Transcripts For CSPAN2 Treasury Secretary Small Business Administrator Testifies On CARES Act 20240712

[inaudible conversations] is a todays committee will come to order and i want to thank everyone for joining us here today and want to welcome the secretary and the administrator and thank you both for being here and all the members for being here. This is the first opportunity to hear from both of you about the enactment of the act in particular as it applies to Small Business. It is a landmark legislation and less than two Weeks Congress passed the largest Economic Relief package. They worked tirelessly to make it possible every single one participated on the leadership of the Ranking Member, senator cardin, senator shaheen and senator Collin Collins isnt a r of the committee that was part of the task force and it was invaluable in helping craft a lot of this and i want the record to reflect dot. We have invited senator collins does it and participate and rightfully so because of the extraordinary contribution. As every member thats been involved, the administrator has an incredible amount of work to do to execute and administer the Paycheck Protection Program and there were bumps along the road. No one would say there wasnt. It is by far in my view no disrespect to anyone else by far the most effective and most impactful portion of the act to date. History will look back at it as an example of what the government can do in a time of crisis to be helpful to the country and if theres any dispute i want everyone to ask themselves what would the economy look like today had there not been a Paycheck Protection Program. It took a new approach as it was being negotiated the businesses were faced with a prospect of laying off workers not because of the weakness in their Business Model for the downturn in the economy but because the government told them you cant alternate or open your doors. You cant do business. In some respect it is the equivalent of a taking. We viewed it as with the government does as the power to do that and that is to help to compensate those that are damaged by it with no work available to be done. Until the normal conditions were restored between you the most efficient economic outcomes wasnt the best outcome from the common good it would have been catastrophic for the country. Within a 72 hour period the father was laid off and the mother and two adult kids were laid off and there was a massive calamity for the family. It is also bad for Small Businesses. Workers are not disposable inputs that can be discarded during tough times. They are especially of Small Business and i have personally heard nothing sure many of the members have from countless Small Business of the english, the personal anguish that many of them felt having to lay off employees many of whom had worked for them for decades. These were people tha that they knew, they knew their families, their children, they watched them grow up and they watched how much they depend upon these jobs to make ends meet. The Small Businesses need they could take out against their future earnings. They needed a lifeline and with the economy needed wasnt just government checks but to listen if you dela pinup delay off to e delay off altogether and i think as much as anything else to preserve the connective tissue of the economy which at its core is being attached to dignified work. It would have had a set of traditional. As nationwide lockdowns shut down the economy, we worked on this and remember the committee and those outside of the two main priority is, the size of it to make sure that it reached enough businesses and people and we needed to do it fast. The scope of the lockdown meant we needed sizable relief and its now at 670 billion. It is a lot of money and its larger than any other program larger than the 2008 stimulus bill and to some estimate some e Largest Program since the new deal. The care act was signed into law on march 27 exactly seven days later thanks to extraordinarily tireless work which is easy to criticize some watching from the outside but we are talking about people that were there overnight, four, five, six or 7 00 in the morning barely enough time to change their clothes, thanks to the tireless work of people working. The Paycheck Protection Program began seven days after Congress Passed it into the president signed it. Small businesses received funds before the people started receiving unemployment checks and other lending programs under the Federal Reserve are only just now beginning to operate. It isnt a criticism of those things it is just to describe the effort it took to stand up the program that didnt exist in just seven days. When this began on april 3 no one on planet earth have ever made for an approved the loan and had never processed a p. P. Loan or applied for one and in seven days, that can. The achievement came at the others. It shouldnt have happened. They represent a minuscule program however and most have since returned to them. The price to pay unfortunately for a program that in hindsight we know is among the most Successful Programs that the government has ever done to rescue the economy. It would be the worst month during the duration of the pandemic. What would that have looked like given Everything Else going on in the world and in the country right now . Without the lifeline, tens of millions of americans would have been permanently separated from their likelihood and stripped for long periods of time on the opportunity of dignified work. Many would quickly be condemned to poverty. It would have been hollowed out from the brick and mortar stores. Its tough out there. Forecasters and every one last month, 2. 15 million americans got their jobs back. Four and a half million american businesses have received loans equal to over 500 billion. But this is equal to 50 million jobs. A recent survey by the National Federation of independent businesses noted 77 of surveyed Small Business owners had applied for the loan. End of the 77 , 93 had received funding. As of june 6 there are Development Financial institutions and minority depository institutions now in the program. It accounted for more than 190,000 phones valued at 15. 8 billion. This is the record of a Successful Program and i want to thank everyone at all the members of the senate and partners in the house and of course the president for not just passing this is working to implement it. I do want to comment on the Economic Disaster loan program in the grand Advancement Program through the extended version offering direct government funding was eligible entities suffering injury due to the pandemic. To date they have approved more than 1. 13 million loans totaling about 79 almost 8,000,000,000. 3. 1 million of advances totaling another 10. 2 billion. The program has numerous challenges both responding to numerous disasters and of course under this current one. I raised concerns with the decisions of the existing program as a whole which only accounts for 2 of the disaster loans made and in particular i was concerned that it would be challenging for the agency to handle a disaster of this extraordinary magnitude. As such, the concept of using the lenders and that the direct government loan student short capital is reaching because of Small Businesses as fast as possible is one of the reasons that gave rise to the ppe. I commend the agency for standing up the program nationwide response to the unprecedented value of applications in a short period of time. Today unfortunately we see similar and challenges including processing disbursement timelines and communication issues. As many businesses rely on assistance to rebuild after the economic disruption caused by the pandemic, we look forward to the agency addressing the current challenges and how congress on this side we can work to support the agency and make improvements in the program. Today is an oversight hearing. There are many issues myself and members of the committee would like to raise to keep the Program Running smoothly especially as some businesses approach filing for loan forgiveness as earlier this month. But we should begin by putting these issues in perspective and recognizing the choices congress and the administration had to make in order to make the program succeed. With that i would now recognize the Ranking Member for his opening statement. First, thank you for containing the hearing but more importantly, thank you for your leadership in the role that the committee has played in a nonpartisan manner in order to help Small Businesses of america. This has been a proud moment of our Senate Career is for these very important programs to help the Small Businesses during covid19 we did this in a way that put them first. Secretary, welcome to the committee. I personally want to thank you for your availability. A. Of making it as effective as we can in the administration and to work as the need for legislative changes. Its provided 4. 5 million loans over 510 billion an incredible effort and we thank you very much for the hard work of the members of your agency. This committee helped craft and i was proud to be part of the committee consisting of the four senators, senator collins is with us today, senator shaheen and myself put together a list of all of the members in the senate and stood up to three programs. The program that has received most of the attention but also the idol Grant Program as well as the loan forgiveness program. When we initially created the program in march, we thought that our economy would be performing at a more normal level than it is today. So it seemed reasonable. As communities began the process of reopening it is clear that they will be up an wont be up t the end of the age we period switch for many will occur this month. I was proud to see the senate act responsibly passing Bipartisan Legislation that gives businesses with existing loans the discretion to use them over a 24 we period rather than the eightweek period. Its working for many employers. In the main monthly job report released by the Labor Department classified it has proven of those added back to the American Economy last month, more than 1. 4 per jobs in the industry many of whom secured loans through the programs. However, the economic challenge facing the country, the National Bureau of Economic Research announced this week that the United States economy is in a recession. And that the Unemployment Rate remains at the historical high level of 14. 