the Honorable Dianne Feinstein 
to introduce our nominee, and then I am going to ask the 
ranking member for his remarks, if you do not mind, and then we 
will hear from our nominee and try to proceed that way to 
accommodate everyone's schedule.
    Senator Feinstein.

  STATEMENT OF HON. DIANNE FEINSTEIN, A U.S. SENATOR FROM THE 
                      STATE OF CALIFORNIA

    Senator Feinstein. Thank you very much, Madam Chairman, 
Senator Risch--I see you on Tuesday and Thursday afternoon in 
Intelligence. It is nice to see you here this morning--and 
members on both sides.
    It is my great pleasure to introduce to this Committee, 
Maria Contreras-Sweet, President Obama's nominee to head the 
Small Business Administration, and she comes with my strongest 
and highest positive recommendation.
    Let me begin by telling you a little bit about Maria's 
inspiring personal story. She was born in Guadalajara, Mexico. 
She immigrated to my home state of California when she was only 
five years old. Her mother worked at a chicken packaging plant 
to support and provide for Maria and her five siblings.
    She went on to study at Cal State Los Angeles. She worked 
hard. She built a distinguished career, including serving as 
the secretary of the Business, Transportation and Housing 
Agency, a big agency in California. In addition to Maria's 
outstanding track record of public service, she possesses a 
keen intellect and considerable private sector experience, both 
of which will serve her well.
    But most important to me, you know, the longer we are here, 
it is easier to look at people as problem makers and problem 
solvers. This woman is a problem solver.
    So let me talk briefly about the private sector. This 
nomination comes at an important time for the small business 
community of our economy, and Maria knows firsthand what it 
takes to run and grow a small business. She is the founder of 
ProAmerica Bank, the first Latino-owned business bank in more 
than 30 years. Before that, she was the president and co-
founder of a private equity fund that specialized in helping 
small businesses access capital.
    As you know, increasingly, those at the very top of the 
income scale have easy access to capital, but many Americans 
who earn more moderate incomes have trouble getting approval 
for a loan. This is the kind of support that is essential to 
grow a small business, something that Maria knows very well. In 
fact, she has dedicated a considerable portion of her career to 
help small businesses access capital, to grow, and to employ 
more people. She has earned respect from community and business 
leaders alike.
    The Los Angeles Chamber of Commerce CEO Gary Toebben, who 
worked closely with Maria over the years, has this to say: ``In 
her business as chair of ProAmerica Bank, she was in contact 
with numerous small businesses every day, businesses that have 
financial needs and need other kinds of advice. That gives her 
a really hands-on understanding of the small business community 
and the challenges and opportunities that they face.''
    So as you can see, Maria is uniquely positioned to make a 
very positive impact at the Small Business Administration, and 
that agency, I think, is one of the best things our government 
does. I deeply believe she can play a critical role in helping 
this country's entrepreneurs and small businesses thrive and 
succeed.
    Finally, and on a personal note, I have known her for many 
years and I have observed her as a person who has dedicated her 
life to helping people and improving the economy of Los Angeles 
and California, and I have seen her in action. She is eager to 
help. She is constructive. She is a problem solver.
    So across California, from the public to the private 
sector, in economically thriving and underserved communities, 
Maria Contreras-Sweet is universally respected and admired. She 
has my strongest recommendation to this Committee. And I thank 
you Madam Chair.
    Chair Landrieu. Thank you, Senator Feinstein, for that 
beautiful introduction. Let me turn it now to my ranking 
member, and then we will hear from our nominee.

  OPENING STATEMENT OF HON. JAMES E. RISCH, RANKING MEMBER, A 
                    U.S. SENATOR FROM IDAHO

    Senator Risch. Well, thank you very much, and Senator 
Feinstein, thanks so much for coming. It is always good to see 
you on Tuesdays and Thursdays and other times too.
    And I want to thank you, Ms. Contreras-Sweet. You 
telephoned me the day that you were nominated, and I 
appreciated that, and then took the time to come see me, and I 
thank you for that. You have an absolutely stunning background 
and qualifications for this job, and I am glad to see that the 
president has appointed someone of your caliber to do this. We 
have had a short period of time to talk about what your vision 
is, and I am impressed to this point.
    On a personal note, we have a mutual friend, Jovita 
Carranza, who you know, and I value her judgment greatly. I 
have known her for some time, and she gives you the highest 
recommend, so that is a real plus for you.
    So with that, Madam Chairman, thank you very much for the 
opportunity, and we look forward to hearing from the nominee.
    Chair Landrieu. Thank you very much. And Senator Feinstein, 
if you have to slip out, you may.
    Senator Feinstein. I do.
    Chair Landrieu. Okay. Go right ahead. Thank you. And Ms. 
Sweet, if you would stand, and we are going to take the oath.
    Do you solemnly swear to tell the truth, the whole truth 
and nothing but the truth, so help you God?
    Ms. Contreras-Sweet. I do.
    Chair Landrieu. Are you willing to appear and testify 
before any duly constituted committee of Congress when 
requested to do so?
    Ms. Contreras-Sweet. I do. I am.
    Chair Landrieu. Are you willing to provide such information 
as is requested by such committee?
    Ms. Contreras-Sweet. I am.
    Chair Landrieu. Please be seated. Thank you very much, and 
please proceed with your opening statement.

STATEMENT OF MARIA CONTRERAS-SWEET, NOMINEE TO BE ADMINISTRATOR 
              OF THE SMALL BUSINESS ADMINISTRATION

    Ms. Contreras-Sweet. Thank you. Thank you, Chair Landrieu, 
Ranking Member Risch, Senator Cantwell, members of the 
Committee. I am deeply honored to appear before you today as 
President Obama's nominee for the position of Administrator of 
the U.S. Small Business Administration. Let me thank you and 
your staff for putting together this hearing so quickly and the 
kindness you and your teams have shown me in this confirmation 
process.
    I want to extend my sincere appreciation to Senator 
Feinstein for her warm introduction. I am grateful for the 
support of both my home state senators. I also want to express 
my sincere appreciation to my husband, Ray; my children, 
Antonio, Francesca and Rafael; and my extended family that is 
represented here today. They are the bedrock and motivation for 
everything I do.
    President Obama has made small business a priority since 
the day he stepped into office. He elevated the role of SBA 
Administrator to cabinet level. He understands small 
businesses. The work of Administrator Karen Mills, Deputy 
Administrator Marie Johns, as well as the stewardship of Acting 
Administrator Jeanne Hulit, has all resulted in a stronger, 
more effective agency.
    SBA's record levels of lending helped pull us out of one of 
the nation's worst economic periods, and the agency has 
streamlined and simplified many processes, reduced paperwork, 
and become more customer oriented than ever before. If 
confirmed, I will strive to build on that record.
