▶ 0:15:00Okay, before we get started, I want to recognize Congressman Osheski from the great state of Maryland uh to lead us in the pledge and the prayer to the flag of the United States of America and to the republic for it stands one nation under God indivisible with liberty and justice for all.
▶ 0:16:13Good morning everyone and I now call the committee on small business to order. Without objection, the chair is authorized to declare a recess of the committee at any time. I now recognize myself for my opening statement. Welcome to today's hearing, the golden age, unleashing Main Street through deregulation. I want to thank our witnesses for being here today. Many of you have traveled a long way to share your experiences and your perspectives, and we deeply value your time and your voice.
▶ 0:16:39Today, we will focus on the need to unshackle small businesses from burdensome regulations created by the previous administration and examine what actions the Trump administration and Congress are taking to help free small businesses from this red tape. Every small business owner knows that regulations limit their ability to grow and succeed. Unfortunately, the Biden administration has cost American businesses more than 1.8 8 trillion in additional regulatory costs over just the last four years.
▶ 0:17:05As a car dealer myself for over 50 years, I know firsthand how harmful regulations can be for small businesses and consumers alike. In the car business, the cost of regulations directly impacts the cost of the car. In fact, regulations could increase the cost of a car by almost 20%. Emissions regulations and fuel efficiency standards are among the most expensive to comply with, which directly impacts consumers. This mountain of red tape is uniquely costly to Main Street.
▶ 0:17:32On average, small business owners pay 20% more than larger companies to comply with the same regulation. While these small business owners are experts in their fields, they are not experts in regulatory compliance. Small businesses must dedicate a much as much as they can and more significant portion of their workforce and funds to regularly comply, drastically limiting their ability to grow and discourage the creation of new small businesses.
▶ 0:17:57Despite the serious headwind small businesses face due this avalanche of regulations, there is reason for hope. The Trump administration has already made progress in removing some of the most harmful regulations imposed on our nation's small businesses by the Biden administration. President Trump's grow progrowth policies have already begun to help our nation's most prominent job creators and make them survive and thrive. As a small business owner, I know the consequences of stifling regulations.
▶ 0:18:23That is why in my time as chairman, one of the top priorities of the committee has been combating the red tape that impedes small businesses across America. This committee is dedicated to creating solutions that will unbburden Main Street America, which is what the legislation, including our hearing today, intends to address. I hope our conversation today will further shape the potential solutions. I want to thank all of you again for being here. I look forward to our conversation. And with that, with that, now I recognize my friend and ranking member from New York, Miss Velasquez, for her opening remarks.
▶ 0:18:53Thank you, Chairman Williams, and good morning everyone. Thank you to the to the witnesses for being here today. While some may argue that the golden age of deregulation will pave a path to economic growth, we must recognize that the unchecked removal of regulations can have lasting consequences.
▶ 0:19:14It is important to understand that regulations provide a foundation that ensures safety, fairness, and sustainability for all Americans as well as small businesses. Regulations make sure the food restaurants serve is safe. The water craft breweries use to make beer is free of contaminants and the air we breathe is clean.
▶ 0:19:40Regulations also provide clear clear rules of the road for small businesses offering certainty and ensuring that they can compete on a level playing field. Clear consistence rule help small firms understand what is expected, foster fair competition and lead to success. Regulations pro promote innovation especially in the energy and manufacturing sectors.
▶ 0:20:09The bipartisan infrastructure law and inflation reduction act created a framework for accelerating clean energy development and innovation. The accompanying regulations prioritized investment in renewable energy, energy efficiency and clean technologies driving innovation in the clean energy sectors.
▶ 0:20:32With that said, I understand certain regulations can be honorous and difficult for small employers to comply with, but deregulation is not the answer. The chainsaw approach will brought back important safeguards and cause uncertainty for small firms. Uncertainty seems to be part for the course with this administration.
▶ 0:20:56In two short months, reckless policies have wrecked havoc, chaos, and confusion across the American landscape, harming Main Street. On January 24, President Trump illegally fired the Inspector General, who was committed to investigating and recovering fraudulent funds.
▶ 0:21:17Days later, OM released a memo requiring agencies to freeze federal funding, causing confusion for small businesses, lenders, and contractors. On February 3rd, Elon Musk and his team gain access to all of SBA's systems, including human resources, contract, and payment systems, endangering the private information of million American small businesses.
▶ 0:21:47Then on Friday, February 7th, hundreds of SBA employees received termination notices only to be told it was a mistake on Monday and then fire for real. On Tuesday, a Maryland District Court judge issued a temporary order reinstating probationary employees through March 27. However, the SBA placed them on administrative leave. This is not the way to lead.
▶ 0:22:17On March 21st, the president announced SBA will take over the federal government's student loan portfolio, which has nothing to do with advancing the mission of the SBA. It is un incomprehensible that SBA will be asked to take on the servicing of more than$1.6 6 trillion in loans while his staff is being cut almost in half.
▶ 0:22:47And if the destruction of the government isn't enough, Donald Trump is picking a fight with Mexico and Canada using tariffs. Small retailers, manufacturers, and farmers all over the country are reeling. The uncertainty has left many small businesses struggling to keep up.
▶ 0:23:09Our focus today should be on the reckless policies of the Trump administration that are sowing chaos, confusion, and uncertainty for small businesses. Mr. Chairman, so much for lowering inflation. Thank you. And I yield back. Lady yields back. And now uh I will now introduce our witnesses. The first witness with us today is Patrick Montaban. Mr. Mr.
▶ 0:23:36Monaban is the chairman chief executive officer of Montaban Oil and Gas Operations Inc. in Cutbank, Montana. Mr. Mabon has overseen Monabon Oil and Gas Operations for over 20 years, taking over from his father who started the company in the 50s. He's also worked with Mountain View Energy Limited, Genesis Energy, and Ultimat Oil and Gas. In addition, Mr.
▶ 0:23:57Monabon is a chairman of the National Stripper Well association and a member of the American Association of Petroleum Geologist, the domestic energy producers alliance and the Northern Montana Oil and Gas Association. Mr. Monaban holds a bachelor of arts in geology from the University of Montana and a bachelor of science and geology from Montana State University at Bosezeman. Thank you for joining us today. Looking forward to our conversation. I now yield to distinguished member from Minnesota, Mr. Stabber, to introduce the next witness from his district. Thank you, Mr.
▶ 0:24:27Chair. Our next witness uh here with us today is Mr. Elden Johnson. Mr. Johnson is the owner and operator of Elden Johnson Transporta Transportation in Rush City, Minnesota. Founded in 1999, Elden Johnson Transportation is a major hub for trucking services in our region. The company's fleet of vehicles manned by skilled drivers ensures the smooth transportation of goods across various distances and terrains.
▶ 0:24:53The company has established itself as a go-to option for businesses looking to move their products swiftly, safely, and securely. Mr. Johnson is a member of the National Federation of Independent Business and currently rides resides in Rush City, Minnesota with his wife and son. Thank you for joining us, Elden, today. And I'm looking forward to your comments. And I yield. Gentleman yields back. And uh uh now our next witness here with us today is Mr. Buddy Hughes. Mr. Mr.
▶ 0:25:21Hughes is the chairman of the board for the National Association of Homebuilders in Washington DC. As a third generation builder, Mr. Hughes opened his own general contracting business, Hughes Construction in 1985. Mr. Hughes has been an active principal in the National Association of Homebuilders leadership structure at that level and state and national levels. He currently serves as a life delegate of the leadership council and has been a member of the board of directors for more than 20 years. Mr. Mr.
▶ 0:25:46Hughes is an Eagle Scout and was awarded the Richie Scott Award from the Insulating Concrete Form Association in 2007 and the National Association of Homebuilders SA Walters Award in 2018. Thank you for joining us today. Looking forward to our conversation. I now recognize the ranking member from New York, Mr. Velasquez, to briefly introduce our last witness before appearing before us today. Thank you, Mr. Chairman. I'm pleased to introduce Mr.
▶ 0:26:12John Arens Meyer, the founder and CEO of the Small Business Majority. John launched the Small Business Majority 20 years ago, and he has built it into a nationally recognized organization focused on empowering America's entrepreneurs to build a thriving and equitable economy. He has become a leading advocate on critical policy issues affecting small business.
▶ 0:26:37Prior to that, John was the founder and CEO of an award-winning interactive communications company. With a background in business and public policy, John will be able to discuss the challenges and opportunity facing small businesses today. We are fortunate to have him here today. Thank you. I yield back. Lady yields back. Uh and again, we appreciate all of you being here today. And before uh uh recognizing all of you, I want to remind you the way we operate here, okay?
▶ 0:27:07uh that uh your oral testimony is uh restricted to 5 minutes in length. If you see the light turn red in front of you, uh it means that your five minutes is up and you need to conclude. Uh if you don't conclude, you're going to hear me doing this. Okay? And but we'll be we'll be fine. And also uh you might see members coming and going in and out. It has no reflection on your testimony or everything. Some there's other hearings going on today.
▶ 0:27:33So you'll hear everybody from me and the ranking member and others stepping out and then stepping back in. So uh with that being said, I'd like to recognize Mr. Montabon for his fiveminute opening remarks. Thank you, Chairman Williams, Ranking Member Val Valet, Vice Ranking Member McGarvey, and members of this committee. Um my name is Patrick Montalbin. I reside in Cutbank, Montana, and I'm the chairman of the National Stripper Well Association.
▶ 0:28:01We represent the small independents of America that produce small wells and we call them the MPAWA outfits in oil and gas business. A strip of well is 15 barrels a day or less or 90,000 MCF. We produce about 13.6 million barrels in this fine country of ours and we produce about 10% of that production or about 1.3 million barrels.
▶ 0:28:23This production is produced out 760,000 wells over 32 states or about 80% of the production this great country. We call it the strategic petroleum reserve. Many of us as we believe it's a very constant and ready for the citizens of this great country. We generate great jobs in rural America and we provide um excellent jobs to our local communities.
▶ 0:28:51It takes as many people to run a three barrel a day well as it does a 300 barrel a day well. We're not the large in integrated companies. We don't produce oil, refine oil, and sell oil. We receive a price at the wellhead or on the site for what we produce. We've been in this business for many years. One of the things many people don't think about are the royalty owners that are associated with our business.
▶ 0:29:18Um, many people such as farmmes and retirees receive this extra income each month to help them pay their bills. To give you an example, some of the royalty owners in Texas 4.4 million. Minnesota 71,000. Pennsylvania 18,000. 221,000 and my great state of Montana Congressman Downing 71,000. I'm chairman and CEO of Montalban Oil and Gas.
▶ 0:29:46I had a degree in geology from the University of Montana. My father started this company in the 1950s. We have 17 full employees and pay $35 an hour. We pay 100% of health care for our employees and their families. We provide an excellent package uh for each and every employee. We're the largest producer on the Black Feet Nation Indian Reservation in in Montana. We pay 19 to 25% royalty.
▶ 0:30:15A normal royalty in the oil and gas business is 12 a.5 to 15%. We're a community orientated company and we give back to the schools, to the hospitals, and all the local businesses. We have been confronted for years on regulations. In the Obama administration, we look back and we called that uh operating under a thousand cuts.
▶ 0:30:41We we got through those eight years, but nothing was like the Biden administration. The Biden administration wanted to clearly put us out of business. And I had a few individuals in the Department of Interior and that EPA tell me so. Think about that. Everyone at this committee, if you'd like to have someone tell you that the government would like to put you out of business, these are strong jobs in rural America. How are they going to do this?
▶ 0:31:10They were going to do this with the methane tax regulations by the EPA, the bonding requirements with the Department of Interior and and dear to my heart, the UIC U injection program for water injectivity in our oil and gas business. We operate under numerous levels in the state of Montana. We have state, federal, tribal, fee, and numerous layers of regulations.
▶ 0:31:39The three major concerns with the methane rules was the subpart W or the reporting or quad B quadc which brought in the small independence. This would have put every small independent out of business in America. Don't kid yourself. The UIC program is the underground injection control program um operated by the EPA.
▶ 0:32:02started in 1986 and it was a very good program but unfortunately they've taken gone over their bounds and have hurt the small independents. One of the hardest things for federal properties for the small independents was how they charge changed the department of interior bonding regulations.
▶ 0:32:22They took a 10,000 well dollar, excuse me, they took a single well bond for $10,000 to $150,000 and a multiple well bond for, in other words, two wells from 25,000 to 500,000. What this clearly did was take us out of operating on small or federal lands. Thank you for this time. It's going to be a new golden age for the small independents of America now that we have new administrators appointed by the Trump administration.
▶ 0:32:53Thank you very much. And I now recognize Mr. Johnson for his five-minute opening remarks. Chairman Williams, ranking member of Velasquez, members of the House Small Business Committee. Thank you for the opportunity to testify today on behalf of the small business owners across America. My name is Elden Johnson.
▶ 0:33:10I own Elden Johnson Transportation in Rush City, Minnesota, which I started in Over the last four years, small businesses have faced unprecedented challenges including COVID shutdowns, supply chain disruptions, historic inflation, burdensome regulatory environment, and systemic workforce shortages. These major challenges have fueled uncertainty and reduced small business optimism.