3 , a level that we havent seen since the great depression. While the success is a wonderful couples and how there have been challenges in the program that have come into sharp focus given the massive protests the nation has witnessed over the past two weeks. The protests sparked by the death of george floyd has raised the awareness of the disparate Public Health and economic consequences of the covid19 pandemic on the communities of color, black americans in particular. The Unfinished Business in america more than 50 years ago the commission created by president Lyndon Johnson warned of the negative consequences of continued inequality. That was 50 years ago. The commission wrote america was headed toward two societies, one black and one white, separate and equal. There is no question we have faced strides since they released the report but there is an economic divide between black and white american. In 1968, the typical middleclass black family had less than one tenth of the wealth of a typical white family. It is the same today and exists at every level of education attainment a report found that there are no actions that americans can take you to laterally that will have much of an effect on reducing the racial wealth gap. It is made even worse by the difficulty in getting the lending. Of the minority Business Owners are two to three times more likely and more likely to receive less funding than the higher Interest Rates of those that they be received. Its with this inequality of mine that senator shaheen and i drafted language of the act instructing the treasury to issue guidance in participating in the program to prioritize loans for underserved Small Businesses. We want to prevent history from repeating itself because we knew that during the 2008 financial crisis, Small Business lending to the minority owned businesses fell dramatically and never fully recovered. The secretary and the administrator, these disparities are why i was so disappointed to read in the recent flash report that was prepared at the request of senator schumer and myself, the report found that the sba implementation did not fully aligned with congressional intent of the act because they didnt provide guidance on the prioritizing underserved and rural markets. Further it found they failed to collect demographic information for the Small Businesses seeking the phones. While i appreciate that they will be collecting demographic information on the loan forgiveness and set aside for the chairman mentioned and the secretary announced it is important that they follow the inspector generals call to provide guidance to lenders that prioritize underserved markets. They do not have access to traditional banking institutions. That is why they sba existing disaster loans were so important. I remain discouraged but these programs which have Great Potential to help Small Businesses seek to adapt to the new reality of the postcovid economy have reached fewer businesses than we had hoped. The democrats and republicans are expressing their frustration on the administration of the program, the slowness of getting approved, the arbitrary cap was put on the program as well as the fact of the lack of transparency. We need to do better. It serves a particular way for businesses and can be used for the working Capital Needs and those that do not have employees. The program is especially important for the minority owned and other underserved businesses which are less likely to have one employee and have fewer on average. Unfortunately the administration hasnt administered in a manner that makes it a reliable resource for Small Businesses. The administration has put in place requirements and limitations without notifying them of the decision to cap the loans at 150,000 even though the statute allows them to go up to 2 million. In may the administration also made decisions to stop taking applications from the Small Business is winning restaurants, retailers and other establishments that havent had access to since midapril. They are relying on you to make these loans more accessible. The Administration Must become more transparent. In the months since the passage, congress has been pushing for Additional Data on who is receiving the aid, and i appreciate the chairman and i have joined together in making that request and we have worked with the administration and weve gotten some of the administration that we need more of it. We are extremely disappointed to learn he had the same problems that we have had in havent caught in thgotthe information o carry out their oversight in the executive branch as well as the difficulties we have in the legislative branch. To help those receive additional funding but we need the data to ensure that the assistance is as effective as possible. We all agree that theres going to be the need for a second round how are we able to get that second round if we dont have the full information on how the first round is operated . We believe that it should go to the smaller of the businesses and to those that are the most in need. It should go to the underserved communities particularly in the rural areas and minority businesses, but we need to have the data in order to make those decisions. Finally, we must do more to ensure that the businesses have the tools and resources they need to address the longterm economic effects. I was proud to work with senator poker for a plan to outline steps congress can take to provide Better Health for Small Businesses in underserved and ud communities with regards to start off an operating capital as well as Technical Training and mentorship. The aim of the plan is to ensure that when we make it through the pandemic and when we have the next economic downturn, we have institutions, programs and knowledge to support Small Businesses underserved Small Businesses and in a timely way. Im under no illusions as we work to rid the nation of these any qualities. Before we can begin to make progress we must work hard to secure the progress we have already made pledges at risk in regards to covid19 did last week at the hearing the association told our committee that the economic consequences are projected to increase decades of minority Enterprise Growth in the underserved markets. We cannot let that happen. Wall street journal headline today says the fibrous overrate black job market. We need to take action to make sure that this does not happen. I look forward to the hearing and from learning more from the secretary and the administrator about wha the trump administratn is doing to ensure the other businesses are not left behind during this crisis. Welcome to the committee and thank you for joining us here today. It sounds likthe it sounds like its on. Try now. The light isnt going on so i will try to speak. The chairman rubio, Ranking Member and members of the committee thank you for the opportunity to highlight the efforts of the treasury and sba to provide for the two businesses and the workers during the Paycheck Protection Program. We are committed to working with you to ensure that every american gets back to work as quickly as possible. Americas economy has begun to rebound and the recovery is underway. We are estimated to predict 8 million jobs lost in the month the actual data shows 2. 5 million jobs gained the largest onemonth job gain in record history. Both the jobs that were saved and the jobs that were hired or a large extent a result of this program so thank you very much. Several other indicators show that we are wellpositioned for the strong reopening of the economy. The chamber of commerce announced last week 79 of Small Businesses are at least partially open without the businesses that remain closed planning to remain open very soon. The personal savings rate released on may 29 had a record high of 33 of disposable income indicating people have built up cash reserves during the pandemic and will be at the position to resume consumer activity as the businesses open. The economic positioning is the direct result of the administration and Congress Working together to pass Bipartisan Legislation to provide necessary liquidity to the workers and markets. The pc has kept tens of millions connected to their jobs. The National Federation of independent business found that 73 of its members retained workers and the economic and tax payments that enhanced Unemployment Insurance are providing relief to millions of families and workers experiencing distrust. The implementation of the Federal Reserve lending facilities are also enhancing the flow of credit for industries across the economy. We continue to monitor the conditions closely in Certain Industries are rebounding more quickly than others for example after losing nearly 1 Million Construction jobs in april, nearly half have returned in may and by contrast retail lost over 2000016 of those positions returned. We remain confident that the overall economy will continue to improve dramatically and third and fourth quarters of this year. The spa and treasury works better to launch this program in a very, very short period of time in less than two months they are supporting a employment of 50 million workers and more than 75 of the Small Business payroll in all 50 states. This is an extraordinary achievement and we appreciate the work of the committee. As you might expect executed on a National Scale and in record time, we initially experienced some complications. We resolved then quickly. By standing up the program quickly, we were able to support tens of millions of workers who may have been laidoff worker load. Aside from the implementation we work with members of congress in both parties to task to subsequent pieces of legislati legislation. We reached an agreement on the second round for over 300 billion providing businesses with more time and flexibility to keep employees on the payroll and ensure continued operations as we safely reopened. Thank you mr. Chairman and other members of the committee for your work in building the program and helping workers and families throughout the nation. I would note that while it is a very important part, it is only one part of the act it is more than 260 billion of record time. Programs to support the aviation and other eligible businesses we have approved the disbursement of over 27 billion to more than 500 airlines and other businesses preserving hundreds of billions of jobs. From the state, local and tribal governments and in doing so weve provided recipients with as much flexibility as possible. That will promote the flow of credit to business households in the state and local governments as well as restored liquidity and funding we have over 250 billion remaining to create new or expanded programs. In conclusion im proud of the work weve done with all of you. We will overcome the unprecedented challenges before us together. I look forward to your questions. Thank you. Thank you, chairman. Let me provide you with some perspective on this historic work that has been engaged in over the last several months. It took up theasked about the multibilliondollar Paycheck Protection Program in a matter of days. The dedicated professional staff helped launch the Program Three days ahead of the deadline imposed by the act. In fact during the first round of funding they processed within 14 years they created a twopage application to streamline the process. Since late march, we issued the interim rule as of today and theres over 4 million loans for over 511 million much needed Financial Relief to american Small Businesses. We administered the program of the focus by recognizing that the pandemic had been particularly harmful for socially and economically disadvantaged businesses. In fact, 45 of the loans into total value would disperse in lowincome areas. They specialize and provide liquidity and unprecedented communities. They still have 113 billion available funds. If is Still Available for the businesses that need assistance with as well as Committee Staff to allocate dollars and 113 business centers. They also allocated funds and worked with the association is nonowavailable for the Small Businesses to utilize. With the Disaster Assistance program the agency worked around the clock to create and implement a system for the idle advances. This was a first for the agency, and we have now processed and dispersed money to all businesses requesting an emergency grant except for Small Businesses that still need to clarify their information. The devastation created in 2017 by Hurricane Harvey and maria, three of the costliest storms on record. Sbk dispersed over 7 billion. That amount represented 8 of the total related disaster funding approved by the agency since midmarch. With respect to the provisions of the act of th, sba issued gue and conducted outreach. The agency provided over 2 billion in principal and Interest Payments on the current funds over the last two months. Before i close, let me briefly discuss how we are improving the obligations they are continuing to build an organization. Ive created an internal oversight plan for each. The agency has brought on thousands of staff to support the disaster operations while still servicing 175 National Disaster declarations. I have also overseen changes within our contracting and investment programs which many of you faced with th graced wite previously. For instance in march i changed leadership and streamline the