    I have, as was stated, over 25 years of management and 
executive experience in both the public and the private 
sectors. I will bring to this post--I will bring these 
experiences to the post if confirmed. My background and 
experience as an entrepreneur and as a government official and 
as a corporate executive give me a unique perspective into 
lessons learned that I can put to good use helping small 
business owners create new products and expand their 
businesses.
    Let me just say, I am a small business owner whose small 
business helps small businesses every day. ProAmerica is a 
Latino-owned business bank in California. It started like so 
many other small businesses do, from the ground up. With 
support from the community, my friends and my family, we remain 
a strong, vital bank in our community. We ensure that 
entrepreneurs can access financing and all their needs to 
contribute to the economy, create jobs and provide for their 
families.
    Earlier, when I started my first business, I experienced 
the same challenges entrepreneurs face today. I wore many hats 
and I poured my heart and soul into that business. Later, as 
California's cabinet secretary over Business, Transportation 
and Housing, I made sure small businesses were integrated and 
involved in the state's procurement process, and we made 
progress on those goals every year.
    I enjoy bringing people together, building bridges, finding 
ways to solve problems, and creating opportunities. I am 
honored that so many small business advocates, community 
organizations and friends from my past are here today, and I 
look forward to working with them and others on the public/
private partnerships to help America's entrepreneurs if I am so 
confirmed.
    When I moved to California from Mexico as a child, I saw my 
mother work long, hard hours to support my brothers and 
sisters. I experienced firsthand the challenges that working 
families face every day, the challenges that recent immigrants 
are facing today. My record of fighting for women and families 
stems from these experiences, and if confirmed, I will continue 
to do that work.
    We have a saying at the bank, ``construyendo patrimonoes.'' 
Translated in English, it means building family legacies. That 
is what small businesses are. They are family legacies. It is 
about family pride, supporting their community. It is what the 
American dream is all about after all.
    I am a very proud American, and proud of all that America 
means to her citizens and to the world. If confirmed, I will 
work closely with you, with your colleagues in the House and 
the Senate, and President Obama for sure, to make sure that the 
Small Business Administration is an even more significant force 
in expanding the opportunities for all Americans, ensuring the 
economic strength of our country and the global economy.
    Once again, thank you again for this hearing. Thank you for 
your leadership, Chair Landrieu, and if confirmed, I look 
forward to working with you, with Senator Cantwell, Ranking 
Member Risch, and I am happy to take your questions. Thank you 
very much.
    [The prepared statement of Ms. Contreras-Sweet follows:]

    [GRAPHIC(S) NOT AVAILALBE IN TIFF FORMAT]
    
    Chair Landrieu. Thank you very much. As I stated, because 
of the time, I am going to submit my statement at the end. Are 
there any other members of the Committee that would like to 
make a brief one-minute opening statement, and if not, we will 
go right into questions.
    Okay. Let me begin. There are so many, but we have just a 
short time. Let me begin with a priority that we were not able 
to finish up in this last Congress that I feel very strongly 
about. The U.S. Congress enacted a Small Business Investment 
Act in 1958--which I am sure you are familiar with--because 
Congress identified a gap in the ability of small businesses 
throughout our country to access long-term credit. The economic 
situation has changed for the better quite a bit since 1958, 
but I think, and as you can tell from your position currently, 
there are challenges to small businesses getting access to 
capital and to credit to expand their businesses and to build 
out that family opportunity and entrepreneurship.
    I introduced with several of my colleagues the EXCEL Act, 
which was filed in both this Congress and last. It has broad 
bipartisan support. It basically would raise the family of fund 
limits for small business investment companies, SBICs, from 225 
to 350.
    One of the leaders of one of our SBICs from Triangle 
Capital in North Carolina, one of our most successful--you 
might have heard of them--said, ``If our legislation had 
passed,''--which it did not, but despite broad bipartisanship 
support, it was held up by literally a handful of members--``If 
the proposed legislation is passed, we believe over the next 12 
to 24 months we would be able to directly help another 30 to 40 
companies create up to 2,000 jobs.''
    That is just from one SBIC that has been successful. This 
is the leveraging partnership where private sector puts up $2. 
The Federal Government puts up $1. We lend out to companies 
that can grow.
    Could you comment on your experience with SBICs, and would 
you be willing to lead the fight to get this authorized as soon 
as we can?
    Ms. Contreras-Sweet. Thank you for that very important 
question, Senator. As I have experienced in our bank in Los 
Angeles, what we find is that clients come in and they have so 
much that they can secure for collateral to underwrite a loan, 
to buy debt. Then on top of that, they put up whatever cash 
they have, whatever their savings, to make up a little more.
    And oftentimes, there is that gap, that mezzanine portion 
that the small businesses need, and that is why I think the 
SBIC has been the most effective in trying to provide that 
funding to make that gap, to make sure that they can actually 
realize their dream and build that business.
    So I am familiar with the product. I support the product, 
and to the extent possible, I would like to learn more about 
the specifics of your proposal. But I am aware of the gap and 
understand the role that, along with private equity, can play 
in layering with debt. So it makes a lot of sense to me. And 
thank you for your leadership in that regard, and I would look 
forward, if confirmed, to working with you on that product.
    Chair Landrieu. Thank you. My second question is our 
Committee was very active, both Republicans and Democrats, in 
trying to expand by encouraging many of our community banks. 
There are about 7,000 in the country. When I took over as chair 
five years ago, only 1,300 were participating in the small 
business programs. Now I am proud to say that there are 2,400 
SBA lenders--you being one of them--around the country.
    So what could you share with us about what some of your 
ideas might be to even expand that number to more community 
banks that could be partners with the SBA? What do you think we 
could do better, the Federal Government, to either minimize 
unnecessary regulations or paperwork that would encourage banks 
to really become partners with us, because they are the ones 
that know the customers. They are the ones that are in the 
communities. How do you see community banks particularly being 
a partner with you in your new role?
    Ms. Contreras-Sweet. Thank you, Senator, again, for your 
overall leadership in this regard. Specifically, let me just 
share with you what I have been experiencing. What I see is 
that large and small financial centers have been addressing the 
area of small business loans to families and to entrepreneurs 
across America. But indeed, it is the small local community 
banks that really benefit from this product the most.
    And for some of us--and again, I am just sharing my 
personal experience--unless you have a specialized officer in 
the bank that really understands the covenants, the warrants, 
the underwriting, the standards that SBA promulgates, it is 
somewhat daunting and a little overwhelming, and you want to 
make sure that when you are pursuing an SBA loan and there is a 
guarantee element, you want to make sure that you are not 
sacrificing that, whether it is a 50 percent, 75 or 90 percent 
guarantee, depending on the product.