▶ 0:33:37One major headwind for small businesses is the unprecedented regulation regulatory burden imposed on us over the last four years. The Biden administration has addedund 1.8 trillion in regulatory compliance costs and added 356 million paperwork hours. These compliance costs disproportionately impact businesses like mine. I do not have compliance officers or lawyers to uh navigate complex laws and regulations.
▶ 0:34:04Those responsibilities and many others fall on me as a business owner. Following the 2024 election, small business optimism surged. Small small businesses saw the elections result as a major shift to the nature's the nation's economic and regulatory policy towards a more pro environment. Although small business remains optimistic, there are warning signs on the horizon.
▶ 0:34:28The looming ex expiration of key positions of the 2017 tax cuts and jobs act, specifically the 20% small business deduction creates uncertainty about whether my taxes will go up next year.
▶ 0:34:41Congress can help small businesses like mine like passing the main street tax certainty act to prevent a massive high tax on nine out of 10 small In addition to uncertainty caused by looming tax hikes, the honorous regulatory environment over the last four years has laid a wet blanket over the economy. Specifically, the EPA's de facto electric man vehicle mandates and the Department of Labor's independent contractor rule have the potential to shut my business down for good.
▶ 0:35:09These regulations ignore the reality the the entire industry relies on long-standing work arrangements like independent contractors or that an all-electric fleet is simply not feasible. In rural Minnesota where I live, there's no infrastructure to support these vehicles and industries like trucking can't wait for hours for batteries to to recharge to go back to work. The Federal Motor Carry Administration has also put significant strain on the trucking industry from their overregulation.
▶ 0:35:36Their proposed speed limiter regulation and electronic logging regulation would impose one-sizefits-all mandates that will make our roads less efficient and less safe. I understand the well-intentioned nature of the rules. However, the one-sizefits-all approach from Washington ignores that safety is my number one priority. Truckers want to get home safely to their families as we want the others that share the road with us, too. We do not need Congress or federal agences agencies to order us to be safe. We already are.
▶ 0:36:07Lastly, the Biden administration beneficial ownership reporting requirements mandated 32.6 Six small businesses register with the federal government or face penalties of up to $10,000 and two years in prison. Thankfully, President Trump stopped enforcement, correctly, calling the mandate outrageous, invasive, and an economic menace. This action has saved small businesses from devastating civil and criminal penalties.
▶ 0:36:31Congress must make this win permanent by passing and repealing the Big Brothers Overreach Act and destroy bene beneficial ownership data that has already been collected from US small businesses. Small businesses are optimistic that the Trump administration and Congress will deliver progrowth economic and regulatory reform policies. However, doing so requires Congress to roll up its sleeves and go to work.
▶ 0:36:57Congress must enact muchneeded regulatory protections for small businesses like the prove it act and eliminate vague statutes like corporate transparency act. Most importantly, Congress must provide small businesses an economic certainty that taxes will not increase at the end of the year. This certainly this certainty will give my business the comfort to expand and increase the opportunities we can offer our associates and workforce.
▶ 0:37:23Thank you for the opportunity to discuss this the impact of these burdensome regulations on small businesses and I look forward to your questions. Gentlemen yields back. I now recognize Mr. Hughes for his fiveminut opening Forgot it again. Sorry. Uh, thank you for the opportunity to testify today on behalf of the National Association of Homebuilders.
▶ 0:37:54America is experiencing a housing affordability crisis. Overly, burdensome and in some cases unnecessary government regulations bear some of the responsibility for driving up construction cost and contributing to our housing affordability crisis. Nearly 25% of the price of newly built single family homes and 41% of apartment development cost are due to regulations.
▶ 0:38:24It does not need to be like this. We can have an effective regulatory environment while minimizing burdens on small businesses. Unfortunately, rulemaking agencies fail to consider how regulations will affect small businesses and often flat out ignore the regulatory flexibility act. Last year, this committee's own RFA compliance investigation highlighted how widespread this problem is.
▶ 0:38:55That investigation also pointed to potential paths to reform and strengthen the 45-year-old law which we support. One example of the lack of RFA compliance is the waters of the US regulation. This rule directly impacts builders who need to determine if a water feature is subject to federal or regulation.
▶ 0:39:21While over 60,000 permit applications for such activities are processed each year, the EPA certified that the 2023 proposed rule would not have a significant impact on a substantial number of small entities allowing the agency to skip the compliance with aspects of the RFA. Uh, this finding defies all common sense.
▶ 0:39:48Legislation such as Representative Finstad's Prove It Act would go a long way toward correcting this by increasing small business input into the rulemaking process and holding agencies accountable. The Trump administration is also taking action to eliminate unnecessary regulation. NHB commends this and I want to point out three regulations in the pipeline that deserve greater scrutiny.
▶ 0:40:15First, HUD and USDA's April of 2024 rule to require homes financed through the agencies to comply with excessive min minimum energy standards.
▶ 0:40:29This will not only drive up cost in some cases by more than $30,000 per unit, but only nine states have fully or partially adopted the new requirements, which means we won't be able to deliver much needed housing using these programs. We urge Congress to support legislation prohibiting HUD and USDA from adopting any energy standards.
▶ 0:40:55Second, Asha's August of 2024 proposed one-sizefits-all rule to establish a federal heat standard contains many elements that would be infeasible for small businesses in the construction industry. NHB urges Asha to withdraw this proposed rule. Instead, Asha should continue encouraging employers to follow the principles outlined in Asha's long promoted water, rest, and shade campaign.
▶ 0:41:25Third, HUD's April of 2024 rule to implement a federal flood risk management standards expands flood plane management requirements and fundamentally threatens access to FHA mortgage insurance programs for single family home buyers and multifamily builders. For these reasons, we urge HUD to repeal its FFR RMS rule.
▶ 0:41:52An improved regulatory environment will unlock economic growth and open the door for the millions of Americans who are priced out of the housing market. NHB applauds this committee for highlighting the lack of agency compliance with the RFA and ways to improve our rulemaking process. NAHB stands ready to work with this committee to unleash Main Street through deregulation. Thanks again for this opportunity. Gentleman yields back. I now recognize Mr.
▶ 0:42:23Errens Meyer for his five-minute opening remarks. Chairman Williams, ranking member of Alaska and committee members, thank you for inviting me here today to speak to you. At Small Business Majority, we engage our network of more than 85,000 small businesses and 1500 partner organizations to advocate for public policy solutions and deliver resources to entrepreneurs in order to promote dynamic small business growth. 21 million new businesses have been created in the past four years.
▶ 0:42:51We need to be doing everything we can to support these new enterprises by focusing on the issues that are impacting them the most. Regulation certainly can be a pain, but small business owners consistently rank regulations near the bottom of the list of many challenges they face. I'll be addressing some of the regulatory issues in a bit, but I want to make the point that businesses are much more concerned with the devastating impact of the Trump administration slash and burn economic policies than they are about federal regulations.
▶ 0:43:20This is fueling extreme uncertainty and a severe drop in business confidence in surveys conduct by organizations across the ideological Our own most recent survey shows a drop by one-third in optimism in the past two months alone and more than doubling in pessimism. For the first time in a long time, pessimism outranks optimism and 44% have experienced revenue declines.
▶ 0:43:46On a daily basis, we are hearing fear and horror about the administration's arbitrary, chaotic, and unpredictable actions that are destabilizing the economy. These actions include ownorous inflationary tariffs, terminating vital federal programs supporting entrepreneurs, slashing the SBA's workforce by 43% while piling on $1.6 trillion of unrelated student loan responsibilities, and mass deportations that exacerbate small businesses existing workforce
▶ 0:44:17challenges. The tariffs are perhaps what we're hearing about the most. 77% of small businesses say the expanded tariffs will be detrimental to our economy. Nikki Bravo, owner of Momentum Coffee in Chicago, Marggo Clayson, owner of the Mighty Metro Green in Income, Idaho, and Mike Roach, owner of Paloma Clothing in Portland, Oregon, are worried that new tariffs could be devastating to their businesses.
▶ 0:44:41The same survey finds that twothirds oppose the administration's policies with more than three quarters opposed to the SBA cuts. But back to regulations. Regulations are a necessary fact of life for small businesses. From food safety to responsible workplace practices to mitigating environmental harm to preventing financial scams, there's a legitimate need for government to ensure a healthy competitive business landscape undergarded by a level playing field. The debate over regulation should not be ideological.
▶ 0:45:12Rather, it must be based on a case-bycase pragmatic analysis. Because regulations can sometimes be burdensome, it's essential that we have a process to assess the their costs and benefits. A one-sizefits-all indiscriminate deregulatory policy, such as eliminating 10 regulations for everyone enacted reflects a performative slash and burn approach to governing that has no relationship to actual business realities.
▶ 0:45:39Small businesses value fair and reasonable regulations that help them compete with large companies and establish clear, easy to follow rules of the road. They repeatedly point to the importance of regulations in both fostering competition and holding large corporations accountable. Our polling shows that 86% of small business owners agree that some regulation of business is necessary in a modern economy and 93% agree that their business can live with regulations if they're fair, manageable, and reasonable.
▶ 0:46:08As such, we support efforts to ensure small business owners are more involved in the promulgation and implementation of new regulations. Existing regulatory structures should be strengthened, such as those under the regulatory flexibility act, which requires a review of rules that will have significant impact on a substantial number of businesses within a 10-year period. Following the RFA along Following the RFA along with proper coordination with the SBA's independent office of advocacy enables agencies to ensure that regulations are not overly burdensome.
▶ 0:46:39Moreover, the office of information and regulatory affairs provides additional insight in the federal rulemaking process. The previous administration recognized the importance of or Iris key functions through an executive order encouraging agencies to take necessary steps to strengthen the regulatory review process with public involvement in rulemaking. Finally, Congress should consider solutions to help Main Street work within the regulatory requirements of their respective industries while maintaining a commitment to health, safety, and commercial standards.
▶ 0:47:09Small businesses need certainty, consistency, and clear guidelines from the government, not chaos and confusion. Congress should be hyperfocused on helping small business owners navigate the everanging and increasingly challenging economy while helping them find relief from tariffs and draconian budget cuts. I look forward to answering your questions. Gentleman yields back and uh we will now move to the member questions under the five-minute rule. I recognize myself for the first five minutes.
▶ 0:47:35Whether by enacting a late minute halt on domestic drilling on federal lands or purposely slowing his slowing his administration's approval process for oil and gas projects, one thing was clear. President Biden's actions threatened American energy independence. This regulatory assault was particularly painful for Main Street America. Small businesses and overly regulated industries had to beg the federal government for approval to simply conduct business. So, Mr.
▶ 0:48:01Monobon, how how did the Biden administration's withholding of your project approvals and other administrative pro prohibitions harm the oil and gas industry? Thank you, Mr. Chairman. Um, starting out with the Department of Interior and the bonding was critical to the small independence I mentioned before. Um they stopped the drilling because of the bonding and they stopped any transaction between independents on trying to buy or sell any federal properties.
▶ 0:48:31Uh did they ever did you ever hear from the government agency officials why an approval was withheld or delayed? Did you ever hear from them? Um we've had numerous situations in our business over the last four years why permitting u permits to drill permits to inject water have not gone through the process and we've never heard back. Uh during the B administration American businesses were saddled by we've heard this figure already $1.8 trillion in additional regulatory costs.
▶ 0:49:01Small businesses do not have enough resource to hire highriced attorneys like large corporations do. Because of that, compliance is often left to the owner or an employee who will have trouble navigating the the complex language of these rules. And even worse, most in industries face regulations from different agencies that may be conflicting. This adds cost, confusion, uncertainty to small businesses trying to navigate the regulatory minefield. So, Mr. Johnson, tell us about your experience navigating the regulatory landscape.
▶ 0:49:28What has been the cost to your business and the impact to your numerous regulations uh a lot of them are I guess the EPA related are the most expensive and troublesome for us um I don't know if you want specific uh one of them is uh the EPA mandate for the diesel uh diesel motors uh called deaf fluid which is
▶ 0:49:59burdensome uh sometimes uh putting our trucks in the shop for weeks at a time and some of the repair bills up to like 17 to $20,000 plus the time that our our trucks are not moving. Yeah. And you don't have time to hire outside auditors and all that to come in. No. Heavens heck of a burden. Can't do it. Can't do it. Uh thank you. As an essential part of the American dream home, the American dream is home ownership. Unfortunately, the cost of housing and building has continued to grow year-over-year.
▶ 0:50:27Studies by the National Home Builder Association found that 25% of the cost of a house is attributed to regulations. This has pushed an estimated 14 million Americans away from their home of being having a dream home and owning one. So, Mr. Hughes, can you explain how burdensome regulations cause such a substantial cost increase for home builders and what should be done to reduce these regulatory barriers? Uh, well, unfortunately, there's a a plethora of of reasons and regulations.
▶ 0:50:55Uh the one that uh that I deal with the most is uh burdensome codes. We've just gone too far with energy regulations and a lot of that 25% and it may help to put that into perspective to to say the dollar amount that 25% uh is $94,000. So the first $94,000 is just regulations and a lot of that is is codes.
