[inaudible conversations] is a todays committee will come to order and i want to thank everyone for joining us here today and want to welcome the secretary and the administrator and thank you both for being here and all the members for being here. This is the first opportunity to hear from both of you about the enactment of the act in particular as it applies to Small Business. It is a landmark legislation and less than two Weeks Congress passed the largest Economic Relief package. They worked tirelessly to make it possible every single one participated on the leadership of the Ranking Member, senator cardin, senator shaheen and senator Collin Collins isnt a r of the committee that was part of the task force and it was invaluable in helping craft a lot of this and i want the record to reflect dot. We have invited senator collins does it and participate and rightfully so because of the extraordinary contribution. As every member thats been involved, the administrator has an incredible amount of work to do to execute and administer the Paycheck Protection Program and there were bumps along the road. No one would say there wasnt. It is by far in my view no disrespect to anyone else by far the most effective and most impactful portion of the act to date. History will look back at it as an example of what the government can do in a time of crisis to be helpful to the country and if theres any dispute i want everyone to ask themselves what would the economy look like today had there not been a Paycheck Protection Program. It took a new approach as it was being negotiated the businesses were faced with a prospect of laying off workers not because of the weakness in their Business Model for the downturn in the economy but because the government told them you cant alternate or open your doors. You cant do business. In some respect it is the equivalent of a taking. We viewed it as with the government does as the power to do that and that is to help to compensate those that are damaged by it with no work available to be done. Until the normal conditions were restored between you the most efficient economic outcomes wasnt the best outcome from the common good it would have been catastrophic for the country. Within a 72 hour period the father was laid off and the mother and two adult kids were laid off and there was a massive calamity for the family. It is also bad for Small Businesses. Workers are not disposable inputs that can be discarded during tough times. They are especially of Small Business and i have personally heard nothing sure many of the members have from countless Small Business of the english, the personal anguish that many of them felt having to lay off employees many of whom had worked for them for decades. These were people tha that they knew, they knew their families, their children, they watched them grow up and they watched how much they depend upon these jobs to make ends meet. The Small Businesses need they could take out against their future earnings. They needed a lifeline and with the economy needed wasnt just government checks but to listen if you dela pinup delay off to e delay off altogether and i think as much as anything else to preserve the connective tissue of the economy which at its core is being attached to dignified work. It would have had a set of traditional. As nationwide lockdowns shut down the economy, we worked on this and remember the committee and those outside of the two main priority is, the size of it to make sure that it reached enough businesses and people and we needed to do it fast. The scope of the lockdown meant we needed sizable relief and its now at 670 billion. It is a lot of money and its larger than any other program larger than the 2008 stimulus bill and to some estimate some e Largest Program since the new deal. The care act was signed into law on march 27 exactly seven days later thanks to extraordinarily tireless work which is easy to criticize some watching from the outside but we are talking about people that were there overnight, four, five, six or 7 00 in the morning barely enough time to change their clothes, thanks to the tireless work of people working. The Paycheck Protection Program began seven days after Congress Passed it into the president signed it. Small businesses received funds before the people started receiving unemployment checks and other lending programs under the Federal Reserve are only just now beginning to operate. It isnt a criticism of those things it is just to describe the effort it took to stand up the program that didnt exist in just seven days. When this began on april 3 no one on planet earth have ever made for an approved the loan and had never processed a p. P. Loan or applied for one and in seven days, that can. The achievement came at the others. It shouldnt have happened. They represent a minuscule program however and most have since returned to them. The price to pay unfortunately for a program that in hindsight we know is among the most Successful Programs that the government has ever done to rescue the economy. It would be the worst month during the duration of the pandemic. What would that have looked like given Everything Else going on in the world and in the country right now . Without the lifeline, tens of millions of americans would have been permanently separated from their likelihood and stripped for long periods of time on the opportunity of dignified work. Many would quickly be condemned to poverty. It would have been hollowed out from the brick and mortar stores. Its tough out there. Forecasters and every one last month, 2. 15 million americans got their jobs back. Four and a half million american businesses have received loans equal to over 500 billion. But this is equal to 50 million jobs. A recent survey by the National Federation of independent businesses noted 77 of surveyed Small Business owners had applied for the loan. End of the 77 , 93 had received funding. As of june 6 there are Development Financial institutions and minority depository institutions now in the program. It accounted for more than 190,000 phones valued at 15. 8 billion. This is the record of a Successful Program and i want to thank everyone at all the members of the senate and partners in the house and of course the president for not just passing this is working to implement it. I do want to comment on the Economic Disaster loan program in the grand Advancement Program through the extended version offering direct government funding was eligible entities suffering injury due to the pandemic. To date they have approved more than 1. 13 million loans totaling about 79 almost 8,000,000,000. 3. 1 million of advances totaling another 10. 2 billion. The program has numerous challenges both responding to numerous disasters and of course under this current one. I raised concerns with the decisions of the existing program as a whole which only accounts for 2 of the disaster loans made and in particular i was concerned that it would be challenging for the agency to handle a disaster of this extraordinary magnitude. As such, the concept of using the lenders and that the direct government loan student short capital is reaching because of Small Businesses as fast as possible is one of the reasons that gave rise to the ppe. I commend the agency for standing up the program nationwide response to the unprecedented value of applications in a short period of time. Today unfortunately we see similar and challenges including processing disbursement timelines and communication issues. As many businesses rely on assistance to rebuild after the economic disruption caused by the pandemic, we look forward to the agency addressing the current challenges and how congress on this side we can work to support the agency and make improvements in the program. Today is an oversight hearing. There are many issues myself and members of the committee would like to raise to keep the Program Running smoothly especially as some businesses approach filing for loan forgiveness as earlier this month. But we should begin by putting these issues in perspective and recognizing the choices congress and the administration had to make in order to make the program succeed. With that i would now recognize the Ranking Member for his opening statement. First, thank you for containing the hearing but more importantly, thank you for your leadership in the role that the committee has played in a nonpartisan manner in order to help Small Businesses of america. This has been a proud moment of our Senate Career is for these very important programs to help the Small Businesses during covid19 we did this in a way that put them first. Secretary, welcome to the committee. I personally want to thank you for your availability. A. Of making it as effective as we can in the administration and to work as the need for legislative changes. Its provided 4. 