    And so what I have really been pleased with is that already 
SBA's made some progress on that, the introduction of SBA One, 
for example, the way that they are clearing up the paperwork, 
streamlining, delegating authority to so many banks. For 
example, ours is a preferred lender bank, so we get the benefit 
of delegated authority. And so I already see great improvement, 
but to the extent that we can get the word out, there is also 
push and pull marketing, as I like to call it.
    There is where we can also get the public to be more 
informed. When I approach some prospective client or a client 
about an SBA product, they are not fully aware, and so we take 
a lot of time to consult them, to walk them through and explain 
to them this alternative.
    So to the extent I think that the SBA can even market the 
products more, get out--and if you will, I use this 
vernacular--we can brand the SBA a little more so that people 
are comfortable with it, understand that this is not your 
grandfather's SBA, I think it will go a long way in encouraging 
local communities, local community banks, to do more of that 
work.
    And if I may just add one more thing. I think throughout 
our 68 field offices, the SBA now has great reach into every 
community through their regional offices, as well as through 
the SBDCs, through the women business centers, through all the 
myriad of programs. So to the extent that we can continue to 
work with those strategic partners throughout the country and 
get the word out about the benefits, about the upgrades, about 
the simplified streamlining that is taking place today, I think 
that too will go a long way.
    Thank you again, for the good question, Senator.
    Chair Landrieu. Thank you.
    Senator Risch.
    Senator Risch. Thank you, Madam Chairman.
    Ms. Contreras-Sweet, you recall when you and I met, I told 
you about one of my favorite agencies over there in the agency, 
and that is the Office of Advocacy. And I'm assuming since that 
conversation you have had time to think about it and perhaps 
even have a look at what they actually do over there.
    To me, that's one of the real important things that the 
agency does. When I meet with people, whether they are from big 
business, medium business, but particularly small businesses, 
they are just really miserable over the crush of regulation 
that the Federal Government is putting on them. And the Office 
of Advocacy is designed to go in there and get them 
figuratively by the collar and say, ``Look, you cannot do 
this.'' The law of unintended consequences is going to come 
around and bite these people and put them out of business.
    The Office of Advocacy really needs its independence to do 
that, not being getting a call from the White House saying, 
``Hey, back off on your advocacy for small businesses.'' They 
really need to make life less comfortable for the bureaucracy 
than what it is when they are in their rulemaking and 
regulating mode.
    So have you had some time to think about that? And I would 
like to get your thoughts on the Office of Advocacy.
    Ms. Contreras-Sweet. Thank you, Senator, for speaking to a 
couple of important points, and I take pleasure in having an 
opportunity to address you on this.
    First, let me just speak to the office and the structure. I 
mentioned to you also in that conversation that I had the good 
fortune of being able to create California's Department of 
Managed Healthcare. And I went to great lengths to assure that 
there was an independent voice for the patient community, the 
Office of Patient Advocate. And I made sure that it reported 
directly to me, as did the director of the department.
    And so I liked the role, that it was important to me to 
have that sense of independence. What I appreciated here is 
that here too the Office of Advocacy is also an independent 
voice and should--we need to maintain the integrity of that 
office to make sure that it stands alone and of its own prowess 
to be able to provide an ardent voice for the small business 
community.
    The small business community represents half of America's 
workforce, and it represents two-thirds--two out of every three 
jobs being created come from the small business community. We 
need to make sure that we're creating a level playing field for 
this community. So that is number one.
    Number two, to the extent of the actual regulation to which 
you spoke, it is a primary goal to assure the small business 
community has a level playing field. We want a level playing 
field. It is already difficult to start a business. You make 
huge sacrifices and yet, this is a community where we harness 
great innovation, where we create jobs, as I just outlined.
    And so to the extent that we can reduce regulation, 
streamline opportunities for them, I think it should be a 
priority. From personal experience, I have endured regulation, 
if you can imagine, having been California's Secretary of 
Transportation. Just in that department alone I had 14 
departments. But just in Caltrans, I was responsible for about 
22,000 employees and a $10 billion budget.
    So trying to work with each dedicated fund, if I was trying 
to fill a pothole but I only had extra capital--in the Carl 
Moyer Program, for example, you could not move things over. So 
the discretion, the flexibility that the regulation prohibited 
me to exploit was difficult. And now, if anybody is going to 
start a business, the most complicated businesses to begin, to 
start from the ground up, would be a bank. It is highly 
regulated.
    So having talked to the point about how we want a level 
playing field, we want to make sure that we can have a 
streamlined program in place, but the other side of it is also 
in balance to make sure that the proper consumer protections 
are in place.
    Thank you, Mr. Senator.
    Senator Risch. Well, thank you very much, and I know you 
and I talked about, and I know you share my concern, that these 
regulations that are put in effect many times can be easily 
absorbed by a large corporation that has an army of lawyers and 
compliance officers. But for the guy that is fixing lawn mowers 
with a couple of employees, it can put them out of business. So 
I appreciate your understanding in that regard and look forward 
to working with you on that.
    Madam Chairman, I have got to excuse myself because I have 
another meeting, but since this will be our last foray 
together, thanks so much for working with you and the many 
courtesies you have shown, and I look forward to working with 
the new chairman of this Committee.
    The bad news is we will only be a few seats apart over on 
the Energy Committee, so look forward to working with you.
    Chair Landrieu. We will continue our strong partnership 
there.
    Senator Risch. Thank you.
    Chair Landrieu. Thank you, Senator.
    Senator Risch. Appreciate it. Thank you much.
    Chair Landrieu. Thank you.
    [Applause.]
    Senator Cardin and then Senator Fischer, Booker and 
Cantwell.
    Senator Cardin. Well, first, Madam Chair, I want to just 
join in recognizing your extraordinary leadership as the chair 
of this Committee. I have had the honor of serving on this 
Committee since I was elected to the United States Senate, and 
working with Senator Snowe and Senator Risch, your leadership 
has been extraordinary, and we have gotten a lot of things 
done. You should be very proud of that.
    The first and foremost was to get funding for the SBA. It 
was not easy. President Obama was a strong supporter, but we 
had to get those funds in the Congress, and through your 
leadership, we were able to get the Budget Committee to make 
the necessary adjustments. So the resources are there. We made 
it a lot easier on the SBA loans, making major changes.
    The reauthorization, the SBIR program, that didn't come 
easy. And there is not unanimity among the research community 
about the SBIR program, and you did a great job in bringing 
together a workable way that we could get that done. I 
particularly appreciate your help in getting a permanent 
increase on the surety bonds that help small construction 
companies and the work to be done on government procurement. We 
made major progress.
    I also acknowledge the work we have done in a fairer SBA, 
dealing with minority businesses and women-owned businesses, 
all under the watchful eye of this Committee. So you have a 
great record, and I thank you for the leadership, and it has 
been an honor to serve under your chairmanship.
