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CoCoHD_transcripts

+<html>
+<title> - ORGANIZATIONAL MEETING</title>
+<body><pre>
+[House Hearing, 117 Congress]
+[From the U.S. Government Publishing Office]
+                         ORGANIZATIONAL MEETING
+=======================================================================
+                                HEARING
+                               BEFORE THE
+                      COMMITTEE ON SMALL BUSINESS
+                             UNITED STATES
+                        HOUSE OF REPRESENTATIVES
+                    ONE HUNDRED SEVENTEENTH CONGRESS
+                             FIRST SESSION
+                               __________
+                              HEARING HELD
+                            FEBRUARY 4, 2021
+                               __________
+[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
+            Small Business Committee Document Number 117-001
+             Available via the GPO Website: www.govinfo.gov
+                               __________
+                    U.S. GOVERNMENT PUBLISHING OFFICE
+43-320                  WASHINGTON : 2021
+--------------------------------------------------------------------------------------
+                   HOUSE COMMITTEE ON SMALL BUSINESS
+                 NYDIA VELAZQUEZ, New York, Chairwoman
+                          JARED GOLDEN, Maine
+                          JASON CROW, Colorado
+                         SHARICE DAVIDS, Kansas
+                         KWEISI MFUME, Maryland
+                        DEAN PHILLIPS, Minnesota
+                         MARIE NEWMAN, Illinois
+                       CAROLYN BOURDEAUX, Georgia
+                          JUDY CHU, California
+                       DWIGHT EVANS, Pennsylvania
+                       ANTONIO DELGADO, New York
+                     CHRISSY HOULAHAN, Pennsylvania
+                          ANDY KIM, New Jersey
+                         ANGIE CRAIG, Minnesota
+              BLAINE LUETKEMEYER, Missouri, Ranking Member
+                         ROGER WILLIAMS, Texas
+                        JIM HAGEDORN, Minnesota
+                        PETE STAUBER, Minnesota
+                        DAN MEUSER, Pennsylvania
+                       ANDREW GARBARINO, New York
+                         YOUNG KIM, California
+                         BETH VAN DUYNE, Texas
+                         BYRON DONALDS, Florida
+                         MARIA SALAZAR, Florida
+                      SCOTT FITZGERALD, Wisconsin
+                 Melissa Jung, Majority Staff Director
+   Justin Pelletier, Majority Deputy Staff Director and Chief Counsel
+                     David Planning, Staff Director
+                            C O N T E N T S
+                           OPENING STATEMENTS
+                                                                   Page
+Hon. Nydia Velazquez.............................................     1
+Hon. Blaine Luetkemeyer..........................................     3
+                                APPENDIX
+Additional Material Submitted for the Record:
+    Rules and Procedures.........................................     8
+                         ORGANIZATIONAL MEETING
+                              ----------
+                       THURSDAY, FEBRUARY 4, 2021
+                  House of Representatives,
+               Committee on Small Business,
+                                                    Washington, DC.
+    The Committee met, pursuant to call, at 9:35 a.m., in room
+2360, Rayburn House Office Building, Hon. Nydia M. Velazquez
+[chairwoman of the Committee] presiding.
+    Present: Representatives Velazquez, Golden, Crow, Davids,
+Mfume, Phillips, Newman, Bourdeaux, Chu, Evans, Delgado,
+Houlahan, Kim of New Jersey, Craig, Luetkemeyer, Donalds,
+Fitzgerald, Garbarino, Hagedorn, Kim of California, Meuser,
+Salazar, Stauber, Van Duyne, and Williams.
+    Chairwoman VELAZQUEZ. Good morning. I call the Small
+Business Committee organizational meeting to order.
+    Without objection, the Chair is authorized to declare a
+recess at any time.
+    I would like to begin by noting some important
+requirements. During the covered period as designated by the
+Speaker, the committee will operate in accordance with H.R.
+965, which was incorporated into the 117th House rule under
+H.R. 8.
+    Just as we did last Congress, we will follow guidance from
+the Rules Committee to respect the rights of all Members to
+participate. Standing House and Committee rules and practice
+will continue to apply during hybrid proceedings as well.
+    House regulations require Members to be visible through a
+video connection throughout the proceeding. Due to the nature
+of a mark-up, it is extremely important that Members follow
+this rule to ensure a quorum can be established and that
+Members' votes can be recorded by the clerk.
+    As a reminder, Members can participate in only one
+proceeding at a time, so if you have another committee
+proceeding or meeting, please sign off and rejoin later.
+    If a Member wishes to offer an amendment that has not been
+prefiled, we will take a brief recess to allow for its
+uploading, printing, and distribution, then resume.
+    We may also recess briefly to address technical issues in
+the event a Member or witness cannot be recognized to speak.
+    Finally, for those Members physically present in the
+committee room today, we will also be following the health and
+safety guidance issued by the attending physician. That
+includes social distancing, and especially the use of masks. I
+request Members and staff to wear masks at all times while in
+the hearing room, and I thank you in advance for your
+commitment to a safe environment for all.
+    I want to first welcome all returning and new Members to
+the Small Business Committee. Before we introduce new Members,
+I want to recognize Mr. Blaine Luetkemeyer, who is returning to
+the Committee as Ranking Member.
+    Most everyone on the Committee knows that the former
+Ranking Member, Steve Chabot, and I shared a wonderful working
+relationship. Over the years, we moved hundreds of bipartisan
+bills to make the world a little brighter for small businesses.
+    While Steve will be sorely missed, I look forward to
+working with Blaine and hope that we can continue this
+committee's tradition of working together.
+    As a former small business owner, Ranking Member
+Luetkemeyer brings a breadth of firsthand experience to this
+committee, and he has been a strong voice in Congress for
+programs that benefit small firms.
+    We all know that small employers are facing challenging
+times. The pandemic has disproportionately hurt small
+businesses and workers from every corner of our country, and
+they fear losing their livelihoods. It is our duty to implement
+policies to help them rebuild and reshape our nation's
+entrepreneurial landscape.
+    During the last Congress, we worked together to pass nearly
+40 bipartisan bills through the committee and the House. It is
+my hope that, given the membership we have this year and the
+defining moment this is for our country, the Small Business
+Committee will achieve even more for small firms in the 117th
+Congress.
+    Small businesses deserve our partnership. We have a diverse
+committee, and that is our strength, because we will ensure our
+work benefits all entrepreneurs no matter their location,
+industry, or background. We are their voice in Congress. While
+we may not always agree, it is my hope we can have a productive
+dialogue and do so in a respectful manner. I look forward to
+collaborating with each of you this Congress.
+    Now let me take this opportunity to introduce the new
+Members on my side. There are a few new Democratic Members of
+the committee.
+    Dean Phillips is a small businessman from Minnesota who is
+committed to working across the aisle. He drafted the Paycheck
+Protection Program Flexibility Act with Representative Chip
+Roy, helping thousands of small employers. He will be a true
+asset to our committee.
+    Marie Newman of Illinois brings a breadth of small business
+experience as a former owner of a consulting firm. Throughout
+her career, she has also been an advocate for national issues,
+such as healthcare, LGBTQ, and economic rights. I am confident
+she will be a champion and powerful voice for small businesses.
+    Carolyn Bourdeaux of Georgia was a professor of public
+management and policy at the Andrew Young School of Policy
+Studies at Georgia State University before joining us in
+Congress. During the Great Recession, Carolyn was the director
+of the Georgia Senate Budget and Evaluation Office, where she
+worked with both parties to balance Georgia's budget and get
+the state economy back on track. Her experience coupled with
+her commitment to bipartisanship will be instrumental in
+helping small businesses recover from the pandemic.
+    We welcome you--all of you, and we are excited that you
+will be serving in this committee.
+    I would also like to welcome back the Members who served on
+the committee in the 116th Congress: Jared Golden from Maine,
+Jason Crow from Colorado, Sharice Davids of Kansas, Kweisi
+Mfume from Maryland, Judy Chu from California, Dwight Evans of
+Pennsylvania, Antonio Delgado from New York, Chrissy Houlahan
+of Pennsylvania, Andy Kim from New Jersey, Angie Craig from
+Minnesota. We are very fortunate to have all you back on this
+committee.
+    Now I yield to the Ranking Member, Mr. Luetkemeyer, for his
+opening statement and to introduce his new members.
+    Mr. LUETKEMEYER. Thank you, Madam Chairwoman.
+    I look forward to working with you. You and I have known
+each other a long time--about 12 years, I think, in total--ten
+on this committee. I stepped off a couple years ago, but we are
+back. And, working with you on Financial Services, I think
+there are a lot of areas I believe we can find some common
+ground. I look forward to that opportunity.
+    I also want to welcome back the returning Members of the
+committee on both sides of the aisle, and welcome all the new
+Members.
+    As we begin this Congress, I want to say that I look
+forward to continuing the tradition of bipartisanship that we
+fostered on this committee on behalf of the nation's
+entrepreneurs and innovators. We always say that small
+businesses are an important economic driver for our nation.
+Now, we must ensure that the small businesses that are
+struggling from the COVID-19 pandemic can keep their doors open
+and have the tools and freedom they need to recover.
+    My focus and concentration will be on policies that allow
+small businesses to recover quickly. Additionally, we must
+create an environment where small businesses grow and expand.
+Access to capital, a smart regulatory environment, and an
+appropriate level of taxation are priorities to get that done.
+    I look forward to lively debate and informative hearings,
+and productive markups as we address these very important
+topics that will assist the nation's job creators.
+    First, I want to recognize Republican Members who are
+returning to the committee: Jim Hagedorn and Pete Stauber, both
+of Minnesota, have made significant contributions to our
+committee's consideration of legislation and policy, and their
+experience will be invaluable as we contemplate the very
+critical issues now facing our nation's small businesses.
+    Next, I would like to introduce the new Members of the
+committee: Representative Roger Williams of Texas, who is not
+new to Congress, but new to our committee. He is a small
+business owner, former Texas Secretary of State, and former
+Major League Baseball player, Atlanta Braves. I am sure you are
+going to hear, ``Play ball,'' often this year.
+    Representative Dan Meuser of Pennsylvania, who is also not
+new to Congress, but new to our committee. Before coming to
+Congress, he worked for a small healthcare products
+manufacturer where he helped create thousands of jobs, and
+actually marketed his products around the world.
+    Representative Andrew Garbarino of New York, a third-
+generation small business owner, practicing law with his
+father.
+    Representative Young Kim of California, one of the first
+Korean Americans to serve in Congress and a former Member of
+the California State Assembly.
+    Representative Beth Van Duyne of Texas, a former city
+council member and mayor, who is used to solving problems that
+we are going to be looking at over the next couple of years.
+    Representative Byron Donalds of Florida, who worked in the
+banking, finance, and insurance industries and served in the
+Florida House of Representatives.
+    Representative Maria Salazar of Florida, a five-time Emmy
+Award-winning journalist.
+    And Representative Scott Fitzgerald of Wisconsin, a former
+Army officer, newspaper owner, and Wisconsin State Senator.
+    As this committee considers the many issues related to our
+nation's COVID-19 recovery and economy, I know the knowledge
+and expertise of all of our new Members will be extremely
+helpful.
+    Madam Chairwoman, I look forward to working with you and
+our colleagues in a bipartisan manner to address these issues
+impacting the small businesses.
+    With that, I would like to present you with a letter of
+what I think are some great topics to begin the year with,
+things that I think are important to our small businesses and
+economy and their role in our economy. And it is pretty
+lengthy.
+    I won't go into discussing it, but I think it gives us a
+lot of topics to begin to discuss in the hearings, and I think
+we are going to need to be able to address a lot of these
+issues.
+    So, with that, I would like to yield the balance of my time
+to our Vice Chair, Roger Williams from Texas.
+    Mr. WILLIAMS. Thank you, Mr. Ranking Member.
+    I am also honored to serve with the Chairwoman. We also
+served on Financial Services and have a long relationship as a
+Ranking Member, as a dear friend on this Small Business
+Committee.
+    In the 117th Congress, this committee has never been more
+important with the things that we are going to be going over.
+And I will turn my microphone on. After 10 years, I ought to
+know that.
+    But this committee will never be--never be more important.
+As someone who has owned a business and still owns a business
+for 51 years, there is a lot of challenges out there for us,
+and I know that this committee is the lifeblood, along with
+small business, of our economy. And Main Street America will
+ultimately turn this country around from the devastation we
+have seen from COVID-19.
+    So, Madam Chairwoman, I give you my time back. Thank you.
+    Chairwoman VELAZQUEZ. Thank you. The gentleman yields back.
+    Colleagues, I look forward to the robust discussions and
+debates that I know will transpire over the next 2 years, and
+now we will move to the rules package.
+    With the adoption of today's rules package, I believe we
+are making it clear to the small business community that we are
+committed to working together and advocating on their behalf.
+    Pursuant to clause 2(a) of the House rule XI, today's first
+order of business is to adopt the committee rules for the 117th
+Congress. The adoption of the rule is central to the work we do
+and the tone we set in this body. Perhaps most importantly,
+they must ensure that all points of view are considered and
+that the minority retains their full rights to be heard.
+    In this context, the rules mirror those of the 116th
+Congress with some minor conforming and clarifying changes.
+Most notable are the renaming of three of the five
+subcommittees and clarifying the Member question order for
+subcommittee hearings.
+    Three subcommittee names were modified to reflect the
+change in nature of small business policy priorities. They are
+Innovation, Entrepreneurship, and Workforce Development,
+formerly Innovation and Workforce Development; the next
+subcommittee, Underserved, Agricultural, and Rural Business
+Development, formerly Rural Development, Agricultural Trade,
+and Entrepreneurship; and Oversight, Investigation and
+Regulations, formerly Investigations, Oversight, and
+Regulations.
+    The second rule change will clarify Member question order
+for subcommittee hearings.
+    During the 116th Congress, many Members of the full
+committee participated in subcommittee hearings when they were
+not members of that subcommittee. While this is permissible
+under the rules, a lack of clarity in the rules for this
+scenario led to confusion with the question order.
+    For the 117th Congress, the rules have been amended to
+clearly state that subcommittee Members will be recognized to
+ask questions first before turning to non-subcommittee Members
+with their question order based on full committee seniority.
+    This committee needs to run in a cooperative manner. I
+believe the best way to do that is to make sure both sides have
+an equal voice and are treated in a way that is fair. Through
+adoption of these rules, we will continue this practice.
+    I would like to thank the staff on both sides for working
+closely on the rules package. At this point, I would like to
+yield to Ranking Member Luetkemeyer for any comments he may
+have on the rules.
+    Mr. LUETKEMEYER. Thank you, Madam Chair.
+    The committee's rules package before us this morning is a
+product of both sides working together. The rules provide
+opportunities for the majority and the minority to participate
+within all facets of the committee. I thank you for your
+collaboration, and I look forward to working in a bipartisan
+manner on many issues to come.
+    I would like to take this time to mention a few of the
+provisions within the rules.
+    All subcommittees now have a ratio of six majority Members
+to five minority Members, which allows for appropriate
+representation across the jurisdictional scope of the
+committee. Three subcommittees, as you mentioned earlier, have
+slightly altered names. We appreciate the Chairwoman retaining
+``agricultural'' in the new Underserved, Agricultural, and
+Rural Business Development Subcommittee, as many of our
+members, including the 3rd District of Missouri, have
+agricultural land and family farms.
+    The Subcommittee on Innovation and Workforce Development is
+now the Subcommittee on Innovation, Entrepreneurship, and
+Workforce Development. And the Subcommittee on Investigations,
+Oversight, and Regulations is now the Subcommittee on
+Oversight, Investigations, and Regulations.
+    But make no mistake. No matter the name of the
+subcommittees, our Members, Republican and Democrat, are
+equally committed to continuing the rigorous oversight for
+which the committee is known.
+    Additionally, the new rules now provide, at subcommittee
+hearings, Members of the full committee who are not
+subcommittee Members will have the opportunity to question
+witnesses after the Ranking woman and Ranking Member of both
+the subcommittee and the full committee if they are in
+attendance and all subcommittee Members have inquired. This is
+the way questioning is handled in other House Committees, so it
+make sense that we follow that protocol as well.
+    Finally, because of social distancing during the 116th
+Congress, this committee has sometimes been in rooms other than
+2360 Rayburn, our customary hearing room. Our rules now state
+that, for hearings held by the committee or a subcommittee in
+the committee's hearing room or another assigned hearing room
+in Washington, D.C., a quorum will be deemed present if one
+Member from the majority and one Member from the minority are
+present.
+    However, the rules continue to state that the Chair will
+exercise reasonable comity by waiting for the Ranking Member,
+even if a quorum is present, before striking the gavel.