▶ 0:51:23Um, other things is as Mr. Arsmire mentioned the one-sizefits-all too many times our engineering and um storm water regulations for small subdivisions which I I deal with a lot more uh are way too burdensome um and and and it is not a one-sizefits all. Well, and they get passed on to the the the potential buyer. Sure. Who has to go to the bank, borrow that much money, pay that much more interest. Correct. And it it hurts, doesn't it?
▶ 0:51:53Oh, if the government would stay out of your business and might we might see a price reduction. Uh that's Yeah, exactly. You're on record. Yes, sir. Okay. Absolutely. I would love to see uh the federal government get out of the the codes business. All right. Uh thank you very much. I now recognize the ranking member for five minutes of of her questioning. Thank you, Mr. Chairman. U Mr. Arener uh what are your opinion polls showing are burdensome regulations one of the top priorities?
▶ 0:52:24Um ranking member we've been conducting um polls of small business owners um and surveys of our own network for the last 20 years uh and uh we talk to small businesses every day. Um we do not hear federal certainly federal regulations um listed as as a top concern. and it's access to capital, health care, child care is now a big issue. Um unfair competition on all of the Is it fair to say that small employers are worried about tariffs? They are incredibly worried about tariffs.
▶ 0:52:54Are small businesses uh concerned about remaining competitive and turning a profit? Absolutely. There the level of fear and uncertainty right now is incredible. We're we're hearing it every day. Mr. views. Are home builders anxious about the Trump tariffs being levied against construction imports like Canadian lumber, aluminum, and steel? Yes or no? Uh, yes.
▶ 0:53:21And build their confidence tick down in February to the lowest level in seven months. Is that partly due to the economic uncertainty? Yes or no? Yes. Uh it seems to me that the top concern of small businesses is the economic uncertainty stemming from the Trump administration reckless policies. And I would like to enter into the record, Mr.
▶ 0:53:49Chairman, uh a press release uh May 17 from the National Association of Homebuilders. So moved. Uh Mr. Arens Meyer, in your testimony, you mentioned small employers need certainty. Could you describe how the policies of the Trump administration has shown confusion and disruption to small businesses? Small business owners have no idea what's happening on a day-to-day basis. They don't know what tariffs are going to be hit with.
▶ 0:54:18They don't know if um their employees are going to be legal legal immigrants are getting rounded up from their businesses and they don't know what next agency is going to be slashed. U they cannot plan in this kind of environment. And President Trump announced SBA will be taking on the 1.7 trillion student loan program.
▶ 0:54:40So I ask you is SBA equipped if that is the core mission of small business of the small business administration. It is it exists to help small businesses access capital uh procure federal procurement $1.7 trillion student loan program.
▶ 0:55:04Do you think this is consistent with the core mission of SBA, Mr. Hughes? Uh I'm I'm sorry. Not my area of expertise. Student loans small business administration. you know, is in the business of providing access to capital, is technical assistant, capacity building for small businesses. What does student loan program has to do with small businesses? Nothing.
▶ 0:55:34Do you believe the SBA can effectively support small businesses while taking on the student loan program and cutting staff by more than 40%. Mr. are honest about you. It's mystifying, Congresswoman. I We can't figure it out at all. I've talked about the growth in small businesses over the last four years.
▶ 0:55:56We need to be making sure we're supporting those businesses and we need sufficient staff to do that and why anybody thinks we take on a $1.6 trillion student loan program is boggles the mind. And we this committee has jurisdiction over the Small Business Administration. Mr.
▶ 0:56:15Chairman, when are we going to have a hearing to bring the administrator in and to explain to us how she will be able to handle the needs of small businesses who need certainty and the student loan program? When will you be asking her to come into this committee and discuss the reorganization of the small business administration?
▶ 0:56:41I sent we the committee Democrats have sent five letters to the administrator. We haven't received one answer. Remember when you really got upset, Mr. Chairman, when the previous administrator uh didn't answer your question, your your letters and I even joined with you. So I expect the same here and later this month we will be marking up the prove it act.
▶ 0:57:11John do you have a position on this bill? Our feeling is that the structures that are in place right now are sufficient if they're not being we've heard that perhaps the RFA is not being sufficiently enforced. Let's increase enforcement. The previous administration took steps to improve the OIRA process. So we don't if we start if we layer another um um structure on top of that's just going to be more confusion and more uncertainty for small businesses. Thank you. I yield back.
▶ 0:57:41Lady yields back. I now recognize Mr. Alford from the great state of Missouri for 5 minutes. Well, thank you. Uh that was interesting. Thank you uh Chairman Williams and ranking member Velasquez. Last four years, small businesses have been under attack from an administration determined to crush Main Street under the boot of big government. In the previous administration, federal agencies finalized more than 1,000 regulations costing taxpayers $1.8 trillion in compliance.
▶ 0:58:09That's the same as the entire federal discretionary budget for FY23. It is unacceptable that federal agencies can put this burden on the taxpayers of this country. This outrageous abuse of power by the executive branch is what the American people rejected when they overwhelmingly elected Donald J. Trump as president. I am proud to support the efforts of the president and the patriots at Doge working to rightsize our government and ensure that no future administration can unilaterally place such a burden on Main Street. And yes, I am optimistic.
▶ 0:58:40I am optimistic that things are going to turn around in America finally. I don't have a woe is me attitude. I am glad we are getting the $1.7 trillion loan portfolio over to the Small Business Administration. Finally, maybe 300,000 square feet of office space that was previously unfilled would be filled with people actually at their desk working for the American people. The student loan program should never been the business of the federal government to begin with, but now we have it.
▶ 0:59:09Let's do something about it along with the PEL grants. Mr. Mont Alban Biden's war on fossil fuels cost jobs. As you know, it's estimated that it cost up to 59,000 jobs. Either people laid off from pipelines and fracking or jobs not realized.
▶ 0:59:33And yet in less than three Doge, the Department of Government Efficiency, has laid off some 30,000 federal workers out of some 33 million. That's less than 1%. And yet there's all this outcry. Are federal workers guaranteed a job for life? Sir, no. Congressman, are workers in the fossil fuel industry entitled to a job for life? No.
▶ 1:00:00Why do you think that there's so much outrage over less than 1% of the federal workforce being laid off? And no one gave a hoot about 59,000 workers uh a and also farmers who have gone out of business because of the high input costs from from fertilizer that's made out of uh natural gas. all these implications.
▶ 1:00:23The president of the United States targeted the fossil fuel industry, but he trained the crosshairs on the backs of our farmers and the backs of people who work for you. Why is that? Why the discrepancy? Well, first of all, it's nice to have common sense back in government. And second of all, I don't think that we should be paying any student loans. I put myself through college.
▶ 1:00:45Um, but the bottom line is in our industry with Department of Interior Doug Bergam, Chris Wright with the Department of Energy and Lee Zelden in the head of the EPA, we think we have a new future in the oil and gas industry, the small independence. Sir, thank you, Mr. Hughes. I'm glad you're here today. $95,000 in added cost in in my area in the Kansas City market.
▶ 1:01:14uh in 6 months before the policies the green new scam was initiated and uh these codes were adopted by Kansas City uh they were averaging 85 single family permits per month. 6 months after the policy implementation only 26 single family permits were issued in total. That's crazy. Do you have anything against if someone wants to build a nice home for them to add these more efficient measures to their home at their own expense?
▶ 1:01:43Oh, absolutely not. I've been dealing with what we would call innovative products uh since the mid9s. U more efficient, structurally sound products that we do envelopes out of. It's a much stronger and and more efficient structure. The bottom line is it costs more. And I deal with a lot of folks that have that extra money when they're building their second or third home. But it's not practical to require that of first time.
▶ 1:02:12And yet it's stifling home ownership in America. The American dream is at risk because this past president, this past administration decided to put their foot on the neck of homebuilders, tying them up, shackling them with these overburdensome regulations which is killing the housing market in America. That's why Tracy Mann and I led a letter to the USDA to pause the implementation of these very burdensome regulations so we can keep the American dream alive.
▶ 1:02:44The dollar mark on that added 2021 IEC was around $30,000. 30. Thank you, sir. Thank you all for being here today on your own time in your own time. God bless you. I yield back. Gentleman yields back. I now recognize Mr. Oshelski from the great state of Maryland for five minutes. Well, thank you, Mr. Chairman, and thank you all for your time today. Um, I don't know where to start, so I'm going to just try to work through this.
▶ 1:03:11Hopefully we can have a bit of a quick conversation in my my time today. Um, I'll just start by an observation. I think done right and done in partnership, uh, government regulation can save lives and can boost economic output. Done right in partnership. Uh, I hope that's something we can all sort of agree to as a general principle as we go about this work. Uh, I think we can also agree there are certainly opportunities to reassess and to re-evaluate, change, repeal regulations that were not done right.
▶ 1:03:38Um, and I would just say I'll speak for myself and I'm sure some of my colleagues, we welcome that conversation. Um, the sense I got from some of the testimony today was that there should not be a one-sizefits-all approach to regulation. Is that a fair sort of observation or takeaway? Okay. Thank you. Um, so I would just, I guess, put out there that perhaps as we consider and have these conversations, we shouldn't take a one-size approach to peeling them back either. So let's take that same approach to unwinding regulations that may be ownorous unnecessarily.
▶ 1:04:09Um and just like we had a conversation today, I do want to associate myself with the comments of the raking member. I truly do and I and I mean this authentically uh welcome a conversation with the administrator hope that she would be willing to answer questions that are proposed by any member of this committee because I think that is how we get to some of that work. Um my my colleague mentioned outrage about um prior employees of the federal government.
▶ 1:04:34Uh my guest to the president's joint address was actually a federal employee who was helping those farmers that were mentioned earlier. She worked for US Fish and Wildlife helping assist farmers in Maryland. She was hired under President Trump's first administration and she was let go under his second administration because she was promoted. She did such a good job that she was on probation. And so I hope again we cannot take this one-size approach in the work that we do.
▶ 1:05:00Um you know I I guess um you know I also wanted to lean in I wasn't planning on doing this on the student loan piece because for for countless businesses um these training programs these pathways are lifelines and pathways to prosperity for so many people. And so I I do think it's critical that we find ways to support that. Um, just as I think we need to do more for home ownership, home ownership is a great frontier. So, Mr. Hughes, I I think we talked about this a little bit.
▶ 1:05:28Um, is it fair to say that the tariffs that are being talked about might raise the cost of building a single family home anywhere from 7500 to 10,000? Any sense of what we're looking at for increased costs? Uh, a dollar amount. It'd be hard to say. Um, because it covers so many different products. Uh, who knows where it's going. Uh we've been dealing with tariffs for years truthfully.
▶ 1:05:52Uh lumber coming out of Canada sure has been tariffed to death already and we are concerned. Yeah. And I and I heard you know the conversations uh earlier about the costs. We we obviously we don't want to unnecessarily increase cost but we can agree that increasing cost through tariffs would be another cost that would would impact businesses and consumers. Is that fair across the board here? Yes.
▶ 1:06:14Um and and I guess just to that point of um employees, I I I do want to I guess re-emphasize the point of I'm uncertain how we can do more to work with businesses as we are peeling away um half the workforce of the Small Business Administration, upending offices, moving people. So again, I I think I just wanted to to leave today with reinforcing that we would welcome uh the conversation with with you and with others.
▶ 1:06:40So, um, as I've done with prior witnesses, if there are specific regulations that you all would like, um, this committee to consider, um, reviewing, perhaps repealing, um, if you could just as a followup submit for the record some of those recommendations, we I I truly would welcome that and I know that we as as a committee would be welcoming those conversations. So, um, really appreciate everyone's time today. I'll do something rare, Mr. Chairman. I will yield back the balance of my time. Gentleman yields.
▶ 1:07:08I now recognize Miss Vanine from Texas for 5 minutes. Thank you very much, Mr. Chairman. Thank you to our witnesses for joining us today. Small businesses are the foundation, as you know, of the American economy, comprising 99% of all US firms and employing nearly half of the nation's workforce. They're instrumental in fostering innovation, creating jobs, and driving economic growth within our communities.
▶ 1:07:32Unfortunately, in 2022, regulatory burdens reached an all-time high of an estimated $3 trillion or approximately 12% of the US GDP. And rather than providing the relief, Biden administration added an additional $1.8 trillion in regulatory costs. And as I've emphasized before, every dollar and hour that's spent on compliance is a dollar not invested in hiring employees, expanding facilities, or fostering innovation.
▶ 1:08:02Small businesses with their limited resources are particularly vulnerable to these impediments. President Trump and Administrator Leler and Congressional Republicans are committed to streamlining government and eliminating burdensome regulations. Uh to date, the administration has halted over $180 billion dollar worth of regulations and Congress has an important role to play as we explore additional reforms necessary to free up small businesses and promote economic growth.
▶ 1:08:29As a member of the oversight subcommittee, I have consistently worked to ensure that small business owners are not buried under bureaucratic red tape. Earlier this year, I reintroduced the Small Business Regulatory Reduction Act, which mandates that uh cost neutrality in the SBA's regulations and also requires the agency to report to Congress on the financial impact of other reg financial uh federal regulations on small businesses.
