[House Hearing, 117 Congress] [From the U.S. Government Publishing Office] COMMITTEE ON SMALL BUSINESS: 2021 MEMBER DAY HEARING ======================================================================= HEARING BEFORE THE COMMITTEE ON SMALL BUSINESS UNITED STATES HOUSE OF REPRESENTATIVES ONE HUNDRED SEVENTEENTH CONGRESS FIRST SESSION __________ HEARING HELD JUNE 29, 2021 __________ [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] Small Business Committee Document Number 117-022 Available via the GPO Website: www.govinfo.gov __________ U.S. GOVERNMENT PUBLISHING OFFICE 44-924 WASHINGTON : 2021 ----------------------------------------------------------------------------------- HOUSE COMMITTEE ON SMALL BUSINESS NYDIA VELAZQUEZ, New York, Chairwoman JARED GOLDEN, Maine JASON CROW, Colorado SHARICE DAVIDS, Kansas KWEISI MFUME, Maryland DEAN PHILLIPS, Minnesota MARIE NEWMAN, Illinois CAROLYN BOURDEAUX, Georgia TROY CARTER, Louisiana JUDY CHU, California DWIGHT EVANS, Pennsylvania ANTONIO DELGADO, New York CHRISSY HOULAHAN, Pennsylvania ANDY KIM, New Jersey ANGIE CRAIG, Minnesota BLAINE LUETKEMEYER, Missouri, Ranking Member ROGER WILLIAMS, Texas JIM HAGEDORN, Minnesota PETE STAUBER, Minnesota DAN MEUSER, Pennsylvania CLAUDIA TENNEY, New York ANDREW GARBARINO, New York YOUNG KIM, California BETH VAN DUYNE, Texas BYRON DONALDS, Florida MARIA SALAZAR, Florida SCOTT FITZGERALD, Wisconsin Melissa Jung, Majority Staff Director Ellen Harrington, Majority Deputy Staff Director David Planning, Staff Director C O N T E N T S OPENING STATEMENTS Page Hon. Nydia Velazquez............................................. 1 Hon. Blaine Luetkemeyer.......................................... 2 WITNESSES Hon. Earl Blumenauer, United States House of Representatives, Washington, DC................................................. 3 Hon. Ed Case, United States House of Representatives, Washington, DC............................................................. 5 APPENDIX Prepared Statements: Hon. Earl Blumenauer, United States House of Representatives, Washington, DC............................................. 8 Hon. Ed Case, United States House of Representatives, Washington, DC............................................. 10 Questions for the Record: None. Answers for the Record: None. Additional Material for the Record: Statement of Hon. Glenn "GT" Thompson........................ 13 Statement of Hon. Linda T. Sanchez........................... 15 MEMBER DAY HEARING ---------- TUESDAY, JUNE 29, 2021 House of Representatives, Committee on Small Business, Washington, DC. The Committee met, pursuant to call, at 10:00 a.m., in Room 2360, Rayburn House Office Building, Hon. Nydia Velazquez [chairwoman of the Committee] presiding. Present: Representatives Velazquez, Newman, Carter, Delgado, Andy Kim of New Jersey, Luetkemeyer, Williams, and Donalds. Also Present: Representatives Blumenauer, and Case. Chairwoman VELAZQUEZ. Good morning. I call this hearing to order. Without objection, the Chair is authorized to declare a recess at any time. I thank everyone for joining us this morning and I want to especially thank my colleagues for joining us today for the House Committee on Small Business Member Day Hearing. Let me begin by saying that standing House and Committee rules and practice will continue to apply during hybrid proceedings. All Members are reminded that they are expected to adhere to these standing rules including decorum. House regulations require Members to be visible through a video connection throughout the proceeding, so please keep your cameras on. If you participate in another proceeding, please exit this one and log back in later. In the event a Member encounters technical issues that prevent them from being recognized for their questioning, I will move to the next available Member of the same party and I will recognize that Member at the next appropriate time slot provided they have returned to the proceeding. For those Members and staff physically present in the Committee room today, we will continue to follow the most recent OAP guidance. Masks are no longer required in our meeting space for Members and staff who have been fully vaccinated. All Members and staff who have not been fully vaccinated are still required to wear masks and socially distance. I sincerely hope we all do our part to protect each other and our staff. Today is a chance for the Committee to hear directly from our fellow Members of Congress about their priorities for supporting programs and policies that promote small business creation and growth. Last year was a pivotal moment across our country that we all experienced and still are because the pandemic is not over. Our nation's entrepreneurs closed more doors in 2020 than in any other year on record, but Congress was able to save many due to bipartisan work by this Committee to provide over $1 trillion in relief. It is easy to focus on the problems and frustrations we have all experienced, but I want to remind everyone today about all the good we have accomplished for main street nonprofits and families. That $1 trillion funding was more aid in 1 year for struggling entrepreneurs than in any other year on record and the SBA rose to the