Small Business Committee Welcomes New Member Trent Kelly
WASHINGTON—The newest member of the House of Representatives has joined the Committee on Small Business. Congressman Trent Kelly (R-MS) will serve on the Economic Growth, Tax, and Capital Access and Contracting and Workforce Subcommittees.
Chairman Steve Chabot (R-OH) welcomed Congressman Kelly to the Small Business Committee, saying, “Congressman Kelly knows what it takes to inspire and empower the next generation of innovators and leaders because that’s what he’s been doing for nearly three decades in the Mississippi Army National Guard. His service in the military and as a district attorney gives him a valuable and unique voice, and we’re lucky to have him.”
“I am proud to have the opportunity to represent the First District of Mississippi on the House Small Business Committee,” said Congressman Kelly. “It is vital to our economy that small businesses have the tools they need to spur economic growth and increase job creation in our communities. I look forward to being a voice for Mississippi on the Economic Growth, Tax and Capital Access and Contracting and Workforce Subcommittees to promote policies that reduce burdens on small businesses and make it easier for American families to successfully start and run a business. I thank Chairman Chabot for this opportunity, and I look forward to working with him and the members of the committee.”
WASHINGTON, D.C. – U.S. Senate Commerce, Science, and Transportation Committee Chairman John Thune (R-S.D.) issued the following statement on new findings by the U.S. Department of Transportation Inspector General about factors that have undermined efforts by the National Highway Traffic Safety Administration (NHTSA) to identify and investigate vehicle safety conc...
WASHINGTON, D.C. – Employee emails sounded dire warnings about safety and quality lapses years before Takata Corp. would fully acknowledge the threat posed by its defective airbags.
The emails in question are among some 13,000 documents gathered by the Senate Commerce Committee as part of its ongoing investigation into defective airbags that so far have been linked to at least...
WASHINGTON, D.C. – U.S. Senate Commerce, Science, and Transportation Committee Chairman John Thune (R-S.D.), the lead sponsor of S. 808, the Surface Transportation Board (STB) Reauthorization Act of 2015, issued the following statement on the bill’s approval by the U.S. Senate last night by unanimous consent.
“Nearly 20 years ago, Congress established the Surface Transportation Board to oversee our nation’s freight railroad system. Passag...
Who’s in-charge of overseeing the SBA? An Interview With Chairman Chabot
by Marc Prosser
The House Small Business Committee oversees the Small Business Administration. Recently, the Committee acquired a new Chairman, Congressman Steve Chabot of Ohio. While new to the chairmanship, Congressman Chabot has been serving on the Committee for 19 years.
I had the chance to interview the Chairman on a late Friday afternoon. As I am not a reporter from a big national publication or a local Ohio news outlet, the very fact that the Chairman wanted to do the interview suggests how important communication with the small business community is to him.
The responses below are from the Congressmen. Text in italics are not from the Congressman but provide context for the question or remarks.
What can the SBC do to promote SBA Loan program efficiencies?
In our conversation, the Congressman talked about the frustration of his constituents with the SBA loan application process. He mentioned that many of his constituents had to spend days putting together the application, and then wait weeks or even months to hear back on the status of their application.
SBA loan processing is time and labor intensive, but it doesn’t need to be. We live in a time when technology is making things more efficient every day. The SBA needs to work with our Committee to modernize and improve its processes. Take for example, electronic signatures. It wasn’t until this past January that the SBA started accepting electronic signatures, which means that if you applied for an SBA loan this time last year, hard copy signatures were required for all their documents – and there are a lot of documents. So upgrading the way we handle basic processes like this can impact the ability of a lender to engage an entrepreneur that they may not have otherwise. Making the process less bureaucratic, and more business friendly is the goal, and the Committee is actively looking at ways to make that happen.
Are the 7(a), SBIC, and 504 programs zero cost to taxpayers?
Congressman Chabot is known to be a fighter against wasteful government spending. I asked him if the SBA loan programs cost the taxpayers money. He provided two answers to this question. The one below (that the SBA loan program does not technically cost the taxpayer money) and a more nuanced answer. He noted that there is an opportunity cost to the loan program. When the government guarantees tens of billions of dollars of loans, it creates a potential future liability if those loans default. In other words, the program does not cost the taxpayer money currently, but there is the potential for it to cost taxpayers in the future, which is why he stressed responsible oversight of the programs is critical.
