Ms. Ernst (00:00):
I now recognize myself for five minutes for purposes of an opening statement.
(00:05)
Senator Loeffler, as I already said, welcome to the committee and thank you for your willingness to serve in this role. I greatly appreciate the time you've spent meeting with me and my colleagues prior to this hearing. I want to take a minute to recognize some of your family here supporting you today. First, your husband Jeff, thank you Jeff for being here. Next your brother Brian and his family who I understand traveled to Washington D.C. from their farm in Illinois. And also your parents, Don and Lynda, who are watching the hearing from their home in Florida today. We appreciate you all making the trip here and tuning into this important hearing.
(00:48)
As a former member of this body, you understand the importance of the Senate's advice and consent process, and I appreciate that you have fully embraced the committee's standard, yet extensive, vetting of your experience and background in advance of today's hearing and our upcoming vote on your confirmation.
(01:07)
As a successful businesswoman, it is abundantly clear that you truly understand what it takes to be an entrepreneur. Throughout your distinguished career, you've risen through the ranks at multiple companies due to your determination and grit, and you've started many successful businesses yourself. Most importantly, you understand what it means to be overrun by Washington's bureaucratic overreach, and that government must instead get out of business's way so they can thrive.
(01:37)
Small businesses and their advocates are excited for your leadership. The committee has received several letters of support for Senator Loeffler's nomination. The mission of the SBA is to aid small businesses to ensure economic prosperity and free competition. Traditionally, SBA administrators programs and services falling… they fall into three main buckets. There's counseling, contracting, and access to capital. While SBA once may have been characterized as a smaller agency, COVID small business programs made SBA a household name, as the agency received a whopping $1.1 trillion in taxpayer funding to assist small businesses during the pandemic.
(02:24)
With that funding came big responsibilities. And I remain concerned the SBA under the prior administration failed to live up to its mission. I believe substantial reforms must be made to get the SBA back in shape, and that is going to require strong leadership. The Biden administration decided to turn a blind eye to COVID fraud and delinquencies, refusing to properly collect outstanding debt and fraudulent funds, which has huge implications to the taxpayer. Reports have indicated SBA charged off about $18.6 billion worth of idle loans in fiscal year 2024. Not once during the Biden administration was the SBA able to provide an accounting of their loans receivable and loans guarantees, which meant that The Government Accountability Office hasn't been able to even issue a financial audit of the agency since fiscal year 2020.
(03:25)
SBA also completely mismanaged a misinformed Congress last year regarding its disaster loan account, resorting in a shortfall lasting 66 days, an unacceptable failure for the disaster victims in North Carolina, South Carolina, Georgia, Virginia, and Florida.
(03:45)
I do appreciate that once the account was funded, SBA staff worked around the clock, including over the holidays to get the money out to disaster victims, but I never want to see that situation unfold again. While SBA is failing, it also appears that its workforce continues to stay at home. While it's more than 246,000 square foot, Washington D.C. headquarters sits empty. The GAO found that even if everyone did show up to work in person, the SBA's building space would still only be 67% utilized, which is a complete waste of taxpayer money.
(04:26)
That is why I introduced a bill to relocate 30% of the headquarters' workforce to the SBA district offices across the country and cut 30% of office space. The SBA has been completely out of touch with the real world challenges of entrepreneurs. And while the Biden administration simultaneously let SBA employees stay home, they also added positions in Washington D.C., while stripping offices in Iowa, New Hampshire, Utah, and other states. I would like to work with you, Senator Loeffler on ways to ensure SBA is effectively utilizing its personnel, and ensuring that small businesses in all parts of America are able to access SBA programs if they need them. I've detailed these concerns and others regarding the mess you have to clean up from the Biden administration, and potential land mines you will encounter in a letter to President Trump on day one of his new administration. I ask unanimous consent to enter this letter into the record.
(05:32)
Without objection, so ordered.
(05:35)
In Iowa main street is in trouble and I hear from my colleagues that this is true in their states across America. Small businesses are the lifeblood of our rural communities, and for too long under the Biden administration, they've been crushed with red tape and woke program requirements, with no one caring about how that affects the day-to-day operations. I see a great opportunity for the Trump administration and you Kelly, to revitalize small businesses in America.
(06:04)
Thank you again for being here and I look forward to your testimony. I now recognize Ranking Member Markey for his opening statement.
Edward J. Markey (06:12):
Thank you Madam Chair, and congratulations to you, and welcome to everyone here. I'd like to take a moment to welcome the newest members of the committee on the majority, it's Senator Curtis, and Justice, and Husted, congratulations, and on the minority Senator Schiff from California. I look forward to working with all of you. Senator Schiff I extend my sympathies to you and the people of California, it's devastating to see the horrific damage caused by recent fires in your state. We stand with you in these challenging times. But unfortunately, climate disasters like those in California and that damage that was caused by just Hurricane Milton and Hurricane Helene in a three-week period in September and October of last year, it caused, those three storms, cost $500 billion worth of damage, much to small business.
(07:16)
I mean that's more than half of the defense budget of the United States. That's the damage caused by three storms in a very brief period of time, not counting all the other damage that's caused. And it's only going to get worse and more expensive unless we invest in long-term solutions to keep communities safe. We need to provide resources for small businesses in places such as California and the southeastern states to recover, to adapt and to innovate.
(07:44)
And I was looking forward to this hearing to discuss work together on behalf of America's 34 million small businesses, including more than 722,000 small businesses in Massachusetts. We have 7 million people in Massachusetts and 722,000 small businesses. That's our state's identity. It is small businesses. However, we find ourselves in a new reality where programs across government can be cut at a moment's notice with a cryptic two-page memo leaving lawmakers and American families alike scrambling to figure out whether the government is open for business.
(08:24)
Can a new business owner looking to open her beauty salon expect to close on SBA loan and get her money on schedule? Yesterday we heard conflicting answers out of the White House. And I can only imagine what that uncertainty does to up first-time small business trying to meet its expenses; unacceptable. We can't allow a plumber or a child care provider in every town America, someone that may have spent their entire life working for someone else and is ready to invest in themselves, to question whether their government will keep its word and stand behind them.
(09:06)
Apparently we also live in a new reality where more than a dozen inspectors general can be fired without notice or cause in clear violation of the law that required a 30 days notice. Mike Ware, the inspector general at SBA was illegally fired by President Trump on Friday night while he was at dinner with his wife.
(09:32)
Inspector General Ware has earned bipartisan respect for his candor, for his meticulousness, and his tireless work ethic over 34 years of service. And because of his work, he was elected to actually chair the government-wide council of inspectors general. Having independent oversight at SBA is more important than ever given the breadth of its work. And I might add here that under Mike Ware's leadership as SBA's inspector general, he collected $9 billion in COVID-related fraud. Mike Ware did that job, and he's the chair of all inspectors general, just for the record. He got fired on Friday night illegally with no notice. Just wrong.
(10:20)
Our job on this committee is to support small businesses and create a ruthless Darwinian marketplace that would bring a smile to Adam Smith. Massachusetts is one of the wealthiest states in America per person, so we believe in capitalism, but we also believe in fairness. I want to ensure that every enterprising kid with a million-dollar idea has the chance to fairly compete in the marketplace.
(10:47)
We can promote innovation and competition by strengthening programs like SBIR, or the Small Business Innovation Research Program, and STTR, the Small Business Technology Transfer Program, which help bring many innovative ideas to life.
(11:04)
In Massachusetts, small businesses have won more than $8 billion in SBIR awards and over $722 million in STTR grants. And as ranking member, I want to work together with Chair Ernst to strengthen SBIR and STTR, keep businesses in Massachusetts, and Iowa, and across our country, and keep them competitive and build on the small business boom that was created under the Biden-Harris administration.
(11:33)
Under President Biden's leadership, we saw a record 21 million new business applications, more than $1.2 trillion in loans and grants to more than 13 million small businesses, 13 million small businesses, and a record amount of federal contracting dollars for small businesses including small disadvantaged businesses. We need to keep that momentum up, and I just am looking forward to this next couple of years.
(12:01)
Senator Loeffler, thank you for joining us today. I know we share a belief that access to capital in underserved areas is vital, and I look forward to hearing your vision for America's small businesses. In particular, I'm eager to hear how you plan to promote competition, innovation, and job creation. It's an absolute critical part of our economy, and as we know, a vision without funding is an hallucination, so we just have to make sure that we keep these programs intact, protected, and flowing for everyone. So I thank you Madam Chair, and look forward to this hearing.
Ms. Ernst (12:42):
Thank you Ranking Member Markey. And next I would like to recognize Senator Britt from the great State of Alabama, to introduce our nominee. Senator Britt, you are recognized.
Katie Britt (12:53):
Thank you, Chair Ernst, and Ranking Member Markey, and members of the committee. It is an honor to be here with you today to introduce my friend. She's President Trump's nominee to be administrator of the small business administration, former United States Senator Kelly Loeffler, a prolific job creator, an entrepreneur, and a quintessential American success story.
(13:18)
Kelly grew up on a family farm, became the first in her family to earn a college degree, and worked her way up to the highest levels of business. She joined Intercontinental Exchange when it had under 100 employees, and then spent nearly 20 years building it into a global powerhouse and a Fortune 500 company. She went on to found Bakkt, and as its CEO and first employee, she laid the foundation to take the company public in just three years. Since leaving the Senate in 2001, she's devoted her time to running a voter registration nonprofit.
(13:57)
To me, the most striking and most impressive part of Kelly's story is this: she gave up a successful career in the private sector to serve in the Senate, and donated every single paycheck while she was here to charity. And now that she's made the decision to serve the American people once again, when confirmed, if confirmed, which I believe you will be, and strongly hopefully in a bipartisan fashion, with her signature selflessness, she will once again donate her salary to charity.
(14:31)
Kelly is the perfect choice to lead the SBA. I want you to understand why this matters to me. First off, 99.4% of the businesses in the great State of Alabama are small, so what you do matters. And I'm also the daughter of two small business owners, and so I have seen the struggles of my parents firsthand. You've seen that when people get in these rooms in D.C. and create big, burdensome regulation, the truth is they hit the little guy the hardest. And you get it, you've lived it, and you're ready to fight for these individuals.
(15:07)
You're ready to fight for the American dream. You have a proven track record in delivering efficiency, accountability, and results-driven leadership, and she wants to empower every entrepreneur with the resources and support they need to pursue what they believe they can.