    I know that Senator Cantwell will provide great leadership 
to this Committee. I look forward to working with her, because 
this Committee is very important. I asked to serve on this 
Committee. Small business is the engine of job growth in 
America and innovation, so therefore, we need a champion.
    So let me, if I might, raise a couple questions as to our 
nominee's commitment on certain areas. Let me talk government 
procurement for one moment. Agencies that are hard pressed for 
dollars--and that is what is happening today--will sometimes 
try to take the easy way on procurement, bundle small contracts 
together so that the only entity that can really qualify for 
the prime contracts are large business. We want to see more 
prime contracts with small companies.
    Can you share with us your vision as to how you will be an 
advocate within the Obama Administration so that the government 
procurement goals are truly met not just by subs but by primes 
and how you will provide leadership to provide that opportunity 
for small businesses.
    Ms. Contreras-Sweet. Thank you, Senator. Thank you very 
much for addressing an important part of what is going to be a 
key element of what we do. Clearly, we all know that the SBA is 
responsible for access to capital, but right behind there is 
the contracting component, and of course, the counseling and 
the disaster relief. So I understand that it is an underpinning 
of the Administration, of the Small Business Administration.
    But if I may just also speak to what you just referenced 
earlier, and that is the importance of the SBIR, the STTR, all 
those programs. What I see from the public, being a banker and 
small business person, I really admire the work of this 
Committee. Let me just say the leader, Chair Landrieu, and how 
thoughtful these programs are, how thoughtfully they fit 
together, you know, to be able to have research dollars, to be 
able to partner up with the university through the STTR 
program, and then to be able to roll it out and through 
counseling to be able to get the capital and to take it to 
market, to patent it and to take it to market. I intend to use 
the cabinet-level status to make sure that I am working 
collegially with the Secretary of Commerce to make sure that we 
are using that Patent Office efficiently and effectively.
    Senator Cardin. And I agree with that. I just would focus 
on the fact that there are some departments that are great on 
small business. There are others that are not.
    Ms. Contreras-Sweet. Right.
    Senator Cardin. And I just hoped you would be very visible 
with those agencies that are not meeting the goal and certainly 
not complying with the spirit, that we want prime contracts for 
small businesses just not subcontracts.
    I want to raise one other issue. I have limited time. We 
have talked about capital a lot. And I must tell you, I have 
been disappointed by the results on loans being made to small 
businesses. I think we provided a great deal more tools here in 
Congress. There was fundamental disagreement, I think, between 
some of us on the Committee and the Administration as to 
whether there should be direct loans or just guaranteed loans. 
The Administration prevailed on the prime tool being 
guarantees.
    There are too many banks that are still very difficult, 
particularly if you are a minority small business or a non-
conventional. Some of the faith-related enterprises, small 
business, it is very difficult to get loans.
    What game plan did you have to make sure that we achieve 
this objective of capital being available?
    Ms. Contreras-Sweet. Thank you. Again, if you will indulge 
me and allow me to answer your first question, because I am not 
sure that I satisfied you. And so let me just say that I have 
extensive experience in contracting, and I want to share with 
you that to the extent that I was working to reach goals that I 
established for our agency, what I found is that first the 
public was not generally aware of the opportunities with 
government. They knew that they could go down the street and 
try to get a local restaurant to buy some things from them, but 
they were not aware about how to approach government.
    And so first it was just to counsel them, to help them 
understand what the procedure was. Once I got them to be aware 
of it, then they would say, ``You take too long to pay. I 
cannot carry the EBITDA. I cannot carry the cash flow.''
    So we put a prompt program in place, a prompt payment 
program. I was delighted to see that the president here put in 
QuickPay. That mirrors some of the things that we were doing 
there. At the next level, it just generally was, you just aptly 
pointed out, and that is that in bundling, you know, you go the 
counter-cyclical way. So I did what would probably be 
counterintuitive, and that is to debundle, to make sure that to 
the extent possible we can kind of break these down to make 
sure that smaller and smaller and smaller businesses could 
capture some of those opportunities. And to that extent, also 
we were able to create more local opportunities, and I think 
those are important facets.
    So I just wanted to underscore the importance of what you 
said and share with you that if confirmed, I would be delighted 
to engage in this project. It is very important to me, and I 
have personal experience, some strategies that we can deploy to 
make that even more effective. So thank you for that.
    To the extent that you just mentioned, again, about access 
to capital, it is the underpinning of everything. So indeed, we 
have to make sure that we market well, that we use our 
counseling centers well, and that I, as you aptly pointed out, 
that I work collegially with my colleagues. The ones with whom 
I have met already have been very receptive, and that 23 
percent goal is something on my mind. And if you give me an 
opportunity and I have your support and I am confirmed, I would 
be delighted to work.
    I am counting the days, Mr. Senator, 365 days in a year. 
And so I am counting the days, and I can assure you that even 
though I am coming in a little late with weekends and evenings, 
we can make up some time and to actually capture some of those 
goals. Thank you.
    Senator Cardin. I like your enthusiasm.
    Ms. Contreras-Sweet. Thank you, Senator.
    Chair Landrieu. Wonderful. Senator Fischer.
    Senator Fischer. Thank you, Madam Chair. And I too would 
like to thank you for your leadership and your service on this 
Committee. I also asked to be on this Committee, so it has been 
such a pleasure to serve with you. Thank you. I wish you well 
in your new chairmanship on Energy.
    Ms. Contreras-Sweet, earlier this year, the SBA implemented 
a policy that would increase costs for some 7(a) loans. The 
rule will require that lenders for special-purpose properties, 
such as hotels or convenience stores, obtain two appraisals. 
One is for the real estate portion and the other is for the 
operations.
    The cost of obtaining those two appraisals, I know you 
understand that that is going to be passed on to the consumer. 
I think it is also going to slow down the sale of the business. 
It is going to slow down the obtaining of the loan that these 
businesses are trying to get.
    As you know, a number of real estate agents have been 
trained where they can do both appraisals, but that is not 
allowed under this rule. Would you be willing to reconsider the 
rule if you are confirmed as the administrator?
    Ms. Contreras-Sweet. Thank you, Senator, for that important 
question, again. It is tough out in the community, I can share 
with you, and so I am delighted that you raised that issue, 
because we usually ask for that appraisal cost upfront, and so 
they have to put that out and then you process them, and then 
hopefully succeed through the process.
    I can share with you that it is something of which I am 
quite familiar, and I commit to you to engage in that from that 
experience point of view, to learn more about, again, the 
rubrics, the bowels of the organization, what is possible, and 
so I would not want to commit prematurely. But if confirmed, I 
would be delighted to take a delve, to dive in and work with 
you on that program. I have an interest in wanting to pursue it 
some more.
