- 7 months ago
On Wednesday, SBA Administrator Kelly Loeffler testified before the Senate Appropriations Committee.
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00:00:00Thanks for agencies under the jurisdiction of the Financial Services and General Government
00:00:03Subcommittee.
00:00:04Today, we welcome the Administrator of the Small Business Administration, my friend and
00:00:09former colleague Kelly Loeffler.
00:00:11Thank you very much for being here.
00:00:14I'd like to also extend a warm welcome to Senator Reid as the new Ranking Member of
00:00:18the Subcommittee.
00:00:19I look forward to working with you, Senator Reid, in a productive and bipartisan manner
00:00:22to address the important issues that face our nation.
00:00:25Small businesses employ 61.7 million people, nearly 46.4 percent of the U.S. workforce,
00:00:32and generate a comparable share of U.S. economic activity.
00:00:36To thrive, these businesses must constantly innovate, remain agile, and manage their resources
00:00:41carefully.
00:00:43Failure to do so can mean failure to survive.
00:00:45In contrast, some federal agencies seem to expand regardless of physical constraints,
00:00:49often without making difficult tradeoffs that small businesses have to confront every day.
00:00:54Senator Loeffler brings with her a distinguished career in business.
00:00:57She understands what it takes to succeed and the challenges that entrepreneurs face.
00:01:02I trust she will apply her vast experience to ensure the SBA operates efficiently and
00:01:07uses taxpayer dollars wisely.
00:01:09The Small Business Administration's initial budget request proposes total funding of $600
00:01:13million in 2026 to manage its operations, its grants, and its loan programs.
00:01:19This direct appropriation supports a massive lending portfolio as well.
00:01:23In the current fiscal year, the SBA will guarantee approximately $72 billion in business loans.
00:01:30This includes $35 billion under the 7A loan program, which is SBA's flagship tool.
00:01:35It is estimated to back over 50,000 loans through private lenders with SBA guarantees.
00:01:41The 504 loan program, focused on real estate and equipment, will provide another $16 billion.
00:01:46The Small Business Investment Company program will support $6 billion in private investment
00:01:51capital for small businesses.
00:01:53Finally, the Secondary Markets Guarantee Program will provide a $15 billion backstop to help
00:01:58lenders securitize SBA-backed loans and maintain liquidity.
00:02:03Since most manufacturers in the United States are small businesses, the SBA is uniquely
00:02:07positioned to assist them in rebuilding their domestic supply chains.
00:02:11In addition to business lending, the SBA also plays a critical role in disaster recovery.
00:02:16I want to thank the SBA for their critical work in helping Tennesseans recover from Hurricane
00:02:20Helene in East Tennessee.
00:02:23Disaster loans help individuals and businesses rebuild physical assets and recover lost income.
00:02:28Applicants must be located in federally declared disaster areas and meet credit criteria and
00:02:32repayment standards.
00:02:34These programs collectively represent an important source of credit, helping both entrepreneurs
00:02:39and disaster survivors.
00:02:41Thank you again, Administrator Loeffler, for testifying today.
00:02:44I look forward to hearing how you plan to manage your portfolio efficiently and responsibly.
00:02:50And now, I'd like to turn to Senator Reid for his opening statement.
00:02:52Well, thank you very much, Mr. Chairman, and thank you for holding this hearing.
00:02:56It is our first hearing, as you noted, and I look forward to working together as we advance
00:03:03the 2026 bill on a productive and very bipartisan basis.
00:03:09And welcome, Administrator Loeffler and colleague Loeffler.
00:03:13Thank you for your service.
00:03:16You are here on behalf of the Small Business Administration, and we look forward to your
00:03:21testimony.
00:03:22As we all know, small businesses make up nearly 44 percent of America's GDP.
00:03:27In total, there are 34.8 million small businesses in the United States, which employ nearly
00:03:33half of American workers.
00:03:35In my home state of Rhode Island, there are over 100,000 small businesses employing the
00:03:40majority of Rhode Island workers.
00:03:42But the uncertainty created by President Trump's tariff regime is putting many of these businesses
00:03:47at risk.
00:03:48Indeed, where margins are tight, disruptive tariffs can sink a small business.
00:03:54And despite the recent 90-day timeout on some of these tariffs, Yale University researchers
00:03:59say that our nation's tariffs are currently at their highest level since the Great Depression.
00:04:05These blanket taxes and tariffs are taxes, are also raising costs directly or indirectly
00:04:10on every good that small business needs.
00:04:13Indeed, I recently heard from Mills Coffee Roasting Company, a coffee roaster located
00:04:19in Providence that was founded in the 1890s.
00:04:23The President's blanket 10 percent tariff will increase Mills Coffee's cost by around
00:04:28$400,000 this year.
00:04:32That's a big number for small business.
00:04:34And coffee can only be grown in certain climates, meaning there is almost no domestic alternative
00:04:39to the coffee beans they import.
00:04:42In other words, despite the President's claims, his tariffs on Mills Coffee simply punish
00:04:46American companies that provided jobs for over 150 years without bringing the production
00:04:52of their imports, coffee beans, back to the United States.
00:04:56As the President's on and off again tariffs roil supply chains and small business finances,
00:05:02the question is what is a small business doing to meet the moment?
00:05:06What we're seeing is cutting staff that respond during disasters, closing offices that help
00:05:11coordinate local businesses access to SBA programs in times of economic uncertainty,
00:05:17freezing and canceling millions of dollars in grants that help small business stock grow
00:05:21and thrive.
00:05:23And further, in President Trump's fiscal year 2026 skinny budget, the administration proposes
00:05:29cutting SBA by over 30 percent, including the elimination of nearly all of SBA's training,
00:05:35counseling, and mentorship programs that support small business across the country.
00:05:40And one asks the question, how does slashing these resources for small business help local
00:05:45companies grow or outcompete their foreign rivals?
00:05:49And it is obvious that this skinny budget eliminates 15 of the 16 entrepreneurial development
00:05:56programs, retaining only small business development centers.
00:06:00And one of those 15 programs slated for elimination is the SBA Veterans Outreach Program, which
00:06:06provides targeted veteran small business programming.
00:06:10And frankly, this is unacceptable.
00:06:12Veterans have served, they've earned the respect and more than the respect of the American
00:06:17people, and they're uniquely positioned to be small business owners, given their leadership
00:06:22skills and what they've learned from the military service.
00:06:26And in fact, we have to do much more, not less, for these veterans.
00:06:32And Administrator LaFleur, I look forward to working with you, but we all understand,
00:06:38and you did, particularly as a senator from Georgia, that the power of the purse and responsibility
00:06:43to conduct oversight of the executive branch rests with Congress.
00:06:47So we would ask that you and your colleagues and fellow workers be responsive to us in
00:06:55terms of any requests we make for information.
00:06:59And in fact, 713 section of the Financial Services General Accountant Government Act
00:07:06explicitly bars any agency from preventing its employees to converse with members of
00:07:11Congress.