(15:26)
In closing, I'd like to say I have absolute confidence in Kelly's ability to strengthen our main strengths, to figure out how we get capital to underserved communities, to figure out how we roll back red tape, and let people do what they do best. Job creators soar and achieve their American dream. Helping our small businesses thrive like never before is what I am confident she will do.
(15:51)
So thank you so much for the opportunity to speak to each and every one of you, and thank you for giving her the utmost credence because she's who we need in this role as the next SBA administrator. Thank you.
Ms. Ernst (16:07):
Thank you, Senator Britt. And next we will have Senator Tim Scott here at the dais to introduce the Honorable Kelly Loeffler. Senator Scott, you are recognized.
Tim Scott (16:17):
Thank you Chairwoman Ernst, and Ranking Member Markey, and members of the committee. It's my honor to be here today to introduce President Trump's nominee to serve as Administrator of the Small Business Administration, my friend Kelly Loeffler from the great State of Georgia.
(16:32)
I agreed to introduce Kelly today because her path, like mine, to success, and to the U.S. Senate defied all odds. She's standing before you because she loves the Lord, she has an amazing work ethic, and frankly, she loves her country as much as anyone I've ever met. Small business in rural America run through the thread of the Loeffler family. I love the story of her family. She's a fourth generation farmer. Her grandfather had an eighth-grade education, her father, a high school education. She worked so hard that literally her hard work and her strong value system made her the first college graduate, and then later she earned her MBA.
(17:19)
Her story is frankly a story of remarkable success, and one that we should all be thankful that America continues to create all across the country. And one of the things that we oftentimes think of when we think about success and the American dream is home ownership. For me, the American dream was achieved through small business, so having someone to be the administrator of the SBA who understands and appreciates small business, I have a great passion for people like that. Someone who's not only… You are at the top of the food chain in business, but frankly I prefer the part of your story that starts with a woman working her way at minimum wage jobs, and working your way up that ladder. That we spend so much time talking about the top of the ladder that we forget that most of us have to climb that ladder rung by rung by rung, and you've done a marvelous job of doing that.
(18:18)
One of the things I'd like to celebrate about her time in the United States Senate, after being appointed in Georgia, was that during the pandemic, we work closely on relief for families and businesses across the South. We fought to improve access to the CARES funds to keep main street alive. You and I fought together to stop bad actors from taking advantage of fraudulent loans, and we backed President Trump's efforts to move supply chains from overseas, cut regulations, lower taxes, and empower American entrepreneurs to succeed.
(18:53)
By the end of your term, you had passed half a dozen bills into law and delivered $47 billion of relief funds to Georgia, to their employees, and to their small businesses. Kelly's career has been nothing short of amazing, proving that the American dream can be achieved through hard work, faith, with the right leaders in place. Kelly Loeffler is the right leader to put in place as the administrator at the SBA. Her proven track record is why we can have great confidence that the SBA will return to the gold standard under your leadership.
(19:36)
I'll just stop there with my prepared remarks, and simply say that as a small business owner for 15 years, I have great confidence in your ability to do the job. To my fellow members of this committee, I hope that you'll hear out, but I'm also asking for you to vote for her, because it is time for us to right the ship, to focus on the underserved communities around this country, and to make sure that every single zip code in this nation has strong, powerful, small businesses, because without small businesses, we will have high unemployment and low enthusiasm.
(20:18)
Thank you for your time.
Ms. Ernst (20:21):
Thank you Senator Scott for that kind introduction. Now I will note that the vote has started, so if we have members further down the dais that would like to go vote now, please do so.
(20:31)
Ms. Loeffler, if you would please rise, we'll swear you in.
(20:38)
Okay, Ms. Loeffler, raise your right hand. And this is the tradition of the committee to swear in our nominees, so we are swearing in today Kelly Loeffler to be administrator of the SBA.
(20:51)
Please answer the following questions. Do you solemnly swear to tell the truth, the whole truth, and nothing but the truth, so help you God?
Kelly Loeffler (20:59):
I do.
Ms. Ernst (21:00):
Should you be confirmed as administrator, are you willing to appear and testify before any duly constituted committee of Congress when requested to do so?
Kelly Loeffler (21:10):
[inaudible 00:21:10].
Ms. Ernst (21:10):
Okay. Are you willing to provide such information as requested by any such committee?
Kelly Loeffler (21:18):
[inaudible 00:21:19].
Ms. Ernst (21:20):
Thank you. You may go ahead and take your seat Ms. Loeffler, and you are now recognized for five minutes to provide your opening statement to the committee.
Kelly Loeffler (21:36):
Let me just say it's a distinct honor to be here today. Chair Ernst, Ranking Member Markey, and members of the committee, it's truly an honor to be before you today as President Trump's nominee for the administrator of the Small Business Administration. I'm as humbled to be here today as I was serving alongside many of you in the U.S. Senate, and I've appreciated the opportunity to meet with you, nearly every member of this distinguished committee, in recent weeks. I'm especially grateful to President Trump for entrusting me with the privilege and responsibility of serving America's 34 million small businesses. There is no stronger advocate for these job creators than our president, and I share his commitment. If confirmed, I will work tirelessly with him to make small business great again.
(22:28)
I want to thank my incredible husband Jeff, my wonderful family and friends who have joined us here today, in-person and via broadcast. Most importantly, I give all thanks and glory to God.
(22:42)
As someone who has spent my life working in small businesses, starting them, growing them, and helping them succeed, I know that small business is big business for America. They comprise 99% of all businesses. They create two out of every three new jobs, and employ nearly half of the private sector workforce. They are the opportunity and innovation engines that drive prosperity and growth, and they power the American economy as much as they power the American dream.
(23:15)
In his first term, President Trump made historic strides to empower job creators and job seekers alike, driving small business formation, a blue-collar boom, and through historic tax cuts, trade deals, and deregulation, his agenda created 7 million new jobs, delivered historically low poverty, and record employment for minority communities. His first term accomplishments were so great that following the 2024 election, small business optimism recorded its largest jump since 1980; that was more than two months before he even took office.
(23:54)
Small business is in my DNA. I grew up the fourth generation on our family's farm in Illinois. My wonderful parents, Don and Lynda, didn't have degrees, but they had faith and grit. They worked relentlessly to sustain our farm and small trucking company, risking everything to provide for us while navigating volatile commodity markets, and complex regulations, and facing countless day-to-day challenges. It's where my Midwestern work ethic was ingrained, working in our soybean fields, and waiting tables at local restaurants, preparing me for a lifetime of growing and starting businesses.
(24:33)
I became the first in my family to graduate college, later earned my MBA, and became the only CFA ever to serve in Congress. Since then, I helped grow a startup into a Fortune 500 company. For 10 years, I co-owned a WNBA team. I later launched a financial tech company as the founding CEO and first employee. I recall managing budgets in Excel spreadsheets, hiring my first team member, and working with regulators as much as I recall ringing the bell when two of those companies went public.
(25:09)
In the Senate, I strongly supported President Trump's historic agenda and pandemic response. Having spent years as a small business owner, I made it my mission to serve as their voice. I spent much of 2020 delivering relief, traveling the State of Georgia and meeting with Main Street entrepreneurs like Eric and Rachel from Dockside Seafood in Savannah. They were struggling to navigate the PPP program. The loan that we helped them get didn't just save the restaurant, it saved the jobs of 35 Georgians, and I'm so proud to say that they're still in business today.
(25:45)
Now, no matter the business, the challenges are consistent, from managing inflation and capital, to hiring a skilled workforce, and weathering uncertainty, job creators in the last four years have faced rising demands to comply with new rules, often drafted with unknown cost and consequence. This regulatory complexity crushes growth, picks winners and losers, and denies opportunity to those who dare to dream of a better future.
(26:15)
If I have the honor of being confirmed, I'll leverage my decades of business experience to champion America's entrepreneurs. We'll cut red tape and modernize this agency, while restoring the accountability and transparency that taxpayers deserve. I will crack down on fraud with a zero tolerance policy, while shifting SBA's focus [inaudible 00:26:39] D.C. back to main street across America.
(26:42)
And if confirmed, I'll collaborate across government and the private sector to deliver efficiency and results. Importantly, we will responsibly and urgently meet the challenge of disaster relief. I am committed to serving all who are impacted from North Carolina, to California, to Hawaii. Each taxpayer dollar entrusted to the SBA should have an economic multiplier effect, delivering productive capital to grow manufacturing, strengthen rural communities, create jobs, and develop critical technologies like AI and chips.
(27:19)
I believe we must continue to empower entrepreneurs from all walks of life, including women and veterans. Above all, the SBA's founding mission needs urgent restoration. Empowering small businesses, and growing our economy, that's exactly what the America-first agenda does. By ending inflation, cutting taxes, unleashing American energy dominance, slashing regulation, and reining in waste, fraud, and abuse across government.
(27:48)
In the last four years, small businesses have lost ground, burdened by inflation, big government regulation, and uncertainty that threatens the very existence of main street. President Trump's proven agenda will restore the small business economy, marking a return to made in America, with a golden era of prosperity and growth.
(28:10)
At the SBA, that means meeting today's dynamic challenges alongside America's entrepreneurs, not by sitting in Washington or working from home, we will honor their jobs by doing ours. Small businesses are the risk-takers, job creators, taxpayers, innovators, and the providers of first jobs to former waitresses like me. They represent the best of American free enterprise. Like President Trump, I've signed the front of a paycheck. We both understand there is nothing small about small business.
(28:46)
Chair Ernst, Ranking Member Markey, and committee members, thank you for your dedication to small business. I welcome your questions, and I would be honored to earn your support to serve as the next administrator
Kelly Loeffler (29:00):
… administrator of the Small Business Administration. Thank you.
Ms. Ernst (29:04):
Thank you, Senator Loeffler, for your testimony. Before we move to questions, the committee has received several letters of support for Senator Loeffler's nomination and I ask unanimous consent to enter into the record letters of support from the following organizations: America's Small Business Development Centers, Independent Community Bankers of America, Independent Women's Forum, Job Creators Network, National Association of Development Companies, National Retail Federation, Small Business Investor Alliance, Small Business & Entrepreneurship Council, National Association of Government Guaranteed Lenders, International Franchise Association, National Restaurant Association, Georgia Public Policy Foundation, governor of Georgia, Brian Kemp, Association of Women's Business Centers, Economic and Community Development Institute, U.S. Black Chambers Incorporated, and the National Small Business Association. Without objection, so ordered.