    Thank you for the question.
    Senator Fischer. Thank you. I appreciate your commitment on 
that. I can tell you in rural areas of any state there is a 
limited number of professionals who are able to do those 
appraisals, and small businesses struggle in rural areas. So 
any time you have to find two appraisers, that adds additional 
costs to a business that is trying to expand, that is trying to 
grow, that is trying to serve the customers they have. So I do 
look forward to working with you on that.
    Also, what is your expectation as to when you believe the 
Administration might be nominating someone for the deputy 
position that has been vacant, I believe, since June? And 
hopefully the Administration is going to move forward on that. 
Have you heard anything about that?
    Ms. Contreras-Sweet. Thank you for asking me a very 
important question, as you can imagine. I can tell you that I 
think the Administration was really focused on filling the top 
job so that if confirmed that person would be able to engage in 
the process and be a part of the selection committee.
    So I am looking forward to your support. And again, I would 
be delighted to engage in that process to make sure that to the 
extent that there is a, if you want to call it, a complimentary 
role, I think it is important in making sure that we are 
working collegially, collaboratively to assure that America's 
small businesses have a loud voice and an active engagement in 
the community of job creation.
    Thank you.
    Senator Fischer. I would assume that would just be one of 
the number of items on your agenda as you move forward if you 
are confirmed as the administrator. Can you tell me what you 
see as some of your priorities? If you are confirmed, how do 
you want to hit the ground?
    Ms. Contreras-Sweet. Yes. As an administrator, whether you 
are in public or private sector, I think you have to first 
explore the fundamentals. You have to assure that the controls 
are in place. You have to, what I call, you know, deploy an 
ERM, an Enterprise Risk Management, system. You have to make 
sure that all the controls are in place.
    So I do not like to launch off into anything until I make 
sure that the fundamentals of business, of government, are all 
in place. So I would first do that. I would just make sure that 
I am briefed about where the vulnerabilities are. How do we 
tighten those things down?
    And then after that, again, just to understand the full 
complement of programs and to understand if there are any gaps 
there. From my vantage point, from my prism at this point, I do 
not see that there is that.
    And then third, I still think that it is very important to 
get the word out about the products, again, making sure that we 
understand the limitations of our role. The SBA is not here to 
supplant the private sector role. The private sector, the 
credit markets, must be first, but where they freeze, or where 
there is a gap, that is where I think SBA has an appropriate 
role.
    So we must make sure that we understand the proper role of 
government, the proper role of the SBA. But where we belong and 
where we must be, we must be there effectively, efficiently. 
Particularly in an instance of disaster, for example, you want 
to make sure that the right layers are in place at the right 
time to be responsive to whatever that family may be enduring.
    I had a personal example, a personal instance where my 
mother-in-law was victim to the Northridge earthquake, and I 
saw what SBA's role was. I saw what FEMA did, and the way in 
which it was unveiled. And I think it is important for us to be 
efficient and to be effective, particularly in those times.
    I will just make one more comment about that. I was on duty 
during 9/11 and as Secretary of Transportation, some folks do 
not know, I also had responsibility for the California Highway 
Patrol, and the Highway Patrol protects our state buildings, 
our courts, some of our state prisons, and so it was important 
to make sure that those safety mechanisms were in place, and I 
am very familiar with that.
    I can tell you that we did not know what was taking place, 
as the world did not know exactly what was taking place. But we 
knew that those planes were bound for California, and I had to 
make sure that the integrity was in place: of our bridges, of 
our highways, and our entire transportation network. Readiness 
around disaster would be fundamental, to answer your question. 
That would be one of the areas that I would want to make sure 
that we have buttoned down everything that needs to be down, 
because that is when the people need us most.
    Thank you for that question.
    Senator Fischer. And thank you for your response. I 
appreciate it.
    Chair Landrieu. Senator Booker.
    Senator Booker. I just want to add my chorus of 
congratulations and gratitude to you. You have been an 
extraordinary leader for me on a very personal level, coming 
new to the Senate. You helped me with my orientation. This 
Committee I was thrilled to be on, but even more thrilled by 
the leadership and guidance you have given me. So thanks for 
being a north star in my early days, and I just hope the people 
of Louisiana, every single one of them, knows how lucky they 
are to have such an extraordinary leader, a leader amongst 
leaders here in the United States Senate. So thank you.
    Chair Landrieu. Now, if my children could hear this, we 
would be making progress. Thank you. Thank you, Senator Booker.
    Senator Booker. But I would be remiss. I have had the 
pleasure of knowing Senator Cantwell long before I was a 
Senator, and it is extraordinary now to have her leadership 
here. She is somebody that comes with private sector 
experience, with experience in the technology sector, which is 
really important to me in an area where small business growth 
is critical, and I am just really looking forward to having you 
now as the chairperson of this Committee, and congratulate you 
as well.
    You are extraordinary, and I am so thrilled to have the 
opportunity to work with you. And this country is lucky that 
someone with your experience, background, expertise and skill 
would want to volunteer to serve in government yet again. You 
are making a personal sacrifice doing so. You are making a 
family sacrifice doing so. And, you know, I was taught as a 
young person that you should never judge someone by their 
personal accomplishments but by their willingness to do for 
others. And under that measure, you are truly a great American, 
and I am grateful to have this moment to talk with you.
    You and I both know I have been in the grassroots trenches 
like you have, trying to figure out how, especially in 
underserved populations and especially in urban areas, how do 
you get businesses going. And my team and I understood that the 
three biggest things, when we pulled together folks, is 
technical expertise--because many people have vision--but 
everything from learning how to make payroll, and all the 
things that help you to really make businesses run, function; 
access to capital, which is something that has to be a major 
part of your mission, and I know it is, and I have heard that 
already expressed; understanding that government is one of the 
biggest opportunities for small businesses. We found that many 
of them did not know how to--everything from bonding 
requirements to even getting in the game to be considered.
    So I am grateful for all those things, and I am actually 
really confident that you are the right leader to tackle those 
three areas. I look forward, as we have talked a little bit 
before this meeting, about the creative ways now to get capital 
into the communities. I am looking forward to discussing with 
you some of our ideas about using online platforms--which we 
think is going to really help New Jersey--is a new movement, a 
democratizing force in terms of access to capital for the 
country.
    A few quick things that I just want to hit you with in the 
remaining moments that I have, and I will just say them both at 
once and allow you to speak to them. There is a lot of 
dissatisfaction in New Jersey about the SBA's speed at which 
they dealt in post-Sandy recovery. And I am hoping that you pay 
particular attention to this, because these 100-year storms 
seem to be coming, at least to my area of the country, with 
great regularity, becoming almost a yearly or every other year 
engagement.
