Transcripts For CSPAN Treasury Secretary Mnuchin Small Business Administrator Testify On Small... 20240712

Authorized to declare a recess at any time. I want to thank everyone, especially our witnesses, for joining us today for our committees hearing. I want to make sure to note some important requirements. By saying standing house and Committee Rules and practice will commit continue to apply through hybrid proceedings. Regulations require members to be visible through a video connection throughout the proceedings. Please keep your cameras on. Member to remain muted until you are recognized to minimize background noise. In accordance with the rules established under hr 965, stafford been advised to meet participants only in the event there is inadvertent background noise. For those members here in the room, i urge members and staff to wear masks while in the hearing room. I thank you in advance for your commitment to a safe environment for all here today. Mnuchin, administrator carranza, thank you for being here today. I want to give a sincere thank you of both agencies who have worked tirelessly over the last few months responding to the crisis. I am deeply appreciative of all the work which helps support millions of american jobs in a moment of unprecedented uncertainty. These are extraordinary circumstances and i would like to paint a picture for you of the magnitude of the devastation that Small Businesses are going through right now. Back in march, it became clear that covid19 would tear through our communities, leaving almost no sectors of our economy unscathed. Was deeper than their larger counterparts. I have been on phone calls with Small Business owners in my mainstaysho have been in the community for decades. Who have lived through 9 11 and the Great Recession, and are now Holding Back Tears telling me if we do not do more to fix ppp and find longterm solutions that they cannot imagine their business, their source of income for their selves themselves and employees to survive the pandemic. 0 small, of our 110,00 businesses that have closed their doors permanently. An estimated 7. 5 million additional firms are at risk for the same fate. On top of all of that, they turn on the news and see headlines familiesmp friends and cleared for millions in Small Business bailout, let me tell you. That is a gut punch to the Small Businesses this program is intended to serve. The ones that did not have the topnotch Financial Connections to quickly get a ppp loan. While we are grateful to sba for providing data that i have been calling for since the start of ppp, it is no secret there have been errors that are cause for concern. I am troubled by the Bloomberg News report that at least 226,000 loans were likely misreported by congressional districts, making it even harder for us to understand how businesses in our districts fair in the program. Meanwhile, a report from the new York City Comptroller suggested that ppp loans were made in greater frequency in states that were less hit by covid19 than in epicenters like new york city. Pandemic hasw, the been especially unforgiving for our communities of color. Minorities have borne the brunt of this Health Consequences of this terrible virus. Businesses,t their also businesses also disproportionally bear the consequences. A mere 12 of black and latino Business Owners who applied for ppp loans reported receiving what they asked for. Nearly half anticipate being forced to close permanently in the future. We dont even know how asian and native american Business Owners fared because Demographic Data was not asked to be voluntarily provided. That is why collecting, graphic Demographic Data on the loans is imperative. Moree we will commit to do for these businesses in what is sure to be tough month ahead. Im sure you both can understand many in our country are frightened. They are angry and they are hurting. We are here today to bring transparency to make sure american knows they have a government that works as well for them as it does for the wellconnected corporations and friends of this administration. As locked out orders started in march, storefronts were of layoffsnd waves are taking place. Congress provided relief to reeling Business Owners and their employees. Thet, congress established Paycheck Protection Program, or ppp, to provide forgivable loans to businesses and nonprofits for mainly covering payroll. Businesseshelp small that needed financing beyond ppp. Sbas programced to get more Flexible Working capital to more business faster knowing that Small Businesses operate on razor thin margins, congress created the program to get cash into the hands of Small Businesses quickly to bridge the gap onto their until their bones are dispersed. Until there loans are dispersed. This has been a lifeline for many entrepreneurs and job creators, injecting governance 670 billion into the economy injecting over 670 billion into the economy. We held numerous hearings with Small Businesses, lenders, and leading policy experts over the past few months. One of the top issues we heard from ppp stakeholders is the incomplete and everchanging guidance. Borrowers testified they had very little guidance regarding how to spend their loans so they could qualify for forgiveness. Theers are still reporting process for seeking forgiveness is not clear and unworkable. If forgiveness is the centerpiece of this program, a streamlined efficient progress forgetting those loans forgiven should be a priority. Turning briefly to idle, the lack of Clear Committee case and has been an ongoing issue. Given the urgency of this pandemic and the uncertainty for so many Small Businesses, sba must do a better job communicating. The spread has accelerated in recent weeks. Lockdown orders returned. It will be extremely important we take Lessons Learned since march to stop unnecessary bankruptcies and make sure these programs are working for americas small firms. We need to explore other ways sba can support our Small Business sector, like turning to triedandtrue programming enhancements that work after the Great Recession worked after the Great Recession. Once again, thank you for being here today. I now yield to the Ranking Member for his Opening Statement. Thank you, madam chair. Thank you administrator carranza and secretary mnuchin for being with us today and taking time out of your very busy schedules. Thank you so much for being here both. While the all agree we must be forwardlooking as we continue to respond to the covid19 pandemic, the topic of todays discussion is equally important. We must continue to Work Together to ensure the federal governments relief efforts face prudent oversight. These programs were developed to assist the nations smallest firms. Instances where an eligible businesses and entities, including clinical organizations who benefited from the programs must be examined closely. Take for example the over received by the Ohio Democratic party in may. Madam chair, i would oppose such a bailout for the Republican Party as well. It happened to be the Democratic Party in ohio that took advantage of this. I dont figure was ever intended for that type of thing to happen. Oversight of how well the billions of dollars allocated to assist Small Businesses was utilized is imperative. That will help us formulate a future strategy and make wellinformed decisions that benefit the greatest number of americans. Represent most of the city of cincinnati. For the past few months, i visited countless Small Businesses and obviously many of their employees as well. I and my staff have spoken with representatives from the cincinnati africanamerican chamber of commerce and the urban league. Some of our smallest businesses, particularly those in minority and economically disadvantaged communities often times the smallest businesses and typically under 10 employees, they when this started and they still dont have the strongest relationship with banks or Credit Unions when they were seeking these loans. I think it is something i know this has evolved in the chair has been instrumental in that effort as well. We worked with her and her staff on that. Those folksake sure in these economically disadvantaged areas have access to this. Often times the relationship they had with the Banking Institutions, Financial Institutions just is not there. That makes it tougher for them. It is impossible to legislate from washington for every single situation across the country. Likewise, it is impossible to regulate from washington for every scenario that may come up. All the folks in this room recognize this and have been reminded since march of the structural impossibility. Congress acted quickly earlier this spring. Speed was paramount in getting funds into the hands of Small Business owners to keep them afloat when they were forced to shut down through no fault of their own. Consolidating six months of legislative work in a little more than six days, the coronavirus aid relief and Economic Security act was passed with overwhelming, bipartisan support, republicans and democrats working together. It was signed into law by President Trump on march 27. This more than 2 trillion Economic Relief package delivered on our commitment to do Everything Possible to protect the American People from the Public Health and Economic Impacts of covid19. The cares act created the Paycheck Protection Program, following passage of this theslation the sba and department of the treasury worked tirelessly to execute the law and issue regulations to inform borrowers and lenders alike how the program would be administered. To the credit of everyone involved, the first loans flowed from private lenders seven days, just one week later on april 3. Since that date, the program has distributed nearly 5 million loans to small firms in the amount of over half 1 trillion. Dollars. Trillion it preserved nearly half a million jobs. He successes cannot be ignored. Ohio is not alone. This program invited Small Businesses and workers a lifeline across the entire nation. Were there bumps in the road . Of course. It is difficult to get a program this size up and running in a week. Heather been communication issues between the federal government and the lenders and the borrowers come o borrowers, undoubtedly. We must prepare for the future. Unfortunately there are still challenges resenting obstacles for the nations smallest firms. We continue to face this threat. We must before thinking. More needs to be done and we have proven what we Work Together across the aisle, across the capital, and the different ends of pennsylvania avenue, we can move mountains. I look forward to engaging with as we continue to work for american Small Businesses. I want to thank you both for being here and thank the chair for holding this hearing today. I yield back. Thank you. I would like to explain how this hearing will proceed. Witnesses will have five minutes to provide a statement and each member will have five minutes for questions. Please ensure your microphone is on when you begin speaking in that you return to mute when finished. I would like to introduce our witnesses. Our first is the administrator of sba. Administrator carranza has an inspiring background. Born in illinois to an immigrant family from mexico, she began her career at ups as a parttime employee, ultimately climbing the ranks to become president of latin america and caribbean operations. In 2006, president bush named her deputy administrator for the Small Business administration. Most recently was the treasurer of the United States. Welcome back to our committee, administrator carranza. Witness is the honorable steve mnuchin. The secretary of the u. S. Department of the treasury. Mr. Mnuchin has a successful career as a banker at Goldman Sachs for multiple decades before leaving to join other hedge funds throughout the 2000. He was appointed treasury secretary by President Trump or he has served for the last three years. Welcome to the house Small Business committee and thank you for joining us today, mr. Mnuchin. Administrator carranza, you are recognized refinements. Admin. Carranza thank you, chairwoman. Thank you. Mic is not