▶ 1:08:55Uh without objection, I move to enter a letter from the Small Business and Entrepreneurial Council uh into the record in support of the bill. So moved. Mr. cues. Uh the price of homes has skyrocketed. You're having issues now with um actually being able to get a mortgage. Mortgage rates are high. Uh and as you noted, the regulatory burdens accounted for nearly 25% of the price of a typically new built single family home. And I'd actually do you on further. I think it depends on what state.
▶ 1:09:25While in Texas it may be 25%, in places like California it's actually So what are some of the regulations at the federal level that contribute to this issue? Uh codes, I keep going back to codes, but uh energy codes in specific um 80% of of codes uh we don't argue about health and safety, engineering, those things don't change much, but it's when um the administration's climate agenda
▶ 1:09:56entered into it. I say it just one new code 2021 IECC which is the energy code um came into being that's when it jumped excuse me jumped an average of $30,000 per house and and that's small houses large houses uh $30,000 at one clip. It's hard to swallow. How have the homebuilders in your association responded to President Trump and the congressional Republicans uh new regulatory commitments?
▶ 1:10:26Uh everybody's excited, very excited about the hope that we can get beyond some of these regulations. Uh particularly and it goes it goes farther than codes too. Um, in my home county, we had um a town hall meeting a couple weeks ago with three of our senators and some folks showed up in the grading business.
▶ 1:10:49Uh, we have a severe shortage of lots, buildable lots that small builders like myself can buy to build a house on. And the reason for that is um, storm water regulations, EP EPA regulations. And the number that jumped out at me, I've done I've only done five or six subdivisions over my career, all very small subdivisions, 20 lots or less, and we didn't have to spend a lot of money in the early 90s for engineering.
▶ 1:11:20The number today at the average is $1,000 per lot per just for engineering. It's great great um information to know. Thank you, Mr. Johnson. In your testimony, you alluded to an issue of a significant non-compliance with the Regulatory Flexibility Act. Would you agree that it's time that the SBA takes stock of agency's compliance and issue a report to Congress so that we can act on these findings? Yes. Excellent.
▶ 1:11:50All right. I uh yield the rest of my time and thank you very much to our our witnesses. General Lady yields. I recognize Dr. Conaway from New Jersey for five minutes. Thank you, uh, Mr. Chairman. And uh before I get to my prepared questions, I just have to comment on some of these energy regulations.
▶ 1:12:09I happen to have upgraded the um energy um situation in my own home recently and um and it was due to a to a state program that um helping with that cost. But um the reason I did it was because uh those that that that more efficient heating and air conditioning system saves money over time and and would enhance the resale value of my house. In fact, I bought my own home because there were solar panels up on it.
▶ 1:12:39I knew it would um I I didn't well I'm sure I paid for that in my purchase price, but you know, it certainly saved me substantial amounts of energy uh energy costs, particularly electricity costs uh for uh for my home. And so I think there is um I guess there's just another side to tell. I'm not asking as a question. I'm just making a statement. Energy efficiency has its place. And I guess you know when it's applied and when people decide in order to try to achieve those savings um leave it to the individual.
▶ 1:13:07But I think if the more that homeowners do that, the better off we'll be on multiple fronts. The homeowner will save money and we'll do uh hopefully better about preserving uh our earth for future generations. I'll get to my statement. The United States is part of global economy. It ripples its way through the largest corporations uh to the smallest businesses on Main Street.
▶ 1:13:28According to the um government uh statistics, a total of 20,72 companies exported from New Jersey locations in 2022. Uh and of that number, 18,331 or 91% were small, medium-sized enterprises with fewer than 500 employees. Furthermore, New Jerseyy's largest market was Canada.
▶ 1:13:52Uh my home state exported 8.4 billion in goods to Canada in 2024, and this represents 20% of New Jersey's total goods exported. The Trump's uh administration's continued roll out of tariffs against our closest trading partners such as Canada and Mexico uh have been unpredictable to say the least.
▶ 1:14:12In fact, I was at a meeting just last night talking to um uh ministers from Europe uh who are now considering how to derisk themselves from the United States market because of the chaos uh they're seeing with respect to tariff policy. It's here, it's there, it's everywhere.
▶ 1:14:28Um, and as I understand it, on this committee and just, uh, dealing with the small businesses in my, uh, community at home, uh, predictability is one of the the main things businesses need in order to decide about their investments, to grow employees, to, um, bring on new technologies, etc. Um, so this unpredictability uh, hurts the American economy and inherently hurts main street uh, businesses across the country. Uh, Mr.
▶ 1:14:55Arens Meyer, uh, in your testimony, you, um, you speak on how unpredictable, uh, the unpredictable nature of Trump administration's tariffs hurt small businesses. Can you speak more specifically about what you've heard from small businesses and what tariffs mean for local economies? We've heard some of that here in our our committee, I can tell you, and how uh tariffs might make economic planning increasingly difficult for such businesses.
▶ 1:15:20Well, they u we're hearing from small businesses on a regular basis that um it's just they they have no idea how to plan. They have absolutely no idea to plan. They're worried about costs. They've already been dealing with inflation and now they um now they have to worry about um uh you know, further inflation, if you will. You know, we have $3.3 trillion worth of imports into this country, and it's just all through the economy.
▶ 1:15:44So, you know, the average small business owner has all sorts of different ways that they're actually going to be impacted directly or indirectly one by these tariffs and they can't even begin to, you know, think about it. They have to think about all their different supplies, all the the different things that they put into their product and it's it's and they have no time to to plan and they don't know it could change tomorrow. So, it's it's been it's it's probably the single biggest thing we're hearing from businesses right now. Thank you.
▶ 1:16:10Um, on March 19th, uh, the president signed an executive order that seeks to dismantle the Department of Education, and we're going to say more about the significant impacts on New Jersey, meeting with the governor and others, uh, here, um, later this week. Uh, and on top of that is adding it's cutting employees and adding 1.6 trillion in outstanding student loan debt to SBA's responsibility. U, workforce reductions, 43% as I've alluded to.
▶ 1:16:37um and this uh and this change and I know there's legislation seeking to affectuate that but you have a shrinking workforce increasing responsibility and um one wonders how the agency can possibly manage uh that uh that change uh how can SBA do this job uh taking on new responsibilities while cutting their workforce by a significant percentage and I'll give back and await your answer sir gentleman Gentleman's time is
▶ 1:17:08expired. Uh I now recognize Mr. Stabber from Minnesota for 5 minutes. Thank you very much, Mr. Chair. Uh and thanks for the all the witnesses for being here uh and your testimony. Minnesota's 8th congressional district is home to hardworking miners, truckers, loggers, home builders, and energy workers. As their representative, I hear one thing time and time again. Washington is making it harder for us to do our jobs. These men and women aren't asking for handouts.
▶ 1:17:38They're simply asking the government to get out of the way. As I mentioned earlier, I'm I'm glad to have one of my constituents joining us today. Mr. Elden Johnson is not just a business owner. He's a Main Street success story, a voice for rural America and a firsthand witness to how Washington's red tape affects our way of life in northern Minnesota. Mr. Johnson, thank you for making the trip out here. Mr. Johnson, you've had to navigate the mandates related to heavy duty vehicles.
▶ 1:18:06Are electric trucks a feasible option in rural America? And how would these rules affect your ability to deliver goods across Minnesota and the upper Midwest? Uh, they're not feasible. In a word, no, not feasible. And if I was to comply with that, I would be completely out of business. We would have to close the doors. It it's it's a one-sizefits-all. doesn't fit here in in rural America with no with no infrastructure.
▶ 1:18:34So you have a truck loading up at Peterson Wood Training out of Superior, Wisconsin when it's 25 below. You're not going to go to Ishbaming, Michigan with that uh with an electric truck, are you? Well, I personally wouldn't want to. You won't get there. Thank you. Uh uh Mr. Hughes, nearly a quarter of the cost of a new home is now regulatory. Yet rulemaking agencies often tell small businesses that it won't cost much to comply with the proposed regulation.
▶ 1:19:02You just gave it an example uh in your earlier testimony that one energy rule or regulation that Congress never voted on cost a home $30,000 whether it's a bigger home or a smaller home. Can you elaborate on that? Well, as we said, it's not a one-sizefits-all. And I am all about energy efficient products and construction, but it absolutely has to be choice. It can't be mandated.
▶ 1:19:31Um I have three grandsons under the age of 10 and I'm worried at the pace we're going, they're not going to be able to own their own their own home. Right. Even if papa builds it. You know, we just had one of my colleagues talk about his personal experience with his own home. That's an example of personal choice. Correct. He wasn't forced to do it. He chose to do it.
▶ 1:19:55You know, under the administration, they put rules and regulations to the tune of 1.3 rules and regulations per day across their administration that affected each and every one of you. We didn't get a vote on it. These are just rules and regulations that the bureaucrats in the back room think it's a good idea. We always talk about Main Street America. Small businesses are the engine of econ our economy. We have to support that.
▶ 1:20:25I've owned a small business uh for 31 years. We have since sold it. It's amazing uh the rules and regulations that came out of St. Paul, Minnesota, and our nation's capital, Mr. Johnson, that make it more difficult for you to succeed and more difficult for these services to be provided to rural Absolutely, without a doubt.
▶ 1:20:47I will um I will just say that as we as we go go into this next administration, President Trump has stated that for every rule of regulation that comes forward, 10 are going to be removed. You had one of my colleagues and I think in good in good faith say which are the rules regulations that are bothersome to you. I challenge you to bring those all of them to us. bring 10 or 20 a week.
▶ 1:21:17We can talk about them because every time that I've asked somebody in the small business uh uh hearing, do you need more or less rules or regulations? They always say less. It's it's it's disruptive. So, the four of you raise your hand if you think that you need more rules and regulations on your small businesses to succeed. Raise your hand. just like the other ones. It's it's it's just like the other hearings.
▶ 1:21:47Not one person raised their hands. And what we have to do is we have to make sure that our small businesses can succeed. And these these bureaucrats in the back room in Washington that are putting these rules and regulations on you. It has to stop. And listen, it just didn't start uh overnight. It's been going this way for a long, long time. We have to in a bipartisan fashion stop this stop these unnecessary rules and regulations that are punishing you. You're the engine of our economy.
▶ 1:22:1799% of our businesses are small business and I yield back. Gentleman yields. I now recognize Mr. Cisineros uh from California for 5 minutes. Thank you, Mr. Chairman. Look, I believe when done right, deregulation um means increased competition that improves quality of goods and services and price decreases. When done right, deregulation can stimulate economic growth, reduce cost, and make businesses more efficient.
▶ 1:22:46But today's hearing is not about deregulation or how we can work across the aisle to actually help businesses. This hearing is an As a co-equal branch of government, we should be actively trying to shape how Congress wants support for small business to look like and not just seek to appease the executive by stating the name of our congressional hearing with the golden age. Our committee also has oversight authority.
▶ 1:23:11We should be able to hold agencies accountable and their leadership should come to this committee room and explain actions or inactions. I have joined my colleagues in sending letters to the SBA and they go unanswered. We sit through hearings to listen to what agencies, particularly the SBA, are doing and not doing. We ask witnesses questions to gouge the impact of actions by the SBA and the administration. But we need to bring the director of the SBA here.
▶ 1:23:41So with my time now, I am calling on this committee to bring the administrator here to publicly answer our questions. If the administrator were here, I would want the following questions answered. What was the extent of DOA's access to SBA headquarters and systems? And what was done by the SBA to ensure that systems were not abused or accessed by individuals without clearance?
▶ 1:24:05What specific offices or departments within the SBA are affected by the announcement of 43% reduction in the workforce? Where is the SBA relocating the six regional offices and will any other offices be closed in the future? How are we appropriating funds being used or how are appropriated funds being used or not used with the SBA undergoing such drastic changes that Congress has not authorized?
▶ 1:24:31What is the SBA's plan to handle $ 1.7 trillion student loan portfolio with less staff and staff not trained to work with such a complex student loan system? In announcing the made in America manufacturing initiative, you claim you will find $100 billion in cuts to regulations. Where are you going to find it and how are you going to ensure cuts don't negatively impact small business owners?
▶ 1:24:53Also, in announcing the made for American manufacturing initi initiative, did the SBA actively mislead Americans by stating that the previous administration was losing an average of $9,000 or 9,000 manufacturing jobs per month. On the last on the last question, the SBA ignored the fact that manufacturing jobs rose by 721,000 during the first three years of the Biden administration.
▶ 1:25:18Some was part of the comeback from the pandemic era job losses, but the Biden administration's final month numbers was still 12,000 manufacturing jobs higher than the last prepandemic month of President Trump's first term in office. The manufacturing employment gains under President Biden were in fact the strongest in 72 years.
▶ 1:25:36I sincerely hope the administrator comes before this committee to work with us to help small businesses flourish because small businesses have fewer options than larger companies to navigate and survive the chaotic actions of the Trump administration. And with that, I yield I hit the wrong one. Gentlemen yields back and now recognize Mr. Weed from Wisconsin for 5 minutes. Thank you, Mr.