licensing process and we are also on track to fund new licenses for the women and minority firms. Ive partnered with other agencies among them u. S. Dea. Theyve helped inform the economic response efforts and several continue to advise us of the important tasks of longterm smallbusiness economic recovery. Thank you again mr. Chairman and members of the committee for the opportunity to testify today. Thank you to both of you. I am going to do for the balance of my questions we can get to all of the members. You indicated for borrowers that failed to spend 60 on payroll costs will continue to be approachable for the partial loan forgiveness and can you confirm that this means they are failing to meet the 60 requirement will still receive loan forgiveness equals to the payroll costs and a proportional amount of non payroll costs . Thank you for your work and for being here today. Applying for the loan and got it and applied for the idle because he needed the funds for the working capital indicates a 30 year loan program he was eligible to receive as a result of not being able to get the funds so, we intended for the program to Work Together. I appreciate the fact that youve issued so many compared to the historic record but weve never had a universal disaster before. The volume level as we understand it is only 15 of those processed and theres still a huge backlog in processing the loans. We made significantly more capacity available to you. Youve delayed the applications of those that have already been filed and closed the windows of the non agricultural programs. Why is the idle program not being used to its full capacity and what can we expect in the future moving forward . I agree with your frustration and assessment of the delete process, however, let me start with the agricultural small farms and coops. When it was announced that we were able to accept over 146,000 concerns, they have several billion come close to 2 billion of loan value. Theyve also taken advantage of the advanced grant. The average loan we are experiencing is 68,000 we expected them to be the community that was going to access the 150,000 we were averaging about 83,000 coming in at 63,000 or 65,000. What is the rationale for the 150,000 cap when it says up to 2 million . When we first opened up the portal to accept the applications, we went from 85,000 phones in one day and in four days the input, the demand increased to 3. 8 million applications. With additional appropriations you can go up to 350 billion in idle loans and i dont think that they were anywhere close to a fraction of that. We made them available and they havent been processed. When you look at the idle government program, it is exactly that. It is designed with various Distribution Channels so if you go from 1800 to about 5400, they now have over 5,000. The applications have slowed down and we do not see them pick up. This is unacceptable it has to operate at a much more efficient level anwith weight you have tos know if you need more help if i want to ask another question with regards to those that have criminal records you issued a regulation that prevented them from participating. We talked about this. Theres Bipartisan Legislation and broad support in the senate to allow those that have paid their debts t debt to society te to participate in the program for those that have committed economic fraud type of offenses. Weve been trying to do this administratively. We appreciate the communications weve had with you on this issue and others. We are in the process of putting our guidance that i think will come out today reducing it from five years to three years as a result of your input and we are happy to work with you and the chairman to see if we should reduce it even more. I appreciate that we have made progress and we can go further than that. We will have those conversations into an opportunity to Work Together on legislation so we dont run into this in the future. I would suggest im happy to speak to you tomorrow and if they wanted us to shorten if we will consider that even more quickly. I think this is a historical moment the first time we had the secretary of treasury and think of the change in leadership and strength of leadership in the committee. When they write the history of this i think that you will have your own chapter in the history book. I spent all my life in Public Service in one way or another and i have to tell you when this whole thing had com, this was a tremendous challenge for the United States of america. And i have always been reticent to believe that the government can step in and fix things easily ive been incredibly impressed by your leadership as weve gone through this and i do have some inside information. We are very close personal friends and i know you and he are on speed dial with each other and talk regularly very i had some issues with him and the program like everybody did. To be flexible in making these things work has been a Great Success. You dont read about in the media or cable news. They are focused on the 3 trillion against the wall they are focused on that and i can tell you as i talk with the Business People in idaho and for that matter around the country, there is tremendous appreciation for what the government has been particularly appreciation for the United States treasury with minister in these programs and there are millions of businesses and millions of people who are a lot better off because of your leadership into the administrations leadership taking this on. Thank you for what you did. I want you to know notwithstanding a lot of the stuff you read theres great appreciation among the people and i think history is going to judge you very favorably as we go forward. Ive got just a couple of quick questions. Number one, or you as surprised as i was as to how the economy is bouncing back for you as surprised as a lot of people that the economy is coming back as quickly as it is coming back admittedly with some sectors more so than others . First of all, thank you for those kind words. Ive repeatedly said this is a unique situation. Th to economic issues, its due to Government Action and shutting down the economy as a result of covid19. As i said before, the traditional economic models are not good at predicting things. I was somewhat surprised and very pleasantly surprised by the recent numbers. I thought that we were going to bottom out in june and is not made as it relates to the markets and the economy in these numbers, this is a direct result of the bipartisan work of the senate and the house responding in unprecedented fashion so not only the 3 trillion we pumped into the economy but the money that you interested to work with the Federal Reserve has unlocked markets without spending a dime taxpayer dollars they thought we would have to come to the government for help. Im absolutely amazed they were used as well as they were used in this regard and the fact of the matter is that it really was the first test of time and the fact they worked so well its just stunning. We are getting some input from the sector that the process and the application is overly complicated. If you would have a look at that, i would sincerely appreciate it. As a safe harbor it would make it substantially easier. You are getting the same kind as to those out there from the Business Community as far as being able to make the programs work that you have so we appreciate that and i want you to know that appreciation is there. The criticisms that have been made to have stepped up, both of you and america sincerely appreciates and thanks you both for what you have done. Obviously 5 million Small Businesses will be in the loan portal which means within a weeks time they will be processed and we will be over with the idols. Thank you. Thank you for your bipartisan effort and for those that are also participating, senator shaheen and collins for all the work thats gone into the smallbusiness to a access per capital is an issue for Small Business and one of the great things i thought our site focused on is the issue i can see in my state where they are basically getting out in marketing themselves and getting access to capital frankly dismal businesses dot turned down by banks. I know you cant guarantee how things operate but obviously this has been a problem if we want to figure out solutions. People with good banking relations are turned down and without good thinking relations probably never have a chance. The issues that come before us now today is that there are a lot of women and minority owned businesses always also a pervasive problem of access to capital and the committee has done good work with that in the past, prioritizing the smaller ones in a whole variety of things to get capital. But i do think we should be looking at what my colleague are recommending that we prioritize smaller sized Small Businesses. I think ten and a bit make sure that we are getting access to capital. There are a lot of women and minorities that are Small Businesses under ten and wikis and again, how are they keeping the business going if they dont have access to capital, so i hope in the next round we will prioritize that and i hope that both of you will agree on that. Weve worked a lot on various aspects in addition to the smallbusiness and there were many hours day and night working aroundtheclock oaround the cle provisions, so i thank you for that. I want to ask do you both agree we should figure out a way to make sure we are sending a message we want th to businesses prioritized under ten people . Yes, absolutely. There is a focus with sole proprietors to pursue the loans so we have a task force dedicated to that to the particr communities. As well as dedicated resources and how we can optimize. Theyve done well with up to 430 plus, but we could do more. I have two questions for you. When we were doing the aviation part of the bill, we thought the supply chain was critical to americas security. We thought of that as they aviation commercial supply chain and not just the defense supply chain so we had a couple of hearings in commerce and we want the dollars to go out the door to someone in the supply chain making commercial manufacturing part of the supply chain. We think those dollars should be eligible to them. Do you agree . To the extent o on the specifics im happy to address them with you. We believe the definitions of importance to National Security is commercial. You didnt have to be engaged in the defense contract that keeping the commercial supply chain is critical to the National Security because if we dont have an aviation sector is going to impact us so we definitely want those dollars out the door and it seems to be a problem. Another area that there are problems is a plugin for the tribal government that somebody that represents 29 different entities definitely want to see those dollars out the door. Can you tell me when the 8 billion would be distributed . The second tranche of that is going to go out tomorrow and the association with alaska. Is literally going out tomorrow if either tomorrow or friday. Lets keep working in a bipartisan basis and not forget those that are getting left behind. Getting access to capital is always hard. Thank you to the panel for being with us this morning certainly appreciate both of your commitment to have the Resources Available to help the Small Businesses survive the economic crisis but theyve never seen in their lifetimes. Every single smallbusiness owner that ive talked to around the country had the same words without a paycheck protection tn program that they would not have survived. So, survival was the key focus. But now the focus turned from survival to recovery many are asking about a second bite at the apple. Is there an opportunity for you to think through where we should go, is there an appetite for folks to see another four weeks in addition to what they already have, and are there any other ideas on the