occasion in distributing it. Every Member in Congress has a small business in their district that has been impacted by our work, both COVID and non-COVID related. I know that when we travel back to our districts, we are eager to hear from our local small business owners to understand what policies are working for them and what we can improve on. For the Members testifying here today, I know that you have been gathering feedback from main street businesses in your district and I am eager to hear more throughout this hearing. Besides our work on relief programs, this Committee's mission is to open the lucrative federal marketplace to entrepreneurs, strengthen capital markets for all small employers, and give small firms the tools they need to take care of their employees and build their companies. We do so while working together. Our Committee has a long history of bipartisanship because we all agree that small businesses truly are the backbone of our economy at the end of the day. They are what unifies us in our work and they hold our communities together. We saw that firsthand last year. Today, we have the chance to engage in an open dialogue on how we can collaborate to support small firms. Thank you to all the Members for being with us today. I look forward to our discussion and to working with you to foster an environment that promotes entrepreneurship and job creation in communities across the country. I would now like to yield to the Ranking Member, Mr. Luetkemeyer, for his opening statement. Mr. LUETKEMEYER. Thank you, Madam Chair, for holding this member hearing today and to the gentlemen who are with us this morning, the members. Throughout this Congress, members have heard from numerous constituent small business owners and job creators in a prioritized legislation to support the small business recovery. I am proud of the work this Committee has been able to achieve on a bipartisan basis such as the Paycheck Protection Program Extension Act, and I look forward to continuing our work together to empower small businesses and Main Street America in the recovery. COVID-19 devastated small businesses, and through no fault of their own, many were forced to close their doors due to overreaching state and local shutdown measures and altered capacity restrictions. As a response, Congress created numerous small business relief programs to provide much needed assistance to Main Street USA. Many of these programs, like the Paycheck Protection Program, have successfully assisted millions of small businesses providing billions of dollars in assistance. As small businesses continue to recover, we must ensure they return to operating independently. Prior to the pandemic, small businesses were reporting historic levels of optimism and confidence that resulted from President Trump's pro-growth policies of a low tax environment combined with efficient and pragmatic regulations. It remains clear that Congress has a lot of work ahead of it when it comes to the small business economy. Small businesses are currently facing labor shortages, rising cost of goods, inflation, and fears of increased taxes and burdensome government mandates. From ensuring that the smallest firms can employ workers, to providing necessary agency oversight to protect taxpayer dollars, I know we will be busy in the months and years ahead. Thank you to the members who have joined us today. I look forward to our continued work to ensure our Nation's small business environment which is rich in opportunities for growth. Thank you, Madam Chair, and I yield back. Chairwoman VELAZQUEZ. Thank you, Mr. Luetkemeyer. The gentleman yields back. I would like to take a moment to explain how this hearing will proceed. You will have 5 minutes to provide a statement and each Committee Member will have 5 minutes for questions. Please ensure that your microphone is on when you begin speaking and that you return to mute when finished. I will begin by introducing our panel before we move to testimony. With that, I would like to introduce our first witness, Congressman Earl Blumenauer, who represents the 3rd District of Oregon. Congressman Blumenauer is a tireless advocate for Portland and its surrounding communities. He is known in the halls of the Capitol as a consensus builder and that is evident from his work on the Restaurant Revitalization Program, a critical relief program that has helped thousands of restaurant owners keep their doors open. Thank you for your hard work and I welcome you, sir. You have 5 minutes. STATEMENT OF HON. EARL BLUMENAUER, UNITED STATES HOUSE OF REPRESENTATIVES, WASHINGTON, DC Mr. BLUMENAUER. Thank you very much, Madam Chair. I deeply appreciate the opportunity to be with you here today. Small businesses in my community and across the country have been saved because of the work that you and this Committee have done. Congress, and indeed the country, owes you a debt of gratitude. But you know well that the work is far from over. As primary author of the RESTAURANTS Act, we generated legislation to deal with the fact that the PPP, which made such a difference for so many was ill-suited for restaurants, who did not even know if they were going to be open in 8 weeks and certainly