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| <title> - SMALL BUSINESS PRIORITIES FOR THE 116TH CONGRESS</title> | |
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| [House Hearing, 116 Congress] | |
| [From the U.S. Government Publishing Office] | |
| SMALL BUSINESS PRIORITIES FOR THE 116TH CONGRESS | |
| ======================================================================= | |
| HEARING | |
| BEFORE THE | |
| COMMITTEE ON SMALL BUSINESS | |
| UNITED STATES | |
| HOUSE OF REPRESENTATIVES | |
| ONE HUNDRED SIXTEENTH CONGRESS | |
| FIRST SESSION | |
| __________ | |
| HEARING HELD | |
| FEBRUARY 13, 2019 | |
| __________ | |
| [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] | |
| Small Business Committee Document Number 116-005 | |
| Available via the GPO Website: www.govinfo.gov | |
| __________ | |
| U.S. GOVERNMENT PUBLISHING OFFICE | |
| 35-125 WASHINGTON : 2019 | |
| ----------------------------------------------------------------------------------- | |
| For sale by the Superintendent of Documents, U.S. Government Publishing Office, | |
| http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, | |
| U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free).E-mail, | |
| <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="086f7867486b7d7b7c606d6478266b6765">[email protected]</a>. | |
| HOUSE COMMITTEE ON SMALL BUSINESS | |
| NYDIA VELAZQUEZ, New York, Chairwoman | |
| ABBY FINKENAUER, Iowa | |
| ANDY KIM, New Jersey | |
| SHARICE DAVIDS, Kansas | |
| JARED GOLDEN, Maine | |
| JASON CROW, Colorado | |
| JUDY CHU, California | |
| MARC VEASEY, Texas | |
| DWIGHT EVANS, Pennsylvania | |
| BRAD SCHNEIDER, Illinois | |
| ADRIANO ESPAILLAT, New York | |
| ANTONIO DELGADO, New York | |
| CHRISSY HOULAHAN, Pennsylvania | |
| VACANT | |
| STEVE CHABOT, Ohio, Ranking Member | |
| AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member | |
| TRENT KELLY, Mississippi | |
| TROY BALDERSON, Ohio | |
| KEVIN HERN, Oklahoma | |
| JIM HAGEDORN, Minnesota | |
| PETE STAUBER, Minnesota | |
| TIM BURCHETT, Tennessee | |
| ROSS SPANO, Florida | |
| JOHN JOYCE, Pennsylvania | |
| Adam Minehardt, Majority Staff Director | |
| Melissa Jung, Majority Deputy Staff Director and Chief Counsel | |
| Kevin Fitzpatrick, Staff Director | |
| C O N T E N T S | |
| OPENING STATEMENT | |
| Page | |
| Hon. Nydia Velazquez............................................. 1 | |
| Hon. Steve Chabot................................................ 2 | |
| WITNESSES | |
| Mr. John Arensmeyer, Founder & CEO, Small Business Majority, | |
| Washington, DC................................................. 4 | |
| Ms. Sabrina Parsons, CEO, Palo Alto Software, Eugene, OR......... 6 | |
| Mr. J. Kelly Conklin, Co-Owner & Founder, Foley Waite LLC, | |
| Kenilworth, NJ................................................. 8 | |
| Mr. Thomas M. Sullivan, Vice President, Small Business Policy, | |
| Chamber of Commerce of the United States of America, | |
| Washington, DC................................................. 9 | |
| APPENDIX | |
| Prepared Statements: | |
| Mr. John Arensmeyer, Founder & CEO, Small Business Majority, | |
| Washington, DC............................................. 40 | |
| Ms. Sabrina Parsons, CEO, Palo Alto Software, Eugene, OR..... 47 | |
| Mr. J. Kelly Conklin, Co-Owner & Founder, Foley Waite LLC, | |
| Kenilworth, NJ............................................. 53 | |
| Mr. Thomas M. Sullivan, Vice President, Small Business | |
| Policy, Chamber of Commerce of the United States of | |
| America, Washington, DC.................................... 59 | |
| Questions for the Record: | |
| None. | |
| Answers for the Record: | |
| None. | |
| Additional Material for the Record: | |
| Employees and Consumers Benefiting from Tax Reform........... 65 | |
| Statement of Hon. Jim Hagedorn............................... 119 | |
| Recommendations for Subcommittees of the U.S. House Committee | |
| on Small Business.......................................... 121 | |
| U.S. Chamber Statement on the Green New Deal................. 172 | |
| SMALL BUSINESS PRIORITIES FOR THE 116TH CONGRESS | |
| ---------- | |
| WEDNESDAY, FEBRUARY 13, 2019 | |
| House of Representatives, | |
| Committee on Small Business, | |
| Washington, DC. | |
| The Committee met, pursuant to call, at 11:00 a.m., in Room | |
| 2360, Rayburn House Office Building. Hon. Nydia Velazquez | |
| [chairwoman of the Committee] presiding. | |
| Present: Representatives Velazquez, Finkenauer, Kim, | |
| Davids, Golden, Crow, Veasey, Evans, Schneider, Delgado, | |
| Houlahan, Chabot, Radewagen, Kelly, Balderson, Hern, Hagedorn, | |
| Stauber, Burchett, Spano, and Joyce. | |
| Chairwoman VELAZQUEZ. Good morning. The Committee will come | |
| to order. | |
| I thank everyone for joining us this morning, and I want to | |
| especially thank the witnesses for being here today. | |
| As I am sure we all agree, small businesses are critical to | |
| the economic vitality and strength of our country. From the | |
| tech company that started as an idea between two friends, to | |
| more established Main Street retailers, or the local restaurant | |
| looking to expand operations, all play an important role in | |
| generating employment opportunities for our communities whether | |
| they are in rural or urban America. | |
| Starting a small business is what the American Dream is all | |
| about. But unfortunately, as recent economic data suggests, | |
| small firms are not without their own challenges. According to | |
| ADP reports, small employers are lagging behind their larger | |
| counterparts when it comes to hiring. Small business employment | |
| grew only half a percent year over year, compared to 1.7 | |
| percent for all companies tracked by ADP. Declining confidence | |
| levels over economic uncertainty is also weighing heavily on | |
| small firms. | |
| That is why today's hearing is so timely. It will allow us | |
| to gain valuable perspectives on how to best help entrepreneurs | |
| continue to do what they do best, invest in themselves, their | |
| communities, and their workers. | |
| Today, we are joined by a distinguished panel of witnesses. | |
| This hearing is an opportunity to listen to their insights into | |
| the challenges facing small businesses, and specifically, how | |
| Congress can prioritize their needs. While the Small Business | |
| Administration and other partners provide extensive support, | |
| there is still more we as lawmakers can do to ensure their | |
| success. As we heard at last week's subcommittee hearing, | |
| access to capital remains an ongoing problem for countless | |
| small businesses regardless of their size or location. | |
| But this is not the only issue facing small firms. As the | |
| ADP numbers indicate, we are still finding that many business | |
| owners struggle to find qualified workers to fill job openings. | |
| This is particularly true in areas that have been ravaged by | |
| the ongoing opioid crisis or there has been a decline in | |
| population due to a lack of opportunities. | |
| Supporting policies to increase educational initiatives, | |
| develop a skilled workforce, and allow small employers to offer | |
| competitive benefits and wages to their workers are all key to | |
| leveling the playing field for small businesses. | |
| When it comes to taxes, entrepreneurs in every sector | |
| deserve more certainty than they are currently being offered. | |
| We can achieve this by taking steps to streamline the Tax Code | |
| and provide greater retirement options for small business | |
| owners and their employees. Finally, we also know the | |
| importance of providing increased access to contracting | |
| opportunities. This is especially true as Congress aims to | |
| tackle infrastructure reform. It is imperative that in this | |
| process we consider the economic potential that comes with | |
| ensuring small firms operating in sectors such as construction, | |
| engineering, and architecture, have a fair shot at receiving | |
| federal contracts. | |
| Today, the small business priorities we address will help | |
| us set our agenda moving forward this Congress. It is my hope | |
| that we will have a productive discussion. | |
| With that, I thank each of the witnesses for joining us | |
| today, and I look forward to your testimony. | |
| I would like to yield to the Ranking Member, Mr. Chabot, | |
| for his opening statement. | |
| Mr. CHABOT. Thank you, Madam Chairwoman. | |
| There are more than 30 million small businesses all across | |
| this country. We call them the backbone of our national economy | |
| because they are fundamental to every community all over | |
| America. They create most of the new jobs in the economy, for | |
| example. | |
| Small businesses make up 99-99/100 percent of all firms. | |
| They employ nearly half of private sector employees and create | |
| two out of every three net new jobs. We call small businesses | |
| the lifeblood of our national economy because they are the | |
| essence of American strength and vitality. From entrepreneurs | |
| to generational mom and pop stores, small business owners | |
| personify diversity, creativity, and grit, essential | |
| ingredients of the American spirit. | |
| During my tenure on this Committee, one that spans over 2 | |
| decades now, we have heard from thousands of small business | |
| owners, from economists and advocates, each with suggestions on | |
| how to improve the way small businesses perform. Our success at | |
| this Committee depends on open and honest dialogue with small | |
| businesses, industry leaders, and government officials. Members | |
| of this Committee will certainly have differing opinions on | |
| priority problems and policy solutions, but as we maintain our | |
| spirit of bipartisanship, I am confident that we will find more | |
| areas of common ground. | |
| Today, as we outline our policy agenda, we begin a search | |
| for small business issues that we can tackle together. Recent | |
| tax and regulatory relief has spurred economic growth and | |
| generated high levels of optimism within the small business | |
| community. In 2018, small business owners reported higher sales | |
| earnings, investments, and hiring. Bolstered by their | |
| confidence, they are looking to expand. At this Committee, we | |
| know that thriving small businesses create more jobs, | |
| revitalize communities, and sustain our national economy. | |
| Our efforts should focus on how we, the government, can | |
| support small business growth instead of constraining it with | |
| more red tape. | |
| In the 116th Congress, I look forward to continuing our | |
| rigorous oversight of the SBA, the Small Business | |
| Administration, and their contracting programs and regulatory | |
| regimes. We are the stewards of taxpayer dollars. When federal | |
| programs operate efficiently and effectively, everyone | |
| benefits. | |
| Madam Chairwoman, I am proud of the legislative successes | |
| that we have achieved together at the Small Business Committee, | |
| and I look forward to many more in the 116th Congress. | |
| I would like to thank our witnesses for being here, all | |
| four of them, and I yield back. | |
| Chairwoman VELAZQUEZ. Thank you, Mr. Chabot. The gentleman | |
| yields back. | |
| If committee members have an opening statement prepared, we | |
| would ask that they be submitted for the record. | |
| I would like to take a minute to explain the timing rules. | |
| Each witness gets 5 minutes to testify and the members get 5 | |
| minutes for questioning. There is a lighting system to assist | |
| you. The green light will be on when you begin, and the yellow | |
| light comes on when you have 1 minute remaining. The red light | |
| comes on when you are out of time, and we ask that you stay | |
| within the timeframe to the best of your ability. | |
| I would now like to introduce our witnesses. | |
| Our first witness is Mr. John Arensmeyer. Mr. Arensmeyer is | |
| founder and CEO of Small Business Majority, a national small | |
| business advocacy organization focused on empowering America's | |
| entrepreneurs to build a thriving and inclusive economy. Prior | |
| to starting Small Business Majority, Mr. Arensmeyer founded ACI | |
| Interactive, an award-winning, international interactive | |
| communications company. Welcome. | |
| Our second witness is Ms. Sabrina Parsons. Ms. Parsons is | |
| the CEO of Palo Alto Software, a business and marketing plan | |
| software company based in Oregon. As a staunch supporter of | |
| entrepreneurs, she is regularly invited to participate as a | |
| judge for business plan competitions across the U.S., as well | |
| as to speak on business planning, leadership, and women in | |
| technology. | |
| Our third witness today is Mr. J. Kelly Conklin. Mr. | |
| Conklin lives in Glen Ridge, New Jersey, with his wife and | |
| business co-owner. In 1968, they founded Foley Waite, LLC, an | |
| architectural woodworking firm located in Kenilworth, New | |
| Jersey. Mr. Conklin is Chairman of the Executive Committee of | |
| the Main Street Alliance, a national network of over 30,000 | |
| small business owners. He also serves on numerous boards, | |
| including 14 years on the Glen Ridge Planning Board. | |
| And I now would like to yield to our Ranking Member, Mr. | |
| Chabot, to introduce our final witness. | |
| Mr. CHABOT. Thank you, Madam Chair. | |
| I would like to introduce today's final witness, Thomas | |
| Sullivan. Mr. Sullivan is the vice president of Small Business | |
| Policy at the U.S. Chamber of Commerce. In this capacity, he | |
| manages the Chamber's Small Business Council, which facilitates | |
| small business input and involvement in Chamber activities. Mr. | |
| Sullivan has advocated for small businesses in the public, | |
| private, and nonprofit sector. Most notably, he served as Chief | |
| Counsel for Advocacy at the SBA under President George W. Bush. | |
| Tom is an expert on small business policy and a long-time | |
| friend of this Committee. Thank you for joining us today. We | |
| appreciate it, and I yield back. | |
| Chairwoman VELAZQUEZ. Thank you. | |
| Mr. Arensmeyer, you are recognized for 5 minutes. | |
| STATEMENTS OF JOHN ARENSMEYER, FOUNDER & CEO SMALL BUSINESS | |
| MAJORITY; SABRINA PARSONS, CEO PALO ALTO SOFTWARE; J. KELLY | |
| CONKLIN CO-OWNER & FOUNDER FOLEY WAITE LLC; THOMAS M. SULLIVAN, | |
| VICE PRESIDENT, SMALL BUSINESS POLICY, CHAMBER OF COMMERCE OF | |
| THE UNITED STATES OF AMERICA | |
| STATEMENT OF JOHN ARENSMEYER | |
| Mr. ARENSMEYER. Thank you, Chairwoman Velazquez, Ranking | |
| Member Chabot, and distinguished members of the Committee. | |
| Thank you for inviting us to speak with you today. | |
| As a long-time small business owner, I founded Small | |
| Business Majority 13 years ago to empower America's | |
| entrepreneurs to build a thriving and inclusive economy. | |
| We have a network of 58,000 small business owners across | |
| the country, with eight regional offices and partnerships with | |
| over 1,000 business organizations. We advocate for smart public | |
| policy solutions and deliver information and resources to | |
| entrepreneurs with a particular focus on underserved | |
| entrepreneurs--women, people of color, immigrants, and rural | |
| small business owners. | |
| We have created a policy agenda that focuses on seven | |
| topics--access to capital, health care, retirement and other | |
| portable benefits, entrepreneurship and the freelance economy, | |
| supporting a skilled small business workforce, infrastructure | |
| and economic development, and taxes. | |
| I am going to address the first three issues briefly today | |
| but I am happy to answer questions about any one of those | |
| topics. | |
| On access to capital, it is no secret that small business | |
| owners face significant hurdles accessing capital. Small | |
| businesses' share of total bank loans fell from 31 percent in | |
| 2010 to 21 percent in 2016, while the average small business | |
| loan amount has steadily increased, making loans less available | |
| for the smallest businesses. | |
| Moreover, women business owners get nearly 50 percent less | |
| in funding than their male counterparts. Similarly, a SBA study | |
| found African American and Hispanic business owners were more | |
| likely to report unmet credit needs. | |
| New alternative and online lending opportunities have | |
| sprung up to fill this market need. This is a potentially | |
| positive development for small businesses. However, alternative | |
| sources of financing operate in an almost entirely unregulated | |
| market, making many small business owners vulnerable to | |
| predatory practices. This new industry must be built on | |
| transparency, fairness, and putting the rights of borrowers at | |
| the center of the process. | |
| A desire to encourage responsible innovation in online | |