table that speak to the recovery aspect of where we are and not simply the survival mode we have been . Thank you and i appreciate all of your help. I think we are definitely going to need another Bipartisan Legislation to put more money into the economy. I think as we said, we do not want to rush into that, because we want to be able to look carefully at this point to see how the money is in the economy. Economy. A part of it is still not been if we need to be much more targeted at this point. At that point in emergency we had to put a lot of money in the economy and we knew that it wouldnt be perfection but i think that whatever we do going forward, it needs to be much more targeted particularly to the industries and Small Businesses that are having the most difficulty in reopening as a result of covid19, if we look forward to working with you and the rest of the committee over the next few weeks as we think about that. Steven mnuchin this role also provided a lot of traction to smaller businesses that may not have had that relationship. I certainly think that we are emerging into a new part of the process worsen tech and unorthodox folks should be part of that process going forward. What was your experience and how should we anticipate the use of syntax is the next wave of opportunities. Thank you. This allows me an opportunity to share with the committee that we have dedicated resources to work with the syntax companies. They have a precious and they indicated they could provide microloans to thousands of people in the underserved markets pretty so that seems like a real appeal for us. In a way to really penetrate that community underserved community. So i wont mention the names we had for companies. We had to dedicated resources bring one from cfpb and to be focused in on working with treasury to help get them authorized to be a preferred lender for us. So it really worked well pretty and they are still in play. That is not side of the aisle. Frankly is common sense. But perhaps America Needs to be more common sense from both sides of the aisle. Sen. Tim scott without any question, secretary you and i had many conversations that right this as well as the others. And i hope that as we look into the future, with the notes and tech platform for ways to serve minority communities that have had a challenging time of having access to capital. That will be a part of our forwardlooking and the ability to help fund some of the emphasize to market as we get through the things of Minority Business Development agency to provide resources for the marketing of these resources and minority communities. Also proved to be helpful as well. More of a comment. The technology and working with the signifies are very important and i want to give it shout to smith who spent a lot of time with us and is dedicated Technology Without making any fees to those signifies of that they can out reach more people. He and his company have been very accessible. And i think done a good job. We need to do a much better job going forward. Sen. Tim scott any firefox administrator. Im just going to comment on robert smith and you beat me to its. Sen. Tim scott he has good ideas. They actually work pretty self thank you offer bring receptive to the private sector being engaged in this process. It was one of the bright sides of this relief package. Thank you both. Thank you all for being here this morning. I certainly applaud is all of us do, the important difference that the Small Business programs made in the ppe rams in the other programs. In New Hampshire weve had to into 2000 businesses that have received over 10 billion. Senator cardin very eloquently very express my frustration of not getting information. We need to make changes to the program. So that we can ensure that what was working continued and what was not working could be changed. It is like closing the barn door after the first has gotten loose. But i think all of us would like to feel like we are getting regular information so that as we are trying to perform, not just our Oversight Mission was a at what we need to do to make changes that we act that data in front of us. So in week more forthcoming in the future than it has been in the past. I want to follow up on senator scott questioned about the second round of health. Because we are hearing, our office is hearing from a lot of Small Businesses in New Hampshire who got the original loans are about to run out that money this week or next week. They did everything that was prescribed in the program. They fired back their people, they have been waiting to start of their businesses, many in the hospitality and Tourism Industry which of the last to open up. In New Hampshire, that a significant part of our economy. Another bus run out of money and about to fbn a position of having to lay off those employees. Again and are worrying about whether they are going to go under in the next couple of weeks. So talking about the legislation that weve been looking in, trying to look at the second round. Hundred 40 million still remaining the beach eat program, we hope that we can all agree this is an opportunity that we should take advantage of for those businesses that need continued help. I know the job number sports betterthanexpected last week 13 percent unemployment is still not acceptable and we dont want another whole round of playoffs because we have Small Businesses who got help and out cannot get additional help when they need it. So i hope you about the open to that. I dont know if you have a view you talked Steven Mnuchin to look at that. But some of these Small Businesses dont have the time. Steven mnuchin we mark we are 100 percent committed to people who have lost their job. To work and people who have the jobs can keep their jobs. And that is an absolute priority of hours. As you said the Unemployment Rate is still way too high. No fault of your own. Theres no question that Small Businesses in Many Industries are going to need more help. We look forward to working with the committee. And the rest of the senate on a bipartisan basis to include incentives. And whether it is through the ppe or others or tax credits, we are open minded. But we absolutely believe that Small Business and by the way, many big businesses be Certain Industries are absolutely going to need more help predict. You talk about the effort to move the loans for the programs. I think that is probably the program that we have heard the most frustration from businesses in New Hampshire about. We are still hearing from them on a daily basis. They cannot get information about the status of their idle loans. You talked about expecting all of the ones that are in the queue to be approved by next week or to be on by next week. What can we tell those businesses who are calling our office about how to get information because they are not able to get through on the tollfree line and the sba to get answers to their questions. Senators them i will exercise the amount of resources that we have added to the phone center. There are 3000 versus a few hundred that we had a couple of months ago. And we have added approximately another thousand we did when about the perleys and what not to reconcile some of the loans. With regards to and im going to get into the weeds and elisabeth. Why this ability, why the loan is not realized with this new automated system. What we understand on the traditional legacy system, and had a lot of visibility. That is the system that would manage all of the Natural Disaster loans. We had to ramp up and do a search processing and plant in dew point, what was not billed was a loan tracking visibility and that his wife and has limited visibility. Jovita we have visibility on the intake and then when they get notified by email, that their loan is progressing and out is a matter of to make a decision whether they want the loan and whatnot. So there is this cup that there is no visibility. We did not have because of time and the urgency to get the machinery up and running, we did not allow the engineer to build that piece. Some now it requires a particular Loan Officers to do this. We are in the process of fixing that because there now being prepared to accept more applications besides the egg and we have a few hundred thousand waiting in the queue and we would like to take them on. We have learned a lot. The amount of communication that is necessary, the amount of persons face to face, not just emails because we have made available up to nine products within the timeframe that we are speaking to. About a loan status. We have about 65000 that want to reenter. And be reconsidered for more funds. They were working through that as well so theres about two or three portfolios where working through to sure of that. We provided a lifeline. I may not be the 2 million. But what we can provide it is a lifeline to many more at that particular cap. And so we are looking to activate that. When i made reference to applications being all in the queue, by next week. All of the 4 million applications that weve had since to the state since march are now going to be in that loan portal which is making an assessment on. The reason we are able to do that is because we went from production way loan officer processed about three five wednesday now 50 loans a day. Is that search, realizing more efficiency. I look forward to resolving those issues very quickly. I do look forward to communicating with you more often. We do have Conference Calls with the committee and members the chairman and Ranking Member. It was not frequent enough to pull away from the operations and i will not be able to personally meet with everyone an update you much quickly and more quickly. Jovitastatement more transparene can be the more people understand what is going on with the program on the list frustration and the more understanding will have. Thank you both. I hope we can continue to have a bipartisan approach to helping the Small Businesses in this country. Thank you. Senator kennedy. Yes her. , sent you have nothing to say which adapt pretty. Thank you mr. Chairman. Thank you mr. Secretary and met an administrator. Ive had some oral surgery as you can probably tell. So my speech and my exit is the same but my speech is a little impaired. That is a blessing right course. Mr. Sec. D you have on your staff people, who can put a value on the amount of damage was done to the businesses from the looting and the burning fro. Not the Economic Impact of the peaceful protests. Or as american as baseball but looting is not. Do you have someone who can blend a value on the Economic Impact of those small and larger businesses. Steven mnuchin i do have economists. Out will pass them if they have done it. I dont know the answer. We have about a hundred and 30 million we have not to disperse. The ppe the program. Is that correct. It appears we will have money left over is that correct pretty. It is pretty. I would like you and your very enabled i mean that sincerely alex to look at and take some of that money and make it available to the businesses, mostly Small Businesses but to the businesses that have been lost. As a result of the burning in the looting and the felony rioting. I think theyre going to need help. Steven mnuchin for more than happy to help you on that pret pretty. [inaudible]. Pretty. Steven Mnuchin Congress gave us an extra 60 million more than we needed. Because everybody was so skeptical that we are going to run house. Some component of this extra money we did not anticipate we would be able to put to work. But we look forward to potentially refocusing it. Im going to reintroduce the bill and if we do have an additional coronavirus bill, i would like to consider making that a part of it. Steven mnuchin we will absolutely work with you. And if you could put some of your best minus, you and the administrator to quantifying the damage done from the rioting. I would envision that we have arrested