(30:06)
At this time, we will go ahead and move on to questions. I now recognize myself for five minutes of questions. Senator Loeffler, in our conversation, you made it clear that, given your time in the Senate, you understand the role of Congress. You denoted given your business experiences, you'd view us as your board and the taxpayers as your shareholders with responsibilities to all of us to ensure the SBA moves forward in the right direction. Unfortunately, the Biden administration did not share this view. I repeatedly requested information and those requests were ignored or fumbled. Can you commit to provide this committee with the documents and information it requests in a timely manner?
Kelly Loeffler (31:00):
Absolutely, Chair Ernst. I look forward to a collaborative and responsive relationship.
Ms. Ernst (31:05):
Yes, and I think that is essential to a good partnership between Congress, the Small Business Administration, and our constituencies. That's who we serve. Thank you for that.
(31:17)
Last year, SBA failed to alert or provide the committee with information before the agency ran out of funding for its disaster assistance program. Can you commit to more transparent, timely, and forthright dialogue between the SBA and this committee, should you become administrator?
Kelly Loeffler (31:38):
Absolutely, Chair Ernst. This should never happen. It will not and we will [inaudible 00:31:44] we have All the controls [inaudible 00:31:46]
Ms. Ernst (31:48):
I'd like to move onto your goals and vision for the agency. Now, we know that it's extremely important to me that we right-size the SBA and get it on a clear course to deliver its mission. Within your first 100 days as administrator, what would be your primary goals and objectives to get the SBA back on track?
Kelly Loeffler (32:10):
Thank you for the question, Chair Ernst. I, too, enjoyed the time that we were able to spend together with you and your staff. I think your leadership of this committee is critical and I appreciate the work that you've done to date. I look forward to working with this entire committee toward the aims of restoring the Small Business Administration to serving small businesses and supporting economic growth in this country. That's our North Star.
(32:39)
In order to do that, we must have accountability at this agency. It's in dire need of restoration and that starts with shoring up the financial situation. The fact that this agency has not been able to pass an audit for four years is a disgrace. We must make sure that we are accountable to taxpayers, that our programs are solvent, and working toward the aims of serving small businesses. Obviously, we're going to get our financial house in order and do it quickly, and we're going to do that in addition to making sure the programs are working for small businesses and taxpayers.
(33:18)
We know that the core 7(a) loan program is in need of oversight in terms of understanding the rising delinquencies and defaults. We will take a hard look at that. We will make sure that the disaster funds are resourced and accounted for and that there are no more situations where Americans in a crisis are faced with months of not having disaster relief.
(33:46)
And then finally, we are certainly going to get this agency back to work. I am grateful for President Trump's rapid action through his executive order to return to work. We're going to make sure that we have people at work committed to the success of small businesses that have a heart for small business but also have that sense of accountability to taxpayers.
Ms. Ernst (34:07):
Thank you so much for that. As you talk about the audit, we know that we need transparency within the Small Business Administration and hearing that is music to my ears. I began my elected career representing the taxpayers of Montgomery County as their county auditor and I'm just excited to know that you will follow through on that commitment.
(34:36)
As you know, I also serve as the chair of the Senate DOGE Caucus and we have a public mandate and a very rare opportunity to expose and roll back [inaudible 00:34:47] dollar boondoggles. SBA is not immune to this, which provides us extraordinary opportunity to streamline and disrupt the bureaucracies and their status quo. Will you commit to examining programs to root out fraudulent actors?
Kelly Loeffler (35:09):
This is critical because we're over four years past COVID. The last administration took a pass on rooting out fraud in these programs. I appreciate your work and your legislation, continuing COVID collections to make sure that we go after those that want to defraud the government. As I said, we will have a zero tolerance policy toward fraud but also toward waste and abuse. We will root that out within the agency and those that seek to exploit the programs.
Ms. Ernst (35:40):
Very good. Thank you very much, Senator Loeffler. At this time, I will turn the gavel over to Senator Curtis while I go vote and I will recognize Ranking Member Markey for your questions.
Edward J. Markey (35:52):
Thank you, Madam Chair, very much. On Monday night, President Trump's budget office issued a memo that directed agencies to cut off all federal spending outside of payments to individuals. The Trump administration issued this order even though this spending was authorized and appropriated by Congress and intended to benefit the American people. My first question is very straightforward. Do you believe that this action by the president to cut off federal funding authorized and appropriated by Congress was lawful?
Kelly Loeffler (36:33):
Senator, I disagree with the premise of your question because the money was certainly with regard to the agency's discretionary in many cases, but I fully agree with President Trump's decision to stop wasteful spending. It resulted in a landslide victory that many Americans were waiting for relief against excessive government spending that has skyrocketed inflation in this country.
Edward J. Markey (36:57):
He froze all programs. He did not freeze programs that had waste, fraud, and abuse. He froze all programs. Do you think that's lawful that he can freeze all programs?
Kelly Loeffler (37:09):
With all due respect, I completely disagree. Not all programs were frozen at all. He specifically, in the OMB, called out programs related to illegal DEI programs and programs that effectively linked to the Green New Deal that picks winners and losers. I think Americans breathed the sigh of relief when they saw that the waste, fraud, and abuse is going to get out of this government. It's going to stop-
Edward J. Markey (37:33):
No, wait a minute. No, no, no. On the next day, OMB did put out a statement saying funds for small businesses are not subject to the order. He did not single out of these programs initially. They were under this cloud of freezing all programs. It had to be clarified and that's good for small businesses but only for now. This uncertainty, the cloud which was placed over the head of small businesses across the country, that could return at any moment. It's just a dangerous precedent that the president set. So I hope-
Kelly Loeffler (38:10):
Senator, if I could add, there was no pause in the individual assistance.
Edward J. Markey (38:11):
If I may finish, I hope that you would hold President Trump to upholding the law. If President Trump asked you to do anything illegal or unconstitutional in your role as SBA administrator, would you say no?
Kelly Loeffler (38:31):
Ranking Member Markey, the president is not going to ask me to do that. I'm not going to create a hypothetical situation here. I will faithfully uphold the law and President Trump is fighting for Americans to get back-
Edward J. Markey (38:42):
The president has already acted illegally twice in the last five days.
Kelly Loeffler (38:48):
I respectfully disagree.
Edward J. Markey (38:49):
He fired the inspectors general. That was illegal under the law. He froze all funding on Monday night. That was also against the law. It's not as though he won't ask you to do something illegal, unconstitutional. He's been doing it all week and this is the first week. Let me move on. Since its creation in 19-
Kelly Loeffler (39:11):
Ranking Member Markey, if I could just for the record note that these were not illegal actions. I support the president's actions. It's in his right to select the members of the executive branch. That's what he's doing and he certainly is in the right to stop wasteful spending as most presidents do when they come in and cause wasteful spending. Thank you.
Edward J. Markey (39:28):
No, the president violated a statute by firing the inspector general. It requires 30 days notice. It's a statute passed by Congress, signed by a president. It's a violation of law. He does not have the ability to be a king. [inaudible 00:39:40] have to follow the law.
Kelly Loeffler (39:42):
Senator, I believe there's precedent for this and it's in his right as the head of the executive.
Edward J. Markey (39:43):
Now, let me move on to SBIR, which has had staggering success across the country and especially in Massachusetts. Overall, Massachusetts has received 26,000 SBIR and STIR grants, $9 billion in funding, and I strongly believe in these programs and their potential for just supercharging our economy as those programs have in Massachusetts and states all across the country. When I met with you, you mentioned that SBIR should be awarded on a merit basis and I agree wholeheartedly that merit drives innovation. Will you commit to working with me and the committee to ensuring that any SBIR, STTR reauthorization effort maintains a merit based process and does not limit innovation?
Kelly Loeffler (40:42):
Absolutely, Ranking Member Markey. If I have the honor of being confirmed, I will look forward to working with you. I know we have a lot of common ground in support of small businesses, particularly the SBIR. And for those watching, it's the Small Business Innovation Research program that allows the United States to be at the forefront of technological, biomedical, and other types of national security-related technology research and innovation that is so important to this country. Thank you.
Edward J. Markey (41:11):
Thank you. Thank you, Mr. Chair.
John Curtis (41:12):
Thank you. I now yield five minutes to myself. I'm so pleased, Senator, to have you with us. We'll call you senator at least for now. When you came into my office, I really appreciated the connection we made about small businesses in our own lives and in your family's lives. And like many of the members here, we can all identify with the statistics in our state. I don't think they're very different in mine. It's 99% of small business, over half of all the employees in the state are small business, and it's such an important part of our economy, yet they often lack resources and don't have some of the advantages of larger businesses.
(41:55)
One of the things we discussed when you were in my office is how to best hook up the resources of your administration with those small businesses in our state. You were generous, I think if I remember correctly, to offer to come out to our state. I'm getting a nod of head, so I'm going to take a yes for that. I think as part of that, not just you coming out but helping educate my small businesses about what's available to them and how they can access those, so we'll look forward to your visit.
Kelly Loeffler (42:22):
Thank you, Senator. I'm very excited about visiting Utah. I'm excited to have you in the Senate and appreciated meeting with you and your staff in the basement office. I used to have a basement office. It's a great way to start.
John Curtis (42:34):
It is like a small business.
Kelly Loeffler (42:35):
That's right. It's a small business.
John Curtis (42:36):
I think we talked about… I had a small business before I came here. My father was a small business owner. My grandfather was a small business owner. My daughters and children have small businesses. And one of the things that I don't think America realizes is that most of these small businesses struggle just to keep the lights on. It's hard paycheck to paycheck. They don't have a lot of money to do a lot of things other people do. Part of that is they don't have the money for lawyers and attorneys to deal with the excessive regulations that sometimes we can put on them here from Washington D.C. And as a result, I believe regulations are disproportionately hard on small businesses. Share with me for a minute what you can do to lighten this burden and how do we make sure here in Washington that we're not the biggest problem with small businesses?
Kelly Loeffler (43:25):
Senator, thank you for recognizing that vital issue to America's 34 million small businesses, many who have fewer than nine employees. In answering your question, I'd like to speak to small businesses and saying you have someone that, if confirmed, will understand what it's like to have a small business, to worry about meeting payroll, let alone paying the bills for the small business. Particularly with the setbacks that small businesses have had in the last four years, losing about 10% on the top line revenue while seeing their costs increase by 20% due to inflation. Small businesses have lost ground.
