House Small Business Committee
1. Hearing Notice
2. Witness List
Mr. Michael Farren
George Mason University
Mr. Bruce Seilhammer
Electrical Construction Group Manager
Camp Hill, PA
Mr. Gardner Carrick
Vice President of Strategic Initiatives
The Manufacturing Institute
WASHINGTON – Today, Members of the House Committee on Small Business Subcommittee on Economic Growth, Tax, and Capital Access heard from a panel of key experts on the challenges small businesses face when dealing with the skills gap in the labor market.
“In just the past year, the number of job vacancies grew from 5.5 to 6.2 million, which is the highest in this century,” said Subcommittee Chairman Dave Brat (R-VA). “Although large businesses may have the resources to staff recruiting departments and offer better wages and benefits, resource strapped small businesses are left at a significant disadvantage.”
Find, Hire, Retain: Challenges Owners Face in Today’s Labor Market
From academia to manufacturing, electrical construction, and even grocers, witnesses with a wide array of backgrounds spoke to the challenges that small businesses endure with the labor market America faces today. High taxes, burdensome regulations, and the skills gap, are just a handful of the small business trials the panel discussed during today’s hearing.
“It seems indisputable that a skills gap does exist in the labor market, but importantly, this issue is probably best characterized as being unique to each company. Importantly, though, any tax code changes should be broadly based and available to all workers and employers, rather than favoring some industries or skills over others. Additionally, programs and policies that reduce the potential workforce available to employers should be reformed,” noted Dr. Michael D. Farren, Research Fellow at the Mercatus Center at George Mason University in Arlington, VA.
“A number of different factors have contributed to the current workforce shortages in the electrical contracting industry. One of those is the fact that many left during the recession and never returned. In addition, much of the skilled trades’ workforce is retiring or is approaching retirement,” said Bruce L. Seilhammer, a member of the Independent Electrical Contractors, Inc. and the Electrical Construction Group Manager at SECCO, Inc. in Camp Hill, PA. “Government-mandated ratios vary across the country, and serve as artificial restrictions that prevent us from training the future electrician help to close this skills gap.”
“The manufacturing sector has struggled to find the right workers and it is impacting our ability to successfully compete in the global economy and grow our industry,” added Gardner Carrick, Vice President of Strategic Initiatives at The Manufacturing Institute in Washington, D.C. “These jobs need to be filled if the manufacturing sector and the U.S. economy are going to remain strong and globally competitive. Fortunately, manufacturing companies are stepping up to offer solutions to this challenge, in partnership with local high schools, community colleges, and technical schools.”
“Obamacare mandates on small business serve as a perfect example of a regulation with good intentions that have created an additional burden for our business,” said Carlos Castro, Founder of Todos Supermarkets in Woodbridge, VA. “Costly regulations often take up too much of our time and resources, and pose a serious barrier to hiring new talent, According to National Grocers Association (NGA) data, the average grocer can expect to spend between 40 and 50 thousand dollars a year on regulatory compliance per store, per year.”
Expediting Economic Growth: How Streamlining Federal Permitting Can Cut Red Tape for Small Businesses
Currently, small businesses must comply with many overlapping layers of federal permits. Obtaining all of the correct permits requires successful navigation through a complex regulatory system of federal laws and regulations and takes a significant amount of time and money. The hearing will examine how federal permitting requirements burden small businesses and ways to streamline the permitting process.Attachments:
Witness List (subject to change):
Mr. Philip K. Howard
Covington & Burling LLP
New York, NY
Mr. Louis A. Griesemer
Springfield Underground, Inc.
WASHINGTON – Today, Chairman of the House Committee on Small Business, Steve Chabot, released the following statement after the House overwhelmingly passed a $7.9 billion hurricane relief package in response to Hurricane Harvey:
“Unfortunately, this storm took many lives. These storms also devastated people’s businesses, possessions, and homes. They will need financial relief to rebuild,” said Chairman Chabot.
“Our Committee is committed to working with our partners at the Small Business Administration and throughout the federal government to help these Americans reclaim and rebuild their lives as quickly as possible. We will continue to be engaged on this issue for the coming weeks and months and will do everything we can to help our fellow Americans in their time of need,” Chabot added.