a lot of people, from our Law Enforcement authorities to calls this, who did the burning in the looting. And i would probably put a provision or a bill where the authorities have to go after them for civil liability. That could offset the money that the taxpayer would have to spend. But i would like you to take a look at that pretty and talk to the president about it. Steven mnuchin we will. Number two, audit cut to the chase here. If you are looking for a day, what would you put in the next coronavirus bill other than the idea. Steven mnuchin evoking for a day i would say that we should spend the next 30 days looking at a lot of different things. And that would be that built. What i know serve the youve been thinking about it i would like to get your general thoughts now what we should be thinking about. Steven mnuchin i think that when we would need money for business to encourage businesses to reap higher people especially in areas that have been most impacted by the end is travel, leisure, restaurants if you cant get Hotel Capacity up to speed without hiring people first. I think we are going to need to fix unemployment brews we knew there was issues with enhanced Unemployment Rate when certain cases we were paying people to mark the nuts work and we recents number some of the did not have a big impact on these people want their jobs. We have a significant amount of an appointment we will need to look at something everyday think were going to seriously look at whether we want to do more direct money to stimulate the economy. But i think this is all going to be about getting people back to work and we will forward to working with the entire senate on this. What about here. What about in sending investors to invest in the economy. Capital gains treatment that would be relaxing that sort of thing. Steven mnuchin it is something that we have discussed. My opinion right now is that the fed facilities have unlocked the capital markets. There is a lot of liquidity. That something we will look at but i think were much more targeted and getting people back to work. I think investors are prepared to invest a lot of liquidity the have right now predict. For the Federal Reserve has done a great job. And they have unlocked in them. But at great expense. We can talk another day about the size of the balance sheet. I think he did great. A rock star. Final thought. A lot of the banks and the Small Business women and Small Businessmen, think that the federal government is going to doublecross them on the forgiveness of these loans. You need to be mindful of that read you also you in the administrator need to take some of those smart minds in your office and you have plenty of them, and try to reduce that 11 page form to about half. And you both in my opinion, i am trying to tell you how to do job. But articulate to the Business People that the federal government is not looking for ways to catch the banks or the businesses who took this money in a manner a mistake so the loans can be turned into loans. Steven mnuchin i assure you that is the case and let me just emphasize in the recent bill, there is an extension from two years to five to ten years. But i dont expect businesses are going to need to use that. I think the majority of this money is going to be forgiven in the next few months and that is our intent. I want to know that but they dont trust it. And for good reason pretty. Steven mnuchin and thats what were going to get the job done quickly. Theres also let me just give a little pinch, theres a third Party Calculator that you can put all of the information it and you can get the forgiveness forms done in 15 minutes. As i said, with a new legislation, it is going to be even easier without safe harbor. Trust me to laugh and people ask us about the senator collins and others, i would like to make this as easy as possible. We are required by law to work within a certain amount of time. I want to assure people that our intent is to process this quickly. I should also mention that, we have been speaking with you and others obviously on the state issue. I know you have potential the decision so i should also put that on the list. Obviously we will address in a bipartisan basis. We want to help the people who are hurt from the burning in the looting. Thank you mr. Chairman and Ranking Members and thank you secretary in the administrator. As many of my colleagues have remarks, this is a rare bright spot bipartisanship and partnership. And it delivered a lot of relief to millions of businesses and households and families. There are some aspects in our Work Together and have not been realized this quickly as many of us had hoped. The idle loans have ended up being a challenge to deliver. And there is others more work to be done together. To make the forgiveness process swift and clear and appropriate. On a focus for a few minutes on a piece of that cares act, the Small Business debt relief act that maybe has not gotten the visibility and needs. And what we could i think make some more progress. Before covid19, africanamerican Business Owners were typically denied think loans and triple the rate of non minority dissenters. And some of the pressures of this procession are compounded preexisting inequalities. And thats one of the core reasons i worked in many filings worked to get the debt relief act into cares title i party it gives six months of principal interest and for relief for five of our micro clinic programs that by definition existed in order to help those who were denied close elsewhere. Just a quick example, fitness and right near where i grow, the blackowned business that is now saving 9000 a month because of this automatic debt relief program. I spoke to the owner give on board and thus we been working tirelessly to reopen her Small Business and go back to serving the customers. Im concerned there arent enough Small Businesses required by law to receive this benefit. There are some remaining who havent buried administrator, if you would have the gape identified all of the businesses eligible to receive this automatically when her lenders are. What are you doing to make sure that every single cover to borrower is fully participating in this automatic relief program. Seen an uptick. Started up to edit a billion in the have and now its to 2 million that have recognized the principal and interest in the coverage. As of the email without. We spoke with the banks. But we have to do a better job of that. And another level of, we saw the increase and we need to do a better job of not only tracking the businesses but also making sure we work with the lenders. Is supposed to be an automatic and it has occurred for many but i believe knowledge is power and will have to do a better job in that area sir. I do think we are falling short in reaching every business for the businesses i have heard that have benefited from this say is critical and timely difference. Theres also a question that senator duckworth wanted me to ask for issues that an Armed Services committee hearing. We both worked on it is a small technical issue. It was a drafting error pretty unconvincingly cares act with the cap 470 are tied. We passed on a bipartisan basis here in the senate, the technical fix that held up in the house, if you would speak briefly to how important is this to avoid a shutdown of the 70 loan program because of this drafting error. We dont see an exposure on that shutting down. We actually have available funds for that particular program. So i need to get back to you on that. I have not heard of any such positions at this point pretty were actually doing really well in five oh four in a community advantage. Were looking at developing and are loan option for underserved communities. I look forward to get back to in this pretty. I was a minor issue but is been flagged by staff on both sides of the eye with a weak and fries. Three more quick questions of again. The cares active 200 million to the gao for oversight of the Ranking Members. The fda extent on individual loans available on its website to the 780 loan program and the administration said they planned to do so for the loans in the future date. Why havent you made individual loans pp Data Available and can you assure us that the gao is going to get the access to the data they need to do their job. But oversight within the executive branch. I can comment on that pretty. Steven mnuchin first of all let me just say, we absolutely believe in transparency and we were very clear across on agreeing to significant transparency especially in the feds facilities which were not required. As a relates to the names and amounts of specific ppe loans, we believe that is pride. Information. And in many cases, for sole proprietors in Small Businesses is confidential information. So the reason why we are not disclosing the names and individual amounts unlike in the program is because that issue because we are working with the gao from an oversight to make sure they are comfortable and they do have access to information. Thank you secretary, i do believe it is critical that they have access to all of the data the need for their information. As retail and hospitality are reopening, their supply chains which often rely on credit, are finding two months later, theres a lot of concern about the cost. There is much more liquidity. But credit in insurance and factors are becoming equally unkind key blockage. I heard from a lot of folks in retail flow line credit to finance the restarting party i hope youre looking at credit insurance. Steven mnuchin and im happy to followup with you in your office on that. Thank you in your engagement has been terrific. In 15 seconds i will say, i hope for a response on the bill referenced by senators cardin and shaheen who work introduce for prioritize paycheck protection for genuinely Small Business that has suffered significant revenue loss to give them a chance for a another ppe loan if they responsibly can and that we have hundred 40 million of unused funds. Thank you for your forbearance. Want to subscribe to the comments the gym said about the support they provided for our economy and for the people who work in our economy. I also recognize is been more than a few glitches and concerns and errors that occurred. But i am thinking about the banana stand and the rest of the developments. If they went from two customers to 2000 customers, will make it difficult for the guy with the banana and the chocolate sauce and beans and so forth. And you to step up very quickly. You have had to rescue many jobs for a country and appreciate that very much. What a heres a talk to people in our Small Business community so much they appreciate these laws but also the beginning to be concerned about whether or not going to be qualified for forgiveness. They note that in some cases they tried to rehire employees, they found it hard to do so. In some cases people making more but not working so not able to get them back. Or others have moved elsewhere to get employment or opportunity elsewhere with family. I hope in underscoring, what senator kennedy said and as you look at ways to determine the people qualify for forgiveness that were not sticklers, means that are looking to help people get forgiveness as opposed to exacting penalties on them. So being said, in terms of loan forgiveness, ims concern about circumstances work businesses applied for a loan, received the money but actually saw no reduction in revenues at all and remain fully profitable. I hereby the circumstances, and that various journals the written about and believe that given the fact that in the loan application, you noted that this loan is necessary to support ongoing operations. Then if the business did not see a reduction of revenue, that is to not qualify for forgiveness. That it should be maintained as a loan. The something what you think gods country be provided on or have you subscribed to that thought. Statement