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Luetkemeyer Remarks: Update on SBA’s Pandemic Response Programs

WASHINGTON, D.C. – Today, the House Committee on Small Business is holding a hybrid hearing titled "Update on SBA’s Pandemic Response Programs.”

Ranking Member Blaine Luetkemeyer's opening statement as prepared for delivery:

Thank you, Madam Chair.  Good morning to all of you and a special thank you to Mr. Shear and Mr. Ware for taking time to speak with us today. 

The COVID-19 pandemic has thrown never before seen obstacles in front of every American, especially our nation’s small business.  From the devastating state and local shut downs, to the struggle to find access to sufficient capital and employees to help them survive, our country has never faced a disruptive problem like this.            

Regardless of who has held the gavel over the years, Congress, and specifically this Committee, has long held the view that small businesses are vital to the health of the nation’s economy and security.  The Small Business Act of 1953 and the Small Business Investment Act of 1958 established that the U.S. Small Business Administration’s function is to “aid, counsel, assist, and protect, insofar as possible, the interests of small business concerns.”  This continues to hold true today, nearly 70 years later.  Equally important to these roles is the need for the SBA to maintain vigorous oversight of its own programs.   

Unfortunately, we have seen numerous blunders (and I use that term very politely) as the SBA has neglected to be good stewards of our constituents’ tax dollars.  Over the course of the last year, we have seen countless stories of how the Paycheck Protection Program (PPP), the Economic Injury Disaster Loan Program (EIDL), and the EIDL Advances have benefitted small businesses, kept employees on their payroll, and helped pay their mortgage, rent, or utilities.  Without these critical programs, more of our country’s smallest firms would have been closed permanently, and millions of employees would have been out of work. 

That is the good news.  The bad news is that the SBA has mismanaged these programs and opened them up to unprecedented levels of waste, fraud, and abuse, limiting their effectiveness and frivolously squandering taxpayer dollars that could help our economy move forward.  This is unacceptable.  We will hear from the SBA’s Inspector General and the federal government’s watchdog, the Government Accountability Office, during this hearing citing specific examples of troubling failures by the SBA in administering these life-saving programs. 

Those of us on this side of the aisle have been working diligently to help rectify these problems.  Over the initial months of the 117th Congress, Small Business Committee Republicans offered numerous constructive amendments to President Biden’s COVID relief bill that moved through Congress via the reconciliation process.  More specifically, we offered amendments that would enhance and improve the oversight of the SBA’s COVID programs. For example, we offered amendments that would significantly increase the appropriation for the SBA’s Office of Inspector General and provisions to expand oversight of the SBA programs, specifically calling on the Administrator to closely examine waste, fraud, and abuse within the EIDL programs.  And while my colleagues on the other side of the aisle had many kind things to say about most of our ideas at the time, not one Democrat voted for any of our amendments.

Perhaps after this hearing and the subsequent events that have taken place at the SBA, my friends on the other side of the aisle will come to the table and actually work with us on these serious issues.  Do we really need another OIG alert detailing the impending doom of another Congressionally-mandated SBA program, like the one published hours before the Shuttered Venue Operators Grants Program went live (and quickly crashed)? Nobody should want that level of dysfunction to occur again. The SBA had more than three months to pull this program together, and they couldn’t do it.  Small business owners have been waiting a long time for these funds to get out the door, and we want those who qualify to get the money as expeditiously as possible, but the necessary safeguards need to be in place for all SBA programs before American taxpayer dollars are disbursed.

In addition to the SVOG program, we are still waiting for a majority of details, like a specific launch date, for the Restaurant Revitalization Fund program contained in President Biden’s partisan $1.9 trillion COVID package. We tried adding more money and oversight protections to this important program during Reconciliation markup, but again, the Democrats chose to go about this in a similar partisan manner. I hope that my friends on the other side of the aisle can agree that we cannot afford another bungled rollout of the Restaurants program like we saw with the Shuttered Venues. We need to be actively pursuing legislative vehicles to ensure that this dysfunction does not occur again.

Moving forward, the Committee must focus on three key areas.  First, we need to prioritize eliminating existing fraud within these programs.  Second, we need to delay implementation of all new programs until the SBA has the oversight controls in place to protect against waste, fraud, and abuse.  And third, we need to take a hard look at restructuring the SBA as a whole.

I thank the Chairwoman for calling this timely hearing, and I yield back.