Transcripts For CSPAN3 Treasury Secretary Mnuchin Small Bus

CSPAN3 Treasury Secretary Mnuchin Small Business Administator Testify On Small... July 12, 2024

The Coronavirus Relief packages passed by congress. Good morning. I call this hearing to order. Without objection the chair is authorized to declare a recess at any time. I want to thank everyone especially our witnesses for joining us today for our committees hybrid hearing. I want to make sure to note some important requirements. Let me begin by saying that standing house and Committee Rules and practice will continue to apply during hybrid proceedings. House regulations require members to be visible through a video connection throughout the proceeding. So, please, keep your cameras on. And remember to remain muted until you are recognized to minimize background noise. In accordance with the rules established under hr965, staff have been advised to mute participants only in the event there is inadvertent background noise. For those members here in the room, i urge members and staff to wear masks while in the hearing room and i thank you in advance for your commitment to a safe environment for all here today. Secretary mnuchin, administrator, welcome to the Small Business committee and thank you for being here today. Let me start by saying i want to give a sincere thank you to all the staff of both your agencies who worked tirelessly over the last few months responding to this crisis. I am deeply appreciative of all the work that helps support millions of american jobs in a moment of unprecedented uncertainty. These are extraordinary circumstances and i would like to paint a picture for you of the magnitude of the devastation that Small Businesses are going through right now. Back in march it became clear that covid 19 will tear through our communities leaving almost no sector of our economy unscathed. And the heat on Small Businesses was in many cases deeper and grimmer than their larger counterparts. I have been on phone calls with Small Business owners in my district. Who have main stays in the community for decades who lived through 9 11 and the Great Recession and are now Holding Back Tears telling me if we do not do more to fix ppp and find longterm solutions that they cannot imagine their business. The source of income for themselves and their employees to survive the covid19 pandemic. In fact about 110,000 Small Businesses have already closed their doors permanently and an estimated 7. 5 million additional firms are at risk for the same fate. On top of all that they turn on the news and see headlines like trump Friends Family cleared for millions in Small Business bill out, sba exempted lawmakers, federal officials from ethics rules, and 660 billion loan program. Let me tell you, that is a gut punch to the Small Businesses that this program was intended to serve. The ones that didnt have the top notch Financial Connections to quickly get a ppp loan. While we are grateful to sba for providing data that i have been calling for since the start of ppp it is not secret that there have been errors that are cause for concern. I am troubled by the Bloomberg News report that at least 226,000 loans were likely misreported by congressional districts making it even harder for us to understand how businesses in our district fared in the program. Meanwhile a report from the new york city controller suggests that ppp loans were made in greater frequency in states less hit by covid19 than in epicenters like new york city. As we all know the epidemic has been especially unforgiving for communities of color. Minorities have borne the brunt of the Health Consequences of this terrible virus. We cannot let their businesses also disproportionately bear the economic consequences. According to a survey a mere 12 of black and latino Business Owners who apply for ppp loans reported receiving what they asked for and have anticipated having to close in the near future permanently. We dont even know how asian and native american Business Owners fared because Demographic Data wasnt asked to be voluntarily provided. That is why collecting Demographic Data on these loans was imperative. I will continue to press to set aside more resources for minority and women owned businesses and i hope that we will commit to do more for these businesses in what we are sure to be tough months ahead. I am sure you both can understand many in our country are frightened. They are angry. They are hurting. We are here today to bring transparency and accountability to ensure that america knows they have a government that works as well for them as it does for the well connected corporations and friends of this administration. As lockdown orders started in march, store fronts were shuttered and waves of layoffs were taking place. In response, congress provided relief to reeling Business Owners and their employees. First congress established the Paycheck Protection Program or ppp to provide forgivable loans to businesses and nonprofits for mainly covering payroll. Second to help Small Businesses that needed financing beyond ppp, Congress Gave more Flexible Working capital to more business faster. Knowing that Small Businesses bs operate on razor