▶ 1:26:01chairman for holding this hearing and thank you to all of our witnesses for sharing their experiences with us today. It's undeniable that the previous administration was anti- business, anti-inovation, and anti-free market. I would like to once again highlight the 1.8 trillion of additional regulations that were needlessly imposed on businesses across this nation. To comply with these regulations, businesses were subjected to 360 million extra hours of paperwork.
▶ 1:26:28As a former small business owner, I know firsthand the disproportionate burden small businesses face to comply with additional regulations. When the government needlessly increases the cost of operating a business, those that cannot keep up are forced to close their doors. Those who do manage to stay open spend their time focusing on staying afloat while innovation and growing their businesses take a back seat.
▶ 1:26:52Working with the Trump administration, Republicans are committed to repealing these harmful regulations and reorienting the small business administration to first and foremost help support small business owners instead of continuing to crush them with regulation after regulation. In just over two months, the Trump administration has stopped an additional 180 billion in regulations proposed by the Biden administration.
▶ 1:27:14I look forward to continuing our work to reverse the Biden administration's burdensome regulatory war and allow small businesses to grow, innovate, and prosper. So, Mr. Montalban, the Republicans on this committee are steadfast in their mission to reduce the massive number in regulations imposed by the previous administration and to promote the extension of the Tax Cuts and Jobs Act signed into law by President Trump.
▶ 1:27:37If taxes and regulatory burdens levied on your businesses are reduced, what are the downstream effects for your customers? Well, Congressman, unfortunately, we're just the producer of crude oil and natural gas that comes to your home or to your vehicles, but I can tell you that the regulations that have been brought upon us over the last four years um were to put us out of business and they were done through the EPA.
▶ 1:28:05This cost us literally personally on a couple wells, over 100,000 on one well and over 400,000 on another well. So, the bottom line was they were they were doing everything they could to put us out of business through regulations. Thank you, Mr. Hughes. What current impacts are home buyers facing as a result of increased regulations placed on home builders? As you know, homes can take several years to construct.
▶ 1:28:33It's very difficult to, you know, buy even to buy land to develop property because of all of the regulations. How do the current regulations hinder the construction of new homes in the coming years? I guess mainly the added cost, but also added time and uh there's just been no thought to uh that added cost and and what that does to um especially the the beginner or or the the firsttime homeowner that I mentioned before.
▶ 1:29:03It's just about put them out. Uh, our numbers suggest that every time we add $1,000 to the cost of a new home, you force $100,000, it's actually a little over 100,000, 116,000 buyers out of the Thank you, Mr. Ernsmeer.
▶ 1:29:26On your organization's website, you mention entrenched discriminatory policies that create obstacles for businesses owned by people of color, women, and immigrants. So, what is a specific SBA policy that has this discrimination written into law? And why hasn't the Biden administration repealed that policy? I don't believe we're referring to actions by government.
▶ 1:29:53I think we're referring to situations in the market that have created dislocations and um differences in opportunities and our organization is dedicated to looking at where those um issues are regardless and um we believe government has obligation to kind of focus on where the need is the greatest. So this isn't so much about accusing the government of doing something. It's really just stating a reality e an economic reality.
▶ 1:30:21Oh, so you weren't referring to the SBA on your website specifically? Not not that the SBA was doing anything discriminatory? No. Okay. If I understand your question. Okay. No, I was just It was on your website. It says, "Yet these entrepreneurs encounter many obstacles due to entrenched discriminatory policies and practices. Challenges that have only been exacerbated by the CO9 pandemic." I didn't know if you were referring to the SBA specifically. I don't believe we were. You weren't. Okay.
▶ 1:30:50So if a policy or practice explicitly favors a certain category of people over others, would you consider that to be discriminatory? I think it's it's an obligation of government to look at where the need is the greatest and look at the economic need and you find the greatest economic need in you know certain communities, urban communities, rural communities.
▶ 1:31:12Um it's not limited to a particular race or demographic and u there are programs in place that address those needs and uh we support those. Gentleman's time has expired. All right, I yield back. Thank you. Gentleman yields and now recognize Mr. Tran from California for 5 minutes. Thank you, Mr. Chair. Thank you. Thank you uh ranking member to all the witnesses. I appreciate you being here today. Mr.
▶ 1:31:35Erinmeer, many of my colleagues on this committee make regulations out to be this unyielding bureaucratic boogeyman for small businesses. Uh but regulations can also benefit the economy through leveling the playing field, incentivizing innovation, and protecting American innovation from uh threats like the Chinese Communist Party stealing our intellectual property. Can you share some of the stories from small businesses within your organization?
▶ 1:32:02I mean again it's it's about setting up a level playing field and um for example um in terms of uh lending we see a lot of irresponsible lending going on uh targeting the most uh vulnerable small business owners and you need regulations in order to um to guard against that um price discrimination that the FCC was attempting to deal with. again um it's the role of government to step in and try to create a level playing field.
▶ 1:32:33Uh so um franchise unequal franchise relationships um you know the list goes on uh and that is that is a function of government to do that and that's why we have we heard a lot about the cost of regulations but it's really about a costbenefit analysis. We're the first to argue that perhaps there are regulations out there where the cost is greater than the benefit and we should look at those. But you've got to look at the benefit side. If you'd only look at the cost side of things, we wouldn't have had the PPP.
▶ 1:33:01Yes, the PPP created some obligations for small businesses, but it was a huge benefit as well. So just looking at the cost side, the cost side of the of the Biden policies, there was a lot of manufacturing and other money that was passed by this Congress. Um obviously regulations came along with that. So again, across the board, we need to be looking at what are the benefits and what are the costs and we are certain there are cases where the costs outweigh the benefits and those should be addressed. Yeah, I agree with that and thank you.
▶ 1:33:31Um to continue on, Mr. Ernsmeer, on March 14th of 25, the president issued an executive order directing that minority business development agency, MBDA, be eliminated to the maximum extent consistent with applicable law. The agency, which was created by President Nixon in ' 69 and codified into law by Congress with bipartisan support in 2021, has been widely successful.
▶ 1:33:57In fact, in fiscal year 24 alone, the agency helped the country's more than 12 million minority businesses access 1.5 billion in capital and create or retain approximately 23 23,000 jobs. What message is the Trump administ administration sending to small businesses by eliminating the minority business development agency? Well, as you mentioned, um, Congressman, the MBDA has done, um, a lot of good work.
▶ 1:34:24They have 26 um um offices across the country that are serving uh small businesses. And on top of that, they are the conduit for a large chunk of the uh small save small business credit initiative technical assistance money that by the way they haven't distributed all of it. You got about 62 um million dollars sitting there with them going away. Who knows that that's going to get distributed. So they have um they have performed a valuable function.
▶ 1:34:51Just to sort of wipe them off the face of the earth is absolutely not the way you're going to help small businesses. Thank you. Chairman, I yield back. Gentleman yields back. I now recognize Mr. Muer from the great state of Pennsylvania for 5 minutes. I appreciate that, Mr. Chairman, and thanks to all of you very much. Um you know, obviously our our committee has oversight over the SBA, but we're also about advocating and fighting for small businesses.
▶ 1:35:16We're really the only only committee here uh in Congress that is that that's our focus, not just the SBA, but but working for you. Um and and what what I'm hearing here today is what I hear when I go to my chamber events, when I'm when I'm doing my main street walkabouts, uh during CO, postco, uh these days that in during the last four years have been very very tough on small businesses. That's just the reality. That's not, you know, there's nothing political there.
▶ 1:35:44I mean, inflation, uh, supplies were were were were difficult. Uh, we had we had excessive IRS and OSHA drivebys because they they didn't have any better systems to do anything with, so they were just stopping in on small businesses and creating all kinds of havoc. Of course, inflation, okay, 20% during the course of the last four years. Uh, energy up and down.
▶ 1:36:09um from to to to keep your your your company going to uh to the cost of uh logistics and distribution, workforce issues. I mean, taxes, taxes. We've lost we've lost t taxes have gone up from bonus depreciation to the R&D tax credit.
▶ 1:36:26Um, uh, the list goes on and, and now, you know, 199A is in jeopardy if we don't pass, uh, the incoming tax relief that our friends to the left like saying, "Ah, that's nothing but tax cuts for the rich." Okay? You know, no, it's for all the small businesses that have the 199A. And and and and by the way, sir, your your organization advocates against 199A, so I don't even know what what what to make of that. It's a 20% I have it in writing. Okay?
▶ 1:36:55You want $25,000 um uh tax relief for small businesses and doing away with 199A. So, so let's just let's just get real. As some of our our colleagues said, look, we we need to work on the regulatory costs. That's what this administration is going to be about.
▶ 1:37:11I mean, things like the beneficial ownership rule that took place, um, the CFPB, my god, I don't think there's anybody on earth or in America that was uh, favorable to the CFPB except maybe some on on the political end of things. Uh, the 1071 final rule, a lot of problems that we need to fix. So, m Mr. Hughes, you mentioned that approximately 25% of the cost of new home is attributable to government regulations.
▶ 1:37:37Can you discuss, if you wouldn't mind, briefly, how regulations have led to increased these housing costs? Uh, well, I touch on the same things. Uh, added codes, um, added storm water regulations, uh, that that simply aren't needed. Um, but, you know, when storm water regulations were first uh, put into practice, uh, they were, and large enough projects, they are, but again, using the the same term, one size doesn't fit all.
▶ 1:38:06And that's uh so added regulations from the ground up. Uh impact fees uh which vary tremendously over the country. We're fortunate in North Carolina we don't have a lot of impact fees, but it's been a battle since the mid80s. What about the HUD's minimum energy standard? I don't mean to interrupt you, but that's that's fine. And that goes right back to that that added cost uh to comply with IEC 21.
▶ 1:38:35Um, we're looking at 30 to $35,000 added cost per house, right? Thank you. We're going to work on it. Uh, the regulatory onslaught, uh, Mr. Montabomb, if you could, uh, try to sum up regarding energy development in in the US. I mean, obviously you've been talking about it. Maybe you just share some other real life situations. U, thank you, Congressman.
▶ 1:38:59The bottom line with the small independents is they are trying to regulate us through the EPA on the underground injection control program and the department of interior on the bonding program and the key issues for the small independence would be percentage depletion and the intangible drilling costs. All right. Thank you. Uh the idea of cutting 10 regulations for each new regulation certainly after the four last four years that's not uh that's not very difficult. Mr.
▶ 1:39:27Johnson, share with us uh two or three of the regulations that you find are most harmful to your business. Uh the ELD mandate, electric logging mandate, uh some of the EPA rigs, and the electric veh electric vehicle mandate that's coming is uh the three that that scare us scare us the most. All right, great. Thanks for sharing that. Now, the uh the TCGA, the tax cut and jobs act that of course, you know, most Democrats hate just because it it was implemented during the Trump administration. How important is that to your business?
▶ 1:39:58Well, I'm not sure. Don't answer that one, sir. Okay. The u the 199A 20% small business tax bonus depreciation. It's a big It's a big part. My business saved $11,000 last year. A very very small business. Saved $11,000 last year alone. And what did you do with that money? You put it back into your business, grew, became stronger, maybe hired some. Yes. It just goes right back in. It it it all goes right back into the business. It isn't some golden nest egg. And thank you, sir. I I yield back, Mr. Chairman.
▶ 1:40:24Gentlemen Neil's back and I recognize Miss Simon from great state of California for five minutes. Thank you chair and thank you Raiki member Velasquez and thank you witnesses for coming in. I've learned a lot in the short period of time about some real hurdles that I think it is important for us all to acknowledge.
▶ 1:40:43But before I get into my comments, you know what I'm struck by is, you know, we're talking regulations and the causation of of hurting Main Street all over the country. And I'm so excited to serve on this committee because in this moment in time, clearly there are ways that we could be supporting small businesses with more efficiency.
▶ 1:41:05Um that said uh I find it difficult to talk about regulation uh being sort of the poisonous factor in the economy when right now in this moment the SBA just took on work that it knows that it cannot do.
▶ 1:41:23And for small business owners like the ones represented here today, because of SBA making the decision to shutter offices in critical areas in the United States, fire thousands of workers who are critical to those small business owners being able to access the small opportunities that we provide. They're not they're not huge opportunities. They keep businesses moving. We're firing staff. We're shuttering offices.
▶ 1:41:53And lastly, we've made the decision to take on federal student loan provision in the SBA. You me who's directing the ship if we truly are about supporting mom and pop businesses in the United States of America. You know, a couple of weeks ago, I hosted a event for over seven chambers in my district.
▶ 1:42:22Those key leaders were clear to me that it wasn't regulation that was keeping businesses shuttered. You know, these challenges that these chamber leaders representing thousands of businesses in my district, they lifted up that it was the lack of access to capital and that already when they called the SBC, SBA, it was hard to get through. The websites weren't working. They talked about issues that the SBA could do better in providing in real time, like translation services.
▶ 1:42:53These chambers talked about the work that they've had to do almost alone to lift up main streets and Broadways across my district since COVID. None of them talked about overregulation as a challenge. So in fact, three out of four small businesses want government to do more to come in to chip in to answer the phone to follow up on the website inquiry. But no, we're shutting offices.