on. Maybe bring it closer the. Closer to you. Admin. Carranza never said the committee, thank you for the invitation to testify this morning. I am eager to update you on the progress made by the agency in helping Small Business weather the pandemic. , since march the sba processed more loan volume than it has and the entire history the agency. Has approved nearly 5 million loans in muchneeded Fiscal Relief to Small Businesses. We administered this first of its kind program with an eye towards equity, recognizing the pandemic has been harmful to socially and economically disadvantaged businesses. We mobilized thousands of new lenders, including Community Banks, Credit Unions, farm credit lenders and hundreds of mdis that specialize in providing liquidity to underrepresented communities. The Economic Disaster loans and advances, the agency reached over 8 million Small Businesses, dispersing yearly 170 billion in assistance. That is more than all other disasters combined in the agency. Loans are being processed in just five days, with disbursements occurring in just two days. These programs help the Small Business sector survive onceinalifetime disruptions. Since early june i made a concerted effort to personally speak to businesses left to relink by this pandemic and a Financial Institutions so i can see for myself what is working and where improvements need to be made. One of the scores of businesses i visited was an African American Logistics Management firm in dallas. Sba loans provided him with a bridge, a financial bridge over the most multi was waters he has ever experienced. It helped him not only keep his employees on the payroll, but who hire new workers received training and professional certifications. Many Small Business owners use that term bridge to describe how sba loans provided them with time and space needed to rethink, innovate, and adapt their Business Models for success in this new environment. One africanamerican manufacture in greensboro, North Carolina told me nsp alone helped her develop brandnew lines of revenue online. Sba loans helped they whiskey distiller in traverse city, michigan transition his operation to Hand Sanitizer to meet both a social need and financial gap. This pandemic has bent an impetus for innovation in the Small Business sector. Also haswoman, it accelerated modernization at the sba. For example, we created an internal oversight plan for each cares act program. We have looked longterm at our management responsibilities for millions of businesses and disaster loans. The agency has brought on thousands of staff to support our covid disaster operations while simultaneously servicing 175 Natural Disaster declarations. Correctedgnificantly the Customer Service experience for idle applicants by accelerating the processing of loan que. Professionals have been working hard to achieve this on teleworking status. , we are more nimble more responsive, and better prepared for tomorrow. Before i conclude i want to say a few words about the ppp data disclosure made earlier this month. That data reflects information about loans approved by lenders and entered into the sba loan system by those lenders. Determined mean sba a borrower has complied with Program Rules or is eligible to receive a loan and forgiveness. We are reviewing all loans. Moreover, we provided the opportunity for business or lenders who believe their reported information is inaccurate to contact us. We will work with them to fix it. At the same time, we should not lose sight of the fact this Unprecedented Program has emerged as one of the most successful and consequential federal economic response efforts in history. That success is the result of a collaborative effort that includes the white house, treasury, sba, the linick thety, chambers of,s lending community, chambers of commerce, and each of you. We all share the same goals of helping Small Businesses across the country. I look forward to working with this committee and other members of congress. Thank you. Thank you, administered or carranza administrator carranza. Secretary mnuchin, you are recognized for five minutes. Sec. Mnuchin i am pleased to join you today to discuss how the department of treasury and the sba are working together to provide relief to businesses and their workers through the ppp. We remain committed to working together until every american gets back to work as quickly as possible. Americas economy continues to recover from the challenges posed by covid19. For the second month in a row, the jobs report vastly expedient desk exceeded forecasts vastly exceeded forecast. While the unimplement rate is historically high, we are seeing signs and conditions of improvement. The bluechip report is forecasting our gdp will grow by 18 in the third quarter. The u. S. Chamber of commerce reports 79 of Small Businesses are these partially open, and half the remaining businesses will open soon. Retail sales rose by 18 in may. By 7. 5 in june. Let me point out, june was 1. 1 higher than the same june 2019. This is a result of all of our programs working with congress. Investors and businesses have historically high caste positions and are putting the back to work. We are in a strong position to recover because the administration worked with congress to pass legislation on an overwhelmingly bipartisan basis and provide liquidity to workers and markets in record time. The ppp is keeping tens of millions of employees and their jobs. Economic impact payments are helping millions of families. We are monitoring Economic Conditions closely. Certain industries such as construction are recovering quickly, while retail and travel are facing longerterm prospects. We are sensitive to the fact certain areas of the country are experiencing increased numbers of cases. The Task Force Working with state and local officials is helping to ensure people can work safely in this environment. We look forward to continued conversations with this committee and other members of congress to address these critical issues. The sba andhe ppp, treasury Work Together to launch this unprecedented in unprecedented time. Billion. Ed 570 this is truly an extraordinary achievement. We are pleased the loans were broadly distributed and made across diverse areas of the economy. 27 of the funds go to low and moderate income communities, which is consistent with the proportion of the percentage of the population. As you might expect with a program of this magnitude executed on a National Scale rapidly, we initially experienced complications. We resolved them quickly. To implement the program our teams worked with members of congress on a bipartisan basis to issue rules and guidance to provide clarity. By standing up the program quickly we could support tens of millions of jobs. We have worked closely with members of congress in both parties the past three subsequent pieces of critical legislation. We reached a second round of funding for over 300 billion. I look forward to these continued bipartisan efforts. On ahase release more targeted basis for Smaller Companies and those especially hardhit such as restaurants, hotels, and other travel and hospitality businesses. The Treasury Department is implementing the cares act with transparency and accountability. We released a significant amount of information on our website reporting on usaspending. Gov. We are cooperating with various oversight bodies. Treasury and sba regularly leased data. Released data. Data information regarding millions of impact payments are available on their website and the gao. We are priest the treasury, working with the Federal Reserve, announced to add to existing look closures posting Additional Information on the website. We have had productive discussions with the congressional oversight commission. In addition to the ppp, we had 160 million payment for the Economic Impact payments. We have made massive amounts to support air carriers. 150 billion to Coronavirus Relief fund. The Federal Reserve facility is up and running. I am pleased to announce main street made his first loan for 12. 3 million to a Doctors Office consisting of 15 practices in wisconsin. Therer was is a 50 Million Construction loan which will save over 3000 jobs. I look forward to working with Congress Next week on a bipartisan basis to pass additional legislation. I would like to thank the members of this committee for working with us to help the American People. I look forward to answering your questions. Chairwoman thank you, mr. Secretary. I will begin by recognizing myself for five minutes. , ethics ruleshin ,ere waived in the p. P. P. Allowing friends of the Trump Administration to get access without further review. Meanwhile, there are thousands of Small Businesses, many owned by women and minorities and located in rural areas that were desperately seeking assistance. Were you concerned about those up ask . Mnuchin let me just say as it relates to certain roles of the administrator said, there will be loans that will be reviewed for appropriateness. On conflict of interest rules, i had specific discussions with senator schumer and mcconnell on the conflict rules, and it loans from thect military and the Federal Reserve. There were specific requirements required from the members of congress and the administration. As it relates to the s. B. A. Program, congress could have included the same requirements but decided not to do so. Indeed, the s. B. A. Followed standard provisions for the s. B. A. The s. B. A. Standards conduct commission determined the loans should be governed by similar disaster programs and exclusively, and again, a committee that did not consist of political people, exclusively decided to provide the same done forhat they have other programs. Again, we look forward to working with oversight committees to make sure proper rules and regulations are followed. I willman w combat and i intend to exert our responsibility and constitutional duty to be at the table. I am the first minority female chairing a committee. When we are discussing lending programs that are within the jurisdiction of this committee, i will demand for the Ranking Member and myself to be at the table. I insisted that ethics rules should not be waived. These are lending programs. If it is good for the 7a, and 504, and fdic, it should be good for this type of lending, and i will insist on that when we sit down to discuss going forward. They were capped at 150,000 in an effort not to stress funding. However, i ask you, administrator, the appropriators and the senate asked you a numerous occasions if additional funding. The answer was not. And here we are. It is Small Businesses that are suffering. Moving forward, you must work with us. I ask you remove the cap for a new item loans immediately and allow those with existing loans to obtain the capital they deserve. You still have to hundred billion dollars of loanmaking Authority Left in the eidl program while Small Businesses are hurting. So help us help you, because members of this committee and businesses looking to testify before this committee, they said that they might remain open, but would not be able to keep those businesses open because when they were thinking they were outside for the maximum allowable loans, then you reduced to 150,000. We need to do better than that. This is not going away, and too many businesses are suffering. Mr. Mnuchin, the pandemic has caused the rate of black on businesses to drop by an astonishing 41 , and the rate for latinoowned businesses by 32 . These numbers are only going to get worse unless we act now. Shouldnt we set aside a percentage of the remaining funds for Small Businesses that need it the most . I heard you saying that you are going to ask for quartile, restaurants and the traveling industry. What about minority businesses . Sec. Mnuchin i agree, there should be some set aside for small an minority businesses. Chairwoman velazquez so i can count on your support that we can set aside funding for missionbased lenders, because we are discussing here the smaller of the Small Businesses no have no connection, preexisting banking relationships with those Financial Institutions. Aree who have