Currently all those programs operate at zero cost. The SBA loan programs are designed to operate at zero cost to the taxpayer, because the cost of administering the programs is collected in fees from borrowers and lenders, which achieve the zero subsidy rate. In FY 2015, the 7(a) loan program actually operated at a negative subsidy rate, meaning it brought in more money than was necessary to cover the cost of the program. When this happens, Congress has the flexibility to actually lower rates for the program, which is exactly what we did for veterans this week.
What simple non-partisan steps can congress take to make life easier for small businesses?
During our discussion Section 179 of the tax code came up. This section of the tax code enables businesses to deduct the purchase of assets like heavy machinery and trucks at an accelerated rate. Basically, it more closely ties when the business spends money on these purchases and when the business can deduct the purchase as a business expense. Unfortunately, this provision of the tax code expired recently, and many small business owners did not know if it would be renewed retroactively. As a result, many small business owners held off on purchases and potentially missed out on getting better deals on the purchase of equipment.
Uncertainty is the biggest impediment to growth in my opinion. When a business owner doesn’t know what their tax liability will be next year or even this year, they cannot plan for the future. The Small Business Committee understands this and is working on policies that will restore some certainty for small business owners. For example, earlier this year, the House of Representatives passed H.R. 636, the Small Business Tax Relief Act. This bill makes Section 179 of the tax code permanent, so that small businesses can expense up to $500,000 of investments in new equipment and property per year. This simple provision is often passed at the 11th hour, and applied retroactively, which completely defeats the purpose of having the incentive in the first place. This bill has not yet passed the Senate, but I am hopeful it will, and I encourage all of your readers to voice their support for this measure.- See more at: http://fitsmallbusiness.com/whos-in-charge-of-overseeing-the-sba/#sthash.1UMRduG0.dpuf
WASHINGTON, D.C. – Today, the Federal Communications Commission (FCC) voted 3-2 on a proposal marking the first step in the process of expanding the Lifeline universal service program to broadband Internet services. U.S. Senate Commerce, Science, and Transportation Committee Chairman John Thune (R-S.D.) and U.S. Sen. Roger Wicker (R-Miss.), Chairman of the Subcommittee on Communications, Technology, Innovation, and the Internet, issued the following joint statement:
“Today, the FCC adopted a proposal to expand the Lifeline program t...
WASHINGTON, D.C. – U.S. Sens. John Thune (R-S.D.) and Bill Nelson (D-Fla.), who respectively serve as the chairman and ranking member of the Senate Committee on Commerce, Science, and Transportation, and Sens. Marco Rubio (R-Fla.) and Cory Booker (D-N.J.), who serve as chairman and ranking member of the subcommittee with jurisdiction over the U.S. Coast Guard, today announced the introduction of S. 1611, the Coast Guard Authorization Act of 2015.
WASHINGTON—Small businesses hoping to play a role in international trade achieved victory today with the passage of the Trade Priorities and Accountability Act of 2015. This legislation aims to bring clarity and communication to American trade deals, chiefly trade promotion authority (TPA).
Small Business Committee Chairman Steve Chabot (R-OH) said: “Better trade agreements mean small businesses will be able to access new customers, offer their products more easily, and that more products will be built and sold. When that happens, jobs are created, wages are lifted, and more opportunity is available to all.”
Chabot added, “TPA will ensure communication between the people negotiating trade deals and the people representing small businesses at home: Congress. Put an American worker against anyone in the world and I’ll take that bet every day of the week and twice on Sunday. But we can’t get there without TPA.”
Over the last few months, Chairman Chabot and members of the Small Business Committee have heard from small business owners and operators about the need for TPA. Chairman Chabot shared these view in a speech on the House floor:
Michael Stanek, VP & Chief Financial Officer of Hunt Imaging, Berea, OH – May 20, 2015
“Free trade agreements are extremely important as they lower foreign barriers to our exports and produce a more level playing field. Without TPA, the U.S. is relegated to the sidelines as other nations negotiate trade agreements without us – putting American workers and companies – especially small ones – at a competitive disadvantage.”
Dyke Messinger, President of Power Curbers, Inc., Salisbury, N.C. – May 20, 2015
“Passage of TPA, which lapsed in 2007, is critical to restore U.S. leadership on trade…Manufacturers in the U.S. face steeper trade barriers abroad than virtually any other major country, including Mexico, China and Europe, largely because those countries have entered into more market-access agreements that the United States. Trade and foreign markets are critical for small business like Power Curbers.”