(44:05)
Now, the SBA can be a way of helping small businesses combat what has been a tough four years if we deploy the resources appropriately and prudently so that the small businesses who need it most have access to that, be it through capital, be it through technical assistance, or other ways of supporting entrepreneurship in this country, which is so vital to our advancement on a global stage but also within our local communities. These are the businesses that sponsor the softball teams. These are the businesses that provide that first job and they're the ones that never work from home. They show up, they turn out their commitments to their customers, and that's absolutely what we're going to do at the SBA.
John Curtis (44:47):
Great. I appreciate that and look forward to working with you on that. Kind of a sister to that would be just federal policy in general. We know we're going to be talking about tariffs in the upcoming days. Once again, these are disproportionately hard on small businesses and we had this conversation in my office. Would love to invite you to work with the administration and the Senate as we move into a world where tariffs are real reality to figure out how to help small businesses accommodate better to those tariffs, things like a different runway timeframes when those hit the small businesses. Can you just comment on how we can deal with our small businesses and what might be one of their most difficult challenges?
Kelly Loeffler (45:32):
Thank you, Senator. If I have the honor of being confirmed, I will be a voice for small business. But let me assure you, there is no bigger small business champion than President Trump. He will make sure that small business has a voice at the table, but I also think it's important that we look at the data and not the hyperbole that happens sometimes in the media. President Trump was successful in implementing tariffs in his first term but also successful at keeping inflation right around that 2% mark, which is really some facts that the media always overlooks. You have my commitment that small businesses will be considered in all the decisions we make and that's something that I know firsthand from President Trump. He is their biggest advocate.
John Curtis (46:24):
I think I should yield my time.
Ms. Ernst (46:24):
And thank you, Senator Curtis, for manning the chair. I now recognize Senator Hirono. Oh.
Mazie Hirono (46:30):
Thank you, Madam Chair, and Mrs. Loeffler.
Ms. Ernst (46:32):
Welcome.
Mazie Hirono (46:33):
As part of my responsibility as a member of this committee, as well as all the other committees on which I sit, I asked the following two initial questions of all nominees who come before any of my committees. So I'll ask you, since you became a legal adult. Have you ever made unwanted requests for sexual favors or committed any verbal or physical harassment or assault of a sexual nature?
Kelly Loeffler (46:57):
No, Senator.
Mazie Hirono (46:58):
Have you ever faced discipline or entered into a settlement relating to this kind of conduct?
Kelly Loeffler (47:03):
No, Senator.
Mazie Hirono (47:05):
During the pandemic, you oppose Planned Parenthood health centers receiving PPP loans for ideological reasons even though, like other nonprofits, they were eligible for loans as later determined by SBA's own inspector general. Last week, the president fired the IG without proper notice as required by law and it's clear that President Trump believes he can do whatever he wants. As the administrator, should you be confirmed, would you commit to implementing SBA programs in a fair and impartial manner?
Kelly Loeffler (47:48):
Senator Hirono, let me first say I hope that we could be able to meet. I requested several meetings. I keep the people of Maui in my prayers. I know that they're still struggling through the disaster that occurred about 18 months ago and I hope that we can work together, but let me correct with all due respect both premises of your question. I objected to the Planned Parenthood receipt of COVID relief loans because they did not fit the parameters of the program because of their affiliation [inaudible 00:48:23]
Mazie Hirono (48:23):
Actually, Mrs. Loeffler, you do know that the IG said… Took a contrary position. All I'm asking is whether you can be fair and impartial in being the administrator of SBA. A very important position, as you say. There's so many small businesses throughout our country, so just a simple affirmation that you can do so is what I'm asking.
Kelly Loeffler (48:45):
Senator, I will faithfully uphold all of the laws and ethics rules.
Mazie Hirono (48:49):
Well, the thing is that, as I mentioned with President Trump, the laws that he likes are the ones he likes, and then the ones he doesn't like he considers them to be illegal, but I will move on. As a senator, you co-sponsored the resolution recognizing Ryan Sicknick, the US Capitol police officer who was brutally attacked during the January 6th insurrection and who later died as a result. Last week, the president issued blanket pardons for the January 6th insurrectionists, including those responsible for attacking Officer Sicknick. Do you agree with the president's decision to pardon these violent offenders? Yes or no?
Kelly Loeffler (49:32):
Yes, Senator. I strongly support president's pardon? These individuals were denied due process and it's time to get past political persecution in this country. That's what Americans voted for.
Mazie Hirono (49:43):
Mrs. Loeffler, they were not denied due process because they were tried and found guilty and some of them even admitted their guilt, so I am disappointed that you agree that these violent, basically criminals, should be pardoned. Then we get to the Lahaina wildfire. In 2023, Lahaina experienced wildfires that devastated the entire community, including schools, homes, businesses, and more. Key to that recovery, what their recovery has been, what I've described as the federal family of agencies, which of course includes FEMA and SBA.
(50:21)
Last week, the president proposed eliminating FEMA and he said, "Let the states take care of the tornadoes and the hurricanes and all of the other things that happened." I have seen the devastation in Lahaina and the rural FEMA and SBA played in the recovery. The SBA itself provided hundreds of millions of dollars in loans to help Lahaina recover. It would be a huge mistake to eliminate SBA's role in disaster response and relief and have states fend for themselves. Do you agree with the president's recent comments that states should be left to fend for themselves during and after natural disasters? That's another yes or no question.
Kelly Loeffler (51:09):
Senator, I disagree with the premise. The president strongly supports disaster relief. He was on the ground just last week in North Carolina and California.
Mazie Hirono (51:17):
Well, unfortunately he also said that the states-
Kelly Loeffler (51:18):
I also mentioned Hawaii in my opening remarks that we do support the continued relief there.
Mazie Hirono (51:23):
So you support the continuing involvement of the SBA in recovery?
Kelly Loeffler (51:28):
Yeah. And the president's been clear that individual assistance will not be paused.
Mazie Hirono (51:33):
I'm glad you do and that you support the continuing role, important role of SBA. When you were running for US Senate, you…
Ms. Ernst (51:44):
[inaudible 00:51:47]
Mazie Hirono (51:47):
Time flies.
Ms. Ernst (51:48):
Yes, the senator's time has expired.
Mazie Hirono (51:51):
Are you having a second round?
Ms. Ernst (51:54):
Oh, we can do a second round, yes, Senator Hirono.
Mazie Hirono (51:57):
If not, I'll certainly submit questions for the record. Thank you.
Ms. Ernst (52:00):
Thank you, Senator Hirono. Next, I will recognize Senator Budd for five minutes of questions.
Ted Budd (52:09):
Thank the, Chair. Senator Loeffler, congratulations on your nomination. Thanks to your family and your friends for being here and for leaving your role in private work twice to serve our country. Thank you for what you're willing to do.
(52:27)
Your state and my state and several others have gone through quite a lot since late September with Hurricane Helene. In the moments where I wasn't in Western North Carolina myself, I was able to look up and see a television. It was you standing there. I believe it was in Valdosta with President Trump, committing that if he were reelected, he would support. He's lived up to that. He's been back to Western North Carolina. I believe he's our rebuilder-in-chief. One of the things that we saw was that the SBA, under President Biden, it failed to notify Congress in a timely manner about the depletion of the disaster relief fund and didn't fulfill their reporting requirements along the way. So if confirmed, how would you ensure timely and accurate reporting to Congress regarding disaster loan account balances and funding needs? And how would you address the transparency failures that we saw during the Biden administration?
Kelly Loeffler (53:32):
Thank you for this important question, Senator. Let me assure you, my prayers are with the people of Western North Carolina. I know the president was there recently and is truly the rebuilder-in-chief, as are many private enterprises in your own state, Samaritan's Purse. I thank them for their dedication across the southeast and my prayers are with the people of Georgia and all impacted.
(53:58)
But let me say what happened on October 15th when Congress was shocked by the news that, despite assurances two days earlier, the disaster relief funding had run out. Now in business, this would never be tolerated and we see examples of this everywhere within this agency that I know we're all trying to get our arms around and make a quick correction on.
(54:25)
You have my commitment that we will ensure that disaster relief funding is there for hard-working Americans when they need it. And I look forward to your feedback on how the response has been so that we can strengthen the program and having the transparency so that this committee is routinely apprised of the status of the agency across all vectors that we're serving the American people on.
Ted Budd (54:50):
Thank you for that. The SBA Disaster Loan program, it's critical in supporting small businesses as you've mentioned a few of your earlier remarks and also being there to help communities during crises. But we have recent disasters like Hawaii or for us, Helene, that really revealed a lot of real shortcomings in the SBA's management and oversight of its disaster loan portfolio. These have led to funding shortfalls, lack of transparency, administrative inefficiency that really hindered a timely disaster response and recovery.
(55:24)
The people of Western North Carolina, I know of North Georgia as well, they felt these failures firsthand when they needed assistance most. Instead, they were left waiting due to the SBA's mismanagement during a time of dire need. Senator, will you commit to working with my office and this committee to address these shortcomings and ensure that the SBA is fully prepared to respond effectively to the needs of businesses in North Georgia, Western North Carolina, and the other states that are in need from disasters?
Kelly Loeffler (55:52):
Absolutely, Senator. You have my commitment.
Ted Budd (55:54):
Thank you. Senator, the numbers paint a troubling picture for small businesses. There was a survey from 2023, '24. It was the Intuit QuickBooks Small Business Index and it says that small businesses' employment declined over 51,000 jobs and it also said that revenue fell on average for those businesses about $12,000. That's a lot for a small business and that's also the steepest year-over-year decline since the Obama administration of 2015. That same time, the 2024 Goldman Sachs 10000 Small Businesses Voices survey revealed that 77% of small businesses are deeply concerned about their ability to access the capital that they need to operate reliably. As you know, small businesses, it makes up the bulk of our economy. I think President Trump has said small business is big business. This level of decline is, I'd imagine you would think as well, is it's unacceptable. So under your and President Trump's leadership, how can we expect to see a new golden age for our small businesses?
Kelly Loeffler (57:07):
Absolutely. Thank you for that question. Because President Trump is restoring the golden era for all Americans by strengthening our economy, making our country more safe and secure, and ensuring wasteful taxpayer spending is not driving up inflation. Inflation is the number one problem, not only facing families but small businesses. They're looking at 20% higher costs on at least 10% lower revenues. That's an unsustainable situation for our employers who are putting it all on the line. Small businesses have my commitment that I will have their back.
Ms. Ernst (57:43):
Thank you, Senator Budd. I now recognize Senator Schiff for five minutes of questions.