relationships i, fdi,based, like cdfc like micro lenders. Onope we can work with you that issue. My time has expired. I recognize the Ranking Member. Thank you, madam chair. , given thea overwhelming response to this emergency, is that as ba prepared to respond to other disasters such as floods, hurricanes and fires . We know they are coming at some point. Are you prepared for that . Yes. We have three types of disaster declarations submitted by the governors. It is either economic disruption based on civil unrest, or a National Economic or the march disaster. We are practicing all three as we speak. Thank you. Secretary mnuchin, does the loan forgiveness process need to be simplified anymore . For example, there are some members of congress who have suggested perhaps for giving all forns under 150,000 example. I am not saying we should or should not do that, but i wanted to hear your thoughts about it. I heard a lot of concerns about how complicated the forgiveness process can be, if you can talk a little bit about that. Sec. Mnuchin we look forward to working with this committee and the senate Small Business committee to simplify the process. There were provisions in the act that made it complicated. We tried to issue as much. Uidance as we could one of the things we will talk about is, should we just have forgiveness for all of the small ones . I think should make sure there is some fraud protection, but we look forward to working with this committee and others. As you know at this point, there are approximately 130 billion still in the p. P. P. Program everyone is talking about. With that . Do do we reduce the number of employees eligible from 500 to 100, do we stick with what we have or do a second p. P. P. . I know these are negotiations everyone is having now, including the administration, house, the senate and this committee and others. What are your current thoughts . Sec. Mnuchin the administration supports using the existing money and topping it off with additional money. That will be discussed. A second payment to businesses that are especially hard hit. Let me just say, i was only giving examples of business. Mean to imply they are the only businesses that are hard hit. This time we need to have the revenue test to make sure money is going to businesses that have significant revenue declines, that is Something Congress did not have in the first provision. Make sure that the businesses that are especially hard hit, particularly Small Businesses, and put in certain safeguards so that people we saw took out loans and i look forward to working with congress. If Congress Wants to put back in the conflict rules, we are more than happy to work with congress. We will participate on the same basis of the house and the senate. Secretary mnuchin, one of the things that you all were operating under impossible time constraints. I was at the signing ceremony on friday, next week at the loans were literally going out the door, although not that many. You all got your act together pretty quickly and staved a lot of businesses all around the country. God bless you for that. This committee was involved and many others as well. One of the things that were frustrating, i heard this from vendors and Small Business folks and from our staff was the time it took to get the guidance out so people knew what the rules were. Do you have any thoughts for the future as to what we might be able to do . Sec. Mnuchin let me say, in one of the more ridiculous statements i have ever made, i committed that we get the program up in two weeks. Working with the s. B. A. Staff, we were able to do that. Obviously, it ran into a lot of thees, but we made judgment. It was more important to get it quickly. Sending money to people for months later was not going to help Small Businesses. Now that we have it up and running to the extent there are andr changes to the p. P. P. Eidl programs, working with the s. B. A. , we can get guidance out quickly. We will not have the Technology Problems we had last time. I encourage this committee to work in the context of these programs and put more restraints. The other thing you should snow we on the eidl, have main street open for loans above 250,000, that we focus eidl on loans that are 250 and below. Ranking member chabot thank you very much, youre my time. Chairwoman velazquez i recognize the gentlelady from finkenauer. Hink i rep. Finkenauer thank you, madam chair. You understand, the district i represent is northeast iowa. It has three bigger city centers. Our district has been hit very hard on a number of levels, whether it has been the attacks on the Agricultural Community the last few years, or now this endemic and how it has affected not just the cities but our rural areas as well. One of the things i want to mnuchin, iecretary really want to dive into the Economic Impact payments, the direct assistance payments of are important for individuals who are worried about how they will pay their mortgage, their rent, put food on the table but also local businesses who have been able to stay open, to have some sort of economic stimulus here during the pandemic. One of the things i was really concerned about is, when these went out to folks, obviously, if they had direct deposit set up, they went into their accounts. However, we heard from 700 people within my district about these payments, who did not receive them or they received them but they were in the debit card and did not realize they were these Economic Impact payments. Why was this set up the way that it was . Why was there no real communication out to these districts, to folks who needed it, to understand how these were coming out . , secretaryu a letter thesen, about issuing cards, because so many folks were throwing them away. I am glad you listened and decided to waive the charge for replacing. But why does it cost 17 to priorityship these cards to folks . Why do taxpayers who need their money now have to wait longer and it costs them more . Just something that needs to be dealt with. I am glad you fixed up pace of fixed up a piece of it. And why was this done in the first place . You for your thank comment. Let me say, the fact that there were 700 of those in your community is inexcusable. If you have specific issues, we up. Happy to follow the i. R. S. And Fiscal Services did Alexander Nouri job sending over 150 million, in a record. Of time did an extraordinary job sending over 150 million in record time. We will correct that going forward. I do think that debit cards was an interesting addition for two reasons. One, it allowed us to get payments out quicker since we could only create so many checks sorry, how long did we. To wait rep. Finkenauer how long did we have to wait to send those out because the president decided to have his name on the checks . Sec. Mnuchin there was a zero delay associated with either of those issues, no impact on the timing. We were limited on the number of checks we could print per week but that had no impact on it. And i think the fees were waived. If you have got statements that still have issues again, i am. Appy to follow up on that rep. Finkenauer there is a fee of 7. 50 to replace them and then 17 to ship. Chairwoman velazquez that should be waived as well. Ap. Finkenauer i also have question about the p. P. P. Program, obviously incredibly important all over the country. I was really disappointed at the beginning when it rolled out. We allocate these dollars and they go to these agencies, s. B. A. And treasury, to set out how these are doled out. Amenities like mine were left behind, because we have the concentration of communitybased Financial Institutions in the country in my district. The big banks, people who were connected with their banks got it. Less to communities like mine. Either of you think about how this would impact folks who bank with communitybased institutions . I know we have that set aside now, for those dollars, but how can we ensure that as we continue to look at this that we are doing what we should with these agencies to make sure we do not forget about rural areas . The s. B. A. , i understand we lost the head of rural affairs, she got moved. Are short one staffing to deal with this, but it is not the time to move somebody that represents do youman velazquez wish to answer the question, sir . Sec. Mnuchin i can assure you we are focused to make sure Community Banks have equal access. You are correct, there were issues in the beginning, but we corrected it quickly. Chairwoman velazquez thank you. Gentleman from ohio is. Ecognized for five minutes thank you, madam chair. My first question is for the administrator. Thank you for being here today. I appreciate your leadership to this pandemic. I would also like to convey to in myat your office district, columbus, ohio, has been a phenomenal resource. We have been doing it back to our the last few weeks. Someone from your office has been with me and my team, and we are grateful to see the Business Owners who encounter s. B. A. Were there. To put a face to the name was pleasing. An issue that i have heard more and more from my constituents is a lack of clarity on p. P. P. Forgiveness. Specifically often from Business Owners looking to have their businesses bought out. This could be because of the pandemic or a planned sale prior to covid19 that has been placed on hold because of the virus. The businesstion, owner took p. P. P. To support their employees, and now they cannot sell their business with this forgivable loan on the books. Why is this . Ms. Carranza thank you. This is a situation i have to speak with you personally or address the particular case, because this is news to me about them taking p. P. P. And then wanting to sell. Not a new incident where Small Businesses that are ready to sell because they dont care to go through a pandemic or another crisis, they are in position and interested in selling their company, but that p. P. P. Or the eidl loan issue was not raised when we had those discussions. But i have experienced similar to you that there are businesses ready to sell, but i will have to look into how to manage the situation. In forgiveness, we have not addressed that at that point, an entity wanting to sell their loan. Nd they have a rep. Balderson one business for example i have been in communication with, they were doing in exchange in january before the pandemic. That i have been in contact with have been having this issue before the pandemic even started. So we will work with your office and address that. look forwardanza to it. Mnuchin, ison mr. Introduced legislation with my colleagues from across the aisle , congresswoman lorenz, providing tax credits for Small Businesses to purchase and install p. P. E. And related safety equipment. It would help Small Businesses suffering under the weight of mandatory closures be able to afford the equipment required to reopen their doors. Are you open to working with myself and Miss Lawrence to ensure Small Businesses are safely prepared to welcome customers again . Sec. Mnuchin absolutely. I am not familiar with the specific legislation, but i like the concept. Rep. Balderson appreciated. It is a tax credit. Thank you. Administrator, if a Business Owner decides to use personal finance moneys, but is not associated with their business to pay off their p. P. P. Loan in order to move forward with the sale of the business, they just have to eat this as a loss . That may be something that you and i have to sit and discuss. Sec. Carranza i agree. I have to understand all the nuances of the particular situation. Also perhaps there are other businesses that may be facing the same thing that we need to look into. Chairwoman velazquez thank you very much rep. Balderson thank you very much. The next aidwards package, much of the focus seems to be providing aid to schools, hospitals and First Responders. I support these efforts but i believe we must conside continue consideration of american Small Businesses. Andow that the chair Ranking Member have to about this. What other Small Business efforts are also being considered i did not review time. Sec. Mnuchin various items, but that is something that should