did not need to pile on more debt under these circumstances. As primary author of the Restaurants Act, I created the Small Business Administration's Restaurant Revitalization Fund. I am testifying before you today about the urgent need to replenish the Restaurant Revitalization Fund to allow all eligible applicants to receive relief. It was clear from the beginning of the pandemic that restaurants, bars, caterers, would be some of the hardest hit businesses of any sector. In April of 2020, 5.5 million restaurant workers lost their jobs, accounting for more than a quarter of the total job losses for the month. Indoor dining restrictions, limited capacity, and the public's personal health concern further prolonged the restaurants' challenges. It was estimated that we could see 80 or 85 percent of restaurants go out of business permanently without Federal assistance. I introduced the RESTAURANTS Act in June 2020 and worked with both Republican and Democratic colleagues to build a coalition of support for the $120 billion Restaurant Revitalization Fund contained in the legislation. An independent analysis found that the fund would generate more than a 2-to-1 return on the investment and bring back millions of lost jobs. The Restaurant Revitalization Fund was finally enacted as part of the American Rescue Plan and it provided $28.6 billion for restaurants, bars, and caterers. The Small Business Administration opened the Restaurant Revitalization Fund on May 3rd and received an unprecedented level of applications from small restaurants, bars, and caterers. Within days, the Restaurant Revitalization Fund had received more than 362,000 applications with a total of $75 billion in funding requested, nearly triple the available funding. The Small Business Administration was forced to close the program to new applicants on May 24th, citing insufficient funding from Congress. Essentially, it was done in a matter of days. While approximately 100,000 restaurants, bars, and caterers have received $27.5 billion in funding, there are hundreds of thousands of restaurants and millions of employees whose future hinges on this Committee's ability to replenish the fund. I have introduced bipartisan, bicameral legislation to replenish it with $60 billion in additional aid, enough to cover all outstanding applications and allow the Small Business Administration to continue its outreach to hard-to-reach communities. In fewer than 2 weeks, the legislation has already garnered 160 bipartisan cosponsors. It has broad support from every link in the trillion dollar restaurant supply chain. There is nothing more central to our communities, large and small, than their local restaurants. From first-time jobholders to classically trained chefs, restaurants support an array of workers at every stage of their career. They are integral to each of our congressional districts and they are still hurting. One or 2 good months is not going to make up for more than a year of losses or protect those jobs. It is critical that this Committee quickly come together to replenish the Restaurant Revitalization Fund. Without it, many of our beloved institutions will be lost forever. Thank you for your courtesy and permitting me to make that case, and I look forward to working with you as we build upon your prior success. Chairwoman VELAZQUEZ. Thank you. Thank you for taking time and thank you for all the great work that you have done to assist and provide relief to small businesses in our country. Now, I would like to introduce our second witness, Congressman Ed Case, who proudly represents Hawaii's 1st Congressional District. Mr. Case was born and raised in Hilo. His great-grandparents on his father's side immigrated to Hawaii in 1896 from Kansas, and his family has lived on many of the state's islands over the generations since. Before joining Congress, Mr. Case spent 2 decades at the Honolulu law firm of Carlsmith Ball, where he rose to managing partner. Congressman Case serves on the Appropriations Committee and I am also proud to serve with him on the Natural Resource Committee. Welcome, Congressman case. STATEMENT OF HON. ED CASE, UNITED STATES HOUSE OF REPRESENTATIVES, WASHINGTON, DC Mr. CASE. Thank you so much, Chair Velazquez, Ranking Member Luetkemeyer, and members of the Committee. Thank you for that kind introduction. And I am also a proud former member of this Committee during my prior service in Congress. I have always enjoyed that privilege. Thank you for the opportunity to share my thoughts with the Committee on two critical issues: 1) Of course, the continuing impact of COVID-19 on Hawaii small businesses, and (2) The need to ensure our small businesses are fully included in our Nation's recovery, especially in government contracting areas. Because Hawaii's large industry is tourism and hospitality, our economy and small businesses have been especially hard hit by COVID-19 related stay-at-home orders and travel restrictions. Hawaii's unemployment rate was one of the lowest in the Nation at 2.6 percent before COVID-19. It quickly peaked at 23.5 percent during the height of the pandemic and today Hawaii's employment remains the highest in the Nation at 8.1 percent. This economic crisis