| lending is what drove us to cofound the Responsible Business | |
| Lending Coalition (RBLC) in 2015. The RBLC has published the | |
| Small Business Borrowers' Bill of Rights, a guide for | |
| responsible small business lending standards that more than 90 | |
| fintech lenders, banks, and other groups have signed onto. The | |
| RBLC has also produced policy recommendations for a national | |
| Small Business Truth in Lending Act modeled on a law enacted | |
| last year in California. | |
| Other policy recommendations include quadrupling annual SBA | |
| lending guarantees from $25 billion to $100 billion, thereby | |
| increasing the volume of small business loans guaranteed by the | |
| SBA to $1 trillion over the next decade. Increasing loan | |
| guarantee percentages from 85 percent to 90 percent for loans | |
| up to $150,000, and from 75 to 85 percent for loans between | |
| $150,000 and $700,000. Dramatically expanding the annual budget | |
| of the CDFI Fund from $250 million to $1 billion, and | |
| prohibiting confessions of judgment in which borrowers agree in | |
| advance to lose any dispute with the lender. | |
| On health care, since its enactment, the ACA has provided | |
| health care to 24 million individuals who otherwise could not | |
| access coverage, many of whom work for small employers or are | |
| themselves small business owners or self-employed individuals. | |
| What is not well understood is that more than half of all ACA | |
| marketplace enrollees fall into these entrepreneurship | |
| categories. | |
| So we must do three things: strengthen our healthcare | |
| markets, expand health coverage, and reduce drug prices while | |
| containing other inefficient costs in the system. Our | |
| recommendations include maintaining protections for individuals | |
| with preexisting conditions, addressing the rising cost of | |
| prescription drugs, protecting consumers from surprise building | |
| by limiting patient out-of-network cost-sharing. Blocking the | |
| extension of both short-term health insurance plans and | |
| association health plans, both of which offer inadequate | |
| coverage and remove younger, healthier individuals from the | |
| general pool, thus increasing costs for everybody else and | |
| destabilizing markets, allowing people to buy into Medicaid | |
| and/or Medicare, guaranteeing cost-sharing subsidies to | |
| insurers, and creating a reinsurance program. | |
| Finally, we need a modernized benefits infrastructure that | |
| serves today's independent entrepreneurs and small business | |
| owners who do not work for large corporations. We recommend the | |
| following: supporting Federal efforts to establish a publicly | |
| administered retirement savings program, like the Secure Choice | |
| programs in some states and make participation open to the | |
| self-employed; passing the FAMILY Act to establish a national | |
| program that provides partial wage replacement for small | |
| business employees and the self-employed; and there are a | |
| number of other recommendations in our policy agenda. | |
| Finally, Congress must focus on the particular needs of | |
| rural entrepreneurs who start businesses at higher rates than | |
| their urban counterparts and have higher 5-year business | |
| survival rates while facing a unique set of challenges. | |
| Yesterday, we released a report on rural entrepreneurship, a | |
| copy of which we will provide to the Committee. | |
| Thank you for the opportunity to comment on these important | |
| issues. I look forward to answering your questions. | |
| Chairwoman VELAZQUEZ. Thank you, Mr. Arensmeyer. | |
| Ms. Parsons, you are recognized for 5 minutes. | |
| STATEMENT OF SABRINA PARSONS | |
| Ms. PARSONS. Chairwoman Velazquez, Ranking Member Chabot, | |
| and members of the Committee, thank you for the invitation to | |
| testify today about the needs and policy priorities of small | |
| businesses around the United States. | |
| My name is Sabrina Parsons. I became CEO of Palo Alto | |
| Software in 2007 and have grown the business to over 70 full- | |
| time employees. I am also an active supporter of entrepreneurs | |
| in Oregon where my company is based, and a member of Main | |
| Street Alliance, a network of 30,000 small business owners. | |
| The policy priorities I am going to discuss with you today | |
| support the family life of both small business owners and | |
| employees, invest in entrepreneurship of women and people of | |
| color, boost wages, and protect the immigrant members of our | |
| communities. | |
| Small businesses need national paid family medical leave. | |
| Eighty-three percent of the U.S. workforce lacks employer- | |
| provided, paid family leave care for a new child or a seriously | |
| ill loved one, and more than 60 percent do not have employer- | |
| provided temporary disability insurance to protect them when | |
| they need time away from their jobs to address a serious health | |
| issue or injury. | |
| Although Palo Alto Software is now able to provide paid | |
| leave, most small businesses lack the scale, expertise, and | |
| resources for such a policy. When my company was smaller, we | |
| could not afford the comprehensive paid leave we can today. And | |
| in other industries it is even harder. For example, it is very | |
| difficult in the restaurant industry where profit margins are | |
| very narrow. | |
| Access to paid leave should not depend on the size of | |
| business or where a person lives and works. We need a Federal | |
| program that gives all worker and small business owners the | |
| kind of leave that Palo Alto Software offers. | |
| For that reason, I ask you to support the Family Act, which | |
| would create an affordable, self-sustaining national family and | |
| medical leave insurance program, making paid leave affordable | |
| and feasible for small businesses. | |
| Small businesses need a strong public investment in child | |
| care. As the mother of three, I know the impact of family | |
| responsibilities on employees and small business owners alike. | |
| The dearth of affordable child care provided by well- | |
| compensated professionals frequently stands in the way of small | |
| business success and growth. | |
| The astronomical costs of child care put parents in a bind. | |
| Nearly one in three families report spending 20 percent or more | |
| of their annual household income on child care. In 28 states, | |
| including my home state of Oregon, child care costs more than | |
| in-state public college tuition. | |
| We ask you to support Child Care for Working Families Act, | |
| which would make unprecedented investments to ensure all | |
| children have access to high-quality, early education, and | |
| ensure that people who work in child care and earn a living | |
| wage. | |
| Boosting wages helps small businesses. The starting salary | |
| for any employee at my company is $16 an hour, even customer | |
| service, which generally pays very low wages. Given what it | |
| takes for a family to make ends meet in Eugene, Oregon, I feel | |
| strongly that people need to be paid living wages. Raising | |
| wages is also better for business. When you pay $7 an hour, you | |
| experience employee turnover over a period of 2 or 3 years that | |
| ultimately can devastate a small business's bottom line. | |
| I understand that raising the minimum wage is a source of | |
| fear for many small businesses. However, the financials will | |
| work out and make businesses stronger, and I believe this is an | |
| area of tremendous opportunity for the SBA and others to | |
| provide better financial management training, education, and | |
| assistance to small businesses. | |
| Fair treatment of immigrants is a small business issue. I | |
| am the daughter of an immigrant mother and a U.S.-born father. | |
| I was born in Mexico City and lived there until I was seven and | |
| spoke Spanish before I spoke English. My mother recently became | |
| a citizen of the United States. Humane and just immigration | |
| policy is important to me as the daughter of an immigrant, as a | |
| mother and community member, and as a businesswoman. | |
| We owe it to all immigrants and ourselves to adopt an | |
| immigration policy that respects family and the basic tenets of | |
| freedom. Please put an end to family separation. Please do | |
| whatever possible to bring healing to the families torn apart | |
| by this policy. And please ensure that the immigrant business | |
| owners, other immigrants in our community, and those who are | |
| seeking refuge here have a fair opportunity to live, work, and | |
| develop businesses here. The facts show these immigrants bring | |
| more positive than negative to our country and are an integral | |
| part of who America is. | |
| Lack of equitable capital continues to hamper small | |
| businesses, particularly for women and people of color. The | |
| Wall Street Journal reports that Black-owned businesses | |
| received only 11 percent of Small Business Administration loans | |
| in 2008, and only 2.3 percent of those SBA loans in 2013. Women | |
| entrepreneurs also experience disparities. A study by | |
| Biz2Credit found that women-owned firms had a loan approval | |
| rate that was 15 to 20 percent lower than their male | |
| counterparts. | |
| I urge you to pass measures to eliminate racial and gender | |
| discrimination in small business lending and recognize that | |
| there is a need to open access to affordable capital for small | |
| businesses, particularly those owned by entrepreneurs who are | |
| women and people of color. I also ask you to bring | |
| transparency, oversight, and fair terms to all forms of small | |
| business lending, whether bank or non-banking loans. | |
| I appreciate the opportunity to share concerns and policy | |
| priorities for small business owners. | |
| Thank you, and I look forward to answering your questions. | |
| Chairwoman VELAZQUEZ. Thank you, Ms. Parsons. | |
| Mr. Conklin, you are recognized for 5 minutes. | |
| STATEMENT OF J. KELLY CONKLIN | |
| Mr. CONKLIN. Thank you, Chairwoman Vasquez, Ranking Member | |
| Chabot, members of the Committee. | |
| I appreciate the invitation to testify here today on behalf | |
| of real small business people like me. We do form the backbone | |
| of Main Street communities across the country. | |
| My name is Kelly Conklin, and I am Chair of Main Street | |
| Alliance. Our organization creates opportunities for small | |
| business owners to speak for ourselves on public policy issues | |
| that impact our businesses, our employees, and the communities | |
| we serve. | |
| In 1978, my wife and I founded Foley Waite, an | |
| architectural woodworking firm. She was on one end of a sheet | |
| of plywood and I on the other, working out of an 800 square | |
| foot shop we lived over. Now our company owns a 13,600 square | |
| foot building and employees 14 people. | |
| Real small businesses like mine need policies, such as | |
| universal health care, a fair tax system, equitable access to | |
| capital, and paid family and medical leave, that serve the | |
| needs of small business and that take into account the ways in | |
| which racial and gender inequity serve as gatekeepers that | |
| structure the small business sector. | |
| Small businesses need high-quality--we are going to say | |
| this over and over again today--high-quality, publicly-funded, | |
| universal health care. The Affordable Care Act was an important | |
| step in the right direction for small businesses but there is | |
| much, much more Congress needs to do. | |
| With the ACA, I saw my premiums finally begin to stabilize. | |
| Then Republican leaders began massaging the ACA and creating | |
| uncertainty. We know this has increased premiums in the | |
| marketplace for individuals. April 15th is a day I dread, not | |
| because it is Tax Day but because that is when I will find out | |
| what this year's insurance premiums will be, how much they will | |
| go up. My business went from providing 100 percent of coverage | |
| for our employees to 85 percent, and now we are at 80 percent. | |
| And we spend $8,000 a month on health care, a real hit. If my | |
| wife and I could put half that money into our business, we | |
| would have one of the most modern, well-equipped architectural | |
| woodworking businesses on the East Coast. | |
| We need universal, high-quality, publicly-funded coverage | |
| that is affordable for everyone. This is not too expensive. The | |
| private sector is delivering the most expensive and inefficient | |
| health care in the world. The cost of doing nothing is too | |
| great. | |
| Our Tax Code should prioritize strong public investment | |
| over corporate profits. The Tax Cuts and Jobs Act passed in | |
| 2017 hurts small businesses. The Joint Committee on Taxation | |
| found that 61 percent of the benefits of this deduction will go | |
| to the richest 1 percent of pass-through business owners by | |
| 2024. Just 4 percent of the bottom two-thirds will benefit. | |
| The revenue lost to tax breaks for the very wealthy and big | |
| corporations are made up for on Main Street with deteriorating | |
| infrastructure and loss of services. We ask Congress to repeal | |
| the Tax and Jobs Act with its tax giveaways to large | |
| corporations and the very rich. Instead, create a tax system | |
| that ensures the rich and big corporations pay their share of | |
| taxes. Let us close corporate tax loopholes and create a more | |
| progressive income tax structure. | |
| Small businesses need equitable access to affordable | |
| capital and protection from predatory financing. Bank lending | |
| to small businesses has not fully recovered since the | |
| recession. There is compelling evidence pointing to a | |
| persistent racial discrimination and redlining in small | |
| business bank lending. | |
| The Minority Business Development Agency found that | |
| business owners of color are 2.5 times more likely to be denied | |
| when applying for traditional business loans compared to white | |
| business owners. A 2014 study reported that women entrepreneurs | |
| receive 16 percent of conventional bank loans and 17 percent of | |
| SBA loans, even though they represent 30 percent of small | |
| businesses. | |
| We need lawmakers to hold banks accountable for | |
| discrimination in lending and ensure entrepreneurs of color and | |
| women get a real opportunity to start and grow their | |
| businesses. Protect small business borrowers from predatory | |
| lending with transparency in lending, reasonable terms and | |
| underwriting, and honest practices. | |
| Families are part of our bottom line. Only 17 percent of | |
| the U.S. workforce have paid family leave through their | |
| employers, and less than 40 percent have personal medical leave | |
| through an employer-provided temporary disability program. | |
| In New Jersey, we are fortunate to have had a state paid | |
| program for more than 8 years, and I have encouraged two of my | |
| employees to use it, one after his mother suffered a severe | |
| brain injury and one after an employee's wife received a cancer | |
| diagnosis. | |
| The Family Act will create a national paid family and | |
| medical---- | |
| Chairwoman VELAZQUEZ. Mr. Conklin, your time has expired. | |
| During the question and answer period you will have some time | |
| to expand. | |
| Mr. CONKLIN. Okay. Thank you. | |
| Chairwoman VELAZQUEZ. Thank you for your testimony. | |
| Mr. Sullivan, you are recognized for 5 minutes. | |
| STATEMENT OF THOMAS M. SULLIVAN | |
| Mr. SULLIVAN. Thank you, Chairwoman Velazquez, Ranking | |
| Member Chabot, and members of the Committee, for the | |
| opportunity to outline the U.S. Chamber of Commerce's small | |
| business priorities. | |
| Ninety-seven percent of Chamber members are small | |
| businesses, and the Small Business Council that I head works to | |
| ensure their views are considered as part of our policymaking | |
| process. In addition to receiving input from our Small Business | |
| Council, we learn a great deal from our quarterly small | |
| business index and from our engagement with small businesses | |
| where they live and work at our regional small business | |
| summits. | |
| The priorities that I will outline really have at the top | |
| of the list workforce, the need for workers. The top priority | |
| of the Chamber is to address the worker shortage that is making | |
| it difficult for small businesses to grow. | |
| The top issue for the small businesses I talk with every | |
| day is finding, recruiting, hiring, and retaining qualified and | |
| willing employees. There is really no single piece of | |
| legislation that can solve Main Street's challenge of a worker | |
| shortage. However, we believe there are legislative and | |
| business leadership solutions that will go far in addressing | |