+    Again, I thank the Chairwoman for working with me on this
+rules package. They provide for a smooth operation of the
+committee, and I urge my colleagues to support it.
+    I yield back the balance of my time.
+    Chairwoman VELAZQUEZ. The gentleman yields back.
+    Are there any Members that wish to be recognized on the
+rules?
+    The committee now moves to consideration of the rules
+package. The clerk will read the title of the document.
+    The CLERK. Rules and Procedures Adopted by the Committee on
+Small Business.
+    Chairwoman VELAZQUEZ. I ask unanimous consent that the
+rules package be considered as read and open for amendment in
+its entirety.
+    Does any Member seek recognition for the purposes of
+offering an amendment?
+    Seeing no amendments, the question is on adopting the
+rules.
+    All those in favor, say aye.
+    All those opposed, say no.
+    In the opinion of the Chair, the ayes have it, and the
+proposed rules are adopted, and staff is authorized to make
+technical and grammatical changes.
+    Pursuant to House rules, the rules adopted by the Committee
+on Small Business for the 117th Congress will be published in
+the Congressional Record and made available to Members and the
+public on the committee's website.
+    Now we will approve our Subcommittee Chairs and Ranking
+Members. The full committee Vice Chair will be Mr. Kweisi Mfume
+from Maryland.
+    Mr. Jared Golden will be the Chair of the Subcommittee on
+Underserved, Agricultural, and Rural Business Development.
+    Mr. Jason Crow will be the Chair on the Subcommittee on
+Innovation, Entrepreneurship, and Workforce Development.
+    Ms. Sharice Davids will be the Chair of the Subcommittee on
+Economic Growth, Tax, and Capital Access.
+    Mr. Kweisi Mfume will be the Chair of the Subcommittee on
+Contracting and Infrastructure.
+    Mr. Dean Phillips will be the Chair of the Subcommittee on
+Oversight, Investigations, and Regulations.
+    I now yield to the Ranking Member, Mr. Luetkemeyer, for any
+remarks that he may have to introduce the subcommittee Ranking
+Members.
+    Mr. LUETKEMEYER. Thank you, Madam Chair.
+    I am pleased to introduce the Republican Ranking Members
+for the 117th Congress.
+    First, I want to recognize Roger Williams of Texas, who has
+agreed to serve as Vice Ranking Member of the full Committee.
+    Next is Jim Hagedorn of Minnesota, who will serve as a
+Ranking Member for the Subcommittee on Underserved,
+Agricultural, and Rural Business Development.
+    Ranking Member for the Subcommittee on Innovation,
+Entrepreneurship, and Workforce Development will be Young Kim
+of California.
+    Ranking Member for the Subcommittee on Economic Growth,
+Tax, and Capital Access will be Dan Meuser of Pennsylvania.
+    Beth Van Duyne of Texas will be the Ranking Member for the
+Subcommittee on Oversight, Investigations, and Regulations.
+    And Maria Salazar of Florida will serve as Ranking Member
+for the Subcommittee on Contracting and Infrastructure.
+    I believe the experience of all these talented Members will
+be invaluable as we consider the important issues facing our
+nation's small businesses.
+    And, Madam Chair, with that, I yield back.
+    Chairwoman VELAZQUEZ. The gentleman yields back.
+    I move that the list of subcommittee Chairs and Ranking
+Members and Vice Chair as set forth in the roster be approved.
+    All those in favor, say aye.
+    Those opposed, say no.
+    In the opinion of the Chair, the ayes have it, and the
+Chairs and Ranking Members are appointed.
+    This concludes the order of business for today's meeting.
+Does any Member seek recognition for debate before we conclude?
+    If not, without objection, this meeting of the Committee on
+Small Business stands adjourned, and the Committee will stand
+in recess for a few moments to prepare for a Committee hearing.
+    [Whereupon, at 9:55 a.m., the Committee was adjourned.]
+                            A P P E N D I X
+[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
+                                 [all]
+</pre></body></html>

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+<html>
+<title> - [H.A.S.C. No. 117-1] ORGANIZATIONAL MEETING FOR THE 117TH CONGRESS</title>
+<body><pre>
+[House Hearing, 117 Congress]
+[From the U.S. Government Publishing Office]
+                          [H.A.S.C. No. 117-1]
+             ORGANIZATIONAL MEETING FOR THE 117TH CONGRESS
+                               __________
+                      COMMITTEE ON ARMED SERVICES
+                        HOUSE OF REPRESENTATIVES
+                    ONE HUNDRED SEVENTEENTH CONGRESS
+                             FIRST SESSION
+                               __________
+                              MEETING HELD
+                            FEBRUARY 3, 2021
+[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
+                           ______
+             U.S. GOVERNMENT PUBLISHING OFFICE
+43-614                WASHINGTON : 2021
+                      COMMITTEE ON ARMED SERVICES
+                    One Hundred Seventeenth Congress
+                    ADAM SMITH, Washington, Chairman
+JAMES R. LANGEVIN, Rhode Island      MIKE ROGERS, Alabama
+RICK LARSEN, Washington              JOE WILSON, South Carolina
+JIM COOPER, Tennessee                MICHAEL R. TURNER, Ohio
+JOE COURTNEY, Connecticut            DOUG LAMBORN, Colorado
+JOHN GARAMENDI, California           ROBERT J. WITTMAN, Virginia
+JACKIE SPEIER, California            VICKY HARTZLER, Missouri
+DONALD NORCROSS, New Jersey          AUSTIN SCOTT, Georgia
+RUBEN GALLEGO, Arizona               MO BROOKS, Alabama
+SETH MOULTON, Massachusetts          SAM GRAVES, Missouri
+SALUD O. CARBAJAL, California        ELISE M. STEFANIK, New York
+ANTHONY G. BROWN, Maryland,          SCOTT DesJARLAIS, Tennessee
+RO KHANNA, California                TRENT KELLY, Mississippi
+WILLIAM R. KEATING, Massachusetts    MIKE GALLAGHER, Wisconsin
+FILEMON VELA, Texas                  MATT GAETZ, Florida
+ANDY KIM, New Jersey                 DON BACON, Nebraska
+CHRISSY HOULAHAN, Pennsylvania       JIM BANKS, Indiana
+JASON CROW, Colorado                 LIZ CHENEY, Wyoming
+ELISSA SLOTKIN, Michigan             JACK BERGMAN, Michigan
+MIKIE SHERRILL, New Jersey           MICHAEL WALTZ, Florida
+VERONICA ESCOBAR, Texas              MIKE JOHNSON, Louisiana
+JARED F. GOLDEN, Maine               MARK E. GREEN, Tennessee
+ELAINE G. LURIA, Virginia, Vice      STEPHANIE I. BICE, Oklahoma
+    Chair                            C. SCOTT FRANKLIN, Florida
+JOSEPH D. MORELLE, New York          LISA C. McCLAIN, Michigan
+SARA JACOBS, California              RONNY JACKSON, Texas
+KAIALI'I KAHELE, Hawaii              JERRY L. CARL, Alabama
+MARILYN STRICKLAND, Washington       BLAKE D. MOORE, Utah
+MARC A. VEASEY, Texas                PAT FALLON, Texas
+JIMMY PANETTA, California
+STEPHANIE N. MURPHY, Florida
+Vacancy
+                     Paul Arcangeli, Staff Director
+             Zach Steacy, Director, Legislative Operations
+             ORGANIZATIONAL MEETING FOR THE 117TH CONGRESS
+                              ----------
+                          House of Representatives,
+                               Committee on Armed Services,
+                       Washington, DC, Wednesday, February 3, 2021.
+    The committee met, pursuant to call, at 11:00 a.m., in room
+2118, Rayburn House Office Building, Hon. Adam Smith (chairman
+of the committee) presiding.
+  OPENING STATEMENT OF HON. ADAM SMITH, A REPRESENTATIVE FROM
+       WASHINGTON, CHAIRMAN, COMMITTEE ON ARMED SERVICES
+    The Chairman. Call the meeting to order.
+    Members in the committee room anyway will take their seats,
+and we will go ahead and get started.
+    Well, thank you all for joining us for the organizational
+meeting of the--I forgot the number--the next Congress in any
+rate.
+    We do have some members who are joining us remotely, as you
+can see. I now have to read the instructions for how to
+remotely participate. One of the key points, as we have already
+learned this morning, is make sure you are muted, unless you
+are officially speaking, something we are all learning.
+    So members who are joining remotely must be visible on
+screen for the purposes of establishing and maintaining a
+quorum, seeking recognition, participating in the proceeding,
+and voting. Those members must continue to use the software
+platform's video function while in attendance, unless they
+experience connectivity issues or other technical problems that
+render them unable to participate on camera.
+    If a member experiences technical difficulties, they should
+contact the committee staff for assistance.
+    Video of members' participation will be broadcast in the
+room and via the television internet feed. Members
+participating remotely must unmute their microphones and seek
+recognition verbally, and they are asked to mute their
+microphones when they are not speaking.
+    Members who are participating remotely are reminded to keep
+the software platform's video function on the entire time they
+attend the proceeding. Members may leave and rejoin the
+proceeding. If members depart for a short while for reasons
+other than joining a different proceeding, they should leave
+the video function on. If members will be absent for a
+significant period of time, or depart to join a different
+proceeding, they may remain logged on to the software platform
+but must turn off the audio and visual functions if and until
+they return.
+    Members may use the software platform's chat feature to
+communicate with staff regarding technical or logistical
+support issues only.
+    Finally, I have designated a committee staff member to, if
+necessary, mute unrecognized members' microphones to cancel any
+inadvertent background noise that may disrupt the proceedings.
+    All right. So that is the intro on remote participation.
+    And now we are here to launch the House Armed Services
+Committee for this session of Congress, and I am very pleased
+to do that. I look forward to coming back and working together
+with both returning members and the new members that we have to
+the committee.
+    Before I get into the new members, I just really want to
+thank the staff and the members who have participated over the
+course of the last 2 years. You know, it is hard to say
+exactly, but in the 24 years I have been here, I would wager
+that they were 2 of the more difficult years for this committee
+in terms of getting our work done in difficult circumstances.
+    And at the end of the day, in ever more creative fashion,
+we got it done, and I think we can all be very, very proud of
+that. The two pieces of legislation that we have passed the
+last 2 years have some incredibly important, substantive
+legislation attached to them.
+    No, Mike, I am not just talking about the Space Force. But
+certainly that was one. And there were a lot of other things
+that we were able to do in that legislation that I think is
+incredibly important.
+    But outside of the substance, the mere fact that in a
+bipartisan way a committee in the United States Congress was
+able to go through regular order and pass two defense bills
+through committee, through markup, through votes in this
+committee, on the floor, in the Senate, go into conference and
+get that done almost qualifies as a miracle in this particular
+setting. And I think it is incredibly important that we did
+that and I think it is equally important that we continue to do
+it.
+    I believe passionately in representative democracy. I think
+it works. I think it is the best system of government going,
+has been for a long time, and will continue to be. And to the
+extent that we show people that it can work, that reinforces
+that message and makes sure that we deliver for the American
+people, deliver them the democracy that they have every right
+to expect.
+    So I am pleased we were able to do that. Again, I want to
+thank the members and the staff. And, hell, I will even thank
+the Senate. I think they did a very good job as well. So
+enjoyed working with them and glad we were able to get that
+done and look forward to moving forward into the new year.
+    With that, we have new members of the committee, which I
+will introduce, and I will attempt to get the details here to
+the extent that my glasses do not fog up while I am doing it.
+    On our side, if I am counting correctly, I think we have--
+we have seven new members. As you will see near the end here,
+we have some who are new, but they have been here before. So
+they are returning.
+    But for now, let me start with Joe Morelle, who is a new
+member to the committee, not a new Member of Congress. He
+represents New York's 25th District, which includes the
+University of Rochester's Laboratory for Laser Energetics. He
+is the son of a Korean War veteran. And he joins the committee
+having previously served as the majority leader of the New York
+State Assembly.
+    Welcome, Joe.
+    I should point out, obviously, given the remote setting,
+some of these members we are introducing are not physically
+here. They are on the screen. So we can just wave at the screen
+and welcome them up there and thank them for joining us.
+    Next we have Sara Jacobs, who I believe is here.
+    Welcome.
+    She is representing California's 53rd District, replacing
+Susan Davis, who we all know well, who served on this committee
+for 22 years, quite ably. Her district includes much of San
+Diego County, which, as we know, has numerous Navy
+installations, from Coronado to Naval Base San Diego, as well
+as Marine Corps Air Station Miramar just outside of the
+district. And prior to Congress, Ms. Jacobs served in the
+Bureau of Conflict and Stabilization Operations at the U.S.
+Department of State. Very qualified.
+    And welcome to Congress and welcome to the committee.
+    Our third new member is Kai Kahele, who represents Hawaii's
+Second Congressional District, which covers all the Hawaiian
+Islands, a lot of ground to cover. On Oahu, the Second
+Congressional District covers the regions outside of urban
+Honolulu and its immediate suburbs.
+    Congressman Kahele is a combat veteran pilot and
+commissioned officer in the Hawaii Air National Guard. Always
+good to have that experience.
+    Welcome to the committee.
+    He, too, is participating remotely. So glad to have
+Congressman Kahele joining us.
+    Next we have Marilyn Strickland, who is from my home State
+of Washington. Once upon a time I lived in the city of Tacoma
+when she was the mayor of the city of Tacoma. So Marilyn and I
+have worked together for a long time. I welcome her to
+Congress.
+    She represents the 10th District, which includes Joint Base
+Lewis-McChord. Also, again, I used to represent them. So after
+redistricting 10 years ago, that moved into this district that
+Marilyn is now representing. And that is the largest single-
+point employer in our State, with a yearly impact of $8
+billion.
+    Marilyn is the daughter of a World War II and Korean War
+veteran. We welcome her to the committee as well.
+    Now we have some returning members.
+    Marc Veasey, who represents Texas' 33rd District, known
+very, very well to us, served on the committee for a couple of
+years before leaving to serve on other committees and is now
+back. So we are very happy to have that experience and to
+represent that part of Texas, which obviously has a huge
+defense industry in it.
+    Welcome back to Marc Veasey.
+    Jimmy Panetta is also coming back to us, having served on
+the committee previously. He represents California's 20th
+District, which includes a lot of national security assets,
+four parent installations--Fort Hunter Liggett, Naval
+Postgraduate School, Presidio of Monterey--and five Army
+National Guard bases.
+    And if you haven't had a chance to get out to see the Navy
+Postgraduate School, it is, number one, an incredibly beautiful
+part of the country to go visit, but, number two, they are
+doing really cool stuff out there.
+    And in 2007 he volunteered for Active Duty and was deployed
+to Afghanistan and was awarded the Bronze Star for meritorious
+service in combat.
+    Welcome back, Jimmy. Happy to have you on the committee.
+    And lastly on our side we have Stephanie Murphy. She also
+has previously served on the committee, is coming back. She
+represents Florida's Seventh District, which includes Naval
+Support Activity Orlando. She has worked in the Office of the
+Under Secretary of Defense for Policy and was a member of this
+committee from 2017 to 2018.
+    A terrific and experienced bunch that we have both coming
+back and joining us anew. So welcome to all the new Democratic
+Members of Congress. Happy to have you on board and look
+forward to working with you.
+    And with that, I will yield to the ranking member, Mr.
+Rogers, for his opening statement.
+ STATEMENT OF HON. MIKE ROGERS, A REPRESENTATIVE FROM ALABAMA,
+          RANKING MEMBER, COMMITTEE ON ARMED SERVICES
+    Mr. Rogers. Thank you, Mr. Chairman.
+    And really it is an honor to be able to lead the
+Republicans on this committee, and I know that we are going to
+continue to work in a bipartisan fashion, like we have in the
+past, delivering an authorization each of the last 60 years.
+    And in that vein I want to thank Chairman Smith and his
+staff for working with us on committee assignments,
+subcommittee assignments, and adjusting the ratio so our
+members could get where they wanted to be, and I appreciate
+that accommodation.
+    This Congress must continue to address threats posed by a
+rising China and a belligerent Russia. Like many of our
+members, I see China's concerted push for global domination as
+a threat to all free nations. America must engage with our
+allies and partners to defend ourselves from this growing
+threat.
+    But that engagement must be backed by a credible and a
+modern military. This means addressing gaps in our readiness
+and fielding next-generation capabilities faster than ever
+before.
+    Thankfully, we have some new talent on the way to help us
+with this endeavor, and, fortunately, again this cycle the
+Armed Services Committee was one of the most sought after
+committees on the Republican Conference side, and we have nine
+new members with a range of interests and experience.