Adam Schiff (57:48):
Thank you, Madam Chair. It's an honor to serve on this committee and represent California's 4.2 million small businesses, including tech startups, nonprofits, child care centers,
Senator Schumer (58:00):
… rural businesses, the arts and entertainment industry, and women and minority-owned businesses. That number is growing daily and I am very proud to represent these incredible business owners, innovators, and hardworking employees. Senator Loeffler, I appreciate the conversation that we had last week. I think it was last week. The weeks have seemed endless these days. As you know very well, horrific wildfires and high winds have ravaged California over the last month, displacing thousands of families and destroying homes, schools, community centers, places of worship, and countless small businesses. As these fires have impacted the livelihood of innumerable Californians, it is crucial that we know California will have the full support of the federal government to respond, to recover, and to rebuild, and we must rebuild resiliently. The SBA provides disaster assistance for homeowners, renters, nonprofits, and businesses of all affected by natural disasters. I got to see this really in operation, visiting the Discovery Resource Centers in Los Angeles, in Westwood and in Pasadena. SBA was on hand in large numbers to help small business owners and homeowners find what resources were available to them to help them recover and rebuild. I do want to echo the concern raised by my colleague, Senator Markey about the freeze on federal funding. I know there has been a subsequent statement saying that the freeze order has been lifted, but not the freeze. None of us really know how to make heads or tails of that. But what concerns me is that even if the administration says that help to individuals will not be affected by this, if federal funding to SBA is curtailed, then it means SBA cannot make loans to individuals and to small businesses. And at a time when Californians desperately need that help, any delay, any uncertainty will just add additional injury.
(01:00:19)
I've also been distressed by some of the calls to condition funding to California. California has contributed more to the recovery of other states than any other state in the Union. And I want to ask you first of all to recommit to something we discussed privately, and that is to ensuring if confirmed that all states, not just California, but all states receive speedy relief for disaster victims and survivors without regard for whether a state is red or blue or green or yellow or anything else. Are you committed to in a colorblind political affiliation blind way, make sure that SBA assistance is speedily provided to small businesses in every state?
Kelly Loeffler (01:01:10):
Senator, I appreciated our time in being in your office and discussing this important matter. Obviously my prayers are with California, but our efforts will be there as well. As President Trump demonstrated by his first official trip, typically, presidents might fly outside the country. He went to California. He immediately appointed a task force, getting the very capable Rick Grenell involved. I think the President's actions have demonstrated his support for disaster relief. He's done it effectively in his last term, and I will support his efforts and leadership to ensure the people of California have the resources they need under President Trump's leadership.
Senator Schumer (01:01:53):
Well, let me just say I was grateful the President came to Los Angeles. I felt that if he saw the damage, he could not help but be moved, and I think and hope that he was. I am concerned though about some of the statements he has made about tying disaster assistance to the passage of completely unrelated voter ID laws or frankly, any other unrelated policy matter. Let me also raise the need, not just with respect to the disaster in California but elsewhere. Make sure that the SBA is proceeding apace with a sense of urgency that it is efficiently and effectively processing loan applications. I realize the balance is difficult because you have to avoid fraud and there was massive fraud among some who were applying for COVID relief. We do not want to see that repeated. But nevertheless, we don't want to see excessive to delays either. Frankly, I think firing the inspector general harms the ability to ferret out waste and fraud and abuse. But are you committed to doing everything you can to provide speedy attention to SBA applications while providing at the same time, safeguards to avoid fraud?
Kelly Loeffler (01:03:11):
Yes, I am Senator. Thank you.
Senator Schumer (01:03:14):
Thank you. Madam Chair… Or Mr. Chairman.
Senator Hawley (01:03:19):
Thank you very much, Senator. On behalf of the Chair, I'll recognize myself. Senator Loeffler, it's great to see you. Thank you for being willing to do this job. As you and I discussed when we met in my office, I love serving with you. You are a terrific senator and I'm just so glad that you're willing to do this job. It's going to be a great, great service to our country. Let me just ask you a question or two to start with about the priorities at SBA. I noticed that on day one of his administration, the last president issued an executive order directing federal agencies to adopt a broad racial equity agenda, and that was particularly a focus of SBA over the last four years. In fact, according to one report, by far the largest program that uses racial preferences in the federal government is the 8A program run by SBA.
(01:04:06)
To be eligible for it, companies had to show various racial and other characteristics in order to access funding. A federal court in Tennessee ruled that unconstitutional. Another federal court struck down a similar requirement, also administered by SBA, the Restaurant Revitalization Fund. Here's my question to you. President Trump has now thankfully with his own executive order, said, "We're going to put a stop to these DEI programs." How do you see implementing that at SBA, and will you get SBA refocused on actually helping small businesses, no matter who the owner is, no matter where they are, there'll be no tipping of the scales in order to fit some bureaucrat's agenda. We're going to help those in need. Get them stood up. We're going to execute on the mission of SBA. Tell us what you'll do about that.
Kelly Loeffler (01:04:49):
Senator, thank you and I appreciate the time we spent in your office discussing these matters. Importantly, President Trump's EO overturns a divisive and illegal DEI program that was spread throughout the government, and particularly within the SBA. This will allow us to reduce the burdens on small business for costly implementation of needless programs. But moreover, I think the best way we can serve small businesses is making SBA lending available to all who qualify as opposed to picking winners and losers and pitting Americans against one another. So you have my full commitment that we will root that out and make sure that it is broadly available to all who qualify.
Senator Hawley (01:05:31):
That's a fantastic answer. I'm glad to hear it. And let me just ask you about another priority. While the last administration's Small Business Administration was focused on this DEI agenda, what it was not doing was helping people in rural areas of the country like most of my state. In FY 24, just to take one example, SBA made 103,000 loans. Only 12,000 of those went to rural businesses. That's just over 12%. Of SBA's $56 billion in capital last fiscal year, only 6 billion went to rural businesses. That's just 11%. You want to talk about inequity?
(01:06:06)
There's an imbalance between urban and rural. And listen, we've got urban centers in my state as well. I'm all for small businesses in urban centers getting what they qualify for. But would you agree with me that our small businesses in rural America are extremely important? They're often the lifeblood of our communities, like the small town where I grew up, 4,000 people relies on small businesses. What will you do to make sure that small business in rural America is a priority, that they're getting access to the funds that they qualify for, and we're doing everything we can to help these small businesses revitalize these communities?
Kelly Loeffler (01:06:39):
Well, Senator, not only do I agree with you, I've lived it. I was raised in a family of a fourth generation small business. My nearest town had 600 people in it and my high school had eight small towns. Many of my fellow students parents were small business owners. I saw the hard work that they did, the complexity of dealing with increased federal regulation even back then. And we have to ensure that small businesses in rural communities are getting the support they need. I understand it firsthand and I know that we can do better and we will do better because this is an area that we can grow in terms of bringing manufacturing, made in America again, can come back driven by rural America, and paying attention to people that have been forgotten about. That's what President Trump does. He remembers the forgotten men and women working so hard in this country to make it work.
Senator Hawley (01:07:35):
Fantastic. Well, I welcome your focus on this. I look forward to working with you. Let me ask you just about fraud and waste and abuse, and you've talked about this some. I think your answers have been very heartening. You remember, in fact, you referenced it at the height of the pandemic, Congress enacted the so-called CARES Act to provide very necessary relief to millions of Americans. We also at the same time created however a special inspector general to monitor any fraud and abuse in that program.
(01:08:01)
Now for reasons that continue to elude me, the last administration, the last president when he came to office almost immediately limited the remit of this special inspector general, then tried to effectively defund it, and now we find out hundreds of billions of dollars were wasted or fraudulently dispersed or not properly paid back under these programs. Would you agree with me that we need the special inspector general, SIGPR, we need that office to be properly funded, we need it to be given the jurisdictional authority that it deserves. Senator Ernst has a bill to make sure that SIGPR gets that jurisdictional authority. Would you support that and can you talk to us about the need to be rooting out fraud and abuse and corruption?
Kelly Loeffler (01:08:44):
Absolutely, Senator. If I'm confirmed, I look forward to working with this committee to have a higher standard of accountability, to act with more urgency, to have a zero tolerance policy with regard to fraud and to making taxpayers whole. We have to get back to that accountability and getting those funds back into taxpayer hands as soon as possible.
Senator Hawley (01:09:05):
Very good. Thank you. And now I'll recognize Senator Shaheen.
Senator Shaheen (01:09:08):
Thank you. Congratulations, Senator Loeffler on your nomination and thank you for your willingness to serve. Welcome to all your family and friends who are here with you this afternoon. New Hampshire, like many of the states represented on this committee, has over 99% of its businesses who are small businesses. I certainly agree with the fact that small businesses are the lifeblood of this country. Two-thirds of jobs are created from small businesses.
(01:09:38)
My favorite statistic about our small businesses is that they create 16 times more patents than large businesses. So it's critical that we provide assistance to ensure that they thrive. Now, I heard from one of our businesses in New Hampshire yesterday that sells agricultural equipment to universities and they help research feed efficiency to help farmers. He was worried that the halt to funding this week, so the order that freezes spending, caused him to worry about his businesses. So what would you say to that business owner so that they're reassured that their orders are going to continue?
Kelly Loeffler (01:10:29):
Senator, I appreciate the chance to meet with you and your office and with your staff and your leadership in this committee as well. Certainly, the facts are that no individual assistance was or is part of that pause. What the President is rightfully doing is fulfilling his commitment that overwhelmingly Americans agree with, which is to root out waste, fraud, and abuse in spending programs, and it's not uncommon for presidents to come in and put a pause on agency discretionary funds that could be contributing to the problems we have with debt, with inflation. And there's no bigger champion of small businesses than President Trump. He's told me personally that small business is big business and he gets it. So small businesses can be assured that they will have a champion in me as well. Having been raised in a small family business, I know the risks that small business operators bear every day and we will ensure that they have a voice in this administration, and they do.
Senator Shaheen (01:11:37):
Well, I certainly agree that it's reasonable to review how programs are working and that we all should be in favor of getting rid of waste, fraud, and abuse. That doesn't help anybody. I think what's unprecedented about the current situation is the uncertainty that it creates for so many of the people who benefit from those programs and the fact that it's so broad and far-reaching. I enjoyed the opportunity to meet with you, and thank you for coming in and talking. One of the things that we discussed was the importance of our field offices within the SBA, and I was pleased that Chair Ernst mentioned the importance of ensuring that we keep people in the field offices and not reduce those staff members because that's where so much of the help for our small businesses comes from. So can you reassure us that you will focus to make sure that the district offices have the support they need and are able to staff up in the way that helps our small businesses?