thank you senator ronnie. I know the revenue test was something that the committee actually considered when this was written at the time and i think the general idea that so many people were going to be undetected by this that not to include the revenue test. As i said, when we put in the certification without that people would self select appropriate sleep. Unfortunately, there were a number of companies that were highprofile that took the loans and i publicly came out against that. We did get about 12 billion returned. I think to a large extent it was from large public companies. In some large sporting teams that i am a big can of raid i had many discussions with many people on this committee about the bipartisan basis for this test on the certification. We made a judgment the majority of the Small Businesses, 98 percent by number, or under 2 million and most likely would legitimately ticket so we issued a safe harbor. And im 2 percent of the loans that are the large loans, we will do a review. Some of that will be an automated review. We have to have the proper balance away from that we will have a more general audit to make sure theres not fraud in the things. I look forward to speaking to you and others on this issue. You noticed an opening opening, that we expect a strong faith recovery in the third and fourth quarter. But there has been an substantial cash resources of our consumers pretty and that we expect a dramatic improvement in quarter three so i am puzzled by the statement that you make that we will need a stimulus to get the current economy going again. Understanding will be certain sectors of the economy, hospitality and so forth that will need ongoing help. And may be Small Businesses who will need help. Maybe we want to extend the ppe Program Beyond the at the end of the month. Do you believe we will need a stimulus or as the economy poised to come back again with those outliers. It is the economy poised to come back without further stimulus. It. I see is one of the things that we want to consider in the recent not to jump into the cares for, is hopefully we wont need to cares five to cares. I do think the economy is going to rebound significantly by would also say is still significant damage and parts of the economy and were going to consider using all of our fiscal tools, working with congress to make sure that we restore this economy back to where it was. And where it should fbn a short and to many still dont have jobs, get back their jobs. So we look forward to your business experience in working with you and others to make sure we do this appropriately. Summa thank you mr. Chairman predicts statement before you turn it over, i just want to comment on the revenue thing. We talked about it quite a bit we have to concerned about it. The first on the front end is you will create all this paperwork, Small Business will have to accumulate all this paperwork to show what the revenue was to compare it so we were concerned was told in the process pretty i know firsthand, were very sympathetic to this argument that youre making a bunch of money, what you need this on. Another thing were concerned about his what are the businesses that survived do. And sometimes they get creative and they reinvent themselves in a crisis. For example, maybe you made close but now youre making masks and ppe, not just to keep people employed but reinvent themselves and provide a need. If we dont want to discourage or punish people for doing it. It is a complicated issue and we should continue to talk about it. We certainly dont want people to take advantage of it but we worried about it when we were talking about this in the front end. Thank you very much. Just echo a lot of the comments and have been made by people on both sides of the aisle. Not just the two of you, and this really difficult time and frankly her teams in the Civil Servants who work under you reader agencies have been able to do things that we can again imagine at the end of last year. So i just want to give my gratitude for the differences made in my state. Its just been extraordinary and there is a lot of folks who are happy. I just want to echo also the pride i havent working with such a bipartisan way. Weve seen people both sides of the aisle on this committee come together and just you really good work. I think senator rubios opening comments he talked about the fact that so many of us rose to the occasion of inside politics and really focus on people and businesses. I am really thinking for that predicament this issue and very personally but also very bipartisan way. A lot of it is my own faith in matthew 25, just beat concerned with people who are often marginalized. Eightyseven of us senators voted to think that a lot of these too long. And we are in a bipartisan way doing a lot on criminal Justice Reform rita work with the administration and talk to jared, and my bill passed about people coming out of prison and eliminating the box that we often have to checkpoint itself im still perplexed and grateful that you mentioned an offer to revisit this issue. And im grateful again in a bipartisan play. These senators and others put together legislation to eliminate the restrictions that are preventing people from getting access to the slums. And credible entrepreneurs in cities and communities all customers at cornell denied. There are seeing their Small Businesses collapsed which are often critical pillars in many communities. This bipartisan issue has been endorsed and supported from everybody from aclu from to the american conservative union. Freedom works pretty so i again, mr. Secretary, i want to know do you believe in an individual who has started a business in contributing to the locally, creating jobs just prior and related conviction should really be barred from participating in the ppe program. Steven mnuchin for some mistake that we want to work with you and others to fix this. I think that really quickly. As i said the original seven a program and we reduced to five years from seven to be that we could reduce it. We are happy if there is bipartisan support and happy to make the change this week. And reduce it even more. So again, i know there we obviously had some issues about people who were convicted for financial crimes and other things. You and i both know thats easy. Steven mnuchin again, we are happy to be responsive. Limited time so i will just say this is not a small issue. This is thousands of people affected tens of thousands of jobs. This basic ideal of justice. Seems incredible into the nixon i would like to put Something Else on your investment, pretrial diversion. We know what it is for those who may not, these are specifically divine programs allow individuals to plead guilty and subject to completion of Certain Court mandated programming, the getty plea is vacated. They do not have that criminal record which has 40000 collateral consequences if you have a criminal conviction. It is a good program it only happens when the judge, the prosecutor, and the defense attorney all components of the criminal Justice System go green come together and break that the individual should not have to suffer those collateral consequences. They are associated with the criminal conviction. So despite the consensus of the entire criminal justice community, we are doing the contrary. Were denying people their in these pretrial diversion programs or entrepreneu entrepreneurentrepreneurs employing markets, we are denying them what prosecutors and judges and Defense Attorneys all agree should not be a bar on collateral consequence. Summa the ppe denied into the spokes. This should shock the conscience of others. Steven mnuchin unaware of it but i will make that fix immediately if that is the case. Steven mnuchin thank god past the collection plate. I really appreciate that. That commitment meant is noted and im really grateful. And i want to be respectful of the time intensive as i just want to echo what a lot of my colleagues have already said about still not an equitable dissipation of the funds. A lot of minorities are falling out of this program. And a lot of its just because Small Businesses, some as we call them but momandpop shops are not. The mission did before. In the building of those funds that are started of injury has on during economic authority. In all across the country to see them or feed them with resources to help because of better targeted to those smaller momandpop shops and getting a lot of fund its out the door, i again think that appeal to my colleagues on this to look at her bipartisan effort to do this. And again my respect and appreciate your willingness to help. Thank you very much for the comments you just made about people in pretrial diversion. Makes me extraordinarily happy so thank you. Thank you for raising that issue in finn fairness, the secretary has told us the numerous conversations that if he could come up with bipartisan language that we support we would be more than happy to facilitate on this criminal justice situation. In time this of the essence even that june 30th deadline. All reiterate that. On behalf of the administrator not forget a letter from the chair in the wrecking member, we will instituted that changes. It said on the call. Again we will make your change immediately but in regards to other changes on this issue, we are happy to implement the essence we get guidance. Thank you very much. Senator ernst. Thinking of mr. Karen i would like to associate myself as well with the concerns of senator booker. In iowa, we are very short and hard labor pool. And we truly value of those that have served their time there commitment, to the great state of iowa. Those that want to find a positive path forward. And starting Small Businesses. Certainly i think the number of us would want to engage in those activities to make sure we are extending opportunities for everyone that doesnt deserve the opportunity. The thank you. In thank you secretary. Thank you very much for being here. And we are seeing some strong numbers coming forward. And i am thrilled. I think because of the work that has been done through the Small Business administration and through the treasury, and through especially the Paycheck Protection Program, we have been able to preserve a number of Small Businesses and jobs across the United States. That has been reflected in the numbers that we are seeing in may, it was projected to lose 8 million jobs. And instead we were able to add the back tuneup million. Again, i credit so much the program that you have put into place the limb enacted in a playing key role for a really stunning turnaround in the economy. So thank you for that. I do appreciate your hard work in implementing the program for you theres still a lot of work to do. Things that have been identified, but we are definitely heading in the right direction. I didnt have a question administrator. Last month, the head of the planned parenthood affiliates received a Million Dollars through ppe. Despite the fact that their affiliation rules disqualified them. What actions are being taken to ensure the planned parenthood returns those funds is held accountable for the violation of the fda rules. They take the affiliation rules mary closely. We look at it very closely. Very fairly. And at this point, would you say that all affiliations are being looked as. And im not in a position to speak about anyone particular borrower at this point. But they will be reviewed, not just planned parenthood but all together all of these affiliations that have unfairly taken advantage pretty. Yes and taken the necessary course of action yes. Thank you. And then as well, for the secretary, the secretary forgiveness is of course become a large issue now that we are moving into a state of recovery. That ppe forgiveness application, is very complicated and i hear that from islands time and time again where the application process was fairly simple. But the