+    First we have Mike Johnson, who represents the Fourth
+District of Louisiana. His district is home to Barksdale Air
+Force Base and Polk Joint Readiness Training Center.
+    Next we have Mark Green of Tennessee. He represents their
+Seventh District. He served 24 years in the Army, between the
+Academy and as a physician on Active Duty in the Army and Army
+Reserve.
+    Stephanie Bice represents the Fifth District of Oklahoma,
+which is home to thousands of Oklahomans who serve with Tinker
+Air Force Base.
+    Scott Franklin represents the 15th District of Florida. He
+has served 26 years as a naval aviator, 14 on Active Duty and
+12 in the Naval Reserve.
+    Lisa McClain represents Michigan's 10th District, home to
+Selfridge Air National Guard Base. She joins us after a very
+successful business career.
+    Ronny Jackson represents the 13th District of Texas. He had
+a 25-year career in the Navy and led the White House Medical
+Unit as physician to President Obama and President Trump.
+    Jerry Carl, a former county commissioner who represents
+Alabama's First District, home of our Nation's critical
+shipyard infrastructure.
+    And Blake Moore, who represents Utah's First District, had
+a distinguished career in the Foreign Service before coming to
+Congress. And he cares very much about Hill Air Force Base.
+    Pat Fallon represents the Fourth District of Texas. Again,
+we have two members from Texas because they do have an
+incredible defense presence there, 15 Active Duty
+installations. He served as an officer in the Air Force before
+becoming a successful businessman.
+    And I welcome each of these new members and look forward to
+working with them.
+    And with that, Mr. Chairman, I yield back.
+    The Chairman. Thank you very much.
+    And actually I was remiss in my opening remarks on
+congratulating our new ranking member. Obviously not new to the
+committee. We have worked together for many, many years.
+    And it is great to have you in that seat. Look forward to
+continuing our bipartisan tradition.
+    So now we have some business to conduct to get the
+committee set up, and I call up Committee Resolution No. 1,
+regarding the committee rules for the 117th Congress. And the
+clerk shall read the resolution.
+    Ms. Quinn. Committee resolution No. 1. Resolved, That the
+Committee on Armed Services, U.S. House of Representatives,
+adopt the committee rules for the 117th Congress, which are
+stated in the copy distributed to each Member.
+    The Chairman. The proposed committee rules have been
+developed jointly with Ranking Member Rogers and made available
+to members' offices on Friday, January 29th. Following
+consultation with Mr. Rogers, I ask unanimous consent that the
+resolution be considered as read and that the resolution be
+open to amendment at any point.
+    Is there objection?
+    Without objection, it is so ordered.
+    And at this time is there any discussion or are there any
+questions concerning the committee rules?
+    If there is no discussion, are there any amendments to the
+committee rules?
+    Hearing none, the chair now recognizes the gentleman from
+Washington, Mr. Larsen, for the purpose of offering a motion
+regarding Committee Resolution No. 1, the committee rules.
+    Mr. Larsen. Mr. Chair, I move to adopt Committee Resolution
+No. 1, concerning the committee rules.
+    The Chairman. The question now occurs on the motion of the
+gentleman from Washington, Mr. Larsen.
+    So many as are in favor will say aye.
+    Opposed?
+    A quorum being present, the ayes have it and the motion is
+adopted. And, without objection, a motion to reconsider is laid
+upon the table.
+[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
+ The next order of business is Committee Resolution No.
+2, regarding the committee's security procedures for the 117th
+Congress. I call up Committee Resolution No. 2. The clerk shall
+read the resolution.
+    Ms. Quinn. Committee Resolution No. 2. Resolved, That the
+Committee on Armed Services, U.S. House of Representatives,
+adopt the committee security procedures for the 117th Congress,
+a copy of which has been distributed to each member.
+    The Chairman. The security procedures were coordinated with
+Mr. Rogers and were made available to members' offices on
+Friday, January 29th. Following consultation with Mr. Rogers, I
+ask unanimous consent that the resolution be considered as read
+and that the resolution be open to amendment at any point.
+    Is there objection?
+    Without objection, it is so ordered.
+[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
+    .epsAnd at this time there is any discussion? Are there any
+questions concerning the security procedures?
+    There is no discussion.
+    Are there any amendments to the security procedures?
+    Hearing no amendments, the chair now recognizes the
+gentleman from Rhode Island, Mr. Langevin, for the purposes of
+offering a motion regarding Committee Resolution No. 2, the
+security procedures of the 117th Congress.
+    Mr. Langevin.
+    Mr. Langevin. Mr. Chairman, I move to adopt Committee
+Resolution No. 2, the security procedures for the 117th
+Congress.
+    The Chairman. The question now occurs on the motion of the
+gentleman from Rhode Island, Mr. Langevin.
+    So many as are in favor will say aye.
+    As opposed, say no.
+    A quorum being presented, the ayes have it and the
+resolution is adopted. Without objection, a motion to
+reconsider is laid upon the table, which brings us to the final
+order of business.
+    I call up Committee Resolution No. 3, appointing committee
+staff for the 117th Congress. The clerk shall read the
+resolution.
+    Ms. Quinn. Committee Resolution No. 3. Resolved, That the
+persons listed on the sheet distributed to the Members and such
+other personnel as may be required by the committee within the
+limits and terms authorized under the rules of the House of
+Representatives are hereby appointed to the staff of the
+Committee on Armed Services, U.S. House of Representatives, for
+the 117th Congress, it being understood that according to the
+provisions of law, the Chairman will fix the basic salary per
+annum.
+    The Chairman. Thank you.
+    As many of you know, our committee is unique in that the
+committee staff is a combined staff. What that means basically
+is most--every other committee you divide up Democrats,
+Republicans, go your separate ways. Here our staff works for
+everybody, and I hope members will recognize that and take
+advantage of that. Every single member of the staff that we
+have is open to every member of this committee, and they have
+incredibly valuable experience that will help us do our job.
+    So please take advantage of that. Build those relationships
+with the staff. They have a lot of knowledge to share. They are
+a very talented group of professionals.
+    A copy of the committee staff in the 117th Congress was
+prepared in consultation with the minority and made available
+to members' offices on Friday, January 29th.
+    Following conversations--or consultation--with Mr. Rogers,
+I ask unanimous consent that the resolution be considered as
+read.
+    Is there objection?
+    Without objection, it is so ordered.
+[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
+    .epsAnd at this time is there any discussion or are there
+any questions regarding the committee staff?
+    Hearing none, the chair now recognizes the gentleman from
+Rhode Island, Mr. Langevin, for the purposes of offering a
+motion regarding Committee Resolution No. 3, appointing the
+committee staff for the 117th Congress.
+    Mr. Langevin.
+    Mr. Langevin. Mr. Chairman, I move to adopt Committee
+Resolution No. 3, regarding committee staffing for the 117th
+Congress.
+    The Chairman. The question now occurs on the motion of the
+gentleman from Rhode Island, Mr. Langevin.
+    So many as in favor will say aye.
+    Those opposed, no.
+    A quorum being present, the ayes have it and the motion is
+adopted. Without objection, a motion to reconsider is laid upon
+the table.
+    Without objection, committee staff is authorized to make
+technical and conforming changes to reflect the action of the
+committee in adopting Committee Resolutions 1 through 3.
+    Before we adjourn, let me raise an administrative matter.
+As chairman I plan--oh, yes. Okay. Yeah, this is the issue
+surrounding our committee hearings. There is a 5-minute rule,
+as you are all aware. We try to get to absolutely every member.
+We this year have 59 members of this committee. We have a lot
+of hearings, and there is a 5-minute rule for every member.
+    You can do the math on that one and figure out how long it
+would take to do a committee hearing if all 59 members took all
+5 minutes. We don't always get to everybody. But we try to make
+sure that the members of this committee, regardless if they are
+senior or junior, have an opportunity.
+    So in doing that, when have you 5 minutes, you have 5
+minutes. There used to be the old trick of, you know, making
+your question last 4 minutes and 50 seconds and then letting
+the guy take 5 or 10 minutes to answer it. We don't do that.
+When the 5 minutes is up, the 5 minutes is up. And the reason
+we do that is not to be mean to the member asking the question.
+It is to try to respect all members of the committee.
+    It is my honest and heartfelt opinion that every single
+member of this committee is equally important, whether you just
+got here or whether you have been here for 24 years. So we want
+to try to be as inclusive as possible and get everybody's
+perspectives and views as best as we can. So that is what we
+will try to do.
+    That is all I have. Let me recognize Mr. Rogers for any
+closing comments he wishes to add to the discussion.
+    Mr. Rogers. I have nothing other than to say it is just an
+honor to be here. And this committee does have a bipartisan
+history that we value and we want to see continue and we will
+be working in that vein and look forward to it.
+    The Chairman. Absolutely. I think it is a great note to end
+on.
+    So no further business, the committee stands adjourned
+subject to the call of the chair. Thank you very much.
+    [Whereupon, at 11:21 a.m., the committee was adjourned.]
+                                  <all>
+</pre></body></html>

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+<html>
+<title> - WOMEN LEADING THE WAY: THE DEMOCRATIC MOVEMENT IN BELARUS</title>
+<body><pre>
+[House Hearing, 117 Congress]
+[From the U.S. Government Publishing Office]
+                  WOMEN LEADING THE WAY: THE DEMOCRATIC
+                         MOVEMENT IN BELARUS
+=======================================================================
+                                HEARING
+                               BEFORE THE
+       SUBCOMMITTEE ON EUROPE, ENERGY, THE ENVIRONMENT AND CYBER
+                                 OF THE
+                      COMMITTEE ON FOREIGN AFFAIRS
+                        HOUSE OF REPRESENTATIVES
+                    ONE HUNDRED SEVENTEENTH CONGRESS
+                             FIRST SESSION
+                               __________
+                             March 17, 2021
+                               __________
+                            Serial No. 117-9
+                               __________
+        Printed for the use of the Committee on Foreign Affairs
+[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
+       Available:  http://www.foreignaffairs.house.gov/, http://
+                            docs.house.gov,
+                       or http://www.govinfo.gov
+                               __________
+                    U.S. GOVERNMENT PUBLISHING OFFICE
+45-701 PDF                 WASHINGTON : 2021
+-----------------------------------------------------------------------------------
+                      COMMITTEE ON FOREIGN AFFAIRS
+GREGORY W. MEEKS, New York, Chairman
+BRAD SHERMAN, California              MICHAEL T. McCAUL, Texas, Ranking
+ALBIO SIRES, New Jersey                  Member
+GERALD E. CONNOLLY, Virginia	      CHRISTOPHER H. SMITH, New Jersey
+THEODORE E. DEUTCH, Florida	      STEVE CHABOT, Ohio
+KAREN BASS, California		      SCOTT PERRY, Pennsylvania
+WILLIAM KEATING, Massachusetts	      DARRELL ISSA, California
+DAVID CICILLINE, Rhode Island	      ADAM KINZINGER, Illinois
+AMI BERA, California		      LEE ZELDIN, New York
+JOAQUIN CASTRO, Texas	              ANN WAGNER, Missouri
+DINA TITUS, Nevada		      BRIAN MAST, Florida
+TED LIEU, California		      BRIAN FITZPATRICK, Pennsylvania
+SUSAN WILD, Pennsylvania	      KEN BUCK, Colorado
+DEAN PHILLIPS, Minnesota	      TIM BURCHETT, Tennessee
+ILHAN OMAR, Minnesota		      MARK GREEN, Tennessee
+COLIN ALLRED, Texas		      ANDY BARR, Kentucky
+ANDY LEVIN, Michigan		      GREG STEUBE, Florida
+ABIGAIL SPANBERGER, Virginia	      DAN MEUSER, Pennsylvania
+CHRISSY HOULAHAN, Pennsylvania	      AUGUST PFLUGER, Texas
+TOM MALINOWSKI, New Jersey	      PETER MEIJER, Michigan
+ANDY KIM, New Jersey	              NICOLE MALLIOTAKIS, New York
+SARA JACOBS, California		      RONNY JACKSON, Texas
+KATHY MANNING, North Carolina	      YOUNG KIM, California
+JIM COSTA, California		      MARIA ELVIRA SALAZAR, Florida
+JUAN VARGAS, California		      JOE WILSON, South Carolina
+VICENTE GONZALEZ, Texas		      RON WRIGHT, Texas
+BRAD SCHNEIDER, Illinois
+                    Jason Steinbaum, Staff Director
+               Brendan Shields, Republican Staff Director
+                                 ------
+        Subcommittee on Europe, Energy,the Environment and Cyber
+WILLIAM R. KEATING, Massachusetts, Chairman
+SUSAN WILD, Pennsylvania             BRIAN FITZPATRICK,
+ABIGAIL SPANBERGER, Virginia             Pennsylvania,Ranking Member
+ALBIO SIRES, New Jersey		     ANN WAGNER, Missouri
+THEODORE DEUTCH, Florida	     ADAM KINZINGER, Illinois,
+DAVID CICILLINE, Rhode Island	     BRIAN MAST, Florida
+DINA TITUS, Nevada		     DAN MEUSER, Pennsylvania
+DEAN PHILLIPS, Minnesota	     AUGUST PFLUGER, Texas
+JIM COSTA, California		     NICOLE MALLIOTAKIS, New York
+VICENTE GONZALEZ, Texas		     PETER MEIJER, Michigan
+BRAD SCHNEIDER, Illinois
+                      Leah Nodvin, Staff Director
+                            C O N T E N T S
+                              ----------
+                                                                   Page
+                    PHOTOS SUBMITTED FOR THE RECORD
+Photos submitted for the record from Mr. Smith...................     7
+                               WITNESSES
+Tsikhanouskaya, Sviatiana, Belarusian Human Rights Activist and
+  Politician.....................................................    23
+                          INFORMATION REFERRED
+Information referred to from Mr. Fitzpatrick.....................    33
+                                APPENDIX
+Hearing Notice...................................................    47
+Hearing Minutes..................................................    48
+Hearing Attendance...............................................    49
+            RESPONSES TO QUESTIONS SUBMITTED FOR THE RECORD
+Responses to questions submitted for the record..................    50
+       WOMEN LEADING THE WAY: THE DEMOCRATIC MOVEMENT IN BELARUS
+                       Wednesday, March 17, 2021
+                          House of Representatives,
+                Subcommittee on Europe, Energy, the
+                             Environment and Cyber,
+                      Committee on Foreign Affairs,
+                                                    Washington, DC,
+    The subcommittee met, pursuant to notice, at 9:32 a.m., via
+Webex, Hon. William R. Keating (chairman of the subcommittee)
+presiding.
+    Mr. Keating [presiding]. The House Foreign Affairs
+subcommittee will come to order.
+    And without objection, the chair is authorized to declare a
+recess of the committee at any point. And all members will have
+5 days to submit , extraneous material, and questions for the
+record, subject to the length limitations in the rules. To
+insert something into the record, please have your staff email
+to the previously mentioned address or contact full committee
+staff.
+    Please keep your video function on at all times, even when
+you are not recognized by the chair. Members are responsible
+for muting and unmuting themselves. Please remember to mute
+yourself after you finish speaking.
+    Consistent with House Resolution 965 and the accompanying
+regulations, staff will only mute members and witnesses, as
+appropriate, when they are not under recognition, to eliminate
+background noise.
+    I see that we have a quorum present. I will now recognize
+myself for an opening statement.
+    Pursuant to notice, we are holding a hearing today entitled
+``Women Leading the Way: The Democratic Movement in Belarus''.
+    I will begin my statement. In the days leading up to August
+2020 and the Presidential election that day in Belarus, one
+after another, the Presidential candidates who opposed
+Alexander Lukashenko were jailed or forced out of the country.
+The election then took place without international observers
+under the control of State-owned media and in an atmosphere of
+fear and intimidation.
+    On the actual election day, Sviatiana Tsikhanouskaya
+stepped in for her husband, Siarhei Tikhanouski, a typical
+activist and blogger who was jailed just a few weeks before.
+During the election process, independent sources found that
+Sviatiana Tsikhanouskaya received more votes than the incumbent
+Lukashenko, and when the election results came in, it was clear
+to Belarusians and the international community at large that
+the election had taken place in fraudulent conditions and that
+Lukashenko could not claim victory. Yet, Lukashenko claimed
+himself to be President, underestimating the will of the
+Belarusian people and the strength of Sviatiana Tsikhanouskaya.
+    After 26 years of dictatorial rule, the Belarusian people
+had had enough. They gathered in the streets en masse,
+peacefully demonstrated against the Lukashenko regime and for
+their right to a new, free, and fair election. They organized
+themselves through new means of technology, sharing information
+over applications like Telegram.