has had a profound impact on our small businesses which are the lifeblood of my state. Prior to COVID- 19, Hawaii had about 136,000 small businesses, roughly 1 business for every 10 people. Although it is difficult to pinpoint the exact number of small businesses we lost due to the pandemic, it has been estimated that well over 1,000 businesses in Hawaii permanently closed during the pandemic. Sadly, this includes Hawaii's institutions with long roots in the community like Love's Bakery, Like Like Drive Inn and many more. This impact would have been significantly worse if it was not for the decisive action of this Committee. Your hard work and ingenious work to create new programs like the Paycheck Protection Program provided a lifeline for thousands of businesses in Hawaii. I also want to commend the Committee for remembering our immigrant and underbanked communities in ensuring they are not being left behind. This has been critical in Hawaii, a state with unmatched ethnic diversity. However, segments of small business in Hawaii and throughout our country were not effectively targeted and still desperately need additional assistance. These include our restaurants and live event operators who despite rounds of Paycheck Protection Program and Economic Injury Disaster Loan Program assistance need additional funding from the Restaurant Revitalization Fund and increased access to the Shuttered Venue Operator's Grant Program. The nearly $80 billion requested by restaurants from the $28.6 billion Restaurant Revitalization Fund shows the desperate need of an industry struggling to recover. Because Hawaii small businesses are some of the most diverse in the Nation with the majority being minority-owned businesses, many were approved for Restaurant Revitalization Fund assistance only to have that funding precipitously halted by the current court action. We should honor our commitment to these small businesses and look to pass my colleague, Congressman Blumenauer's Restaurant Revitalization Fund Replenishment Act of which I am a co-sponsor. I have also spoken to many small business owners in the hospitality and live event industry that were left out of the Shuttered Venue Operator Grant Program. While I understand that there are some challenges in defining this industry, that should be eminently surmountable. If we continue to leave out those that support the live entertainment industry such as audiovisual rentals, specialty entertainment services, wedding operators and more, we will neglect a critical component of the hospitality sector. Lastly, as we work towards a comprehensive infrastructure package, Congress must ensure that our small businesses are fully included in this once in a generation investment. In particular, we must ensure that small business contractors, including Super 8(a)s 8(a)s, HUBZone, women- and veteran-owned businesses have meaningful and enforceable set-asides. This will require this Committee's continued oversight and focus but it is a critical component to helping small businesses and all of our districts truly recover from the COVID-19 pandemic. In closing, thank you so much for your leadership and work in helping to provide relief to our Nation's small businesses that are still struggling to survive the unprecedented disruption of COVID-19. Without your decisive action over the past year and a half, many more small businesses would have shut their doors. I look forward to continuing to work with you on behalf of our Nation's small businesses as we continue to transition from basic survival to recovery. Mahalo. Chairwoman VELAZQUEZ. Thank you, Congressman Case for everything that you have shared with us and for taking time out of your busy schedule to be here advocating on behalf of small businesses. This Committee will continue to work with you in addressing the issues that we are still facing, especially during the recovery and rebuilding after the pandemic. We appreciate the work that you have done and your advocacy on behalf of small businesses. Mr. CASE. Thank you. Chairwoman VELAZQUEZ. Now I would like to ask if any other Member would like to be recognized from the Committee. If not, if there are no other comments, I would like to conclude this hearing by once again thanking my colleagues for being here today. I can hear the passion and enthusiasm in your voice when you talk about ways to strengthen our nation's small businesses. Many of the issues you talk about are at the heart of what this Committee will be working on for the rest of the 117th Congress. We will also be giving a voice to small businesses and making sure that they are represented as we advance important initiatives like infrastructure. I encourage you to work with my staff and our Republican colleagues because working on behalf of small businesses is a bipartisan issue. I will also ask unanimous consent that Members have 5 legislative days to submit statements and supporting materials for the record. Without objection, so ordered. If there is no further business to come before the Committee, we are adjourned. Thank you. [Whereupon, at 10:18 a.m., the Committee was adjourned.] A P P E N D I X [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] [all]