Committee on Small Business Hearing Examining the Effects of Inflation on Main Street
Chairman Williams Led a Full Committee on Small Business Hearing
Washington, June 8, 2023
WASHINGTON, D.C. – Yesterday, Chairman Roger Williams (R-TX) led a full Committee on Small Business hearing titled “Prices on the Rise: Examining the Effects of Inflation on Small Businesses.” Chairman Williams issued the following statement after concluding yesterday’s hearing.
“Yesterday’s hearing placed crucial emphasis on the severe impact inflation continues to have on our nation’s small businesses,” said Chairman Williams. “Inflation is an invisible tax on everything Americans purchase and is making it more challenging for small businesses to operate. The House Committee on Small Business will continue to draw attention to the crisis so stubbornly high inflation and interest rates are not the new normal for America’s job creators.”
Watch the full hearing here.
Below are some key excerpts from yesterday's hearing:
Rep Alford: “Mr. Gray, how are current administration policies making it more challenging for rural, small businesses to navigate the impacts of inflation?” Mr. Gray, Vice President for Economic Policy, American Action Forum: “Well, I would first speak to the current inflationary environment, as I think we would all agree is complex. I would identify, however, some policy errors that were made recently that exacerbated it. Certainly not the only cause. And as the members of the committee have already addressed that, the regulatory environment is a challenge for commerce. And I think the combination of those two elements are antithetical to our understanding of price discovery, which is the intersection of supply and demand. And these policies sort of push in the wrong direction.”
Rep. Stauber: “What kind of trends have you seen over the past year or so in small business loan activity? Like, have you seen an increase in the number of businesses that are unable to keep up with their loans or small businesses?” Ms. Lee, Executive Vice President and Chief Lending Officer, First Community Bank: “Actually, what we've seen is just a decline in applications because they're in a very difficult situation in which their profits are suffering. And as much as they would like to come to the bank to borrow money, they know that that's going to further their problems. And a lot of things are just services in the moment where you don't want to do some short-term lending and borrowing for long term capital.”
Rep. Luetkemeyer: “With regards to inflation, how is it affecting your small businesses that you're financing right now? Are they struggling as a result of that? And you're seeing increased past dues losses or businesses going out of business? What do you see as the effect of inflation on small businesses?” Ms. Lee, Executive Vice President and Chief Lending Officer, First Community Bank: “There's a variety of things. What we're really watching right now is any small loans that have a fixed rate at this point, we originate 5/1 ARM’s or 3/1. So that means they're fixed for five years or three years. So, they're in that time frame as they start to readjust those rates, that's where the stress comes in. We had one business owner that absolutely could not afford the increase in rates and other costs associated with his business, and he's put his business up for sale.”
Rep. Meuser: “You know… some don't think a little bit past what's right in front of us. But that being said, would more natural gas be beneficial Mr. Zittel? First of all, where you are in upstate New York, you probably have you'd like to you'd like to mine or gather some of that natural gas.” Mr. Zittel, President, Amos Zittel & Sons, Inc.: “We actually started in 1973 and started with our first well, which was an abandoned well. And we've got nine wells, but we can only go down to the Medina region, which supplies about 30 percent of the gas for our greenhouses and our greenhouse operation. If we were allowed to deep well, probably one well would do that and all of our houses and probably half the neighborhood. But we are limited. But we, we do have gas wells and yes, we are very short sighted, at least in our state, to say let's get rid of gas, let's go all electric. There's been comments and what would have happened in that November storm, and it would have been a lot more than 40 people die in Buffalo from freezing to death if we would have had all electric instead of gas.”