be considered and we look forward to working with you. Rep. Balderson thank you, sir. Madam chair, i yield back. Chairwoman velazquez the gentleman yields back. We recognize the gentleman from maine, mr. Golden for five minutes. Thank you, madam chair. As you are talking in your Opening Statement about the p. P. P. Program, perhaps trying to track at assistance to businesses that need the help the most as well as may be learning from some of the lessons along the way as we worked on the p. P. P. Program together, i want to encourage you to look at the restart act introduced in the senate by senators bennett and young and here in the house, by myself. This bill builds upon the p. P. P. Program and models himself after that, but i think importantly it has provisions that would target the businesses that can demonstrate a in fact suffered revenue losses or the loss of several months related to the economicnd impact. I dont know if you are familiar with the restart art, but i encourage you to give it a look as you are looking to improve upon what we do next to assist businesses in the United States as we shift into recovery . Sec. Mnuchin i am familiar with it. Parts of it should be incorporated. Thank you for that. I look forward to working with you and with senators and house members on something similar to. P. P. And the Program Proposed i want to raise an issue with you on the half of critical access care hospitals, including some in my district. Are you familiar with critical access hospitals . Sec. Mnuchin a little bit. Rep. Golden generally defined as providing Important Health care access in rural areas,. Ural communities hospitals that operates on a very thin margin and struggle financially, but it is important that the federal government recognizes how important they are to accessing care in addition to accessing health care, they are often the largest employers in numeral region. Therefore, they are just critically important. Has, i thinknt rightly, looked at organizations applying for p. P. P. Who are for undergoing bankruptcy as ineligible. I understand why you would do ,hat under normal circumstances but there are a number of Critical Care hospitals who are undergoing chapter 11 restructuring. Given the fact that we are dealing with the pandemic and a recession, and that these hospitals have a very unique federally recognized mission and are providing important access to health care in areas where it is going to be hard even in good times, to be making money, these are really like nonprofit hospital organizations, i was wondering if you would consider reconsidering eligibility for Critical Care hospitals undergoing chapter 11 restructurings, but our remaining with the remaining p. P. P. Funding that you have . They have been excluded. You can imagine doing this endemic, the fact that they types of do certain services, they are really struggling. Are almostthem closing, which would be a terrible loss to these communities. Sec. Mnuchin i am sympathetic to these types of hospitals in and look forward to working with you. Rep. Golden i appreciate that. As you know, the treasury and s. B. A. Have been able to make changes in the program for eligibility for organizations to include some nonprofit hospitals socceret percent sent. Those jobs are important to rural communities, but even more important is ensuring access to care is preserved. They have been applying for p. P. P. But were rejected. In some instances, some of these courts,s have gone to who have said the determinations made by the s. B. A. Would have to be changed, or congress would have to act. I dont know if you think you some kind of authority to look at this and make the change yourself, but i want to thank you for working with both my office but also senator kaine and senator i amns from maine, and sure, other senators who represent similar hospitals in a similar situation are eithe eagr to work with you to help some of these hospitals. Velazquez the gentlemans time has expired. Now we recognize the gentleman from oklahoma. Thank you, madam chair. Mr. Chabot. Mr. Secretary, these are unprecedented times. Our office has dealt with many people who have waited weeks and weeks to get their unemployment checks approved, hundreds of thousands across the country. We discussed this on a phone call four months ago where we noted that under current capacity, states were illequipped to handle the influx of applications. Congress worked in a bipartisan way, unprecedented in todays times, to establish the Paycheck Protection Program. While i believe the program more could have been done to help the americans currently unemployed, this program has saved 50 million jobs in america. It was designed so that when we come out of this pandemic, we can quickly stand up the economy, which we have seen happen in may and june and we continue to see happen now. You have stated many times that the priority of the p. P. P. Was preserved and save jobs and employees rather than the Business Owners themselves. Would you still agree with that statement . Sec. Mnuchin yes. Rep. Hern additionally, could you discuss what you have learned from this, or strategies that the federal government can implement in the future to better prepare for this situation in the future . Sec. Mnuchin let me comment on one of the things we liked about the p. P. P. Was all the money we were spending on the unemployment side of this was money we saved on unemployment. One of the issues we have learned and we have to fix in the next legislation is a technical issue, where, in certain cases, states were paying people not to work than to work. Some of the states were better prepared, some of these states had 40yearold computers. I know a lot of people used this , 40 Million People unemployed unfortunately, it is not 40 million unemployed, we thought it would get to that. Fortunately right now, we only have 18 million unemployed. We have about 14 million more than where we started, and we have to get those people back to work. Thank you. Rep. Hern my team has worked with hundreds of people who had difficulties receiving their stimulus checks. I know you are aware of this, we talked to your offices. Can you explain briefly what you have seen happen and is there a big issue here, or all of these oneoffs. Sec. Mnuchin all of these oneoffs are sympathetic, these are people who need their check. I dont mean to minimize this. Again, we sent out over 150 million checks in record time. Yes, there were certain cases because they were either done off previous tax returns or , but we willtion work with you on it. Rep. Hern thank you. Administrator carranza, a few weeks ago, an associate testified regarding the eidl program. Theng my conversation with administrator, he committed to providing a document outlining best practices by september 30, 2020. This would be a document to explain what the s. B. A. Has learned and how you all believe you can better be prepared in should another pandemic arise. As a side note, the administrator stated he had been been here 9 11 and through the financial crisis. We keep reinventing the wheel. It seems that all of us engaged in a bipartisan way, we can put a pandemic playbook in place so we dont make the same mistakes again because when we make mistakes, people are harmed or they do not get the stimulus when they need it. If we could learn from it, it would be great. Of the key components of this document would be to design it communication plan for future pandemics to help us Work Together. Would you commit to seeing that get done by the end of the First Quarter . Sec. Carranza yes, congressman. We have already begun, we are preparing how we are addressing fraud. Also staff up. I started with two additional executives. We will and the leadership in future positions. You will have the full sop and. Op rep. Hern those are business people. I have been in business 35 years. We can talk about what happened but that will not help. Document whatin a those issues are so we do not make this again, if we could get that done, that would be great. Madam chair and Ranking Member, i thank you for allowing us to have this meeting. It is very important. Admin. Carranza i look forward to working with you. Admin. Carranza we now recognize the gentleman from new jersey for five minutes. You, madam chair for convening the meeting. Secretary mnuchin, you rightly noted in your testimony that Small Businesses continue to face dire circumstances right now, even those that received Paycheck Protection Programs loans are telling me that they are unsure whether or not they will survive. There are a lot of concerns about the bigger state of our economy and whether or not our economy will be able to pursue will be able to proceed these coming months and if not, if it will have an impact on Small Businesses. In my home state, we have gone through a tough time and we face a tougher challenge ahead on it comes to our state economy. It has been crippled. We have the magically hampered our recovery especially for Small Businesses. These are not just covidrelated expenses, it is about loss of revenue that could cause layoffs, decrease Consumer Spending and decrease investment in our communities. Would you commit to working with congress to ensure we have the necessary funding to our state and local municipalities to solve the crises and create a strong economic recovery . Think, as youi know, we allocated significant amounts of money to covidrelated expenses. We tried to issue guidance to be very clear that money can be used for Law Enforcement and First Responders and others. The issue of lost revenues is a , andmore complicated issue the issue of taxing authorities between the state and local government. We will be working with congress on this. Rep. Kim i raise this because i have heard you talk about what could potentially come next with states and local funding on it. It is central to this th discussion will be having. You have previously described this money as bailouts for some states. So i went to hear from you a little more on that front. I believe that from you, perhaps you dont want to see this funding going to state you characterize as mismanaging fund , because you think it would not be fair to states that are working hard on their economy and their budget, so i have them cover for other states . Is that a correct interpretation of your assessment . Sec. Mnuchin what i have said and i agree with, is that if there were financial conditions that states had coming into this, it is not the federal governments role to bail them out of that. Now, we have to remain through the fed lazaridis, we have provided lending facilities to the states and municipalities. The issue of taxing authority, the federal government has taxing authority and the states have taxing authority. Where there are lost revenues, there is a fairness issue of how those get allocated across the country. Rep. Kim i agree there is a fairness issue at stake. Our state only gets back somewhere around . 75 to . 81 for every dollar we put into the federal government, one of the lowest in the nation. Other states get back well over one dollar. Kentucky gets back to dollars and . 35. I would ask you, is that fair to this president kentucky gets back to dollars . 