▶ 1:43:22No, we're firing staff. No, we're taking on hundreds of thousands of student loans. So, I ask us, what are we really here doing? What are we really talking about? If we really cared about small business, we would be having a very different conversation. Um, you know, I'm curious to the witness, the Democratic witness. Thank you, sir, for coming today.
▶ 1:43:45I know one of the the issues that many of us in the United States Congress are are struggling with is with the the shattering um of the CFPB. You know, the work that the organization did, this federal agency did was to protect not just elderly people fighting scams, but the small business owner. And I know the CFPB worked in conjunction with the SBA.
▶ 1:44:14I'm curious, how would you in this moment, sir, explain how the regulations preventing medical debt, for instance, from being reported on credit score reports might help a small business? Well, Congressman, as Congresswoman, as everyone at this table can attest, um your personal credit is absolutely essential, especially when you're starting a small business and for many years of growing a small business.
▶ 1:44:42So, medical debt that reduces your credit rating, inability to get loans because of of your credit situation, that absolutely impacts business. And there's a real intersection, especially with smaller businesses and a lot of the new businesses that have been started, um, self-employed businesses where personal and business debt are essentially the same thing.
▶ 1:45:03The only regulation, the only uh provision of the DoddFrank that related directly to small business was the 1071, which was simply track where you're making the loans. So we so we know so we get information so we can do a better job so the industry can do a better job targeting um people and making sure there's a broader range of credits available.
▶ 1:45:24So the the CFPB was actually beneficial to small business both in terms of 1071 and in terms of um helping entrepreneurs um avoid scams and and be able to improve their their credit. Thank you. You've just made my point that we're making work harder for small business owners. We're making their lives less uh less equitable in this moment. And I want to thank you all of you all for being here today. Thank you. Gentle lady yields back. Now recognize Mr.
▶ 1:45:52Breznahan from the great state of Pennsylvania for 5 minutes. Thank you, Chair Chairman Williams for holding today's hearings. As many of our witnesses pointed out today, the last four years have been brutal for our small businesses. From CO shutdowns and supply chain issues to runaway inflation and we will focus on today, an overburdensome regulatory environment. Many of our small businesses were crushed by this wave and did not survive. Many of those that did survive only did so by the skin on their teeth.
▶ 1:46:22We must begin now to get to now to get back to our small businesses and entrepreneurs who are disproportionately affected by this mountain of regulation. The current state of regulation in America is an opportunity cost. Just a few months ago, I was in the same situ same same situation as our witnesses, balancing my company's budget and being forced to make tough decisions that affected the future of my company.
▶ 1:46:45I could give a laundry list of what I wished I could do with the profits, but too often I was forced to divert funds and working hours towards compliance of the complex and often unnecessary network of regulations. Large corporations can survive this. Another fee to a lawyer or hiring an additional compliance officer or even a government affairs team won't make a dent on their income statement. To our small businesses, however, the legal fees and fines from reg regul regulations are make or break costs.
▶ 1:47:13I look forward forward to working with our small businesses, this committee, and the administration to cut the red tape holding back economic growth in America. Now, I'd like to ask a few questions to the panel. Um, Mr. Johnson, um, I'm sure, uh, if your business is anything like mine, um, taking a day to come to Washington DC here to testify means a lot. So, I do appreciate you, uh, coming here to hear firsthand what it's like for small business to go through.
▶ 1:47:40But um I was a heavy highway electrical contractor in my past life. We had about 350 pieces of equipment on the road. Um are there any specific regulatory challenges that you would hope to see ease through this administration? Just just the EPA Um the ones that we have are not working. Um I'm sure that there's better solutions than what we had. what we have isn't working.
▶ 1:48:10Um, like that's our biggest hurdle. I I believe it. What was it like? I mean, what was it 2008 when the dry deep uh DPF took into a place? I know we ran a bunch of Ford F550 bucket trucks with the old uh 73 inside of them. And I mean, constantly we were dealing with the DPF filter and needing to go into the drate situation.
▶ 1:48:34has um the compliance or at least the the wet DPF been any more beneficial or easier to run? Uh no, no. Very troublesome. Uh repair bills all the time, trucks down all the time. Um I had one one of my constituents in northern Minnesota had 21 trucks in the industry. And he said he needed 21 to keep 15 on the road every day just because of the sensors and the cold weather. And these things don't work.
▶ 1:49:00Uh a one-sizefits-all doesn't work in our I appreciate that and echo your your comments and concerns. And actually, the city of Philadelphia implemented uh a diesel particulate filter requirement uh for anything over 50 horsepower where you would have to go to a tier 4 uh diesel and if you can even acquire or procure that specific piece of equipment, it um was hard to come by specifically during the COVID era.
▶ 1:49:28Um, how have the regulations affected your business's ability to compete with larger firms? Well, we don't have a lot of deaf trucks, only a few. Um, I think we're all on the same level. They're they're they're they're suffering just as much as we are. Um, uh, the big companies still have the same problems. It's still the same trucks. It's still the same issues. It's still the same repair bill. It's still the same same employee that goes home that day um without work.
▶ 1:49:59Uh, I'll my I'll redirect my questions to Mr. Montaban. Um, I recently had the EPA administrator Lee Zeldon in my district to talk about the energy demands needed to grow our manufacturing base and economy. Uh, how has the Biden administration's regulations held back our in our energy industry and what can Congress do to unleash our domestic energy production to meet the demands of the 21st century economy? And the reason I asked that is I'm from northeastern Pennsylvania.
▶ 1:50:28Um Wayne County uh by some estimates has $900 million worth of natural gas under our own feet and with the explosion of AI data centers. We are constantly uh looking for increased energy production specifically for electricity. But can you point to one regulation that totally crippled our ability to produce domestically? Thank you, Congressman. Um, that's very easy.
▶ 1:50:55The methane rules and how the methane rules, both subpart W and the quad B and quad C brought brought us into the regulations to put us out of business. And I would like to touch with the other members of this committee that we are regulated and we work with the EPA, this board of oil and gas, the department of gentle and so we have many regulatory bodies. Gentleman's time is up. Thank you. I yield back. I now recognize Mr. Macyver from the great state of New Jersey for 5 minutes.
▶ 1:51:24Thank you uh chairman and to my ranking member of Velasquez for having this hearing and thank you to our witnesses for joining us today. At a time when small businesses are driving economic growth, the role of smart, effective regulations has never been more critical. Regulations provide the foundation for fair competition, ensuring that entrepreneurs, no matter their background, have a real chance to succeed.
▶ 1:51:49Strong regulations protect small businesses from pred from predatory practices, promote access to capital, and create an environment where innovation can thrive. In my home, the district to in my home district, the 10th congressional district of New Jersey, we saw firsthand how regulatory safeguards put in place by the Biden Harris administration helped usher in historic growth among small businesses.
▶ 1:52:13We must continue to ensure that critical protections remain in place to protect small businesses against large corporations, help create jobs, and preserve the American dream for future generations of entrepreneurs. With that being said, I have a few follow-up questions to some of the comments that were made today. Mr. Hughes, specifically, you spent a lot of time talking about the um cost on building and how it hasn't increased. Do you think that the cost of building was cheaper before CO 19?
▶ 1:52:45Uh, sure it was. It was it was cheaper prior, but uh I I don't feel like there was a connection with COVID that that had Thank you. So, basically it was cheaper to build before CO 19. You have not mentioned that through all of your talks about some of the elements of the cost of housing. I know in the 10th congressional district um and in New Jersey specifically, we have a shortage of about 200,000 uh affordable housing units specifically um that we are dealing with right now.
▶ 1:53:15And many times where I speak to small developers, they talk about um the cost, you know, around uh co 19 before co 19 and how materials went up and the cost of that. But you have not mentioned that in talking about some of the cost of that um some of the reasons for the cost now based off the past administration and now with the new tariffs being introduced Mr. Hughes what kind of impact do you see that especially on steel and lumber?
▶ 1:53:40Uh it'll have a huge impact because it it involves so many of the materials that we use uh copper, aluminum, steel, lumber. Uh and like I said earlier, we've dealt with tariffs uh for years. That's nothing new for us and as has been mentioned it it makes it very unpredictable hard for us to know where the cost is going. However, but these new tariffs on lumber specifically and still are based upon this current administration, the Trump administration, not previously.
▶ 1:54:10Just want to put that out there on the record. And then secondly, uh I do want to mention something. You spent a lot of time and I heard one of my members across the aisle talk about it too about the waste of some of the standards that we have now and how that drives cost up, which I could understand that and I think that you know different agencies, especially ones that we govern um and Congress should do something more to be able to help small developers in some of these uh standards. But it doesn't mean that the standards are a waste of time.
▶ 1:54:36Specifically, I want to point out for those that may not be aware and just for their own um knowledge, the importance of energy standards. One, energy efficiency construction. We need that especially in our uh urban cities. Uh energy savings for renters. I'm sure many families would love to save on energy. Uh especially in my district who is seeing the cost go up in energy. Uh enhancing comfort and health always very important with the new energy standards being introduced.
▶ 1:55:04And lastly, reducing the carbon footprint, which is very important. We need eco-friendly housing in our communities, especially in those that I represent in New Jersey. With that, I yield. Lady yields back. I now recognize Mr. Downing from the great state of Montana for 5 minutes. Thank you, Mr. Chair, and thank you to the witnesses. Um, you know, my background, I've I've built businesses in in uh highly regulated industries. Uh, you may say I'm a glutton for punishment.
▶ 1:55:33and I've done it in securities and insurance and in alcohol. So, uh I've seen how heavy-handed regulation um can can cause problems not just in running a business, but also in raising capital. You know, when you're trying to attract capital uh if you have a bar that's always changing in the regulatory environment, it's hard to get capital if they don't know where that bar is going to be. You can always plan a business to a bar being someplace.
▶ 1:55:58And and so I've seen how that um how handy heavy-handed regulation can stifle growth, stifle investment, stifle job creation, stifle innovation, and uh how uh ambiguity in this regulation, you know, is, you know, causes the problems I talked about of of attracting capital and end of the day, you want to build a business, you need to somehow, you know, find out how to fund it. You know, money money is what drives so many things in this regulatory environment cause problems.
▶ 1:56:23Um I'm particularly excited uh to be joined here uh by a fellow Montanan uh Mr. Montelbin. Thank you for being here. Uh deeply red uh rooted in Montana's uh energy uh sector and I appreciate that. Thank you for being here today. And I want to talk to you about how the last administration has deeply hampered American energy production. You know, hurting our ability uh to provide affordable, reliable, resilient power to our communities.
▶ 1:56:53Uh, I think about that all the time in energy. You know, reliable, affordable is important to building that American dream. So, I want to just, you know, quickly, uh, how did the Biden administration's overbearing environmental regulations make it difficult for Montana oil and gas producers like yourself to operate? Thank you, Congressman Downing. Um, the methane rules with subpar W and quad B, quadc bringing us in to testing of all the wells in Montana were critical and very damaging.
▶ 1:57:22in the small independent, but the biggest one that we're seeing now is the uh EPA with the underground injection control program and holding up permits in region 8 in Denver, Colorado. Thank you. Last year, the Biden administration's Bureau of Land Management, BLM, released its final fluid mineral leases and leasing process rule. This rule significantly increased the financial bonding requirements for oil and gas operations in order to cover for the abandonment of wells. Uh again, uh to Mr. Montalban.
▶ 1:57:51Um, how has this rule disproportionately impacted your business and smaller oil and gas operations across our country? Thank you again, Congressman Downing. Um, as we mentioned earlier, uh, a single wide bond, a single well bond went from 10,000 to 150,000. Multiple well bond went from 25 to 500,000. We cannot buy shity bonds. You're well aware of that. So, these are cash bonds. And u on the other side of that, we're also um well bonded on the EPA, the BLM, the state of Montana side.
▶ 1:58:21And so the bottom line is that it's taken away all possibilities of buying and selling transaction on um federal lands. Thank you. Do you believe that uh the BLM under the Biden administration adequately consulted and took into consideration the concerns of the oil and gas producers while drafting this rule? Uh Congressman Downing, indeed. Great question.
▶ 1:58:42I can give you an example of Bill Fulton out of Billings, Montana that contacted the BLM during this process and u he wanted more time to give his partners and royalty owners time to answer and ask questions about this and they would not even um allow him to do that. Thank you. Uh you know, going back to one of my themes on the American dream, I I I think of the American dream as being able to buy your first home and I wonder how young families are able to do this.
▶ 1:59:10So, I'm going to, you know, move on here to Mr. Hughes. Uh, you know, one of the things that struck me, uh, in your testimony is pointing out that over a 100,000 households would be priced out of the housing market if the median new home price in the United States raises by $1,000. Uh, this is while 75% of US households already are unable to afford a medianric new home. I mean, that that's incredibly concerning to me. Um, so, Mr.
▶ 1:59:38Hughes, in this environment, do we need more or less regulation in the home construction industry? Well, obviously we think we need a lot less. Uh and and there are other things that uh we could focus on rather than continuing to increase the regulation as we're you know the the reality is homes that we've built in the last 20 years really perform very well, but the existing stock is where a lot of our energy is wasted and uh we'd like to see more focus put on that. Right.