| the need for workers, and those are outlined in more detail in | |
| my written statement. | |
| Immigration. The Chamber has long supported common sense | |
| reforms to our Nation's broken immigration system. And when | |
| businesses large and small are prevented from growing because | |
| of a lack of workers, our call for reform is even more urgent. | |
| As far as education goes, the Chamber supports high- | |
| quality, lifelong learning to ensure all Americans have the | |
| opportunity to reach their potential. There are several | |
| legislative initiatives to expand high-quality education that | |
| we support, and expand and improve training and retraining | |
| programs that include employer-led ``earn and learn'' | |
| opportunities like apprenticeships. | |
| Competing for talent and retention of employees. The | |
| Chamber believes that providing small businesses with | |
| healthcare coverage options and retirement options for their | |
| employees are key ingredients for growth and allow them to | |
| compete for and retain top talent. | |
| Our local and state chamber of commerce partners are | |
| excited about new opportunities to provide healthcare coverage | |
| and retirement benefits for their small business members, and I | |
| am hoping in the question and answers that I would be able to | |
| detail some of those opportunities. | |
| Access to capital. It is no surprise that this Committee is | |
| already off to a good start when it comes to forwarding | |
| bipartisan legislation that will help small businesses access | |
| the capital they need to start, sustain, and grow. We hope that | |
| H.R. 116, the Investing in Main Street Act, is taken up by the | |
| Senate and signed into law. And we look forward to working with | |
| this Committee on additional legislation that will help provide | |
| access to capital for startups and small businesses. | |
| Regulatory relief. SBA's Office of Advocacy acts as the | |
| watchdog for small business within the Federal Government and | |
| oversees implementation of the Regulatory Flexibility Act, | |
| which is under this Committee's jurisdiction. I was honored to | |
| lead that office from 2002 to 2008, and I appreciate this | |
| Committee's support for that office and its mission. | |
| One of our priorities for this Congress is to work with you | |
| on legislation that can improve that office's work to the | |
| benefit of our Nation's small business community. | |
| Infrastructure. The Chamber is buoyed by the bipartisan | |
| agreement that seems to surround infrastructure, and we | |
| encourage you to help the Committees of jurisdiction to get the | |
| legislation moving. | |
| As far as working with other Committees, from | |
| Infrastructure to Health Care, to Trade and Tariffs, to Tax | |
| Policy, many of the Chamber's small business priorities fall | |
| within the legislative jurisdiction of Committees other than | |
| this one. To the credit of you all, you have a history of | |
| helping those Committees understand the unique concerns of | |
| small businesses. I compliment your vigilance in this area and | |
| want to stress the importance of continued cross-Committee work | |
| when it comes to small business priorities. At the Chamber, we | |
| are similarly dedicated to advancing these and other policies | |
| that can benefit Main Street businesses, fuel the economy, | |
| provide for individuals and families, and grow communities. | |
| Thank you. | |
| Chairwoman VELAZQUEZ. Thank you, Mr. Sullivan. | |
| I recognize myself for 5 minutes. And I would like to | |
| address the first question to the members of the panel. | |
| As a staunch supporter of entrepreneurs, I want to make | |
| sure that I am doing everything within my power to provide the | |
| tools to help small businesses and the business community to | |
| turn an idea into a flourishing business. So as an active | |
| member of the entrepreneurship community, what are some of the | |
| opportunities and challenges that you see on the horizon? What | |
| will be that one issue that you feel will make a difference in | |
| empowering that small individual to turn an idea into a | |
| startup? | |
| Mr. Arensmeyer? | |
| Mr. ARENSMEYER. Well, first, I think we need to make sure | |
| we are connecting small business owners and entrepreneurs with | |
| all the programs that are out there. We have a very extensive | |
| entrepreneurship program across the country where we not only | |
| provide education but we provide resources both online and | |
| face-to-face. But most importantly, we connect people with | |
| resources that are out there, resources from the SBA, resources | |
| from the U.S. Department of Agriculture. I am pleased to see | |
| the Rural Entrepreneurship Program has continued in the recent | |
| Farm Bill. So a lot of it is just connecting people with | |
| resources. | |
| We need to make sure that they are connected to the local | |
| community banks. The problem is there is no one solution. We | |
| have to, when it comes to lending, you know, there are 7(a) | |
| loans. There are other microloan programs, et cetera, but there | |
| is no sort of one place where a small business owner can go to | |
| get everything. | |
| We are optimistic that some of the technology embedded in | |
| some of the fintech products can be useful but we cannot let | |
| those expand without very strict guidelines around | |
| transparency, around underwriting rules because literally what | |
| is happening is a lot of those small business owners are being | |
| taken advantage of much the way individuals get taken advantage | |
| of by payday loans. So it is a combination of making sure | |
| people have access to resources and setting up policies to | |
| ensure maximum access. | |
| Chairwoman VELAZQUEZ. Thank you. | |
| Ms. Parsons, I know that you care deeply about providing a | |
| level playing field for women entrepreneurs, and we know that | |
| women receive nearly 50 percent less funding compared to male- | |
| owned businesses. How do you see this committee enacting | |
| legislation or how can we enhance the programs so that we | |
| provide that level playing field for women? | |
| Ms. PARSONS. Yeah, thank you. I think that is a great | |
| question. | |
| Right now, if you want to get a loan for your small | |
| business startup, and that is usually where people are going, | |
| we have this system in place where banks, including SBA-backed | |
| loans, are asking entrepreneurs to have 2 years in business and | |
| $250,000 of revenue as a starting point, which clearly if you | |
| are a startup entrepreneur you have neither, which then means | |
| people are using personal assets to start their businesses. And | |
| this is why women and people of color are falling behind. All | |
| the statistics show that women have less access to personal | |
| assets and personal guarantees. And so you just have this | |
| catch-22 of the same entrepreneurs who have access to resources | |
| are the only ones who can start businesses. | |
| So the first thing that has to happen I think is the | |
| recognition that where we are today and how we lend simply | |
| leaves behind people who do not have access to personal assets | |
| and who do not have personal wealth. And that would be the | |
| first thing. | |
| Chairwoman VELAZQUEZ. Thank you. | |
| Mr. Conklin? | |
| Mr. CONKLIN. Well, the single biggest problem we face, and | |
| it has been an ongoing problem throughout the 40 years we have | |
| been in business, is manpower. Skilled manpower. Access to | |
| people who are trained and knowledgeable and can step into our | |
| facility and safely do the work we do. And there is a focus I | |
| think both educationally and culturally in our society that is | |
| blind--to I think a very good opportunity for people to make | |
| very good living--doing the kind of work we do. The focus on | |
| STEM in education and the abandonment of training folks in the | |
| trades and crafts over the course of the time we have been in | |
| business. I went to the School for American Craftsmen. I do not | |
| think it exists anymore. | |
| Chairwoman VELAZQUEZ. Thank you. | |
| Mr. CONKLIN. And my wife went to Philadelphia College of | |
| Art. So we have to have workers and we have to have an | |
| immigration policy that recognizes that the skillsets necessary | |
| for small businesses to function include using tools, like saws | |
| and chisels and hammers. | |
| Chairwoman VELAZQUEZ. Thank you, Mr. Conklin. | |
| Mr. Sullivan, I will come back to you in the second round. | |
| My time has expired and now I recognize the Ranking Member for | |
| 5 minutes. | |
| Mr. CHABOT. Thank you, Madam Chair. | |
| It is a relatively new concept but I would like to get each | |
| of your input or opinion on this briefly. Would you be inclined | |
| to be for or against the so-called Green New Deal? | |
| Mr. Arensmeyer? | |
| Mr. ARENSMEYER. Well, there is no question that we have got | |
| a major problem facing us, and we need to take dramatic action. | |
| We have not studied the details. I am not even sure there is | |
| that sort of a document so I cannot say that we would support | |
| everything in it. But we definitely support the concept. And I | |
| think what is important to remember is that as we figure out | |
| how to reduce our carbon footprint and create more renewal | |
| opportunities, there are business opportunities. And many of | |
| those business opportunities are available to small businesses. | |
| So we would like to see as part of a--and yes, there does need | |
| to be a comprehensive effort to deal with this--we would like | |
| to see making sure there is a role for entrepreneurship and for | |
| new technologies and for new opportunities for business which | |
| we think can create a whole new generation of jobs in this | |
| country. | |
| Mr. CHABOT. Ms. Parsons, inclined to be for it or opposed | |
| to it? | |
| Ms. PARSONS. I am inclined to be for it. Obviously, there | |
| are not the details necessary, but I---- | |
| Mr. CHABOT. Let me just stop you there. And Mr. Conklin, | |
| because I have only got limited time, I have got other | |
| questions. | |
| Mr. CONKLIN. Sure. Yes. | |
| Mr. CHABOT. Inclined to be for or against? | |
| Mr. CONKLIN. For. | |
| Mr. CHABOT. Okay. Mr. Sullivan? | |
| Mr. SULLIVAN. Congressman Chabot, the U.S. Chamber of | |
| Commerce issued a very strong statement opposing the Green New | |
| Deal. I would like to submit that to the Committee with your | |
| permission. | |
| Mr. CHABOT. Yes, absolutely. We would welcome that. | |
| Let me go back to you, Mr. Sullivan. The 2018 surveys | |
| relative to small businesses recorded really record-breaking | |
| levels of optimism among small business owners. Are there a | |
| couple of things that you would attribute that to, or what is | |
| your opinion on that? | |
| Mr. SULLIVAN. Thank you, Congressman Chabot. | |
| We think that there was a significant change in the | |
| attitude of small business on whether or not Washington, D.C. | |
| was wind in their face or wind in the back, and in | |
| particularly, this administration's attention to regulatory | |
| relief, red tape relief for small business. We believe that is | |
| the single most ingredients that has caused small business | |
| optimism to be as high as it has been over the last year and a | |
| half. | |
| Mr. CHABOT. Okay. Thank you. | |
| Let me follow up. Some of the other witnesses, one in | |
| particular, indicated that the Tax Cuts and Jobs Act was not | |
| helpful. In fact, not putting words in their mouth, but just | |
| basically went to the wealthy and not others. What is your | |
| opinion relative to how small businesses were affected, either | |
| positively or negatively as a result of that legislation? | |
| Mr. SULLIVAN. Thank you for the question, Congressman. | |
| First of all, with regard to our quarterly survey, when we | |
| surveyed small business owners when tax cuts were passed in | |
| late 2017, their optimism spiked. So that had raised the | |
| highest optimism levels that we have seen, and I think that is | |
| echoed by the monthly confidence survey that was issued by | |
| NFIB. So the initial passage was a huge boost to small business | |
| confidence. What we have seen since then is a steady stream of | |
| small businesses who have told us that they have reinvested | |
| savings from tax cuts into growing their businesses. And with | |
| the Congressman's permission, I have a list of 612 of those | |
| companies over the past year who are willing to be very public | |
| about the reinvestment that has occurred because of the tax | |
| cuts. So we were very favorable of the tax reform and the | |
| statements by small businesses from the past year backup our | |
| support. | |
| Mr. CHABOT. Thank you very much. | |
| Madam Chair, I would ask that those, by unanimous consent, | |
| be part of the record. | |
| Chairwoman VELAZQUEZ. Sure. Without objection. | |
| Mr. CHABOT. Thank you very much. | |
| And I have only got a little bit of time left, but | |
| workforce came up by a couple of the witnesses, and I know that | |
| when I go around my district that is one of the first things | |
| that the small business folks, or even medium business or even | |
| large talk about how tough it is to find good, qualified | |
| people. | |
| Real quickly, Mr. Arensmeyer, is that something that you | |
| think is a real challenge? Or what can we do about it? | |
| Mr. ARENSMEYER. Absolutely it is a real challenge. And we | |
| need to have policies that encourage--first of all, there is a | |
| labor shortage now in this country, so we need to have | |
| immigration policies that recognize this and recognize the | |
| tremendous value that immigrants bring to our economy. And we | |
| need to need to make sure that we are matching the skills of | |
| employees with the needs of small business owners. We found | |
| this particularly in the rural study we just did where there | |
| was even a bigger gap in rural areas between the needs of small | |
| businesses and the population. | |
| Mr. CHABOT. Thank you very much. | |
| Chairwoman VELAZQUEZ. The gentleman yields back. | |
| Now I recognize Representative Andy Kim, Chairman of the | |
| Subcommittee on Economic Growth, Tax, and Capital Access for 5 | |
| minutes. | |
| Mr. KIM. Great, thank you. | |
| I am very honored to be on this Committee and be able to | |
| look out for small businesses across my district, across New | |
| Jersey, and across the country. | |
| Small businesses are the lifeblood of both Burlington | |
| County and Ocean County where I reside, and we are very much | |
| focused on what we can do. And as I have gone around both | |
| counties and talked with business owners and talked with other | |
| entrepreneurs, what comes up often is our concern in New | |
| Jersey, and I am sure in a lot of other places about our young | |
| Americans, especially coming out from schools, we are worried | |
| about brain drain and other issues of that as we have seen an | |
| exodus out from New Jersey. | |
| So I wanted to just focus on that in two ways. First, with | |
| regard to student debt and the huge amounts of problems that | |
| young Americans face with regard to the debt that they carry, | |
| how does that impact--I wanted to ask Mr. Arensmeyer about | |
| this. I wanted to ask, you know, what can we do to try to help | |
| alleviate these issues, to help entrepreneurship with younger | |
| Americans while they are still dealing with student debt? Are | |
| there any particular ideas that come to your mind? | |
| Mr. ARENSMEYER. Thank you, Congressman. | |
| We actually did a poll 1-1/2, 2 years ago of millennials, | |
| and we found that almost half of them say that their student | |
| loan debt has been an impediment to them considering starting a | |
| business. I mean, that is huge. I mean, this is a new | |
| generation of Americans, new generation of people who we want | |
| to continue to start small businesses. So figuring out how to | |
| get some kind of student loan debt relief is absolutely | |
| essential to making sure that we foster the next generation of | |
| entrepreneurs. | |
| Mr. KIM. Thank you. | |
| In addition to making sure we can foster the | |
| entrepreneurship and the start of small businesses, I think a | |
| number of you also talked about the workforce developing and | |
| making sure that we are bringing in top talent in terms of the | |
| employees of these small businesses. So I wanted to ask Mr. | |
| Sullivan and Mr. Conklin to just go into this a little more. I | |
| had some very good meetings yesterday with different community | |
| college leaders and others that had been talking about this, | |
| and in New Jersey, trying to find ways to strengthen that | |
| pipeline between colleges and universities and training centers | |
