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67–850 2011

THE STATE OF SMALL BUSINESS ACCESS TO 

CAPITAL AND CREDIT: THE VIEW FROM 

SECRETARY GEITHNER 

HEARING 

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

HEARING HELD 

JUNE 22, 2011 

Small Business Committee Document Number 112–023 

Available via the GPO Website: http://www.fdsys.gov 


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(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

SAM GRAVES, Missouri, Chairman 

ROSCOE BARTLETT, Maryland 

STEVE CHABOT, Ohio 

STEVE KING, Iowa 

MIKE COFFMAN, Colorado 

MICK MULVANEY, South Carolina 

SCOTT TIPTON, Colorado 

JEFF LANDRY, Louisiana 

JAIME HERRERA BEUTLER, Washington 

ALLEN WEST, Florida 

RENEE ELLMERS, North Carolina 

JOE WALSH, Illinois 

LOU BARLETTA, Pennsylvania 

RICHARD HANNA, New York 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

KURT SCHRADER, Oregon 

MARK CRITZ, Pennsylvania 

JASON ALTMIRE, Pennsylvania 

YVETTE CLARKE, New York 

JUDY CHU, California 

DAVID CICILLINE, Rhode Island 

CEDRIC RICHMOND, Louisiana 

GARY PETERS, Michigan 

BILL OWENS, New York 

BILL KEATING, Massachusetts 

LORI SALLEY, Staff Director 

PAUL SASS, Deputy Staff Director 

BARRY PINELES, Chief Counsel 

MICHAEL DAY, Minority Staff Director 


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C O N T E N T S 

OPENING STATEMENTS 

Page 

Graves, Hon. Sam .................................................................................................... 1 

Vela ́zquez, Hon. Nydia M ........................................................................................ 2 

WITNESSES 

The Honorable Timothy Geithner, Secretary, United States Department of 

the Treasury, Washington, DC ........................................................................... 3 

APPENDIX 

Prepared Statements: 

The Honorable Timothy Geithner, Secretary, United States Department 

of the Treasury, Washington, DC ................................................................ 39 

Questions for the Record: 

Graves, Hon. Sam ............................................................................................. 50 

Additional Materials for the Record: 

The Small Business Agenda, the National Economic Council ...................... 51 

Statements for the Record: 

Governor Rick Snyder ...................................................................................... 134 

The Financial Services Roundtable ................................................................. 136 

Michigan Credit Union League ....................................................................... 139 

Independent Community Bankers of America ............................................... 140 

Wolverine Metal Stamping, Inc ....................................................................... 143 

United Metal Products ..................................................................................... 144 

Michigan Ladder Company .............................................................................. 146 

Women Impacting Public Policy ...................................................................... 147 

Missouri Credit Union Association ................................................................. 151 


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THE STATE OF SMALL BUSINESS ACCESS TO 

CAPITAL AND CREDIT: THE VIEW FROM 

SECRETARY GEITHNER 

WEDNESDAY, JUNE 22, 2011 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

Washington, DC. 

The Committee met, pursuant to call, at 10 a.m., in room 2360, 

Rayburn House Office Building. Hon. Sam Graves [chairman of the 

Committee] presiding. 

Present: Representatives Graves, Chabot, King, Mulvaney, Tipton, Landry, Herrera Beutler, West, Ellmers, Walsh, Vela ́zquez, 

Critz, Altmire, Clarke, Chu, Cicilline, Richmond, Peters, Owens. 

Chairman GRAVES. We will bring this hearing to order. I would 

like to say good morning to everyone. I would also like to definitely 

welcome Secretary Geithner to the Committee. He is the first Secretary of the Treasury to testify before this Committee, and so we 

appreciate that. Obviously, we appreciate that very much. 

More than two years after the President’s inauguration, the economy still remains stagnant. Growth is anemic, unemployment hovers around nine percent, and that figure excludes those who have 

simply given up looking for a job. No Republican or Democrat can 

be satisfied with those results. However, every single member of 

this Committee truly believes in one thing—that any recovery will 

be led by the ingenuity and drive of America’s entrepreneurs. 

To accomplish that goal, small businesses need capital in order 

to purchase inventory and invest in plants and equipment and hire 

workers. America’s entrepreneurs simply will be unable to revive 

the economy without access on reasonable terms to debt or equity 

capital. 

There is little doubt that the environment for obtaining debt financing is difficult for small businesses. This Committee has heard 

on multiple occasions that entrepreneurs cannot get credit and 

small businesses face significant cuts to their existing lines of credit. Bankers have told this Committee that they have capital but are 

nervous about lending because the regulations might question the 

safety of the loans of those small businesses. 

Nor can small businesses easily turn to equity markets. To do so 

they must navigate a complex series of federal and state regulations. Those businesses then face significant ongoing regulatory 

costs in order to comply with the securities laws, including DoddFrank and Sarbanes-Oxley. These are resources that could be better spent hiring new employees. 


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Today’s hearing focuses on the efforts by the Department of the 

Treasury to improve small business access to credit through the 

State Small Business Credit Initiative and the Small Business 

Lending Fund. These programs are designed to bolster the capital 

available to community banks so that they can then lend to small 

businesses. 

I did not support these initiatives and opposition came from both 

sides of the aisle. The opponents did not object to the worthy goals 

of this program; rather, they do not believe that the incentives provided will generate sufficient new lending to ‘‘small businesses’’ as 

that term is defined by the Small Business Act. 

Despite my concerns about these programs, I want to do everything possible to help small businesses obtain needed capital. And 

with that in mind, I would like to hear from Secretary Geithner 

about the potential benefits of these two programs. I also want to 

know whether the Secretary believes changes to the programs 

might provide greater capital access to small businesses. Finally, I 

am sure that the Committee would like to hear any suggestions on 

improving the ability of small businesses to obtain equity capital. 

I recognize that the programs have not been in full operation and 

the Secretary would be welcome to return and discuss these initiatives after the Department has had greater operational experience 

with those programs. 

Before yielding to the Ranking Member for her opening statement, it is my understanding that the Secretary has obligations 

that are very vital to all members of this Committee and to Congress, which are going to require him to leave at noon. So as a result of that I am going to strictly enforce the five-minute rule. 

And with that, now I will turn to Ranking Member Vela ́zquez for 

her opening statement. 

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

Secretary. And welcome. 

In early 2007, when the financial crisis began to emerge, no one 

could have predicted the economic damage that would follow. For 

small businesses, the capital markets dried up, leaving many unable to find lines of credit. To address this, actions were taken, 

many in fact led by the Small Business Committee. These measures were successful. Thanks to these policy changes, along with 

gradual although uneven economic improvement, small firms are 

now better able to secure capital than at any time since the heart 

of the crisis in 2008–2009. These more favorable credit conditions 

have been confirmed by both the Federal Reserve and the Thompson Reuters PayNet Small Business Lending Index. 

The Fed reported that in net 15 percent of banks eased terms 

while the Thompson Reuters Index rose 17 percent in April from 

a year earlier. This represented the ninth straight double-digit rise 

in the index. Even the NFIB measures of credit conditions remains 

near a two year high. These are very positive developments since 

small firms have been all but locked out of capital markets for a 

long time. Unfortunately, while credit conditions have loosened for 

borrowers, we are not seeing corresponding increases in overall 

commercial lending. In fact, lending now is below the level reached 

in June 2006, declining by $15 billion in the most recent quarter. 

Totals of small business loans dropped 2.4 percent from 624 billion 


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in December 2010 to 609 billion in March 2011. Small loans of less 

than $100,000 were down by 2.9 percent, while large loans outstanding declined by 2.2 percent. 

From the broadest possible view, small businesses are getting 

less capital than they did five years ago. As demonstrated by the 

many hearings this Committee held in the last four years, the reasons behind this decline are complicated. However, we do know 

that banks are flushed with more cash than any other time in history. Banks are holding nearly $1.6 trillion in reserves at the Fed, 

of which only a small portion are required reserves. This is nearly 

double where they stood just two years ago when banks held only 

$900 billion at the Fed. Clearly, liquidity is not a problem for lenders. 

With that in mind, today we will examine Treasury’s SBLF program, an initiative designed to increase small business lending in 

one particular way—liquidity. Only 847 banks applied for 11.6 billion from the fund by its June 6th deadline. Less than half of the 

$30 billion was made available. If liquidity was a problem, there 

would be a line out the door for SBLF funds, rather than the lack 

of interest we are now seeing from lenders. 

There are two areas in particular that I hope to review today. 

The SBLF’s lack of requirement that its funds be used by banks 

to make small business loans undermines the supposed intent of 

the program. Instead, the SBLF relies on loose incentives and nonbinding plans to channel capital to small firms. I do not believe 

this is enough. You know that, Mr. Secretary. Throughout the debate that was an issue and concern that I raised. The problem is 

compounded by the initiative relying on an overly broad and vague 

definition of small businesses. So when banks do lend, it will be 

virtually impossible to know if they are lending to true small businesses or actually large corporations. 

During the debate to pass the SBLF, the rationale most offered 

by its proponents was that we needed to quickly put a policy in 

place and that the SBLF could be implemented within six months. 

But here we are, more than nine months after passage and not one 

single investment has been made in the nine months since enactment. It could be several more months before any SBLF dollars 

made their way through banks and into the hands of entrepreneurs. All of these issues are as relevant today as they were 

when the legislation was considered. 

And so with that, Mr. Chairman, I thank and I yield back. 

Chairman GRAVES. Thank you very much. Secretary Geithner, 

your entire written testimony will be entered into the record. And 

you are now recognized to give your statement. 

STATEMENT OF THE HONORABLE TIMOTHY F. GEITHNER, 

SECRETARY, UNITED STATES DEPARTMENT OF THE TREASURY 

Secretary GEITHNER. Thank you. Nice to be here. Mr. Chairman, 

Ranking Member Vela ́zquez, and members of the Committee, it is 

good to come before you today to talk about this broader challenge. 

You know, I know we have not always agreed on the best way 

to advance this objective of helping small businesses and we have 

had to make some compromises to get things done, but I know we 


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all share that basic objective of looking for ways we can make it 

easier for small businesses to expand and to invest and to hire. 

Now, as you both said, this financial crisis took a very heavy toll 

on small businesses and American workers. You know, in the 

month the President took office, job losses peaked at about 

$820,000. The recession ultimately claimed nearly nine million 

jobs. 

Our efforts over the past two and a half years have helped restore economic growth. The President righted the ship, put out the 

fire, and we have now seen 15 straight months of private sector job 

growth. More than two million Americans have gone back to work 

over that period, one million within the last six months alone. 

But of course, even as economic growth continues, we continue 

to face very substantial economic challenges. And in order to help 

strengthen this recovery, help get more Americans back to work, 

we need to continue to find ways to help small businesses. As you 

all know, half of the workforce of this country is employed by companies with fewer than 500 employees. 

Now, the recession hit small businesses especially hard and that 

is for two reasons. The first is that it is because so much of the 

recession was concentrated in construction and small businesses, of 

course, are disproportionately concentrated in the construction and 

real estate areas. The second reason is because small banks, small 

businesses were most directly affected by the contraction in credit 

we saw across the financial system. 

Small businesses are more dependent on bank loans than are 

large businesses, and therefore, they were more affected by the 

pressures we saw on small banks across the country. And they 

were more affected by the withdrawal of credit for loans backed by 

real estate. And of course, the broader contraction and credit card 

lending. 

Now, in view of these challenges we worked with Congress over 

the past couple of years to run a series of programs. I want to describe briefly and summarize briefly the basic elements of that 

strategy. The first was to provide a significant amount of additional 

tax relief targeted at small businesses. We have supported 17 direct specific tax breaks for small business, many of them through 

the Recovery Act. Overall, these 17 specific tax breaks are estimated to save small businesses more than $50 billion over the 10 

years over the classic budget window. And this means that the 

overall tax burden for small businesses is lower today than when 

the President took office. 

We propose in the budget some additional long-term tax relief for 

small businesses which I will be happy to describe in more detail. 

The second element of our strategy was to help small businesses 

get more access to capital, access to credit on more favorable terms. 

We are now implementing two public-private partnerships—the 

Small Business Lending Fund and the State Small Business Credit 

Initiative—which are designed to leverage government resources 

with the local knowledge of community banks and state credit programs. We have already approved 10 states for the State Credit 

Initiative, including the announcement today that Kansas will receive funding to spur more than $130 million in small business 

lending. 


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Now, these capital programs are one of the most cost effective 

ways we know that Congress can help encourage small business 

lending because every dollar of capital that Congress provides can 

be leveraged to support lending that is many multiples of the 

government’s investment. And the bank capital programs that were 

at the center of the government’s emergency programs that began 

under the last administration have demonstrated the effectiveness 

of this approach. We have seen these broad programs, capital investment banks yield a significant positive return to the taxpayer 

and they were decisive, of course, in bringing about the overall improvement in credit conditions that the Ranking Member referred 

to. 

