Luetkemeyer: “The Real Impact of Inflation and Economic Headwinds on America’s Small Businesses”
Ranking Member Luetkemeyer's Opening Statement
Washington, July 27, 2022
WASHINGTON, D.C. – Today, the House Committee on Small Business held a full hybrid hearing. Republican Members of the Committee, led by Ranking Member Blaine Luetkemeyer (R-MO), focused on the important issues impacting small businesses, such as inflation, supply chain disruptions, and a workforce crisis.
Ranking Member Blaine Luetkemeyer’s opening statement as prepared for delivery:
Thank you, Madam Chair for convening our Committee this morning.
Later today, the Federal Reserve will announce its next interest rate hike.
The decision to raise rates is directly tied to the inflationary pressures our country is facing.
As we sit here today, inflation is at a 41-year high of 9.1 percent.
This elevated rate didn’t just happen out of the blue and has been rapidly rising for the last year despite some calling this transitory or temporary.
In addition to a CPI reading of 9.1 percent, wholesale inflation, or the Producer Price Index, is running hot at 11.3 percent.
These highs are impacting all Americans and all small businesses.
From the pump to the grocery store to the energy bill, it all costs more than it should, but you aren’t getting more for the money you are spending.
For a small business this means a cycle of price increases that can’t easily be offset.
The options or tools that they have at their disposal is limited.
They can raise prices on their own, which NFIB has found that 86 percent of small businesses have already done.
Or small business owners can decrease the goods and services available, use less expensive products, or resign to the fact that revenues will be down.
All options are disastrous for a small business owner, their employees, and the communities that they serve.
Inflation and the ongoing cost pressures cannot be ignored.
In survey after survey, small business owners report that inflation and rising prices are the top challenges facing their company.
When I am in my district visiting with small businesses, the conversation often begins and ends with inflation.
And it isn’t just rising costs, rather it is a multitude of economic headwinds that are hitting Main Street businesses.
From ongoing and persistent supply chain issues that are leaving shelves bare to an employment crisis where small businesses can’t find workers; current economic conditions remain forbidding.
In fact, NFIB found that small businesses anticipating a more robust and healthy business environment has soured every month this year.
Simply put, we are heading in the wrong direction.
Yet my democratic counterparts are proposing more spending and potential tax increases on all pass-through small business entities.
Higher taxes on the nation’s job creators do not result in growth, expansion, and job creation.
In addition to the proposed tax increases, the Biden Administration just finished off its first year in office by proposing over $200 billion in regulatory costs.
During a time of economic uncertainty that is hallmarked by inflation running at a forty-year high, it is illogical to propose tax increases and an enhanced regulatory environment.
Plain and simple, this Administration is ignoring the plight of small businesses.
From the Small Business Administration’s quest to become a voter agency to Treasury Secretary Janet Yellen’s refusal to testify before this Committee, the Biden Administration continues to disregard and overlook the top concerns of small businesses that produce almost half of the nation’s GDP and create two out of every three new jobs.
While some of my colleagues dismiss these concerns, we will not.
I am confident that if we listen and address the needs of our small business owners, including the soaring levels of inflation, our country will grow leaps and bounds.
The entrepreneurs, innovators, and startups of our nation can drive our economy forward.
In order for this to happen, we need to get out of their way.
We need to usher in a pro-growth economy that is focused on less regulations and less taxes.
Otherwise, this downward cycle will continue.
Thank you, Madam Chair, I yield back.