| to small businesses in particular. And I wanted to ask you if | |
| you had any lessons learned or any good examples from around | |
| the country that, you know, we certainly might be able to draw | |
| upon in New Jersey and elsewhere and we on this Committee might | |
| be able to use and replicate to be able to strengthen that | |
| pipeline. | |
| So Mr. Sullivan, why do we not start with you? | |
| Mr. SULLIVAN. Thank you, Congressman. | |
| So at the Chamber, we are really very proud of our | |
| Foundation that has what is called a Talent Pipeline Management | |
| Program. Really, the fundamental idea here is to connect the | |
| business community and what they need with what the workforce | |
| training centers are training the eligible employees. There has | |
| been a disconnect in many communities where the workforce | |
| process is teaching things the local community does not need. | |
| So something as simple as connecting the need with the training | |
| has actually gone very far. And this is a program that is | |
| basically open sourced from our Chamber Foundation to local | |
| communities through their workforce centers, through local | |
| chambers of commerce, and other employer organizations. So I am | |
| happy to share with the Congressman a more detailed explanation | |
| of our Talent Pipeline Management program, but it is an | |
| exciting initiative that we believe will go far in addressing | |
| the workforce issue. | |
| Mr. KIM. Great. Thank you. I certainly would love to follow | |
| up with you and learn some more about that. So let us talk | |
| offline. | |
| Mr. Conklin? | |
| Mr. CONKLIN. Yes. Thank you, Congressman. | |
| Well, we have a member in Oregon who worked with others in | |
| his industry, the auto repair industry, to set up an | |
| apprenticeship program. They linked with local high schools and | |
| they replicated a program that existed when I was in high | |
| school. And that was a part-time apprenticeship, part-time | |
| school curriculum day for kids who were interested in | |
| particular trades. It was pretty much limited to the auto trade | |
| when I was a kid. I have heard of similar programs that involve | |
| electricians and plumbers. That is a pretty basic approach, but | |
| you first have to convince people that that is a path they want | |
| to follow. And we have a cultural disconnect between the | |
| reality of what is happening on the shop floor, say at Foley | |
| Waite and what we are preparing people for and encouraging them | |
| to follow. Part of it is that I do not think people understand | |
| how well you can do in the trades. You can do very well in the | |
| trades. You could have a great career in the trades. But we are | |
| not really encouraging people, and people, kids particularly do | |
| not seem to be particularly interested in pursuing it. There is | |
| some work involved and that is something that I think is a | |
| little discouraging, and there is some work involved in making | |
| it happen. | |
| Mr. KIM. Great. Thank you so much. | |
| I yield back. | |
| Chairwoman VELAZQUEZ. The gentleman yields back. | |
| And I recognize the gentlelady from American Samoa, Ms. | |
| Amata Radewagen, Vice Ranking Member with the committee for 5 | |
| minutes. | |
| Ms. RADEWAGEN. Talofa, and good morning. | |
| I want to thank you, Chairwoman Velazquez, and Ranking | |
| Member Chabot for holding this hearing. And I want to thank all | |
| of you for testifying today. | |
| I am honored to serve on this Committee, as strengthening | |
| and diversifying the economy through the growth of small | |
| businesses of American Samoa. It is one of my biggest | |
| priorities. | |
| Like the rest of the country, small businesses make up the | |
| majority of the businesses in my home of American Samoa. | |
| Unfortunately, due to the remoteness of American Samoa, it is | |
| difficult for my constituents to receive the technical | |
| education to grow their businesses, although our SBDC is doing | |
| a great job to raise awareness of their services. | |
| One of my main concerns is a lack of microlending in | |
| American Samoa. I have seen microlending in neighboring | |
| independent Samoa and it has met with great success. I look | |
| forward to working with you all over the next 2 years to | |
| continue to grow America's small businesses. | |
| Now, Mr. Arensmeyer, my question is for you. How can | |
| existing entrepreneurial development resources, such as Small | |
| Business Development Centers, Women's Business Centers, SCORE, | |
| or Veterans Business Outreach Centers better tailor their | |
| programs to meet the needs of underserved businesses? | |
| Mr. ARENSMEYER. Thank you. And absolutely, there are some | |
| great programs out there. We work very closely with the SBDCs, | |
| with the Women's Business Centers, with SCORE, with veterans' | |
| groups. And I am glad to hear that in American Samoa there is a | |
| thriving SBDC. We need to get those resources in the hands of | |
| people. A lot of times small business owners, they maybe think | |
| they need capital but they are not ready for it or they need to | |
| do some things to fix their credit. They need to maybe come up | |
| with a business plan to better understand where they are going | |
| before they actually get credit, and those organizations can be | |
| very useful and we spend a lot of our time connecting small | |
| business owners with those organizations. So, I do not know, I | |
| am guessing the Rural Microentrepreneur's Business Program | |
| applies to American Samoa, I am not sure, but that is a program | |
| that we definitely think needs to be strengthened. And we do | |
| need to continue to connect businesses with those resources | |
| that are out there. | |
| Ms. RADEWAGEN. Thank you, Madam Chairman. I yield the | |
| remainder of my time. | |
| Chairwoman VELAZQUEZ. The gentlelady yields back. | |
| And now I recognize the gentleman from Maine, Jared Golden, | |
| Chairman of the Subcommittee on Contracting and Infrastructure | |
| for 5 minutes. | |
| Mr. GOLDEN. Thank you. Thank you, Madam Chair. | |
| Mr. Sullivan, I thought we would talk a little bit about | |
| infrastructure. You expressed some interest in that. | |
| If this Committee were going to work, let us say, with the | |
| Transportation Committee or even work independently on our own, | |
| what would your members of the Chamber look for, particularly | |
| let us talk about ones from rural communities, like a state | |
| like Maine and very small businesses. You know, would they put | |
| the priority on something like broadband? Would they put it on | |
| rail development? Would they put it on just straight roads and | |
| bridges? And as a follow up, if you could also talk a little | |
| bit about how would we ensure that an infrastructure package | |
| truly got down to small businesses and into rural communities, | |
| thinking about maybe specific provisions that would ensure that | |
| it does not just go to the states that maybe have more money or | |
| bigger companies that have more resources for things like | |
| matching fund requirements or other provisions. | |
| Mr. SULLIVAN. Thank you, Congressman, for the question. | |
| So the threshold answer to your question is that small | |
| businesses are hugely enthusiastic about infrastructure reform, | |
| which I cannot overstate the optimism that our members have | |
| with Congress coming together in a bipartisan way on this | |
| issue. That is not normal these days, and because | |
| infrastructure does have such a bipartisan enthusiasm, that has | |
| made small business owners who I speak with very optimistic. | |
| We had a conference on this topic just last week. I was | |
| told it was the first time ever we had a small business panel | |
| as part of this conference. And their answer to your question | |
| of which need do we address was ``all of the above.'' And I | |
| mean, that gets at the beauty of this Committee and the beauty | |
| of Congress, is that you all have small business communities | |
| who want different things. But the constant throughout is that | |
| infrastructure is absolutely crumbling. What we heard last week | |
| primarily were the traditional things of roads and bridges | |
| because you have this kind of, this duality. On the one hand, | |
| small business owners cannot get to their jobs, whether it is a | |
| bad road or a damaged bridge, that is curbing their ability to | |
| get more jobs and make more money and grow. The second part of | |
| that duality is that these small business owners are convinced | |
| that when there is that investment nationally, that they will | |
| receive some of the benefits of infrastructure spending and | |
| construction. And so as you know, many of the small business | |
| owners are in that business, and so they have a dual benefit. | |
| As far as the formula goes, I would love to follow up with | |
| you and get into some of the more particulars on what we are | |
| supporting on infrastructure reform. | |
| Mr. GOLDEN. I would appreciate that. In fact, I think I am | |
| meeting with one of your counterparts later to talk in depth | |
| about some of this. | |
| Mr. SULLIVAN. Thank you. | |
| Mr. GOLDEN. Thank you. | |
| If I could, Mr. Arensmeyer, you talked a little bit about | |
| in your testimony about how we can bring an advantage to rural | |
| small businesses when talking about opportunity zones. And I | |
| think you talked a little bit about concerns that it may | |
| sometimes not benefit small businesses specifically but rather | |
| sometimes just go towards real estate development, which is | |
| fine. But I think that we also want to, I mean, the point is to | |
| create jobs. So if you could just talk, maybe expand upon that | |
| testimony a little bit more. | |
| Mr. ARENSMEYER. Sure, Congressman. | |
| There is no question that investing in real estate is | |
| sometimes easier to figure out, to make happen, to underwrite | |
| than investing in small business. So what we do not want to see | |
| happen is have the Opportunity Zones kind of devolve into, you | |
| know, primarily real estate projects and not enough support for | |
| actual small businesses. So there needs to be an effort. There | |
| need to be guidelines--I believe those are still being worked | |
| on by the Treasury Department--to make sure that actually, a | |
| good chunk of that investment is going directly to small | |
| business. We are not opposed to some of it going to real estate | |
| but we want to make sure that it does not end up being the easy | |
| way out in terms of underwriting these investments. So we think | |
| that is critical. And we think it is the legislative intent of | |
| the bipartisan support that existed for the Opportunity Zones | |
| from both sides that that be the case. | |
| Mr. GOLDEN. Thank you. | |
| Chairwoman VELAZQUEZ. The gentleman yields back? | |
| Mr. GOLDEN. Yes, ma'am. | |
| Chairwoman VELAZQUEZ. Thank you. | |
| Now I recognize the gentleman from Ohio, Mr. Balderson, | |
| Ranking Member of the Subcommittee on Innovation and Workforce | |
| Development for 5 minutes. | |
| Mr. BALDERSON. Thank you, Madam Chair, and the Ranking | |
| Member for holding this testimony today. Congressman Hern. | |
| Sorry about that, everybody. | |
| I see this as an opportunity for members of our Committee | |
| to plan for the next 2 years and share each of our priorities | |
| to help lift America's small businesses. In Ohio, we have a | |
| saying that our state is the heart of it all, and like much of | |
| small businesses are the heart of the American economy. So I | |
| look forward to working with all of you and having your input. | |
| As the Madam Chair said, regarding my position in Workforce | |
| Development, it is a passion of mine. | |
| I am going to direct my first question to Mr. Sullivan, and | |
| I understand that you did not get through all your written | |
| testimony but I did read your written testimony and I got | |
| excited when I saw a couple things that you mentioned in there. | |
| You referenced to Ohio's Common Sense Initiative. Could you | |
| take a moment to kind of expand on that a little bit, please? | |
| Mr. SULLIVAN. Thank you, Congressman. It is always good to | |
| hear that a member of Congress gets excited when they read a | |
| testimony. So thank you for that first. | |
| What you were referencing was in the statement talking | |
| about one of our Small Business Council members, Michael Canty | |
| in Ohio, and some of his experience with red tape, both | |
| positive and negative. I will start with the negative, and that | |
| is something that this Committee is more familiar with than | |
| most, and that is that any state, local, or Federal mandate is | |
| going to impact a small business more than a larger business. | |
| And there are studies that document this, but it just makes | |
| sense. I mean, I think we are familiar with husbands and wives | |
| at the kitchen table late at night in early April trying to get | |
| all of the materials together before they go and see their CPA. | |
| It just takes more time and time is money compared to a larger | |
| business that has an accounting department. | |
| So the negative that Michael Canty describes is just really | |
| the overwhelming burden of red tape. The positive is that there | |
| are state initiatives, like the Common Sense Initiative, and | |
| Federal, like the Regulatory Flexibility Act, that their basic | |
| premise is (a) one size mandates do not work when it comes to | |
| small business, and (b) more importantly, that when you involve | |
| a small business in the development of regulatory policy you | |
| end up with a great two-for. One, you get a regulatory policy | |
| that is sensitive to how it impacts small business, and two, | |
| you actually get buy-in from the small business community about | |
| what the end product is. And that is really the basic tenet of | |
| both the Regulatory Flexibility Act and the Common Sense | |
| Initiative that was done in Ohio. And this is, quite frankly, a | |
| model that has been followed by many states. | |
| Mr. BALDERSON. I was proud to cosponsor that piece of | |
| legislation back in 2009, and I can sit here and tell you that | |
| the new administration in Ohio is moving forward and we are | |
| going to make that initiative better. So I look forward to | |
| working with you. | |
| I want to talk about the national level and how we can make | |
| that even better. And you spoke about that. But I look forward | |
| to discussing it with you in the future. | |
| I yield back, Madam Chair. | |
| Chairwoman VELAZQUEZ. The gentleman yields back, and now I | |
| recognize the gentleman from Texas, Mr. Veasey, for 5 minutes. | |
| Mr. VEASEY. Thank you, Madam Chair. | |
| I wanted to ask Ms. Parsons if she wanted to continue to | |
| expand on her thoughts on the Green New Deal. It sounds like | |
| you had more that you wanted to say, and I wanted to see if you | |
| wanted to expand on that. I think that most of us know right | |
| now that it is not anything concrete and solid. There have been | |
| some proposals. I believe I have heard the words ``more | |
| aspirational.'' And so maybe a work in progress. Do you want to | |
| just kind of expand on what you wanted to say? | |
| Ms. PARSONS. Yes, thank you. I do. | |
| As a mother of three kids, climate as obviously a huge | |
| worry. To have your children--I have got a ninth grader who is | |
| 14, seventh grader who is 12, and a third grader who is 9--they | |
| are very cognizant of what the future brings. And living in | |
| Oregon, our climate is going to change. And it will change the | |
| nature of what it means to live and work in Oregon. We are a | |
| state that has been dependent on natural resources, wood | |
| products, trees. Our entire ecosystem will change. And we are | |
| already planning in Oregon for what it looks like when you no | |
| longer have evergreen forests. When there is no longer snow in | |
| most of Oregon. This is the Northwest, so it is an impact that | |
| is very frightening to the generation of our kids who are | |
| cognizant. Even my third grader understands what this will | |
| mean. But for the economy of a state like Oregon, and many | |
| other states. I mean, I cannot speak to what it is going to do | |
| in Texas, for instance, although I suspect many Texans will be | |
| moving up north, but it will impact how people do business and | |
| traditional businesses in manufacturing, in logging because our | |
| climate will affect our natural resources. And I think it is | |
| very important to listen to scientists and develop policies | |
| that are fact-based. | |
| Mr. VEASEY. I also wanted to ask Mr.--say your last name | |
| again? | |
| Mr. CONKLIN. Conklin. | |