00:07:12And we were a bit troubled when SBA didn't bother to brief the subcommittee staff following
00:07:19its March 21st announcement that it would be slashing the agency's workforce by 43%.
00:07:25And the responsiveness has to be improved, frankly, Madam Director.
00:07:31And you appreciate that as a former senator.
00:07:33I'm sure many times you were frustrated, and please remember those days.
00:07:40There's a lot of work to do, and we want to do it together, and we want to make progress
00:07:43for the country.
00:07:44And thank you, Madam Administrator, for being here, and thank you, Mr. Chairman.
00:07:59I'm going to turn to the Administrator now for her opening statement.
00:08:03Thank you, Chairman and Ranking Member Reed, and Chairman Hagerty.
00:08:08Certainly my thoughts are with Tennesseans as they endure the fallout from this crisis.
00:08:13The SBA will be on the ground with them.
00:08:15I want to say thank you to all the members of the committee.
00:08:18Thank you for the opportunity to appear before all of you today to discuss the President's
00:08:22Fiscal Year 2026 Discretionary Budget Request for the U.S. Small Business Administration.
00:08:27This budget reflects our agency's return to its mission with a clear strategy, streamline
00:08:32services, eliminate waste, and ensure every taxpayer dollar delivered measurable results
00:08:39for America's small businesses and taxpayers.
00:08:41It consolidates duplicative operations, shifts resources to our field offices on the front
00:08:46lines, and refocuses the agency on proven solutions, including our capital access program
00:08:52and nationwide network of small business development centers.
00:08:56It reflects the President's belief that small businesses are not just part of the economy,
00:09:00they are the engine of it, and that to build a stronger, more secure, and more prosperous
00:09:05America, we must put Main Street and our job creators first.
00:09:09I'm pleased to report that under President Trump's leadership and through the reforms
00:09:12we've implemented at the SBA, that's exactly what's happening.
00:09:16Main Street is making a historic comeback.
00:09:19Since January, President Trump has cut core inflation to its lowest level since 2021.
00:09:24He's secured over $10 trillion in private sector investment, and he's delivered half
00:09:29a million new jobs while deregulating after the last four years of massive bureaucratic
00:09:33expansion of the regulatory state.
00:09:36He's brought dozens of countries, including China, back to the negotiating table for fair
00:09:41trade deals.
00:09:42Job creators and workers once again know that they have a seat at the table, and they know
00:09:46this administration has their back.
00:09:48Our economy is spring-loaded for growth, especially on Main Street, and I'm pleased to report
00:09:52that the SBA has never been more prepared to help small businesses lead the America-first
00:09:57economic comeback.
00:09:59Since January 20th, we've undertaken a sweeping overhaul of the agency to refocus it on its
00:10:04statutory mission of supporting small business and fueling economic growth through free enterprise.
00:10:11We're committed to cutting red tape, restoring accountability, and delivering capital to
00:10:15the job creators who power economic opportunity, growth, and innovation.
00:10:21When we arrived at the SBA, it was bloated and dysfunctional, weighed down by a work-from-home
00:10:26bureaucracy that promoted a partisan political agenda.
00:10:30The Biden administration presided over unprecedented levels of fraud and four straight years of
00:10:34failed audits.
00:10:36Our flagship 7A loan program was mismanaged to the tune of $400 million in negative cash
00:10:42flow in just one year.
00:10:43Oversight and accountability had broken down along with any sense of fiscal responsibility
00:10:48to taxpayers.
00:10:49Common sense had left the building along with our workforce.
00:10:53That era is over, and it is a new day at the SBA.
00:10:56I come to this role with three decades of private sector experience.
00:11:00Following an extensive review of the financials and operating metrics, I launched a full-scale
00:11:05reorganization to right-size this agency, returning to pre-pandemic staffing levels.
00:11:10Our team is unleashing resources that had been consolidated in Washington back into
00:11:14the field among our 68 district offices and local communities.
00:11:19We canceled wasteful contracts for total cost savings of more than $3 billion.
00:11:24I'm proud that we're working alongside the DOJ team, who are not partisans, but patriots
00:11:29and business leaders who care deeply about the financial future of this great nation.
00:11:33We also took urgent action to restore the financial integrity of our core loan programs
00:11:38by reinstating the lender fees and restoring underwriting standards, eliminating the do-what-you-do
00:11:44criteria that put taxpayers on the hook for billions of dollars.
00:11:49We implemented new identity and citizenship verification protocols to ensure that loans
00:11:54only go to eligible businesses, not illegal aliens or fraudsters.
00:11:59We made it a priority to depoliticize the agency and end the era of picking winners
00:12:03and losers based on race or ideological belief, replacing that with our nation's strong tradition
00:12:09of free enterprise.
00:12:10We eliminated DEI mandates, terminated the Green Lender Initiative, and withdrew SBA
00:12:16from voter registration schemes.
00:12:18We began relocating SBA offices out of sanctuary cities that refused to enforce federal immigration
00:12:24law.
00:12:25At the same time, we're helping rebuild American industry through the SBA's Made in America
00:12:29Manufacturing Initiative.
00:12:31We're backing new bipartisan legislation to give small manufacturers additional capital.
00:12:37Just yesterday, we introduced a first-of-its-kind onshoring portal to help small businesses
00:12:42find American-made supply chains and partners.
00:12:46The results are immediate and measurable.
00:12:49In our first 100 days, SBA loan approvals have skyrocketed by 80 percent compared to
00:12:54the same time under the last administration.
00:12:57Loans to the smallest businesses, those with five or fewer employees, have nearly doubled,
00:13:02and the share of federal contracts going to small businesses is now 23 percent, up from
00:13:06just 18 percent when we came into office.
00:13:10With new opportunity and a strong economic agenda, demand for capital is up, businesses
00:13:14are growing, and confidence is rising across the country.
00:13:17I'm proud to say this is not the SBA of the past.
00:13:20This is a leaner, stronger, and unapologetically pro-small business agency.
00:13:25It's one that supports American industry and its workers, that respects taxpayer dollars,
00:13:30and will deliver results.
00:13:32I have seen the impact of these reforms firsthand.
00:13:35From Bay City to Boise, small business owners are expanding, hiring, and reinvesting in
00:13:40their communities.
00:13:41They know that for the first time since the first Trump administration, this administration
00:13:46is on their side.
00:13:47The SBA is once again serving the people who built this great nation, not the globalist
00:13:51bureaucrats or partisan political interests, but the small defense manufacturer, the local
00:13:56construction company, and the tech company founders who put everything on the line to
00:14:02live the American dream.
00:14:04Chairman Hagerty and members of the committee, as a former small business owner and employee
00:14:08myself, I believe firmly in the dignity of work, the American dream, and the power of
00:14:13free enterprise to uplift every job creator across this country.
00:14:17That's what guides our work at the SBA, and I'm proud to say it's also the vision that
00:14:22we're returning to at the SBA.
00:14:24Thank you so much, and I look forward to your questions.
00:14:26Thank you, Administrator, and I want to particularly applaud the SBA's efforts in the Made in
00:14:31America Manufacturing Initiative, and I especially want to thank you for spending National Small
00:14:36Business Week in my home state of Tennessee in Nashville, meeting with small businesses
00:14:40across the state.