forgiveness portion, the application process, is very confusing. And our banks are Small Businesses have told us that his team lawyers and accountants would be necessary to help those businesses that are filled out that forgiveness application which puts our smaller businesses at a date significant disadvantage. Do you believe they have the authority to simplify the application for small borrowers and if not, would you eat willing to work with the committee on this issue. First let us tell im helped design the application form. And i personally reviewed the forgiveness form. I dont want this to be any more complicated than all of you do. There are requirements in the bill and make it difficult on the forgiveness. I do think in the new law, the safe harbor for people who check the safe harbor will make it significantly easier and out need do for less of the calculations. And we are coming out with new forms for people who check that. Again i would also just advertised as a thirdParty Calculator that if you put in all of the information, it fills it out in 15 minutes so you dont need to go hire lawyers and accountants but i can assure you we will work with you very closely. We want to make this easy for people to deal. And with the safe harbor, most people will have the benefit of that. Appreciate that in thinking very much. We just got a call,. [laughter]. Senator rosen. You can hear me now. Only thank you review of freud taking my call. Ranking member carded an administrator, and the secretary you really provided leadership in helping our Small Businesses especially for those of us in nevada. You really helped us with that critical support that we needed during these challenging and unprecedented times. Thank you for your willingness in public to provide her small nevada Gaming Business up and on the state. People thing is just a big hotel for the trip but its up and down our state and everywhere. And everyone is very very appreciative. I want to talk a little bit about idle perform. And over a course past few months the coronavirus enemy is just devastated Small Business. 99 percent of our businesses Small Businesses. Whitman forcefully also we have the highest Unemployment Rate, 28 percent. Up over 24 percent from last year. So it is clear that Unemployment Rate is a reflection of the overall state of the pandemic is happen. Small business my office is helped 500 cc of this Small Business with their questions shout out to our Small Business administrator. Over 100 webinar. I have been able to present to spate on a lot of those. With one common complaint repeatedly is about the 1000 for employee cap. I know investment is hundred 50000 camp on the loan. 93 percent reduction from the 2 million level many nevada businesses have contacted the offices hundred 50000 just is not enough. It does not provide enough support. They will probably have to permanently close the businesses. The Ranking Member earlier spoke about this. These caps were not the intent of congress me a secures act. They were part of any deal. That Small Business owners thought when they applied for their unsupported. Senator cornyn and i and others a letter recently on this same issue back in april. I have raised a few weeks ago when we were on the phone. Administrator following up on the Ranking Members question earlier, why has the placed iron 50000 our limit. How did you come up with that number. And wanted to come back to us before. Appreciate your question. Small businesses have oppressed my office well. Again personal emails and followup on their request so im very close to the situation. But i want to reassure every member on this committee this arbitrary never was a matter of realizing that we had over 5 million applications in the queue. And thanks to this committee and thank you senator cardin for providing the council and the opportunity to speak with you in the german about what was in the pipeline and the fact that we had already 7 million that we had in the pipeline and then, also we had available close to ensure that we gave not just something, but based on six months of operating costs, this basically how the formulas base, is calculated. In the average loan at the given time was being realized it about 80 3k. So we thought if i can manage the decisions remain that if we could manage the 5 million applicants that were already in the queue, that had been waiting for the funds that we can cover all the money. A thousand dollars for the invite. Will the rent was the same calculation in the sense that we looked at a thousand per employee. At the first applicants about 700,000 that were sole proprietors pretty and one four employees. And we again, to allocate that many applicants a grant, we needed to cover this. How are you assessing this going forward. As nearly 300,000 which only about 83000 have been able to take advantage of this idle loan. We didnt want to discourage anyone on that queue. In the idle queue and we sent them a couple of emails indicating and demonstrating comparison of idle and wasnt available and what they could achieve with the ppe program because there was still sufficient funds up to this point. That is the other option we tried to clarify that theres another loan option they could consider if there a need of greater fund. This time as i mentioned are individuals who are miscalculated their operating costs from six months to three months. They were rate visiting those particular things. And so we have about 65000 of those who are reconciling. So that if they needed of 250,000, we would have it available to them. It will be taking new applicants as well. We have some and not as much as others so that is sort of disproportionate. I look forward to working with you. Theres a particular sector that is problematic. And i look forward to working with you on that pretty. Heres an update. Were going to mention the senators and then if there any wrap up items, i will ask them. And then we will send you a new way. Thank you. Ive been closely monitoring the implementation of the various programs the congress has established. I have to say, i am thrilled in last weeks numbers the ppe is played a vital role in the vital lifeline shut down pretty and is clearly help us stop the economic hemorrhaging. Its in a place now for recovery. So that i think is a Great Success story, think the chairman for his outstanding work on this. I know questions about the idle that is following up on was senator rosen and was asking about. Let me start, just in the planned parenthood issue, they have 16000 employees. This is not a great issue. Its black and white issue. They talk about it and all other organizing documents. Im just wondering when 37 planned parenthood offices, separate offices applied for ppe, why did the internal system at the fda not flag the application. Our system accepts applications than signs and loan number. And the loan arrangement is made between the borrower and the lender. So when you about 5 million applications being injected into our system, the nemesis of the flags affiliations or any particular particular industry predigital signs in a number. This was very important for us when we looked at sectors, and some sectors had tendencies and certain loan values, we then in the affiliations were one of them. We started to assess the value of how they exercise are interpreted that. What youre telling me is it in heavy safeguards in place in this critical question. No systems in place to flag applications like that. That is correct. Despite the fact, the affiliation rule was pretty fiercely debated as part of the ppe package pretty part of the cares package. Amended several times. Tell me about the planned parenthood affiliates who probably received funds how many for the contacted pretty. I would not be able to speak about a particular loan situation. Why pretty. s proprietary information. Im not asking how many of contacted. His statement saying that you have contacted the affiliates who sent letters. How many. Lee acted accordingly. But at this point, given the detail on it, on particular borrower is not right pretty. You can confirm that you want tell us how many. Is this what your testimony is pretty. Know him saying that the affiliation running borrower that we have taken the course of action is, that is, i dont talk about the particulars. How many have returned to the funds. And again, have to take the position that im not able to share that borrow information. When will you be able to and how will we conduct oversight. I look forward to meeting with you and discussing the situation with this point, i cant speak to them publicly. With different. Is just to clarify again the position. I wouldnt be able to develop any of the details. How will you provided with information about this breach of the rules that are in the statutes that we can conduct oversight. How are we going to conduct oversight if we dont know the details business is what you want to do it now, when we do and what are the guidelines you will follow in disclosing information pretty. But i would like to do is review with you the controls that we have put in place in the course of action would take with all affiliations. Not just that one. For the record i would like to say, it is important that this Committee Conducted oversight roles written in the statute. I want answers about how planned parenthood which is forbidden by the statutes that this congress wrote and passed into law. Is not a rule or regulation, it is in the statute. I want to know how it happened that 80 million was diverted to plan players had affiliates that is plainly not permissible under the statute. This committee has an obligation to perform oversight and i want answers on that. I will not accept that you cant tell us so that you dont know. I want answers. We will follow up with you. In the department of justice. It will not be acceptable that youre not going to tell us to get back to us and not going to be responsive. And frankly the pattern of unresponsiveness throughout this process has been disturbing. Ive said for the record and i will say it again today, one of the questions if i could. Im gonna move on. Youre not being responsive. Let me ask another question. On the idle applications, you answered an earlier question that the idle applications around the portal. I would like to know the timeline of when they will be process. Ive had applicants in my state that avoided 80 days pretty 80 days. For any kind of response on their applications. Similar problems in her state. When will they be process. We have repeatedly asked for answers they cant get answers and i cant get answers. When will they be processed and will these good folks get responses to the application pretty. I can extract all of the applications that pertain to your particular stage british i can review with you the status of them. But at this current time, about two and half million applicants that have been processed. As a heightened number of declines. We are reinstating those particular declines once they they have given their information for the other two in appleby injected by next week. So all the 5. 