Expediting Economic Growth: How Streamlining Federal Permitting Can Cut Red Tape for Small Businesses
WASHINGTON – Today, the House Small Business Committee held a hearing examining how the current federal permitting process burdens small businesses.
“The federal permitting process is a component of this vast regulatory state. Usually before a business can begin to open its doors, launch a project, or begin an initiative, it must obtain a number of permits before moving forward. But the current permitting process is a maze that businesses—big and small—must navigate. And as with regulations generally, the federal permitting process disproportionately affects small businesses,” said House Small Business Committee Chairman Steve Chabot (R-OH).
“[w]e must continue to look for ways to simplify and streamline the permitting process. Especially to ease the regulatory burden on small businesses, our economy’s lifeblood,” added Chabot.
Small Businesses Must Overcome High Hurdles to Obtain Permits
The witnesses provided testimony detailing how small businesses must overcome a number of hurdles—including wading through regulatory overlap, enduring lengthy delays in permitting decisions, and bearing increased costs—as they try to obtain all the appropriate federal permits before launching projects.
“Getting a permit to start a business, or to build anything, requires going to multiple agencies, often at federal, state, and local levels. These agencies rarely coordinate their requirements. Often their demands are duplicative, and sometimes conflict with one another. Nor do they honor the practical implications of the regulations—not the costs, time constraints, or diversion of energy,” said Philip Howard, Chair of Common Good.
“It gets even more complicated when we need to expand our operations, open a new or temporary operation, or merely do minor construction work at a site to upgrade our facilities to provide needed material for crucial infrastructure projects. A host of federal requirements come into play, among them the Clean Water Act, the Endangered Species Act, and the Historic Preservation Act. These statutes often require businesses to prove that we should not fall under their jurisdiction, said Louis Griesemer, President of Springfield Underground, Inc., Springfield, MO, testifying on behalf of National Stone, Sand, Gravel Association. “A 'regulated until proven otherwise'approach is very costly and difficult for any business, particularly a small company like mine, without the resources for dedicated compliance staff that larger corporations employ. This is not an efficient use of resources for either the company or the agencies, and punishes the businesses who are trying to comply and care deeply about safety and the environment.”
“For me, the timing of this hearing could not be more appropriate. The wildfires burning in Western Montana are having a devastating effect on our state and local economies. Lives have been lost, homes have been lost, and hundreds of resident evacuations due to the threat of fire, including my own family,” said Mark Hayden, General Manager of Missoula Electric Cooperative in Missoula, MT.
“I fully recognize that the fires burning in Montana today were all lightning sparked, but also realize the increased risk that long delays in federal approval of permit applications, inadequate fuels reduction programs, and other factors bring to our co-op and to our infrastructure,” Hayden added.
Flawed Regulatory Structure
Mr. Howard explained that, within our current regulatory structure, no one seems to be in charge, testifying, “[t]here’s no one with the responsibility to ask, ‘What’s the right thing to do here?’ No one in government has the job of balancing the demands of different agencies. No one has the job of giving a small business a permit. Instead, American regulation is a dense jungle, impenetrable to all except large companies with legal staffs of hundreds of lawyers.”
“The Status Quo is not an Option”
As Mr. Hayden testified, “[f]or us, the status quo is not an option. We need streamlined, expedited procedures that allow for timely implementation of projects to protect the long-term health of our forests, our small businesses, and the overall economies of the communities we serve.”
WASHINGTON – Last week, a federal judge struck down the Obama administration’s costly Department of Labor’s overtime rules. House Small Business Committee Chairman Steve Chabot (R-OH) commended the decision in the following statement:
“Small business owners, and their employees, can breathe a sigh of relief knowing they will have to worry about one less burdensome rule that hurts their business or affects their job. This is an issue the Committee has been working hard to reverse. I look forward to working with the new Administration as the Department of Labor continues to get feedback from stakeholders about what would be most favorable to small business owners,” said Chairman Chabot.