00:14:42They really appreciated your presence there, helping Tennessee small business owners, and
00:14:46I think everybody knows this, but these small businesses are the backbone of America, and
00:14:51I appreciate your commitment to helping our small businesses thrive.
00:14:55To advance the subject, the President has proposed moving new lending of up to $10 million
00:15:02per small U.S. manufacturer from the SBA.
00:15:06Are you intending to provide this funding from an existing program or from a new program?
00:15:11Chairman, thank you for the question, and it was a great honor to celebrate National
00:15:15Small Business Week in Nashville and talk to everyone from contractors to restaurants
00:15:20and see that business is thriving, and that's what the Made in America Manufacturing Finance
00:15:27Act is about, is to help our businesses thrive even more.
00:15:31The last time that a loan size increase happened was about 15 years ago, so we're raising our
00:15:37manufacturing loan limits under the proposed bipartisan legislation from $5 million to
00:15:42$10 million that would be provided still at zero subsidy to taxpayers, like our entire
00:15:487A and 504 loan program operates, meaning no cost to taxpayers, because those loan programs
00:15:54are supported by annual lender fees and guarantee fees.
00:15:58So no new appropriation required?
00:16:00No additional appropriation.
00:16:01Unfortunately, the Biden administration had waived some of those fees and reduced them,
00:16:06so that loan program under the four-year cohort of the Biden administration is negative cash
00:16:11flow to the tune of $2.2 billion.
00:16:13We will never let that happen, and we will alert this committee should we have any further
00:16:18issues beyond that, but our program will operate at zero subsidy for taxpayers.
00:16:23Got it.
00:16:24Got it.
00:16:25As Congress examines tax policy, can you explain how immediate expensing and tax cuts on domestic
00:16:30production will be able to strengthen domestic manufacturing?
00:16:33Well, absolutely.
00:16:35That's what I hear as I travel across the country meeting with manufacturers.
00:16:39They are telling me that their business is spring-loaded for investment.
00:16:44These tax cuts are absolutely critical to not just manufacturers, but to all small businesses
00:16:50who want to invest that next dollar, but have the uncertainty that the tax bill still has
00:16:55not been passed.
00:16:56So small businesses are telling me they need that tax bill more than anything, and we know
00:17:01that it's not just spring-loaded, but between the access to capital we're providing, the
00:17:06tax cuts, the counterinflationary economic environment where investment is encouraged,
00:17:12that this economy is spring-loaded once the tax cuts come through.
00:17:16I couldn't agree with you more, and I frankly think that as the investment occurs, more
00:17:20jobs will be created, more economic activity therefore occurs.
00:17:23This positive feedback loop is going to be extraordinary for the American economy, and
00:17:27we'll be back on the same track we have been in the past, and I look forward to seeing
00:17:30your leadership in that.
00:17:33The Biden administration's agency rulemakings incurred nearly $1.4 trillion in incremental
00:17:40compliance costs.
00:17:41That's a drag on economic growth.
00:17:43The Trump administration and Congress have a clear mandate to streamline government operations
00:17:48and roll back excessive regulations.
00:17:50And I don't think this is deregulation for its own sake.
00:17:53It's about making the government serve our citizens more effectively.
00:17:57But some have raised concerns that streamlining at SBA, including some reductions in force
00:18:01that you mentioned earlier, could undermine the agency's ability to function.
00:18:05I want to know how you respond to this question and how ongoing streamlining efforts actually
00:18:09contribute to SBA's efficiency.
00:18:12Chairman, this is an important question.
00:18:15Taxpayers want to know that government is serving them and serving them efficiently,
00:18:19and that's what we're doing at the SBA.
00:18:21The agency had doubled under the last administration in terms of size and workforce, but yet as
00:18:27we come into President Trump's administration, we've increased loan volume by 80 percent
00:18:31in our 7A loan program.
00:18:33We're doing more with less, just like small businesses across Main Street have to do.
00:18:38We're more accountable to taxpayers.
00:18:40We're reining in waste, fraud, and abuse.
00:18:42And so what small businesses can expect to see is more of the SBA on Main Street.
00:18:48We're deconsolidating it out of Washington back into the field.
00:18:52So small businesses will actually have more resources where they're located.
00:18:56We're working for Main Street, not the bureaucracy.
00:19:00Much appreciated.
00:19:01I'll turn it over to Ranking Member Reid.
00:19:02Thank you very much, Mr. Chairman, and thank you, Administrator.
00:19:07Earlier this month you indicated that President Trump's tariffs will bring a period of change
00:19:12for small business, and I think that is right.
00:19:17Many, as I indicated in my opening statement, are very, very concerned about the cost of
00:19:23these tariffs.
00:19:25More than that, that the National Federation of Independent Businesses in their monthly
00:19:30business indexes saw that small business confidence levels have dropped every month since President
00:19:35Trump took office, which indicates that small business people are not exactly feeling yet
00:19:44or even expecting many of the things you described.
00:19:49What are you doing right now to help businesses get through this period of change?
00:19:56Ranking Member Reid, thank you for your question.
00:20:00President Trump believes in the American worker and American industry.
00:20:03We have to have that back in this country, and the SBA is going to support him in those
00:20:06efforts completely because what we have seen across this country is a hollowing out of
00:20:11our productive capacity that didn't just cost us 7,000 factories, it cost us 5 million jobs
00:20:18in small towns where I grew up, where our union training center in a town of 600 closed.
00:20:23It was one of the last major employers, and that's as manufacturing jobs have left.
00:20:28We can never let that happen again, and we can never let it happen again that small businesses
00:20:33rely on the Chinese Communist Party for their productive supply.
00:20:37We can do better.
00:20:38That's why the SBA is looking to increase onshoring through our lending programs, but
00:20:42also yesterday announced our Make Onshoring Great Again portal that connects small businesses
00:20:48with 1 million suppliers across this country.
00:20:51As I've traveled from East Coast to West Coast, I have seen the incredible productive
00:20:56capacity and capabilities of our hardworking men and women in our factories across this
00:21:01country, and while the media narrative likes to say we can't make things in this country,
00:21:06I'm seeing it done in real time, and I'm seeing an investment in these factories, I'm seeing
00:21:10a skilled workforce being created, I'm seeing jobs and economic opportunities.
00:21:14Just on the factory floor last week, I met a young man, he's 21 years old.
00:21:19He had been at the CNC, a machine operator, for two years.
00:21:23He just got married and bought a house.
00:21:25He has no student loan debt.
00:21:26He has a great future ahead of him as a skilled technician, and this is the new color boom
00:21:31that President Trump is going to bring to this country where we can make things in this
00:21:36country again, where we can export again, where we will have open export markets for
00:21:40small businesses who have 400 pages stacked against them in the U.S. Trade Rep's report
00:21:47against our small businesses that no one has fought back on, and so I'm excited to
00:21:51see what's happening across this country.