    And getting small businesses up and running again is so 
important and is so critical. And I hope you understand that 
part of your duty--I pray not, but should be--is going to be 
responding to crisis and businesses in crisis, and the SBA has 
not lived up to the expectations people have for it.
    And then the second thing, there is so much attention on 
cyber security for the big businesses, Target and the like, but 
I have increasing concerns, especially as many small businesses 
do deal with personal information, do deal with valuable 
exchanges that add up to large amounts of money, is what we are 
doing from a small business perspective to prepare our 
businesses in America to do the things they should be doing to 
protect themselves from cyber attack?
    Thank you.
    Ms. Contreras-Sweet. May I first say that you are an 
American hero in every sense, and so as we say, I would like to 
just sort of shout it back at you.
    Senator Booker. I do not have kids, but can we record that 
for the record? Yes. Just so I can pull that out.
    Ms. Contreras-Sweet. So your reputation precedes you, so 
thank you for the generosity of those compliments.
    Let me just make a couple of comments in response. First 
and foremost, when we had the Los Angeles riots, a highly 
underserved community, I was delighted that here I was sitting 
at, if I may plug, 7-Up at the time. I was delighted that I was 
called by the Mayor and Peter Ueberroth, the chairman of 
Rebuild Los Angeles, to come and serve at that board to make 
sure that we could respond to those riots and that we could 
restore those communities immediately.
    And I learned something in that process, Mr. Senator, and 
that is that oftentimes we think we have the answer, and people 
said, ``You have to put in this and''--and when I went in and I 
actually went into the community, walked those streets, talked 
to those families, and what they said is, ``Yes, we need jobs 
and we need a bank and we need''--``for sure, but please do not 
forget a laundromat. I can't even interview until I get my 
clothes washed.''
    The fundamentals of understanding, to connect with the 
folks, ask them what they need. It is important that we engage 
in the community. So first, I must say it is important to 
understand what the needs are before we begin to respond.
    Secondly, with respect to your cyberspace question, I had 
the good or--I am not sure if I want to say good fortune, but I 
was in the position of cabinet secretary over our business 
regulation, and as part of that, I had to help the state ready 
for Y2K. Now, I know in retrospect, you know, we have perfect 
vision, right? Hindsight is 20/20. But in advance of that, we 
had no idea what was in store for the world, let alone our own 
state.
    And so I was responsible for one-third of the California 
data systems, the tiered data center. And so I learned a little 
bit about how to manage technology, as well as in the way we 
executed our driver's licenses. You have to stay ahead of, you 
know, those who will counterfeit your products. And so we were 
continually upgrading and changing our driver's licenses.
    So in different ways, whether it was through the banking--
you may know that I oversaw the Department of Financial 
Institutions for the state, and so I regulated in-state 
banking. And there too, we had to make sure that there was 
redundancy, that there was a proper separation of duties to 
make sure that somebody was watching what the other person was 
doing. So I have a little insight into this community, and I 
would be prepared to, if confirmed, to bring some of those 
ideas that I was able to glean from those experiences to this 
process to make sure that we are being responsive in making 
sure that we are protecting Americans, particularly the small 
business community that desperately needs a level playing 
field.
    But just one more thing about that, and that is that we 
have to make sure that we avoid fraud, waste, and abuse as 
well. We have to make sure that we respect our public 
employees. Our public employees are largely hard-working people 
across America; that is what I see. But you have to also convey 
a message of zero tolerance if anybody is going to try to game 
the system, try to do something that is inappropriate. So I 
would bring my past experience to those areas that you just 
outlined.
    Thank you for the question, Senator.
    Chair Landrieu. Thank you. We have two more senators, 
Senator Cantwell and Senator Levin, and then I am going to 
finish up with a few questions. And I think we will close out 
in about 10 to 15 minutes, because votes will be called at 
11:30.
    Senator Cantwell.
    Senator Cantwell. Well, thank you, Madam Chair, and I too 
want to thank you for your tremendous leadership here at the 
Small Business Committee. Not only do I consider you a personal 
friend, but a giant advocate for small business. And when our 
country had one of our biggest economic downturns, there was a 
lot of discussion about how to help the big banks. In fact, in 
my opinion, we kind of gave them access to the keys to the 
Treasury, something I did not quite appreciate how that was 
done.
    But you were steadfast in the Small Business Jobs Act of 
2010 in advocating for small businesses and trying to come up 
with ways to help protect them as they were getting hammered by 
new regulations and this economic downturn, when performing 
lines of credit were pulled right out from under people.
    So I just could not have been more proud of your leadership 
in this Committee. People did not realize what an advocate Mary 
Landrieu was when she took over this Committee, and I actually 
feel like she put the small business activities in that battle 
of 2010. You know, we had to work with Senator Voinovich and 
Senator Lemieux to finally get a bill that tried to protect 
small business, but it was the cry in our country at that time 
that small businesses were just getting hammered on this 
downturn and really, in some ways almost being a scapegoat for 
what had happened. I do not think a lot of these small banks, 
or even the businesses that they were serving, were involved in 
derivative activity, but yet they were the ones who took it 
right in the chin.
    So I am just very proud of your leadership on that and very 
proud of your leadership on this Committee. And I know you are 
not going far. In fact, we both serve on the Energy Committee 
and this Committee will certainly be looking for ways to work 
together. So thank you for that.
    Ms. Contreras-Sweet, thank you so much for your willingness 
to serve. You have shown today you have a command of these 
policy issues that we are going to be looking forward to your 
activities and I personally like that you are a good marketer. 
Anybody that knows push and pull technology marketing is okay 
by me, because to me a lot of the Small Business Administration 
is both push and pull. I mean, part of it is getting people to 
understand what programs we have and what they can take 
advantage of, and obviously, getting them to work with us on 
those that need to be improved.
    One of the things about the Small Business Jobs Act of 2010 
was the 504 refinancing program, and that refinancing expired 
in September of 2012, so I wanted to have your thoughts on 
whether you support reauthorizing that section of the bill.
    Ms. Contreras-Sweet. Thank you for speaking to 504. It is 
an important product, and to the extent that you were able to 
offer up the refi program, let me just tell you from my 
personal experience it was very well received. At the onset, at 
the very beginning, I must say that we were trying to work our 
way through and tried to understand it a little bit.
    But once we got it down is about when it sunset, and so we 
were a little disappointed about that. As I understand it now, 
the president is supportive. I, from the community, understand 
the importance of the product and if I am confirmed, I would be 
delighted to work with you and explore ways in which we can 
continue to fill that important gap.
    Senator Cantwell. So you would support reauthorization of 
that?
    Ms. Contreras-Sweet. If given the opportunity, I support 
the product. I think it is an important tool for Americans 
today.
    Senator Cantwell. Thank you. Another program, and again, I 
appreciate your perspective on small businesses and small 
business exports.
