Senator rubio thank you all for being here today. The hearing will come to order. Im going to go out of order, senator young has a related hearing to be at, i want to be sure hes able to be on the record before we begin. A relat hearing to be at, i want to be sure hes able to be on the record before we begin. Senator young i first want to get on the record and thank our subblingt matter experts. If theres anything we legislative leaders ought to be doing an more broadly our government leaders, its listening to Public Health experts. Thank you so much and the experts in some of these discrete areas that will be impacted by the coronavirus. I regret that in minutes i have another meeting that pertains to this important topic. I just want to publicly express my intention to submit for the record some important questions i have for you related to the increasingly integrated supply chains that we now have between various enterprises and i guess this is this situation will create certain vulnerabilities uring times of what is now a pandemic. I have some questions related to supply Chain Mapping that im hoping someone will be prepared to answer and lastly, our reliance on foreignmade medical supplies is something that i think were going to have to rethink over the course of coming weeks, months, and years. But its certainly caused heightened awareness of this important issue. So your attention to those issues would be much appreciated. Thank you again, mr. Chairman, for this opportunity to say a few words and for holding this important hearing. Thank you. Well give the Ranking Member an opportunity for opening comments. He wants me to go first. Very nice people here. We work on a lot of stuff ogether. Senator rubio todays hearing is timely because of what were seeing. I was to bifurcate it into two steps, first what we can do to weather the storm thats going to be affected by the fact that people are in the going to be able to be together in places and thats going to impact cash flows and the impact on employees and in some cases the effects on businesses not being able to function. Thats the immediate thing we have to deal with if were triaging this right away. I think were beginning to see the outlines of a second problem, that is, what it means when your supply chain is disrupted. Meeting just left a with the entire senate with leaders in our country on health care. Whats becoming evident and apparent is one of the impediments to the widespread availability of testing is the supply chain unpredictabilities. Its not just the tests. If you dont have cotton swabs or the protective gear or basic material for the tests youll have a problem conducting those tests. From our perspective is the role Small Business can play structurally new and for years to come to ensure these sorts of supply Chain Disruptions dont become a National Threat to the country. A lot will be focused on china because thats where a lot of activity has gone. Its not just china. India, south korea, if youre a country that makes these things and youre facing this threat, youre going to hoard it. Youll act in the best interest of your nation. Thats understandable. We need to start acting in the best interest of our nation in these regards, thats important. Later today if we can bring it here, because i believe we can, we have been engaged before last night in conversations with the white house, with Ranking Member cardin and his team work individual members of this committee, with our counterparts in the house Small Business committee, on what relief the Small Businesses should look like and how we can help them and so hopefully later today were going to have an opportunity to present it and the crux of it as i have already outlined is taking the commitments the president made last night and funneling it through our program and Community Banks because they are in the community. They have, through Community Advantage and other related programs as well, have the ability to process the paper on this, were going to have to give them a little flexibility. We have to allow Small Businesses to use the funds they have borrowed to make payroll, to provide paid sick leave for employees that are hurt or employees that are sick or employees that frankly cant come to work. Were going to have to give them the flexibility to do that we want to make sure the money being lent is real and will be paid back. By the same token, thats where the Community Bank process can help, but we also have to make it quick. These guys cant wait 90 days to get these funds. Workers cant wait 90 days for the paid sick leave that will give the opportunity. I dent claim it solves all the problems, but it does help. If were going to make that commitment to Small Business it should be in a way thats most effective and responsible with taxpayer money. On the supply chain issue, i think the back drop to our general economy even before and this committee issued a report a year ago that warned about it, even before all of this, is that we are dangerously reliant in particular on china for the production of critical goods. That includes goods as i have outlined that are needed to fight the coronavirus. And i think we rely on far more goods than we know. And part of the economic pain thats going to be inflicted on the country as a result of these disruptions will be directly related to disruptions in the supply chain because of an outbreak that shut down factories that end up impacting the availability of important consumer goods. Just a brief review our staff put together for this hearing, last year, this is according to the census bureau, china accounted for 88 of electric hand drill and sawing imports. 87 of airconditioning machinely ry imports. 3 of jackson hoists, 73 for cell phones and its parts, 51 of lithium ion batteries and the list gos on and on. Disruptions in these supply chains tell you even after the virus is contained and starts coming under control we could have shortages and you know the industries relying on this, this is where the spread of this becomes much more serious. So the focus is on three things that we really want to talk about. First is the immediate consequence of not having the capacity to produce essentials here at home. Small businesses are going to experience a great deal of economic pain as a result of supply Chain Disruptions. But theres also going to be increased demand. Increased demand for medical supplies and surgical masks and pharmaceutical drugs and our Small Businesses can be a part of the answer to that. To filling in those gaps in the supply chain for critical sectors that have been exposed as weakened because of offshoring of our productive capacity to china and elsewhere. The absence of having these domestic businesses that can ramp up production to meet demand neers critical goods limits our ability to mitigate the worst effects of this virus beyond the broader Economic Impact. And the result is that the virus could end up being more damaging han it needed to be. And the Economic Impact greater than it needed to be. One of the reasons weve struggled to produce testing kits is because we rely on foreign producers for the chemicals needed to make them. Theres a growing shortage because more people are testing an as i said earlier, the countries that have it are going to be less willing to provide t. We need to look at what we can do through the s. B. A. , it has to be bipartisan, to help Small Business be a growth sector in our economy to meet some of this increased demand. Second, obviously that we will discuss and im sure youll point to is the consequences of as a result erblet particularly when it comes to china. This wasnt the accidental byproduct of demrobalization, its the outcome of a strategy on their part with their made in china 2025 