Now, as you know, in addition to these direct—these new types 

of credit programs, we have, with the help of this Committee, increased the SBA’s 7(a) and 504 loan guarantee programs and permanently increased SBA loan limits. The Community Development 

Financial Institutions Fund continues to be a critical source for 

capital to reach underserved communities through a variety of programs, including the New Market Tax Credit Program and through 

the Start-Up America Initiative and other efforts we are looking at 

ways to reduce barriers to equity capital and the chairman referred 

to this. It is just so important for start-ups and other high growth, 

innovative small businesses. 

The third piece of our strategy is about regulatory reform. The 

President has directed Cass Sunstein at OMB to lead a government-wide review of existing regulations so that we can eliminate 

or fix rules that are outdated and unjustifiably costly and to make 

sure that new regulations undergo a more rigorous process of review. And of course, as part of this effort we are going to take a 

close look at how we can remove unnecessary barriers and burdens 

to small businesses. 

The fourth piece of our strategy is about federal contracting opportunities for small business, which we are committed to work to 

expand. We are very pleased that a third of the Recovery Act dollars went to small businesses. We want to look for ways to do more. 

And finally, we are looking at ways to improve export opportunities 

for small businesses. As part of the President’s broad National Export Initiative, we placed a high priority on helping small businesses access foreign markets. My testimony lays out in more detail the scope of those programs. 

Now, these initiatives, these programs we believe are very important to continue to help small businesses expand, hire, and invest. 

We have got a lot of challenges ahead. And I want to just end by 

saying that it is very important that as we work towards a bipartisan, comprehensive agreement to reduce our long-term deficits, 

we make sure that we reach agreement on a program that is good 

for the economy, that does not endanger the recovery, and it helps 

make sure that we can retain and remain competitive in the long 

run. If we meet that test, then we can help small businesses thrive 

as we recover. 

Thank you. 

[The statement of Mr. Geithner follows on page 39.] 

Chairman GRAVES. Thank you, Mr. Secretary. 


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And I will start with questions. And I ask that if other members 

have opening statements, please submit them for the record so we 

can get the majority of our questions in. 

And basically my question is fairly simple and I am just looking 

for reasons why we cannot—we seem to have a gap here. We hear 

in testimony every single week from bankers that come in here and 

they tell us they have got money to lend. With the fact that I point 

out and the Ranking Member pointed out, too, even with the Small 

Business Lending Fund that we have only seen a portion or at 

least a few banks applied for it. But banks say they have money 

to lend and yet we have small businesses come in here every single 

week also and tell us they cannot get capital. We are trying to find 

a reason for that. Do you have any ideas, thoughts? What is causing the problem here or this divide that nobody seems to be able 

to cross? 

Secretary GEITHNER. Well, Mr. Chairman, that is the right question. And I will give you my sense. And of course, you know, like 

you, I talked to small businesses across the country all the time 

and I hear the same things. People still say it is very hard to get 

credit. We think we deserve it. We should be able to have access 

to it. Banks were throwing money at us before the crisis and now 

it has dried up. We think that is unfair. It is hurting our capacity 

to expand. Many of them say, you know, we are just on the verge 

of being able to—we are seeing more demand for our products. We 

would like to meet that demand but we cannot do it unless we have 

more working capital. So I think you are absolutely right about the 

nature of the problem. 

And I think the way to explain why it still feels that bad is just 

to remind people that the crisis caused a huge amount of damage. 

It is going to take years for us to dig our way out of that hole. A 

lot of the damage was concentrated in construction where a lot of 

small businesses operate. And the credit damage caused by the crisis hurt a lot of small banks’ capacity to lend and hurt a lot of the 

classic lending channels that small businesses rely on. So I think 

those are the best explanations for why it still feels so bad. 

It is fair to acknowledge that, you know, examiners across our 

banking industries, state and federal, are trying to be more careful. 

You know, they look back at the experience or the judgments they 

made on the run-up to the crisis. They felt they were behind the 

curve in lots of ways. And they are being very careful. Now, maybe 

too careful in some ways. The typical thing you see in recessions, 

coming out of recessions caused by financial crises is that there is 

a risk that supervising examiners overreact. And after a period of 

maybe being a little too loose they tend to overdo it. 

And so I think it is very important as we try to make sure these 

programs reach as many people as we can, that the federal banking 

agencies continue to try to give their examiners more balanced 

guidance so again they do not make these problems unnecessarily 

worse by overdoing it. They should be cautious. They should be 

careful. But they do not need to overdo it. 

Chairman GRAVES. We hear some of exactly what you said when 

it comes to the examiners. They are either requiring more equity 

for the same line of credit on a business that has never missed a 


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payment or they are lowering their line of credit, with the same equity—the reverse. 

Do you think that small businesses out there are, one of the 

things that I worry about, too, just sitting on cash that they may 

have? And do you think that the concern over the deficit or the concern over the debt is hampering that growth or do you think that 

small businesses are holding back just as a result of that alone? 

Secretary GEITHNER. I think it is a good question. You know, we 

have a bunch of surveys that some of you cited that we use as a 

measure of what small businesses say their main challenges are. 

And I think those surveys have consistently said throughout the 

crisis that the biggest challenge they face, the biggest source of uncertainty is over how much growth and demand for their products 

they are going to see. And although we have had now about 18 

months of positive growth, because the crisis was so traumatic and 

caused so much uncertainty, so much damage, you know, this is 

something that most Americans had never experienced before in 

their lifetime, never thought they would experience. And that has 

lasting damage to confidence. And people are a little more tentative 

of giving the shocks caused by the crisis about how strong it is 

going to be in the future. That seems to be the main effect. 

However, having said that, I agree very much that if Congress 

can find a way to reach a bipartisan, comprehensive, balanced 

agreement to bring down the long-term deficits that that would 

help. It would be a sign that Washington works, is able to try to 

come together and solve some problems. And I think that would 

improve overall confidence across the country. Of course, how we 

do that is very important. As I said at the end, it is important not 

just to bring more gravity to our fiscal position, demonstrate that 

we can live within our means, but we have to do that in a way that 

is going to be good for growth, good for the economy in the near 

term and good for the economy in the long run. And that is a complicated challenge. 

Chairman GRAVES. I have a lot more questions. I am going to 

defer to the Ranking member because I want to make sure that our 

other members have the opportunity to ask and I will ask at the 

end if we still have time. 

Ranking member. 

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

Mr. Secretary, I would like to discuss the SBLF program. The 

focus of it basically was liquidity to address the issue of the lack 

of liquidity. Given the fact that only less than 10 percent of the 

banks who qualify for these funds have applied, why is it that more 

lenders are not applying? 

Secretary GEITHNER. It is a good question. And I should say that, 

you know, you referred to our debates and discussions about how 

best to solve this problem. And I very much respect not just your 

record of accomplishment on these issues. I know you have had 

somewhat different views than us and I respect those views, so I 

will give you my sense. 

We have had about roughly almost 850 banks apply. I think that 

is a pretty good, reasonable number of banks. I think it suggests 

a fair amount of interest, although you said, you know, we are a 

country with 9,000 banks, 8,000 banks. So it is not a large fraction 


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of banks. But it is a pretty substantial number. And not all of them 

will qualify. And you are right to say you cannot be certain what 

you are going to see in terms of the term on those investments. But 

we think it will be positive. 

Ms. VELA ́ ZQUEZ. You do not think that is because of the TARP 

stigma? 

Secretary GEITHNER. I think that, and you are right to recognize 

that, you know, we have done this in three stages, these broad approaches to credit. We are experimenting a bit. And what we found 

in the first stage of TARP, as you know, is we saw hundreds of 

banks withdraw their applications for the program because they 

were worried about the stigma. And they were worried that if they 

came and took capital from the government that they would be penalized in the eyes of their competitors and their creditors and 

their customers. And so they withdrew in waves. And therefore, 

that instrument was not as powerful as we thought it would be for 

small banks. That is partly why we tried to design a complimentary program that had less stigma. 

Ms. VELA ́ ZQUEZ. Another reason could be that banks are sitting 

on a record amount of cash. 

Secretary GEITHNER. Well, I think you are right to say if you look 

across the banking system, the banks today have much more capital than they did before the crisis. And you are seeing them—they 

are not facing much loan demand yet, and a little tentative to use 

that in some cases, but what this program tries to do is reach a 

subset of the banking system that cannot raise capital on their own 

but are still viable institutions. That is not going to be the bulk of 

banks but it is going to be a meaningful fraction of banks. 

Ms. VELA ́ ZQUEZ. What will Treasury do with the excess funds 

that will not be used for the SBLF? 

Secretary GEITHNER. That is a judgment only Congress can 

make. We have no authority to use the funds once we run out of 

time and once we reach the ones we think are eligible. 

Ms. VELA ́ ZQUEZ. So if you do not use it because banks will not 

apply, will you recommend to Congress to rescind the funds? 

Secretary GEITHNER. You know what, I have not really thought 

about it yet. We have been focused on trying to get this moving but 

I would be happy to talk to you about what the best use of the remaining authority is. 

Ms. VELA ́ ZQUEZ. Well, you heard the Chairman and in my opening statement I also make reference to the fact that time and 

again, businesses are coming here telling us that they are having— 

and these are creditworthy companies—and still are not getting 

any affordable capital. So do you think, do you expect that the 

SBLF fund will change this trend? 

Secretary GEITHNER. Well, I think it is going to make a meaningful difference for the banks that qualify and are eligible. And it will 

make a meaningful difference for their customers. Because, again, 

you know, the central feature of this program is that you get a dollar of capital and that means that you have between eight and 12 

additional dollars of lending capacity. If you are short capital, it is 

less likely you have to cut your lending to your credit lines to your 

customers by that magnitude. If you have ample demand for loans 

and capital then you can leverage that money substantially. So it 


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will make a meaningful difference for the banks that apply and a 

meaningful difference to their customers. And in a very efficient 

way for the Congress. I think one of the most efficient ways we 

have to use the taxpayers’ money to try to incent investment and 

hiring. 

Ms. VELA ́ ZQUEZ. On a scale of one to 10, one having no effect, 10 

satisfying the capital needs of small businesses, at the end of the 

day how do you qualify the SBLF fund will lend? On a scale of one 

to 10. 

Secretary GEITHNER. Well, I think I will repeat what I said. It will make a meaningful contribution. We are a $14 trillion economy. We have 8,000 banks. We have had 850 roughly apply. The 

total capital that they have applied for is about $12 billion in authority. So it is meaningful for those who are eligible, meaningful 

for their customers, but of course, you are right to say we are a 

large economy. 

Ms. VELA ́ ZQUEZ. Mr. Secretary, throughout my discussion with 

Treasury staff I was told that the program will be up and running 

in six months. And I am quite disappointed that still not a single 

money has been disbursed to a small company, a small firm. When 

will the first small business actually see this money? 

Secretary GEITHNER. Very soon. But thank you for asking that 

question again that you said in your opening remarks. And let me 

explain to you why we are here. Because we are a little disappointed, too, and a little surprised. It has been a little slower 

than we thought. Let me explain why. In the program Congress 

legislated, there are very strong protections to protect the taxpayer 

as you would expect. Very important that those exist. 

And in our system we rely on two safeguards for that. One is we 

require the applications to be reviewed by their primary bank supervisor. And we do not consider them unless they get recommended by the bank supervisor. That program leaves us vulnerable to the time it takes those regulators to be careful in a review. 

But also we have to look independently of them and we are trying 

to be careful. So we are a little slower than we thought but we are 

very close to moving ahead. And again, I am very confident you are 

going to see a very meaningful impact on the institutions that are 

eligible and we are close to being able to unleash that capital. 

Ms. VELA ́ ZQUEZ. I have many more questions but in light of— 

what guarantees are we going to have that community banks or 

the banks, financial institutions that will get these funds, will provide small business loans? 

Secretary GEITHNER. Well, you know this debate as well as anybody. We do not have the capacity and the program does not give 

us the ability to force banks to lend. We do not think we can do 

that. What we did is something different. We created a program 

structured to provide very powerful incentives for them to lend. 

But you said they are incentives. They are not guarantees. They 

are not compulsory. But if a bank does not lend above the baseline 

of lending that proceeded the enactment of the law, then they have 

to pay a higher dividend. So their incentives are pretty strong. But 

you are right to point out that we do not have the power to compel. 

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

Chairman GRAVES. Ms. Herrera Beutler. 


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Ms. HERRERA BEUTLER. Thank you, Mr. Chair. Thank you, Mr. 