Kelly Loeffler (01:12:53):
Absolutely, Senator. If confirmed, I can assure you, we will put an emphasis on the field, and we have in the SBA 10 regional offices and then 68 district offices. And the great aspect of this is we can be out with our entrepreneurs, with our small businesses not only delivering capital, but the technical support and counseling that they need to succeed, because we know that when small businesses have the counseling and mentorship that they need to fill in any gaps, they are more successful. And I've heard so many great stories from small businesses, I know you hear them every day, who rely on just that extra little help to become successful. I've seen them in our own community. So you have my commitment and I look forward to visiting your state as well.
Senator Shaheen (01:13:40):
Good, thank you. We look forward to having you come to New Hampshire. One of the most important roles you will have is as a spokesperson for small businesses, I was pleased that President Trump continues to maintain the SBA administrator as a member of his cabinet. I think that's very important. And one of the issues that I've been proud to work on that I think we need to continue to focus on for our small businesses is helping them access foreign markets. Because 99% of markets are outside of the United States, but only about 3% of small and medium-sized businesses do business outside of the United States. I was proud to help create the State Trade Expansion Program, the STEP program. I would hope that, again, you would commit to continuing to support that program and helping our small businesses get into those international markets.
Kelly Loeffler (01:14:41):
Certainly, the STEP program is a very appealing program to understand how we can broaden our work with exports, and small businesses can play a tremendous role there. I look forward to working with you and the entire committee to see where we can broaden the export program and make this more efficient and to deliver more wins for small businesses.
Senator Shaheen (01:15:06):
Thank you. Thank you, Madam Chair.
Senator Ernst (01:15:07):
Great. Thank you, Senator Shaheen. I'll recognize Senator Young for five minutes.
Senator Young (01:15:12):
Thank you, Madam Chair. Welcome, Senator Loeffler. It's great to see you here today, and congrats once again on this nomination. It's good to see your husband, Jeff, a Hoosier, a fellow Midwesterner behind you as well. When my father heard, not only that I was elected to the United States Senate, but that I was going to sit on the Small Business Committee in the US Senate, I can't tell you how excited he was. He perhaps perceived this to be known as the most powerful committee in the US Senate. It's not always known for that, but it was the most important committee to my dad, because when my dad was getting started in the business, he relied on SBA support loans in particular to help him grow his business.
(01:16:03)
And for him, this was the most important committee. And there's a certain wisdom to that. As we travel around our various states, we see that most jobs these days are actually created not by large enterprises, because those come and those go. They're great for ribbon cutting sometimes, but it's usually the smaller enterprises. And to the extent we can optimize our policies so that more people will start these small businesses and they grow into larger businesses, that's the key to economic development. So really important post you're going to be occupying here. If confirmed, how are you going to work to keep our small businesses competitive today and resilient tomorrow? An open-ended question.
Kelly Loeffler (01:16:49):
Thank you, Senator, and I agree with your dad. I couldn't be more humbled by this awesome responsibility for small businesses that power our local communities that do create two out of every three new jobs in America. That's incredibly powerful. So I think there's a number of things we can do to make small business more competitive. First of all, respecting that small business is about free enterprise and it's not about the government. So we have to look at ourselves and say, "What are we doing within this agency to make it harder for small businesses to access capital, to access perhaps government contracting or counseling? Are we there for them?" A big part of that is getting everyone back in the office, off the golf course, into the office, being aligned with our small businesses where they are on Main Street and not K Street. So my focus is certainly going to be on the field activity, making sure everyone in the agency is accountable and making sure the programs actually work for small business. We'll be doing a deep dive.
Senator Young (01:17:51):
I think directionally, you're absolutely on the right course, and that's the most important thing at this point. Do you have specific ideas about how SBA might be modernized and improved under your leadership?
Kelly Loeffler (01:18:04):
Well, certainly I don't want to get ahead of myself. If I have the honor of being confirmed, I would look at a broad range of efficiency, both cost and technological efficiencies that could be gained. I'll be looking at organizational design. I'll be looking at skillsets and training that might be needed to deliver our services to increase our response times to small businesses. And we'll be metrics driven. We'll have goals and we'll be reporting that out to this committee.
Senator Young (01:18:35):
Well, I think there are members of this committee, count me in, who want to help you and the rest of the administration be successful as it relates to small businesses and the Small Business Administration. One of the things that you might consider doing is prioritizing an incentive for new businesses and small businesses to adopt the latest technologies. I just had a great exchange with Howard Lutnick, a Secretary of Commerce nominee, and we emphasized the importance of digital trade, which he strongly supports, unlike unfortunately the previous administration, but I think that's encouraging. But related to the Small Business Administration, I found that many Hoosier small businesses rely on digital tools, but the law doesn't clearly state if these costs qualify within the 7A loan program. So if someone wants to buy an AI technology, for example, it's unclear if the law will include that. So I've introduced legislation along with Senators Rosen and Budd and Shaheen, the Small Business Technological Advancement Act that would clarify and promote the purchase of digital tools with small businesses. If confirmed, would you be willing to work with me on this topic.
Kelly Loeffler (01:19:56):
Senator Young, absolutely if confirmed, I would be. AI is at the forefront of both, as President Trump said, a wake-up call to American innovation, but potentially as tools for automating small businesses, making them more efficient. And whether it's things like copilots or agents, I would support looking at that as a solution.
Senator Young (01:20:17):
Well, thank you, and I will be submitting a question for the record on another important topic, I know to you in our small businesses about how you intend to address bolstering SBA's cybersecurity infrastructure. Thanks so much.
Senator Ernst (01:20:32):
Very good. Thank you, Senator Young. Senator Coons.
Senator Coons (01:20:35):
Thank you, Chair Ernst. Thank you, Senator. Great to be with you, and thank you to your family and those who are here to support you. As I hope you know your predecessor in this position in the previous two administrations, I've had a particularly strong working relationship with. SBA Administrator McMahon came to visit Delaware several times. We worked well together. I would agree, my dad said the same thing, to Senator Young's comment. My dad started and ran a small manufacturing business and he thought this was the most exciting committee I could possibly be on. And it has been, in the past, a very productive committee.
(01:21:09)
My hope is that we will get back to churning out legislation that works with you, that we will appropriately authorize and review funds and programs. When we had a chance to meet two weeks ago, one of the programs I brought up was SCORE, which I suspect everyone knows. It was founded in Wilmington, Delaware. That's my obsession with SCORE. But I think one of the highest federally appropriated dollar for actual impact programs in history. There is more than 10,000 volunteers through SCORE who deliver roughly 4 million hours a year of free business plan consulting. SCORE clients return $59 in tax revenue for every dollar appropriated to SCORE. It needs to be reauthorized. We need to look at it to ensure it's operating well and that there's accountability. Would you support SCORE and its reauthorization and work with me to achieve a bipartisan reauthorization if confirmed?
Kelly Loeffler (01:22:09):
Senator Coons, I thank you for the time you shared in your office. I was also just delighted to hear now about your dad's sentiments, I agree. And I look forward to working with you to review SCORE, see how it can be made more robust, and to evaluating the program and sharing all of that data with this committee so that we have a very collaborative approach to ensuring our efforts are making a difference for small businesses. As you note, it's definitely had an impact, and we want to make sure that programs that work are made available to more entrepreneurs.
Senator Coons (01:22:45):
Well, those 10,000 volunteers help more than 300,000 entrepreneurs, so I'm very hopeful we can work together on that. A piece of legislation, Senator Rubio and I, now Secretary Rubio and I, worked on for several congresses was to help make sure that SBIR grantees actually produce commercialized technology. About half of SBIR awards lead to commercialized technology, but half don't. And this would specifically authorize some of the pre-market scale-up costs through SBIR. It's called the RAMP for Innovators Act. The SBA plays a critical role in coordinating SBIR activities across the whole government. I'd be interested in what your priorities would be for SBIR as a program and whether you would help work with us on reauthorization and ensuring that it doesn't just fund endless research, but actually funds the leap to the marketplace.
Kelly Loeffler (01:23:39):
Absolutely, Senator. I think the Small Business Innovation Research grants are critical to solving some of the challenges America has in scaling our technological innovations quickly. The program gives more dry powder and runway to these important technological breakthroughs, whether in the area of bioscience, technology, AI, drones, mission-critical things to our national defense that would not be possible without the support of research institutions. So I look forward to collaborating with this entire committee on the reauthorization and reviewing the program for where it can be strengthened to produce more efficient results, and to highlighting some of the wins to ensure that these are wins that generate a powerful return on taxpayer investments.
Senator Coons (01:24:27):
Another concern I've expressed in previous Congresses is the amount of federal contracting money that's going to small businesses. Small businesses continue to get a robust piece of the total federal pie, I think it's 28%, which exceeds the target, but it's for a smaller and smaller number of larger and larger small business firms. I'd also be interested in working with you to make sure that we actually are contracting federally as broadly as possible to as many small businesses as possible. I think as literally every colleague has referenced, 98% of the businesses in my state, even in the state of Delaware, which has a whole lot of incorporation, are small businesses. Would you work with me to make sure that we achieve those goals in terms of small business contracting?
Kelly Loeffler (01:25:12):
Absolutely, Senator. If confirmed I would like to work with you on that. I do agree that this program is vital for small businesses to have an awareness of and to have access to the program. If the programs become too complex that only a select few can find their way in, that voids the program's foundational beginnings. So I would look forward to working with the entire committee to ensure small businesses have an additional path to success. And I also wanted to acknowledge Administrator McMahon and her great work, and I hope that we can have the same constructive, collaborative, great relationship working for small businesses. Thank you.
Senator Coons (01:25:49):
I look forward to it. Thank you, Senator.
Senator Ernst (01:25:51):
Thank you, Senator Coons. Senator Husted,
Senator Husted (01:25:54):
Thank you, Chair Ernst and Ranking Member and my fellow colleagues. Great to join you on the Small Business Committee. And Senator Loeffler, congratulations on your nomination and look forward to supporting you when your nomination comes to the Senate floor. I know you are entering this job at a difficult time in the sense that there have been a lot of questions about fraud that occurred and lost money that has occurred during the pandemic. And there will be an expectation of accountability, which there should be for every tax dollar we spend. But at the same time, we know that time is money in business and small businesses, particularly during time of natural disaster or when they're just really trying to be able to make ends meet to keep the business open, and they may need help from the SBA, so that time is also so very important. So just give me some insights into the committee
Senator Husted (01:27:00):
… to how you expect to balance that accountability and speed.