+    And what is so striking for many of us in the U.S. was that
+they were led by a coalition of women who called for solidarity
+with Sviatiana Tsikhanouskaya. Unfortunately, these peaceful
+demonstrations were met with State-sponsored violence that was
+organized and mandated by the highest levels of government.
+Security forces began to beat and detain hundreds of peaceful
+demonstrators, crack down on independent journalists, and
+intimidate opposition leaders.
+    The Lukashenko regime took Sviatiana Tsikhanouskaya into a
+government building, directly threatened her and her family,
+and thus, forced her into exile in Lithuania. Later, activists
+like Maria Kalesnikava were kidnapped and attempts were made to
+force them out of the country as well. And finally, journalists
+like Katsiaryna Andreyeva and Darya Chultsova were arrested and
+jailed for simply filming peaceful demonstrations.
+    Authorities have arbitrarily detained and physically,
+sexually, and emotionally assaulted tens of thousands of
+peaceful protestors, journalists, and civil society members.
+Today, hundreds remain in detention, and many have recounted
+experiencing torture, sexual violence and rape, beatings, and
+other ill treatment. At least eight protestors have been
+killed.
+    And today, the Belarusian people mark 221 days or
+resistance against brutal authoritarian oppression. It has been
+over 7 months in a fight to establish a rule of law and achieve
+a democratic future for their country.
+    We in Congress must stand with the people of Belarus as
+they push for democracy. We must recognize the sacrifices made
+daily by peaceful protestors who take to the streets, knowing
+full well that they will face harassment, intimidation,
+unlawful detention, or worse. And we must salute the courage of
+the women of Belarus who in a highly patriarchal society have
+shown strength, determination, and leadership, standing at the
+center of organizations like Coordination Council, in an
+attempt to establish a dialog with the Lukashenko regime and
+initiate new, free, and fair elections.
+    Our expert witness today knows all too well the challenges
+posed by autocratic regimes who benefit from corruption and
+whose close friends and allies only support repressive tactics.
+    Yet, the continuous fight for democracy around the world is
+real and can take different forms. We have watched some
+countries, such as those in Central Europe, who have fallen
+into the trap that is democratic backsliding and illiberalism.
+We have watched as authoritarian States have used the pandemic
+to gather even greater control over their citizens, such as the
+recent arrest of almost 200 opposition leaders in Moscow. And
+we here in Washington have had to confront the fragile nature
+of our own democracy, as just months ago, violent, armed
+insurrectionists stormed the U.S. Capitol in an attempt to halt
+the democratic process for a free and fair election.
+    In times marked by challenges to democracy at home and
+abroad, one democracy must lend its hand to another. Helping
+democratic allies across borders and oceans can ensure that
+societies seeking to establish democratic, often in the face of
+anti-democratic threats, can prevail. A network of support, and
+the ability to communicate with that network, is a necessary
+component to democratic strength. That is why we, the
+transatlantic community and the U.S. Congress, must stand in
+unity and support the democratic movement in Belarus and all
+those who fight to establish or protect their democracy abroad.
+    That is why last September I held a hearing before this
+subcommittee on the democratic awakening of governments. That
+hearing included firsthand accounts of images of violence
+inflicted upon the Belarusian people by security forces, with
+introduced resolutions condemning the human rights abuses by
+Lukashenko and praising the bravery of the Belarusian citizens.
+We have also passed the revised version of the Belarus
+Democracy, Human Rights, and Sovereignty Act, authored by
+Representative Chris Smith, which expanded the robust set of
+sanctions and authorities related to Belarus at the President's
+disposal.
+    Yet, while we have taken these steps forward, it is the
+peaceful protestors on the ground in Belarus and the Belarusian
+diaspora around the world from Vilnius to Cape Cod that
+continues to drive movements and democracy forward and to keep
+this fight for democracy in Belarus alive.
+    With that being said, I am pleased to welcome the woman who
+has become the leader of the democratic movement in Belarus,
+Sviatiana Tsikhanouskaya, as our expert witness today. She did
+not plan to run for President. However, as she has said, she
+has shown up for her people because her people showed up for
+her. Her steadfast courage, dedication, and tenacity is
+remarkable, and I look forward to our discussion.
+    I now turn to the ranking member for his remarks, Mr.
+Fitzpatrick.
+    Mr. Fitzpatrick. Good morning, and thank you, Chairman
+Keating.
+    Today, we gather to recognize the bravery of our witness,
+Sviatiana Tsikhanouskaya, and her inspiring campaign to promote
+democratic aspirations in the people of Belarus. You and
+historic peaceful protestors have stand down overwhelming odds
+and lit a fire to a renewed democratic spirit in Belarus. And
+this movement is now shining a light on the authoritarian
+shadow that has covered the citizens of Belarus during
+Alexander Lukashenko's rule.
+    I would also like to acknowledge the Coordination Council,
+its members, and all the Belarusian citizens engaging in the
+noble pursuit of a free and democratic society. And it is worth
+noting, as we recognize International Women's Month, that
+exceptionally brave and daring women are leading this
+democratic revolution in Belarus.
+    Mrs. Sviatiana Tsikhanouskaya and thousands of women like
+her have proven to their country and the rest of the world that
+the future is in their able hands. These freedom fighters are
+not seeking unreasonable terms. They seek legal process. They
+seek freedom of expression and information, and they seek
+freedom from the harassment of an oppressive state. And they
+seek freedom to chart their own future.
+    Following the August 9th election, the people of Belarus
+wanted their voices heard in response to the dictatorial
+actions of Lukashenko. In response to these citizens' peaceful
+protests, Lukashenko's security forces responded with excessive
+force, the use of chemical riot dispersion methods and
+measures, and detained citizens completely without cause.
+Plainclothes police officers have engaged in increasingly
+aggressive and brutal crackdowns of those who are peacefully
+protesting the election results and its resulting movement.
+    International monitors estimate that more than 32,000
+Belarusians have been temporarily detained and imprisoned, and
+nearly 300 political prisoners remain behind bars as of this
+hearing this morning. According to a report by the European
+Parliament last year, at least 10 demonstrators have been
+killed by government forces or died while in custody under
+suspicious circumstances.
+    The harrowing account of our witness describes the
+situation of jailed protestors that, quote, ``have been rounded
+up and housed like cattle in tiny, overcrowded jail cells
+without access to water, sanitization, or any normal sleeping
+positions,'' going on to say that, ``torture is now
+commonplace.''
+    Lukashenko has smothered free speech in Belarus and
+manipulated the media to suppress the surge in his opposition
+and conceal the tactics of his oppression. Russian
+propagandists were flown in to work for State-run TV in
+Belarus. Meanwhile, independent journalists have faced
+intimidation and imprisonment. Local critics of the regime face
+trumped-up charges and are imprisoned for speaking truth to
+power.
+    And as the illegitimate regime in Belarus continues to
+normalize a litany of human rights violations, the calls for
+Mr. Lukashenko to step down and recognize a new, free, and fair
+system of elections is gaining momentum worldwide. A group in
+my home State of Pennsylvania even organized a rally in
+Pittsburgh in a snow-covered day this year to raise awareness
+of the plight of their loved ones. And as such, the United
+States, in coordination with its European allies and partners,
+must be vigilant and robust in our support for Belarus and
+their civil society and those who are persecuted by the
+Lukashenko regime.
+    In line with the Belarus Democracy, Human Rights, and
+Sovereignty Act of 2020, which I cosponsored, we must continue
+to demand the end of Lukashenko's violence and the release of
+all those wrongfully detained, and continue harsh sanctions for
+those complicit in these human rights violations. The
+illegitimate Lukashenko regime must, once and for all, step
+down and allow for free and fair elections to be held. The
+people of Belarus are demanding the right to chart their own
+future, and their voices deserve to be heard.
+    I yield back.
+    Mr. Keating. I would like to thank the ranking member.
+    And without objection, I would like to recognize
+Representative Smith, who is the author of the Belarus
+Democracy Act, for a brief statement.
+    Mr. Smith. Mr. Chairman, thank you so very much for
+inviting me to be and allowing to be part of your panel, and to
+Brian Fitzpatrick, as well as to you, for the great work that
+you gentlemen are doing and this subcommittee. Your resolution
+that is pending, I think, will, again, reiterate the
+bipartisan, bicameral support of Congress behind Tsikhanouskaya
+and the rest of the human rights activists and defenders in
+Belarus.
+    The leadership that you have shown and that the people of
+Belarus have shown, despite incredible odds, despite the fact
+that the bullies are out there beating, arresting, torturing,
+and even killing the best and the bravest and the brightest of
+Belarus.
+    The picture, Mr. Chairman, that you have painted, as well
+as the ranking member, is both bleak and hopeful--bleak because
+Lukashenko is still in charge, but hopeful because the people
+of Belarus have you to champion their dreams, and that goes for
+this leadership led by women who are in exile, some of whom are
+in exile; others, sadly, are in prison.
+    My work on Belarus goes back to really the 1990's. And in
+2004, I authored the Belarus Democracy Act, which really has
+become the template for Magnitsky holding men and women in the
+Lukashenko regime, both in terms of visa denial and making them
+unable to participate in any kind of economic relationship with
+the U.S. and U.S. banks. I did it again in 2006, 2011, and as
+you pointed out, the 2020 Act, which reiterates and expands and
+puts an emphasis on sovereignty, because we know that the
+Russians are eying Belarus in a way that is reminiscent of what
+they did with the Crimea and other parts of the Ukraine.
+    Again, according to the representative of the OSCE, the
+Belarusian authorities have filed at least 141 politically
+motivated cases again women. Forty-nine are currently in
+detention or under house arrest. Another 75 are suspects in
+politically motivated criminal cases, and thousands of other
+women have fled Belarus in fear for their safety. Despite all
+of this, the image of Belarusian women in white has become
+iconic, representing the hopes of all Belarusians for a better
+future.
+    Again, thank you for this timely hearing. And again, it
+gives us all an opportunity to say we are in solidarity with
+these incredibly brave women and men.
+    Thank you, Mr. Chairman, and I yield back.
+    Mr. Keating. Thank you, Representative Smith, and thank you
+for your longstanding work on this important issue.
+    Mr. Smith. Thank you.
+    Mr. Keating. I will now introduce our witness. Ms.
+Sviatiana Tsikhanouskaya is a central leader of the democratic
+movement in Belarus and a human rights activist who challenged
+Alexander Lukashenko at the 2020 Presidential election. This
+Belarusian election was fraught with widespread fraud and
+followed by unjustifiable violence.
+    In the months following, Sviatiana Tsikhanouskaya has been
+a symbol leader of the Belarusian protests and has contributed
+greatly to promoting and organizing positive change in Belarus,
+both through her domestic and international engagement.
+    The Europe Parliament recognized the fight of Belarusian
+people for democracy and freedom, led by Sviatiana
+Tsikhanouskaya, by awarding her, among other leaders, the
+prestigious annual Sakharov Prize. She has also received a
+series of international awards for her courageous struggle
+against the authoritarian regime of Lukashenko.
+    I will now recognize, and State my pleasure at joining us,
+Ms. Tsikhanouskaya, for 5 minutes. And without objection, your
+prepared written statement will be made a part of the record.
+    Ms. Tsikhanouskaya, you are now recognized for your opening
+statement.
+STATEMENT OF SVIATIANA TSIKHANOUSKAYA, BELARUSIAN HUMAN RIGHTS
+                    ACTIVIST AND POLITICIAN
+    Ms. Tsikhanouskaya. Good morning, everyone.
+    Chairman Keating, Ranking Member Fitzpatrick, Honorable
+Representative Smith, and distinguished members of the
+subcommittee, first of all, I would like to extend my Saint
+Patrick's Day greetings to all of you. Mr. Keating, as you may
+know from me, Ireland has had a very special place in my heart.
+    Mr. Smith, thank you for being here with us today. We
+deeply appreciate your tremendous support for Belarus
+throughout decades, including all four Belarus democracy acts
+that you introduced and helped enact.
+    Mr. Chairman, I would like to submit pictures for the
+record.
+    Mr. Keating. Without objection, we can display those
+pictures as you begin your testimony.
+    [The information referred to follows:]
+    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
+    Ms. Tsikhanouskaya. Thank you.
+    So, I am deeply grateful for the great honor of addressing
+you on behalf of the Belarusian people. I am here to give voice
+to the thousands of Belarusians who face injustice,
+intimidation, and brutality, and who still continue to protest
+daily.
+    It has been more than 7 months since Belarus has begun the
+united peaceful protest movement, which was met with
+unprecedented violence from the authorities. Over 32,000 people
+have been detained. More than 2,500 criminal cases have been
+initiated. Over 1,000 cases of torture have been documented by
+human rights NGO's. And there are 290 political prisoners at
+the moment. At least eight protestors were killed.
+    Not a single government official has been held accountable
+for the brutality, repression, torture, and murder. Amidst the
+injustice, the brave women of Belarus became a symbol of hope
+and resilience for our country.
+    Seventy-three-year-old Nina Baginskaya has been protesting
+against the regime since the 1990's, despite the detentions by
+police and raids on her house.
+    Miss Belarus 2008, Volha Khizhinkova, and basketball star
+Yelena Leuchanka spent 42 days and 15 days, respectively, in
+detention in unsanitary and humiliating conditions for
+peacefully protesting.
+    Women wearing white dresses and carrying flowers formed the
+first human chains a shield for male protestors. Their desire
+to protect was stronger than their fear of being detained and
+tortured. Yet, they could not protect everyone.
+    On 10th August, Alexander Taraikovsky fell, the first
+victim of police brutality. He was shot point-blank by a police
+squad in Minsk.
+    Two female journalists, Darya Chultsova and Katsiaryna
+Andreyeva, were sentenced to 2 years in prison for doing their
+job, livestreaming a vigil for the peaceful protestor Raman
+Bandarenka, who was murdered by the regime cronies in his own
+backyard for protecting our national symbols.
+    With those stories, it was straight that we are dealing
+with a human rights crisis of unprecedented proportions for
+Belarus that keeps worsening day by day. But the people still
+persist.
+    Our workers united in strike committees. Our doctors and
+professors stood up for their colleagues who were fired for
+their political views. Our professional athletes raised
+awareness all over the world. Principled police officers and
+investigators resigned. Neighborhood communities have become
+the place for a grassroots movement.
+    Yet, all of this is not enough. Lukashenko still has the
+resources to retain power. So, the United States should insist
+on stopping the violence, releasing the political prisoners,
+restoring the rule of law, and launching a genuine dialog
+between the legitimate representatives of Belarus and the
+regime.
+    At the same time, it is not words, but actions that matter.
+We call on the U.S. to enforce sanctions against State-owned
+enterprises, the judiciary, and oligarchs. Sanctions are one of
+the most effective measures. We call on the U.S. to use its
+diplomacy to isolate Lukashenko by curbing international
+agreements and commerce between the Lukashenko regime and other
+countries. We call on the U.S. to help with international
+mediation through the OSCE.
+    We call on the U.S. Congress to consider increasing the
+support for the pressing needs of Belarusians. People of
+Belarus require support, especially the civil society, the
+human rights defenders, the independent media, and the
+businesses. All of them have been repressed by the regime.
+    As the European Union has drafted a comprehensive plan to
+support Belarus during the transition and after free and fair
+elections, we call on the U.S. Congress to join this work in
+order to start developing a joint Marshall Plan for Belarus.
+    I am bound by the view of the majority of Belarusians to
+make this happen, and I call on the United States of America to
+join me on this mission. My nation is facing a humanitarian
+crisis. People are suffering and dying right now. Belarusians
+need you as never before.
+    Thank you.
+    [The prepared statement of Ms. Tsikhanouskaya follows:]
+    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
+    Mr. Keating. Thank you very much for that very moving and
+very important testimony.
+    I will now recognize members for 5 minutes each. And
+pursuant to House rules, all time yielded is for the purpose of
+questioning our witnesses.
+    Because of the virtual format of the hearing, I will
+recognize members by committee seniority, alternating between
+Democrats and Republicans. And if you miss your turn, please
+our staff know and we will circle back to you. If you seek
+recognition, you must unmute your microphones and address the
+chair verbally.
+    I would just ask, is Representative Sires still with us? I
+know he had to leave. I was going to yield my time to him.
+Evidently, he has had to leave. So, I will start by recognizing
+myself.
+    The role of women in the movement for a democratic and free
+Belarus is really the theme of what we are talking about in
+terms of the democratic movement that is there. And this is
+unique in that respect, and it is effective and it is
+important. And it has really captured the attention of the
+world.