Brian Bieron, Executive Director of the Global Public Policy Lab for eBay – May 20, 2015
“Through our experience, we have found that technology is transforming trade by allowing Main Street businesses to directly take part in globalization, reaping the benefits of markets previously only open to the largest global companies. This is good economics because it means more growth and wealth, and it is good for society because it means a more inclusive form of globalization.”
Kevin Severns, Owner of Severns Farm, on behalf of California Citrus Mutual, Sanger, CA – June 11, 2015
“Without [TPA] critical negotiations with some of our key export markets may well stall. My understanding is that on average, U.S. citrus exports to the countries included in the Trans-Pacific Partnership can currently face tariffs as high as 40 percent. Given that 35 percent of California’s citrus crop is exported around the world, access to these markets is vital to us.”
For more on the Small Business Committee’s recent trade hearing, click here. For recent Small Business Committee trade legislation, click here and here. For Chairman Chabot’s recent op-ed in the Washington Examiner on small business and trade, click here.
The purpose of the hearing is to examine the possibility of lifting the crude oil export ban and the effect its removal will have on United States Small Businesses
Chairman Steve Chabot (R-OH)
Witnesses and Testimony:
WASHINGTON, D.C -- U.S. Senate Commerce Committee Ranking Member Bill Nelson (D-Fla.) is seeking answers from Google CEO Larry Page on recent reports that YouTube Kids contained content inappropriate for children. In a letter sent late Tuesday, Nelson is asking the company to detail, among other things, how it selects content for the new app and what steps it’s taking to ensure kids aren’t exposed to unsuitable content.
“As parents seek out safe and appropriate online venues for their children, it is...
Roe Statement: Hearing on “Restricting Access to Financial Advice: Evaluating the Costs and Consequences for Working Families and Retirees”
One of the most difficult challenges we face as a country is a lack of real retirement security for America’s families. The defined benefit pension system continues to experience a decades-long decline, while many workers are still rebuilding the savings they lost in the recent recession. Due to these and other challenges – including a persistently weak economy – too many workers are retiring without the means necessary to ensure their financial security.
Our goal as policymakers should be to advance bold, bipartisan solutions that will help more Americans plan, invest, and save for retirement. Regrettably, the department’s fiduciary regulation would move our country in the opposite direction. It would cut off a vital source of support many low- and middle-income families and small business owners rely on, and that is the help of a trusted financial advisor.
Four years ago, the subcommittee examined a similar proposal that was later withdrawn under intense bipartisan opposition. I said at the time that anyone who provides investment assistance should be well trained, committed to high ethical and professional standards, and devoted to the best interests of those they are serving.
That is why financial advisors have long been subject to a host of securities, tax, and disclosure requirements. It is a complex system of rules and regulations, but it is an important one that has worked well for decades. That does not mean we shouldn’t look for opportunities to improve current standards. But we cannot – in any way – make it harder for workers, retirees, and small business owners to receive the financial advice they may need.
Yet that is precisely what this regulatory proposal would do. Offering some of the most basic assistance would be prohibited, such as advice on rolling over funds from a 401(k) to an IRA. Financial advisors would no longer be able to assist individuals in how to manage their funds upon retirement. And small business owners would be denied help in selecting the right investment options for their workforce, which will lead to fewer employees enrolled in a retirement plan.
It has been suggested on numerous occasions that this proposal will simply apply to financial advisors the same standard recognized in the medical profession. Mr. Secretary, I believe you have drawn that comparison from time to time. It is a clever talking point, but one that couldn’t be more flawed.
As a physician with more than 30 years of experience treating patients, let me just say that the approach reflected in this proposal would destroy what’s left of our health care system. Imagine what would happen if doctors were prohibited from receiving compensation, or were required to sign a contract with each patient before delivering services, or were forced to publish online each and every treatment that had been prescribed the following year. No doctor could run a successful practice under this type of regulatory regime, and no responsible financial advisor will be able to either.
Make no mistake, if this rule goes into effect, a lot of people will quickly learn that their financial adviser – someone they may have known and trusted for years – will no longer be able to take their call. And it is important to note that low- and middle-income families are the ones who will bear the brunt of this misguided proposal. They will lose access to the personal service they rely on and be forced to find suitable advice online or simply fend for themselves.
As is often the case with big government schemes, the wealthiest Americans will do just fine and those we want to help will be hurt the most. Mr. Secretary, this latest fiduciary proposal will lead to the same harmful consequences as the first and should suffer the same fate: Please withdraw this proposal and work with this committee on a responsible, bipartisan approach that will strengthen protections for investors and preserve robust access to financial advice. Our nation’s workers and retirees deserve nothing less.
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