00:21:53It's a manufacturing renaissance, and I'm grateful to President Trump.
00:21:57Well, thank you.
00:22:00It's going to take many years to reassure a significant number of businesses, and frankly,
00:22:06many small businesses will not be able to last that long unless SBA actively engages
00:22:12with them, helps them, and I hope you're appreciative of that point, and one of the major reasons
00:22:19we've had a diminution of our manufacturing was the NAFTA agreement, the CAFTA agreement,
00:22:26and the USMCA, and I opposed all those agreements, but it was both Republican and Democrats that
00:22:33passed them.
00:22:35We have to make up for that right now, and SBA has to be in the lead.
00:22:39You indicated that DOJ is working with you, and you also indicated it's non-partisan.
00:22:43Elon Musk is non-partisan, is that your conclusion?
00:22:47I'm really proud of the work we've done with our DOJ team.
00:22:49No, no, I'm going to ask you a specific question, Director.
00:22:51I know you've learned the filibuster in the United States Senate, and you've demonstrated
00:22:55it quite well, but is Elon Musk non-partisan?
00:22:57Look, our DOJ team is a group of young men who are supporting our efforts, and I call
00:23:05the shots at the SBA. I'm the one calling the shots at the SBA, and I appreciate the
00:23:13support I've gotten in terms of some of the quantitative work that I wanted done in analyzing
00:23:18the financial and operational metrics, and I have made all those decisions. They're based
00:23:24on the business skills I learned over three decades.
00:23:28Does DOJ have access to data of American small businesses?
00:23:34I can only speak to my ... My team are members of the Small Business Administration, and
00:23:39they comply with all the laws that apply to all small business employees.
00:23:44So they're not DOJ people? They've been ...
00:23:46They are members of the Small Business Administration.
00:23:49They are hired members of the SBA?
00:23:51Correct, they're employees of the SBA.
00:23:53SBA. Temporary employees, or ...
00:23:57They're active and current employees.
00:24:01Have DOJ reimbursed the SBA for any support they received from you?
00:24:11Senator ... Chairman, Ranking Member, could you please clarify your question?
00:24:16Yeah. DOJ goes in, they do quite a bit of work, and encounter costs. Do they turn to
00:24:24you and ask to be reimbursed, or ... What is the salary, typically, of these young men?
00:24:32They are employees of the SBA. I can come back to you with regard to any compensation
00:24:39details as an employee, but ...
00:24:41I would appreciate that.
00:24:43I'd be happy to do that.
00:24:44Thank you, Administrator, and I look forward to the second round.
00:24:48Thank you, Ranking Member Reid. I'll open the floor up to questions right now, and I
00:24:53will turn to Senator Mullen.
00:24:56Thank you, Chairman and Administrator. Thank you so much for being here.
00:25:02My Democrat colleagues continue to rail on President Trump's tariffs, and it seems like
00:25:07a lot of my colleagues forgot that of the literally hundreds of thousands of manufacturing
00:25:13jobs that have left the United States, and the trillions of dollars of not just income
00:25:24throughout our communities, but also the billions of dollars of investments that we've lost
00:25:30over the last 30 years.
00:25:34And yet, they're completely silent on the fact that over the last previous administration,
00:25:39they averaged 4.95 percent inflation at a high point of 9.71 percent, which was a greater
00:25:45cost than these tariffs will ever be on our economy.
00:25:50And so, I appreciate you standing strong and fighting, and this administration for fighting
00:25:55the way that they have.
00:25:57But with that being said, while you were on your manufacturing tour across America, which
00:26:01I love, I'm actually a little jealous of, I think that'd be absolutely awesome to walk
00:26:06into all these manufacturing plants and see these proud workers making a living and developing
00:26:12tomorrow's future.
00:26:14What did you hear about the tariffs?
00:26:17Senator, first of all, it is such an honor to work for the SBA in terms of supporting
00:26:26the manufacturing initiatives, because you're exactly right, as we walk onto factory floors
00:26:30and we see the pride in American-made, we see the American flag hanging in that factory,
00:26:35we're talking to apprentices coming in to manufacturing.
00:26:39It's absolutely encouraging, and they're encouraged by the Trump administration's belief in the
00:26:46American worker and restoring this industry, because we did lose millions and millions
00:26:50of jobs, and that's why the SBA got to work as soon as President Trump unleashed what
00:26:56is a brilliant fair trade agenda.
00:27:00We have to have this in this country.
00:27:02It's the first president that has had the backbone to stand up for the American worker,
00:27:07so that is why we immediately responded with providing more capital.
00:27:11We've already set records for manufacturing loans in President Trump's first 100 days,
00:27:17issuing 1,120 manufacturing loans, an increase of 74 percent of the 7A loans compared to
00:27:24Biden's first 100 days, so we continue to do that.
00:27:29We're working with manufacturers around skilled workforce.
00:27:33I was at a great technical and trade school last week where we saw students learning everything
00:27:39from welding to CNC machine operating to composites materials, and then finally ensuring that
00:27:45we are advocating for those important tax cuts that will affect everyone and that will
00:27:51allow us to enable this boom in manufacturing made in America through the, not just the
00:27:57199A deduction, but the 179 and the accelerated depreciation and immediate expensing, so.
00:28:04In your opening statement, you had talked about partisan funding that had been riddled
00:28:10through the SBA.
00:28:11Can you expand on that?
00:28:13Senator, what we found was an agency that was almost aimed at social engineering through
00:28:19its loan programs.
00:28:21We saw DEI programs that crowded out our veterans programs for small business statutory goals
00:28:30in contracting.
00:28:32We saw the use of trying to expand loan limits for Green New Deal companies, which are obviously
00:28:39a scam, and we ended that.
00:28:42We saw lending companies giving licenses so that they could do DEI-based lending.
00:28:50We recently reformed that, announcing that community advantage SBLCs licenses would be
00:28:56rescinded if they didn't meet capital requirements.
00:29:00These are mission-based, nonprofit, undercapitalized groups such as the Black Investment Fund,
00:29:08the Progress Fund, the People's Fund, and we saw some of their delinquencies as high
00:29:13as 30% when our portfolio runs at roughly 3%, including those terrible data points.
00:29:22We're really reining that in for the benefit of small businesses who qualify all across
00:29:28this country, and to make sure they don't disadvantage or advantage anyone unequally.
00:29:33You're starting to actually have loans based on merit, not based on political ideas?
00:29:39Yes.
00:29:40That's great that you're finally getting politics out of the SBA.
00:29:42It's where it should be.
00:29:44And that's why the loans are growing, that's why the lenders are coming back to the program.
00:29:47They trust that these are fair and qualified loans.
00:29:52Thank you so much for being here, and thank you for the job you're doing.
00:29:54Thank you, Senator.
00:29:56Senator Coons.
00:29:57Thank you, Chairman Hagerty, Ranking Member Reid.
00:30:01Thank you, Administrator Loeffler, good to be with you again.
00:30:06It is unfortunate we don't have in front of us a full budget.
00:30:09That's the case of all the appropriations subcommittees on which I serve.