Chairman Chabot and Committee Republicans have focused on the DOL overrule throughout the 114th 115th Congress.
The Department of Labor is still inviting stakeholders to submit public comments on the overtime rule. For more information, the Committee has put together a Regulatory Watch page on our website to track regulatory proposals that have been published in the Federal Register and are open for public comment.
Entrepreneurship is on the decline. This may come as a surprise with the popularity of shows such as “Shark Tank.” But between 2010 and 2014, only about 165,000 new businesses were started, compared with almost half a million new businesses between 1992 and 1996. Perhaps more surprisingly, millennials are starting even fewer businesses than previous generations.
Why are innovators – particularly Millennials – reluctant to start their own company? The recent recession coupled with barriers such as regulations, taxes, and lack of access to capital needed to start and grow a company, is adding to their reservations.
As chairman of the House Small Business Committee, I’ve seen first-hand how entrepreneurs and small businesses create a majority of our nation’s jobs. In fact, 99.9% of all businesses in the United States are considered a small business, and two out of every three new jobs are created by a small business. With these kinds of facts, you probably know someone who owns, works for, or works with a small business.
That’s why we need to make sure that people with great ideas feel like they can take that idea and successfully turn it into a product, service, or job.
In response, the House Small Business Committee recently held a hearing to ask industry experts what we can do to reverse the decline. We brought in Gregory Crawford, Ph.D., the president of Miami University in Oxford, Ohio, and Karen Kerrigan, president and CEO of the Small Business & Entrepreneurship Council, to get their input on the current state of entrepreneurship.
Dr. Crawford is focused on using universities as testing grounds for the next generation of innovators. He believes in not only traditional education, but also real-world experience and entrepreneurial lessons, to prepare more students to create new businesses, and thus create new jobs through their entrepreneurial accomplishments.
According to Dr. Crawford, Miami University has transformed their traditional internships into “interactive apprenticeships” where students can jump into the middle of a “messy, complex, sometimes risky, tension filled” real-world experience of entrepreneurship. Kerrigan noted that half of Millennials would be interested in starting a new business. However, she stressed the fact that millennials are more risk averse than other generations, leading to a 24 year low in businesses created by young Americans. She also said we need to create a more “business-friendly” environment, particularly by reducing duplicative or outdated regulations that prevent companies from growing.
I couldn’t agree more.
Across the country, federal government regulations affect small businesses in all industries, making it harder and more costly for small companies to start, grow and expand their businesses. Entrepreneurs are struggling with high compliance costs and expensive mandates. We need to lighten the massive regulatory burden, and make it easier for small businesses to thrive.
The Small Business Administration’s (SBA) Office of Advocacy is currently holding round tables around the country to hear directly from small businesses about which regulations are hurting them the most. By updating, cleaning up, or getting rid of bad regulations entirely, entrepreneurs will be better able to do what they do best – create jobs.
While there are many reasons potential entrepreneurs are apprehensive, perhaps the biggest barrier to taking the leap is the broken tax code. According to a June CNBC survey, taxes were the number one issue for at least a quarter of small businesses surveyed.
First, the current system is confusing for many small business owners. Many came from different careers, but with one great idea decided to start their own business. They do not have accounting backgrounds to help them navigate our complicated tax system. Nor are many of them able to hire tax attorneys to help them figure out how to save money.
Second, when small businesses have to pay higher taxes, it prevents them from investing money back into their company. Money they could use on new equipment to make their latest cupcake, invest in a marketing campaign about their new phone app, or even hire more employees to manage a new store.
Third, the smaller the business, the higher their tax burden per employee. Businesses with more than 50 employees have a tax burden of less than $200 per employee, while businesses with five or fewer employees face burdens as high as $4,500 per employee. This is not fair. We need to ensure that our tax system doesn’t favor the size of a business or their ability to turn a profit the quickest.
With slow economic growth and declining entrepreneurship, especially among millennials, it is more important than ever to provide legislative solutions to help, not hurt new and small businesses. From reducing regulations, increasing access to capital, and reforming the outdated tax system, I am committed to helping create an environment that encourages younger generations to get excited about starting a business. Millennials have the talent, creativity, and work ethic to create the next generation of businesses and jobs, and I look forward to working with my colleagues on Capitol Hill to make that a reality.The original article can be read HERE.