+    And I would just like to ask you, what specifically you
+have seen as the role of women in spearheading this effort for
+free and democratic elections and a democracy in Belarus? What
+can you tell us in more detail about that specific role of
+women?
+    Ms. Tsikhanouskaya. Actually, the women played a huge role
+in this revolution. And first of all, the fact that three women
+led this pre-election campaign in spite of all other
+prohibitions for women to fight. We three women, we are put in
+this position instead of our men, and it was really the
+regime's mistake that they underestimated women of Belarus.
+    Our ex-President always told that our constitution is not
+for women, that women will never be able to lead the country,
+but we managed because women, especially Belarusian women, are
+really strong. And when our women were put in such
+circumstances, when they had to show how strong they are, they
+showed the most bravery that the whole world was inspired of.
+    And after 3 days of hell the regime made in Belarus after
+the election date, and thousands of men had been detained and
+tortured in jails, our women had to stand in front of our men,
+just hide the men behind them to protect them. So, our
+wonderful, peaceful women showed to the whole world that we are
+brave and we manage everything, only because we want a better
+future for our children, and we ready to defend not only our
+children, but our men as well.
+    Mr. Keating. I think this effort has changed the dynamics,
+gender dynamics, in the country as well. It goes far beyond
+this movement itself.
+    Now you recently released a liberation plan of yours. Can
+you highlight the most important aspects of that and how the
+U.S. can be useful in seeing that plan come to life?
+    Ms. Tsikhanouskaya. I think that the women of this
+revolution after the election, and before the election, we
+thought that we need new elections because the previous
+election was falsified, and just to step out of this political
+and humanitarian crisis in Belarus, we need new elections. But
+we need these new elections through peaceful dialog with the
+regime.
+    But we see that the regime does not respond to our calls
+for negotiations. And that is why we are systematically,
+continuously putting pressure on the regime and his cronies.
+Inside the country, these are protesting movements,
+demonstratives, different initiatives. People are not giving
+up. And despite of this tremendous level of violence from the
+regime, people are continuing to fight.
+    But, of course, we need international support as well. We
+need international pressure because democratic countries cannot
+close their eyes on what is going on in Belarus and they have
+to stand for the values of the democratic countries, for human
+rights, for dignity. And it is the institution in Belarus, it
+is a challenge not only for Belarusians, it is a challenge for
+European countries, for the USA, for Canada, just to prove that
+the values are not just words; that they want, that they have
+to stand for these.
+    And we are a wonderful country, and we are on our own path
+for democracy. So, we call on you, stand with us in this
+difficult time and do your best for one more nation, proud
+nation, to become a democratic country.
+    Mr. Keating. Well, thank you. And I also want to thank you
+for meeting with Ambassador Julie Fisher. I spoke with her just
+the other day, and we are looking forward to her being
+recognized, too, by Belarus.
+    I now yield to our ranking member, Mr. Fitzpatrick, for his
+questions.
+    Mr. Fitzpatrick. Thank you, Mr. Chairman. Mr. Chairman, I
+would like to begin by asking you, sir, to please enter into
+the record a letter from the Free Belarus Coalition for
+Bipartisan and Bicameral Support requesting $30 million for
+Fiscal Year 2022, funding to support Belarus' civil society and
+the organic democratic movement.
+    Mr. Keating. Without objection, that will be, per our
+instructions in the beginning, put in the record. Thank you.
+    [The information referred to follows:]
+    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
+    Mr. Fitzpatrick. Thank you, Mr. Chairman.
+    And this is aligned with the bipartisan 2020 Belarus
+Democracy Act, which calls for increased foreign assistance.
+    Ms. Tsikhanouskaya, thank you so much for being here with
+us today. We greatly admire and respect your courage more than
+you know. You are a beacon of courage, not just for us on this
+committee, but for the Congress and for the world.
+    So, ma'am, if you could just state for the record, in
+furtherance of this request for $30 million, how will the
+Belarus assistance be best served by those who are pro-civil
+society and are pro-democratic initiatives?
+    Ms. Tsikhanouskaya. So, first of all, I have to say that
+your help is very extremely essential in our case, but I have
+to admit that we need rapid help because people are suffering
+now in this very moment in jails and on the ground.
+    And so, through those, democracy can progress, can
+increase, and appropriate more funding for two organizations
+working in Belarus. For example, just through traditional and
+emerging civil society, like traditional, we need to help to
+NGO's like defend activists now, to media and to activities,
+and to emerging civil society like Telegram channels, YouTube
+bloggers, athletes, doctors. And you also can increase budgets
+for Belarus of American organizations, such as USAID, for
+example.
+    But, again, I have to repeat that this is urgent help. You
+know, just to keep civil society resistance, we need to have
+them now.
+    Mr. Fitzpatrick. Thank you, Sviatiana.
+    And to all my colleagues on the committee, I urge strong
+bipartisan support for this funding request.
+    Mr. Chairman, I yield back.
+    Mr. Keating. I would like to thank the ranking member.
+    And the chair now recognizes the vice chair of the
+committee, Ms. Spanberger.
+    Ms. Spanberger. Thank you very much.
+    And thank you for being with us here today, Ms.
+Tsikhanouskaya. You have demonstrated immense bravery and
+selflessness over the past year and a true commitment to the
+people and the future of Belarus. Thank you. And I know that
+those standing up for democratic principles and human rights
+around the world appreciate your tremendous work and,
+certainly, your willingness to be a witness here today.
+    After your husband's candidacy for the election in August
+was denied, you took on the role and ran against Lukashenko.
+How has your own vision of your future and leadership evolved
+since August? And frankly, did you ever see yourself taking on
+such a prominent role?
+    Ms. Tsikhanouskaya. Thank you. You know, I became in this
+action and campaign a symbol of resistance, a symbol of unity.
+But, as a matter of fact, life put me in such circumstances
+that I had to take this responsibility and become a leader of
+this revolution. And I know that the Belarusian people know who
+they voted for, and I feel huge support from the Belarusian
+people.
+    It is a rather difficult way. You know, I was put in
+difficult circumstances. I feel huge pressure from propaganda.
+And I know that all the Belarusian people are feeling
+tremendous pressure on the ground. But knowing that I am doing
+this for the future of the Belarusian people, for my children,
+for all those who are suffering in jails now, I have to find
+strength every day of this fight, and I am finding this
+strength in the Belarusian people. I know that they are
+fighting and that they are not giving up. So, I have no right
+to give up as well.
+    It is difficult, but I am a woman, and a woman is
+everything.
+    [Laughter.]
+    Ms. Spanberger. Isn't that so true?
+    Well, I am curious, then, how has your forced exile
+affected your ability to interact with the democratic movement
+back home in Belarus? And how has it impacted your ability to
+communicate and advocate, and certainly lead, this continued
+movement?
+    Ms. Tsikhanouskaya. You know, it was the usual regime's
+practice to make the people flee from the country for them to
+stop struggling. And the same happened to me. I was sent out of
+the country and I was supposed to stop, but I could not. I
+could not betray the Belarusian people.
+    And, you know, the propaganda always say, ``Oh, she lost
+this connection with Belarus. She is an exile. She does not
+understand everything.'' But it is not true. And thanks to the
+internet, every day I have some conferences and some meetings
+with all the groups in Belarus. I have meetings with doctors,
+with students, workers, striking committees, neighborhoods.
+Every day I have to tell people, I have to look into their
+eyes, I have to inspire them, and they inspire me back. So, for
+sure, I am not losing this connection. I feel like I am there
+on the ground through this connection.
+    But, of course, knowing that I will be jailed as soon as I
+pass the border, I am sure that here, even in exile, I can do
+much, much more for the Belarusian people, for the sake of my
+country. So, I have to stay here and struggle to bear that with
+the Belarusian people.
+    Ms. Spanberger. Well, I want to thank you so much for
+bringing your answers to this committee, certainly your
+experiences. Thank you for your continued work on behalf of the
+Belarusian people and on behalf of democratic ideals and
+values. It is amazing to see leaders like you who are fighting
+for the rights of the people they should be representing and
+that they want to stand up for. So, thank you again for coming
+before this committee. Thank you for telling us, as a
+committee, what we could be doing to support. And I think you
+have heard so far that you have many American Members of
+Congress who are paying close attention to your ongoing
+struggles and the struggles of your people. So, thank you very
+much.
+    And, Mr. Chairman, I yield back.
+    Mr. Keating. The chair thanks the vice chairman.
+    It is my understanding that Representative Wagner has
+yielded her time to Representative Smith. So, the chair calls
+on Representative Smith for his questions.
+    Mr. Smith. Thank you very much, and, Ann, thank you very
+much.
+    Mr. Chairman, thank you again for this important hearing,
+so we can reassert, recalibrate, and do even more to help the
+democratic opposition in Belarus. And Sviatiana certainly
+epitomizes grace under pressure, courage under pressure, and we
+are all inspired, I think, beyond words to do more to assist.
+    You, in your recent appeal to the United Nations, you and
+the United States, Sviatiana, asked that political prisoners
+and trying to support political prisoners, that we sanction
+prison chiefs, judges, prosecutors, prison guards. And I am
+wondering, is it your sense that we are doing enough to try to
+impose those sanctions? Obviously, getting the names of those
+individuals is extremely important, and the more we have that,
+the more we can try to hold them to account.
+    You have also noted the gross mistreatment of the female
+prisoners, including threatening to take their children away,
+humiliation of all kinds, beatings, all kinds of assault,
+humiliation. If you could perhaps elaborate on some of that,
+because it is outrageous.
+    I have met with Lukashenko twice. He is a bully. We all
+know that. I think he is an egomaniac. We all know that.
+    But, for those who are behind bars, we have to got to find
+the most effective strategies to intervene, and to do it
+immediately. In this, bottom line, do you think we are all
+doing enough, the European Union, the United States, the U.N.?
+And be blunt. You know, everyone means well. We all mean well.
+This is totally bipartisan. And again, the chairman I think is
+doing a great job. His resolution will, again, give us an
+opportunity to speak out with one voice when that comes up on
+the floor of the House. Don't worry about being diplomatic. We
+have got to know, are we doing enough? Sviatiana?
+    Ms. Tsikhanouskaya. Yes, I am here. I have to say that I am
+really grateful for all the actions that Europe and America and
+Canada did, have done already, because you stand for us in the
+crucial moment of our revolution, just after the elections. No
+one country recognized Lukashenko as legitimate. Everybody told
+that the elections were fraudulent, Lukashenko is illegitimate.
+And just I ask you at the moment to be consistent in your
+vision.
+    And I understand that you have done a lot and you imposed
+sanctions, individual sanctions. But, you know, what is going
+on in Belarus, it is my personal pain. And, of course, just to
+stop this level of violence, just to start negotiations, to
+start to develop, we need more pressure on the Lukashenko
+regime. And in this way, I suppose that sanctions are the most
+powerful leverage to make this regime to respond to our calls
+for dialog.
+    And now, we need to widen this list of individual
+sanctions. These sanctions should be imposed on security forces
+offices, judges, educational and support officials who support
+the regime, who in this or that extent were involved in
+atrocities and humiliation and violence in Belarus.
+    And also, Congress should also legislate to widen the
+sectorial sanctions, such as in the oil and gas and the potash
+fertilizers industries, just to strike at the regime's most
+important benefactors and prime resources of resilience.
+    So, we have to put sanctions on those like bullies of
+Lukashenko that support the regime. And support the regime
+means supporting violence and torture in Belarus. So, I am sure
+that you can do more and more. Until this violence stops, we
+have to put greater pressure on the regime.
+    Thank you.
+    Mr. Smith. Thank you.
+    Mr. Keating. Thank you, Representative.
+    Mr. Smith. Thank you, Mr. Chairman.
+    Mr. Keating. The chair now recognizes Representative Wild.
+    Ms. Wild. Thank you, Mr. Chairman. Sorry for the delay in
+getting my mute off. I appreciate it. Sorry.
+    Mr. Keating. Okay.
+    Ms. Wild. Okay, I am ready to go. I am sorry about that.
+    First of all, I just want to start by echoing comments made
+by my colleagues in recognizing your courageous efforts to
+build a democratic future in Belarus. Your leadership is
+inspiring.
+    And my question is about the role of U.S. diplomacy. I
+would like to know what your thoughts are on the role that
+might be played by newly appointed Ambassador Julie Fisher in
+promoting democracy and supporting the democratic aspirations
+of the people of Belarus. And as she engages with a regime that
+does not have popular legitimacy, what message would you like
+our Ambassador to convey?
+    Ms. Tsikhanouskaya. Thank you. As a matter of fact, with
+Julie Fisher, we had a wonderful conversation, and I saw such a
+huge empathy for the Belarusian people from her. And I
+understood that she would be the greatest diplomat on the
+ground ever.
+    And, of course, we welcome the presence of Julie Fisher on
+the ground for her to monitor the situation in Belarus. She can
+visit jails just to see conditions of keeping women and men in
+jails. They are unhuman, I have to say. She can visit trials,
+you know, to see that there is no law in Belarus. She can
+support civil society in different ways.
+    But a very important moment, Julie Fisher has not given
+credentials to Lukashenko. He is not the legitimate President
+and he cannot be considered as a person whom credentials can be
+given to. So, I am sure it can be done, you know. I mean, she
+can stay there as a diplomat without doing this action.
+    Ms. Wild. Thank you.
+    And I have a little bit more time. So, I also wanted to ask
+you, you have called on the pro-democracy movement to hold
+demonstrations on March 25th, on Freedom Day, marking Belarus'
+declaration of independence in 1918. What I would like to know
+is, what can we, as Members of the U.S. Congress, and others
+who stand in solidarity with pro-democracy forces, do that
+might be helpful to put pressure on the regime ahead of that
+day or on that day?
+    Ms. Tsikhanouskaya. On the 25th of March, it is our
+independence day in Belarus, and people went out for
+demonstrations every year. And for sure, this year will not be
+an exclusion. And moreover, people demand this day will be the
+beginning of the new wave of demonstrations in Belarus, new
+wave of protesting movement.
+    And people really have this in a demand to show them that
+we are here; we are people that have our rights to vote, to say
+everything. And, of course, people will go for the rallies, and
+people are continuing putting pressure by different
+initiatives.
+    And just to support these people, the whole world has to
+show solidarity with them, to be vocal about them, to put these
+facts on the reader, that, look, there are some people who are
+fighting; they are still there, and we have to help them. Just
+put the repression of Belarus on the agenda. Be with us with
+any different ways. Talk about us in the social media, in the
+social networks. You know, put us on the agenda, and we will
+see this. Because international support is extremely important
+in our case. We have to know that the whole world is watching
+us, that we are not alone.
+    Ms. Wild. Thank you so much. We will do our best to support
+you.
+    I yield back, Mr. Chair.
+    Mr. Keating. Thank you, Representative Wild.
+    Representative Wagner is now recognized for 5 minutes.
+    Mrs. Wagner. I thank you, Mr. Chairman, for this very
+important hearing. I am proud to stand with the Belarusian
+democratic movement as it demands greater freedom and respect
+for fundamental rights from the authoritarian Lukashenko
+regime.
+    I want to thank our witness, Ms. Tsikhanouskaya, for her
+courage and tireless work for the people of Belarus.
+    Ms. Tsikhanouskaya, you wrote last year that ``Access to
+information is the strongest weapon'' the opposition has. And I
+could not agree more. Truth is the potent threat to
+authoritarianism, and shedding light on the abuses perpetrated
+by the Lukashenko regime advances democracy and liberty for
+Belarusians. What more can the United States do to support
+independent media in Belarus and amplify voices that continue
+to exercise their rights to dissent and free speech?
+    Ms. Tsikhanouskaya. Thank you. Yes, you are so right, the
+media is really important in our case because
+    [audio interference] in Belarus. You know that this regime
+has oppressed almost all the independent media in Belarus. They
+cannot work. The regime did not create international media.
+They did not allow international media to come to Belarus, just
+because he had a lot to hide. He had to hide his crimes,
+violence, and atrocities. And still, just for media to survive
+in Belarus, they really need great support.
+    And first of all, you can, at the moment, you can support
+different YouTubers that are on the ground and out of the
+country, show us the real situation in Belarus. You have to
+call to free imprisoned journalists who just have been detained
+for doing their job. And you can support Telegram channels that
+also show the real picture, the crowds. And you can support
+Radio Free Europe on the ground. So, a lot can be done really,
+and thank you for what you are doing already.
+    Mrs. Wagner. Thank you.
+    In the coming months, how will opposition's Coordination
+Council work to sustain the pro-democracy movement in Belarus?