5 million loans over 510 billion an incredible effort and we thank you very much for the hard work of the members of your agency. This committee helped craft and i was proud to be part of the committee consisting of the four senators, senator collins is with us today, senator shaheen and myself put together a list of all of the members in the senate and stood up to three programs. The program that has received most of the attention but also the idol Grant Program as well as the loan forgiveness program. When we initially created the program in march, we thought that our economy would be performing at a more normal level than it is today. So it seemed reasonable. As communities began the process of reopening it is clear that they will be up an wont be up t the end of the age we period switch for many will occur this month. I was proud to see the senate act responsibly passing Bipartisan Legislation that gives businesses with existing loans the discretion to use them over a 24 we period rather than the eightweek period. Its working for many employers. In the main monthly job report released by the Labor Department classified it has proven of those added back to the American Economy last month, more than 1. 4 per jobs in the industry many of whom secured loans through the programs. However, the economic challenge facing the country, the National Bureau of Economic Research announced this week that the United States economy is in a recession. And that the Unemployment Rate remains at the historical high level of 14. 3 , a level that we havent seen since the great depression. While the success is a wonderful couples and how there have been challenges in the program that have come into sharp focus given the massive protests the nation has witnessed over the past two weeks. The protests sparked by the death of george floyd has raised the awareness of the disparate Public Health and economic consequences of the covid19 pandemic on the communities of color, black americans in particular. The Unfinished Business in america more than 50 years ago the commission created by president Lyndon Johnson warned of the negative consequences of continued inequality. That was 50 years ago. The commission wrote america was headed toward two societies, one black and one white, separate and equal. There is no question we have faced strides since they released the report but there is an economic divide between black and white american. In 1968, the typical middleclass black family had less than one tenth of the wealth of a typical white family. It is the same today and exists at every level of education attainment a report found that there are no actions that americans can take you to laterally that will have much of an effect on reducing the racial wealth gap. It is made even worse by the difficulty in getting the lending. Of the minority Business Owners are two to three times more likely and more likely to receive less funding than the higher Interest Rates of those that they be received. Its with this inequality of mine that senator shaheen and i drafted language of the act instructing the treasury to issue guidance in participating in the program to prioritize loans for underserved Small Businesses. We want to prevent history from repeating itself because we knew that during the 2008 financial crisis, Small Business lending to the minority owned businesses fell dramatically and never fully recovered. The secretary and the administrator, these disparities are why i was so disappointed to read in the recent flash report that was prepared at the request of senator schumer and myself, the report found that the sba implementation did not fully aligned with congressional intent of the act because they didnt provide guidance on the prioritizing underserved and rural markets. Further it found they failed to collect demographic information for the Small Businesses seeking the phones. While i appreciate that they will be collecting demographic information on the loan forgiveness and set aside for the chairman mentioned and the secretary announced it is important that they follow the inspector generals call to provide guidance to lenders that prioritize underserved markets. They do not have access to traditional banking institutions. That is why they sba existing disaster loans were so important. I remain discouraged but these programs which have Great Potential to help Small Businesses seek to adapt to the new reality of the postcovid economy have reached fewer businesses than we had hoped. The democrats and republicans are expressing their frustration on the administration of the program, the slowness of getting approved, the arbitrary cap was put on the program as well as the fact of the lack of transparency. We need to do better. It serves a particular way for businesses and can be used for the working Capital Needs and those that do not have employees. The program is especially important for the minority owned and other underserved businesses which are less likely to have one employee and have fewer on average. Unfortunately the administration hasnt administered in a manner that makes it a reliable resource for Small Businesses. The administration has put in place requirements and limitations without notifying them of the decision to cap the loans at 150,000 even though the statute allows them to go up to 2 million. In may the administration also made decisions to stop taking applications from the Small Business is winning restaurants, retailers and other establishments that havent had access to since midapril. They are relying on you to make these loans more accessible. The Administration Must become more transparent. In the months since the passage, congress has been pushing for Additional Data on who is receiving the aid, and i appreciate the chairman and i have joined together in making that request and we have worked with the administration and weve gotten some of the administration that we need more of it. We are extremely disappointed to learn he had the same problems that we have had in havent caught in thgotthe information o carry out their oversight in the executive branch as well as the difficulties we have in the legislative branch. To help those receive additional funding but we need the data to ensure that the assistance is as effective as possible. We all agree that theres going to be the need for a second round how are we able to get that second round if we dont have the full information on how the first round is operated . We believe that it should go to the smaller of the businesses and to those that are the most in need. It should go to the underserved communities particularly in the rural areas and minority businesses, but we need to have the data in order to make those decisions. Finally, we must do more to ensure that the businesses have the tools and resources they need to address the longterm economic effects. I was proud to work with senator poker for a plan to outline steps congress can take to provide Better Health for Small Businesses in underserved and ud communities with regards to start off an operating capital as well as Technical Training and mentorship. The aim of the plan is to ensure that when we make it through the pandemic and when we have the next economic downturn, we have institutions, programs and knowledge to support Small Businesses underserved Small Businesses and in a timely way. Im under no illusions as we work to rid the nation of these any qualities. Before we can begin to make progress we must work hard to secure the progress we have already made pledges at risk in regards to covid19 did last week at the hearing the association told our committee tha