WASHINGTON, D.C. – Today, the House Committee on Small Business is holding a full committee hearing to hear testimony from the Administrator of the Small Business Administration, the Honorable Isabella Guzman: “Oversight of the Small Business Administration.”

Chairman Roger Williams’ opening statement as prepared for delivery:

Good afternoon and welcome to today’s hearing which will focus on the much-needed oversight of the Small Business Administration.

First, I want to thank our witness, Administrator Guzman, for joining us today. As someone with ties to the great state of Texas, it is a pleasure to have you here. 

I hope this is the first of several productive hearings we will have with you this Congress, so I appreciate you making the trip up to speak with us today.

This hearing could not come at a more important time for Main Street America. Our nation’s small businesses are facing unprecedented levels of inflation, interest rates that are being raised at the fastest pace since the 1980’s, and a labor shortage that have windows plastered with help wanted signs across the country.

As small businesses have been working through these economic headwinds, this committee must ensure that the Small Business Administration is focusing their attention on ways to help them get through these daunting challenges. 

During the COVID-19 pandemic, the SBA was asked to step up in ways that they never had to before. While they were able to get money out the door quickly, the after-action reports showed there were serious problems within the agency. A disorganized management structure and a lack of basic guardrails to prevent fraud led to unacceptable amounts of waste of taxpayer dollars.

In the Economic Injury Disaster Loan program alone, the Office of Inspector General found potentially $78 Billion in loans and grants were fraudulently obtained. Criminal opportunists took advantage when the SBA was overwhelmed with the sheer volume of work they were asked to do, and the taxpayers were the ones left holding the bag. 

While there were many past findings that showed what could have been done to prevent fraud, there are other recommendations that were made in the last few months that could have remedied some of these crimes. Unfortunately, it looks like the SBA is not taking these recommendations seriously.

For example, against the OIG’s advice, the SBA has decided to end their collection and forgive all PPP loans with an outstanding balance of $100,000 or less. While I support ensuring that the forgiveness process is as seamless as possible for small business owners, you cannot help but wonder how many illegitimate entities were able to walk away with tens of thousands of taxpayer dollars because of this decision.

Given all the problems the SBA had during the pandemic, we must have a serious discussion on the role the SBA should be playing in the future.

The President’s budget proposal and some rules currently being developed by the agency make it very clear that this Administration thinks the SBA did a great job over the past few years and deserves more responsibilities.

I completely disagree with this assessment. With such high levels of fraud that occurred during the pandemic and the most recent failures of large banks in California and New York, I have serious concerns about expanding the government backed 7(a)-loan program and increasing SBA’s role as a regulator. Additionally, I am very concerned that the President’s budget request diverts resources away from programs that have bipartisan support and a proven track record of helping main street to duplicative programs with unclear performance metrics. And finally, we continue to hear how the customer service at the agency continues to fail our constituents. We must ensure the agency is capable of handling their current tasks before they expand into more areas.

Main Street America has been forced to endure profound challenges over the past couple of years. I hope this hearing can serve as the starting point to get the SBA back on track. Too much is at stake for America’s small businesses for it to not be.

I want to thank you all again for being here with us today and I am looking forward to today’s conversation.

With that I will yield to our distinguished Ranking Member from New York, Ms. Velázquez.

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