| Mr. VEASEY. I am sorry. I am having a hard time seeing it | |
| from here. Oh, thank you very much. | |
| I wanted to ask you, I think that you had spoken about | |
| trades earlier and about how there are young people that just | |
| are not being directed in that area, and they are not being-- | |
| they do not know about those opportunities, and for whatever | |
| reason they are not taking advantage of them. One of the areas | |
| that have been talked about on this particular subject a lot is | |
| Germany. And there are two things that occur in Germany that | |
| are not happening here anymore. There is not as much of a | |
| stigma attached to blue collar jobs in Germany. One of those | |
| reasons is because the ratio between what white collar workers | |
| and what blue collar makers make in Germany, there is much less | |
| of a discrepancy than there is here in the United States. And | |
| so there is less stigma attached to those jobs. | |
| Another issue that I would like for you to touch on, | |
| including the one that I just mentioned, is also labor unions. | |
| As you know, the quality and income inequality in this income | |
| has slipped dramatically with the demise of certain labor | |
| unions in this country. Of course, everybody knows the story | |
| about Henry Ford and when productivity went up it was also good | |
| for the worker. We have seen a decline here in that area with | |
| the decline of organized labor. Of course, in Germany, and the | |
| business community and the labor forces, it is my understanding | |
| they do go at it pretty hard in Germany, but at the end of the | |
| day, it is a result that has led to better outcomes and quality | |
| of life for the citizens there. Can you touch on that, please? | |
| Mr. CONKLIN. Well, I cannot speak with great expertise | |
| about Germany. I think the contribution that unions made | |
| through history to the improvement for workers on the shop | |
| floor has outlasted the strength of their influence in our | |
| current economy, which on the one hand speaks to the importance | |
| of that contribution, and on the other hand it speaks to the | |
| reality of the decline of unions, particularly in the trades, | |
| and how they interact with small businesses. When we started, | |
| we were a nonunion shop, and the union shops went out of their | |
| way to make it as difficult for us as they could. But they did | |
| not prevail. In fact, over the course of the time that we have | |
| been in business we have watched the trade unions' portion of | |
| the work that is done shrink to the point where there just is | |
| not a whole lot of noncommercial, small scale, high value work | |
| being done by union workers. | |
| But I think the larger question is, and it speaks to the | |
| culture we are in now, we are just not encouraging kids to | |
| pursue the trades. My employees make $60,000 to $70,000 a year. | |
| Chairwoman VELAZQUEZ. The gentleman's time has expired. | |
| Now, I recognize the gentleman from Oklahoma, Mr. Hern, | |
| Ranking Member of the Subcommittee on Economic Growth, Tax, and | |
| Capital Access for 5 minutes. | |
| Mr. HERN. Thank each of you for being here today. It is | |
| always good to be on this Committee having been a small | |
| businessman for 34 years, so it is exciting. | |
| One of the things I have learned about being up here is not | |
| every small businessperson thinks the same way and certainly | |
| the three of you have some different ideologies that I would | |
| not prescribe to. | |
| I have had the blessings of starting and growing and sold | |
| many businesses over the last 34 years, since 1985, starting | |
| out as a one person shop writing software and growing into | |
| banking and manufacturing, skilled labor. And Mr. Conklin, you | |
| are so right. We undervalue the value of skilled labor today | |
| and technology and welding, C&C machinery, woodworking | |
| materials. Also, I have been blessed to be involved on the | |
| banking side, so I have seen the other side of what has been | |
| impacted in community banks over the last 10 years through most | |
| recently Dodd-Frank, but just a consolidation of community | |
| banks where most lending occurs for small business men and | |
| women. Must of the testimony that I have heard over the last | |
| couple hearings, I have never heard of the folks offering the | |
| lending and I probably created more small businesses as an | |
| individual than anyone. So one of my goals is to figure out how | |
| we put the resources of where capital can be accessed into a | |
| reserve or a place where you can find it. So it is interesting. | |
| But I would really, you know, if you look at the optimism | |
| in 2016, I think my goal is to keep that optimism going. And I | |
| think the optimism from small businesses as a whole, as | |
| identified by the NFIB, is that the government get out of the | |
| way of small businesses, not get in the way. So that would be | |
| my goal as we go forward. | |
| But I want to talk just real briefly from each of certainly | |
| the three of you all on this end about what you think we could | |
| do differently as far as access to capital. Briefly if you | |
| could because I have got like an hour's worth of questions. | |
| Mr. ARENSMEYER. Thank you, Congressman. We have a couple of | |
| suggestions in our policy agenda. One is to, I mean, we are | |
| going for broke here, quadrupling the SBA lending guarantees | |
| from $250 million to $100 billion a year, to reduce the loan | |
| guarantee percentages. And to expand the CDFI budget, the | |
| Community Development Financial Institutions are a tremendous | |
| source of capital for small businesses across the country but | |
| they only represent about 1 to 2 percent of all small business | |
| lending. So we have a bunch of other stuff in our policy | |
| agenda. | |
| Mr. HERN. Sure. | |
| Mr. ARENSMEYER. But those are a few things. | |
| Mr. HERN. Those are great. | |
| Ms. Parsons? | |
| Ms. PARSONS. Yeah. I want to talk about a program that I | |
| think is fairly innovative in the State of Oregon. I was | |
| appointed by Governor Kate Brown onto the Oregon Growth Board. | |
| It is a board that uses a very small percentage of lottery | |
| money and invests in funds that invest in Oregon businesses | |
| with a particular focus on equity, diversity, and inclusion. | |
| And we are really looking at social impact investing. Any | |
| returns from those investments go straight into the Oregon | |
| State School Education General Fund, and so it is an experiment | |
| to say can we take some lottery money and do some innovative, | |
| social impact investing that puts emphasis on investing in | |
| funds that help Oregon entrepreneurs and particularly the | |
| equity diversity party. | |
| Mr. HERN. If my staff could get that information because we | |
| have a particular interest in that as well. | |
| Ms. PARSONS. Great. | |
| Mr. HERN. Mr. Conklin? | |
| Mr. CONKLIN. In 1980, when my wife and I had hired I think | |
| at that point two employees and we were doing more work for a | |
| construction company across the street and was offering us | |
| great opportunities to work for some major corporations that | |
| surround New Jersey, we needed to borrow $5,000 for some | |
| equipment. It just was not available. Nobody was interested in | |
| loaning it to us. I think ultimately we leased some equipment | |
| at a relatively high rate of interest and we got what we needed | |
| in the most expensive way. And, we got the sense that we were | |
| pretty much on our own. We are going to have to figure this | |
| stuff out for ourselves and find the money where we could and | |
| pay more for it. And that is exactly what happened. | |
| So when we were talking about how women and---- | |
| Mr. HERN. Mr. Conklin, I am so sorry. We are running out of | |
| time. | |
| Mr. CONKLIN. Yeah. | |
| Mr. HERN. But I would love to get your thoughts. | |
| I just want to close out with this. I know that when you | |
| are creating jobs and you are in the business world and you | |
| have tons of risk, I just want to share with you from both | |
| perspectives what Dodd-Frank did to community banks. Now, I | |
| understand the big banks and why it was created, but to | |
| community banks where we get our resources it was devastating | |
| because it created a hurdle that you talked about a minute ago. | |
| Dodd-Frank introduced tons and tons of regulators into the | |
| system to ensure that there was no discrimination, but what | |
| they also put in there was a high hurdle to actually take | |
| loans, whether it was mortgage, expand the mortgage period from | |
| 30 days to about 60 days, but also in a sense of what it did to | |
| folks who came in with a business plan and no personal wealth | |
| to create jobs. | |
| I could tell you a story how I started my first business, | |
| my true business of mowing lawns when a guy loaned me $100 at a | |
| bank on a passbook account without any credit. Those days are | |
| long gone but that is how businesses used to start. Today, to | |
| your point, you have to have a quarter million dollars to come | |
| in. If I had that I would not even start the business. | |
| So thank you all so much for your testimony. | |
| Chairwoman VELAZQUEZ. The gentleman's time has expired. | |
| And now I recognize the gentlelady from Iowa, Ms. | |
| Finkenauer, Chairwoman of the Subcommittee on Rural | |
| Development, Agriculture, Trade, and Entrepreneurship, for 5 | |
| minutes. | |
| Ms. FINKENAUER. Thank you, Madam Chair. And thank you to | |
| our panel here today. It is great to hear the different | |
| perspectives and where you all come from. | |
| But this question is actually to Mr. Arensmeyer, who I had | |
| the opportunity to see yesterday and had the pleasure of | |
| getting to speak at the Rural Small Business briefing. I know | |
| you organized yesterday with the Co-Chairs of the Congressional | |
| Rural Caucus as well. So thank you for that opportunity, and | |
| thank you for your testimony today. | |
| I know you talked about how rural entrepreneurs start | |
| businesses at higher rates, but also how there are a host of | |
| challenges facing rural businesses and that the unemployment | |
| rate is still very high in rural areas. I know one of the | |
| challenges for rural businesses and farmers is the trade war | |
| started on Twitter, but also, on top of that we have got low | |
| broadband deployment and transportation and infrastructure | |
| issues, along with young people leaving rural America. Or not | |
| coming back home after they have left to go to college. And I | |
| look forward to getting to tackle some of those issues, in | |
| particular on the Rural Development, Agriculture, Trade, and | |
| Entrepreneurship Subcommittee. But from the small business | |
| majority's view, what should we be doing to ensure our farmers | |
| and our rural employees and small businesses can thrive? Were | |
| there any recommendations? I know, I really appreciate again | |
| getting to speak yesterday, but also seeing all the young folks | |
| in that room, and I imagine you all had some very interesting | |
| discussions and interesting ideas that came out of that. And I | |
| am wondering if you would be able to share any of that with us | |
| today about how best we can support rural businesses and our | |
| farmers. | |
| Mr. ARENSMEYER. Thank you, Congresswoman. And thank you | |
| very much for joining us yesterday at the release of our rural | |
| report. And your comments were very enlightening. | |
| You have identified some of the issues. I mean, broadband | |
| is a huge issue. One in four rural entrepreneurs say they do | |
| not have access to broadband. I do not know if you were still | |
| around, but one of the people on the panel, one of the New | |
| Mexico Native American business owners literally talked about | |
| how she has a home-based business and talked about how she had | |
| to worry about whether her kids were playing videogames, | |
| whether her husband was doing work online for her to be able to | |
| actually get on, and she has a floral business, and make | |
| orders. So it was kind of an interesting, although not very | |
| happy story. So broadband is key. | |
| You know, access to resources is absolutely key. I know I | |
| sound like a broken record here, but just because of distance, | |
| a need. Infrastructure is huge. I am glad Tom has talked a | |
| little bit about that. Not only do small businesses depend on | |
| infrastructure more than most businesses on sort of a per | |
| capita basis but there are actually jobs available for small | |
| businesses getting involved and improving infrastructure. So | |
| you know, again, I talked about the Rural Microentrepreneurship | |
| Assistance Program. There are programs out there, but we need | |
| to do more. And, you know, there is a whole list of suggestions | |
| in our report. I would be happy to share that with the | |
| Committee. | |
| Ms. FINKENAUER. Great, thank you. | |
| Mr. Sullivan, I wanted to talk to you as well because I | |
| know in my district we have really active chambers in some of | |
| our larger towns, and also some in our smaller towns as well. | |
| Has the U.S. Chamber put together, or could you tell me, you | |
| know, what could we be doing better working with some of the | |
| smaller chambers in some of the smaller towns to attract more | |
| people, especially young people back to the area, fill up those | |
| Main Streets, and anything that you guys have suggestions for | |
| or things like that. | |
| Mr. SULLIVAN. Well, thank you, Congresswoman. | |
| First of all, let me compliment you on one of the bills | |
| that you worked on and this Committee passed. I see that you | |
| sponsored H.R. 246, which was the---- | |
| Ms. FINKENAUER. The long name. Yeah. | |
| Mr. SULLIVAN. Stimulating Innovation through Procurement | |
| Act. It is really another example of the bipartisan nature of | |
| this Committee and how important it is to get that type of | |
| movement behind bills because then they can get through the | |
| House and hopefully through the Senate. | |
| Ms. FINKENAUER. Knock on wood. | |
| Mr. SULLIVAN. You mentioned local and smaller chambers of | |
| commerce. Actually, the best part of my job is getting out of | |
| Washington, D.C., and visiting with these incredible local | |
| chambers. How do you get more people to them? I do not know | |
| other than trying to breathe in the same type of optimism that | |
| this Committee has about entrepreneurship and how government is | |
| there to help them and not to get in their way. And we are | |
| trying to do that. But I think your question brings a whole set | |
| of opportunities for us to work together to kind of ignite that | |
| type of enthusiasm for local chamber membership. | |
| Ms. FINKENAUER. Absolutely. I look forward to having those | |
| conversations. And thank you again to all of you for being | |
| here. And I yield back. | |
| Chairwoman VELAZQUEZ. The gentlelady yields back. | |
| And now I recognize the gentleman from Florida, Mr. Spano, | |
| for 5 minutes. | |
| Mr. SPANO. Thank you so much, Madam Chair, and thank you | |
| all for being here this morning. I just have a few questions. | |
| My first question is to Ms. Parsons. My experience as a | |
| small business owner in the district that I represented for | |
| several years before I was even involved in public office or | |
| publicly policy was I was on the chamber board, two chamber | |
| boards involved in numerous local networking organizations to | |
| try and keep my business going and growing. And it was not | |
| until I was elected to office that I first heard about the | |
| Small Business Development Corporation. So my concern is that, | |
| and maybe we are doing a better job of that now. I hope so. But | |
| at that point in time there just was not enough dissemination | |
| by small business development. And look, they have done a great | |
| job. I do not mean to disrespect them in any way, but what can | |
| we do specifically to get the word out in order for it to | |
| filter down to people on the frontlines out there trying to | |
| build a small business that will actually allow them to access | |
| opportunities? | |
| Ms. PARSONS. Yeah, thank you. That is a great question. And | |
| my business has worked with SBDCs for over 25 years. We work | |
| very closely. We have donated millions of dollars of software | |
| to SBDCs all around the country because we really believe in | |
| entrepreneurship. But you are right. People do not know about | |
| it. They call our business and ask for help, and that is not | |
| what we do. We sell them software and tools, and we always | |
| recommend, and in fact, on our website, free and public, we | |
| have an entire directory where people can find their local | |