thin margins, congress created the program to get cash into the hands of Small Businesses quickly, to bridge the gap until their loans are dispersed. Despite the flaws in their implementation, this program has been a lifeline for millions of entrepreneurs and job creators, injecting over 670 billion dollars into the economy. To address concerns and make the program work better, our Committee Held numerous hearings and forums with Small Businesses, lenders and leading policy experts over the past few months. One of the top issues we heard from ppp stakeholders, is the incomplete and everchanging guidance. Borrowers testified that they had very little guidance regarding how to spend their loans so they could qualify for forgiveness. Lenders are still reporting the process for seeking forgiveness is not clear and an workable. If forgiveness is the centerpiece of the program, a streamlined, efficient process for getting those loans forgiven should be a priority. Turning briefly to idle, the lack of Clear Communication has been an ongoing issue. Given the urgency of this pandemic and the uncertainty for so many Small Businesses, sba must do a better job of communicating. At the spread of covid19 has accelerated in recent weeks, and lockdown orders return, it will be extremely important that we take Lessons Learned since march to stop unnecessary bankruptcies and make sure that these programs are working for americas small firms. We also need to explore other ways sba can support our Small Business sector, like turning to try and true Program Enhancements that work after the Great Recession. Once again, thank you for being here today. I now yield to the Ranking Member for his Opening Statement. Thank you, madam chair. I want to thank administrator carranza and secretary could mnuchin for being with us today and taking time out of your very busy schedules. Thank you so much for being here, both of you. What we agree we must be forward looking as we continue to respond to the covid19 pandemic, the topic of todays discussion is equally important. We must continue to Work Together to ensure the federal governments relief efforts face sound and prudent oversight. These programs were developed to assist the nations smallest firms. Instances where ineligible businesses and entities, including political organizations who benefited from the programs, must be examined closely. Take, for example, the over 300,000 dollars taxpayer backed loans that were received by the Ohio Democratic party in may. And madam chair, for the record, i would oppose such a bailout for the Republican Party as well, but it happened to be the Democratic Party in ohio that took advantage of this. I dont think it was ever intended for that type of thing to happen. Additionally, oversight of how well the billions of dollars allocated to assist Small Businesses was utilized hasnt heard of. That will help us formulate a future strategy and make well informed decisions that benefit the greatest number of americans. I happen to represent most of the city of cincinnati. For the past few months, i visited countless Small Businesses and obviously many of their employees as well. And i and my staff have spoken with representatives from the Cincinnati African American Chamber of commerce and the urban leak. Some of our smallest businesses, particularly those in minority and economically disadvantaged communities, oftentimes the smallest businesses and typically under ten employees, when this started and many of them still dont, they didnt have the strongest relationship with banks or Credit Unions when they were seeking these loans. Can i know that this has evolved and the chair has been instrumental in that effort as well, and we have worked with her and her staff on that, but we have to make sure that those folks in these economically disadvantaged areas have access to this. As i say, oftentimes, the relationship they have had with the Banking Institutions, Financial Institutions just isnt there. That makes it even tougher for them. It is impossible to legislate from washington for every single situation across the country. Likewise, it is impossible to regulate from washington for every scenario that may come up. All the folks in this room recognize this and have been reminded since march of that structural impossibility. Congress acted quickly earlier this spring. Speed was paramount in getting funds into the hands of Small Business owners to keep them afloat, when they were forced to shut down through no fault of their own. Consolidating six months of legislative work in a little more than six days, the coronavirus aid relief and Economic Security or cares act was passed with overwhelming, bipartisan support, republicans and democrats working together. And it was signed into law by President Trump on march 27th. This more than two trillion dollars Economic Relief package, delivered on our commitment to do Everything Possible to protect the American People from the Public Health and Economic Impacts of covid19. The cares act created the Paycheck Protection Program, or ppp, following passage of this land mark legislation, the sba at the department of the treasury worked tirelessly to execute the law and issue