35. I would ask you, is that fair . Sec. Mnuchin i dont believe that is an appropriate number. The answer is more rich people live in those states and because of the way we have taxes and the rich people are the ones who pay the preponderance of federal taxes, i dont believe the calculation as a result is the right way to look at things. Rep. Kim that is helpful for me to understand how you are approaching this problem. I want to continue to work with you on that, because if new jersey is often calculating that we give into the federal government about 20 billion more than what we get back every year, there is an issue of fairness here. I dont want us in a pandemic to get into a situation where we are trying to pin states against each other. We saw that with p. P. E. With funding, there is a chance for us to think about this, especially when we know the current and former fed chairs have reported he wanted that economic recovery could be hampered if we do not appropriate more aid to states localities. Switching gears, administrator carranza, i understand the Economic Injury loans were capped at 150,000 to ensure all borrowers could access the funds. Changed many businesses. Moving forward, would you commit to removing this cap for new eidls and to allow existing loans to obtain more funding in phase two. Admin. Carranza our experience currently is the average loan has dropped from 63,000 to about 37,000 since we opened in july. Point, the operating expenses that people apply for are not hitting the cap in great numbers. About 1 of applicants are pursuing that amount. We havehe loans processed come in significantly under the 150,000. I will continue assessing it. We are reviewing that on a daily basis and they look forward to working with your office. Admin. Carranza there is no time left. [laughter] we are over time. But i expect for you to lift when therespecially are other states that are facing the pandemic. You cannot predict if any business from those states will need more than 150,000. So the fact that now, those other states, youre not getting those types of applications or that type of amount, does not mean that that will apply to every other. Businesses should have the opportunity to apply for over 150,000 if that is what they need. Admin. Carranza congresswoman, at this time, since we opened up the portal, we have an additional 5 million applications. 1520 daysout remaining with the remaining funds. 150, iep that level of would be able to service 5 million more businesses. Admin. Carranza but from the senators, some of the and congress people, myself included, asked if you need it more than we included in the bill and you said yes. So, come to ask. Tell us when we ask if that is enough. Admin. Carranza i will work with your office. Admin. Carranza thank you. Chairwoman velazquez thank you. We recognize the gentleman from minnesota. Thank you. Secretary carranza, this follows what the chairwoman talked about. I would like to share with you some concerns i have heard from my constituents. S. B. A. Has taken liberties to reduce the cap of to 150 thousand. While this is likely to ensure the maximum number of businesses that receive some funding during this crisis, my constituents are rightly upset. They feel they are being cheated out of what they were promised by the government. I heard your colleague, mr. Rivera on this issue a couple weeks ago, but i wanted to give you the opportunity to respond today. Admin. Carranza i also received there arere calculations and on operating expenses may not have reached 150,000. We took those under special consideration and looks at ways exceed that amount. To exceed 150,000 at this given time would be premature, because we have 5 million applications currently. To the chairwoman, if there are needs for funds, we will bring that up for discussion. What we do with the applicants that need more friends is the council them that there is a ppp program that is also a and we providen, technical assistance. We dont influence, nor do we recommend cannot we just share that there is another option they can consider we dont take lightly the fact that businesses are in need of funds. It is an emergency lifeline we initially thought was going fought this pandemic would be two weeks and now it is a couple of months. We recognize the fact that they are in need of greater funds. Hagedorn thank you. Treasury were given a nearly impossible task. There have been some bumps in the road, but we appreciate the work you secretary carranza and secretary mnuchin have put to help Small Businesses across the nation during the pandemic. My last question will go to secretary mnuchin. From local hearing Grocery Stores and Community Stores of a claims shortage. What are your thoughts for addressing this issue . Have you considered some type of messaging or pr campaign to help jumpstart the claims circulation across the nation . Sec. Mnuchin thank you. We are working closely with the mint and Federal Reserve on the coin shortage. The mint is working overtime. As you said, as a result of covid, a lot of the coinage is stock, but we are working on public messaging and look at updates to your office. Thank you, mr. Secretary. My committee would you happy to help you in that Public Relations campaign. With that, madam chair, i yield back. Chairwoman velazquez a gentleman yield back. We recognize the gentleman from colorado, mr. Crow. Thank you, madam chair. Administrator carranza, on july 6, the s. B. A. Sent to congress a list of loans distributive by district. They sent to my office a list inwing 317 Small Businesses my district received loans over 100 50,000, 30 600 received loans less than that. I need that was not right given the number of businesses in my district. We conducted our own analysis and determined 1400 businesses in my district received loans over 150,000. Over 10,000 that received under 150,000. The data was welloff. What are you doing to fix it . Sec. Carranza i would like to meet with you and address those statistics. We would be immature to comment on these data points that i am not familiar with at this point, so i look forward to working with you. Rep. Crow you will commit to work with me and every other member of congress . Sec. Carranza absolutely, the entire committee. Rep. Crow ok. Was very pleased to hear from secretary mnuchin that he would commit to working with us to look at how to get that 100 stilln plus of money available to members of the black and Brown Community and to womenowned businesses and others that are hardhit. Do you share that commitment, and you commit now to develop a program to get money to those businesses . Sec. Carranza yes, i do. We have been working in concert with the treasury, we have worked together on but it , thes, savings and loans fintech organizations, many of these Community Banks are the ones that are very specialized in providing loans to these particular underserved communities. Definitely, i agree with you. Thank you. I appreciate that commitment. Secretary mnuchin, you have had a long career in investment correct . Nd banking, sec. Mnuchin i have not been in Investment Banking for close to 18 years but i have been in banking. Rep. Crow when you are in banking, you advised your banks on where to send money and to to, to make loans and funds correct . Sec. Mnuchin i had a regionalbased bank, i did not advise where to give money. I served on a loan committee. Crow you advised whom to give loans your banks would make decisions on where to spend money and give loans to, correct . Sec. Mnuchin customers applied for loans and the banks made credit decisions. [no audio] chairwoman velazquez mr. Crow, we cannot hear you. Rep. Crow requirements as to whether or not an employee of the bank, a Family Member or you or one of your employees or close business relationship was one of the recipients of that money. There are Disclosure Requirements, correct, in the financial industry . Sec. Mnuchin there are Disclosure Requirements and also requirements by the fdic. Rep. Crow what are the purpose of those Disclosure Requirements . Sec. Mnuchin the real focus is a conflict of interest. To the extent there is a conflict of interest, in many cases, it has to go to the board of directors to be approved. It is more focused on conflict of interest than disclosure. Rep. Crow you need to have the disclosure in order to do that analysis, correct . Sec. Mnuchin again, most banks dont publicly disclose. Mnuchin, secretary you have to have the disclosure of information in order to do the analysis on conflicts of interest . Sec. Mnuchin disclosure within correct. , yes, that is rep. Crow by that same rationale, is it important that members of the trump family, associates of the trump organization, or employees of the administration this close their interest in receiving again, let me repeat . Sec. Mnuchin again, let me repeat. Rep. Crow i asked a specific question, do you think that disclosure is necessary in the context of the administration . Sec. Mnuchin again, i dont believe that because this was not an issue required by congress, it was a very specific issue and there were no restrictions. I am not aware if they took loans or they did not, but there was no restrictions on the p. P. P. There were restrictions for the administration and congress, the iterms on the other dont think the Trump Administration should be held to the same standard as congress on the p. P. P. Rep. Crow they should not be held to the same standards as your banks and the financial industry you belonged to during your career . Sec. Mnuchin i think you are misrepresenting my comments on, again, conflict of interest versus disclosure. Rep. Crow i think i was very clear. ,y time is up, i yield back chairwoman. Thank you. Chairwoman velazquez the gentlemans time has expired. We recognize the gentleman from tennessee, mr. Burchett. Is he here . Rep. Burchett yes, can you hear me . Chairwoman velazquez yes, i can hear you. Rep. Burchett thank you. I hope my melodious voice carries well over the internet. Thank you all for letting me be here, chair lady and Ranking Member. Administrator carranza, i might have missed this earlier, i am having trouble hearing what people are saying. If you could just give me a brief answer. Night, the s. B. A. Still does not have a portal to access existing loan forgiveness applications. Why is this . Admin. Carranza the forgiveness portal, or the application or guidance, will be out very shortly. We are resolving some of the language between treasury and s. B. A. It is going to be available very, very soon. Rep. Burchett wendy you think that would be . Government, very soon is like a glacier. I am in tennessee. Admin. Carranza i have not been greatly, and we are in a pandemic, but we are working as quick as we can. We trying to make it right the first time and address all the issues raised by the lenders and the borrowers as well. If i can tell you, by august, that will be the target date. Rep. Burchett 2020 . Admin. Carranza yes, sir. [laughter] rep. Burchett had to get that clear. Yes, maam. Secretary mnuchin, in your opinion, how should congress utilize the remaining 103 billion in p. P. P. Funding . Sec. Mnuchin my suggestion is that congress would reauthorize the program to allow for a second payment to the businesses that are most hardhit. Rep. Burchett which would those be, in your opinion . Sec. Mnuchin we should use a revenue test, so, as opposed to i dont think any specific industry should be targeted, we should use a revenue test. Something significant. Rep. Burchett i caught part of that earlier but it cut out. Secretary mnuchin, do you believe the nations smallest businesses, those with 10 or less, received the assistance they needed to survive this emergency . Sec. Mnuchin many of them did. I am sure there were some that fell through the cracks, but we are very proud of the majority of the loans went to Small Businesses. Rep. Burchett ms. Carranza, what measures are in place of the s. B. A. To reduce the waste and fraud and abuse in the eidl and the p. P. P. . Admin. Carranza we have developed an infrastructure that is overseen by our cfo, and we as well so we can have Institutional Knowledge as it relates to experience in the lending sector. We have a very comprehensive approach to oversight, not only for the p. P. P. , but the eidl, and ongoing audits of the c. A. R. E. S. Act implementation total. Rep. Burchett can we have a flowchart, something we can have just, when we talk to our folks, our local media about that, we can inquire . Admin. Carranza yes. I have no hesitation reviewing what our strategy looks like with the committee. Rep. Burchett if you can get that to the committee, i would be very grateful. Admin. Carranza will do. Rep. Burchett noting that august is my birthday month, that would be great. [laughter] thank you, chair lady. Always good to see you. Chairwoman velazquez you are welcome. Thank you. The gentleman yield back. We recognize the gentlelady from ms. As, missed david davids. Rep. Davids thank you for hosting this important hearing today. Secretary