00:30:13What's the timeline on which you'll be providing us with an actual budget for us to review
00:30:17and work with you on?
00:30:19Senator, we hope to have it to you in the coming weeks.
00:30:21I don't have a hard deadline for you, but as soon as we have it, we will be providing
00:30:27that to you.
00:30:28As you can imagine, it's sort of difficult for us to do our work if the budget hasn't
00:30:33arrived and we can't have it in front of us.
00:30:35I think my small home state is typical.
00:30:39Small businesses are 98% of all the businesses and employ two-thirds of our workforce, and
00:30:44the SBA is crucial for those who want to start a new business.
00:30:47It provides a great resource for new and existing businesses, and I want to briefly at the outset
00:30:52recognize the service of Michelle Harris, the SBA State Director, who is retiring after
00:30:5735 years of federal service and who dedicated her career to lots of small businesses.
00:31:03I am concerned by actions you've taken to cut over 40% of the workforce at SBA and close
00:31:10regional offices, and from what we have in the skinny budget, you're proposing fairly
00:31:16significant cuts to an agency that I think does very important work.
00:31:22I wanted to focus for a moment, if I could, on a small but mighty part of SBA, which is
00:31:28the SCORE program.
00:31:30SCORE, as you know, was founded in my hometown of Wilmington by DuPont volunteers, and it
00:31:35is the definition of an efficient government program.
00:31:38There are 10,000 SCORE volunteers all over the country in every SBA office and district
00:31:45that help new small businesses launch.
00:31:48In fact, last year, these 10,000 volunteers helped launch 63,000 small businesses, and
00:31:55Congress appropriated $17 million to it.
00:31:58With a full-year continuing resolution, this program should receive another $17 million.
00:32:03In your confirmation hearing, you agreed you'd want to work on a bipartisan reauthorization
00:32:08of this program, and the most recent study said that for every dollar we appropriate
00:32:13to SCORE, it generates $45 just in new federal tax revenue.
00:32:18So I think this is a wonderful program well worth saving.
00:32:22I understand you're here defending a budget that is not complete or finished and that
00:32:27may reflect choices not your own.
00:32:29That's always true.
00:32:30Could you provide us with an update on the funding that's been appropriated and whether
00:32:36it's being dispersed?
00:32:37And tell me anything about how you see SCORE fitting into the mission of the agency to
00:32:43deliver highly efficient and effective support for small business.
00:32:47Senator, thank you for your question, and congratulations to Michelle.
00:32:51And, Senator, I also want to thank you for your support of the Made in America Manufacturing
00:32:55Bill.
00:32:56Look, as I've traveled across the country and done dozens of roundtables with our resource
00:33:03partners that provide technical assistance, be it SCORE, Women's Business Centers, our
00:33:09Small Business Development Centers, and others, I've seen a fair amount of confusion by small
00:33:14businesses about who they should be working with, and within the budget constraints, it's
00:33:20important that we unify and streamline this agency so that small businesses have the benefit
00:33:26of going direct to the agency, which we have 1,000 small business development centers that
00:33:32operate across the country that provide direct access to our resource partners as well as
00:33:38direct access to our lenders and the SBA.
00:33:42And so those SBDCs are critical in delivering those services to our small businesses, and
00:33:48we think that unifying and streamlining will create a better user experience for our small
00:33:53businesses and have more accountability for taxpayers of eliminating overlapping services
00:33:59that often result in confusion for our borrowers.
00:34:02But if I might, I think SCORE fits a unique niche in that it is seasoned, experienced,
00:34:09often retired business executives, people who've got personal experience financing,
00:34:15running, whether it's a manufacturing business, a service business, and at very little cost
00:34:20to the federal government, they provide a service.
00:34:21I hear you on the potentially, we could debate it, confusing array of different centers and
00:34:28missions, but I think SCORE fits a unique window, if I might, with your forbearance.
00:34:32One more question, Mr. Chairman.
00:34:34We also discussed during your confirmation hearing the SBIR program.
00:34:38I recently introduced with Senator Curtis the Ramp for Innovators Act, which expedites
00:34:43the application process, improves technical and business assistance, and focuses more
00:34:48on commercialization.
00:34:50Some have rightfully criticized SBIR grants as leading to circular, not moving towards
00:34:56the workplace.
00:34:57This is a bill that Senator Rubio and I previously worked on.
00:35:00SBA plays a critical role in the success of SBIR.
00:35:04Can you assure us when we get your full budget that your agency will have the staffing to
00:35:09successfully implement this valuable program that takes research and innovation to the
00:35:14marketplace?
00:35:15Senator, we've been reviewing the SBIR program, and we feel that it's languished in the last
00:35:20four years.
00:35:21It needs attention to achieve the important aims of the program so that critical technologies
00:35:27can be brought to market, and in this, a reauthorization year for SBIR, I look forward to working with
00:35:33you and your office to understand how those programs can be strengthened across all agencies
00:35:39that utilize this important effort.
00:35:42Great.
00:35:44Thank you, Mr. Chairman.
00:35:45Thank you, Senator Coons.
00:35:46I'll turn to Senator Fischer now.
00:35:47Thank you, Mr. Chairman.
00:35:48Welcome.
00:35:49Administrator Loeffler, it is such a pleasure to see you again, and I want to congratulate
00:35:54you on your nomination confirmation, and also thank you for all the good work you are already
00:36:01doing in this position.
00:36:04Your enthusiasm is evident, your passion is evident, and I know you will continue to provide
00:36:12the services that this administration has focused on and that need to happen for the
00:36:22small businesses across this country, so thank you for that.
00:36:27As you know, in the 2017 tax bill, it included my bill to create a tax credit for employers
00:36:34who offer paid family and medical leave to their employees.
00:36:39The credit is the only national paid family medical leave policy that has ever been enacted
00:36:47into federal law.
00:36:48The credit expires at the end of this year, and I've introduced legislation to make a
00:36:53couple of tweaks to make the credit permanent.
00:36:57I was pleased to see that the House included my bill in their tax package, and I look forward
00:37:02to working with my Senate colleagues to see that it is included in the final product.
00:37:08I believe that the SBA can play a critical role in increasing awareness of the credit.
00:37:15One of the tweaks we made in the bill was to require SBA to do targeted education, outreach,
00:37:22and technical assistance on the credit, and how employers can use this.
00:37:28And when we designed the bill, our hope was that small businesses would be able to take
00:37:35advantage of it to offer their hourly employees a paid family medical leave that many of them
00:37:45do not have the opportunity to have, as employees from larger businesses and corporations have
00:37:52that.
00:37:53We know that over 75 percent of small business owners support a federal financial incentives
00:38:00for small employers to provide paid leave benefits.
00:38:08Another survey tells us that for small business owners who don't offer paid leave, over 58
00:38:14percent reported that while they wanted to, they couldn't afford to.
00:38:18So I think awareness, education, assistance are keys here, and I think the SBA will play
00:38:24a large role in helping to get the word out.
00:38:27Again, this is a tax credit, pro-business, pro-family, not a mandate, not a new entitlement.