Secretary. 

I am going to follow along the same lines of the Small Business 

Lending Fund. I have some real concerns. I mean, I have had— 

whether it has been small businesses who have said, hey, look, this 

is one of the only games in town or I have had several community 

banks and credit unions, creditworthy, right? I had a bank fail in 

my largest county so I am learning the difference here. We are 

talking about creditworthy, financial institutions who have come in 

and said can you help us with Treasury? We cannot get a response. 

That was in my first couple of months here. As it has drug on, we 

are now at six months plus. And as we communicate with Treasury 

we get told we hope so. So when I filter through kind of the answer 

I heard you give the Ranking Member, it had to do with, you know, 

getting approval through a primary bank supervisor and then an 

independent review, correct me. I was not here so please do correct 

me if I am wrong. But I thought the whole purpose of getting this 

small bit of cash infusion to those small community banks to get 

out to small businesses in a short term was the goal. What is happening with the money? And can you give us a time guarantee? Because it should not take this long. 

Secretary GEITHNER. Well, I wish it were otherwise but we are 

doing what I think you would want us to do and you would expect 

us to do, and you would hold us accountable for, which is we are 

being careful with the taxpayers’ money. If you think about the 

U.S. banking system today and community banks today, they fall 

roughly into three categories. There are banks that are very strong 

and were very careful. Can go raise capital and therefore can expand their customers on their own. They have no interest in coming to the government for help. 

There are a lot of other banks who got themselves way underwater, lent too much to commercial real estate or in sectors affected by the crisis, innocent victims of the recession who may not 

survive. Do not have enough capital and we cannot justify helping 

keep them alive. 

Ms. HERRERA BEUTLER. Yeah. And—— 

Secretary GEITHNER. But then there are banks in the middle who 

this program can help that are viable, cannot raise capital on their 

own because those markets are still much more tentative about 

lending to banks given the crisis. But we think there is a good way, 

responsible way to reach those banks. But they will not protect 

banks from failing, a lot of banks from failing. And there are a lot 

of banks that would like this capital that will not be eligible. 

I wish it were different, but the reason why we are a little behind schedule is because we are being careful and because the regulators are being careful. And that is what you want us to be. 

Ms. HERRERA BEUTLER. With that, I think you are right. There 

are going to be banks who are still teetering. Right? And Washington State has had—were fourth or fifth, I think, in terms of 

bank closures. But again, I am not talking about—and we had 

Washington Mutual. I am talking about a big bank that made a lot 

of these risky loans. Right? Got into the subprime market. I am 

talking about community institutions. Heritage Bank in Olympia. 

IQ Credit Union in Vancouver. I am talking about financial instituVerDate Mar 15 2010 02:41 Sep 02, 2011 Jkt 067850 PO 00000 Frm 00014 Fmt 6633 Sfmt 6602 E:\HR\OC\A850.XXX A850

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tions who have weathered this, continued to weather this well and 

cannot get a response from Treasury. 

Secretary GEITHNER. Well, again, we will be as responsive as we 

can and we will be as clear with people about if they do not meet 

the test, the regulators’ test or our test, we will make sure they get 

a response. But just a little context without commenting on the 

specific banks you mentioned. You are right to say that in general 

this was a crisis not caused by small banks. But it is also true that 

if you look at small banks across the country running up to this 

crisis, a very substantial number of those banks got themselves 

very, very exposed to commercial real estate as a share of capital. 

Therefore, very, very vulnerable. 

Ms. HERRERA BEUTLER. Absolutely. 

Secretary GEITHNER. It is hard for any of us—any of you really 

or even me in this context, to know—— 

Ms. HERRERA BEUTLER. Let me reclaim my time really quickly 

because I recognize there are a lot of banks who got out over the 

tip of their skis. That is not what I am talking about. I am talking 

about creditworthy institutions who cannot get a response from 

Treasury, from your office. 

Secretary GEITHNER. But you—— 

Ms. HERRERA BEUTLER. Let me finish. From your office on 

whether or not they are approved or not approved. And we are 

talking six months. 

Secretary GEITHNER. No, they will get that response. But again, 

the reason why people have not heard from us yet is because we 

depend on the regulators to review these applications. We do not 

even see them until they meet that review. When they see them, 

we look at them. And we will make those judgments as quickly as 

we can. But again, none of you, I hate to say it, will be in a position to make a judgment independently on your own about whether 

they are viable or not. That is a judgment that you need to leave 

to and the law is designed this way. Leave to the checks and balances we set up. 

Ms. HERRERA BEUTLER. Let me, the last couple of seconds, well, 

then, if this turns out that of the banks that maybe we cannot 

judge as creditworthy or the credit unions, institutions, do not meet 

your criteria, is that money going to then be returned? What happens to that money if we are not lending it and it is not getting 

to small businesses? 

Secretary GEITHNER. The way the law of the land works, if there 

is money leftover, meaning there is not eligible institutions come 

on a scale to use all that money, then that money is left to the Congress to choose what it wishes to do with that. It cannot be used— 

we cannot use it. And you can make your own judgments. And this 

Committee should take a look at that. What would be a better use 

of those funds? 

Ms. HERRERA BEUTLER. I yield back. Thank you. 

Chairman GRAVES. The gentleman from Pennsylvania, Mr. Altmire. 

Mr. ALTMIRE. Thank you, Mr. Secretary, for being here. And 

when we confirmed your appearance here I went back to my district and talked with some key small business owners and asked 

them what they would like for me to ask you given the opportunity. 


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And universally, businesses in my district are saying that lenders 

are focused primarily on real estate—and you addressed this in 

your testimony. Real estate loans—rather than on providing the 

working capital that will enable small firms to rehire the people 

they have had to lay off and expand their operations and their employment, which has led lenders to state that there is no demand. 

And businesses are claiming there is no supply, the push and pull 

that you described earlier. 

So how can the Treasury ensure that businesses are getting the 

loans that they need in that climate? 

Secretary GEITHNER. Cannot ensure. You know, we can help but 

we cannot ensure. And you have not given us the authority or the 

power to ensure. And I do not think you could. All we can do is 

through this mix of things. And it is a very substantial mix of programs we put in place. The SBA guarantees the capital programs, 

the tax incentives, that we are doing as much as we can to help 

them dig their way out of this as quickly as possible. But we cannot ensure. 

And, you know, countries facing these challenges over the decades have tried all sorts of different ways to get capital directly to 

companies who need businesses. And those programs are littered 

with failure and waste and distortion and politics. It is not a record 

you want us to emulate. And because of that we are left with the 

tools that we have which are to try to work through banks, use the 

knowledge banks have about who is creditworthy, who is not. Not 

to make those judgments independently but try to make it economically, more economically attractive for them to lend. 

Mr. ALTMIRE. Right. And for many lenders, when making a determination of creditworthiness, the discussion we were having earlier, they look at the past year or two. Obviously, that was not a 

good time in the economy and it is difficult for any business to 

have shown a profit in that time period. And the Fed, Federal Reserve has encouraged lending to creditworthy businesses to aid the 

recovery. But to date the Fed has yet to define what creditworthy 

means. So the uncertainty further compounds the lenders’ fears 

that regulators will penalize them for making loans that will later 

be found to have been made to non-creditworthy businesses. 

So what guidance can the Treasury offer or have you offered to 

help define what creditworthy means? And do Treasury’s lending 

initiatives allow for a longer term review beyond the two years for 

a business’s finances? 

Secretary GEITHNER. We cannot really make that judgment for 

the regulators or their banks. Not something we can do. But the 

programs we set up do not—would still give the primary regulators 

the discretion to make a judgment about whether banks are looking at credit risk in a more balanced, reasonable way. And you are 

right to say that when you have a crisis like this, you know, this 

is something that could have been a second grade depression. And 

you saw a huge amount of business failure, a huge loss of wealth, 

huge trauma to the American economy. It has made everybody too 

tentative. A little too tentative, too cautious. And I think a real 

challenge we all face is to try to make sure people look forward and 

look at the earnings capacity of these businesses, recognizing that 

we will be coming out of this over time and you want to make sure 


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they give as much weight to the future as they give to the recent 

past. 

Mr. ALTMIRE. Right. And lastly, Mr. Secretary, in Western Pennsylvania, venture capital. Something I hear a lot about and access 

has been an issue recently. And it has proven to be a critical driver 

in producing the high-tech, high-growth jobs and new businesses 

can create jobs that would fuel the economy in the way that we all 

hope to see. Do you think that more of a focus should have been 

put on retrospect on this type of equity investment rather than 

solely on debt financing? 

Secretary GEITHNER. It is a good question. I think you are right 

to say that, you know, one of the great strengths of the American 

financial system before the crisis was we were really better than 

any country in the world at helping small businesses get access to 

equity capital and debt capital, early stage. And we have got to 

make sure we are recreating that fundamental strength of our system. 

And you are right that angel investments and early stage equity 

investments are very important to innovate companies. And we are 

looking at a range of ways to help that. 

On the credit side though, our judgment was we have to work 

really with the knowledge of community banks; not try to independently make judgments of which companies are creditworthy, 

which ones they are not. 

But we think there are some other things we can do on the equity side, and we are working closely with the SEC and the SBA 

and others in that direction. I will be happy to talk to your colleagues about how best to do that. 

Thank you. 

Mr. ALTMIRE. Thank you. Thank you for being with us today. 

Chairman GRAVES. The gentleman from Florida, Mr. West. 

Mr. WEST. Thank you, Mr. Chairman and Secretary Geithner. 

Great to see you here today. 

Last week, Friday, I had the opportunity to speak to the Greater 

Fort Lauderdale Chamber of Commerce. And of course, there were 

a lot of local community bankers that were there. And again, the 

reoccurring theme always seems to be, you know, we want to provide that access to capital but we are seeing an increase in regulation. We are seeing more examiners coming down. They really do 

not understand things going on here on the ground and that relationship. In the six short months that I spent here I have learned 

that in Washington, D.C., if it is worth reacting to, it is worth overreacting to. 

So I am just wondering, is anyone at the Treasury going back 

maybe now and looking at the Dodd-Frank law and looking at 

maybe the potential negative impacts that we could find on small 

businesses and those community banks? The large banks have 

these huge staffs. They can take care of these things, but the small 

banks and that relationship with small business, is it a possibility 

we can go back and review Dodd-Frank? 

Secretary GEITHNER. Well, I want to, I think, you are raising a 

really important question. And I agree that the main challenge in 

thinking about regulation is how to get the balance right. It is obvious looking back at the financial crisis, we got a whole bunch of 


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things wrong as a country and how much oversight we put over the 

banking system. And we have to fix that. And that is what DoddFrank was designed to do. But we have to be careful we do not 

overdo it. I completely agree with you. 

I do not believe that—well, let me say it affirmatively. I think 

Dodd-Frank was very carefully designed to make sure that small 

businesses were not the object of a huge increase in regulation or 

meaningful increase in regulation. In fact—— 

Mr. WEST. But there is a little collateral damage that has happened. 

Secretary GEITHNER. Well, it is a good question I think that they 

were largely protected, insulated from the core provisions of the 

act. The act was really designed at the big failures by large institutions and markets and that is why I just want to read you this 

quote from Cam Fine when the bill was passed. Cam Fine, as you 

know, chairs the Independent Community Bankers Association. He 

said that Dodd-Frank recognizes the two distinct sectors in the financial services sector, Main Street community banks and Wall 

Street Meta Banks. Broadly supportive of the act. Does not agree 

with everything in it but it recognizes the efforts of many people 

on the hill to make sure that small banks were not subject to an 

unfair and unnecessary burden as we try to fix the big failures in 

the system. 

But I agree with you that we want to be very careful that we do 

not overdo it. And I think that the bigger challenge, I think, apart 

from just the uncertainty facing banks and businesses across the 

country is that I think examiners, there is just some natural tendency. These are human beings. They want to make sure they are 

earning this out of caution now and we want to make sure they do 

not overcorrect. 

Mr. WEST. Well, but I think that as we go forward, let us just 

make sure, as you just said, that sweet spot, kind of like on a baseball bat, we need to find that right position as far as this regulation. 

The next question I had is when we look at the Small Business 

Lending Fund, and you just talked about how many thousands of 

banks we have out there, but how many are looking toward using 

this fund? We really have a bottom-up process by going out, talking 

to the SBA, talking to some small business leaders, community 

banks, as far as what would you like to see us tailor this fund to 

be so that it could be a bottom-up process and maybe not a topdown driven process? 