    My colleague from New Jersey mentioned technology and the 
State Trade and Export Promotion program, the STEP program. Are 
you familiar with that program within----
    Ms. Contreras-Sweet. I am. The partnership with the states?
    Senator Cantwell. Yes. And I am a huge believer in where we 
are right now in the context of an information age and a lot of 
products and services, but you have to add capital. And the 
U.S. has a lot of these, and so the STEP program in my state 
has been beneficial from many technology aspects. It helped a 
program in my state grow to nearly a hundred new people on some 
swipe technology that right at the critical moment they got 
access to the Asian market, and, just recently, some aviation 
companies have used the program. Silicon Forest Electronics, a 
company in Southwest Washington, got access to some aviation 
sales because of the STEP program. A small company, Slingshot 
Sports in Stevenson, Washington, a very small company, got 
access to help grow their business.
    So for me, I want to get your thoughts on the STEP program 
and whether you support continuing that or growing that effort. 
Because we have huge opportunities with the Asian market and 
the Pacific Northwest, and we certainly want to see us use 
these promotions to help meet the agenda that the 
administration has on doubling the number of exports out of the 
United States, and certainly, small businesses can play a very 
big role in that.
    Ms. Contreras-Sweet. If you will indulge me, Senator. 
First, I just wanted to thank the State of Washington. When 
California was going through its energy crisis, the State of 
Washington really came forward and helped us through, and I 
will never forget that. So thank you to all of the good people 
of the State of Washington for all that they did for 
Californians in that very difficult period.
    Next, let me just speak to STEP. What I like about STEP is 
that it has three important components, in my view, again, just 
from personal experience. I really appreciate that somebody can 
come in and get some counseling through a university, the 
partnerships with the universities, that it is state-sponsored 
so that there is a relationship and a partnership with the 
state government.
    In many instances, this is where many small businesses are 
a little more comfortable. So I appreciate that. I appreciate 
that it provides for introductions, in many instances 
internationally. And so there are so many good components 
around STEP, and in a globalized economy, we have to find ways 
to make sure that small businesses too can compete in that.
    There is currently, in my view, with technology and all the 
other tools that are available to us, the lowest barrier to 
entry for a small business opportunity, and so to the extent 
that we can have programs like STEP, helping them, partner with 
them, and providing them the right tools, I think that we can 
strengthen our ability to compete globally.
    Again, this is where the innovations are taking place, and 
so why not let the small businesses also have a piece of that 
pie, a bite of that apple, to make sure that they are also 
partaking of the international globalized opportunities that 
are presenting themselves in an increasing way every year. So I 
believe in the program. I think it is an important program, and 
the tools in it support small business expansion in the 
international economies.
    Senator Cantwell. Great. Thank you. Thank you, Madam Chair.
    Chair Landrieu. Thank you, Senator Cantwell. Senator Levin.
    Senator Levin. Thank you so much, Chairman Landrieu. And 
welcome to you, Ms. Contreras-Sweet. Congratulations to you. 
Your wonderful experience and talent is going to be put to 
great use with the SBA program and it is matched only by the 
enthusiasm which you show for the job at hand. We are delighted 
with your appointment and look forward to your confirmation.
    I want to thank our chairman. Mary Landrieu has been an 
absolutely superb chairman of the Small Business Committee. 
There are not too many people who are able to get legislation 
passed these days. I will not go into any more detail on that 
as to why. But she is one, because she knows how to work across 
the aisle. Her energy is legendary. She will bring that energy 
to the Energy Committee now. It will be called the Energy 
Energy Committee after Mary Landrieu is there.
    And we are also delighted with our new chair. We have known 
Senator Cantwell a long time, and her background is going to be 
useful from before she was a senator. The respect in which she 
is held by all members of the Senate will be a major gift to 
this Committee. So you will be working with a wonderful new 
chairman as we say goodbye but not farewell to our current 
chairman.
    You have a couple more hours here, I believe. Have you been 
formally----
    Senator Cantwell. Not until Thursday.
    Senator Levin. Not until Thursday, if we are here.
    There are a number of small business programs I have been 
involved with. I have been on this Committee actually since I 
got to the Senate and one of the programs I have been involved 
with--and this is a recent addition to the panoply of programs 
in the Small Business Administration--is the Intermediary 
Lending Pilot Program. It is currently a pilot program where we 
have non-profits that are, on a competitive basis, given awards 
to re-loan to small businesses, filling in a gap between the 
smallest program, the Microloan Program, and the 7(a) program. 
And so this intermediary program fills that gap.
    It is a pilot program which has been in place only for 
three years now and it is up for reauthorization. And I am 
wondering if you are familiar with the program. The SBA itself 
has said it has had great success with it. That is our 
experience in Michigan. But I am wondering if you are familiar 
with this program and whether or not you would support its 
permanent reauthorization.
    Ms. Contreras-Sweet. Thank you, Senator. And in preparing 
for this, I heard from my good friend George Mitchell, Senator 
George Mitchell, who said to say hello.
    Senator Levin. Well, thank you.
    Ms. Contreras-Sweet. And so I do extend his regards here.
    Senator Levin. Thank you.
    Ms. Contreras-Sweet. But thank you for asking a really 
important question and oftentimes an overlooked part of our 
economy, and that is that so many of us think about loans and 
banks, but in the microlending program--and I was delighted to 
see that that was an offering in the SBA, that they do have a 
microlending program. And so thank you for your leadership and 
your ardent support for that sector.
    Clearly, it is always difficult to start your first loan, 
and until you build credit, it is difficult to get a 200,000, a 
3, 4, $500,000 loan. So to the extent that we can issue some of 
those microloans, $50,000 loans to get people started, it spurs 
innovation. So I am familiar with the program. I think it is an 
important tool in the tool chest and I am very much in support 
of microlending programs.
    And through our intermediaries now as a banker, to the 
CDFIs, through programs like CAMEO in San Francisco--a program 
I am familiar with--different disseminators of microloan 
programs have been really good stewards of making sure that 
particularly underserved communities--and as I said, folks that 
are reentering the workforce--that they are providing for that 
first line of credit that will build eventually to the next and 
the next.
    Senator Levin. Okay. Well, the next step then is this 
intermediary program. It is the next step up from the microloan 
program. It is a pilot program, and I hope when you get to the 
SBA, not if but when you get to the SBA, that you will check 
this out, because we need to reauthorize the next step-up 
program from the microloans, which are these more intermediate-
sized loans. And it is an important program, so if you can get 
back to us as to what you find when you get there about this 
pilot program and whether you are going to be able to strongly 
support it.
    Finally, we have been very much involved in the SBIR 
program. As chairman of the Armed Services Committee, the 
Defense Department is the largest contributor to the SBIR 
program. As a matter of fact, under the leadership of our 
current chairman for another day, we were able to get the SBIR 
program reauthorized in the Defense Authorization Bill.