00:38:37Like in FY25, I also intend to secure funding for the SBA to conduct that outreach.
00:38:47Can you commit to me that SBA will carry out this work diligently and quickly once we're
00:38:52able to get the authority and the funding to do the work?
00:38:55Well, Senator, thank you for your leadership in this important area, and you brought it
00:39:00to my attention during my confirmation process, so I'm pleased to hear that it's progressed,
00:39:06and it's timely because we at the SBA have refocused on our field organization in our
00:39:1468 regional offices, and as you just heard, our 1,000 small business development centers
00:39:19that would be an excellent conduit to support awareness and implementation and support.
00:39:25It's one more reason that this tax bill is so critical to small businesses across this
00:39:30country, so I look forward to learning more about that with you and your team, and welcome
00:39:35the conversation.
00:39:38Earlier this year, I joined with my Alaska colleagues, Senator Sullivan and Murkowski,
00:39:43in sending you a letter requesting the SBA issue guidance on SBA's contract program,
00:39:518A contract program, clarifying that the recent executive order that eliminates DEI programs
00:39:58does not impact contracting with native-owned companies, and I appreciate your response
00:40:06that we have gotten a guaranteeing that tribes will not be impacted by that executive order.
00:40:12It is important that we provide support to and for our native-owned companies through
00:40:19the 8A contract program, including conducting outreach through the Office of Native American
00:40:25Affairs.
00:40:28As we look at this program, first of all, will you commit to continuing to work with
00:40:35me on ensuring that SBA tribal efforts are protected, but also to be able to stress the
00:40:43importance of this program in our outreach and support for our native tribes?
00:40:51Absolutely, Senator.
00:40:52We look forward to talking with you further about this and actually visiting your state
00:40:57to learn more about the key issues there for small businesses and our Native Americans.
00:41:08We look forward to welcoming you to Nebraska, and once again, good to see you.
00:41:13Vice Chair Murray.
00:41:14Thank you very much, Mr. Chairman, for your accommodation.
00:41:16I'm running between several approvals committees this afternoon, so I appreciate the opportunity
00:41:21to ask Administrator Loeffler a few questions.
00:41:24First of all, I've been hearing from small businesses in my state about the SBA grants
00:41:29that have been canceled and frozen.
00:41:32One example is you canceled a $2.5 million regional innovation cluster contract in Washington
00:41:38State that would have supported small businesses that were working on carbon capture and utilization
00:41:44and storage.
00:41:45It's not an isolated case, but that is a program that Congress historically funded with strong
00:41:51bipartisan support.
00:41:52I wanted to ask you today, why have you canceled funding for a program that has bipartisan
00:41:57support and really drives small business growth in our emerging sectors?
00:42:04Vice Chair, thank you for the question.
00:42:06Our regional innovation clusters are certainly mechanisms to deliver support, technical assistance
00:42:12to small businesses in various regions based on expertise in that region and the needs
00:42:19of that region.
00:42:21I have broad authority in this administration to reshape the regional innovation clusters,
00:42:28and we are undertaking a review of those programs to right-size them and form them to where
00:42:34the needs are most urgent.
00:42:37Right now, we've just announced that we have a regional innovation cluster centered around
00:42:41manufacturing because of the skills and efforts and the focus needed on that right now.
00:42:48But we intend to continue to pursue these programs based on the regional needs, and
00:42:52we'll be working.
00:42:53I would just say this is a regional need, and I would just ask you to go back and look
00:42:57at that one.
00:42:58Happy to provide you information, but it really is a critical one for our region.
00:43:01I'd be happy to work with your office.
00:43:03Okay.
00:43:04And I wanted to say, I met with some small business owners in Seattle a few weeks ago.
00:43:08One of them runs a coffee shop and imports green tea.
00:43:13And like a lot of small business owners that I'm talking to, and you know they operate
00:43:17on very thin margins, so the current tariffs are hitting them really hard.
00:43:22We don't grow green tea in the United States.
00:43:24I doubt we ever will.
00:43:26And given that increased cost imposed by those tariffs could really, he told me, shutter
00:43:33his business, what should they do in this situation?
00:43:37So this period of negotiation, you know, is not one where we don't acknowledge the near-term
00:43:43effects, but for the long-term, we want to have a situation.
00:43:46This is a small business.
00:43:47They can't last much longer.
00:43:49Well, what we're focused on is ensuring that we never get in the position again of having
00:43:54unfair trade.
00:43:55And that's what President Trump's fighting for.
00:43:57That's what we're fighting for.
00:43:59We just yesterday put out our Make Onshoring Great Again directory to ensure that small
00:44:05businesses have access to millions, a million suppliers across this country that can offer
00:44:10alternatives to them.
00:44:11This country doesn't produce green tea, and this small business is not going to last more
00:44:15than a few months.
00:44:16I hear your bigger scheme is that someday this will all pay off.
00:44:20This small business won't be there.
00:44:22I'm just asking you.
00:44:23Yes.
00:44:24What are they supposed to do?
00:44:25Are you going to have, do you have anything drafted?
00:44:28Are you looking at anything that can help these small businesses who are on the verge
00:44:32of closing right now?
00:44:34And they can't wait two, three, five, six months from now.
00:44:38Well, what the SBA is offering is certainly the capital, the counseling that they need,
00:44:43as well as import and export loan financing to deal with these times of uncertainty.
00:44:48But the uncertainty is going to be short lived.
00:44:50President Trump already has 75 countries at the negotiating table.
00:44:54We've already cut deals with China and the UK, and there's more to come.
00:44:58And small businesses are benefiting because inflation is down, because we're having $10
00:45:02trillion of investment that we've never had in this country.
00:45:05We have economic opportunity on the horizon that is really unprecedented.
00:45:11I appreciate that you have an optimistic view.
00:45:13I'm just telling you, having sat down and met with these small businesses, whether it's
00:45:17shutting the regional SBA office or canceling these grants to support our entrepreneurs,
00:45:24or these tariffs that are having impact, there are small businesses that will not make it
00:45:28based on your optimism.
00:45:30And there are small businesses that are going to be struggling if we don't pass this tax
00:45:34bill too.
00:45:35Small businesses, unfortunately, bear a lot of headwinds of uncertainty right now, specifically
00:45:40with regard to the tax bill that will affect 100% of all small businesses.
00:45:44I'm not here to talk about the tax bill, I'm talking about our little shop owners that
00:45:48aren't going to make it.
00:45:49Well, small businesses obviously face a number of —
00:45:50I appreciate your response.
00:45:52Yes.
00:45:54Thank you, Vice Chair Murray.
00:45:55We'll turn to Senator Bozeman now.
00:45:59It's great to have you here, Administrator, Senator Leffler.
00:46:03We miss you, but we're very, very proud of the great work that you're doing.
00:46:07And I know that your heart is certainly in this, and you are doing a very, very good
00:46:11job.
00:46:12I guess the first question I'd have is just, as a committee, what tools can we give you
00:46:20in your toolbox?