| SBDC. And it is a content site that attracts 2 million unique | |
| visitors. We need more businesses like mine to help and aid in | |
| this effort because small business development centers have | |
| free support and free help, and yet the community does not know | |
| about them. We need community colleges who often house SBDCs to | |
| also engage in those marketing efforts and to do more to pair | |
| SBDCs with entrepreneurship classes that they are giving to | |
| their local communities so that people know that there is free | |
| support and expertise to help them navigate access to capital. | |
| Mr. SPANO. Thank you. Thank you so much. | |
| My next question is for Mr. Sullivan. I had a meeting with | |
| some constituents, small business owners just last week in my | |
| office, and they were just frustrated by their inability to | |
| hire people. They could not find truck drivers, other kind of | |
| nonskilled labor positions. And they are not in the ag | |
| business. Right? So the season guest worker program will not | |
| help them. | |
| My question is should we open up or expand our guest worker | |
| program, right, so that our small businesses will have the | |
| access to the labor that they need? | |
| Mr. SULLIVAN. Congressman, thank you for the question. | |
| The simple answer is yes. Our immigration system is | |
| completely broken and small businesses are hurting because of | |
| it. I tried to detail out in my written statement the story of | |
| Dick Cardew. He produces hay and folks unfortunately then | |
| categorize that as kind of the need for seasonal workers. Well, | |
| he is producing hay in Arizona. It is a yearlong season, and he | |
| needs workers. And there are hundreds of other examples like | |
| this. And so we are with you and we want to work with you to | |
| pass comprehensive immigration reform through Congress. | |
| Mr. SPANO. Thank you. I yield back, Chair. | |
| Chairwoman VELAZQUEZ. The gentleman yields back. | |
| I now recognize the gentleman from Illinois, Mr. Schneider. | |
| Mr. SCHNEIDER. Thank you. Thank you, Madam Chairwoman. And | |
| I want to thank you and the Ranking Member for hosting this | |
| hearing. I want to thank the witnesses for being here today and | |
| sharing your experiences. | |
| This is a critically important issue as others have already | |
| stated. Small business is the engine that grows our economy. It | |
| creates the majority of the new jobs. It is where the majority | |
| of Americans find their work. And if we are going to strengthen | |
| our communities, whether it is urban communities or communities | |
| in rural, small business is going to be key to that. | |
| And when I think about business, and I have said this for | |
| years, there are four key pillars that business success depends | |
| on. One we cannot really help with. You guys have to come up | |
| with your own business idea. That is up to you and that model, | |
| that paradigm, whatever buzzword you want to use is what is | |
| going to help propel you to success. | |
| But where we can make a difference is improving access to | |
| talent, making sure you have the people you need. Improving | |
| access to capital. Providing a stable business environment | |
| which is a stable government that does not threaten shutdown on | |
| a continuous basis. It is eliminating obstacles and hurdles. It | |
| is finding ways to reduce complexity, and it is looking for | |
| ways to find levers to amplify or multiply the work that you | |
| are doing. | |
| So my general question, and I will open this up to the | |
| entire panel is if you can think of three of the things that | |
| you are concerned about, from health care, infrastructure, | |
| debt, student loan debt as a piece of it, and one thing that | |
| would make a difference that we can do that will propel small | |
| business forward in the country. What would you recommend to | |
| this Committee? And we will start at the end. | |
| Mr. ARENSMEYER. Congressman, I want to just address a | |
| couple issues we have not talked about that much here. I mean, | |
| there is no one silver bullet but a huge issue is health care. | |
| And health care is something that has been a tremendous concern | |
| for small businesses for years. As I detail in my testimony, | |
| the ACA has actually created tremendous opportunities for | |
| business owners, business employees, small business employees, | |
| and self-employed entrepreneurs to access health care. As I | |
| said, over half of the participants in the marketplace fall | |
| into those categories. We absolutely have to shore up, we have | |
| to reduce the market risk. I talked about some of the issues | |
| there of eliminating some of these short-term plans and | |
| association business plans that are sort of balkanizing the | |
| market and leaving the rest of the market much more expensive | |
| and less stable. There is a functioning small business market | |
| now and it has gone up. The increases in the market have gone | |
| up half of what they were going up before the ACA. So there is | |
| no reason to start creating new markets out there. We should | |
| support the markets that exist. We obviously have to get | |
| control over drug prices and other out-of-network prices. I | |
| just want to---- | |
| Mr. SCHNEIDER. I do not mean to cut you off but we are | |
| limited in time. | |
| Ms. Parsons, if you could opine. | |
| Ms. PARSONS. Yeah, there are so many things that I would | |
| like to say but I will keep it to urging you to support the | |
| Family Act, which will provide paid leave for all small | |
| businesses. One of the things that I think people do not | |
| necessarily understand is one of the biggest problems small | |
| businesses have, and I am not talking about the SBA definition | |
| of 500 employees or less, I am talking about micro small | |
| businesses, 20 employees or less, is the infrastructure, | |
| resources, and tools to understand how to do better financial | |
| analysis which big businesses have. They have analysts and | |
| planners and they can understand how to structure their | |
| financials and provide paid leave. The economics are there. | |
| Paid leave will return to the small businesses because they | |
| will retain their workers. People have to choose right now from | |
| do I take care of my sick child or do I keep my job? And at the | |
| end of the day you are not going to make that choice. You are | |
| going to take care of your sick child. So---- | |
| Mr. SCHNEIDER. All right. Thank you. I am sorry to cut you | |
| off. | |
| Mr. Conklin? | |
| Mr. CONKLIN. I would say both my predecessors covered some | |
| of the important issues so I will go back to the Green New | |
| Deal. | |
| We have a 13,600 square foot flat roof in a neighborhood of | |
| buildings that are similarly structured. It is absurd to me | |
| that they are not all covered with solar panels. We could | |
| produce more energy off our roof than we consume, and we | |
| consume quite a bit of energy. We need to have imaginative | |
| programs put in place very quickly that make it affordable for | |
| companies like mine to actually do that work. And sometimes | |
| that means the company has to put a new roof on the roof before | |
| it can put the solar panels on the roof. We need to be really | |
| imaginative about this and we really need to hit it hard. | |
| Mr. SCHNEIDER. Thank you. | |
| And if I can indulge one last, Mr. Sullivan, last word. | |
| Mr. SULLIVAN. I will try to be really quick. | |
| I think the biggest thing that you can do is really build | |
| on the success of this Committee going forward. Work with your | |
| colleagues in the Education and Labor Committee and celebrate | |
| the examples that are going on right now. I mention the Tapani | |
| sisters in Minnesota, for instance. Celebrate what is working | |
| to solve this workforce challenge and celebrate it loud and | |
| proud through your work with those Committees so that you can | |
| inspire others to follow in their footsteps. | |
| Mr. SCHNEIDER. Thank you. And I will echo that. And I think | |
| we need policy that is strong, confident, secure that moves us | |
| to the future that addresses our challenges, whether it is | |
| environment, health care, education, infrastructure, and small | |
| business can lead the way. | |
| And with that I am happy to yield back. | |
| Chairwoman VELAZQUEZ. The gentleman yields back. | |
| And now I recognize the gentleman from Tennessee, Mr. | |
| Burchett, for 5 minutes. | |
| Mr. BORCHER. Thank you, Chairlady and Ranking Member. | |
| I had a couple of questions, and I apologize if they have | |
| been asked before. If they have, you all just say they have | |
| been asked before and I will go back and watch the tape. | |
| But ultimately, where do you all find that government is | |
| still getting in the way of small business? I hear this a lot | |
| when I am talking to folks. And how can this Committee work to | |
| solve that problem? | |
| Mr. ARENSMEYER. Congressman, you know, I think there is not | |
| sort of one big answer to that question. There are many cases | |
| where government is needed to help small business. We talked | |
| about some of those in terms of resources, in terms of | |
| obviously, you know, you have heard about the FAMILY Act, about | |
| healthcare needs, about access to capital. On the other hand, | |
| there are times when government, maybe we should look at | |
| regulations and we should figure out how to streamline them. | |
| When we have done polling, we found that fewer than 20 percent | |
| of small businesses ranked regulatory problems at the top of | |
| their list. And in fact, the biggest regulatory problems that | |
| exist are more at the state and local level, particularly the | |
| lower level. There is not a huge human cry from the businesses | |
| that we deal with about Federal regulations. So again, I think | |
| we support the work of the SBA's Office of Advocacy, certain | |
| laws, the SBREFA process. We are not sure we need another sort | |
| of comprehensive process on top of that, and we do need to look | |
| at, and you all need to and the regulatory agencies need to | |
| look at each regulation, what it is trying to do, what the cost | |
| benefit is, and not sort of have a global sort of response to | |
| that. | |
| Mr. BORCHER. The thing I always found in my time in the | |
| legislature in Tennessee and as mayor, a lot of the time | |
| somebody was trying to fix a problem that did not exist and it | |
| is always easy to put another nickel on a can of beer until all | |
| your beer drinkers call you and then you know you have got a | |
| real problem. | |
| Did anybody else want to take a shot at that one? Chamber? | |
| Mr. SULLIVAN. Yes, Congressman, I am amazed at the | |
| government's inability to reward those small business owners | |
| who are trying desperately to keep up with local, state, | |
| regional, and Federal requirements. And I think the time has | |
| come for us to admit that and for Congress to pass a | |
| comprehensive law that gives these folk a pass. As long as no | |
| one is hurt or imminently in danger, let us start rewarding | |
| these small business owners for trying to get it right instead | |
| of looking to nickel and dime them and penalize them. And they | |
| are the ones who are trying the hardest to comply with all the | |
| regulatory mandates. | |
| Mr. BORCHER. I noticed too the little cafeteria where I eat | |
| at frequently, Wright's Cafeteria, and my predecessor still | |
| eats there quite a lot, too, that when the state came in and | |
| said you all have to submit your tax forms on computers, that | |
| in fact was an unfunded mandate because David Wright, my good | |
| friend, he is tight as a tick and he did not want to have to go | |
| out and buy a computer. And so it was that way all over the | |
| state. There were a lot of problems that that solution that we | |
| were looking for created. | |
| And as new opportunities for small businesses a part of the | |
| growing economy, is there a skills gap for new types of | |
| industries? I assume there is. I assume that is a pretty common | |
| thing. Just a head nod will be sufficient. All right. | |
| Where do you all see the opportunities for innovation and | |
| helping train folks that are looking to join the work force? I | |
| see a lot in our inner city, hardworking black folks and our | |
| Hispanic community, they just seem to be almost left out of | |
| some of this stuff and to me it looks like we, you know, one | |
| size does not fit all. Do you all see that? Any response would | |
| be appropriate if you would like. Or just a head nod. I do not | |
| know, Chairlady, do we enter head nods as---- | |
| Ms. PARSONS. I would love to tell you about a program in | |
| Oregon that is directly addressing by bringing school teachers | |
| into technology companies. It is called Elevate Lane County, | |
| and technology companies in Lane County, Oregon, are bringing | |
| school teachers in. We are volunteering to do this. We have | |
| them in a program for 3 weeks in the summer. They are paid by | |
| the Department of Labor to be there and they learn specific | |
| skills so that they can bring a specific computer science | |
| course to their high schools that September. So from a | |
| technology company perspective, it is fantastic because we | |
| often feel that government moves very slowly and this allows | |
| something to move very quickly. This summer will be the third | |
| summer. My company has helped train four teachers, but all | |
| together we have trained over 40 teachers. And the immediacy of | |
| being able to train teachers and then provide a computer | |
| science course and then take those students and bring them in | |
| as interns, in Lane County, Oregon, we have had six students | |
| graduate from college and get jobs in computer programming | |
| directly because of this program. | |
| Mr. BORCHER. Chairlady, I have gone over my time so I do | |
| not yield back any of my time. Thank you. | |
| Chairwoman VELAZQUEZ. The gentleman's time has expired. | |
| And now I recognize the gentleman from New York, Mr. | |
| Delgado for 5 minutes. | |
| Mr. DELGADO. Thank you, Chairwoman. And thank all of you | |
| for your testimony. | |
| I am going to share a story from Otsego County. Last week I | |
| was at an event there and I met with owners of a small, family- | |
| owned farm that was started by two brothers and their wives. | |
| The family founded the farm in 2010 with a vision to create a | |
| vibrant food system in Upstate New York that is strengthened by | |
| a commitment to preserving the beauty of our natural lands and | |
| the human treatment of animals. They have worked hard to | |
| deliver grass-fed meat to their customers and have been | |
| successful enough to have customers in places such as Long | |
| Island, Pennsylvania, and New Jersey. However, making | |
| deliveries to their downstate and out-of-state customers has | |
| not been very easy. Members of the family take turns loading up | |
| their truck with fresh meat and driving up to 5 hours to meet | |
| their customers. The cost associated with growth, and in this | |
| case working with a distributor, has limited the ability of | |
| many small businesses to expand to their full potential. This | |
| family-owned business is one of many in my district that has | |
| great products to offer but faces challenges marketing those | |
| products to a broader market and meeting the costs associated | |
| with expansion. | |
| So Mr. Arensmeyer, my question for you is, in your | |
| testimony you highlighted some of the unique challenges that | |
| rural Businessowners often face. What actions should Congress | |
| take to ensure that existing Federal programs are meeting the | |
| demand from rural small businesses that are looking to expand | |
| and move their products into larger markets? | |
| Mr. ARENSMEYER. Thank you, Congressman. | |
| That has become a huge part of our work, is making sure we | |
| are getting out with our entrepreneurship program across the | |
| country and letting people know about these programs. As I | |
| think was highlighted by one of your colleagues before, a lot | |
| of times these programs exist and people do not know about | |
| them. A gentleman who ran a small business and did not know | |
| about SBDCs until he got into the public policy world. We find | |
| that all the time. We find that there are things, SBA programs, | |
| SBDCs, Women's Business Centers, we need to do a better job of | |
| communicating those, and it is even more essential in rural | |
| areas because it is much harder sort of physically to get | |
| access to those so we need to use technology. We do a lot of | |
| work with webinars, as well as face-to-face seminars. So I | |