regulations to inform borrowers and lenders alike how the program would be administered. To the credit of everyone involved, the first loans flowed from private lenders seven days, just one week later on april 3rd. Since that date, the ppp program has distributed nearly 5 million loans to small firms in the amount of over half a trillion dollars. In my district and the surrounding area alone, Small Businesses utilize to preserve nearly half 1 million jobs. These successes cannot be ignored. Why is not alone. This program invited Small Businesses and workers a lifeline across the entire nation. Where there bumps in the road . Of course. As i stated earlier, its difficult to get a program this size up and running in a week. If there had been communication issues between the federal government in the lenders in the borrowers, undoubtedly, but that is the one of the reasons why we are here today, we must prepare and examine we must examine the pass to prepare for the future. Unfortunately, there are still challenges that are presenting obstacles for the nations smallest firms. Because we continue to face this threats, we must be forward thinking. More needs to be done and we have proven that when we Work Together, across the aisle, across the capital and across the different ends of pennsylvania avenue, we can move mountains. We arent done yet. I look forward to engaging with you madam administrator and you mister secretary as you as well as you madam chair as we continue to work for american Small Businesses, i want to thank you both for being here and thank the chair for holding this hearing today, and i yield back. Thank you mister chabot. I would like to explain how this hearing will proceed. Witnesses will have five minutes to provide a statement and each member will have five minutes for questions. Please ensure your microphone is on when you begin speaking and that you return to mute when finished. I would like to introduce our witnesses. Our first is the honourable carranza administrator of sba. Administrator carranza has an inspiring background. Born in illinois to an immigrant family from mexico, she began her career at ups as a parttime employee, ultimately climbing the ranks to become president of latin america and caribbean operations. In 2006, president bush named her deputy administrator for the Small Business administration. Most recently was the treasurer of the United States. Welcome back to our committee, administrator carranza. Witness is the honorable steve mnuchin. The secretary of the u. S. Department of the treasury. Mr. Mnuchin has a successful career as a banker at Goldman Sachs for multiple decades before leaving to join other hedge funds throughout the 2000. He was appointed treasury secretary by President Trump where he has served for the last three years. Welcome to the house Small Business committee and thank you for joining us today, mr. Mnuchin. Administrator carranza, you are recognized for five minutes. ,. . Thank, you chairwoman. Thank you. The mic is not. On maybe bring it closer to. You can you hear . Me yes. Thank you for the invitation to testify this morning. Im eager to update you on the progress made by the agency in helping Small Business whether the pandemic. Since march, the sba process more loan volume than it has in the entire history of the agency. As of this morning, the ppp has approved nearly 5 million loans and over 518 billion dollars in muchneeded Fiscal Relief to americas Small Businesses. We had minister to this first of its kind program with an eye toward equity, recognizing the pandemic has been particularly harmful to socially and economically disadvantaged businesses. We mobilized thousands of new lenders, including Community Banks, Credit Unions, companies, form credit lenders and hundreds of empty ice that specialized in providing the quantity to underrepresented communities through economic and disaster loans and idle advances the agency has reached over 8 million Small Businesses, dispersing nearly 170 dot 170 billion dollars in assistance. That is more than all other disasters combined in the agency. Idle loans are currently being processed in just five days, with disbursements occurring in just two days. These programs helped the Small Business sector survive once in a lifetime disruptions. Since early june, i have made a concerted effort to personally speak to businesses left reeling by this pandemic, and to Financial Institutions, so that i can see for myself what is working and where improvements need to be made. One of the scores of businesses i visited with an African American Logistics Management form and dallas. Sba loans provided him with a bridge, a financial bridge over the most mulches waters he has ever experienced. It helped him not only keep his employments on the payroll, but also hire new workers who receive comprehensive skills training and professional certifications. Many Small Businesses owners use that term, bridge, to describe how sba loans provided them with time and space needed to rethink, innovate, and to adapt their Business Models for success in this new environment. One African American manufacture in greensbo

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