Secretary GEITHNER. Very good question. You know, it took nine 

months for Congress to react to the initial proposal we made and 

reshape them and ultimately legislate them. Nine months is a long 

time with a country facing this degree of challenge in the financial 

sector. And during those nine months, not just we but your predecessors and other people on the Committee spent a lot of time talking to states with experience in these programs to community 

banks and businesses about what would be the most powerful set 

of packages. And I am sure we did not get it perfect but what we 

all tried to do was take the best mix of things that would command 

the most support up here and, you know, we are trying a lot of different things. 


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You know, Roosevelt said in the Great Depression, he said, you 

know, if I am not mistaken what the country needs is bold experimentation. And we are experimenting with the best mix of things 

we think will help mitigate it. It is not going to make it easy for 

everybody caught up in this mess, but we thought we were taking 

the best mix of ideas that could command the most support up 

here. 

Mr. WEST. Okay. The last thing I will say is from a lot of people 

down in South Florida where we still have some double digit unemployment and incredible foreclosure problems, please remember 

that small businesses operate as S corporations from personal income tax rates when you start talking about raising taxes. 

Thank you very much. I yield back. 

Secretary GEITHNER. I absolutely will remember that. And you 

are making a good point. 

Chairman GRAVES. The gentleman from Rhode Island, Mr. 

Cicilline. 

Mr. CICILLINE. Thank you, Mr. Chairman. Thank you, Mr. Secretary, for being with us today. 

I have a small business jobs and economy roundtable in my state 

and my district. And when I talk to small business owners in that 

setting they reaffirm how important capital is, the lifeblood of 

small business, as you have said already. In Rhode Island, where 

our economy has been particularly hard hit, small businesses, 

many of our small businesses do not have a strong balance sheet. 

They may be underwater in a building that they are in or in their 

own home and they may have impaired credit scores because of 

credit card debt that they have taken to keep their business running and keep their businesses open. And so with all those factors 

in play, even with an SBA guarantee getting a capital infusion can 

become—may be still very, very difficult for some small businesses 

in Rhode Island. 

So when I spoke recently with the president of Coastway Community Bank, which is my state’s largest dollar lender of SBA 

loans, I was very surprised to learn that his institution is not planning to take advantage of the Small Business Loan Fund. 

Coastway is a mutual institution and according to the documents 

that I have had the opportunity to review from Treasury, mutuals 

cannot issue preferred stock to Treasury without changing their tax 

elections, so Treasury will not offer mutuals tier one capital. And 

so here we have instances where we have a lender who really is 

an experienced lender that could have borrowed $10 million from 

Treasury and leveraged that between $100 and $150 million in 

small business loans, but instead, because of this complication, 

they are really forced to remain on the sidelines and not participate. 

And so my question is what could we do now at this stage in the 

SBLF program to engage these mutual institutions in this program. We know, as you said, 844 banks have submitted applications seeking $11.6 billion, so there is $18 billion remaining. And 

if this distinction between tier one and tier two capital is keeping 

these really good, tried and tested and secure and successful banks 

like Coastway in Rhode Island on the sidelines, what can we do? 

What can Treasury do now to get them in this game to really get 


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that capital out in places like Rhode Island and in places like my 

congressional district. 

Secretary GEITHNER. I am not sure we have a solution to this 

problem, just to be honest. But we will be happy to talk to you in 

more detail and to your staff about it. But let me explain the way— 

the nature of this constraint. 

Under the system we have today, it is the banking regulators 

that determine what counts as capital. And in their judgment, for 

those types of institutions, they are not willing—I want to say this 

carefully—to count as capital the capital Congress made available 

to this program. And that gives us a problem. And what it does 

mean is that this has limited benefit for certain types of institutions that are structured in that form. But I would be happy to talk 

to you and your staff in more detail about it and see if there is anything we can do about this. I am not sure there is. 

Mr. CICILLINE. I mean, it just strikes me that some of these community banks which are best positioned to do this work and have 

the pre-existing relationship with small businesses are in the best 

position to do this kind of lending and they are prohibited, 

which—— 

Secretary GEITHNER. Yeah. I completely understand. The whole 

program is designed to take advantage of the knowledge community banks have about who is creditworthy and, you know, it has 

got very good leverage in it because of the public-private partnership. But we have got this problem, which is that bank regulators 

do not want to or do not feel they can count as capital, tier one capital, this type of capital investment for those types of institutions. 

And I am sure they would be happy to explain to you why they 

came to that judgment, and we would be happy to be a part of that. 

Mr. CICILLINE. Terrific. Thank you. I yield back the balance of 

my time. 

Chairman GRAVES. The gentleman from Colorado, Mr. Tipton. 

Mr. TIPTON. Thank you, Mr. Chairman. Mr. Secretary, thank you 

for joining us here today. 

I would like to go back actually to your opening comment when 

you stated that the President had righted the ship. And frankly, I 

have to tell you in the Third District of Colorado, we have not seen 

the ship righted. We see unemployment at 9.1 percent. If you go 

through the Third Congressional District of Colorado, we have better than double digit unemployment in many of our communities 

right now. We are seeing great frustration in terms of the marketplace. Access to capital, I am a small businessman. And let me tell 

you the problems that I see and my counterparts are really seeing 

right now. It is actually uncertainty. You can provide the access to 

capital, but if we do not have sales it does not work. We have to 

be able to get this economy moving and the uncertainty that we are 

seeing, frankly, coming out of the administration is greatly impacting a lot of business decisions right now. 

When I read through your entire statement last night, you were 

talking about government-run health care providing certainty. It 

has created uncertainty for a lot of small businesses that are out 

there. When we are talking about the tax code that Mr. West had 

referred to as well, you and the President have stated that if you 

earn $250,000 or more in this country you are wealthy. I would inVerDate Mar 15 2010 02:41 Sep 02, 2011 Jkt 067850 PO 00000 Frm 00020 Fmt 6633 Sfmt 6602 E:\HR\OC\A850.XXX A850

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vite you to come to Colorado with me, sit down with small businesses, LLCs that are working. They do not feel that they are rich 

because in the case of my business, and believe me, for the last few 

years we have not had to worry about making those types of profits. We reinvest those back into our business to be able to keep our 

people employed. We are facing higher gas prices in this country. 

So in the entire scope of things that we are looking at right now, 

when we are talking about access to capital and we are doing everything we can to state, to go to your comments, to make sure 

that we are preserving and standing up for the American taxpayer, 

I guess I would like to know when we look back on TARP and ERA, 

did the government actually stand up for the American taxpayer? 

Secretary GEITHNER. In TARP? 

Mr. TIPTON. Yes. 

Secretary GEITHNER. Let me come back to where you started because you are absolutely right that unemployment nationally is 

roughly nine percent but that does not capture much higher unemployment rates in many parts of the country. And you are absolutely right that this is still a very tough economy and we have got 

a long way to go to dig out of and repair the damage caused by the 

crisis. So I do not disagree with you on that. And I absolutely agree 

that, again, small businesses in many parts of the country, parts 

where unemployment is very high or businesses that were in construction and real estate are still showing the deep scars caused by 

the crisis. The question is what can we do to help make that better. 

Now, you referred to a tax question. I just want to make sure I 

respond to that because I know that is a broad concern. Let me explain to you what our view is about that particular question. What 

we proposed is to allow the tax rates that affect individuals and 

businesses that pay taxes as pass-throughs, who make more than 

$250,000, to have those rates revert to the level they were at the 

end of the Clinton administration. And we do not do that because 

we think that we want to do it in particular; we do it because we 

have huge fiscal challenges as a country and we have to figure out 

a way to dig out of that mess. And we think the best way to do 

that for the economy is through a broader balanced approach with 

savings matched by some modest changes in revenues. 

Now, you are right that that will change the tax treatment of 

small businesses but only roughly three percent of small businesses. And we think that is a reasonable strategy given the broad 

challenges we face. And we are just restoring to the rates that prevailed at the end of the Clinton administration, which was a period 

of very good small business performance, very strong investment 

growth, very small income growth, very strong employment growth, 

very strong productivity growth. And we think the economy can 

handle it. And, you know, it is about alternatives. If we do not do 

that, you know, if we extend those tax rates for the top two percent, then we have to go out and borrow $700 billion over the next 

10 years. We cannot afford to do that and that is why we proposed 

that. 

Mr. TIPTON. Well, I understand that. I just might throw out the 

suggestion if we get people back to work we are creating new taxpayers. And one way I can assure you that we will not be getting 

people back to work is you can dismiss only three percent. Those 


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are job creators, people that are creating jobs, and we have got 

struggling people right now that cannot meet those mortgages. 

But if we go back a little bit to some of the issues that we are 

really seeing on the banking end of the world, Colorado Bankers 

Association notes that we are going to have 25,000 pages potentially of new regulations coming out of Dodd-Frank. These are 

going to impact it. And when we look through the five Cs in terms 

of making those actual loans to small businesses in this country, 

banks want to be able to loan this money but the regulators, regulations again are coming into play, choking off the American economy and our ability to be able to create jobs. 

Secretary GEITHNER. I do not agree with that. Let me explain a 

little bit why I think it is a fair approach to thinking about that. 

And as I said, again, it is very important we get this balance right. 

And there is no perfect way to get that balance right. But remember, look back at what happened given the basic failures of oversight in our financial system. It caused a huge amount of damage 

to small businesses. They were the innocent victims in many ways 

of the big mistakes in design of regulation, checks and balances of 

our financial system. It was catastrophic. So we have to figure out 

a way to fix that mess. And those regulations are overwhelmingly 

targeted. Not at small banks; at the large institutions, the derivatives markets, the complex aspects of our financial system where 

most of the trauma was. And these are complicated problems and 

they require complicated solutions. But the law was designed very 

carefully because of the efforts of many of the people in this body 

to make sure that those burdens did not fall on small banks. And 

we have got to make sure we have a system that provides more 

stability, more stability and access to credit, and that is what those 

rules are designed to do. But of course, you are right to say we 

have got to be careful to get the balance right and not overdo it. 

Chairman GRAVES. The gentlelady from California, Ms. Chu. 

Ms. CHU. Last year, the Congressional Asian-Pacific Caucus and 

the Congressional Black Caucus teamed up to offer an amendment 

to the Small Business Lending Fund legislation that would make 

sure culturally and linguistically appropriate services are part of 

the financial institution’s lending plan where appropriate. And of 

course, we did this to ensure that there is greater success for the 

program and that the funds go where they are needed. What criteria have you set up to decide whether or not businesses will have 

to institute culturally and linguistically appropriate lending plans? 

Secretary GEITHNER. Congresswoman, I am going to have to consult with my staff and come back to you in writing with a more 

detailed response to that. But I know the provision you are referring to. The objective is something we share. I think it is very important. We have worked very hard to do much more extensive outreach across the country to make sure people are aware of these 

programs and can take advantage of them. We are committed to 

continuing that and we are happy to work with you on how best 

to do that. And I will be happy to report on the detail and exactly 

what we are doing with that provision. 

Ms. CHU. I would appreciate that. I am also very interested in 

the establishment of the Office of Minority and Women Inclusion 

at Treasury and at the other federal financial regulatory agencies. 


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Minority communities face many cultural and linguistic barriers 

that are often tackled by community-based organizations or CBOs. 

The CBOs are the link to these communities that often do not 

know about federal government programs or understand how to 

navigate the federal process. It is important that this new Office 

of Minority and Women Affairs overcome these barriers, and without significant expertise in community affairs in the office, we are 

concerned about the effectiveness of the outreach program. Can you 

give me a status update on the Office of Minority and Women Inclusion offices in the Department of Treasury? 

Secretary GEITHNER. Absolutely. And I think you are right to 

point out the challenge and you are right to say it requires people 

in these jobs who have a better feel for what is happening in those 

communities. And as I think you know, we appointed Dr. Lorraine 

Cole to take this job at Treasury in February of this year. She is 

excellent, great record of accomplishment in this area. And if you 

have not had a chance, I think you should spend some time with 

her and she will be happy to give you an update on exactly where 

she is, what she is doing, where the opportunities are, where the 

challenges are. 

Ms. CHU. To what extent has this office been active in reaching 

out to minority-owned banks or banks where there is a high concentration of minority businesses so that they can promote the 

Small Business Lending Fund? 

Secretary GEITHNER. Well, the entire council and people at 

Treasury responsible for these programs have been doing a huge 

amount of outreach to small banks across the country. And she will 

play a meaningful role in that. But that is a broader departmentwide priority. It is not just a burden we place on her. 

Ms. CHU. Okay. Switching topics, let me ask about the State 

Small Business Credit Initiative. This is a program that is building 

upon successful models of state small business programs. And I 

know California received $169 million through this program. How 

successful has this program been in increasing lending to small 

businesses in California? 