| would just say that there are Federal, state, and local | |
| programs and there are entities like SBDCs out there and we | |
| need to collectively do a better job of making sure small | |
| businesses know about those. | |
| Mr. DELGADO. Appreciate it. | |
| I will ask one other question for you, sir. You mentioned | |
| in your testimony, I am not sure if someone has already asked | |
| this, and if I missed it I apologize. You were talking about | |
| the different ways we could legislatively help small business | |
| owners, and you mentioned a buy-in to Medicare. I believe you | |
| referenced that. | |
| Mr. ARENSMEYER. Yes. | |
| Mr. DELGADO. Could you speak to why you think a buy-in to | |
| Medicare would be helpful for small business owners? | |
| Mr. ARENSMEYER. You know, it creates another option. You | |
| already have a whole sort of Medicare system set up and | |
| certainly on a no-cost basis allowing people to buy in we think | |
| is a good thing. There are a lot of entrepreneurs that fall in | |
| the upper end of the subsidies where they phase out at 400 | |
| percent of Federal poverty level, which is about a little over | |
| $50,000 for a single person, about $90,000 for a family of | |
| four. And they struggle sometimes to be able to cover that, to | |
| offer that coverage. So we think if there is another option to | |
| expand into Medicare, let us see how it goes. Maybe you allow | |
| everybody. Maybe you lower the age to 55 or 50. You know, I | |
| think, you know, it is no secret. There are all sorts of | |
| proposals out there around health care. We think the ACA was a | |
| huge step in the right direction. We still need to have the | |
| debate about how really to get to universal coverage and what | |
| is the way to do it, is to start to incrementally move in that | |
| direction. See what works, what does not work. And create some | |
| additional options for small businesses who might be struggling | |
| with existing subsidies. | |
| Mr. DELGADO. Thank you very much. | |
| I yield back my time. | |
| Chairwoman VELAZQUEZ. The gentleman yields back. And now we | |
| recognize Mr. Stauber from Minnesota for 5 minutes. | |
| Mr. STAUBER. Thank you, Madam Chair and Ranking Member | |
| Chabot for holding this hearing. And to the witnesses. | |
| I, too, am a small business owner. My brothers and I have | |
| owned a business for 28 years and there are ups and downs and | |
| struggles. And as my colleague from Oklahoma stated, there are | |
| some political differences here. I listened to them and the | |
| partisanship on some of your comments, I do not agree with | |
| them. But we are going to have a healthy discussion as we move | |
| forward. | |
| The small business in my mind, I want to tell you a story | |
| about what happened in Minnesota just recently. In Ely, | |
| Minnesota, we have small businesses. They are outfitters for | |
| canoeists and men and women who want to fish and recreate. The | |
| United States Forest Service implemented a system after holding | |
| hearings where these small businesses in Ely, Minnesota, said | |
| that is not the way we should do it. The U.S. Forest Service | |
| went ahead, took zero input, the system failed, to get permits | |
| into the boundary waters canoe area wilderness. Those small | |
| businesses are backed up now at least a month and some change. | |
| Every day they do not have customers is a day without money. | |
| And I look at the Federal Government to listen to our small | |
| businesses, listen to our chamber of commerces. They are the | |
| engines of our economy. If we lose our small businesses, every | |
| time we lose a small business down on Main Street USA or Main | |
| Street Minnesota, we lose an employer or employee, we lose | |
| money, we lose the economic drivers of our Main Street. | |
| And to my colleague sin Maine and Iowa, I fully agree with | |
| broadband. Bringing the ability to have broadband into rural | |
| American. We have talked about it for many years. | |
| And to Mr. Sullivan, from the Chamber's perspective, what | |
| do you think broadband would do--reliable, high-speed broadband | |
| to rural America--what do you think it would do to the | |
| developing small businesses and the entrepreneurship? | |
| Mr. SULLIVAN. Congressman, thank you for the question. | |
| First of all, this is part of what we were talking about | |
| earlier about infrastructure investment. A simple answer is we | |
| believe that type of broadband deployment would have an | |
| enormous positive impact on small business. And we are working | |
| on finalizing a study that would help us put data and figures | |
| to that sense that we have. And I would be happy to share that | |
| with you. We expect that to be out in the middle of March. | |
| Mr. STAUBER. Thank you. | |
| And then can you reiterate to me what the Tax Cuts and Jobs | |
| Act did for small businesses in relation to your role as a | |
| member of the Chamber? | |
| Mr. SULLIVAN. Sure. So when tax reform passed, we had a | |
| survey out in the field. This is part of our quarterly survey | |
| of a thousand small business owners. The survey firm is called | |
| IPSOS. They do this every quarter. But the tax reform passed | |
| right while that survey was out in the field and we saw the | |
| highest spike in optimism that we had ever seen. That same | |
| spike was recorded by the National Federation of Independent | |
| Business that has been doing a monthly confidence survey, a lot | |
| longer than we have been doing our quarterly index. So that was | |
| the immediate. | |
| Then what we saw, really, which was what the intention of | |
| the tax cuts were, and that was to put stimulus immediately | |
| back into the economy. And so we saw examples like a landscaper | |
| in Jacksonville, Florida, buying a new landscaping truck. | |
| I grew up just outside of Boston. We had a bakery in | |
| Braintree, Massachusetts who bought a new oven specifically | |
| from the savings from tax cuts. And I had mentioned earlier, we | |
| have been trying to track this on a map, and we have hundreds | |
| of examples of small business owners that not only were | |
| grateful but they took those tax cuts and they reinvested them | |
| into their businesses. And that means hiring new employees. | |
| That means providing greater benefits, greater training, and | |
| also buying new equipment, which is basically a double impact | |
| because they are generally buying it from other small | |
| businesses. | |
| Mr. STAUBER. Thank you for that comprehensive answer. | |
| I want to end, Madam Chair, by saying I really think it is | |
| our role on this Committee to facilitate a business environment | |
| that allows small businesses to succeed and flourish, and I | |
| think far too long there have been rules and regulations put | |
| forth that stymie, stop, or do not allow an individual to want | |
| to pursue small businesses. | |
| And I see my time is up. Thank you, Madam Chair. | |
| Chairwoman VELAZQUEZ. Thank you. The gentleman yields back. | |
| And now we recognize the gentlelady from Pennsylvania, Ms. | |
| Houlahan for 5 minutes. | |
| Ms. HOULAHAN. Thank you, Madam Chairwoman. | |
| My name is Chrissy Houlahan. I am a freshman. I have only | |
| been here just about 35 days but I have been a serial | |
| entrepreneur in Pennsylvania, built a number of different | |
| companies in the for-profit and non-profit space focused on | |
| basketball apparel and manufacturing, all the way to early | |
| childhood literacy, all the way to corporate social | |
| responsibility. So fundamentally, I consider myself to be an | |
| entrepreneur and very much about elevating small business | |
| people. | |
| My questions have to do with the Tax Cut and Jobs Act, and | |
| specifically I would like to dig in a little bit on the data | |
| that you, Mr. Sullivan, shared about your surveys. What I am | |
| interest in, because I am also an engineer, is sort of the | |
| inverse of your offering. You offered that 600-plus businesses | |
| said that they initially had positive reaction or experiences | |
| because of this tax cut. Were there several hundred or any that | |
| responded in the negative, or did you ask them? | |
| Mr. SULLIVAN. Thank you for the question, Congresswoman. | |
| So first of all, they are two separate things. First, the | |
| survey that we talked about is part of a quarterly index, and | |
| this index does what most indexes do. It asks small business | |
| owners in a random sample on a quarterly basis how did you do, | |
| how are you doing, and how do you think you are doing? And in | |
| that we saw an enormous spike. | |
| Ms. HOULAHAN. Great. But I am asking about those 600 that | |
| you offered for the record that had specific---- | |
| Mr. SULLIVAN. That is the second part. | |
| Ms. HOULAHAN. Okay. | |
| Mr. SULLIVAN. I said there were two parts to it. So first | |
| is the survey. The second part are these small business owners. | |
| We tracked newspaper reports and others who came to us and said | |
| we would like to publicize our reinvestment. But no, we did not | |
| ask small business owners, did you experience a negative impact | |
| from taxes? No, we did not. | |
| Ms. HOULAHAN. Thank you. And my next question has to do | |
| with, of those 600 who responded, you mentioned that you had | |
| the geography of them, can you, if you are able to, talk into | |
| California, New Jersey, New York, Pennsylvania, those states | |
| that are the state and local tax states that may have not | |
| necessarily been as positively affected? Could you on a heat | |
| map identify where those 600 were? | |
| Mr. SULLIVAN. We actually do have a heat map up online. It | |
| is uschamber.com/tax-reform. | |
| Ms. HOULAHAN. Perfect. | |
| Mr. SULLIVAN. And I am happy to get you the state-by-state | |
| data following this hearing. | |
| Ms. HOULAHAN. That is perfect. | |
| And my final question has to do with I was, and still am, | |
| that person who sits at the table with my husband doing taxes. | |
| Between us we have several degrees and have a very hard time | |
| getting through it. And I know that businesses sometimes have | |
| different fiscal years than an April reporting timeframe. But | |
| have you had the opportunity to ask the question again of those | |
| business owners, those small business owners after the first | |
| tax cycle that they have gone through if they are still as | |
| enthusiastic about the Tax Act? | |
| Mr. SULLIVAN. So we are right in the middle of that cycle, | |
| and I am glad that you raised that because taxes have always | |
| been complex, and whenever there is a change to the Tax Code it | |
| becomes more complex. We reached out to a lot of CPAs. We | |
| actually found that the local chambers and CPAs who were | |
| leaders in those local chambers had the best sense of how their | |
| clients, who are also small business owners, were doing. We | |
| have heard mixed reactions and we are really anxious in this | |
| tax season, which is a month and a half away from us, on seeing | |
| the data coming back. We are optimistic. We saw positive | |
| reviews over the past year but this tax season I think will | |
| give us a lot of valuable data on what we need to do even more | |
| to reduce tax burden to help small businesses grow. | |
| Ms. HOULAHAN. I am going to be interested in it, too, | |
| because I think that it will be very telling as we come through | |
| one cycle of this to see if really people remain as enthused as | |
| they were initially. | |
| And in my last minute of questioning, if you do not mind, | |
| Mr. Conklin, I know that your testimony had something to do as | |
| well with the inverse, which was that you would like to see the | |
| Tax Cut and Jobs Act, in some cases I believe your testimony | |
| said repealed. And I just would like your comments and | |
| perspective on that. | |
| Thank you so much, Mr. Sullivan, for your testimony. | |
| Mr. CONKLIN. Yeah. First, it had no impact on us, positive | |
| or negative. It was neutral. And that came straight from my | |
| accountant. I cannot give you the specifics or the details. | |
| My point is when we give these tax breaks to large | |
| corporations and to the very wealthy, and I work for the | |
| wealthiest people in the world and that is not hyperbole. We | |
| are depriving the community where I work of the necessary | |
| revenues to maintain the roads, to rebuild the tunnel under the | |
| Hudson River that when it finally fails and collapses will be a | |
| national disaster and will put 800,000 cars on the roads of New | |
| York, New Jersey, and Long Island, and create one of the | |
| biggest log jams that has ever occurred in commerce. | |
| So going back to a question that was asked earlier about | |
| delivering goods and services, yeah, we can create some real | |
| problems by starving the government and starving our | |
| communities of necessary revenue to do the maintenance and | |
| upkeep. | |
| Ms. HOULAHAN. Thank you very much for all of your testimony | |
| and for coming here today. | |
| Chairwoman VELAZQUEZ. The gentlelady's time has expired. | |
| And now we recognize Ms. Davids from Kansas for 5 minutes. | |
| Ms. DAVIDS. Thank you, Chairwoman. | |
| Well, I am excited to hear and read about all the | |
| priorities, and thank you to you all for taking the time to put | |
| together your testimony. | |
| Like so many of the folks who have already spoken, and this | |
| is a great segue, Mr. Conklin, because I sit on the | |
| Transportation and Infrastructure Committee as well, and there | |
| certainly are a lot of intersections, pun intended, to the | |
| points that you all are making about how small business can be | |
| buttressed, supported, and see an increase if we are properly | |
| investing in our infrastructure. And you know, I mean, in | |
| Kansas, we are actually coming off of the Brown Bag Tax | |
| Experiment and have seen a reduction in revenue, so I | |
| appreciate your comments, Mr. Conklin. | |
| We are in the middle of a new administration. Laura Kelly | |
| came out almost immediately, our new governor, talking about | |
| the need to invest in our infrastructure, and I was | |
| particularly excited to be on this board because the Kansas | |
| City metro area, the district that I am in, the Third District | |
| in Kansas, particularly, we have entrepreneurship baked into | |
| the DNA of the place that we are in. We have got great | |
| organizations like the Kauffman Foundation, which supports a | |
| lot of initiatives that you all have been talking about. And | |
| Kansas has 13 SBDCs, Small Business Development Centers, and | |
| Ms. Parsons, I was really excited to hear you talking about | |
| Johnson County Community College--I am going to mention them-- | |
| about the role that community colleges can play in highlighting | |
| and elevating SBDCs. But also, Mr. Conklin, it goes to some of | |
| what you were talking about, about the technical trades. | |
| Johnson County Community College and Kansas City, Kansas | |
| Community College were just here visiting with me, telling me | |
| about those exact programs. So I want you to know it is not | |
| falling on deaf ears. | |
| But Mr. Sullivan, I would like to ask you a question that | |
| touches on the infrastructure piece, which is can you talk a | |
| little bit about, in your testimony I know that you mentioned | |
| that you all just had, you know, an extensive set of meetings. | |
| The infrastructure portion was kind of the shortest section in | |
| your testimony but I think it might be because you all were | |
| just having this meeting. Could you talk to us a little bit | |
| about the areas that infrastructure can play a pivotal role in | |
| small business? | |
| Mr. SULLIVAN. Thank you, Congresswoman. I apologize for | |
| giving short thrift. I have with me the 35-page booklet of U.S. | |
| Chamber priorities. | |
| Ms. DAVIDS. I thought there might be something. | |
| Mr. SULLIVAN. I had to cut somewhere. | |
| The conference that I referenced last week was the U.S. | |
| Chamber's kind of kickoff to what we see as a huge push to get | |
| infrastructure legislature moving. And I do not mean to pass | |
| the baton back to you, but we are convinced that if legislative | |
| text is not moving before the summer, then we are going to be | |
| in a lot of trouble. So that is kind of the setting that came | |
| out of last week's conference. And it was encouraging to hear | |
| from your colleague that our infrastructure team is up here on | |
| Capitol Hill meeting with you all and trying to map out some of | |
| the details. | |
| As far as small business goes, I had mentioned earlier that | |
| we see really a two-part benefit when it comes to | |
| infrastructure investment. The first is that it makes it easier | |
| for the small business owners to get to their jobs and to get | |