+How is the Lukashenko government obstructing the Council's
+mission, and how can the United States best pressure Lukashenko
+to end political persecution of Council members specifically?
+    Ms. Tsikhanouskaya. You know, the Coordination Council was
+created as they pled for negotiations, and they are building
+structures inside the country, different working groups that
+are working with students, with striking committees, with
+neighborhoods, and all this stuff. And this new form of social
+groups, pressure social groups, are extremely important. It is
+like a new building of democratic organizations. We have never
+had democracies within our country. It is like grassroots
+democracy.
+    And every country can support this organization, these
+grassroots organizations, like teaching them how to build this
+democracy, how to be involved in this political competitions, I
+would say. And we have to start everything. We have to start
+everything from the beginning, and you can assist us in this.
+    Mrs. Wagner. Thank you very much.
+    I understand that the Kremlin sent Russian propagandists to
+work at Belarusian State TV in support of the Lukashenko
+regime. Are these propagandists still actively working in
+Belarus, and are their efforts to shape the information domain
+in Belarus in Lukashenko's favor, is it working?
+    Ms. Tsikhanouskaya. You know, after the
+    [audio interference] violence after the elections, most of
+journalists were fired from State TV, but they very soon were
+replaced by Russian journalists. And Russian journalists did
+not feel the pain that the rest of the journalists felt. And,
+of course, they could use this propaganda very widely to show
+me in the bad way, I would say.
+    But now, I know that the Russian journalists, they already
+went back to Russia, but, still, propaganda in Belarus is
+working very hard. They want to discredit me. They want to show
+that the opposition is splitting, but it is not; it isn't so.
+And they put much, they put a lot of efforts to show that the
+opposition like died. And every day we show to the whole world
+that we are still here, that we are fighting. So, we are
+fighting with the propaganda as well. They cannot do anything
+when the opposition is united.
+    Thank you.
+    Mrs. Wagner. Well, thank you. Thank you, Ms.
+Tsikhanouskaya. We are grateful for your courage.
+    And I have expired my time. Gratefully, Mr. Chairman, I
+yield back.
+    Mr. Keating. Thank you.
+    The chair recognizes Representative Deutch for 5 minutes.
+    Mr. Deutch. Thank you, Mr. Chairman. Mr. Chairman, I want
+to really extend a deep debt of gratitude to you for holding
+this hearing today. There are a lot of things that our
+committee does, and they are all important, but what we are
+doing today in this hearing, and the message that we are
+sending to Lukashenko, the message that we are sending to the
+people of Belarus, the message that we are sending to the
+Kremlin and to the world, that we are committed to helping to
+foster democracy, to standing on the side of those who want the
+ability to live in a democracy. That is as important as
+anything we will do.
+    And, Ms. Tsikhanouskaya, there is no one who has done more
+in Belarus to help accomplish than you. And I want to thank you
+for appearing before the committee. I want to thank you for
+your powerful testimony.
+    We see in the work we do here the constant, relentless
+threat that authoritarianism poses to democracies and to
+democratic values. And Belarus and the United States may not be
+neighbors, but the struggle in Belarus today is a generational
+challenge that we cannot afford to look away from. We have to
+lead.
+    And as my colleagues have made clear, the U.S. Congress
+stands with the people of Belarus and we support you as you
+work to withstand Russian aggression, create a freer, more
+democratic nation. So, the battle lines of the fight to protect
+democratic values and human rights transcends State boundaries
+and peoples. It is imperative that those who stand for
+democracy everywhere, including here in the United States,
+recognize one another as partners in this struggle.
+    And not only am I an American invested in protecting my own
+country's democracy, I am also, Ms. Tsikhanouskaya, the proud
+grandson of immigrants from two small towns in Belarus.
+    And I thank you for your testimony today, and I thank you
+for your courage and for your determination.
+    I want to ask you, we have spoken a lot, you have spoken
+powerfully about the pressure that Lukashenko must feel.
+Recently, Lukashenko talked about enacting constitutional
+reforms at a referendum next year and organizing new
+Presidential elections sometime thereafter. How do you
+interpret these actions, and what can we do to not fall prey to
+efforts to shield Lukashenko and others responsible for the
+jailings, the attacks on journalists and activists, from our
+actions now? What do we do here with this?
+    Ms. Tsikhanouskaya. You know, I have to say that when the
+regime is at risk, it starts to talk about a new constitution
+and referendum, and all this stuff. We aren't talking about new
+elections. We are talking about dialog between society sources
+and the regime. We need amending of the constitution, but it is
+not the question now. The question now is solving a political
+and humanitarian crisis in Belarus. And this amendment of the
+constitution expressed, that he is talking about, it should
+take place alongside with new elections or right after the
+elections. We have to show priorities in our revolution.
+    So, as for journalists, again, I have to say that
+journalism is a very important factor in our revolution, and it
+is important to support them because they are lack of space,
+you know, in the country. They cannot earn the money just to
+show us this truth. So, this technical support to journalists
+is very important.
+    So, have I missed----
+    Mr. Deutch. No, I appreciate it. As I finish, I just want
+to thank you again for your courageous leadership.
+    I want to thank the chairman and the ranking member, Mr.
+Smith and others who have been helping us focus the world's
+attention.
+    And as you approach these Freedom Day protests, as you talk
+about the need for grassroots democracy, and even as 400
+activists have been sentenced to prison, including a 16-year-
+old suffering from epilepsy who was sentenced to 5 years in
+prison simply for participating in the protests, please know
+that it is not just this subcommittee and the House Foreign
+Affairs Committee, but that the U.S. Congress and the people of
+the United States stand with you and the people of Belarus in
+your rightful quest for democracy. And we are so honored by
+your presence today. Thank you very much.
+    I yield back.
+    Mr. Keating. Thank you, Mr. Deutch. Thank you for your
+strong remarks and incorporating your family background. That
+was very meaningful.
+    Representative Titus is recognized for 5 minutes.
+    Ms. Titus. Thank you, Mr. Chairman. And thank you for
+setting up this amazing meeting. I cannot imagine having a more
+inspiring witness than we have this morning.
+    Thank you for your courage and for being here.
+    I would just ask you if you would maybe elaborate on the
+plan that you call the liberation plan that you came out with
+in February. Talk a little bit about maybe your deadlines, what
+you see as part of that plan. Will you be working with any
+NGO's or organizations like NDI or IRI to help you with that?
+    And is part of that plan dealing with COVID? I know that
+Lukashenko has just pretty much denied COVID and said, ``Go to
+a spa and drink vodka and you'll be Okay.'' But someone of your
+stature and your presence could have a lot of impact on
+addressing that issue as well.
+    Ms. Tsikhanouskaya. You know, the COVID situation is
+rather, I would say, interesting in Belarus because, when the
+whole world was struggling with COVID, with the first wave of
+COVID, our regime told that there was no COVID in Belarus, and
+even if it is, so you can treat it with ``tractors and vodka''.
+    And a moment when the regime did not take care of--there
+were some people in the spring. The Russians had to take care
+of themselves. They started to buy this usual mix for doctors
+and this special proven equipment. They collected money to buy
+this equipment for hospitals. So, at that moment, again, we had
+a proff that government does not take care about the Nation.
+    And now, the situation is also very bad with COVID on the
+ground, but we know that real numbers are much higher than the
+government say. And one doctor who dared tell the real numbers
+was immediately fired from their hospital, just for telling the
+truth.
+    And as for our plan, you know, there cannot be deadlines
+here. Of course, we want new elections to happen on September.
+For this, we have to start dialog this May. That is why people
+are beginning the second wave of the protesting movement in
+Belarus on the ground. That is why this is a very crucial
+moment for all the international society, for all the countries
+and leaders and organizations to put maximum pressure on the
+regime to make him answer our calls for dialog.
+    So, we have, if we can say so, spring is the beginning of
+protests. Until May, we have to organize this data platform on
+the basis of overseeing and start to negotiate about new
+elections in September or October this year.
+    Ms. Titus. Thank you very much.
+    You have quite a task ahead of you. Are you working with
+any NGO's on the ground there? Are there any formal
+organizations? Or is it just kind of spontaneous protests?
+    Ms. Tsikhanouskaya. You know, it is very difficult for
+NGO's to survive in Belarus. They are pressed; they are under
+constant pressure. And we can say that we have like legal NGO's
+in Belarus and illegal. I cannot pronounce these words, but
+this is our reality. And we are just trying to help, and, you
+know, the international society is trying to help a different
+kind of NGO's on the ground, for them to transfer this help to
+people who are suffering, people who are in prison, people that
+are fighting. So, we have to like look for new forms of helping
+these NGO's. It is very difficult to work in the country where
+there is no law. You know, all the organizations that are
+helping people are under constant pressure of the regime
+because they don't want this organization to help.
+    Ms. Titus. Yes, they don't even want it to exist.
+    Well, thank you so much. And thank you for being here and
+for your courage. Just be careful there. Just be careful.
+    Ms. Tsikhanouskaya. Thank you so much.
+    Mr. Keating. Thank you, Representative Titus.
+    Representative Schneider is recognized for 5 minutes.
+    Mr. Schneider. Thank you, Chairman Keating. And as others
+have said, I cannot thank you enough for having this hearing.
+    And, Mrs. Tsikhanouskaya, I cannot thank you enough for
+spending the time to share with us your story, but also cannot
+thank you enough for the inspiration you provide to your
+country, to the world, for democracy, for courage, bravery, and
+hope.
+    I join with my colleagues on this panel who I believe are
+representative of the entire U.S. Congress, and by extension,
+to the entire American people, in standing in solidarity with
+you, with the heroic women leading the way, and with the entire
+Belarusian people, and the pro-democracy movement.
+    Personally, my story has connections to Belarus. My
+maternal grandfather's family was from Brest-Litovsk in
+Belarus. They came here at the turn of the last century, but we
+can trace the roots back there.
+    I take personally extraordinary inspiration from the
+bravery and the defiance, the resiliency, of the women of
+Belarus that we have talked about today and of the Belarus
+people as a whole.
+    I have three questions we can touch on, try to get into
+specifics. I will lay them out, and then, you can address them
+any way you want.
+    But, first, what can Congress do to best support you and
+the pro-democracy movement, to support your resolve, the
+resilience, to stand strong throughout this crisis, until we
+get to the end we all hope for?
+    Toward that end, in more detail, what pressure can we apply
+to the regime? You mentioned sector-specific sanctions. What
+specific sectors do you have in mind and are there specific
+entrepreneurs we should be focused on?
+    And finally, what can Congress, the United States, and our
+allies do to, in your words, create a positive program for
+change for a new Belarus?
+    And I think I may have lost you.
+    Mr. Keating. Yes. Could we just pause for a moment?
+    Ms. Tsikhanouskaya. It was the button. Sorry.
+    Mr. Keating. Perhaps if you could just summarize again
+quickly, if that is possible. Representative Schneider, could
+you just----
+    Mr. Schneider. I am sorry, were you able to hear me, Ms.
+Tsikhanouskaya, or do I need to summarize?
+    Ms. Tsikhanouskaya. Yes, yes, yes. I just think--I am
+sorry--help support the Belarusian people or Belarus at the
+moment; how to be with the Belarusian people? So, first of all,
+this is like three pillars.
+    First of all, it is pressure on the regime--sanctions,
+putting political pressure on Lukashenko politically and
+economically, and all this stuff.
+    Second, it is support to civil society--media, workers,
+medics, any groups of people.
+    And the third pillar is justice in our country. There is no
+law at the moment in Belarus. We have to look for justice in
+other countries. In many cases, investigation of crimes in
+Belarus have been started on the basis of universal
+jurisdiction--you know, Lithuania, Poland, the Czech Republic.
+    So, you can like support the three pillars or through
+something else you can. And second, you can support the U.N.
+accountability mechanism for investigating crimes in Belarus.
+And again, from the USA sectoral sanctions, in such spheres,
+oil, gas, and potash fertilizer industries are very important.
+Just if you find any State organizations that are like wallets
+of Lukashenko, oligarchs that are supporting this regime,
+supporting violence, and impose sanctions on them, it will be
+very good, strong leverage on the oppression for the regime.
+    And as for the future of Belarus, you know, the only thing
+I want from the future of Belarus is that my children and the
+new generation feel safe on the ground; that they understand
+that a person is their highest value for this country; you
+know, that everybody, every person is responsible for building
+this new Belarus.
+    And, you know, having paid such a huge price during this
+revolution for a new Belarus, I am sure that every Belarusian
+will do his or her best to stay united in the future and to do
+everything to come to democracy.
+    Mr. Schneider. Thank you. That is a phenomenal, inspiring
+answer, and know that we are with you. Know that we are
+cheering for your country, for your people.
+    And with that, I yield back.
+    Mr. Keating. Thank you, Representative.
+    Representative Meuser is recognized for 5 minutes.
+Representative Meuser?
+    Mr. Meuser. Yes, thank you, Chairman.
+    Thank you for attending this hearing with us. It is
+certainly some compelling testimony.
+    Ms. Tsikhanouskaya, you wrote in a Washington Post op-ed
+last year that, ``we will continue our boycott of the State
+apparatus. Many private businesses have stopped dealing with
+State-owned banks; more will do the same. Whenever possible,
+businesspeople should delay, refuse to pay and refuse to buy
+products from State-owned factories.''
+    Can you describe how things have gone since making those
+statements? And has it been successful? Has it had some
+deteriorating factors? Maybe expand upon that a little bit, if
+you would not mind, Ms. Tsikhanouskaya.
+    Ms. Tsikhanouskaya. So, can you repeat the question?
+    Mr. Meuser. Your comments in The Washington Post op-ed that
+you had written last year regarding boycotting of State-owned
+businesses and factors, can you please expand upon what support
+that was met with? Heavy resistance? Problems for you
+personally? Has it met with any success?
+    Ms. Tsikhanouskaya. Well, many people say sanctions can
+make people suffer on the ground because they will lose their
+job or something. But people are already suffering. It is not
+my demand, putting sanctions on the State organizations. It is
+the people's demand who are working in these organizations. You
+know, they are suffering at the moment. They have been fired.
+They are putting on pressure from the regime. They are
+humiliated or other factors in different ways. They get small
+salaries and have a lot to do on the factories. But, still,
+they lead this sanction because people understand that this
+economical pressure will ruin this regime.
+    When the regime does not have money to pay to the riot
+police, riot police will refuse to serve this regime. You know,
+it is like a circle. If factory does not pay the regime, the
+regime does not pay the riot police, and the regime does not
+have support because the only support at the moment the regime
+has, it is violence--violence executed by riot police. So,
+people are ready to suffer because of lack of salaries, but
+they want to change this regime so much that they want the
+sanctions most of all.
+    Mr. Meuser. Okay. And so, the nine Belarusian officials and
+four entities related to human rights abuses that were
+sanctioned several months ago, has that been effective and
+should that be expanded, in your view? Based on what you
+Stated, we should be engaged in more, heavier sanctions of more
+individuals as well as entities that are part of this
+suppression?
+    Ms. Tsikhanouskaya. Of course, I have to say that we are
+grateful for all the sanction list you have already enforced.
+But we see that the number of people is not enough. Because
+this very narrow circle of people sanctioned, they know how to
+avoid the sanctions. You know, they don't have assets in your
+banks already. They know how to avoid this.
+    But those people, the judges, security forces offices,
+education and support officials that support the regime, they
+also to be put on the sanctions list. Because the next time,
+the next judge will think twice before making a crime against a
+person or against demonstrators, peaceful demonstrators.
+    The threat of these sanctions is sometimes even more useful
+than any other way of pressure on these people. For sure, the
+sanction list has to be widened.
+    Mr. Meuser. Right. Thank you very much.
+    And, Mr. Chairman, I yield back.
+    Mr. Keating. I thank the gentleman for his comments.
+    And just a couple of closing remarks. Our thanks, Ms.
+Tsikhanouskaya. This was an enormously moving hearing, an
+unusual hearing in that respect. And your participation and
+taking the time to talk to us in Congress is so important.
+    And my colleagues, I want to thank all of them. It is an
+abnormally busy day today for many reasons, and the
+participation was extraordinary at this subcommittee hearing.
+    I would say this: that, Ms. Tsikhanouskaya, you began the
+hearing with your remarks wishing us a happy Saint Patrick's
+Day. And I want to think about the words of a very famous Irish
+poet, Seamus Heaney. And he remarked at one point--and it is a
+remark that is used quite often by our President, President
+Biden--when they were talking about a period of troubles in
+Ireland that was so severe. He said that, ``If we winter this
+one out, we can summer anywhere.''