Secretary GEITHNER. Well, I think to be fair it is a little too early 

to tell. But again, the basic rationale for this program is you had 

across the country a lot of state programs with a pretty good record 

of creative, innovative ways to help small business get credit. And 

we made the judgment with Congress that as a complement to 

what we did directly with banks using their expertise, we take advantage of these credit programs, and California is one example of 

that. But we have now approved 10 states for funds through this 

program. We have other applications coming. We expect to reach 

a bunch more, but it is going to take us a little bit more time to 

judge the actual results. 

Ms. CHU. Why are not more states applying for these funds? 

Secretary GEITHNER. Well, as I said, we have had 27 apply. We 

have had many more express interest. And, you know, we leave 

that judgment to them. Many of them may have felt that they did 

not need the additional assistance. Or many may have felt that 

they could not match their programs to the requirements in the 

law. It is hard to know. But we think we will reach a significant 

number of states. 


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Ms. CHU. Thank you. I yield back. 

Chairman GRAVES. The gentleman from Illinois, Mr. Walsh. 

Mr. WALSH. Thank you, Mr. Chairman. Mr. Secretary, thank you 

for being with us today. I know you have got a busy schedule. 

I can guarantee you of very few things in life, but I can guarantee you—I wish I could guarantee you of more—but I can guarantee you that if you and I took a day and we spent the afternoon 

in my Eighth District of Illinois and we randomly, just randomly 

knocked on the doors of 30, 40, 50, 20 small businessmen and 

women in my district, I can guarantee you they would all say the 

same thing. The uncertainty is killing them. They see their government pass a piece of health care legislation that their government 

does not even seem to know what it will cost. How are they expected to factor it in? They are feeling overregulated. And they are 

feeling—there is huge trepidation about regulations they see coming down the pike. I can guarantee you if you and I knocked in my 

district on the doors of five small and community banks, or 10, they 

would all say the same thing. Government regulations are tying 

our hands. That is why we are not able to lend. 

I love listening to you. I always learn something when I listen 

to you. But is it at all possible that all of those business men and 

women in my district and those bankers, are they all misguided 

when they say they are overregulated, they are scared, there is uncertainty? And everything, and again let me just be pointed here 

as I close, everything they see coming out of this administration 

adds to their uncertainty and their fear. To all of them. 

Secretary GEITHNER. I do not—I think I have a slightly different 

perspective. I will tell you my view. Absolutely, businesses, small 

businesses are more uncertain about the future than they would 

have if you asked them the question in 2005. Absolutely. And the 

biggest concern they have and the one they talk about the most, 

and this is what all the surveys say. Not our surveys. They say 

their uncertainty is about how much demand for their products is 

going to grow. They put that at the top of the list. That has been 

true for years now and that makes sense. It is sort of a natural 

thing because they are not going to invest or hire unless they have 

more confidence what rate of growth and demand for their products 

is going to be. And even though we have had 18 months of growth, 

people understandably, given the pressure you are seeing in the 

economy today, gas prices, weather, Japan, a little concern about 

Europe, you see a few more headwinds now. So that is understandable. 

Now, it is also true that businesses always want less regulation. 

Understandable. And banks would like to operate with less regulation. There is nothing unique in that. 

Mr. WALSH. No, but understandable, but is it correct? 

Secretary GEITHNER. Well, I think what is correct is that we 

have to be very careful given the trauma caused by the financial 

crisis to make sure that we have a financial system that is more 

conservatively managed. And I do not believe there is really a 

meaningful risk for small banks that Dodd-Frank itself is going to 

add to their regulatory burden. I think there is some risk, as I said, 

that examiners are going to do it a bit. Maybe a little too cautious, 

tighten up a bit. And that is something that I think the chairman 


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of the Fed, the chairman of the FDIC, other bank regulators, are 

trying to lean against carefully so there is more balance in that. 

But where there is concern about people over on the regulatory 

side, we will take a careful look at that. But that is the way I 

would see it. And you know, I have not spent any time in your district but I spend a lot of time talking to people and they say similar 

things. They say banks say we are not lending because we are regulators, which they often say. And we see businesses that were 

more uncertain. And I do not think that is surprising given what 

this country has just been through. 

Mr. WALSH. So how do we give them certainty? 

Secretary GEITHNER. Well, I think there are a lot of things that 

we can do and I think that just to speak to the issue of the day, 

I think it would be very helpful for Washington to come to agreement on a long-term fiscal consolidation plan, you know, a reasonable growth fiscal consolidation plan, because I think that would 

demonstrate that the country has the capacity—the country leaders 

in Washington have the capacity to try to make some progress in 

solving a long-term problem that is a bit of a cloud on the country. 

I mean, just to be honest about it. 

Mr. WALSH. I hear all the time from folks that, look, this recession, this crisis was not the President’s. It was there when he came 

into office. This recovery is his. When you look at this recovery in 

historical perspective, and I know I am running out of time so you 

have got to be brief, we are not nearly where we need to be at 

when it comes to this recovery. 

Secretary GEITHNER. I agree with you about that. But I think 

this is an important question. Mr. Chairman, can I just spend a 

minute on this issue? Because I think it is at the center of this big 

debate we are having about the country and it is very important 

to understand this issue as we think about what we can do about 

it. 

And I think it is important to recognize that you had a crisis 

caused by a country that was living beyond its means. Too much 

leverage in the banking system. People across the country borrowing way beyond their means. And when you have a crisis 

caused by that, then recoveries are necessarily unavoidably slower. 

And why is that? When you build too many houses, you are going 

to have a long period where construction is weak. When people 

have to reduce the amount of debt they have to feel more secure 

about the future, they are going to spend less, be more cautious 

when banks have to deliver. So those create headwinds for the recovery that consign us to more moderate recoveries than we would 

normally have. Much more modest recovery is the reality we face 

today. The question is how can we make it stronger? How can we 

make it better? And I think we can do things on the tax side by 

expanding exports, by doing a sensibly designed long-term fiscal 

plan. By being careful about the balance in regulations, we can improve the odds if we get more people back as quickly as we can. 

But most of what we are living today as a country now is the effects of those mistakes we made up to and after the crisis. 

And if you look outside construction, you look beyond the banking system, you look beyond the sectors most directly affected by 

people being a little more careful about how they spend and borVerDate Mar 15 2010 02:41 Sep 02, 2011 Jkt 067850 PO 00000 Frm 00025 Fmt 6633 Sfmt 6602 E:\HR\OC\A850.XXX A850

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row, the rest of the American economy, if you look at export performance, private investment growth, productivity growth, agriculture, manufacturing, high tech, this is a very resilient, very productive, very innovative economy. And we have a very good chance, 

if we make some sensible judgments coming out of this, to emerge 

from this crisis stronger. 

Mr. WALSH. Thank you, Mr. Chairman. Thank you, Mr. Secretary. 

Chairman GRAVES. The chair recognizes the gentleman from 

Louisiana, Mr. Richmond. 

Mr. RICHMOND. Thank you, Mr. Chairman. Thank you, Mr. Secretary, for being here. 

In anticipation of this hearing I did reach out to my local community banks and businesses to just get a sense of what they would 

like to hear and get answers to, one of which I think we have 

talked about for awhile. However, I would like to just ask the question again and get as concise an answer as possible so I can make 

notes and give them the answer. Particularly, some of the banks 

applied for the SBLF on the first day and they still have yet to 

hear any type of response. I heard you say that there are numerous 

steps but their question is can you give a timeline to the best of 

your knowledge, or if you have to get back to me that is fine, on 

when these banks should start hearing their fate in the program? 

Secretary GEITHNER. Relatively soon. As I said, we have had 

about 850 banks apply. The first step they have to go through is 

they have to go through their primary regulators. We only see the 

applications or we only look at applications after they make it 

through that process. That process is taking longer than I think 

anybody expected. But we are moving as quickly as we can. But remember, we have an obligation to be careful; careful with the taxpayers’ money. So we will give people as quick a response as we 

can. 

Mr. RICHMOND. Just to follow up on that, something that may 

help us is to let us know how many have been through that first 

phase of the regulators and are now sitting in Treasury. 

Secretary GEITHNER. I cannot tell you that now but we are not 

the meaningful source of delay. 

Mr. RICHMOND. Okay. If you can get me that information that 

would certainly help. 

The second question posted from the bankers was how especially 

in Louisiana we continue to lose our local and community-based 

banks because of mergers and acquisitions by larger banks. And 

following the financial crisis, the bigger banks are only getting bigger. Knowing community banks are the engines of entrepreneurship in their local communities, what is Treasury doing to affirmatively support the local banks and to help them grow and sustain 

themselves? 

Secretary GEITHNER. A very important question. You are right to 

say that one of the great strengths of our system and we intend 

to preserve it is we have a system with I think more than 8,000 

banks, community banks, operating alongside the large institutions. And that is a great strength of our system and it makes the 

system more stable, more resilient, more responsive to the needs 

of Main Street businesses. We intend to preserve that. 


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The two most important things we can do about that are, one, 

make sure that we help these programs to provide capital to banks, 

reach as many institutions as possible. And the second is to make 

sure that as we reform our financial system we are putting the 

bulk of the burden for reform on the large institutions that took 

the most risk, whose failure caused the most damage. And so just 

to give you two examples, we are putting higher capital requirements on the large institutions relative to the risks they take, relative to small banks. And we are making sure that large banks, not 

small banks, bear most of the cost of solving future crises. Those 

are just two examples. But again, we are committed, as are you, 

to try to make sure we preserve a system with this great strength 

of thousands of institutions that operate in these communities and 

can better meet the needs of their Main Street customers. 

Mr. RICHMOND. And in just shifting a little bit from community 

banks, my experience in Louisiana especially and watching our 

small business growth and actually had some very good results 

with the New Market Tax Credit program, part of my question 

would be to maybe gauge the administration’s view of the success 

of new markets. What can we expect in the future in terms of new 

market, which is a very creative way to put equity investments into 

communities to create jobs? 

Secretary GEITHNER. You are right. It is a great program. It has 

had a lot of bipartisan support over a long period of time. A very 

good record everybody can look at for impact. And the main thing 

that we are looking at now is to try to make sure we can enhance 

the program so that more of the incentives go directly to small 

businesses that are not directly in the real estate business. And we 

think we can do that. We have got some suggestions on how to do 

that. I am happy to have my colleagues brief you in more detail 

on what we think is possible there. 

Mr. RICHMOND. And in my last 30 seconds I will just make a 

quick comment, which is to, as best as we can, to continue to help 

those small businesses, especially as the administration will come 

to us and present maybe three trade bills to us, to make sure that 

our small businesses can compete, to make sure that they can get 

their products and their goods to market and all of those things so 

that they can be competitive. 

And I will end with my last plug, as always. We cannot get our 

goods to market unless we dredge the Mississippi River. Sixty percent of all grain in this country comes through the Mississippi 

River. There was an 800–foot ship stuck in the middle of the Mississippi for two days a couple of weeks ago. So we have to do that 

if we are going to be serious about doubling exports and getting our 

goods to market. So thank you again for coming in. Mr. Chairman, 

thank you. 

Secretary GEITHNER. I agree. Exports and infrastructure are a 

very important part of our long-term growth strategy. 

Chairman GRAVES. Thank you, Mr. Richmond. 

Now we have to turn to another member from Louisiana, Mr. 

Landry. 

Mr. LANDRY. Thank you, Mr. Chair. Mr. Geithner, if I ask you 

a question that you answered already, I apologize. I had to go to 

a committee to vote. 


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You know, it is frustrating on our end because I hear your comments that, you know, you tried to place the majority of the burden 

on the larger banks because it seems like they were more at fault 

as to this meltdown. But yet I do not hear them crying as much 

as I do the community banks. Why do not we just waive the community banks from Dodd-Frank and then if that is the case, then 

we can allow the community banks to go back to being community 

banks because they are crying more than the larger banks under 

this bill? So how can that be if what you are saying is we tried to 

place more burden on the big banks than the small banks? 

Secretary GEITHNER. Dodd-Frank did largely, not completely, but 

did largely leave small banks out of it. But I think if you listen 

carefully, the large banks are complaining much louder. They are 

spending a huge amount of money trying to undo, shift the burden, 

delay the reforms that are targeted at them and their risk taking. 

They are spending a huge amount of money trying to block, delay, 

erode, weaken, walk back. And I think it is important to small 

businesses, to businesses and small banks that you guys do not let 

that happen because again, why would you want to put the country 

through what we went through in this crisis where so many innocent victims were left bearing the consequences of a lot of mistakes 

they were not part of? 