▶ 2:00:06And in the Biden Granhome Department of Energy, uh they created numerous restrictive energy efficiency standards for household appliances like refrigerators, uh air conditioners, lighting. You know, how have these regulations impacted the homebuilders and the average American family's ability to buy a home? Well, just the increased regulation on appliances uh is a is a whole another can of worms that we could talk on forever. and we do see those starting to back off some.
▶ 2:00:36Well, I've uh I've run out of time. Thank you for your answers. I I yield, Mr. Chair. Gentleman yields. I now recognize Dr. Morrison from the great state of Minnesota for 5 minutes. Thank you, Mr. Chair, for holding this hearing and thanks to our witnesses, for your testimony. I acknowledge that regulations can create additional requirements for small businesses. And as a physician, I'm also acutely aware of the important role that regulations play in keeping Americans safe and healthy. Heat is a leading cause of weather related deaths in the United States.
▶ 2:01:05Excessive heat in the workplace can cause heat, stroke, and even death if not treated properly. Heat injury and illness prevention standards help prevent workers from succumbing to heat related illnesses and being hospitalized. Flooding is the most frequent and costly natural disaster in the United States. Flood risk management standards help reduce the effects of current and future flood hazards, helping prevent our homes from being destroyed by flooding.
▶ 2:01:32As climate change intensifies storms and increases the severity of hurricanes, we need federal standards to ensure that our communities are more resilient to extreme flooding. Many EPA regulations ensure that toxins do not end up in our environment, our air, and our water. EPA's underground injection programs regulations do ensure that the brine from oil and gas extraction that contain toxic metals and radioactive substances does not contaminate people's drinking water.
▶ 2:02:01These are just a few of the many examples of why regulations when implemented correctly are important tools for reducing harm. One way we can reduce the burden of regulations on small businesses is by creating a consistent and predictable regulatory environment. Mr. Dr. Errens Meyer, during your testimony, you said that small business owners across the country look to their representatives in government to help provide certainty, predictability, and stability in the business environment in which they operate.
▶ 2:02:28How does the unpredictable and haphazard rolling back of regulations impact small businesses and affect their ability to plan for the future? Well, small businesses, as we've said, really need as much predictability and certainty as possible.
▶ 2:02:44Um and you know we all recognize there maybe need to adjust regulations but once regulations are in place and you've got kind of gone through the analysis you want to lock them in and small businesses then will adapt and as as heard it's sometimes costly for them to change. So if you have certain regulations governing a certain way to do things and all of a sudden you come in and say well maybe that wasn't so good we're going to change it. That's actually a cost to small business.
▶ 2:03:07So we need to look at not only the you know sort of costs of the original regulation but you need to look at costs of going in and tinkering with that. Thank you sir. In addition to introduc introducing regulatory uncertainty the Trump administration's trade policies have been erratic and unpredictable I think at best proposing then pausing then ultimately implementing tariffs on Canada and Mexico has created uncertainty for small businesses and consumers.
▶ 2:03:33I worry that President Trump's volatile trade policies will have dreadful consequences for our economy. With President Trump himself admitting that his tariffs will cause a period of transition. Small businesses often operate on smaller margins than larger businesses. So, a period of transition could be enough to force small businesses to close their doors permanently. Mr. Arensme, again, could you describe how economic periods of short-term pain caused by tariffs will be especially impactful on small businesses?
▶ 2:04:01Well, we've already seen a whipsawing of this dating back even before President Trump took office. Um, business, small business, all of a sudden we're saying we got to go out and buy extra inventory. Uh, which is also inefficient in many cases. In some cases, the businesses don't have the cash to do that. And since um, President Trump's come into office, we've seen this whipsawing back and forth. Even today of what tomorrow I guess is the big day, we're not really sure what's going to happen.
▶ 2:04:27And as I mentioned, you've got so many different um elements in supply chain that are impacted by these these um in many cases small businesses might have multiple ones. They don't really know um depending where the country it comes from, depending on what the product is. We've got an ice cream shop in our network and he gets his sprinkles from Canada. I mean, who knew? I mean, so it's it's everywhere.
▶ 2:04:50and the the more volatility you have, the more uncertainty based on country, based on product, it just makes it impossible for small businesses to do any kind of planning. Thank you, sir. And thank you, Mr. Chair, and to all of our witnesses.
▶ 2:05:04I just want to end by saying that I hope that we can all agree that we should reduce regulations where costs outweigh the benefits and cut down on unnecessary bureaucratic red tape and that we should issue this in a in a responsible we should approach this in a responsible manner and I'm open to working with my Republican colleagues um when to do just that. Uh and with that, thank you Mr. Chairman. I see that my time is expired so I yield back. I now recognize Mr.
▶ 2:05:34Finstead from the great state of Minnesota for five minutes. Thank you. Excuse me. Thank you, Chairman Williams, and thank you for uh holding this uh committee hearing today. Thank you to our witnesses for taking time away from your businesses to come here and share your your stories with us. Uh as a small business owner myself, I've seen the impact of regulations and the mounting mounting compliance costs and what they can have on a small business.
▶ 2:05:59The Biden administration alone, and we've heard it over and over again today, has added uh in the last four years over $1.8 trillion in new regulatory compliance costs. Uh but a point that hasn't been talked about that is as uh important and as devastating, I think, to small businesses is over the 356 million hours in paperwork that it has caused uh small businesses. The last four years have been the most burdensome regulatory environment in history.
▶ 2:06:26In 1980, Congress passed the Regulatory Flexibility Act to protect small businesses from these type of burdens. Unfortunately, the Biden administration disregarded the law and they used disregarded the law to push a far-left agenda that has hurt our small businesses and communities. So, with that being said, uh I want to talk to a fellow motan, Mr. Johnson. And that couldn't be more of a Minnesota name. There's about 10,000 Mr. Johnson's in Minnesota. So, Mr. Mr.
▶ 2:06:55Johnson, as a fellow motan, small business owner, um you know firsthand the impact of overregulation and what it has had on small business owners. Last year, the House passed my legislation, the Prove It Act, to strengthen the RFA, and protect small businesses from these impacts. In part, the Prove It Act would force agencies to consider the true cost of their regulations, force agencies to comply with the RFA, and give small businesses a seat at the table in the regulatory process.
▶ 2:07:23If agencies fail to comply with the law, small businesses would be exempt from that regulation. Do you think, Mr. Johnson, that federal agencies should be required to comply with existing law that requires them to limit their impact on small businesses? Uh, yes. Agencies are not lawmakers.
▶ 2:07:39They need to be held accountable for the and uh when they disregard protections for the small businesses that have been enacted by Congress and signed by the So, you've all talked about different, you know, regulations maybe in general, but there has been some specifics. Uh, Mr. Johnson, do you know, uh, by name the the faceless, maybe nameless bureaucrat that is establishing those rules or regulations that you have to comply with? No, sir, I do not.
▶ 2:08:09So, come election time, you can't throw them out of office. No, I cannot. Right. Okay. Uh in your opinion, do you believe agencies should consider both the direct and indirect costs like the paperwork hours uh that their regulations uh put on small businesses? Yeah, the true cost regulations is is actually behind the scenes and and all the time it takes to comply with it. Uh the paperwork hours and and just simply the filings and filings and filings that never end. So, Mr.
▶ 2:08:36Johnson, uh as I said earlier, I'm a small, you know, business owner myself. Uh, and I would assume it's probably similar to you. You don't have a stable full of lawyers, compliance officers, regulatory specialists. Uh, you go down the list. All of the above right here. Yeah. So, it's safe to say that you are the janitor, the carpenter, the mechanic, the HR professional, the legal adviser, the uh master time card keeper, all of it. Absolutely.
▶ 2:09:06And and what I can't do, I have to hire done with the compliance companies. You have to have a comp compliance companies to keep you compliant now because of all the rules. Yeah. So lastly, uh Mr. Johnson, do you do you think small business owners like yourself should have a larger voice in our nation's regulatory process? Yes. I believe we should be heard in the and maybe they should be tailored to meet our needs, not just a one-sizefits-all. Yeah. Yeah. And that's a good point.
▶ 2:09:30And I heard uh some of uh my colleagues on on uh in the minority that had talked about, you know, regulations as a way to level the playing field. And the fact of the matter is, if you're a small mom and pop business, small business America, it isn't leveling the playing field because you are the carpenter, the janitor, the uh timekeeper, the HR director, the the everything, and you don't have the manh hours where maybe a large business can can take that uh cost over over their bandwidth.
▶ 2:10:00And so it does put us at a as a small business in an unlevel playing field. Um, so I I want to just thank you all again for being here. I know this costs time and money and effort. Uh, I'm sure some of you woke up this morning making sure your employees were at work where your trucks were heading today. And I know that's a a stressful situation. So I appreciate you taking time. Mr. Chair, I'd also like to submit to the record uh into the record a letter from the Associated Builders and Contractors uh a letter of support of the pro it act. So mood.
▶ 2:10:30Thank you, Mr. Chair. And again, thank you witnesses for being here. I yield back. Gentleman yields back. I now recognize Mrs. Sculton from the great state of Michigan for five minutes. Thank you, Mr. Chair. Uh gentlemen, thank you so much for being here.
▶ 2:10:44Two years ago, uh a a groundbreaking story uh broke out in my district about children, some as young as my two boys, uh working in factories where foods like the breakfast cereals that many of us eat across America, Lucky Charms and Cheerios, are packaged. These children were handling machinery that could tear their fingers off.
▶ 2:11:10The company used a staffing agency to hire workers for this plant, but did not require the agency to verify ages against social security numbers. Regulations keep us safe. Regulations protect some of the most vulnerable among us. Regulations protect our children.
▶ 2:11:30Regulations themselves are not the enemy, but regulations that are overly burdensome, overly cumbersome, and don't do the work that they set out to do are the problem. And we need to be cleareyed when we talk about that. Mr. Erin Meyer, how can Congress do a better job of ensuring businesses know the quote rules of the road when it comes to regulations that keep workers safe?
▶ 2:12:00Well, a couple things. First of all, uh, Congress has an oversight role and, um, we've heard again that the RFA may not be working all that well. Well, Congress has an opportunity to identify that and to make suggestions. Um, Congress can also um make sure there's enough funding to help small businesses, to help um the to um support the Office of OMBbudsman, the SBA, to make sure small businesses understand and get the support that they need.
▶ 2:12:28A lot of the time small businesses simply need to know they need they need help. They need understanding. So making sure that those resources in place um are in place. Uh so those it's the oversight and making sure that there's enough money being allocated to make sure the regulations are being implemented in a fair way. Thank you. My district in West Michigan is home to one of our state's uh 46 community development financial institutions or CDFIS.
▶ 2:12:58These CDFIs have deployed billions in loans in my home state, resulting in over 41,000 permanent jobs and 27 million square feet of real estate development. There are about 25,000 small and micro businesses in Michigan that have benefited from the support of a CDFI. Mr.
▶ 2:13:18Ernsmeer, coming back to you, your testimony highlights how the Trump administration's recent executive order to dismantle CDFI funds, which provide funding uh to CDFIs around the country, would impact small firms. If the CDFI fund cannot support CDFIs like the one in my district, what kind of impact can we expect on our local economy?
▶ 2:13:43Well, small businesses, the marketplace has um frozen out a lot of businesses um who don't have the collateral, don't have the the credit score of of of some better off businesses. And so there are government programs um that support that. And the CDFI, the the CRA, the Community Reinvestment Act, provides for private financial institutions to put money into a system where uh there's more missiondriven, but the CDFI fund also uh supports that.
▶ 2:14:11And um that again it's a it's a it's a cut that is directly impacting the most um underresourced businesses. There's no other way to put it. And we're pleased to see that in the Senate there's actually bipartisan push back on that. Um really pretty strong bipartisan push back. So hopefully we're hoping that perhaps the House will also um take a look at that. Uh because these are these are CDFIs that exist in every red, blue, and otherwise district in this country. Thank you.
▶ 2:14:40Um, one last comment uh and and question for you. Another thing that regulations can do is provide uh a stable economic environment helping people to understand that there are rules of the road to follow. I just came back uh from hosting two in-person town halls in my district last week. Hundreds and hundreds of people showing up at each one. Um, my constituents are worried about the myriad of uncertainties coming out of this administration.
▶ 2:15:10One of them being the detainment of individuals who are legally working here, detained just because of the color of their skin. They happen to have a tattoo that, you know, god forbid promotes uh autism awareness or celebrates their mom and dad. Uh, in Michigan, our service and hospitality industries rely heavily on immigrant workers. Mr.
▶ 2:15:33Arens Meyer, can you speak to the economic impact these industries will face if they're unable to find and keep the workers that they need? Well, small businesses were already facing huge um pressures on workforce um coming out of the pandemic and and that has that has continued and now that not only have employees rounded up, but the fear of that happening so they don't even come to work has created, you know, it's impacted operations. And again, it gets back to this whole issue of certainty.