+    And I think winter has descended in terms of democracy
+right on Belarus, and the world knows that and the U.S. knows
+that. And we are going to weather this winter together, a
+winter of authoritarian rule, of violence, of intimidation. And
+we are going to work together with you, hopefully, joining
+together as a diaspora, as well as government officials. As you
+go forward with your IT platform and strategy and victory, we
+will be looking, and perhaps helping, to deal with those issues
+as you go forward.
+    But I want to tell you we will continue. The U.S. will
+fully implement the powers that it can implement for democracy
+in Belarus. We will work on a continuing basis to stop the
+violence there, to push for the release of political prisoners
+there, and to make sure that there is a genuine dialog between
+the people of Belarus and forging ahead to a legitimate
+government where people can be represented.
+    And just in your last few remarks, I think you summed up
+the goals of all of us in a free world when you just said, What
+we want most is to pass a better world and better country to
+our children. And importantly, you said, every person has a
+responsibility.
+    So, I want to assure you that we view our responsibility as
+standing up for Belarus, for democracy. And you continue to
+inspire us every day. And the work and the effort that you have
+done, joined by so many courageous individuals, and the
+hallmark of them, probably in this effort more than many
+others, of women being involved is so important.
+    So, thank you so much for being here. We will continue to
+work with you to make sure that the people of Belarus can get
+through this winter. And then, when that happens, we can all
+celebrate democracy all the time in the summer. So, thank you
+so much.
+    And with that, this hearing is adjourned.
+    [Whereupon, at 10:53 a.m., the subcommittee was adjourned.]
+                                APPENDIX
+[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
+            RESPONSES TO QUESTIONS SUBMITTED FOR THE RECORD
+[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
+                                 [all]
+</pre></body></html>

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+<html>
+<title> - BRAIN DRAIN: REBUILDING THE FEDERAL SCIENTIFIC WORKFORCE</title>
+<body><pre>
+[House Hearing, 117 Congress]
+[From the U.S. Government Publishing Office]
+                        BRAIN DRAIN: REBUILDING
+                    THE FEDERAL SCIENTIFIC WORKFORCE
+=======================================================================
+                                HEARING
+                               BEFORE THE
+                     SUBCOMMITTEE ON INVESTIGATIONS
+                             AND OVERSIGHT
+                                 OF THE
+                      COMMITTEE ON SCIENCE, SPACE,
+                             AND TECHNOLOGY
+                        HOUSE OF REPRESENTATIVES
+                    ONE HUNDRED SEVENTEENTH CONGRESS
+                             FIRST SESSION
+                               __________
+                             MARCH 17, 2021
+                               __________
+                            Serial No. 117-4
+                               __________
+ Printed for the use of the Committee on Science, Space, and Technology
+[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
+       Available via the World Wide Web: http://science.house.gov
+                              __________
+                    U.S. GOVERNMENT PUBLISHING OFFICE
+43-704PDF                 WASHINGTON : 2021
+-----------------------------------------------------------------------------------
+              COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
+             HON. EDDIE BERNICE JOHNSON, Texas, Chairwoman
+ZOE LOFGREN, California              FRANK LUCAS, Oklahoma,
+SUZANNE BONAMICI, Oregon                 Ranking Member
+AMI BERA, California                 MO BROOKS, Alabama
+HALEY STEVENS, Michigan,             BILL POSEY, Florida
+    Vice Chair                       RANDY WEBER, Texas
+MIKIE SHERRILL, New Jersey           BRIAN BABIN, Texas
+JAMAAL BOWMAN, New York              ANTHONY GONZALEZ, Ohio
+BRAD SHERMAN, California             MICHAEL WALTZ, Florida
+ED PERLMUTTER, Colorado              JAMES R. BAIRD, Indiana
+JERRY McNERNEY, California           PETE SESSIONS, Texas
+PAUL TONKO, New York                 DANIEL WEBSTER, Florida
+BILL FOSTER, Illinois                MIKE GARCIA, California
+DONALD NORCROSS, New Jersey          STEPHANIE I. BICE, Oklahoma
+DON BEYER, Virginia                  YOUNG KIM, California
+CHARLIE CRIST, Florida               RANDY FEENSTRA, Iowa
+SEAN CASTEN, Illinois                JAKE LaTURNER, Kansas
+CONOR LAMB, Pennsylvania             CARLOS A. GIMENEZ, Florida
+DEBORAH ROSS, North Carolina         JAY OBERNOLTE, California
+GWEN MOORE, Wisconsin                PETER MEIJER, Michigan
+DAN KILDEE, Michigan                 VACANCY
+SUSAN WILD, Pennsylvania
+LIZZIE FLETCHER, Texas
+VACANCY
+                                 ------
+              Subcommittee on Investigations and Oversight
+                  HON. BILL FOSTER, Illinois, Chairman
+ED PERLMUTTER, Colorado              JAY OBERNOLTE, California,
+AMI BERA, California                   Ranking Member
+GWEN MOORE, Wisconsin                PETE SESSIONS, Texas
+SEAN CASTEN, Illinois                VACANCY
+                         C  O  N  T  E  N  T  S
+                             March 17, 2021
+                                                                   Page
+Hearing Charter..................................................     2
+                           Opening Statements
+Statement by Representative Bill Foster, Chairman, Subcommittee
+  on Investigations and Oversight, Committee on Science, Space,
+  and Technology, U.S. House of Representatives..................     9
+    Written Statement............................................    10
+Statement by Representative Jay Obernolte, Ranking Member,
+  Subcommittee on Investigations and Oversight, Committee on
+  Science, Space, and Technology, U.S. House of Representatives..    11
+Statement by Representative Pete Sessions, Committee on Science,
+  Space, and Technology, U.S. House of Representatives...........    12
+Written statement by Representative Eddie Bernice Johnson,
+  Chairwoman, Committee on Science, Space, and Technology, U.S.
+  House of Representatives.......................................    12
+                               Witnesses:
+Ms. Candice Wright, Acting Director, Science, Technology
+  Assessment, and Analytics, U.S. Government Accountability
+  Office
+    Oral Statement...............................................    14
+    Written Statement............................................    16
+Mr. Max Stier, President and CEO, Partnership for Public Service
+    Oral Statement...............................................    38
+    Written Statement............................................    40
+Dr. Andrew Rosenberg, Director of the Center for Science and
+  Democracy, Union of Concerned Scientists
+    Oral Statement...............................................    55
+    Written Statement............................................    57
+Dr. Elizabeth Southerland, Former Director of Science and
+  Technology, Office of Water, Environmental Protection Agency
+    Oral Statement...............................................    66
+    Written Statement............................................    68
+Discussion.......................................................    74
+             Appendix I: Answers to Post-Hearing Questions
+Mr. Max Stier, President and CEO, Partnership for Public Service.    88
+Dr. Andrew Rosenberg, Director of the Center for Science and
+  Democracy, Union of Concerned Scientists.......................    90
+            Appendix II: Additional Material for the Record
+Report submitted by Representative Bill Foster, Chairman,
+  Subcommittee on Investigations and Oversight, Committee on
+  Science, Space, and Technology, U.S. House of Representatives
+    ``Scientific Brain Drain: Quantifying the Decline of the
+      Federal Scientific Workforce,'' Majority Staff.............    92
+Statements submitted by Representative Bill Foster, Chairman,
+  Subcommittee on Investigations and Oversight, Committee on
+  Science, Space, and Technology, U.S. House of Representatives
+    American Federation of Government Employees (AFGE) Local 3403   116
+    Climate Science Legal Defense Fund...........................   119
+Report submitted by Dr. Andrew Rosenberg, Director of the Center
+  for Science and Democracy, Union of Concerned Scientists
+    ``The Federal Brain Drain: Impacts on Science Capacity, 2016-
+      2020,'' Jacob Carter, Taryn MacKinney, Gretchen Goldman....   124
+                        BRAIN DRAIN: REBUILDING
+                    THE FEDERAL SCIENTIFIC WORKFORCE
+                              ----------
+                       WEDNESDAY, MARCH 17, 2021
+                  House of Representatives,
+      Subcommittee on Investigations and Oversight,
+               Committee on Science, Space, and Technology,
+                                                   Washington, D.C.
+     The Subcommittee met, pursuant to notice, at 10:03 a.m.,
+via Webex, Hon. Bill Foster [Chairman of the Subcommittee]
+presiding.
+[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
+     Chairman Foster. The hearing will now come to order.
+Without objection, the Chair is authorized to declare recess at
+any time.
+     And before I deliver my opening remarks, I just wanted to
+note the unusual circumstances under which we're operating
+today. Pursuant to House Resolution 8, today, the Subcommittee
+is meeting virtually. I want to announce a couple of reminders
+to the Members about the conduct of this remote hearing. First,
+Members should keep their video feed on as long as they are
+present at the hearing. Members are responsible for their own
+microphones. Please also keep your microphones muted unless
+you're speaking. If Members have documents they wish to submit
+for the record, please email them to the Committee Clerk, whose
+email has been circulated prior to the hearing.
+     Well, good morning, and thank you to all of our Members
+and panelists for joining us today for this Subcommittee
+hearing on the brain drain from the Federal scientific
+workforce. This is our first Subcommittee hearing of the 117th
+Congress, and I'm very pleased to return as the Chairman of the
+Investigations and Oversight Subcommittee to continue our
+important work. I'm also pleased to welcome Ranking Member
+Obernolte to the Subcommittee. I look forward to working
+together in support of America's scientific community to ensure
+that our country remains its position--remains in its position
+as the global leader in science and innovation.
+     Today's hearing focuses on a subject close to my heart:
+the Federal scientific workforce. The scientists of the Federal
+Government are a pillar of some of America's greatest
+achievements, and federally funded science is a key to long-
+term economic growth. Today's hearing is doubly important.
+First, the STEM (science, technology, engineering, and
+mathematics) workforce has been under stress in recent years,
+as we will be discussing. And secondly, we stand on the cusp of
+what we all hope will be kind of a Sputnik-like moment for
+federally funded scientific research.
+     We're in a historic position where Democrats and
+Republicans on this Committee and Republicans and Democrats in
+the Senate have dueling proposals to double the scientific
+research budget in this country. And maintaining proper
+stewardship on what we all hope will be a historic return to an
+adequate level of funding for scientific research will require
+a top-notch and well-experienced federally funded STEM
+workforce.
+     Government scientists oversee grants for priority research
+areas, fund basic research that expands our horizons through
+breakthrough discoveries, and lead the way in helping to
+address the most pressing challenges of our time, from climate
+change and clean energy to public health, to national security.
+Whether pushing the boundaries of scientific knowledge or
+informing policymaking with the best available science,
+government scientists perform a vital public service.
+     Unfortunately, recent years have been difficult for many
+career government scientists. The last Administration's
+hostility toward evidence-based decisionmaking often created a
+significant tension with scientists simply attempting to carry
+out their duties. And as violations of scientific integrity
+worsened and political interference escalated, scientists often
+felt marginalized and demoralized. Far too often, they saw
+their expertise ignored, their motives were impugned, their
+work was dismissed. And this crisis arrived after years of
+budget constraints had already slashed their funding.
+     Sadly, the consequences of--one of the consequences of
+failure to properly support the Federal scientific workforce
+are clear: In critical science-based agencies and occupations,
+far too many scientists have recently decided to leave the
+Federal Government. The statistics are alarming. According to
+data reviewed by the Committee staff, EPA's (Environmental
+Protection Agency's) workforce declined by 3.9 percent in the
+last Administration and over 16 percent since 2009. The DOE's
+(Department of Energy's) civil service STEM workforce has not
+increased in four years. The EPA, DOE, and NOAA (National
+Oceanic and Atmospheric Administration) have all lost large
+numbers of STEM workers in key occupations such as the
+environmental protection specialists, nuclear engineers, and
+oceanographers. Even offices with broad bipartisan support have
+not been spared. The DOE's Office of Nuclear Energy lost over
+20 percent of its workforce in just the first three years of
+the previous Administration. And in many science agencies, see
+the remaining outsized gender, racial, and ethnic employment
+disparities persisting in their STEM workforces. These facts
+show just how much Federal scientific capacity is at risk of
+being lost due to scientific workforce reductions.
+     The departure of so much scientific talent and
+institutional knowledge from the government represents a
+competitive disadvantage for the United States. We must fix
+this. We can rebuild the Federal scientific workforce, but to
+do so, we must recommit ourselves to strengthening scientific
+integrity in the Federal Government and supporting career
+scientists.
+     Today's discussion will help us understand how we got
+here, the implications of the reduced scientific workforce, and
+how best to reverse these trends and restore Federal scientific
+capacity. I'm eager to hear from our expert witnesses, who are
+strong advocates for career scientists and the role of science
+in government. I look forward to hearing your ideas on how we
+can address this issue. I'm also attaching a majority staff
+report as part of my written statement for the record. The
+report has been shared with the minority and represents the
+majority staff view on many of the issues here.
+     [The prepared statement of Chairman Foster follows:]
+    Good morning, and thank you to all of our Members and
+panelists for joining us today for this Subcommittee hearing on
+brain drain from the federal scientific workforce. This is our
+first Subcommittee hearing of the 117th Congress, and I'm very
+pleased to return as the Chairman of the Investigations &
+Oversight Subcommittee to continue our important work. I'm also
+pleased to welcome Ranking Member Obernolte to the
+Subcommittee. I look forward to working together in support of
+America's scientific community to ensure that this country
+remains the global leader in science and innovation.
+    Today's hearing focuses on a subject close to my heart: the
+federal scientific workforce. The scientists of the Federal
+Government are a pillar in some of America's greatest
+achievements. Government scientists oversee grants for priority
+research areas, fund basic research that expands our horizons
+through breakthrough discoveries, and lead the way in helping
+to address the most pressing challenges of our time, from
+climate change and clean energy, to public health, to national
+security. Whether pushing the boundaries of scientific
+knowledge or informing policymaking with the best available
+science, government scientists perform a vital public service.
+    Unfortunately, recent years have been difficult for career
+government scientists. The last administration's hostility
+towards evidence-based decision-making created an awful tension
+with scientists attempting to carry out their duties. As
+violations of scientific integrity worsened and political
+interference escalated, scientists felt marginalized and
+demoralized. Far too often, their expertise was ignored, their
+motives were impugned, and their work was dismissed. And this
+crisis arrived after years of budget constraints had already
+slashed their funding.
+    Sadly, the consequences of the failure to properly support
+the federal scientific workforce are clear: in critical
+science-based agencies and occupations, far too many scientists
+have recently decided to leave the Federal Government. The
+statistics are alarming. According to data reviewed by the
+Committee staff, EPA's workforce declined by 3.9% during the
+last administration and over 16% since 2009. DOE's civil
+service STEM workforce has not increased in 4 years. EPA, DOE
+and NOAA have all lost large numbers of STEM workers in key
+occupations, such as environmental protection specialists,
+nuclear engineers and oceanographers. Even offices with broad
+bipartisan support have not been spared: DOE's Office of
+Nuclear Energy lost over 20% of its workforce in just the first
+three years of the previous administration. And in many science
+agencies, outsized gender, racial and ethnic employment
+disparities persist in STEM workforces. These facts show just
+how much federal scientific capacity is at risk of being lost
+due to scientific workforce reductions.
+    The departure of so much scientific talent and
+institutional knowledge from the government represents a
+competitive disadvantage for the United States. We must fix
+this. We can rebuild the federal scientific workforce, but to
+do so, we must recommit ourselves to strengthening scientific
+integrity in the Federal Government and supporting career
+scientists. Today's discussion will help us to understand how
+we got here, the implications of a reduced scientific
+workforce, and how best to reverse these trends and restore
+federal scientific capacity. I am eager to hear from our expert
+witnesses, who are strong advocates for career scientists and
+the role of science in government. I look forward to hearing
+your ideas about how we can address this issue.
+    I now yield to Ranking Member Obernolte for his opening
+remarks.
+     Chairman Foster. And now I'll turn it over to my
+Republican colleague.
+     Mr. Obernolte. Well, thank you very much, Chairman Foster.
+I am honored to serve as the Ranking Member for the
+Subcommittee. This Subcommittee's jurisdiction is near and dear
+to my heart, as you know, and I think that the subject of our
+hearing today is one of critical importance. We absolutely need
+a strong, dedicated, and talented Federal scientific workforce,
+and we need to make sure that we retain those people and that
+we recruit the best of what is coming out of our Nation's
+schools and universities.
+     I'm very much looking forward to hearing what our expert
+witnesses have to say. We're focusing this hearing today mostly
+on retention, and I think that that's of critical importance.
+But I'd also like to see us focus a little bit on recruitment.