| new jobs. I call it eliminating the hassle factor that is so | |
| familiar to anyone who has to commute a long way, and then just | |
| think of that times 100 when you are trying to actually do | |
| business on those same roads and bridges. | |
| The second are the small business owners who actually as | |
| their business do public works projects. We believe that they | |
| will receive an enormous benefit from jobs and work when | |
| infrastructure investment becomes a legislative reality in this | |
| Congress. And again, I do want to emphasize the positive here | |
| and that is the bipartisan nature of support for infrastructure | |
| reform. So to the extent that we can follow up with your office | |
| after this hearing, we are all in, we are all ears, and we want | |
| to work with you to make it a reality. | |
| Ms. DAVIDS. Thank you. And I yield back the rest of my | |
| time. | |
| Chairwoman VELAZQUEZ. The gentlelady yields back. | |
| I would like to go into a second round. | |
| Mr. Arensmeyer, I serve on the Financial Services Committee | |
| and I, too, am concerned about the fintech space as it relates | |
| to lending for small businesses. I know that you have done some | |
| research. In terms of rural areas, do you have any information, | |
| either anecdotally or factual based that tells you there are | |
| some concerns as it relates to transparency and online lending | |
| to small businesses? | |
| Mr. ARENSMEYER. Sure, Madame Chair. You know, there are two | |
| sides to lending. One is the lack of access. So that creates | |
| the market need for a greater number of products, and we agree | |
| you cannot solve the transparency alone and solve the problem. | |
| We have to deal with the access problem. So we start off in | |
| rural communities. They have less access to resources, less | |
| access to loans than other people. And so they are going to | |
| naturally be attracted to online alternative lenders, | |
| especially because they are online, so assuming they get | |
| broadband they are able to access them. And so the Borrowers' | |
| Bill of Rights that we put together that we think should be | |
| enshrined in legislation, and we took the first step to that in | |
| California this last year is, you know, there are six points-- | |
| the right to transparent pricing and terms; the right to | |
| nonabusive products, meaning there is an expectation that the | |
| loan is going to get paid back out of business revenues, not by | |
| taking another loan or out of the person's personal pocket; the | |
| right to responsible underwriting; the right to fair treatment | |
| from brokers; the right to inclusive credit access; and the | |
| right to fair collections practices. These are nationwide | |
| concerns that we have and we really think that the Congress | |
| should address, particularly the Financial Services Committee. | |
| But they are particularly concerned in rural areas. | |
| Chairwoman VELAZQUEZ. Thank you. | |
| Ms. Parsons, would you like to comment? | |
| Ms. PARSONS. Yeah, I would. My business serves millions of | |
| entrepreneurs, and I could make money all day long partnering | |
| with fintech who does not often seem concerned about the | |
| effects of the types of loans they are giving small businesses. | |
| Small businesses and entrepreneurs are sometimes in a position | |
| where they will take anything, much to the detriment of their | |
| own business, just the same way personal finance has needed | |
| regulations so that people do not bankrupt themselves. And I | |
| very much agree with we need to look at that. We need to give | |
| small business protection. No one can recover from a cash loan | |
| that is at a 40 percent interest rate, and it will put the | |
| business out of business. | |
| Chairwoman VELAZQUEZ. Sure. Thank you. | |
| Mr. Sullivan, today's Wall Street Journal says, ``Small | |
| business sentiment sours.'' So it makes reference to small | |
| business optimism. And it says that it has declined according | |
| to figures from NFIB in January, and consumer confidence has | |
| declined as well for the third straight month of decline. Why | |
| do you think that is? | |
| Mr. SULLIVAN. I think that the dip in small business | |
| confidence that NFIB's monthly survey picked up has to do with | |
| the lack of certainty in the business environment. I think the | |
| government shutdown was a shock to the system. I compliment | |
| this Committee for having a hearing last week that brought that | |
| shock into reality about what a shutdown means to small | |
| business. We cannot have government not govern because it does | |
| affect small business confidence. And I think that is one | |
| reason. | |
| I would like to try to give a little bit more of a positive | |
| though. We did see a Gallup Poll 2 days ago that looks at | |
| consumers' attitudes towards personal finance. And what they | |
| found is that actually for the first time in 16 years, 69 | |
| percent of Americans believe they will be better off | |
| financially at this time next year. So I am a ``glass half | |
| full'' type of guy. I take some optimism from that survey but I | |
| will admit, as you pointed out, that confidence has taken a | |
| dip. Hopefully, we will not have another shutdown and that we | |
| will continue to see confidence go back up. | |
| Chairwoman VELAZQUEZ. And it has nothing to do with the | |
| fact that maybe some small businesses now are focusing on the | |
| Tax Code and the tax cuts and finding out that some of those | |
| are temporary, and will not be made permanent for them? | |
| Mr. SULLIVAN. I think there have also been news accounts | |
| that echo what you had just said. I think my response is that | |
| we have a year of information from small business owners who | |
| have said that they have reinvested savings from tax cuts. And | |
| so I would much rather rely on that year of testimonials than 1 | |
| week of discussion of whether or not folks are going to get as | |
| big of a tax refund a month and a half before taxes are due. | |
| Chairwoman VELAZQUEZ. The gentleman Ranking Member will be | |
| recognized for 5 minutes. | |
| Mr. CHABOT. Thank you, Madam Chair. | |
| I would just note the nonpermanence of those tax cuts were | |
| a result of the Senate rules, not because of anything the House | |
| did or wanted to do. We wanted to make them all permanent but | |
| they have got rules over there that they have to comply with. | |
| And as in the Bush tax cuts, ultimately, I think most people | |
| think that the tax cuts for individuals, et cetera, will be | |
| made permanent. It would be very unpopular not to do that but a | |
| lot of the statements out there about talking about the rich | |
| got it or the middle class did not or individuals did not get | |
| it are based upon assuming that the tax cuts are going to go | |
| away in 10 years for a lot of people which I cannot imagine | |
| that that would happen unless we have an extremely | |
| irresponsible Congress at that time. So I do not expect that, | |
| although Congress is certainly capable of being irresponsible | |
| at times. | |
| Let me, just one question, one final question, Mr. | |
| Sullivan. A number, some of our witnesses today have talked | |
| pretty glowingly about the ACA, the Affordable Care Act, or | |
| what some people refer to as the Unaffordable Care Act, or most | |
| people over time have referred to it as Obamacare, but that is | |
| what we are talking about here. So pretty glowingly about it. | |
| Now, none other than Bill Clinton famously said that it is, | |
| referring to Obamacare, said it is the craziest thing in the | |
| world. People's premiums have doubled and they are getting half | |
| the coverage. And you talked to, in your position at the | |
| Chamber and with the Small Business Council, I know you talk to | |
| a lot of small business folks from all over the country there. | |
| Has that been your experience relative to Obamacare? Have they | |
| been pretty big fans of it or have they had real concerns about | |
| it? Or what do you hear with all the small business folks you | |
| talk to? | |
| Mr. SULLIVAN. Thank you, Congressman, for the question. | |
| Reiterating my attitude of being a ``glass half full'' type of | |
| person, we actually hear very positive things about the | |
| availability of association health plans that are just being | |
| rolled out across the country. There was a study released 2 | |
| weeks ago by a healthcare expert in Nashville, Kev Coleman. And | |
| he actually talks about the 28 association health plans that | |
| have been offered through state and local chambers of commerce, | |
| and also industry associations. And he actually paints a very | |
| positive picture of this. | |
| Mr. CHABOT. Not to interrupt you but I know I am. When you | |
| say association health plans, you are talking about small | |
| businesses getting together and negotiating with the insurance | |
| companies to keep the rates down; is that correct? | |
| Mr. SULLIVAN. Congressman, yes. There was a rule issued by | |
| the Department of Labor this summer that under the construct of | |
| the Affordable Care Act, and the pooling arrangements under the | |
| Affordable Care Act, the Secretary of Labor determined that | |
| those same types of poolings can be utilized for small | |
| businesses to join together for better buying power through | |
| association health plans and our local chambers of commerce | |
| have really jumped at the chance of offering these. And this | |
| study actually shows that a sharp rebuttal to some inaccuracies | |
| about noncoverage of preexisting conditions or skimpy plans, in | |
| fact, his analysis of these 28 plans showed that they were | |
| comprehensive and resulted in savings upwards of 20 percent. So | |
| there are 13 states who are allowing chambers of commerce to | |
| offer these, one of them being Ohio, and we are encouraged, and | |
| we hope that this is something that Congress looks at favorably | |
| and perhaps shines some light into really addressing a key | |
| issue. I think John Arensmeyer was right that health care is a | |
| huge issue for small business. I just take a ``glass half | |
| full'' view that these association health plans are part of the | |
| equation of solving that challenge. | |
| Mr. CHABOT. With the little time that I have left I would | |
| just note that that was one of the aspects that I know | |
| Republicans were very supportive of was association health | |
| plans, as well as allowing insurance companies to sell their | |
| products across state lines so that would increase the | |
| competition so that consumers, including small businesses, | |
| could get health care at lower rates. | |
| And finally, with the 5 seconds that I have got left here, | |
| to note that we were very much for making sure that preexisting | |
| condition coverage was there as well, so. | |
| And I yield back my time even though it has been exhausted. | |
| Chairwoman VELAZQUEZ. Mr. Golden is recognized for 5 | |
| minutes. | |
| Mr. GOLDEN. Thank you, Madam Chair. I appreciate it. I know | |
| that we are bumping up against the end of this but I just | |
| wanted to follow up a little bit on my earlier questions. I | |
| want to thank the Chairwoman and the Ranking Member for having | |
| this hearing. I think it is a great opportunity to sit here and | |
| talk with small business owners. I want to thank every member | |
| of the panel for coming in and being a part of this as we look | |
| forward for what I hope is 2 years of really productive work on | |
| this Committee. | |
| But earlier, Mr. Sullivan, we talked a little bit about | |
| infrastructure. I know you have a lot of members. It is hard to | |
| prioritize and, you know, you are spread out across the entire | |
| country, but we cannot always do everything, particularly not | |
| at once. And I think it is important to push you a little bit | |
| on it. | |
| You know, back home when I was in the Maine State | |
| Legislature, the first thing I did when I got elected in 2014 | |
| was do a small business tour and ask people, you know, what are | |
| your top priorities? Now, where I come from and the town that I | |
| represented, at that time they prioritized work force, then | |
| infrastructure and energy costs, and then they talked a little | |
| bit about taxes and regulation. It could be different, I know, | |
| in different areas in different parts of the country, but | |
| again, just circling back to infrastructure, for the entire | |
| panel, if you could just, a short answer, specific to rural | |
| areas and small businesses, if this Committee and the | |
| Subcommittee that I am going to be chairing, we are looking at | |
| infrastructure, what would be the area of infrastructure that | |
| you would prioritize particularly to help spur growth? | |
| Something like broadband. Is it investment in rail? Just pick | |
| one. There is no right or wrong answer here. | |
| Mr. SULLIVAN. Thank you, Congressman for the question. | |
| My quick answer is that whatever infrastructure bill | |
| Congress gets moving, which I hope it does, make absolutely | |
| certain that the user fees go to infrastructure. | |
| Mr. CONKLIN. I think we need to strengthen public | |
| transportation. I think in the concentrated areas, the nonrural | |
| areas, that are often the customers of rural areas, when we get | |
| jammed up, you get jammed up. Earlier we heard about a person | |
| who took 5 hours to get something delivered. We are 20 minutes | |
| from New York with no traffic and 2-1/2 or 3 hours from New | |
| York when there is traffic and there is always traffic. And one | |
| of the reasons there is traffic is because there are too many | |
| cars on the road. And one of the reasons there are too many | |
| cars on the road is because our public transportation system is | |
| collapsing. And so these extraneous effects of disinvestment | |
| and misguided investment have far-reaching effects and they do | |
| have a direct impact on our bottom line. So that is one of the | |
| things we really need to focus on. | |
| Mr. GOLDEN. Mr. Sullivan, you want to get the money to the | |
| projects. You are saying invest in public transportation | |
| including in rural areas. | |
| Ms. Parsons? | |
| Ms. PARSONS. I would really have to support broadband to | |
| rural communities. We are failing our rural communities. They | |
| are falling behind. We are not able to train workers and give | |
| them access to online education, online tools. The world is | |
| moving into, you know, technology is what is going to drive | |
| innovation and we cannot leave rural communities behind. | |
| Mr. GOLDEN. Thank you. | |
| Mr. ARENSMEYER. I agree with everything that has been said, | |
| particularly the broadband into rural areas. I think something | |
| this Committee has jurisdiction over is we need to make sure | |
| that when the infrastructure bill is implemented that the | |
| procurement is focused very much on small business, that the | |
| small business rules are followed, the women-owned business | |
| rules are followed. You know, that is a great source of growth | |
| for entrepreneurship in all of our communities and this | |
| Committee can really take the lead in making sure that those | |
| contracts are focused on small businesses, making sure that | |
| small businesses, and particularly women and minority-small | |
| businesses are at the center of that, and rural-owned small | |
| businesses in rural areas. So I am not sure. You know, there | |
| are a host of projects that need to happen, broadband, and then | |
| a lot of physical projects but we would like this Committee to | |
| make sure that they track the procurement on that. | |
| Mr. GOLDEN. Thank you. I yield back. | |
| Chairwoman VELAZQUEZ. The gentleman yields back. | |
| Mr. GOLDEN. Thank you, Madam Chair. | |
| Chairwoman VELAZQUEZ. Well, let me take this opportunity to | |
| thank all of you for being here today and helping us craft a | |
| small business priority going forward. Small businesses are | |
| critical to the success of our country, whether it is the small | |
| technology startups or advanced manufacturing, these firms | |
| generate tremendous economic activity and provide employment | |
| opportunities for our communities. As we move forward in this | |
| Congress it is critical that we listen to and prioritize their | |
| needs to ensure their future success. | |
| I would ask unanimous consent that members have 5 | |
| legislative days to submit statements and supporting materials | |
| for the record. | |
| Without objection, so ordered. | |
| And if there is no further business to come before the | |
| Committee, we are adjourned. Thank you. | |
| [Whereupon, at 1:09 p.m., the Committee was adjourned.] | |
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