mnuchin and administrator carranza, i appreciate both of you appearing before the committee to answer questions and discussing the way forward in supporting our businesses through this crisis. We enacted a Paycheck Protection Program to ensure that our countrys Small Businesses can keep employees on payroll and keep businesses afloat. Many Small Businesses in my home state of kansas, especially minority owned ones, struggled to access the program during a critical time. At the same time, we saw wellconnected and even publicly traded Companies Getting these loans, little to no problems. Or even borrowing when they had already borrowed from their own executives. I believe kansans need to know that their tax dollars are not being used to pay back high dollar salary for their executives. I have been working with my colleagues in this committee to push for accountability and transparency that the public deserves. In fact, i introduced the p. P. P. Accountability act which would ensure that both congress and the public were able to see the information about the loan themselves. Or i appreciate it let you listen to some of these concerns and have made some of the initial data public. We knows information, that in the kansas third district, close 100,000 jobs were retained and preserved. We also know that there is a lot of information we heard from some of my colleagues today a lot of information we still do not know, like what loan forgiveness rates will look like, the rate at which minority businesses have received loans. This is essential for congress to provide the oversight we are constitutionally mandated to provide. Will start with secretary mnuchin and administrator carranza, can you tell us what your plans are for releasing the data of the recipients for the loan forgiveness portion here . Say,mnuchin let me first i agree with your comment on public companies. You know there was about 30 billion returned. As the administrator said, we will have a very robust process to review loans before loans are forgiven. ,n the forgiveness process people will be required to provide much more data and that data will be released. Rep. Davids i know you had mentioned earlier, and it was highlighted a couple of times that there is definitely a commitment to making sure that minorityowned and women owned businesses, and some of the most marginalized or disadvantaged Small Businesses out there should be getting access to these loans at the same rate as everyone else. Some of the fields included in the data are optional. When we talk about how many jobs are saved through loans and democratic information demographic information being optional, i am curious what your plans are to evaluate the effectiveness and reach of the program without this information. I appreciate your commitment to making sure that some of the most bonobo businesses out there are getting loans and img curious how you will get there with some of these information being optional . Sec. Mnuchin the jobs numbers. Ill be required when people apply for forgiveness, they will have to be specific and how much money was used for payroll and the number of jobs. As it relates to demographics, this is optional. There are legal issues associated with forcing people to give demographics. We have looked at low and moderate income census tracks and we are pleased that money was this to be did proportionately. But we look forward to working with you and the committee on transparency and collecting more of this information. Rep. Davids i appreciate that. I know that this has certainly iterative process particularly the rolling out of the guidance and the roles of these programs. Working hard at the s. B. A. And Treasury Department. I have a lot of appreciation for the career folks putting in tons. F hours thank you both for continuing to show up and listen to our concerns. I went to particularly thank for listening to the concerns that my office put forward about Tribal Enterprises and making sure the Paycheck Protection Program was accessible to all travel enterprises. I look forward to working with you to make sure our Small Businesses are taken care of in this country. Chairwoman velazquez time has expired. We recognize the gentleman from pennsylvania, dr. Joyce, for five minutes. Rep. Joyce chairwoman velazquez and Ranking Member chabot, thank you for convening us today. Administrator carranza and secretary mnuchin, thank you for joining us and thank you for your leadership during an incredibly difficult time. Small businesses, which we in this group frequently state are , duringbone of america this crisis, they have become the heart of america. According to data that you have s. B. A. , myom the district fortunately has received 295 million in ppp loans. This number represents over 2700 Small Businesses which were able to retain their employees, pay their benefits, their health insurance. It was a significant relief for the Small Businesses in pennsylvania. Would beer substantially lower had it not been for your attentiveness to the needs of the farmers. On the half of pennsylvania farmers, i thank you for your willingness to work with my office on adjusting these programs to fit the needs of our agricultural producers. Feed uso every day safe and nutritious food. Administrator carranza, as we continue to reopen our economy, it is possible that people may increasingly rely on the internet platforms to purchase goods and services, and to even work from home. While these platforms provide enormous opportunities for Small Businesses, this transition could further stretch the Digital Divide between urban affordableesses and access to and reliable broadband in the rural areas that have less reliable internet options. This response to covid19 has been an impetus for innovation. Were very striking to those of us sitting here in the committee. You support further modifications of the ppe that would allow funding to be used for broadband achievements or other costs associated with the tools and infrastructure that is so necessary to allow rural Small Businesses to telework effectively and utilize Online Platforms . I have always been a strong proponent of costeffective broadband for rural areas in underserved markets and so i look forward to working with you to continue that discussion. Thank administrator. Areas cann our rural necessarily access areas of commerce. Considerationthis and for allowing us to continue this discussion and evaluate the use of ppe to support rural broadband. Thank you for utilizing the can positively affect Small Businesses that have been and continue to be drastically affected by code. Covid. Thank you for focusing on different businesses and considering the additional Economic Impact. I think it is a reliable model that will allow us to move forward and effectively utilize the remaining funds. Thank you for your continued work with us, secretary, and for your efforts to return those remaining workers to their jobs. Do you feel that utilizing additional ppe resources will allow us to continue to see those additional workers return to full employment . Yes. Thank you both for being here today. Then you for continuing your work and i yield the remainder of my time. Gentlemen yields back that mr. Cognize mr. Fruman mfume. Chair, think you very much for the opportunity. Thank you for your relentless efforts to try and bring about the artist and the to this issue and the overall sphere of what is happening with Small Businesses. I want to thank the Ranking Member and guests who are here. People who see the rollout of funds of this project and are being torry. It being something that works for others but does not work for them and is something they believed was set up to be that way. People have their own beliefs, shortcomings and misgivings about things, but when they look at the fact that the president s ander received ppe funding members of congress have received it, that private equity chains have received this look at it is hard to those persons and say that is not the case, these are just coincidences. Backdrop forf that me that i am concerned we continue to have this discussion about bringing equity to black, brown and korean businesses. I think if we were true to what we were saying to begin with, whether it was this program or another that preceded it, that would be something we could look for. Something we automatically had as a threshold something we wanted to achieve. ,nd as i said the other day having served on this committee for 10 years through the 80s and 90s, through three president ial administrations and then to be fortunate enough to return 20 years later to be a part of this congress and committee, it is disheartening for me to look back and recognize that many of the same arguments advocating on behalf of black brown and korean businesses where fairness and equity are still being made. Its almost unbelievable, but if i didnt live it for myself, i wouldnt believe it. People are concerned with what they see does not gel with what they are led to believe. They think that the awarding of this program in some way represents robin hood in reverse. People who should be getting some of this money on a fair basis are not getting it. They anticipate another review, a study on the study and the plan b for plan a that failed. So i want to get that on the record, because these people oftentimes dont have an opportunity to speak for themselves. Let me just say that in a hearing conducted by this committee on june 17, we learned of many issues that many borrowers and lenders have faced borrowing and using ppe dollars. Including specific rules and more specificity for minorityowned and underserved businesses. They believe those are crucial issues. They believe the structure and implementation of ppe continues to disadvantage smaller businesses. Specifically, businesses of color that is due to the limitations built into the program. I think both of you would agree that ppe funding is heavily dependent on traditional Banking Institutions and prior banking relationships. Both of those institutions have been biased documented to be biased in their awarding of loans, documenting a different assignment of risk for persons who may be black, teedo or asian latino or asian. Harmedave traditionally these people, and now when we get to this juncture, you have got to show me this is not true. Prior to the june 17 hearing, yourto each of departments, inquiring how and why minority businesses have had so much trouble and being denied outright. We needed transparency, we requested you immediately begin publishing democratic data on ppe recipients. Was releasede data and our worst anecdotal. Bservations were confirmed in my state of maryland, is not a large state, there are only ight districts, the district represent got 7 of the funding. Yes, sir. Now, we recognize the gentleman from North Carolina. Thank you to all of the Committee Members present right here in this Committee Room who have watched the kind of leadership the American People need to see. Whove joined those complement to do those serving with you, especially for your historic comp meant in implementing the Paycheck Protection Program. Observed, the key to that speed was enlisting private institutions as well as banks, Credit Unions to serve as the conduit for massive relief and huge numbers for Small Businesses. Success,t fantastic congress legislates additional relief, we would be wise to continue the model of ppe and keep lenders implicit admission, but we have heard that lender fatigue is an issue, attributable in part to the fact that after these communities jumped to respond to the call of the federal government, a number now face frivolous lawsuits. As the administration looks at additional relief measures, it seems to me we should prove that adage wrong for one, mainly by clarifying the current language which protects lenders from liability applies throughout the loan. To fightimportant lender fatigue in this way, and will you work with us on the protection of lenders who have done so much . You. S, we will work with shouldnt we also be looking at the same issue for Small Businesses face serious concerns . That is, serious