Kelly Loeffler (01:27:07):
Thank you, Senator, and thank you for making time to meet in your first week here in the Senate. I enjoyed our conversation, and know that small businesses have a champion, based on your work in Ohio for them. You ask a critically important question about accountability of these programs. Americans are expecting them to be there when they need them. When they're not, it creates yet another layer of uncertainty at a time of devastation, or at least uncertainty if you're forming a small business. So certainly what we need to do, is have a review of these programs, what's working, what's not working. And make sure that it's data-driven, that we look holistically across the 7(a) Program, the Disaster Relief Program, and understanding what went wrong, what are the parameters of the program? Where have we gone outside the parameters and why? And what work we might do with Congress to strengthen these programs so that they're accessible.
(01:28:04)
Obviously, Chair Ernst has pointed out rising delinquencies in the 7(a) Loan Program, rising delayed payments, early defaults, and these are the types of things that red flags should be put up sooner. We need greater accountability in this agency. And certainly we can't find out two days later when we had assurances that there was a disaster fund ready for hurricane victims, that it's actually dry. That's an abuse of taxpayer dollars and of the program, and we need to get to the bottom of it. So you have my assurance that if confirmed, we will work closely to be a steward of taxpayer dollars, be accountable to this committee.
(01:28:50)
And I know President Trump strongly supports the small business community having the resources they need in an efficient manner, that respects taxpayer dollars. Because let's face it, the 7(a) Loan Program, the bread-and-butter loans that small businesses use to start, is meant to operate at a zero subsidy, meaning taxpayers do not fund these programs, they should pay for themselves when they operate appropriately. And they generally do that, but we're in a position right now, as this year starts, that, that may not happen. So we need to investigate that.
Senator Husted (01:29:26):
Great. One more thought. One of the things that I always talk to my team about, is customer service. How do we serve people well? Are we listening to our customer? And then what are they telling us? Then how are we turning that information back to into change, enhancements, things like that, that we can do. So I'm interested in your thoughts on how you intend to do that, and then encourage you to let us know what you learn, so that we can be better in what we do and how we serve those same customers.
Kelly Loeffler (01:30:03):
This is an area that I really look forward to getting into. The Field Program, the Field Operation that SBA has, could be incredibly powerful to increasing responsiveness, to tailoring programs that are more efficient to deliver resources to small businesses in a way that the original formation of the agency's [inaudible 01:30:25] was meant to do. So I think first of all, getting people back to work, getting people out in the field, tracking the data, and using that feedback loop, looking at how long our case-times are open, how long is a case open? When someone comes to us with a question, how long do they have to wait on the phone for someone to answer it? When you're a small business person, you don't have any extra time. I think what small businesses want to know is that there are people at this agency that understand the challenges and the complexities that they already deal with, and this agency doesn't need to be one of them. So we want to be part of the solution, not the problem.
Senator Husted (01:30:59):
Great. Thank you.
Ms. Ernst (01:31:00):
Wonderful, thank you. And welcome to the committee. Senator Rosen, five minutes please?
Senator Rosen (01:31:05):
Well, thank you, Chair Ernst, Ranking member Markey for holding the hearing. And Senator Loeffler, when you came to the Senate, your office was across of mine, from Russell and appreciate your service to the nation. You know how this place works and your willingness to serve again. I too have had a great relationship with all the past administrators, under both administrations because small business matters and I look forward to having the same ones with you. In our discussions, we talked about the challenges and the resources, and just being able to get to the people who need it, and help them do what is their dream or their idea, really important.
(01:31:46)
So Chair Ernst and I have had, we've had a bill out there for a while, we're going to hope, [inaudible 01:31:53] to talk about a little bit. We talked about it a little bit too, it's on childcare. Because childcare is so important, and the rising cost of childcare, severe shortage of affordable options, they're really financially squeezing, not just Nevada families, I would say, families all over this country, urban and rural. Lack of access to childcare, it's really a problem for small business and parents alike, and it creates barriers for people who want to start or even grow their business, right? And it makes it difficult for small businesses sometimes to retain employees, because they struggle to find affordable childcare. So this is why we know this crisis demands action.
(01:32:31)
Yesterday we reintroduced our bill again, Chair Ernst and I, the Small Business Child Care Investment Act. Our bipartisan bill will increase the availability of affordable, high quality childcare for working families by allowing nonprofits, your boys and girls clubs, your YMCA, your church, your mosque, your synagogue, whatever that is, I've even talked to senior centers in rural areas. They have a big footprint, commercial kitchen. They said, "We're a place for the community, we could put up childcare, right?" So this program doesn't cost anything. It just lets down the guardrail so that nonprofits have the opportunity to apply for the same resources, and now they can put this affordable childcare, they're nonprofit, they don't need to make a profit. We look forward to getting it over the finish line as quickly as possible. So can you discuss sometime a little bit how you feel about the childcare crisis, how it impacts small business, and are you open to SBA expanding access to resources and loans to nonprofits?
Kelly Loeffler (01:33:36):
Senator, thank you for the question and appreciated our time together in your office to hear more about Nevadans' needs, and how the SBA can be part of it. I think childcare is a relevant issue in every single state across this country. Small businesses particularly, given the need to provide for childcare for the owner, if you're a small business owner or an employee, it cuts across every single person that touches a small business. I think small businesses can be part of the solution. I'd love to work with you and Chair Ernst to review this potential solution, and to look at other ways that the SBA might support parents and children as they work in small businesses. So I look forward to those conversations and the input of the rest of the committee as well.
Senator Rosen (01:34:29):
Thank you. Something we had a great talk about was our veterans and how entrepreneurial they are, and how much they take the things that they've learned in the military and they can translate those to things when they come home. So Nevada, we are home to over 200,000 veterans and over 23,000 veteran-owned small businesses. Despite this, Nevada was without, for the longest time, a dedicated in-state Veterans Business Outreach Center, easier to say, VBOC, until 2023, when, at my urging, we pushed the administration to have Nevada have its first SBA VBOC. And our veterans, our transitioning service members, they receive that tailored support they need. Like I said, we talked about it with your own dad and how he started his business. It was such a great story. So I appreciate you shared that with me. So in the FY '25 budget, SBA requested an increase for veterans outreach, underscoring the importance of VBOCs in helping ease the transition from active duty to civilian life. So under your leadership, what do you see as the future for the Veterans Business Outreach Center, and how it helps?
Kelly Loeffler (01:35:39):
Senator, I couldn't agree more. Our veterans need the support of the SBA. And if confirmed, I would love to work with all of you on how do we better support our veterans. As I mentioned, my father learned skills, truck-driving skills in the Air National Guard that resulted in our small trucking business. We know that veterans have untapped potential that we can help unleash. I will commit to working with this committee and even across this administration with Secretary Collins to ensure that our veterans have the resources that they so deserve.
Senator Rosen (01:36:13):
Thank you. And I'll submit the rest of my questions for the record, but they're mostly on workforce development. We had a good chance to talk about how we train people right where they are, to give them the skills they need to stay in their communities and build back those neighborhoods and diners and all of that, wherever they are, and how important it is. So I look forward to hearing back from you, and working with you.
Kelly Loeffler (01:36:37):
Thank you, Senator Rosen [inaudible 01:36:39]-
Senator Rosen (01:36:37):
Thank you, Madam Chair.
Ms. Ernst (01:36:38):
Thank you Senator Rosen. And we will start a second round of questions. I believe Senator Markey, our ranking member, has another question. Thank you.
Edward J. Markey (01:36:47):
Thank you. One of the benefits of being chair or ranking member, is all the other members leave, and they don't even know that there's a hearing that continues, and we get to ask more questions. So earlier, one of the Republican senators asked you, Senator, about the DEI executive orders, and mentioned Section 8(a) for socially and economically disadvantaged small businesses, that it was deemed unconstitutional. It was not deemed unconstitutional. The application process had to change, and the program continues. So with that clarification, earlier you said, Senator, that President Trump's executive order overturned DEI SBA programs, and again, 8(a) for socially and economically disadvantaged small businesses, it's codified. So in your opinion, does an executive order overturn a law that was put on the books by this committee on a bipartisan basis?
Kelly Loeffler (01:38:07):
Ranking Member Markey, thank you for the question. I think the important thing to note here, is I support President Trump's executive order overturning DEI programs, but-
Edward J. Markey (01:38:17):
Can an executive order-
Kelly Loeffler (01:38:17):
… I've also committed to following the law.
Edward J. Markey (01:38:17):
… overturn … Okay, I'm sorry, okay. Yeah, please? No.
Kelly Loeffler (01:38:23):
Yes, I've committed to following the law. We will work with the administration to ensure that all Americans have access to the programs that exist in the Small Business Administration under the law, and will continue to keep this committee updated as to any modifications as we go.
Edward J. Markey (01:38:43):
So do you believe the law does in fact, an executive order does in fact overturn a law passed by the House and Senate and signed by a president? Is that your conclusion, that President Trump is right, and that all DEI programs are now removed?
Kelly Loeffler (01:39:08):
Ranking Member Markey, I've committed to you that I will uphold the law in all the programs, and we will communicate any changes to the programs to this committee.
Edward J. Markey (01:39:17):
You believe therefore, that you're authorized to change DEI programs because of an executive order, even though it's statutorily mandated that those programs are on the books?
Kelly Loeffler (01:39:27):
I support President Trump's executive orders, and we will ensure that we follow the law in the administration of the SBA.
Edward J. Markey (01:39:35):
Okay. Well, the Small Business Administration administers a number of programs that aim to level the playing field for entrepreneurs from underserved communities that have faced historical barriers to small business ownership due to discrimination and prejudice. The programs that this committee has put on the books include the service disabled veterans-owned small businesses, women's business centers, and 8(a) business development programs for disadvantaged. These programs and many others like them are codified into statute, and recent actions by President Trump seek to rescind these so-called, "DEI," initiatives. But as administrator, President Trump's executive order would also direct you to terminate diversity, equity, inclusion and accessibility positions at SBA. In light of that, we just have to remember that executive orders cannot change or rescind congressional mandates. We are the Article I-branch of government. When those Redcoats were going down Massachusetts Avenue in Massachusetts and the minutemen and women came out in Lexington and Concord, they were saying, "No taxation without representation."