00:46:21You've been out and about and touring and, you know, trying to figure out — the world
00:46:27is very different now than it was a year or so ago.
00:46:33What additional authorities do we need to give you, or how can we help you?
00:46:36Well, Senator, thank you for the question.
00:46:39You know, it is humbling to serve our nation's 34 million small businesses, and then to be
00:46:44able to walk their restaurant floors, their showroom floors, their factory floors with
00:46:48them and listen to what their needs are.
00:46:51And their needs are really along the lines of reduced regulation.
00:46:55They've suffered from four years of trillions of dollars of burdensome regulation.
00:47:00They almost faced a $4 trillion tax increase if we don't get this tax bill passed, the
00:47:06uncertainty from that.
00:47:08They're focused on a skilled workforce.
00:47:10They really need support on attracting that workforce into these what we call new-collar
00:47:16jobs for the fusion of technology and manufacturing, which is very exciting and is going to provide
00:47:23an on-ramp into the economy for towns that have been hollowed out by the prior three
00:47:28decades of shipping our jobs overseas.
00:47:31And so, obviously, our focus is on deregulating, supporting the tax cuts, providing capital,
00:47:37which we're doing at record levels for small businesses who are investing in themselves,
00:47:42and ensuring that they have the access to the counseling through our small business
00:47:46development centers.
00:47:47I'm also really pleased with our work to support our veterans who had been virtually left behind
00:47:53during the Biden administration.
00:47:56So what we are seeing is an opportunity to get the social engineering out of the SBA,
00:48:03get back to Main Street, leave behind the bureaucracy that had been built up over the
00:48:09last four years.
00:48:10And then, finally, small businesses want us to pursue the fraud that has happened in this
00:48:14agency that was swept under the rug the last four years, and get back to focusing the resources
00:48:19on them.
00:48:20They're already seeing the impact in the field.
00:48:23They said that they feel that the Small Business Administration is now there for them again.
00:48:28And so, you know, continuing to support our funding, and certainly the bipartisan Made
00:48:34in America Manufacturing Finance Act would be tremendous to continue to put America first.
00:48:40One of the things, you know, I'm always amazed at the, as you learn about the small business
00:48:46program, just how broad it is, and the tremendous things that can be offered to our small businesses.
00:48:54A lot of small businesses simply don't know.
00:48:58And I guess my question would be, you know, how can we help you, how can you help yourselves?
00:49:03What are we doing to make it such that small business is aware that there's this great
00:49:08vehicle out there that this committee, you know, has worked hard to support through the
00:49:13years, so that they can actually benefit from the opportunities?
00:49:19Well, we certainly take that responsibility very seriously to get the word out.
00:49:23That's why we've put 30% of our staff into the field.
00:49:26We'd love to partner with your offices in the field to make sure that they know the
00:49:31resources available.
00:49:32We'll be working with the Veterans Administration to reach our veterans in the field collaboratively,
00:49:39the USDA as well.
00:49:41So we would look forward to visiting Arkansas.
00:49:43We've certainly, our hearts go out to those impacted by recent disasters, and we've been
00:49:49on the ground serving disasters.
00:49:51In fact, we've put out more disaster loans in the first hundred days of President Trump's
00:49:57administration than all of the last year of President Biden's administration.
00:50:01So we are back on the ground in local communities, and would welcome the opportunity to work
00:50:07with your office to support Arkansas small businesses.
00:50:11Tell me about the small business loan volumes.
00:50:14What is SBA being able to accomplish in the first hundred days regarding small business
00:50:20loans?
00:50:21Yeah, so you're asking specifically about the loan program?
00:50:24Yeah, so we operate two core loan programs, the 7A loan program.
00:50:31We've seen tremendous increase in interest in that program.
00:50:35That's largely because we've put the guardrails back on the lending standards.
00:50:39Our lenders were very confused by the rolling back of the guardrails around underwriting
00:50:44during the Biden administration that unfortunately for that four-year cohort drove a $2.2 billion
00:50:52negative cash flow for a program that should operate at no cost to taxpayers.
00:50:57So we've cleaned up the underwriting standards and tightened that so that all small businesses
00:51:02that qualify have access to that, but that we aren't funding businesses that don't qualify.
00:51:09Our 504 loan program is also one that will benefit from the increased from $5 to $10
00:51:14million in manufacturing.
00:51:15That's a fixed capital asset program really aimed at restaurants and manufacturers, asset-based
00:51:22businesses.
00:51:23We're probably going to have the second highest year in that loan program in terms of volume.
00:51:30So we see an interest in Main Street businesses, rural communities, investing, and growing
00:51:35thanks to President Trump's economic agenda.
00:51:40Thank you, Mr. Chairman.
00:51:41Thank you, Senator.
00:51:42I'll call on Senator Van Hollen now.
00:51:44Thank you, Mr. Chairman, and it was good to work with you when you were a ranking member
00:51:49and I can't say that I'm happy we switched places, but congratulations, Senator Reid.
00:51:56Thank you for taking on the ranking member position.
00:52:00Administrator Leffler, welcome.
00:52:04I want to pick up actually on the SBA's role when it comes to disaster relief.
00:52:10I was out in Western Maryland on Friday.
00:52:13It's a beautiful part of our state, but it just got hit really hard by massive floods.
00:52:21The waters rose at an incredible rate, three feet per hour.
00:52:26In some places, the waters rose as high as 23 feet.
00:52:31You may have seen some of the images of students at Western Port Elementary School being evacuated
00:52:37by boat.
00:52:39So lots of damage done.
00:52:42I was out there surveying sort of the aftermath.
00:52:47The great news is communities are pulling together and the emergency responders were
00:52:52doing a great job.
00:52:54But lots of damage to small businesses, to homes, to personal property.
00:53:02I have been concerned to hear Secretary Noem talking about the possible elimination of FEMA.
00:53:09That's a debate for another day and another hearing.
00:53:13And I've been concerned about their talking about not allowing smaller disasters qualify
00:53:23for some of the FEMA declarations and relief.
00:53:26Because as you well know, it may be small on the larger scheme of things nationally,
00:53:33but they can be very intense locally.
00:53:35And the losses can be huge relative to the local jurisdictions, town's ability to handle them.
00:53:42So I just did want to get your reassurance with respect to the SBA disaster loan program.
00:53:50When we had the collapse of the Key Bridge in Baltimore, because that wasn't a natural
00:53:56disaster, that didn't qualify for a FEMA declaration.
00:54:00But the Small Business Administration was there.
00:54:02And I do want to thank all the men and women at the Small Business Administration that
00:54:06played an important role there.
00:54:08And so my question to you today is very straightforward, given what just happened in Western Maryland.
00:54:16Can I get your commitment that you will work with us?
00:54:19I think the governor's likely, not final, to make a damage assessment and declaration
00:54:26based on the surveys that they've been doing.
00:54:29And I would just like your assurance that you would work with us to make sure that if
00:54:34it qualifies, if the damage qualifies for the current criteria for SBA damage relief,
00:54:40that we could try to expedite that.
00:54:42Absolutely, Senator.