lawsuits . One of the concerns i had was that we dont take any measures that would be punitive to the borrower or the lender, especially when we start with 1800 authorized through that to 1800 and grew that. Were still looking at nontraditional lenders who are applying to provide nonppe loans and we are looking forward to making sure the underserved really have an opportunity with this. Thank you. Issue to follow up on an that has disturbed millions of americans. It is now widely known that planned parenthood brazenly violated the law by taking 80 million in ppe loans. The American People want to know how we fails to act in real time to prevent this wrongdoing and how we will act quickly to propel the return of those funds and prosecute those responsible. I will answer that question into manners. In two manners. Want, we do not discuss individual loan issues publicly and we will be discussing all affiliations and all loan. I request to submit for the to plannedletter parenthood of delaware inc. , including the investigative document must. Document request. Secretary, your testimony referred to the anticipation of additional relief for businesses, and importantly that it will be targeted to parts of the economy that needed most as we move from lockdown to restart. Undoubtedly, the lockdowns hit Certain Industries harder knows pleased to hear your answer to that young member propose to rely on neutral standards such as documented pandemicrelated revenue loss. You elaborate on the threshold you have in mind of revenue loss . To workingorward with this committee and the Senate Committee to determine those issues. As you just raised, we should look at whether it should be a specific number of actuated. But i think its important that we target this to the businesses that are hardest hit. Last point, curious if you would agree that the reason to do that, targeting it to revenue loss, is that to do the latter would both over and under inclusive and you might arbitrarily pick winners and losers rather than respond to a particular need. Yes. Time has expired. The gentlelady from california is recognized for five minutes. Administrator, i would like to followup up on this issue planned parenthood. Planned parenthood has been a lifeline for health care providers. Their affiliates serve nearly 3 andion patients annually its an Important Health care provider for many low income people across the nation. And let me say that planned parenthood affiliates operate independently from the national organizations, each having their own ceo and board of directors therefore qualify for ppe. Letter28, aiko led a signed by 166 members of congress. Those steel to administer ppe programs in a uniform manner and specifically not to exclude any entity or nonprofit on the basis of political ideology. Came planned parenthood affiliates learning that they were under investigation for violation of the rules even though they were not. Am deeply concerned about wouldtivations that prompt this investigation into planned parenthood affiliate, especially as many learned about these affiliations first from fox news rather than from the sps from the sba directly. So can you tell the committee intoany investigations affiliation rules have been conducted . Suchave you initiated investigations against any other nonprofit organizations for violation of affiliation rules under the ppe . , as i addressed to congressman bishop, at this point, i am not able to discuss any particular loan review and i am not in a position to discuss any others that we are reviewing. The specific one you are referring to is under review but i will not get into any specifics about that. Im sorry. Then let me focus in on another issue. Mr. Secretary and miss like to speak on two mandates of the code of the caren act. One, that they must be translated into calmly spoken limiters other than english and the other mandate is that ppe should prioritize underserved businesses. Mandate, theear treasury and spa failed to even collect Demographic Data of ppe documents, and as a result the data released by your agencies onlyd that in california, 6 of loans under 50,000 included these. In may, the Inspector General testified to the subcommittee that i chaired that agencies have failed to issue any formal guidance to lenders on how to prioritize underserved businesses, and of course to adequately collect data. To demonstrate the seriousness of this failure, just this week the Community Coalition published a study showing that black Business Owners with identical or better finances were less likely to be offered federal assistance and participate in ppe lenders. , please explain why you have not provided this guidance and what you are doing and i dos this issue appreciate your testimony saying the sba has translated resources but thisguages, application is still not translated, and what is happening with the . With that . Let me say it demographic information was always intended to be collected on the forgiveness. This was something we can force people to do, but we hope they will there will be a lot more information disclosed. Workde major efforts to with lenders for greater access and that is well represented but we could always do a better job and we will. The gentleladys time has expired. Miss carranza, you may answer the question. Concerning the language you are correct. We have 70 language interpretations of the ppe application. I will have to look into how mailing wages but that program was also to have bilingual. The gentleman from pennsylvania is recognized for fiveminute. Chair, foru, madam your leadership, especially on. He subject for the gentleman that i could yield some of my time, to give an answer to this question . The gentleman from maryland is recognized. Thank you, madam chair. The point that i was trying to make was that when the data did finally get released after our data that was released for all of us should the secretary and madame administrator that in the state of maryland which only has eight congressional districts, the one i currently represent god 2. 7 of all of the fundings. Got 2. 7 of all of the funding. This district has been without Elijah Cummings but there is no reason in gods world that there should be this kind of disparity so obvious in a district so diverse and i will yield back my time to the gentleman. I appreciated. Appreciate it. I want specifically to go to the secretary and kinda piggyback a little bit. What areion i have is you doing to address the discriminatory loan practices and what are you going to do to hold these banks accountable . Arid i thinkthis the chairman chairwoman should Work Together. What have you, specifically as a , can you of treasury speak to that . We have hadrst say a call with chairwoman waters and they have been very helpful. We have also found ways to expand cdf eyes and we were pleased with their work. Robert smith has been particularly helpful. We had Weekly Conference calls with him and his team and we have to do a better job to make sure that all areas and communities have access to these funds. To the extent there are specific instances of discrimination or others, we want to research that. You have a lot of experience. The gentleman from colorado asked you about your background. You tell us what tools you intend to use, especially when you know this problem does exist . Let me just repeat, the statistic we have on lower or moderate Income Housing is that we did have copper representation. That is obviously different than other demographics. These are best use that serving underserved communities and that is why we proactively put a cdi set aside, something we very much support and we support an additional legislation making sure they have the proper resources to serve these communities. Going to the administrator really quick. The idle program is available to constituents who called questions around credit. Tell me what you are thinking in terms of receiving that information, their ranking of order relating to idle distribution of grants. How exactly was management around he relating to that program . The advance administration the number of applications that were again in on queue and we based it 1000 per employee. That was not just an arbitrary number, it was a wellassessed and analyzed strategy. It was discussed with members of the senate Small Business committee. We advise them that in order to cover the number of applicants and Small Businesses, we needed to do something so that many more people would receive the funds. The average for both the agriculture and normal businesses were about three employees per business. The gentlemans time has expired. The gentleman from illinois is recognized for fiveminute. And i want to thank you for holding this hearing. Congressional oversight of these Unprecedented Programs is critical, especially as we think about our posture going into the fall. I want to thank the Committee Staff for the work they have been doing during this process. Secretary and administrator, think you for your work today and addressing Small Businesses throughout the pandemic. That, likesured me many complaints, the backlog has been addressed i know you address a process in only five days but im concerned that things are quiet but its going to get busy soon when money starts to run out. When you talk about the 150,000 as a cap, and earlier you had mentioned that our work had provided a bridge, when you bridge,that arbitrary many will find themselves in the river. I hope you will give us the help many of these businesses need. Economic uncertainty will continue in the month ahead arid Small Businesses are still going to need more help in the fall and today what i would like to discuss is the preparations to anticipate these challenges. Earlier, i sent you both a letter on challenges i would and what gapss remain and what agencies are doing to anticipate that. Vein, what modeling has the treasury done to anticipate future needs . I think Economic Modeling is particularly hard at the moment because of the fact that we closed down the economy. This is not a typical economic situation. But we are relying on our economic models where we anticipate as we open the economy that we will have a and wecant improvement have done Economic Modeling within the treasury on the industries that are going to be we hardest and the sizing need of additional funds to address that. We will be working with the committee and the senate on that. Dear models take into account the factors we are seeing in texas, arizona, louisiana florida . In california, youre seeing businesses close down again. Do the models take that into consideration . That may 1 say that traditional economic models given the situation are very hard but yes we are looking at this across the entire u. S. In certain scenarios where there will be a slowdown in certain areas where things are doing better. But thats the reason we need additional funds to help these hardhit businesses. I appreciate it is hard, that it is necessary and its also necessary for our businesses and other organizations have clear guidance. I was on a zoom call yesterday with superintendents and all of them were talking about the challenges they are facing about the lack of guidance they are from your department as well as others. And i asked the superintendent about teachers who said they are absently terrified about going back to work. I dont think the government is doing nearly enough for that guidance. But as you look at forward thinking and what you might need , how do you incorporate the data you have to make sure you get better guidance to our businesses . You that there task force will be working and continues to work with the state unguided. On your comments, i expect we will have a significant amount tomoney to get dedicated k12 education so that it is safe for students and teachers. When you say the money is not only critical guidance on how to use that an open safely. In my last few seconds, when we , 59 businessesh in my district have still not received a decision on the application. We willgive us an when . Et these companies the gentlemans time has expired. Congressman, i look forward to