▶ 2:16:02If you don't know that, you better gentle lady's time is up. Yeah. Thank big impact. I appreciate it. Yield back. Gentle lady yields back. And now recognize Miss Goodlander from the great state of New Hampshire for 5 minutes. Thank you, Mr. Chairman, and thank you to our witnesses uh for being here today. I want to pick up where you just left off, sir.
▶ 2:16:21Um you in your written testimony pointed out that the National Federation of Independent Business has um released last month its uncertainty index which rose to the second highest reading on record last month. Can you speak to you know I I've I've traveled all across New Hampshire. If I had to capture the word that describes how small businesses are feeling across my state, it's uncertain. It's the crippling uncertainty of a trade war with Canada, our neighbor to the north.
▶ 2:16:52New Hampshire shares a 58 mile border with Canada. So many of our small businesses rely on that partnership, which has been a model for the world. Can you tell us more? Why do you think we're we're at record high levels of uncertainty in this country? Well, for all the reasons you stated, um the fear of not knowing what's happening with terrorists, the um attacks on workforce that small business owners need, the gutting of programs that are vital to small businesses. I mean, this and it's coming like a tsunami.
▶ 2:17:20I mean, this is not like a little bit here, a little bit there. This is like in the last two months, it's just been um you know, just hurtling at small businesses and they're really, I will tell you, they're really scared. We talk to them every day. They are petrified and um they don't know where it's going. And as I said before, we have this big sort of event tomorrow and they don't even know what's going to happen. The administration, the president could change his mind. Um oh, I decided I'm not going to have this tariff this month or maybe next month.
▶ 2:17:49So, it's it's we've never seen anything like this before. You know, I heard from one of my constituents in Hopkinington, New Hampshire, who wrote to me to say that the threat of a trade war and the tariffs that have been imposed so far are causing customers to cancel projects and suppliers to preemptively raise prices for tariffs that may or may not materialize. Can you talk to us about how consumers are going to feel the pain of a trade war with Canada? Well, absolutely.
▶ 2:18:17if if this impacts business's ability to deliver products, then that's going to impact consumers. And one way or the other, you're going to see price increases. Um, you know, those the whole notion that somehow everything we're doing is to bring down inflation, it's the exact opposite. If you can't get workers, if you if you don't if you're getting huge price hikes and you don't know if you're going to get huge price hikes and so you're making business decisions that are inefficient, ultimately that's going to be reflected in higher prices as well.
▶ 2:18:45So consumers are absolutely going to feel the pain. We've got a housing crisis in New Hampshire and we've got a real imperative to build tens of thousands more homes in the next 5 years. This is a problem that I've found partnership with people at every level of government in New Hampshire and it's a problem that I'm really committed to addressing. The the we there was some talk about the median single family home price in this country. In New Hampshire it's above $500,000. Um, I wanted to ask you, Mr.
▶ 2:19:15Hughes, you know, I'm all about cutting red tape and creating efficiencies wherever we possibly can. If you had to advise this committee on the top three changes that we could make to to make home building more efficient and effective in this country, what would you prioritize?
▶ 2:19:32Uh, first of all, I keep going back to codes, but there's no question the increase in energy codes or IEC, energy and conservation codes, that was the sharpest increase that that we've experienced u in years. So, we'd like to roll that back most of has the threat of a trade war with Canada had an impact on homebuilders in this country? I've want to submit, Mr.
▶ 2:20:00chairman, for the record, an article from the Boston Globe this month entitled, "Tariffs could drive up New Hampshire housing costs even more developers warn your organization is quoted here, homebuilders in in my state have sounded the alarm on the costs that that this trade war is going to exact on home building and and on home buyers. So, can you please speak to that?" Well, sure.
▶ 2:20:24We've, like I mentioned earlier, we've dealt with tariffs for years and and it's going to be another 25% um is is going to be terrible to to say the least. Um but we like we've had to deal with it for for decades because what would you say is the closest precedent that we should look to because as I understand it there's we've never seen the threat of this kind of trade war with Canada before. So when you say we've dealt with this before, what should we be looking to?
▶ 2:20:52We've we've just dealt with tariffs on Canadian lumber because the and this goes back into the 90s with the first softwood lumber agreement and it was all over dumping of of products from Canada that harmed domestic lumber mills. And so we've we've been paying those tariffs forever.
▶ 2:21:14Um, now to get into the particulars or the weeds about what's fair and what's not fair between the two countries, I'm I'm not that expert, but like I say, it's um yeah, we're we're very concerned about additional tariffs, but we've we've been dealing with it for a long time. Thank you. I the people of New Hampshire share your concern. And with that, Mr. Chairman, I yield back. Gentle lady yields back. I now recognize Mr. McGarvey from the great state of Kentucky.
▶ 2:21:43for five minutes. Thank you, Mr. Chairman. Appreciate everybody being here today. Look, I'm going to read the headline from the Wall Street Journal and the story written last night on its website. It just says simply, "US stocks post worst quarter since 2022 on threat of trade war. In Q1 of 2025, the S&P 500 dropped 5.1%, the Nasdaq fell 10.3%, and the Dow sunk 2.3%.
▶ 2:22:09On Sunday of this week, Goldman Sachs predicted that higher tariffs, weak economic growth, and greater than expected inflation would depress the S&P another 5% and just might cause a recession. In fact, they gave that a one in3 chance. It's not just Wall Street feeling this. I think what we know in this committee that Main Street feels this, too.
▶ 2:22:31Data released last week from the University of Michigan's consumer sentiment index shows Main Street feels it and that Americans are more worried about their economic well-being than at any time since the pandemic. Concerns about the job market are greater than they have been at any point since 2009. I know this. I spoke to a home builder in Kentucky over the weekend who said they are raising their prices and he feels a recession is coming. This is not a golden age.
▶ 2:23:01that's being ushered in. And people's anxiety right now doesn't just come from regulations. Go to any small business in any district in America and I promise you they're going to find regulations and tell you about regulations they don't like. It'll make sense. But I think what they'll also tell you is they want certainty.
▶ 2:23:25And so what you're seeing right now out of the White House is the opposite of certainty. You're seeing a reckless and ruless approach to governing. And it's not just putting uncertainty in the regulatory environment. It's putting in every single part of our economy. Of course it is. Every week right now, we're seeing people who work for the president go on TV and say they have no idea whether he's going to follow through on his threats to annex Greenland.
▶ 2:23:55uh impose a 200% tax on Guinness or get rid of FEMA. If his closest people don't know what he's doing, how do we expect the small business owners in our district to know what's going to happen? So, Mr. Arensmeer, question for you. What do you think is tougher for small businesses to operate under?
▶ 2:24:17smart, well-crafted policies that agencies take years to write and implement, or the Trump administration's whiplash economic policies that are making everything more expensive, destroying supply chains, and cutting off critical export markets. Well, we've never seen anything um in the 20 years I've been running small business majority, we've never seen anything like this in such a short period of time. Our own um we just got these numbers yesterday. Didn't make it in my written testimony.
▶ 2:24:44the confidence levels are just plummeting in the regular um surveying we do of our network. Um so um compared to a a smart regulatory system um there's there's no there's no choice. I mean, this is this is really um I' I've never had a small business and yes, there are regulations. A lot of them are state and local, and we're we're very active in pushing back on regulations at the local level or state licensing regulations that are too ownorous to keep keep small entrepreneurs out.
▶ 2:25:12But we've overall regulations have never been that important in terms of the list of stuff. And right now, believe me, we're not hearing a word about regulations from anyone out there. We're hearing about tariffs. We're hearing about mass deportations. We're hearing about slashing of programs and that's that's where it's at right now. Yeah. And and this brings me no joy to bring this report. I mean, at the end of the day, I root for America. I want our economy to be doing well. I want our trade policies to be doing well.
▶ 2:25:40I want our small businesses to be doing well and people's 401ks to be doing well. They are not right now under the uncertainty that is being caused by this administration. I know this. Companies in my district are already hurting from this trade war. Uh just quickly about the trade. Tariffs aren't good or bad. Tariffs are a tool. A hammer is a tool. It's a good tool for putting a nail in a wall. It's not so great to use it to fix your iPad.
▶ 2:26:09How you use these things matters. And these indiscriminate trade wars right now we're feeling the impact of in my district. The bourbon industry in particular under a 25% retalatory tariff from Trump's first term as president. their exports were cut in half. Now they're talking about a 50% tariff that's set to go into effect tomorrow. And he's raising all of our prices and hurting the economy. And for what? For what?
▶ 2:26:38A tax package that isn't going to help Main Street. It's going to help the richest executives and companies on Wall Street. And with that, Mr. Chairman, I yield back. Gentleman yields back. I now recognize Mr. Jack from the great state of Georgia for 5 minutes. Mr. Chairman, I appreciate you saving the best for last. I'm very grateful for uh this hearing. Um and if I could, Mr. Hughes, I'd love to start my line of questioning with you.
▶ 2:27:02Uh first and foremost, want to thank uh your association for its leadership and trying to generate uh affordabil affordable homes and to make housing more affordable for my constituents and really all Georgians. Uh, but specifically, I really welcome your testimony and I'm curious, you know, how would you say burdensome regulations limit your ability to meet the growing demand for single family homes and what policy changes would most effectively encourage additional private investment in this sector?
▶ 2:27:34Uh, well, just the cost and affordability of homes is is the biggest hurdle that we all have to deal with. and um higher interest rates right now. Of course, we we expect those to to fluctuate, but uh just the overburdensome of and I hate to keep going back to codes, but but that's the thing that's that has affected us the most in the short period of time. Helpful context.
▶ 2:28:00And in your testimony, you spoke uh to something that means a lot to me, and that's Congressional Review Act. uh you talk about uh specifically uh National Association of Homebuilder support for HJ Res 20, which I'll talk about in a moment, but would welcome thoughts and uh really uh open it to the panel on um on how Congress can better use the Congressional Review Act to make housing more affordable. Uh I am not that expert, so if you have someone else that would be great. Sure. Anybody else want to take that question?
▶ 2:28:30Well, I I'll speak to um in your testimony, you outlined support for HJ Res 20. And just to to walk the uh the witnesses through um we repealed a regulation um that would have uh that would have effectively outlawed a very specific type of tankless water heater. Uh it's Renai America Corporation is a company within my congressional district. It's headquartered in my hometown of Peach Tree City.
▶ 2:28:54And it about four years ago opened a state-of-the-art facility in Griffin, Georgia that manufactures uh what's called a gas fired instantaneous water heater, non-condensing tankless water heater. But regardless, the tankless water heater and the Biden administration issued a rule in uh late December on December 26th, the day after Christmas that would have effectively uh outlawed production of this type of water heater, thus endangering about 500 jobs within my congressional district. And I'm proud to report that House uh took action on this in late February.
▶ 2:29:2411 Democrats voted along with House Republicans to overturn this rule. But to me, it's an effective usage of the Congressional View Act and I welcome that um from your testimony. Um if I could ask uh just the panel at large and we'll start just going down the line since we have two minutes left. Uh but if there was one regulation that you think that Congress could uh address that would help your industry, would welcome your thoughts as we go down. Thank you, Congressman Jack.
▶ 2:29:50Um, made it very clear today that that those are the methane emission rules and regulations against the small independents and want to tell you that the small independents of America are excited. We're happy. We're looking forward to develop the natural resources of this great country. Thank you, sir. I guess uh the 20% small business redu tax deduction is is probably the most important one to me right at this moment. Wonderful. Thank you, Mr.
▶ 2:30:20Oh, I'm sorry. I thought I'd already commented. And uh the the question again, I'm just saying if there's just in closing this hearing, if there's one one regulation you'd love to see us work to to relieve that burden for you, what would it be? Well, I hate to keep going back to the burdensome coats that have have hit us all at once. Uh but to be honest, uh I'd like to see like Mr. Johnson, I'd like to see the cost of fuel come down. Uh took a picture uh the day uh Mr. Biden went into office.
▶ 2:30:50Fuel in my area was $187 a gallon. Uh that's had a huge impact uh to our industry whether it's gas or diesel fuel. Wonderful. And Mr. Erens, well, we've heard a lot about the cost of housing. So, I'm sure there are some regulations out there regard related to housing that um that could be looked at. Absolutely. I'm not an expert like Mr. views on that. But um I'm I'm sure I'm sure there are and I think that is a big issue out there. One thing I want to mention, Mr.
▶ 2:31:19Johnson mentioned the TCJA, the 199A, and also one of your colleagues mentioned it. I want to be clear, we support 199A. We support reforming it and making it where the benefit is benefiting those at the bottom. Right now, 73% of the benefit goes to the top 4% of pass through entities. We don't want to eliminate it. We want to reform it. I want to be very clear about that. Well, thank you all very much for testifying. I think the whole committee appreciates your uh thoughtful comments today. And I yield back to our distinguished chairman, Mr. Williams.
▶ 2:31:49Gentleman yields back. And I'd like to thank our witnesses for your testimony today and for your being with us. Uh without objection, members have five legislative days to submit additional materials and written questions for the witnesses to chair which will be forwarded to the witnesses. Now, I want to ask the witnesses to please respond promptly if that happens. No further business. Objection. This committee is adjourned.