Mr. LANDRY. Look, I am with you. I am trying to protect our 

community banks. And that leads me into the next question. You 

know, I started several businesses. One of them, the first one actually using a SBA loan. And I was always under the impression that 

SBA loans were kind of a bridge to help the little guy out there 

when the other banks were not able to or did not want to lend to 

them. But yet my community banks are telling me that now, in 

fact, I had a real life example of where there was an application 

by a business owner to invest in a business and he had great credit, he had plenty of collateral, but the examiners would not allow 

the community bank to make the loan because they felt that his 

business plan—he could not prove that his business plan could continue to pay the note. Well, if that was the case, a lot of us would 

not—I would have never been able to start my business. But yet 

he was able to get a loan through small business. And what concerns me is that here we have the private market willing to take 

the risk, but yet we are moving them to the taxpayer who is going 

to take the risk when the private market would gladly take the 

risk. And they are pinning that on the regulators. Why would that 

be? I mean, is that the effect that you guys would like? 

Secretary GEITHNER. I do not think so. And I agree with you. 

And I think that you are right that the challenge in this is you 

have to figure out how to put out a financial fire, make sure you 

open up the credit channels again when they are stuck because of 

the crisis, but do so without creating more dependency on the government over the long run or crowding out private markets from 

financing. I think we have actually been very, very successful at 

doing that in the financial system as a whole. And the terms of 

these loans, these programs are established in a way where as conditions improve, as people are willing to take more risk, as the private markets come back and it will not be economically attractive 

or sensible for banks to rely on the government for these programs. 


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Mr. LANDRY. So you are saying that example should not have 

happened? 

Secretary GEITHNER. Well, I do not, again, in a crisis, for a temporary period of time when the markets freeze up and private investors pull back—— 

Mr. LANDRY. But this was within the last six months. 

Secretary GEITHNER. I think now you should see the balance 

shifting. And you are right. I think your point is we should not create a system where government programs are crowding out private 

capital from financing that. Absolutely. And I do not think that we 

face a meaningful risk of that. I do not think we do. 

Mr. LANDRY. As long as I have your all commitment that that is 

not what you are trying to do. 

Secretary GEITHNER. Absolutely not. 

Mr. LANDRY. Okay. All right. Thank you, Mr. Geithner. I yield 

back. 

Chairman GRAVES. The chair now recognizes the gentleman from 

Pennsylvania, Mr. Critz. 

Mr. CRITZ. Thank you, Mr. Chairman. Thank you, Mr. Secretary, 

for being here. 

Talking about the SBLF, launched December 20th of last year, 

as of June 20th of this year you have 869 applications for approximately $11.6 billion in funding. There is $30 billion available. Is it 

succeeding? Is that where you think it ought to be? Or are there 

issues that we need to review or that you can help to get that 

money into the economy? 

Secretary GEITHNER. Well, as I said at the beginning several 

times, I think we are a little behind what we thought was the realistic schedule at the beginning, and that is because it is taking 

longer to put in place the checks and balances to determine eligibility. In our system, those checks and balances to protect the taxpayer depend on two steps. One is the review by regulators. That 

is taking longer than we thought. But as I said, we think we are 

going to reach a meaningful number of institutions and make a 

meaningful difference in their capacity to lend. And I think we are 

largely going to achieve the basic objectives of the act. You cannot 

be sure at this stage because it is still early days. 

Mr. CRITZ. So the delay caused—where I am going is I would 

have thought that banks would have been out there. They would 

have seen this impasse and would have been sending applications 

in? 

Secretary GEITHNER. Oh, yeah. They came and they came in 

numbers, in the hundreds. 

Mr. CRITZ. Which is not a big number. 

Secretary GEITHNER. Well, actually, I think it is a pretty big 

number. 

Mr. CRITZ. Okay. 

Secretary GEITHNER. I think it is a pretty big number because, 

you know, it is true we have 8,000 banks but many will not be eligible. Many of them are fine on their own. So I do not think it is 

a surprisingly small number. 

Mr. CRITZ. Well, the thing that I find interesting about it is that 

the dividend that the banks will pay the Treasury goes down as 

they lend more to small business. So it is a huge incentive. This 


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is not a Democrat or Republican issue. I think we all have small 

businesses that are looking for credit and having a hard time finding it. So this program seems so perfect for that opportunity. 

Secretary GEITHNER. I agree. I think it is a well designed program, pretty powerful incentive and, you know, again, I cannot be 

sure why it is 800 and not 2,000. But I do not think it is that surprising, again, because you have a lot of institutions that feel fine 

on their own and, you know, do not want to do business with the 

government. And frankly, I do not—I think that is reasonable. You 

want people to be reluctant to come to the government. 

Mr. CRITZ. Right. 

Secretary GEITHNER. And we would like these programs to reach 

as many institutions but we cannot force them to come. 

Mr. CRITZ. Well, that brings me to my next point, which is a statistic, and I am assuming it is accurate, about 38 percent or, no, 

59 percent of the funds requested are from institutions that took 

TARP money, and they are trying to convert that money. Now, are 

we defeating the process by converting TARP money to this? I 

mean, it really was not to do that. 

Secretary GEITHNER. Well, no, it actually was designed to do 

that. Congress chewed over that and thought about it a lot and decided that was a good thing to do. And the reason why they 

reached that judgment, and I agree with that judgment, is there 

are just two reasons. One is because the reasons you said, this is 

a, we think, pretty well designed way to create incentives for more 

lending. So we think it has more bang for the buck in terms of 

lending than the additional, the original capital programs. 

Mr. CRITZ. Okay. 

Secretary GEITHNER. So we think that is a good reason you 

should let them refinance. The other reason is just a fairness question. You know, why should you penalize institutions that took the 

initiative to apply for the initial capital program? Congress issues 

a new program. It is more economically attractive. Why would you 

penalize them for coming early? 

Mr. CRITZ. All right. You had mentioned earlier about housing, 

the construction, small businesses and construction took a huge hit. 

I had my staff run some numbers that Home Depot’s fourth quarter profits were up 72 percent. Lowe’s is more for a home person. 

Home Depot does a lot for individuals but also a lot for small construction companies. Lowe’s was down a bit. Then 84 Lumber, 

which is one in my district. Of course, they are much smaller than 

they were in ’05, about a third of what they used to be. But it 

seems like there is some activity there, although when calling the 

halls, the union halls back home, I know I got a lot of people that 

are still laid off and we are in prime construction season. So you 

know, this housing issue is going to drag on our economy for quite 

some time. Are there things that we should be reviewing as a Committee that we can help jumpstart or help get that housing inventory off the market? 

Secretary GEITHNER. I think you are right. Housing is still very 

tough. There are some signs of light in some parts of the country 

but you know, with unemployment so high it is not that surprising. 

You still have such a large imbalance between homes out there and 


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demand for new homes. And that is going to take realistically several more years to work through. 

We think the three most promising things you can do about that 

are first, and this is overwhelmingly the most important one, is to 

make sure growth is stronger. More people back to work, more incomes growing again. That is the most important thing we can do. 

And everything we do here and you do in Congress should be governed by that basic simple objective. 

Housing specifically, we are trying to make sure that we bring 

this broader global settlement effort to improve the foreclosure 

process down to earth on sensible terms to reduce some uncertainty. And we are trying very hard to make sure through the full 

complement of housing programs we have through HUD, FHA and 

the ones authorized by Congress for the Treasury, that they reach 

as many people as they can. They have helped set a new standard 

for modifications that have helped two to three million Americans 

stay in their homes who can afford to stay in their homes, but they 

cannot reach everybody. But we want to make sure they reach as 

many people as possible. 

Mr. CRITZ. Thank you, Mr. Chairman. 

Chairman GRAVES. The gentlelady from North Carolina, Ms. 

Ellmers. 

Ms. ELLMERS. Thank you, Mr. Chairman. And thank you, Secretary Geithner, for being here today. 

Mr. Secretary, I have listened to all of your testimony and especially your last few statements there. Obviously, the answer to our 

economic problem here in this country is jobs. We have got to get 

businesses hiring again. 

Now, you, in your initial comments, kind of painted a pretty rosy 

picture, certainly much rosier than what we see back in North 

Carolina or in the Second District of North Carolina. You said 15 

straight months of economic growth with about a million jobs created over the last six months. And yet we are sustained at above 

nine percent unemployment for over 23 months. Overwhelmingly, 

the businesses back home and across the country continue to tell 

us that regulation, lack of access to capital, taxation, fear of taxation, and just the overwhelming uncertainty that our businesses 

face is what is keeping them from hiring. They just simply cannot. 

They have cut everything they can cut. Our households have cut 

everything that we can cut. And yet we are talking about doing 

some things in the future. Right now we are at a standstill with 

the lending. We have no guarantee, and as you have stated, you 

have no ability to tell us when that will occur, especially with the 

small business loan program. 

Looking into the future, you are supporting the idea of taxation, 

increasing taxes on those who make $250,000 or more. Those are 

our business owners. Those are—— 

Secretary GEITHNER. They are three percent of your business 

owners. 

Ms. ELLMERS. Three percent. 

Secretary GEITHNER. Three percent of your small businesses. 

Ms. ELLMERS. Sixty-four percent of small businesses. Sixty-four 

percent of jobs created in this country are for the small businesses. 


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Secretary GEITHNER. No, that is right. I agree with that. But just 

to put it in perspective, it is important to recognize why are we 

doing this? You know, our deficits are 10 percent of GDP, higher 

than they have been since any time in the post-war period really. 

We have a big hole to dig out of and we have to figure out how 

to do that in a way that is balanced, good for growth, fair to people 

as a whole. We are not doing it because we want to do it. We are 

doing it because if we do not do it then again I have to go out and 

borrow a trillion dollars over the next 10 years to finance those tax 

benefits for the top two percent and I do not think I can justify 

doing that. And if we were to cut spending by that amount to do 

it, you would be putting a huge additional burden on the economy, 

probably a greater negative economic impact than that modest 

change in revenues. So that is why. 

Ms. ELLMERS. Then what is the goal? You stated it is only three 

percent. What is—— 

Secretary GEITHNER. Of small businesses. 

Ms. ELLMERS. What is the goal then in increasing the taxes? 

Secretary GEITHNER. Well, no, the goal is that, and I know you 

and your colleagues understand this and you care about it deeply, 

we are living with unsustainable deficits. 

Ms. ELLMERS. Yes. 

Secretary GEITHNER. If we do not address them, they will hurt 

economic growth and investment in the United States. 

Ms. ELLMERS. But if, as you stated, only three percent of small 

businesses will be affected, how can that increase in taxation be 

that significant to turn that around? 

Secretary GEITHNER. Well, you are making our case in the sense 

that—— 

Ms. ELLMERS. The point is we need jobs. 

Secretary GEITHNER. We are not doing it because we want to do 

it. We are doing it because we see no alternative to a balanced approach to reduce our fiscal deficits. And again, if you do not—I 

think the House past demonstrates this, if you do not touch revenues and you leave in place the tax cuts for the top two percent 

that were put in place by President Bush, if you leave those in 

place and you are trying to bring our deficits down over time, then 

you have to do exceptionally deep cuts in benefits for middle class 

Americans and you have to shrink the overall size of government 

programs and things like education to levels that we could not accept as a country. And so to do a balanced approach to reduce our 

deficits you have to make modest changes in revenues. There is no 

realistic opportunity alternative to doing that. But, you know, we 

have to be careful how we do it. 

Ms. ELLMERS. Okay. I would like to reclaim my time for a moment. You, we all agree jobs are the answer. And yet you are willing and more than capable of putting that excessive burden, which 

we already know from our small business owners is the issue, why 

would we go and—why would we do more? Why would we harm 

them more? Why would we create more uncertainty in the private 

sector? 

Secretary GEITHNER. I am not sure we disagree fundamentally. 

The economy needs to grow to create jobs. Our basic challenge is 

to try to figure out how to make growth faster, more sustainable, 


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and translate into more jobs. Part of that is expanding exports. 

Part of it is making sure that we are investing in infrastructure, 

education, things that matter to our strength. And part of it is a 

balanced growth-friendly approach to deficit reduction over time 

because if we do not fix that problem, you will leave a broader 

cloud in the economy longer term. But we have to be careful how 

we do it so we do not hurt the economy. 

Ms. ELLMERS. Well, Mr. Secretary, I would just like to close by 

saying that on behalf of the business owners in North Carolina and 

across this country, you are wrong. 

Chairman GRAVES. The gentleman from Michigan, Mr. Peters. 

Mr. PETERS. Thank you, Mr. Chairman. Thank you, Secretary 

Geithner for being here. And I want to take a moment before I ask 

a couple of questions to tell you where you are right. In fact, I had 

the opportunity yesterday before I flew into Washington to be at 

a groundbreaking for a new Chrysler facility. I represent Michigan. 