working with your office to identify the remaining balance of these businesses. The gentleman from new york is recognized for five minutes. You need to unmute yourself. We cannot hear you, so im going to recognize the gentleman from new york for five minutes. Thank you. I want to thank both the administrator and secretary for being with us today. Ppp while these programs have been critical for Small Business owners, wants take a moment to highlight a bill i included that was included called the Small Business Debt Relief Program which provided six months of payments, interests and fees for qualified businesses. In the month of april, we made payments to lenders over one billion. It corresponds to hundred 63,000 total borrowers. Indicate thatates there are about 320,000 outstanding loans across these three programs. Administrator, you noted during a Small Business Committee Hearing last month that the sba had taken steps to notify borrowers but needed to do more outreach to ensure these borrowers are available of this aware of this benefit. Can you tell me what steps you have taken to ensure every borrower is able to take advantage . Thees, we dealt with lenders and intensified communications. As a result, it has gone from one billion to 3 billion of debt relief. We can do more because as you stated, there is still an opportunity to work not only with the existing businesses, but others that are interested. Significantly which we are very pleased about. I am pleased to announce that within the hub zone, the 504 falls into that area. We have over 106 billion that had been appropriated to the program. Working withd to your office if you have any areas you would like to concentrate on. I would just like to follow up. You said you contracted the lenders and then you said you can do more. Im curious if you are able to detail what more would include. A followup call to the individuals we contacted through our office of capital access. Anything else . Toagain, i look forward speaking with you and working up a strategy. If you have a particular area you believe we could do a better job on i will go back to the inquire as to how we are working with all of the other program offices. Again, seven a has progressed strong, the debt relief has seen an increase. Given it has increased, other things being done in regards to utilized that could be in regards to the other major loans that could help . Congressman, we have been talking about strengthening all. F the flagship loans we should deftly coordinate with our offices and talk through other concrete steps we could take to help facilitate this. We also dont know how much has. Een bent we dont know how much has qualified loans, we dont know how much borrowers have hit to receive it. We request this information. To have it available and when. An we expect it information if we have the data heights want to know if you have been a recipient of the letter. Im sure our Congressional Office is looking at it, so i will connect with your office and resolve that particular issue and provide you the information that you need. I appreciate that. We would certainly like to expedite this process. Im sure you can imagine the importance of that. With that, i wheeled back my time will yield that my time. They are having some technical issues. The gentlelady from minnesota. Can you hear me now . Will you allow me to proceed go ahead. Thank you madam chair, thank you Ranking Member. Thank you administrator and secretary. Month back i spoke at this committee and i said small yorkesses throughout new who are really upset and mad as amazed see how everyone is praising the ppe becauseand how it began we all know that it was on the back of the portal crash. Traditional Banking Institutions went to preferred customers, and only the wellheeled and connected were able to get access to the program to the degree that many of them were shamed into returning the money because they were publicly embarrassed that they were accessing this money and Small Businesses throughout america felt that main street should be bailed out. Weve already bailed out wall butet the Airline Industry main street needed to be bailed. Ut of technology out we to address communitywaste banking and cfi to access dollars and give them to the Small Businesses across main street in america. Even with that, we had just recently seen how the new york times, wall street journal report on an investigation revealed that only 12 of the 1. 1 million businesses in new ink city got ppe loans comparison to 20 of businesses in states like montana, kansas, wyoming etc. But while the pandemic was ravaging new york the program is giving money to those states that were the least impacted. So my first question is to you, secretary. How much money from the remaining part of the program and additional funding will you carve out for that particular part of the economy . , would youd question consider having some parody and level of access to the program for states like new york which contribute far more to the federal coffers and contribute in ways that other states dont and yet they get far less back . Again, only 12 of businesses here got that as opposed to 20 in states like kansas and wyoming. Those are my two questions. And is there an effort to give states like new york which are had one by the pandemic of the lowest numbers of loans given to the businesses. If you will see, you see many Management Consulting firms got Legal Services firms got as opposed to say nursing homes,. Hich i think were critical please address that mr. Secretary. As it relates to new york, im not sure why more ppe loans havent been made there. There still money available, so to the extent there are , we arees in your area more than happy to work with you. It took a while to get this up and running and we have a system that will work well in the next round. Isnow that the pandemic ravaging the rest of the country. Some of those businesses might have to shut down. As states reopen, this is the current time to focus in places like new york to see how we can help out. As this goes across the rest of the country, is there a commitment to help womenowned businesses in new york state . Hashe tenements time expired and now we recognize the gentlelady from minnesota. I want to say thank you to the administrator and secretary for their efforts over the course of the last threemonth. Has really been a model of bipartisan efforts to save our Small Businesses, so i just want to say thank you to my colleagues across the aisle as well. Secretary, i was going to ask you and the administrator about extending the ppe applications for a second loan. You indicated you are open to that idea. I actually have the bill here in the house that would allow the backst hit sectors to come and get a second forgivable loan if their revenues have been impacted by 50 or more and decide their business is 100 or fewer employees with that remaining approximately 130 million. I also had bills a couple of weeks ago that passed the house and signed the extension of the loan program through august 8. I tell you that this week we have been meeting with small, Community Lenders who have been telling me that the smallest of Small Business loans of 6000, 9,000. People are coming back and getting these loans for the first time in the smallest of. Oans which is heartwarming secretary, 10 you just say a little bit more about the program as you would envision allowing the hardest hit sectors to come back . Just want to i make sure i understand the direction you and the administration are thinking as well. Let me just say we look forward to working with you in the senate, but my suggestion is that we have a program that were we try to keep as many arts checkm we allow a second and we put a limitation on a revenue decline. I understand your bill is a reasonable approach but we want to work with you, the committee and senate to find out what the appropriate revenue decline should be. What the size of the businesses should be, whether 100 or slightly higher. But again we have complete agreement. There should be a second check available to the businesses and there should be requirements surrounded. Around it. Thank you. Are starting to ask the question if theres any thought to the size of these loans that would absolve these businesses of essentially filling out those loan justveness applications, from the perspective of the bureaucracy of doing that. Is there any thought on either of your parts that, whatever orber, we might not require, should we be advising Small Businesses to get your materials ready . We put out what we call the easy form and there are certain things we can work with the legislation in new i am somewhat hesitant to just say a blank check, because again i am concerned about fraud and wants to make sure the oversight committees are comfortable this money was used appropriately. So i think some level of reporting in a simple way is important important. Thank you very much. Two final things very quickly. In initial cares act i know house perhaps on a second, additional bill. 18yearolds were left out as dependents, disabled dependents. Mine wereudents, like left out as dependent. Would you be open to including them in the next package and . Aking that retroactive let me say that from a policy standpoint, i understand that issue and im sympathetic. Thee are technical issues irs has in administering that because of the way dependents were reported on tax return but we are trying to figure if there is a way to do that. I appreciate that, and with that i yield back. Let me thank the administrator and secretary of the treasury. With you again for being us here today and discussing your agencys response to the covid19 pandemic. I am dedicated to pushing the treasury to prioritize our small , underserved businesses because these communities are hurting. Programs have been fraught with challenges for participants and a lack of transparency for those of us seeking to conduct oversight. With that said i expect regular updating to the data on ppe and forgiveness in the future and i also ask that you publish a comprehensive program guide. We cannot continue to operate this way. Its not good for borrowers, its not good for lenders either. We cannot work when there are at least 22 entering final rules on 49 frequently asked questions that borrowers and lenders must navigate. Understand this program was thrown up with extraordinary speed. It is long overdue than a comprehensive guide was published. I ask unanimous consent that members have five legislative days to submit statements and supporting materials for the record. If there is no further business before the committee, we are adjourned. Thank you. [gavel bangs] [indiscernible] during the summer months reach out to elected officials with cspans congressional directory. It contains all the information you need to keep in touch with members of congress and state governments. Order your copy online on state. Org. Sunday night, on q , the american conservatives consecutive director and acting editor john burka on this special edition of the magazine. I conceived of the project because theres a lot going on in our country and it is unsettling times for a number of americans. Everything having to do from the covid crisis lockdown and the killing of george floyd and subsequent protests. And, the president ial election. A lot of people are taking the opportunity to really examine First Principles and trying to examine where we stand in the nation. Watch sunday night at 8 p. M. Eastern on cspans u. N. Day q a. Next week, the house and Senate Return to legislative business before the august recess. On monday and tuesday, house takes up the fiscal year Defense Authorization act. The bill establishes policies for Defense Department programs. Wednesday the house will consider a bill to remove the tony, the author of the dred scott ruling, from the Supreme Court chamber and to discuss the issues of confederate statues on display in the u. S. Capitol. The senate also reconvenes to the office ofon senate and budget, and for the remainder of the week, the Senate Continues work on the 2021 Defense Authorization act