WASHINGTON - Today, Chairman Steve Chabot (R-OH) of the House Small Business Committee released the following statement on the Hurricane Harvey Emergency Funding legislation to designate $450 million to the Small Business Administration’s (SBA) Disaster Loan Program.
"As Chairman of the House Small Business Committee, I applaud House Leadership, Chairman Frelinghuysen, and the House Appropriations Committee on their swift action to craft a bill to provide disaster relief aid to the victims of Hurricane Harvey. The people of Texas and Louisiana are strong, but their small businesses will need our help to rebuild.”
“I trust that the SBA and Administrator McMahon will be good stewards of the funds and ensure small businesses and homeowners get back on their feet as quickly as possible.”
WASHINGTON – Today, House Small Business Committee Chairman Steve Chabot (R-OH) sent a letter to Small Business Administration Administrator Linda McMahon recognizing the SBA’s early efforts to respond quickly to Hurricane Harvey and encouraging SBA to continue to respond efficiently and effectively to the victims in Texas and Louisiana.
“As you are aware, the Committee reviewed SBA’s Disaster Loan Program at its April 26, 2017 hearing. The program necessarily improved following Hurricane Katrina and Hurricane Sandy. In the wake of those disasters, the oversight community—including Congress, the Government Accountability Office, and the SBA Office of Inspector General—made several recommendations and took legislative action to help SBA improve its disaster loan program. SBA has largely implemented these recommendations and legislative provisions. At the hearing, however, the Committee emphasized that SBA must continue improving its loan process times while also guarding against fraud and abuse in the program. Although a difficult task, SBA reassured the Committee at the hearing it was capable and ready for that next big disaster,” said Chairman Chabot.
“As I emphasized in April’s hearing, the Committee wants to help SBA to make sure it is prepared. I look forward to continuing to work with you to ensure that SBA has the tools necessary to aid the Hurricane Harvey victims from homeowners to small business owners,” he said.
The full letter can be read HERE.
WASHINGTON – Last week, Karen Kerrigan, President and CEO of the Small Business and Entrepreneurship (SBE) Council, acknowledged the Administration’s efforts to ease the regulatory burden on small businesses in an SBE Council article. These efforts coincide with the House Small Business Committee’s efforts over the past several years that have helped provide certainty and encouraged entrepreneurship. Ms. Kerrigan, however, explained that small businesses are still waiting for long-lasting regulatory relief, especially through the passage of S. 584, the Small Business Regulatory Flexibility Improvements Act. A similar bill was authored by House Small Business Committee Chairman Steve Chabot (R-OH) and passed the House on January 11, 2017.
What About Small Business Regulatory Reform?
By Karen Kerrigan
“From the first full day President Trump took office until now, the Administration has focused on removing regulatory impediments and overreach that are hurting our economy and its small businesses. A series of executive orders, Congressional Review Act (CRA) resolutions signed by the President (14 in total), as well as specific actions by the agencies to roll back or review some of the more onerous rulemakings under the Obama Administration have made a significant difference in bringing certainty and lower costs for many businesses,” said Kerrigan.
The article goes on to explain that the Small Business Regulatory Flexibility Improvements Act “updates the Regulatory Flexibility Act and closes loopholes used by rule writers to avoid complying with steps that protect small businesses from rash or one-size-fits-all regulations. It would make federal agencies account for a full and complete economic impact of their proposed regulations (direct and indirect costs); include IRS rulemakings for analysis; require full transparency as to why a rule was drafted, how it was drafted, and the real impact on small businesses; review old rules currently on the books; and waive certain fines for first-time paperwork violations.”
“This is a critical bill for Main Street, as large companies have their K Street outposts to comb through the Federal Register on a daily basis and intervene with regulators on their behalf. S.584 embeds common sense steps in proposed federal rulemakings, which systematically protect startups and small firms from overreaching regulatory efforts.”To read the full SBE Council article, click HERE.