In fact, Chrysler is headquartered in my district but I was at a 

groundbreaking for a new factory, a new paint shop, an $850 million investment in that plant, which is about 2,200 jobs just in that 

plant. And as you know as well as anybody, those 2,200 jobs translate into a lot of other jobs throughout the economy, not just the 

auto suppliers but all of the small businesses that are located 

through there. And I am a relatively new member of Congress. I 

came in in 2009 at the height of the financial crisis. I remember 

sitting in the boardroom with Mr. Nardelli, who was the CEO of 

Chrysler at the time who said in very explicit terms that if there 

is any assistance for Chrysler as they go through bankruptcy because of the credit markets that had basically seized up because of 

what had happened, the fiasco on Wall Street, there simply was 

not money available for a company the size of Chrysler or General 

Motors to get through bankruptcy. They needed access to funds. He 

said very clearly that they would go into liquidation. This company 

would just close, liquidate, sell everything off. 

And I was sitting in Chrysler headquarters, which is the second 

largest building in the country next to the Pentagon. And that 

building would have been shuttered. Thousands of people would 

have been laid off. Grass would have been growing in the parking 

lot. That money was necessary. The President did a very courageous thing. Took a lot of heat from a lot of people around this 

country. You took a lot of heat from people around the country. 

Made that investment. 

And now fast-forward two years. That building actually has run 

out of space. They are going to be hiring an additional thousand 

engineers. They cannot put them all in that building. They are 

looking for additional real estate, additional jobs in the community. 

And Chrysler has announced, as you know, paid off the money 

from the taxpayers with interest. It is an incredible success story. 

Thank you for doing that. Thank you for believing in American 

workers. Thank you for believing in the American middle class because those are jobs that we are seeing, not just in Michigan. Those 

are jobs throughout the country, through suppliers all through the 

country, through auto dealers. Our auto dealers, many of them 

would have been closed. They would have been closed had that 

company liquidated. And those are important small businesses in 


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every one of our congressional districts that would have disappeared. So that was a courageous thing to do. Thank you for 

doing that. It is a great success story. Now we need to continue to 

build on that success, continue to build on those jobs. 

And as you know, it is certainly something that I have worked 

a great deal on with small business lending in particular with my 

work on the financial services committee. And one area that I 

worked in particular with was with Gene Sperling, who is now 

with the White House Economic Council and that is on the State 

Small Business Credit Initiative, which we have heard. You have 

had some questions from folks on that. 

And I wanted to just put in the record some of the successes with 

that State Small Business Credit Initiative. Mr. Chairman, you 

should have a letter that was submitted by our governor in Michigan, Governor Snyder. I would like to have that letter entered into 

the permanent record. 

The Small Business Credit Initiative was really modeled after 

what we are doing in Michigan, what we have been doing in Michigan for a number of years, which is a collateral support program 

that has been particularly helpful right now to those smaller auto 

suppliers as the auto industry is recovering. And yet a lot of those 

smaller auto suppliers are in a situation where their factors are 

worth considerably less so they cannot get loans that they needed. 

But this program, which was a bipartisan effort, it was started by 

Governor Granholm, a Democrat, and it has now continued to be 

supported by Governor Rick Snyder, who is a Republican. In the 

letter that I have entered into the record, he talks about the very 

successful experience that we have had in the state of Michigan. 

Michigan has not experienced since they started the program in 

2009, not a single loss. And I am quoting here, ‘‘while generating 

nearly $200 million in private loans with a very small public investment. It is a good investment that has leveraged considerably.’’ 

Now, I know these programs are starting to get these applications and you are approving them, but I would expect because of 

the success we have had in Michigan and other states, that this is 

something that should gear up fairly quickly because of the experiences we have had. What is your expectation? Now that that is occurring, applications are continuing to come in. Is this a program 

where we are going to get fairly quick results, particularly relative 

to other components of the act? 

Secretary GEITHNER. I think so. It depends, of course, on how 

quickly the states are able to put the money to work. But I think 

in California and North Carolina they are already making loans. 

Missouri’s fund has already been oversubscribed with 55 applications. So I think the speed will depend on how quickly the states 

can put the money to work. But I think you are right to point out 

the benefits of it. Again, the basic insight we adopted with the support of you and many others is to work with the grain of established programs that have a good record of doing these things carefully. And that is the promise of the program. 

Mr. PETERS. And I appreciate the effort. And Mr. Chairman, I 

have another letter just in closing from the Michigan Credit Union 

League. We also had credit unions and other institutions that have 

participated and have seen this program as a success in the past 


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and are looking forward for the additional resources. But thank you 

for your work, Mr. Secretary. 

Secretary GEITHNER. Thank you. 

Chairman GRAVES. The gentleman from Iowa, Mr. King. 

Mr. KING. Thank you, Mr. Chairman. I would just comment in 

listening to the last presentation that an additional 1,000 engineers 

and the success of Chrysler, I bet the security creditors that had 

their assets confiscated in the Chapter 11 filings have also been 

made whole and who had their assets restored and received their 

dividend checks and that the shares that have been handed to the 

unions have been handed over to their rightful owners. I don’t 

think any of that happened. And that is the other side of the story 

from the gentleman’s comments. 

But Mr. Secretary, aside from those disagreements we might 

have here on the panel, I am curious about some things to lay 

down a foundation. And when I listen to you speak and I appreciate your testimony, I do not hear things I disagree with. And 

often your analysis is accurate within at least the scope of what 

you are talking about. So just a couple of questions to help me illuminate your philosophy. On a scale of one to 10, how would you 

rank Milton Friedman? 

Secretary GEITHNER. That is an interesting question. I am not an 

economist. I am not a trained, credentialed economist. So I would 

say I probably agree on a lot of his things but not everything. 

Mr. KING. You would not put a number to that? 

Secretary GEITHNER. No, I would not do that. 

Mr. KING. Would you put a number to John Maynard Keynes? 

Secretary GEITHNER. No, I would not do that either. I would say 

sort of the same thing which is no perfect guide in either to the 

challenges facing the country but things we can draw from both. 

Mr. KING. Adam Smith? 

Secretary GEITHNER. I am not going to give you a number. I will 

say the same thing to you no matter what. 

Mr. KING. I am a little surprised because I would look at you and 

I think this is a man that is a complete expert on all three of these 

individuals who has a—— 

Secretary GEITHNER. You have got the wrong guy. 

Mr. KING [continuing]. An intuitive and an intellect and a gut 

understanding of the flow of market capitalism globally and historically going back a couple of hundred years plus. I do expect you 

to have that basis of knowledge. 

Secretary GEITHNER. I am a student of financial crises, unfortunately, but not a credentialed economist. You know, the philosophy 

I bring is a much more pragmatic test. What is going to work? Ultimately, that is what matters. 

Mr. KING. Then I am interested in what is going to work as well. 

And we discussed the burdens of regulation on business, in here 

primarily small business, and there are a few things that stick in 

my mind having founded and operated a small business for not 

quite 29 years and it is a second generation business today. And 

I would list three of the top regulation burdens which we discussed 

as a small businessman by trade. And I would list them IRS, 

Obama Care, Dodd-Frank. Can you come up with any regulations 


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or any proposals that are heavier, a heavier burden on small business than those three? 

Secretary GEITHNER. That is an interesting way of framing your 

question. But I take a different approach. The tax burden on small 

businesses, as I said in the beginning, is lower today than when 

the President took office. Now, you are right. Congress is now debating what should happen to tax policy in the country as we try 

to dig out of our deficits. And we are going to have to figure out 

a way to do that that is fair to the American people, that can be 

passed by the Congress, that is good for future growth. And people 

disagree on that. The country is very divided on that. But the tax 

burden today is lower than when the President took office. We have 

already discussed the financial system at some length. I know a 

fair amount about that. And again, I would say how good was it 

for small businesses across the country that they were left with 

this amount of damage caused by a failed financial system, something we have to fix. And again, the bulk of that law is not directed 

at raising burdens on small banks. That is a point to avoid. 

Mr. KING. Mr. Secretary, let me just inject in this. And in your 

earlier testimony you talked about the crisis was caused, at least 

in part, by a country living beyond its means. And I agree with 

that. And we have overbuilt in housing. And I agree with that. And 

I would ask though that the solution for that appeared to be TARP, 

economic stimulus plan, increasing a lot of government spending. 

And now we have a government that is living beyond its means. 

It seems as though from sitting here as a member of Congress and 

a small businessman, that the solution for the problem is to apply 

to the Federal government the same problem that small business 

had. In other words, we overspent with government. We lived beyond its means. Now, I believe I heard some reference to you in 

that if you have that kind of a solution it delays the recovery because we have to pay interest and principal, some concept along 

that line. Not your words, certainly. 

Secretary GEITHNER. Well, let me tell you how I approach this. 

You know, again, we have unsustainable deficits, long-term, shortterm. They are a product of a bunch of decisions made in the last 

decade, the product of the recession. And the principle driver over 

the long run is that Americans are living longer, aging, health care 

is very expensive. Now, if we do not address that then investment 

will be lower, growth will be weaker, interest rates will be higher. 

The economy will be burdened by that. 

Mr. KING. We do agree with that. I agree with that. But when 

you apply the Federal government’s debt, is it the same concept of 

the equation as a business that is overleveraged? 

Secretary GEITHNER. A little different in the sense that, you 

know, governments are not a business, not a family. And in financial crises and recessions, the lesson of history is that when the 

markets pull back, the government has to step in temporarily. But 

only temporarily, and it is very important to make sure that the 

government pulls back as it is now doing. And the government is 

starting to pull back now. That is slowing growth a little bit so you 

want to be careful not to overdo it. But the key lessons should be 

for us is the composition of these reforms on the budget side have 

to be designed in a way that they do not hurt growth short-term 


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and long run. That is why we believe you have to have some balance. 

Mr. KING. If I could ask unanimous consent for just an additional 

question. Thank you, Mr. Chairman. 

I just, and again, your testimony is interesting to me, Mr. Secretary. And one of the things you said was Roosevelt said that one 

thing we need is bold experimentation. And I recall a statement 

made to us by the President and that date was February 10, 2009, 

in speaking to a Republican Conference when he said that Franklin 

Delano Roosevelt’s New Deal actually did work. And that the problem was that he lost his nerve in the second half of the ‘30s and 

got concerned about spending too much money. And he pulled back, 

which brought about a recession within a depression. Unemployment went up and then along came World War II, the largest economic stimulus plan ever. That is almost verbatim. It is conceptually exact. And so I am wondering what you think of this bold 

experiment of President Obama’s. It seems to be committed to be 

substantially more bold than that of Franklin Delano Roosevelt. 

Secretary GEITHNER. I, of course, work for this President and I 

believe in everything he is doing but I would not quite compare it 

that way. I was using that phrase to refer to the range of things 

we had to do to fix the financial system, put out the financial fire, 

and you know, we did exceptional things no one would ever want 

to do and would never want to do again ever. And the things we 

are doing on the credit side, capital side are very creative, no precedent for it. And they require new approaches. That is what I was 

referring to. 

Mr. KING. Well, I like audacity when you are right. Thank you, 

Mr. Secretary. Thank you, Mr. Chairman. 

Chairman GRAVES. The gentleman from New York, Mr. Owens. 

Mr. OWENS. Thank you, Mr. Chairman. Thank you, Mr. 

Geithner, for coming today. 

As I listened to your testimony and listened to the questions 

from the floor, one thing seems to reach out to us and that is the 

demand is really the key, both in terms of product, that is sales. 

It is also generating demand for bank loans. The critical issue then 

really is how do we generate demand which will then flow through 

the economy and essentially bring us out of this recession? I assume you agree that demand is the key? 

And one of the things that it appears to me that we have not 

done here in Congress is really developed a real jobs creation program. And I have to say that from my perspective it does not appear that the administration has done that either. You may disagree but that—— 

Secretary GEITHNER. I do. 

Mr. OWENS [continuing]. My perspective. 

One of the things that we have on our plate that I think we could 

do that would stimulate demand, and I hear this from my small 

business owners back in my community, from my bankers, is get 

the transportation bill passed which would push dollars into infrastructure. Do you agree with that? 

Secretary GEITHNER. I do. I am a very strong supporter of the 

need for a very large, much more substantial level of investment 

over the long term in improving the nation’s infrastructure. I think 


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it is important for businesses. We have underinvested in those. 

That raises the cost of doing business, taking goods to market. 

There is a very strong economic rationale for doing it. It would help 

get employment up, people back to work in the parts of the economy most affected by the crisis. Very strong economic case for 

doing it. 

Mr. OWENS. So then you would urge us as one of the positive 

things we might do to stimulate demand is to make sure we pass 

a transportation bill as quickly as possible? 

Secretary GEITHNER. I would absolutely say that, you know, we 

have to make sure we can pay for it, we do it responsibly, but it 

is one of the most effective things we could do to help improve the 

strength of recovery, breadth of recovery, job creation. 