(01:41:04)
They already had a king. They could pick a prime minister or a president, but they were going to have a House and Senate, which is why we're Article I in the Constitution. That's what the minutemen and women all across our country are fighting for. So Trump might think he can overturn what we do here, but that's what the revolution was all about. It was about having representation on this committee. You may say that you're going to support him and that he's the law, but he's not the law, okay? And I just want to continue this conversation with you, because I just think that there has to be an understanding that supporting women-owned businesses, [inaudible 01:41:43]-
Kelly Loeffler (01:41:42):
Senator, I can assure you I will.
Edward J. Markey (01:41:44):
Do you believe supporting women-owned businesses is DEI?
Kelly Loeffler (01:41:47):
Senator? I've never said that. Senator, I can assure you that I will uphold the law. I was a women-owned business.
Edward J. Markey (01:41:54):
Right, exactly.
Kelly Loeffler (01:41:54):
I had a majority, minority women-owned business for a decade. I understand the importance of it.
Edward J. Markey (01:42:01):
Okay.
Kelly Loeffler (01:42:01):
By having a well-functioning agency is the best way that we can assure that there is more access to these programs by a diverse range of communities without picking winners and losers. That's what the American people want. That's why President Trump won in a landslide, because the American people want fairness and merit brought back. You and I have discussed that in your office, that's what this country is about.
Edward J. Markey (01:42:24):
But you do understand that it has to be the Congress that changes the laws, it can't be done by executive order?
Kelly Loeffler (01:42:29):
Yes, Senator, I will uphold the law.
Edward J. Markey (01:42:31):
Okay, thank you.
Ms. Ernst (01:42:31):
Thank you, thank you, Ranking Member Markey. I'll make some comments to this discussion as well. We know that there are many programs that are codified. They are in law, and you will uphold the law, and I appreciate that answer. Unfortunately, what we did see during the Biden-administration was through a lot of supplemental movement from the administration, they did put into place different DEI programs within the SBA. So the executive order is likely to immediately roll back the Biden-era DEI mandates that were supplemental, but those that are not legally binding. So yes, I anticipate that you will follow the law, Senator Loeffler, should you be confirmed, and you're well on your way. I will assume your confirmation, not you. But again, there are many things that President Biden took within his own action, his own prerogative within the SBA that was not codified nor approved by this committee. So we will ensure that you follow the law, Senator Loeffler, but certainly we can roll back the things that were unilaterally done by President Biden in the SBA. Thank you, and I will recognize Miss Cantwell, Senator Cantwell, for five minutes.
Senator Cantwell (01:44:03):
Thank you Chair Ernst, and congratulations on taking over the chairmanship. Great to see you there, and look forward really, such big integration between small businesses in the State of Washington and our military and Hanford cleanup. So really great lessons that I think could be applied broader to other areas of the government. And great to see our new ranking member, Senator Markey. I know I'm probably feeling ancient at the moment, but it's not that long ago when Senator Kerry was the chairman of this committee, and he brought a lot of energy to the SBIR and other important technology startup issues that were a big part of the discussion at that time. So look forward to working with both of you on the committee. And it's good to see my former colleague again, congratulations on your nomination. You and I had a chance to talk briefly in the office. I wanted to bring up a couple of things. One, we had this question to Mr. Lutnick today at our Commerce hearing, but do you support the Minority Business Development Authority?
Kelly Loeffler (01:45:16):
Senator, thank you for your time in your office. I enjoyed our conversation. Certainly, I appreciate that program that the Commerce Department runs and see that there's potential for collaboration between SBA. I really do support working across the administration to ensure our resources are utilized, and we don't have overlap in our programs, and that they're serving Americans who need those services the most.
Senator Cantwell (01:45:42):
Thank you. And will you work with me to make sure that the Department of Agriculture meets this same small business set-aside challenge that DOD has so successfully done? But in this case, the Department of Agriculture really isn't giving our small mills the access that they need. So will you work with me to make sure that those important SBA issues are addressed at the Department of Ag?
Kelly Loeffler (01:46:09):
Senator, I appreciate our conversation about your timber business. I think if confirmed, I would look forward to working with Secretary Rollins to ensure that we have a collaborative relationship. I understand there was previously an MOU with the Department of Agriculture, and hope that we can collaborate to support small businesses in that regard as well.
Senator Cantwell (01:46:33):
Thank you so much. I appreciate that. When it comes to … Let's just carry that on, one of the reasons why we want this infrastructure is because if you think about reducing the fuel that we need, and some of the ideas like cross-laminated timber, you need to have the mills in those regions. So to get the mills, you have to have the agreement that you're going to give them some supply. But now look at the disaster we just saw in California, and we realized the situation is … We already knew this in the Northwest, we've had our share of pretty big dramatic fires.
(01:47:07)
But there was a border crossing issue in Sumas, where a town was flooded. And then a town of Malden where a fire wiped through the town, over 300,000 acres burned in wildfires in my state just in 2024. So how do we make sure that we keep politics … I feel like so much politics happened on federal funding in the last few years. How do we keep the politics out of it, and disagreements, and make sure … There was a case on the Malden Fire where it was delayed for months about a disagreement between the president then and our governor, and it took a new administration …. This was even though Cathy McMorris Rodgers and I were working together to say, "Let's do these funds." How will you help us make delivering disaster assistance urgently without all this noise that we're hearing?
Kelly Loeffler (01:48:06):
Senator, I appreciate the question. And I think, certainly your state has had its share of disaster. You had the bomb cyclone in November, and an ongoing recovery from that. I think Americans were stunned by the politicization of the hurricane response under FEMA, where they refused to go to homes with Trump signs in the front yards. Americans want to see the end to that. We should not be politicizing our disaster response. I think that's something that we have to restore confidence in. Certainly the SBA will be working with the Trump administration to restore integrity to the relief efforts.
Senator Cantwell (01:48:50):
I don't know whether the chair has had this issue, but probably, because there's disasters everywhere. That is this whole debate about the way the funding model works currently in taking care of communities who've experienced disasters. The urban communities, because they have density, are taken better care of. In the rural areas, although a rural community is a rural community. Sumas is an example. It's right by the border. It hangs together. If Sumas isn't there, I'm not sure we can sustain that border. What'll happen, is it'll get closed down and then what? All the traffic will then have to go down I-5, so it's a bad idea. Or in the [inaudible 01:49:28], we had an economy that was devastated and people were like, "No, we're not going to help you, because you don't really have the same ratio." I'm like, "It's a juggernaut of an economy. Just because it doesn't have density doesn't mean that it isn't a big problem."
(01:49:40)
So the GAO concluded that the SBA needs to recognize that rural communities experience disasters differently. Not really differently, they're devastated, it's just they're not in the same density. So as we consider how to make SBA loans for small, vulnerable rural communities more viable, do you think businesses and homeowners … We want them to return to these areas. We don't want to see a community, in our case, these are communities that sit on close proximity to the Cascades, but they're a huge tourism economy for the whole state. So they have a big footprint. So what are your thoughts on how we implement this SBA change, working with our colleagues, to get a better recognition of the economic impact that disadvantages rural communities?
Kelly Loeffler (01:50:31):
Well, Senator, I would love to work with you on that, to visit your state, to understand the dynamics there. I grew up in a rural community. I understand the unique characteristics of delivering relief. I mean, we lived in the heartland, lived through tornadoes, hailstorms, and other devastating efforts, that recovery together as a community. Often the TV cameras weren't there. You're recovering on your own. So how can we better ensure that disaster relief isn't based on, as you mentioned, any politics or media profile, but where the relief is sorely needed to prop up and strengthen the economic stability of that tax base, of the community, the culture, the people, the generations that live there and the industry that it supports? So I'd love to work with you on that if confirmed.
Senator Cantwell (01:51:22):
Thank you. Is my time expired, Madam Chair? Thank you so much. Sorry to go on, but those are-
Ms. Ernst (01:51:26):
No, that was [inaudible 01:51:27]-
Senator Cantwell (01:51:27):
… very important issues, and I so appreciate the opportunity to ask them and look forward to working on these with you.
Ms. Ernst (01:51:34):
No, thank you, Senator Cantwell. I would enjoy working with you on that as well, because yes, in the State of Iowa, we have had challenges with disaster recovery and the cost-to-benefit ratio. We have struggled with this for a very long time because of our rural areas. Just for the audience, if I can take the Chair's prerogative here and share with you, we have many disasters, flooding in particular in Iowa, where many restaurants in downtown rural communities are destroyed.
(01:52:07)
But the cost-to-benefit ratio is never high enough for the federal government to come in and provide that level of assistance. However, if a restaurant on an eastern or western coast along the ocean is destroyed, well, of course the cost-to-benefit ratio is going to be higher, the cost of that restaurant is much higher. So they are the ones that are likely to receive the disaster assistance, but not those of us that are in the Midwest. A home of one size in Iowa is much cheaper than a home on the coast, but it's still someone's home. It's still someone's business. So I think that we have a lot of work to do in this area, and I'd be happy to partner with you on that, Maria.
Senator Cantwell (01:52:54):
Well, thank you Madam Chair. I think the added thing that people don't realize, is that it also is an economy that generates a lot of revenue-
Ms. Ernst (01:53:01):
Absolutely.
Senator Cantwell (01:53:01):
… for your state. It could be an ag economy, it could be a tourism economy, it could be a community that offers something different. But if you take that out of the middle of your state, or wherever it is, because the ratio just hasn't been addressed correctly, then we're losing out on that big picture economic. So we have to get people to realize that relationship to the state overall should-
Ms. Ernst (01:53:30):
Right.
Senator Cantwell (01:53:30):
… somehow be considered in the ratio.
Ms. Ernst (01:53:32):
Yeah, absolutely. No, I thank you for that input, Senator Cantwell, and a number of issues were addressed today during this really productive hearing. Thank you for being here. I want to thank President Trump for your nomination to the Small Business Administration. I look forward to working with you upon your confirmation into this position. Because there are no other questions, I, again, want to thank you very much for your willingness to serve and to be here today, and for your family's support of you in this position. We are going to leave the record open until close of business tomorrow at 5:00 PM, Thursday, January 30th, for members to submit questions for the record. We will keep the record open for two weeks to edit statements and submit letters and any other relevant materials. Without objection, so ordered. Senator Loeffler, we would appreciate your prompt response to any additional questions that are submitted. With that, the Committee on Small Business and Entrepreneurship stands adjourned.