00:54:44And my prayers are with all who are impacted.
00:54:47Our team is already actively evaluating that.
00:54:50And as you know, an SBA declaration can be made even if there's not a FEMA declaration.
00:54:55So we will be on that very quickly, as we have been, and ensure that we provide whatever
00:55:02relief we possibly can.
00:55:04I appreciate that.
00:55:05Yeah, I walked, you know, like a local library.
00:55:07The mud was three feet deep.
00:55:10The book collection pretty much wiped out.
00:55:14The local fire department was in better shape, but lots of damage.
00:55:17If I could turn to student loans, because you mentioned some of the SBA traditional
00:55:23loan programs, like the 7A program.
00:55:27We've been hearing, although I haven't heard this confirmed, there's a possibility that
00:55:31people are trying to move the student loan programs from the Department of Education
00:55:36to the Small Business Administration.
00:55:40My understanding is, I think it's pretty clear that would require congressional action.
00:55:46Number one, do you share that view, and are you expecting to make that request as part
00:55:50of the upcoming budget or through other legislation?
00:55:54Senator, this time, you know, the repayments on the student loans have just started under
00:56:01the Department of Education.
00:56:03And we will be working closely with the Department of Education, Treasury, the White House, and
00:56:10all of you in Congress to determine the best path forward.
00:56:14And I do strongly support President Trump's decision to return educational funds to the
00:56:19states where they belong, with students and local education officials.
00:56:25But at this moment, there has been no final decision, and we will all be working closely
00:56:30together on that.
00:56:31Okay, I appreciate it.
00:56:32I don't want to get into a debate about this, but you do agree that in order to make those
00:56:37changes, that would require a change in the statute, right?
00:56:43Senator, I'll defer to the White House as to the path that they're going to take to
00:56:47make those changes.
00:56:49At this time, I don't have anything to announce.
00:56:52Okay.
00:56:53And just to make sure I understood your answer correctly, and you're not planning to make
00:56:58those proposed changes as part of the SBA budget request, fuller budget request?
00:57:04I have further conversations with the White House.
00:57:06I don't have any budget requests to announce at this time.
00:57:10Okay.
00:57:11Anyway, thank you.
00:57:12Just let me follow up on Senator Van Hollen.
00:57:22Last March, the President said in the Oval Office, I've decided that the SBA, the Small
00:57:27Business Administration, headed by Kelly Loeffler, a terrific person, will handle all of the
00:57:33student loan portfolio.
00:57:34We have a portfolio that's very large.
00:57:37That's a quote from the President.
00:57:38He is reconsidering this decision now?
00:57:41Senator, what we're focused on is supporting the White House's decisions and ensuring that
00:57:50we're able to take on whatever the President would ask us to do, and we would be working
00:57:56with the Department of Education and with Treasury should such a transition be made.
00:58:03Our agency operates a $444 billion loan portfolio that performs very well.
00:58:09It's a public-private partnership through lenders, much like the Department of Education's
00:58:14program is with outsourced servicing and so forth.
00:58:18We will be working with the White House on next steps.
00:58:23This portfolio is $1.6 trillion, and it has 43 million borrowers.
00:58:32One, it would be very difficult, I think, for any agency to assume that, particularly
00:58:37as we progress into the year and we don't have any direction.
00:58:42And also, if you're cutting your workforce by 43 percent, where will you get the people
00:58:49to run this very complicated loan program?
00:58:52And I must reemphasize what Senator Van Hollen said.
00:58:56You need congressional authorization to make this transfer.
00:59:01And so, if you don't propose it, then it can't be done, and I hope you can communicate
00:59:06that back to the White House.
00:59:08Just let me go one final point here on veterans.
00:59:13You're cutting veterans programs, and it seems to me inappropriate.
00:59:24You're cutting the veterans outreach programs, which include veterans business outreach centers,
00:59:30the Boots to Business program, and the Service Disabled Veteran Entrepreneurship Training
00:59:34Program.
00:59:36I think we should be doing more for veterans, not less, so why are you cutting aid to veterans?
00:59:41Ranking Member, I'm glad you asked.
00:59:44There is no stronger champion of veterans than President Trump, and that's why he plussed
00:59:48up the Veterans Administration budget by $5 billion.
00:59:53And as the daughter and granddaughter of veterans, my father actually started a business based
00:59:57on what he learned in the military for trucking.
01:00:00And I'm proud of the work we're doing at SBA to actually grow our veterans outreach.
01:00:05What we had seen was our veterans work had been crowded out by the DEI initiatives.
01:00:09We've rectified that.
01:00:10We're getting the small business contracting targets for veterans met again by reducing
01:00:16arbitrary DEI limits that the Biden Administration had put in.
01:00:20This week alone, we're conducting 15 veterans outreach efforts for Boots to Business and
01:00:26Reboot to serve our veterans in their local communities.
01:00:29And I'm excited to partner with Secretary Collins at the VA for an MOU we have to streamline
01:00:35the VET-CERT and VET-Biz on ramp into the small business ecosystem, and then also working
01:00:42with the Department of Defense Transition Assistance Program as veterans come into that
01:00:47transition phase and looking at starting a small business.
01:00:50So veterans are going to find that we are not cutting the VBOX.
01:00:55We are simply ensuring that they're working with our small business development centers,
01:01:01of which there are 1,000 across the country, along with our PCRs, which are our procurement
01:01:06center representatives, putting them on base at military installations to better support
01:01:12that small business ecosystem.
01:01:13So I'm really optimistic that we are going to make small business more accessible to
01:01:20more veterans than has ever been true before.
01:01:23Well, I don't think the numbers are quite as supportive.
01:01:27You are planning to integrate these veterans programs into the SBDCs and providing a $10
01:01:35million increase this year.
01:01:40Last year, or the last in FY24, the level of congressional funding was $18.5 million.
01:01:48So what you're proposing is a 46% decrease in funding directed to veterans, and the numbers,
01:01:56I don't think, lie.
01:01:59Ranking member, if you will, that's a floor, that's a $10 million floor, minimally, that
01:02:03we are putting into VBOX, but also note that we talked about our district outreach at 68
01:02:09district offices in addition to 1,000 SBDCs, so we have quite a network, and those are
01:02:15already delivering those boots to business and reboot efforts and the outreach on base.
01:02:21So we are going to supercharge the resources that we have and make them front and center
01:02:26for veterans as opposed to what happened in the last administration where everything was
01:02:30brought back to Washington and the veterans outreach was basically nonexistent.
01:02:35There's no stronger champion of veterans than President Trump and myself, and we are going
01:02:41to make sure that we make a difference working alongside Secretary Collins and the Department
01:02:45of Defense.
01:02:46Well, thank you, Madam Administrator, appreciate your testimony.
01:02:50Thank you, Mr. Chairman.
01:02:53Thank you, Madam Administrator, for appearing before our subcommittee today.
01:02:57Our members will have one week to submit questions for the record, due May 28th.
01:03:01I would appreciate it if your office could respond to those questions as soon as possible.
01:03:06With that, this subcommittee is adjourned.
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