Mr. OWENS. Thank you. Just two other points. You also mentioned during your testimony the Clinton era tax rates. During that 

period of time, I believe if we look back historically we also saw significant GDP growth in those years. 

Secretary GEITHNER. We did. I think if you, again, if you just 

compare most measures of economic success, if you compare the 

record of growth, private investment, job creation, income growth, 

productivity growth between those two periods, employment 

growth, job growth, the period of the second half of the ’90s and 

the decade that followed, very good evidence for the type of growth 

strategies that we are promoting today. 

Mr. OWENS. And so it would appear, one could also conclude, 

that those tax rates did not impede either job growth nor GDP 

growth. 

Secretary GEITHNER. Absolutely. In fact, I think you can say that 

the economy did very well during that period of time by all the 

measures we choose to judge economic performance by. 

Mr. OWENS. And the final question I have for you goes to working capital. Just by way of background, I spent 14 years on a bank 

board and 10 of those years as a permanent member of the loan 

committee. So I think I have—— 

Secretary GEITHNER. My condolences to you for that. 

Mr. OWENS. When we talk about working capital, there is some 

confusion I think that goes on in the conversation. In my view, the 

strain on the working capital issue is because normally working 

capital is pegged to inventory and accounts receivable. And because 

you have declines in working capital, it is because you do not have 

AR and you do not have inventory. And there is really not much 

that I can see that government can do about that directly. That has 

to come as the result of increased demand. 

Secretary GEITHNER. I agree with you completely. I mean, again, 

it is important to step back and remember what we have been 

through. We had an economy frankly with too much debt, economy 

was falling at a rate of about five to six percent a year when the 

President took office. That was going to come with it a substantial 

fall in demand for lending. That was going to be magnified as the 

country pulled back and went to living within its means. No surprise. You saw demand for loans fall very, very sharply over that 

period of time. But that decline would have been much, much 

worse if we let the financial system burn and collapse. And the 

case for capital, the case for the programs you put in the emerVerDate Mar 15 2010 02:41 Sep 02, 2011 Jkt 067850 PO 00000 Frm 00038 Fmt 6633 Sfmt 6602 E:\HR\OC\A850.XXX A850

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gency is to make sure you did not see the capacity of the system 

to support lending contract unnecessarily. And we were very successful, not just in putting out the fire at a very low cost to the 

taxpayer, but in bringing rates of cost of lending down very dramatically, opening up the credit pipes very quickly. And I am very 

confident that this financial system today is now in a position 

where it can finance a growing recovery within concern that there 

will be a very substantial meaningful capital constraint on the capacity of the system to lend. There will be pockets of constraints 

and weakness, but for the system overall, our financial system will 

be able to support a growing recovery. 

Mr. OWENS. Thank you very much, Mr. Secretary. Thank you, 

Mr. Chairman. 

Chairman GRAVES. The chair recognizes the gentleman from 

Ohio, Mr. Chabot. 

Mr. CHABOT. Thank you, Mr. Chairman. Mr. Secretary, I think 

we are now only beginning to comprehend the extent of the compliance costs that will result from the passage of last year’s, what I 

would consider to be pro-bureaucracy, Dodd-Frank bill. As with any 

regulation, the smallest firms are going to have the most difficult 

time complying. They have the least resources to deal with so it 

will take up a disproportionate share of their available resources 

in that compliance, while many of the larger financial institutions 

may be able to weather the increased burden of complying with the 

act’s existing and proposed regulations. Small and community 

banks are already scrambling to survive. How can the administration claim to promote access to capital for small businesses when 

it is smothering the very community banks that are the lifeblood 

for small business entrepreneurs across this nation? 

Secretary GEITHNER. Well, Congressman, I think you understand 

my views on this. My view is, no surprise to you, that a law was 

appropriately and carefully designed to reduce the risk that it was 

putting an unnecessary burden on small banks who were not the 

principle source of the problem and we rely on a lot to be a source 

of lending to small businesses going forward. Now, they were not 

left untouched by the law but overwhelmingly the thrust of the reforms in the law are targeted at parts of the system they are not 

part of. At derivatives, at the complicated risk management challenges facing large firms. And if we had not done that we would 

be leaving this economy vulnerable to another crisis like this. And 

again, this was a crisis exceptionally damaging to the innocent victims among small businesses. 

Mr. CHABOT. I have only got limited time so let me just say that 

I am hearing still from especially small community-type banks and 

small business entrepreneurs and you have heard the uncertainty 

that this is causing, et cetera. But let me move on to—— 

Secretary GEITHNER. Can I just say I will try to be very quick. 

Mr. CHABOT. Let me move on, if I can. Last year the administrations’ major initiative and its so-called jobs bill towards increasing 

lending to small businesses was to push more government spending. In this case, to create a $30 billion mini-TARP, the Small Business Lending Fund out of remaining TARP funds. Now, your Treasury is warning us that we are on the brink of financial catastrophe 

unless we raise the debt ceiling. In fact, you said in May that a 


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‘‘default would not only increase borrowing costs for the Federal 

government but also for families, businesses, and local governments.’’ If we are indeed close to disaster that would severely jeopardize lending, would you be willing to return the remainder of the 

$30 billion in mini-TARPs so we can move towards paying down 

the debt and therefore averting this disaster? 

Secretary GEITHNER. Well, of course. The loans that we cannot 

spend, the resources we cannot spend because we do not have eligible banks for it go back to the Congress. But unfortunately, they 

will not make a meaningful contribution to reducing our long-term 

fiscal problems. But those funds, if not used, go back to you. You 

can choose what to do with them. I would recommend you put them 

to deficit reduction. 

Mr. CHABOT. All right. And I am for deficit reduction, too, so we 

certainly agree on that. But let me ask you about that, again, the 

debt ceiling question. The business about that we are going to default, our nation is going to default, the actual—— 

Secretary GEITHNER. We are not going to default because Congress is going to do what they need to do. 

Mr. CHABOT. Yeah, we are not going to default. I would agree 

with that. Let me ask you this. How much of the actual expenditures goes towards paying down this so-called debt? Is it 15 percent 

or thereabouts? 

Secretary GEITHNER. Do you mean the interest costs? 

Mr. CHABOT. Yes. 

Secretary GEITHNER. Well, you know, we borrow roughly 40 cents 

for every dollar Congress has authorized us to spend. 

Mr. CHABOT. I have heard up to 43 cents on a dollar. 

Secretary GEITHNER. Roughly. Interest costs are a much smaller 

fraction of it. But here is the basic problem. And I think the best 

analogy is to use the business analogy or small families’ analogy 

which is if you stop paying your utility bill, your credit card and 

just pay your mortgage, who is going to lend you money? And if 

you had to refinance your mortgage every month, like we effectively have to do, who would lend you a dollar? So there is no responsible path that avoids default, avoids cash offered to the economy that has us decide as a country we are going to stop paying 

all our obligations so we can pay interest. It does not work. It is 

not workable. And it will not relieve Congress of the obligation of 

raising the limit. 

Mr. CHABOT. I certainly agree that we should not default. And 

I would just argue that a lot of the sky is going to fall, we need 

to be careful about what is being said. And also it is not only yours 

but Congress’s determination. 

Can I have an additional minute, Mr. Chairman? 

The determination, you can prioritize where the money is spent. 

You can say the debt continues to get paid, the Social Security 

checks continue to go out. Perhaps our troops continue to get paid. 

But other things, we are going to make substantial cuts. 

Let me move off that for one last quick question. It was raised 

here a couple of times the 9.1 percent unemployment. It went from 

8.6 to 9.1, which is most unfortunate. We are heading in the wrong 

direction. But it is really a lot worse than that 9.1, is it not? I 

mean, we are talking about the fact that people who used to be 


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full-time, some are now working part-time. People are underemployed and they have a college education and they are now perhaps working in the fast food industry flipping burgers, although 

lots of people do that. It is respectable work. But perhaps they did 

not need a four-year college degree to do that. And the people are 

just—a significant group has stopped looking altogether. And those 

ones I just mentioned are not even included in that 9.1 percent, so 

really it is worse than that. Would you agree? 

Secretary GEITHNER. My quick response. First, you are asking 

whether my judgment is right about the consequences of default. 

But what I would just ask you to quickly ask your staff to show 

you are letters written by every President, every Secretary of the 

Treasury, who has faced this problem over the last several decades 

and you will see in Ronald Reagan and Jim Baker and others, eloquent testimony to the risks of contemplating what you are proposing. There is no responsible path for making that work. On-thejob stuff—— 

Mr. CHABOT. Let me just interrupt you for a second. And you 

know your boss said that it was irresponsible to vote to increase 

the debt ceiling and voted against it as well. And I am referring 

to President Obama. 

Secretary GEITHNER. He also said that that was a mistake. As 

many people have said, it was a mistake. 

Mr. CHABOT. He said it was a mistake. 

Secretary GEITHNER. But on the specific question you are suggesting is go back and look at my republican predecessors. You will 

see they have made the same judgment. 

On the jobs front, again, I would say this. You are absolutely 

right that, you know, the national averages mask a lot of differences across country. Unemployment is much higher in many 

ways. But remember, it is two million private sector jobs since job 

growth started. Hours worked have increased more than that. And 

incomes are growing because the economy is growing as a whole. 

But we have a long way to go to dig out of it. Our collective task 

responsibility is to figure out how best to do that. 

Mr. CHABOT. And the population has increased as well. So we 

have to put on jobs just to tread water. 

Secretary GEITHNER. You do. You are exactly right about that. 

Mr. CHABOT. Okay. And thank you, Mr. Secretary. We appreciate 

you being here. Thank you, Mr. Chairman. 

Chairman GRAVES. Thank you, Mr. Secretary. On behalf of the 

Ranking member, and I might point out that the only reason for 

her absence, she was managing amendments on another committee, which was completely unavoidable. And so on behalf of the 

Ranking member and myself, we appreciate very much you being 

here and your testimony. And we are going to get you out of here 

on time. 

I would ask unanimous consent that all members have five legislative days to extend and revise their remarks. And I would also 

ask unanimous consent that the record for this hearing be left open 

for 14 days in order to have members submit questions and the 

Secretary respond. Without objection, that is so ordered. And with 

that this hearing is adjourned. Thank you very much. 


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[Whereupon, at 11:53 a.m., the Committee hearing was adjourned.] 


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pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 143 here 67850A.048
87 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 144 here 67850A.049
88 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 145 here 67850A.050
89 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 146 here 67850A.051
90 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 147 here 67850A.052
91 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 148 here 67850A.053
92 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 149 here 67850A.054
93 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 150 here 67850A.055
94 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 151 here 67850A.056
95 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 152 here 67850A.057
96 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 153 here 67850A.058
97 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 154 here 67850A.059
98 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 155 here 67850A.060
99 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 156 here 67850A.061
100 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 157 here 67850A.062
101 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 158 here 67850A.063
102 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 159 here 67850A.064
103 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 160 here 67850A.065
104 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 161 here 67850A.066
105 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 162 here 67850A.067
106 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 163 here 67850A.068
107 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 164 here 67850A.069
108 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 165 here 67850A.070
109 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 166 here 67850A.071
110 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 167 here 67850A.072
111 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 168 here 67850A.073
112 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 169 here 67850A.074
113 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 170 here 67850A.075
114 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 171 here 67850A.076
115 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 172 here 67850A.077
116 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 173 here 67850A.078
117 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 174 here 67850A.079
118 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 175 here 67850A.080
119 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 176 here 67850A.081
120 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 177 here 67850A.082
121 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 178 here 67850A.083
122 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 179 here 67850A.084
123 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 180 here 67850A.085
124 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 181 here 67850A.086
125 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 182 here 67850A.087
126 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 183 here 67850A.088
127 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 184 here 67850A.089
128 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 185 here 67850A.090
129 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 186 here 67850A.091
130 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 187 here 67850A.092
131 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 188 here 67850A.093
132 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 189 here 67850A.094
133 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 190 here 67850A.095
134 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 191 here 67850A.096
135 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 192 here 67850A.097
136 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 193 here 67850A.098
137 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 194 here 67850A.099
138 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 195 here 67850A.100
139 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 196 here 67850A.101
140 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 197 here 67850A.102
141 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 198 here 67850A.103
142 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 199 here 67850A.104
143 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 200 here 67850A.105
144 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 201 here 67850A.106
145 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 202 here 67850A.107
146 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 203 here 67850A.108
147 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 204 here 67850A.109
148 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 205 here 67850A.110
149 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 206 here 67850A.111
150 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 207 here 67850A.112
151 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 208 here 67850A.113
152 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 209 here 67850A.114
153 


pwalker on DSK5TPTVN1PROD with HEARINGInsert offset folio 210/300 here 67850A.115