plan, it encourages Domestic Companies and their predatory practices and provides a shortterm bargain for Foreign Company bus bigtime costs for our nation and the world. For years, china has been able to entice american multinational corporations with access to markets in exchange for offshoring and sharing intellectual property and weve watched as beijing captured critical portions of the Global Supply chain. Today 80 of the active pharmaceutical ingredients in the United States are sourced somewhere else. And a lot of that is china. And now in the face of the pandemic as i said the absence of this capacity in the medical sector is endangering our health care. Thats something we have to figure out in the shortterm and forever. Its hopefully something that we are able to act on to find out what role can Small Business play in growth and in taking back the ability to make these critical goods in the United States right now and in the future. So i hope that we can come up with a second wave of proposals that will empower Small Businesses to bring their production of critical goods all in house and getting american multinationals to buy domestically from them, in the as a matter of economic protectionism, but as a matter of National Security and National Economic stability. This is good for our Public Health. Its good for our economy. Its good for, as i said, our National Security and its good for our people. I look forward to hearing from our witnesses who are experts on these topics about what we can do to help Small Business be part of solving this challenge. Now i turn to the Ranking Member. Mr. Chairman, thank you very much for convening this hearing, as you pointed out, we came from an allsenatemembers briefing on the covid19 virus and its consequences. We learned from that briefing, what we heard last night, it has struck our family. Senator cantwells staff person has the virus. Senator cantwell, former chair, Senior Member of the committee and there are members of her staff now in quarantine as a result and of course one etting, needing treatment. We know this impacts all of us. I want to underscore the last point you made. Our First Priority is triage to deal with the circumstances were confronts today, whether medical circumstances or the economic circumstances. But i hope that we will follow your advice and recognize this will not be the last crisis that were going to have. In regard to supply chain, we need to take a look at making sure that we are better prepared for the next crisis that comes down than we were for this one. I agree and look forward to working with you in regard to those issues. Clearly our First Priority is the is to deal with the medical challenges. Thats our First Priority. We still are not where we should have been or need to be in regards to testing. We are developing the vaccines and drugs that will hopefully be available, the therapeutic drugs may be available to help us in this crisis, thats possible, the vaccines will not. Im proud of our leadership in regard to those developments at institutions located in the state of maryland. Including the National Institutes of health and Johns Hopkins university and university of maryland medical center. We need to deal with local responses, make sure they have the capacity, the hospital capacity, mitigate the spread and the emergency supplemental dealt with manufacture those needs and as the chairman pointed out, the first installment, not going to be the last installment, and we also have to deal with the Economic Impact, including the disruption of the supply chain to american Small Businesses. I was pleased to see that it was recognized in the supplemental, there was a recognition of the problems that Small Businesses are confronting. We recognize that small sinesses are very much impacted by the facts that americans are selfquarantining and not using the Business Community as much as they would, avoidance of gathers, cancellations of events, school closures, the trip cancellations, all that has an impact on american Small Businesses. I could give you specific examples in maryland. Johns cop hins Johns HopkinsJust Announced theyre closing their campus from the point of view of students and faculty. I can tell you Charles Village in baltimore city, a lot of Small Businesses located in Charles Village they depend upon the students and faculty. Theyre not going to be there. Its going to impact those Small Businesses. We can give you many, many more examples. Chanel wallace who owns a hair salon shared that order for Hair Extensions placed in january yet to be filled from her vendor in china. Jerry who owns a noodle restaurant in gaithersburg reported that his restaurant has experienced a 30 decline in sales. And the spread of the coronavirus is only going to make that situation worse. Sterling forever, a Jewelry Company based in town send reported that not only were some of the factories in their spy chain closed, their distributors were requesting advance fimet help with the crisis. The list goes on and on and on. We know that were just starting to see this. Its getting worse by the i would say by the day but it seems like its getting worse by the hour. We know we have an immediate crisis. Capital is the life blood of Small Businesses. We need to deal with that issue. The emergency supplemental allowed Small Businesses to qualify for Economic Injury disaster loans. And provided some resources to the Small Business administration in order to administration that. We need to build on that upplemental. Het let me point out, i have heard from some Small Businesses that they need information on how they qualify. We need to get that information out to Small Businesses so they can take advantage of what was in the first supplemental dealing with the coronavirus. Our Resource Partners need to be better empowered. Theyre the ones Small Businesses can go to for help. Our Women Business centers. Our Minority Business Development centers and other Resource Partners. We need to make sure they have the resources. We all heard last night as President Trump mentioned the number for Small Businesses that i thought was one that we could work with. 50 billion. We need to come together in a boinch solution. I hope the disaster loans will provide help and well deal with resiliency, the issueus talked about, paid leave for workers of Small Business. Dealing with telecommunicating telecommuting, thats going to cost some resources. Do we have resources to provide that . Lets look at the s. B. A. Loan pack adges, make them easier, more generous an less costly for Small Businesses to be able to take advantage of those, including looking at the cost of taking out a Small Business oan. I would hope we also look at one additional factor. If youve seen a 30 decline in your revenue, will you qualify for a loan . The disaster loans are direct loans. Thats good. From the s. B. A. But they have to be repaid. If you dont have the revenues, how are you expected to repay and will the s. B. A. Structure allow those loans to take place. We need to take a look at a targeted Grant Program to keep Small Businesses afloat. Why . Because thats where job growth, innovation and our economy depends upon it. This is an extraordinary crisis that requires us to respond in kind. Let us act in that regard to triage the current situation, be prepared for the future, i think we can Work Together and get this done. We need to do that for the sake of american businesses. As Congress Begins to address this Economic Impact of the coronavirus we must ensure we focus on being prepared to withstand the economic disruption that is occurring in our economy. I look forward to hearing from our very distinguished Witness Panel and look forward to all of their testimony. Senator rubio items we have