4 million applications that we have in the queue, since marge will not fbn will be called loan processing portal. I have visibility when that loan is positioned there and i can share with you exactly where your Loan Portfolio stands. I just want to emphasize again is absolutely vital for people who have been waiting for 80 days plus. Their application be processed pretty care what you label the queue this cure the queue. They just want to process. They want an answer. Theyre waiting on a vital lifeline principally will work for that. Thank you mr. Chairman. Let me start by thanking you for the invitation to join your committee today. I also want to say quite a rewarding experience there was to work with you and with senator cardin and senator shaheen in developing the ppe program which has been a tremendous benefit to more than 4 million Small Businesses and their employees. I want to turn to our witnesses. First i want to emphasize the point that many others have brought up today. And that is many Small Businesses are reaching the end of their eight week loan. And yet, they are still on able to fully reopen the cause of state restrictions. We didnt just run out t week. We now have curbside, in only six outdoor tables and we can only serve a maximum of 28 people a night. She writes that she lives in fear of a rainy night in which case she cant serve anybody in both outside tables. She said without the state easing the restrictions on indoor seating, i dont see how we can continue much longer. This is an extremely viable business that was doing very well until the state restrictions into the corona virus hit. So now we know we have 130 billion in funding for this program that remains available. I want to press you a little bit. You said you would need more support. Would you support these heavily affected sectors such as the Tourism Industry that cannot fully reopen until the left of restrictions to seek additional funds to extend perhaps another four weeks so that they can just make it through this period that they are forced to be closed, because they are viable businesses, and its not their fault. Mr. Secretary. I want to personally thank you for your involvement in this. I am especially sympathetic to the restaurants. I would just say that we had a large numbehave alarge number ot owners and industry people come in and meet with the president and we heard the 24 week issue and im pleased Congress Responded to that. As i said before, i think that restaurants and hotels in particular do need more help. Weve taken great pride in the bipartisan work, so if there is support for you and the committee on a bipartisan basis, we will very seriously look at that issue. And let me just give a pitch on indoor seating. Im happy that in dc theyve now a loud restaurant open. Ive tried to support restaurants. I dont see why on an indoor basis socially distanced that restaurants cannot be serving indoors particularly in parts of the country where it is under control. So, i agree with you this distinction between indoor and outdoor seems a bit random, and i dont know what people what to dwoulddo when it rains. Thank you. I have one technical question if the chairman would indulge me. It is a very quick question for the secretary. And that is i am getting a lot of questions about the timing for seeking forgiveness. There are some businesses that have gone through the eight weeks and our reopen and they would like to close it out now. But they are wondering with the extension to 24 weeks if they have to wait until the 24 weeks, can they close out . If youve used all of your money you can apply for forgiveness. The 24 weeks is meant to be an option. If you havent used it to specifically if you are not open or otherwise, you can extend. We would encourage people as theyve used all the money properly, please seek forgiveness so we can process these loans and get them off the books. That would be helpful for the workload purposes as well. Thank you very much and thank you both. Thank you mr. Chairman and senator cardin. Im going to touch on some quick points here. We have a vote that starts at 12 15, so we are almost done. Nearly perfect attendance today, weve never had that before so i appreciate you coming in. After the changes that were made last week with the additional flexibility down to 50 , 24 weeks to pay back, have we seen businesses that have said it didnt work for me but the new one does . Have we seen any uptick or indication that there is more business lining up now to use the program as a result of the change . My expectation is that we will definitely see businesses that were on the sidelines and now taking the position, especially restaurants that had issues but yes i would expect we would see that. That we dont know on the nightly numbers if its been reflected . We dont have those numbers but there have been expressions of relief that there is more time, so it is worthwhile. I have the curiosity as to whether im confident people have either gotten a loan or feel better about being a able to use what they have. Im curious if people out there are businesses out there now who think this works for us and me access is. We will keep a close eye on this, but as we get down the stretch with about two and a half weeks before the june 30 cutoff. The observation, and im glad you talked about targeted release and what we do moving forward. One thing that does concern me is the disparity in the recovery. I will give you one example of what i just read a while back or not long ago on a recent study estimated. Its pretty shocking. Its found in the majority of africanamerican neighborhoods, 95 of Small Businesses in the neighborhood said they cache buffer of less than two weeks. And the majority of white neighborhoods, not white nonhispanic, 30 of less than two weeks cash on hand. Clearly the 30 in those neighborhoods need help. There is no one disputing that. 95 versus 35 is a big disparity. So, one of the things i think we need to think through as the structure [inaudible] [inaudible] [inaudible] [inaudible] [inaudible] the treasury and our staff have been working all over the weekend [inaudible] [inaudible] bill from accessing the information that needs to fulfilit needs tofulfill somethd in the statute, and that is the report to congress, so it requires the gao to issue reports on Agency Implementation of the act with the first report due june 25, which is coming up. This is what they are telling us, saying of all of the agencies, the sba is the only one that has not cooperated and the lack of cooperation has infected her efforts to gather information that they need to fulfill the mandated reporting requirements to be put in place in the law. I imagine you have heard the same thing from them. What is happening because we need to get that solved. I spoke to the chairman yesterday, and i express to him that i next week we should be able to resolve some of the data his staff has been asking for, so i told him that we would be very punctual and as thorough as we possibly can. So we had a meeting yesterday and clarified the reasons for the delay. So your expectation is at some point next week it should no longer be an issue . We are preparing the data for the data act and that is in about a week or two, yes. I will keep you posted. We just need to get that fixed. Thats something thats in the wall and reflects poorly. Okay. Let me thank both the witnesses and this was very helpful. A couple of observation, first on the idle program, you are hearing from all of the members of the committee that its not working at the level that we anticipated. I think we can understand that initially there were certain administrative decisions that have to be made because of the volume, but two things have happened that are not acceptable. That is people and businesses have been left in the dark as to the status of their loans, and if it is delayed beyond it being useful to plan their businesses during the period of time, that needs to be corrected. And then secondly, the cap was put on the 150,000 really makes no sense today. I will be very surprised if the final numbers of the loans given out under idle come anywhere close to the capacity that you have thats authorized by congress. So i would just urge you to look at correcting the program as quickly as possible from the timely status of applications and the dollar volume. The second thing, there seems to be a growing consensus of the need for a second round for Small Business. Mr. Secretary, with response to one of our members, i couldnt agree with you more. We had to give money out quickly on the first round. The second round can be more discerning so i hope we can start the conversation now about how we could configure a second round for Small Business. I understand you may have on Small Business, but it would be helpful i think to try to get the discussions started now because as the senate normally updated congress normally operates, we usually get panicked around the deadline, so it would be nice if we could flush this out a little bit earlier. We took an earlier lead on Small Business and the other parts of the care act and it allowed us to have i think a more thoughtful draft legislation than some of the other sections. The third point is that it seems to me in regards to those that have criminal records there is a consensus, and i would hope that this week we could get all of this together and try to resolve that issue in a broad manner as weve talked about at this hearing. The last one i want to mention is the senators comment with the affiliate rules. I couldnt disagree more as it relates to the statements he made in regards to plaintiff. And i appreciate the administrator not talking about specific cases which is appropriate and i agree on that. But let me just point out one of the reasons we would like to get more granular data is so we can understand the scope of the issues. We wrestled with how to deal with affiliates in the new categories of businesses that qualified for the ppe program that could qualify for the other including the nonprofit veterans organizations and we put the provisions in the care act said it is applicable to the affiliations under section 121. 103 of title 13 code of federal regulations to the Nonprofit Organization in the federal organization in the same manner with respect to a Small Business concern so we expected you to use the same affiliate rules that you used correctly to qualify for the forprofit community. It we were concerned when publicity arose under planned parenthood that we dont start imposing the test on affiliation they say that its critical they implement it as congress directed without the ideological efforts to treat certain Nonprofit Organizations different from others. So, i just really want to put that in the record in regards to the senators comments. But it doesnt underscore how important it would be for us to get the granular information to the number of ones issued to affiliates so we can get a feel for hothefeel for how many woule qualified if we included all of the affiliates and the numbers for the 500th. But its also true in the exception. It would be nice to have the granular information. It might also be helpful to have the information regards to those that use the alternative test for determining the number of employees to qualify for the Small Business loan. So, any type of information we can get we can then analyze with those exceptions being, but we shouldnt draw a conclusion that if one particular organization who was treated differently than any of the other organizations because of their organizing mission, and that is one thing i would urge us to be very careful that we do not start discriminatory ways of implementing laws that are passed by congress. [inaudible] in discussing the process. Thank you, mr. Chairman. We are grateful you all came in today. Its important as you saw the level of interest in the senate and across the country. Obviously weve got some followup to work through, but we appreciate the answers given to a. They are important. The housekeeping item, the hearing will remain open for two weeks into the statements and questions would be set up by wednesday, july 1 at 5 p. M. With that, thank you and the hearing is adjourned. [inaudible conversations] [inaudible conversations] quoru. Mr. Sanders all right. Thats good, too. Mr. President , as everybody knows, our country today faces an extraordinary set of crises, unprecedented in fact in the modern history of this country. Over the last several weeks, hundreds of thousands of americans from one end of this country to the other, big cities, small towns have rightly taken to the streets to demand an end to Police Murder and brutality and in fact to rethink the nature of