    Chair Landrieu. Thank you.
    Senator Levin. We cannot use the Defense Authorization 
bills for everything, but we were in this case able to actually 
use this bill when we were having trouble getting bills passed 
because of the creativity of Chairman Landrieu coming to me, 
basically saying, ``Can we get this done in the DoD 
authorization bill?'' The argument was, ``Yes, the Pentagon is 
the biggest contributor of funds to the SBIR program.'' That 
gave us the quote, ``hook''--not probably politically correct 
word--but the hook to include this in that bill.
    So it is an extremely successful program. We hope that it 
will have your full support.
    Ms. Contreras-Sweet. First, may I thank you on behalf of 
America's small businesses, if I may be so presumptive, because 
it allows the small business community to again have a more 
level playing field. The large corporations have extensive 
research dollars and R&D centers, and so to the extent that we 
can provide innovation and research resources for the small 
business community, I think it is an important tool again, once 
again. So thank you for your leadership.
    As I understand, it is a very well received program out in 
the community, and I think it should be supported. And I would 
be delighted to, if confirmed, if from your lips to God's ears, 
my prayers are answered and I am confirmed, I would be 
delighted to engage more deeply in that program and work with 
you closely on it. But thank you for your leadership. It is an 
important tool.
    Senator Levin. Thank you. And again, congratulations and 
thanks to our current chair and our future chair.
    Chair Landrieu. Thank you so much. If the members would 
just give me a five-minute personal privilege to close out this 
meeting and give my remarks.

              OPENING STATEMENT OF CHAIR LANDRIEU

    Chair Landrieu. First, to begin, you will have my strong 
and unequivocal support for your nomination.
    Secondly, I have been on this Committee now almost 10 
years. I think you may be the most extraordinary nominee that 
we have ever had. Your command of the details of the programs, 
your own personal experience that you bring, is going to be 
just a tremendous asset. I could not be happier to hand over 
the leadership to two extraordinary entrepreneurs in your own 
rights maybe for the first time in the history of this 
Committee, two women who have built businesses, run businesses, 
marketed businesses, and understand the challenges. So I think 
this Committee is going to be well served.
    First, Senator Levin, you have been such a mentor to me in 
my time here. To have the chair of the Armed Services Committee 
hardly miss a Small Business meeting is just a testimony to his 
heartfelt belief that he may be running and authorizing some of 
the largest businesses in the world, which he does, but has 
never lost his passion for the people of Michigan, the people 
of Detroit, all the places in Michigan, where he knows that 
small business is the heart and soul of his state.
    Senator Booker, your experience as mayor and coming as a 
new member of this Committee, you are just going to be 
extraordinary on it. I want to particularly thank Senator 
Cantwell. People do not realize this, but she was my rock 
behind the scenes in so many places where I could not figure 
out where to go and what to do, and her technical knowledge is 
so spectacular. And she helped me to put this Jobs Act together 
when we really couldn't find a lot of support to do it. And the 
two of us just kind of made up our mind.
    And I want to thank Senator Merkley, Senator Boxer, Senator 
Levin, Senator Schumer, Senator Durbin, Begich and Cardin, who 
were the original co-sponsors of it, and the two Republican 
members that stepped up against great pressure, Senator 
Voinovich and Senator LeMieux, that helped us to pass that.
    In closing, in three minutes, I just want to leave you and 
the Committee with three or four big issues. First, your 
command of the need for small business in a disaster, I really 
want to just cry, but I am not going to let myself. Because I 
know what happened in Katrina and the Gulf Coast. You know what 
happened in the earthquake. You know how desperate small 
businesses are. And they have nowhere to go, nowhere, because 
no one wants to lend them any money. It does not matter how 
long they have been in business. It does not matter how 
profitable they have been. People just want to shut them out 
and say, ``Come back when the situation is better.''
    The problem is the situation cannot get better, Senators, 
unless the small businesses are helping to make it better, like 
the gas stations, the laundromats, the restaurants that cook 
food for the first responders so they actually have a place to 
eat. This woman understands this, and we have done some good 
work on that, but God bless you for taking it to the next 
level.
    Secondly, I want to talk about--30-seconds--rural 
businesses. President Obama made a great effort to try to bring 
high-speed internet to rural communities. Technology has 
changed. People in rural areas need help. They are smart, they 
are hardworking, and they do have community banks in rural 
areas that know them. But they have to have high-speed 
internet. Please continue to focus on that.
    On the entrepreneurship underemployment, the president 
spoke about this in his State of the Union. We have millions of 
Americans--you know them well. You can see their faces--that 
have either flunked out, stepped out or been kicked out of the 
mainstream. They are not going to be able to finish high school 
or college. They are of an age but if given a chance, they 
might be able to start their own business, employ themselves, 
their family, their community. I do not think we are doing 
enough to reach them.
    The president has called us to come up with special 
initiatives. I really hope the Small Business Administration 
will be first to the line to say, ``This is what we can do.''
    And finally, the STEP program. Maria Cantwell is correct. 
Carl Levin was particularly focused on helping us. 1 percent of 
small businesses in this country export, 1 percent. In the old 
days, their markets were their neighborhood. These days, their 
markets are the world, but they cannot reach the world because 
they are so little. They are profitable. They are powerful, but 
they are small. They need our help to either help them 
cooperatively get together or give them some help to get their 
products to the world, and I think we can do a better job.
    I personally saved the--how much money in the STEP 
program--$8 million, which was going to be zeroed out. We need 
a lot more than $8 million. That is all we have to help these 
28 million small businesses reach the world. There are billions 
of dollars out there to help every big business. You know, they 
have embassies that will show up for conferences to help one 
big business and all we have is $8 million in our budget, and 
that would have been zeroed out had I not tracked it and kept 
it in the budget.
    So finally, I just want to say the 504 reauthorization, the 
STEP program. And Senator Cantwell will bring an outreach to 
Native Americans, who are also left out, forgotten. She is a 
fabulous advocate. And again, there is some tremendous 
entrepreneurship opportunities.
    So it has been a joy, pleasure for me to serve as chair. I 
am really looking forward to giving this gavel to you on 
Thursday. I cannot give it until then. If we are not snowed 
out, we will make that change on Thursday. God bless you all. 
Thank you, and thank the staff. Would all of my staff please 
stand, and the Republican staff too.
    [Applause.]
    Chair Landrieu. Thank you all. Jane Campbell, Don Cravins, 
thank you all for an extraordinary job well done. I will submit 
all their names to the record, and the meeting is adjourned.
    [Whereupon, at 11:47 a.m., the Committee was adjourned.]

                      APPENDIX MATERIAL SUBMITTED

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