+I think that our Federal Government needs to be entrepreneurial
+in our approach to getting the best talent that we can, and
+that means that we need to be cognizant of the fact that we're
+competing against not only other government agencies but
+against academia and against the private sector in recruiting
+top scientific talent for our Federal workforce, so we need to
+make sure that we've set the stage for success in that area.
+     Of particular concern to me is the fact that it takes 98
+days to fully onboard a scientist into our Federal workforce
+right now, and compared with private sector where I come from,
+you know, that is shocking to me. You know, we can't be
+surprised that we're failing to recruit the most talented and
+the brightest people that are coming out of our universities
+when our bureaucracy is that sluggish.
+     So I'm looking forward to hearing from the testimony of
+our expert witnesses and looking forward to working with you,
+Mr. Chairman. I yield back.
+     Mr. Sessions. Mr. Chairman, I'd like to ask unanimous
+consent to speak.
+     Chairman Foster. Yes, granted.
+     Mr. Sessions. Thank you very much, and I appreciate this.
+I would like for us also to keep in mind that during the period
+of time that preceded this by a few years on a bipartisan basis
+Republicans and Democrats changed processes, many of them,
+including the NIH (National Institutes of Health) and how the
+NIH not only gets its money but is able to make it mandatory as
+opposed to discretionary and that there has been a substantial
+amount of time and I believe progress that at least Chairman
+Lucas and Mr. Perlmutter would recognize. We've not been
+without understanding this challenge. We have made many
+important things, but we also have the United States Air Force
+using our government techniques, and they blew up 10 Titan
+missiles, rockets, and we felt like we had to go to outside
+sources, which really--the content and the technology exists
+within America. It just may not be employed by the government.
+And as an example of that is SpaceX, which is located in Waco,
+Texas, which I represent. We have taken ideas from landing
+capsules out in the middle of the Pacific to where they land on
+the deck of a ship.
+     So, Mr. Chairman, thank you very much, but I think it's
+important for us to note this did not just happen. There has
+been a lot of work that has been bipartisan that has included a
+definite effort to make sure that we grew scientists and not
+just those that work for the government. Thank you very much. I
+yield back my time, sir.
+     Chairman Foster. Thank you. And I really concur with that.
+You know, one of the proudest bipartisan achievements
+particularly the last several years is that we've seen
+proposals to really cut the Federal scientific budget, and
+Republicans and Democrats have stood together to say no, that
+this is--these things should be preserved. And that was one of
+the--really the greatest bipartisan achievements of the recent
+past.
+     [The prepared statement of Chairwoman Johnson follows:]
+    Good morning. I would like to begin by welcoming back
+Chairman Foster as the Chairman of the Investigations &
+Oversight Subcommittee for the 117th Congress, and by welcoming
+Ranking Member Obernolte to the Subcommittee. I look forward to
+working with both of you on a vigorous oversight agenda to
+strengthen federal scientific research and promote the
+advancement of American science and technology.
+    The subject of today's hearing is critically important for
+the future of research and development in this country. Career
+scientists in the Federal Government are instrumental in
+shaping America's scientific priorities, funding cutting-edge
+research, and ensuring that policies are crafted on the basis
+of the best available science. These public servants frequently
+dedicate their entire careers to essential scientific functions
+as varied as supporting basic research, protecting clean air
+and water, and preparing the country for outbreaks of
+infectious disease. As a nation, we ignore them at our peril.
+    But in recent years, due to political and budgetary
+pressures, the federal scientific workforce has struggled. Too
+many career scientists have decided to leave. Fewer federal
+scientists means less research, slower grant processes, less
+mentoring for young scientists, and less specialized expertise.
+It means less informed policymaking and weaker regulatory
+enforcement. This is a problem for the agencies who employ
+scientists, the academic and private-sector researchers who
+work with them, and the American people, who benefit from their
+knowledge and dedication. We need to understand the
+implications of these staff departures for federal science
+agencies so that we can properly address them.
+    Additionally, it is imperative that we continue to promote
+greater diversity in the federal STEM workforce. Under my
+leadership, this Committee has been a strong advocate for
+increasing the opportunities available to women and communities
+of color to enter STEM professions. It is vital for the future
+of American science that the nation's scientific institutions
+encourage greater participation among historically
+underrepresented groups, because our strength lies in our
+diversity and broader perspectives lead to better science. The
+Federal Government must be a leader in this effort, and the
+federal scientific workforce must reflect the diversity of the
+country that it represents. Advancing diversity and inclusion
+will be key to revitalizing the federal scientific workforce in
+the years to come.
+    It is a longstanding priority of this Committee to
+strengthen the scientific capabilities of the Federal
+Government. A major part of those capabilities is a robust
+scientific workforce. We must look for ways to boost the ranks
+of career scientists, and to encourage scientists across the
+country, from all regions and backgrounds, to join the effort.
+I appreciate the work of our distinguished panelists in
+furthering this goal, and I look forward to hearing your
+perspectives.
+    Thank you. I yield back.
+     Chairman Foster. And now I'd like to introduce our
+witnesses. Our first witness is Ms. Candice Wright. Ms. Wright
+is an Acting Director of--at the GAO (Government Accountability
+Office) and its Science and Technology Assessment and Analytics
+Team. She oversees GAO's work on the management of federally
+funded research, intellectual property protection, and
+management and Federal efforts to help commercialize innovative
+technologies and enhance the U.S. economic competitiveness. She
+has also served as a congressional Detailee to the Senate
+Committee on Homeland Security and Government Affairs and as
+the head of the GAO's office in Kabul, Afghanistan. Wow. You
+know, people complain about being posted in Kansas City.
+     This--after Ms. Wright is Mr. Max Stier. Mr. Stier is
+President and CEO (chief executive officer) of the Partnership
+for Public Service, a nonprofit, nonpartisan organization
+dedicated to revitalizing our Federal Government--the workforce
+of our Federal Government by inspiring a new generation to
+serve. Previously, Mr. Stier worked in all three branches of
+the Federal Government, including a clerk for Supreme Court
+Justice David Souter. He is also currently a member of New York
+State--the New York State Spending and Government Efficiency
+Commission and the Brookings Institution's Public Sector
+Leadership Advisory Board.
+     Our third witness is Dr. Andrew Rosenberg. Dr. Rosenberg
+is the Director of the Center for Science and Democracy at the
+Union of Concerned Scientists (UCS). He has more than 30 years
+of experience in government service, as well as academic and
+nonprofit leadership. Dr. Rosenberg has offered peer-reviewed
+studies and reports on fisheries and ocean management and has
+published in the--on the--at the intersection between science
+and policymaking. He previously served as the Chief Scientist
+at Conservation International, the Dean of Life Sciences at the
+University of New Hampshire, and the Deputy Director for the
+U.S. National Marine Fisheries Institute.
+     Our final witness is Dr. Betsy Southerland. Dr.
+Southerland retired from her position as Director of the Office
+of Science and Technology in the EPA's Office of Water in 2017
+following a 33-year career with the agency. While at the EPA,
+Dr. Southerland led the development of national regulations and
+guidance manuals informed by science and through the--through
+coordination with State environmental agencies, industry
+representatives, and environmental groups. In 2015 Dr.
+Southerland received the Distinguished Presidential Rank Award
+for her career at the EPA.
+     And as our witnesses should know, you will each have 5
+minutes for your spoken testimony. Your written testimony will
+be included for the hearing. And when you all have completed
+your spoken testimony, we will begin questions. Each Member
+will have 5 minutes to question the panel. And so we will start
+with Ms. Wright.
+       TESTIMONY OF MS. CANDICE WRIGHT, ACTING DIRECTOR,
+         SCIENCE, TECHNOLOGY ASSESSMENT, AND ANALYTICS,
+             U.S. GOVERNMENT ACCOUNTABILITY OFFICE
+     Ms. Wright. Chairman Foster, Ranking Member Obernolte, and
+Members of the Subcommittee, I'm pleased to be here today to
+discuss the Federal science and technology workforce.
+     Agencies face the difficult task of keeping pace with
+advances in science and technology. In our prior work, GAO has
+seen how agencies often struggle to attract and retain a
+workforce that meets their needs and positions them for the
+future to address the complex social, economic, and security
+challenges facing the country, not to mention the COVID-19
+pandemic. Our long-standing concerns have led us to include
+strategic human capital management in GAO's high-risk series
+since 2001.
+     Today, I will highlight GAO's past work that can provide
+insights in three key areas. First, workforce planning; second,
+pay and hiring authorities; and third, the Federal work
+environment. With regard to the first area, strengthening human
+capital management, particularly for agencies with science and
+technology missions, can help them build a highly diverse,
+highly qualified and agile workforce. To successfully implement
+their missions, agencies need to identify current skill gaps
+and future needs in the workforce. They also need to select the
+right human capital strategies to fill them.
+     However, our prior work has identified workforce strategic
+planning challenges that agencies have not fully addressed. In
+October 2019 we found that 18 of the 24 agencies we reviewed
+had not fully implemented certain key workforce activities such
+as establishing a workforce planning process or developing
+strategies to address gaps in staffing. We recommended agencies
+such as the National Science Foundation (NSF) fully implement
+these activities, but not all agencies have done so.
+     We've also reported on NSF's use of rotators, who are
+outside scientists and engineers on temporary assignment. We
+made two recommendations aimed at improving NSF workforce
+strategy for balancing its use of rotators with permanent
+staff.
+     On the second area, improving Federal pay and hiring can
+help agencies compete with employers in other sectors. Agencies
+can tap an array of incentives when they need to recruit or
+retain experts in fields such as cybersecurity, engineering, or
+in other high-demand fields. Special payment authorities allow
+agencies to pay higher wages, help pay off student loans, and
+provide other incentives. In December 2017 we reported that
+fewer than 6 percent of employees at 27 agencies reviewed
+received special payments. Agencies reported that incentives
+were helpful, but the extent of impacts was not known, and the
+Office of Personnel Management (OPM) has not assessed how the
+authorities help improve recruitment and retention. Similarly,
+agencies have multiple hiring authorities but afford
+flexibility in the hiring process.
+     In August 2016 we reported on 105 hiring authorities.
+Among the most used authorities was direct hire, which allows
+agencies to fill positions that have a severe candidate
+shortage or a critical need such as for STEM personnel. OPM and
+agencies have not analyze the effectiveness of such hiring
+authorities. GAO made six recommendations to OPM to assess and
+improve the use of pay and hiring authorities, and OPM is in
+varying stages of implementation.
+     For the third area, our work has identified several
+factors that, if left unaddressed, may negatively influence
+agencies' ability to attract, hire, and retain a diverse,
+highly skilled science and technology workforce. For example,
+we reported last year that individuals who experience sexual
+harassment at work are more likely to leave their jobs. We've
+made recommendations to agencies to improve implementation of
+their policies and procedures to prevent and address sexual
+harassment both in their own workforce and also at the
+university level as Federal research grant recipients can be
+important part of the pipeline for the future Federal
+workforce.
+     In April 2019 we reported that while selected agencies we
+reviewed had taken various actions to help achieve the
+objectives of their scientific integrity policies, additional
+actions were needed. Here, we made 10 recommendations to six
+agencies to address various issues, including developing
+procedures to identify and address scientific integrity policy
+violations.
+     In closing, science and technology is integral to how
+agencies execute their mission. The Federal Government's
+success in attracting, hiring, and retaining a world-class
+science and technology workforce is tied to how it effectively
+and strategically utilizes the wide range of available
+authorities and other resources. As science and technology
+continues to rapidly evolve, so too must the government's
+recruitment and retention efforts. How the government responds
+or doesn't to face its human capital challenges today will have
+lasting effects for the future workforce it needs.
+     Chairman Foster, Ranking Member Obernolte, and Members of
+the Subcommittee, this concludes my statement. I would be
+pleased to respond to any questions you may have.
+     [The prepared statement of Ms. Wright follows:]
+    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
+     Chairman Foster. Thank you very much for that. And thank
+you for all the work that you and the GAO does, you know, every
+year for us.
+     So reading over your written testimony earlier reminded me
+of how important it is to have you around for--to lengthen the
+attention span of the U.S. Congress.
+     And so next is Mr. Stier.
+         TESTIMONY OF MR. MAX STIER, PRESIDENT AND CEO,
+                 PARTNERSHIP FOR PUBLIC SERVICE
+     Mr. Stier. Thank you, Chairman Foster and Ranking Member
+Obernolte and all the Members of the Subcommittee. It is
+tremendous to see the bipartisan approach that you've taken to
+such a vital issue. Your Committee staff has done an
+exceptional job at laying out the problem, and I thought I
+would take my time to talk about why the problem exists and
+offering a few recommendations about what you can do about it.
+     Starting with why the problem exists, if we don't
+understand that in the right way, we'll never solve it. And
+there are five big reasons that I would focus on in terms of
+the problems that are facing recruiting and hiring top-tier
+STEM talent begins with the fact that the Federal brand itself
+has been damaged. Government shutdowns, hiring freezes,
+negative rhetoric, political interference in science have all
+tarnished that brand.
+     No. 2, opportunities for young people are hidden and
+scarce. You can see this from one devastating statistic. Just 4
+percent of new hires in the Federal Government are drawn from
+Federal programs employing current students and recent
+graduates. The talent doesn't know about the opportunities, and
+therefore, they can't even pursue them.
+     No. 3 and really important, the hiring process is deeply
+broken. The barriers to entry are many. I can take my entire 5
+minutes and many more on this issue. One stat that has already
+been cited is that it takes nearly 100 days to hire people on
+average, which is more than double what you would see in the
+private sector, but the barriers are way more diverse and
+problematic than that.
+     And No. 4, very important here, even when people are hired
+into the STEM field, we aren't retaining that talent once
+recruited. The full-time employees under 30 who voluntarily
+quit the Federal Government, nearly 3/4 of them have only been
+there for 2 years. One of the key reasons for this is that
+we're not creating an environment that is welcoming, that grows
+them. We see that in our Best Places to Work employee
+engagement scores, which are 15 points below in the Federal
+Government than they are in the private sector.
+     And finally, clearly, diversity in STEM is a real issue in
+the general workforce and a very prominent one in the Federal
+Government itself. So now we need to do more than just admire
+this problem. We need to actually do something about it. So
+here are 10 quick ideas that I can extend on if they are
+interested in the question-and-answer period.
+     No. 1, it begins with leadership. We need to create high
+expectations of Federal leaders to own this problem, and that
+includes in Congress the work that you're doing is fundamental.
+We have a public sector leadership model. What does it look
+like to be a leader in government, and I would advise that this
+Committee and Congress more general hold executives to that
+model. There's also in terms of accountability our Best Places
+to Work rankings around effective leadership. And finally, I
+would say we ultimately need to reduce the number of political
+appointees, and that would make a big difference.
+     No. 2, we need to promote the government's mission, and
+this is something that NASA (National Aeronautics and Space
+Administration) has done very well as an example with their
+custom-built career website that includes video stories and
+great things that NASA people are doing. We have our Service to
+America medals. We need to tell the stories that will then
+encourage others to follow.
+     No. 3, we need to improve recruiting and hiring, again,
+lots to be done here, but the beginning point is to enact the
+civil service recommendations from the final report of the
+National Commission on Military, National, and Public Service.
+They did a tremendous job. That stuff is ready to go.
+     No. 4, we need to get young people in government, and one
+of the key ways to do that is to have internships be the
+primary mechanism of bringing them in. Government doesn't use
+internships nearly enough, paid internships, and there's more
+that can be done.
+     No. 5, we need to promote innovative talent models.
+Partnership has the cyber talent initiative where we work with
+several companies, MasterCard, Microsoft, Workday, and a dozen
+Federal agencies to create a 2-year special fellowship for top
+talent in cyber to come into government. Those kinds of special
+channels work, and we need to invest in more of them.
+     No. 6, we need to overhaul the pay and classification
+system. Think about it, the pay system we use today was
+designed in 1949. No private sector company is in business
+today operating under the same system as it did 70 years ago
+with respect to compensation. It doesn't work.
+     No. 7, we need to invest in the H.R. workforce and create
+a governmentwide STEM human capital strategy. It's one
+government and yet it operates vertically, not good enough.
+     No. 8, we need to create a culture that embraces
+technology, innovation, and collaboration. The pandemic has
+created lots of innovation. It should serve as a future model
+of how government can operate, lots to talk about there.
+     Nine, I mentioned DEI has to be a key part of this
+workforce strategy: diversity, equity, and inclusion (DEI) at
+all levels, including the leadership in government.
+     And number 10, we need your continued oversight. This
+ought to be an annual hearing. We ought to learn from agencies
+across the board, and you need to visit agencies and see what
+they're doing. There's great things that are going on.
+     And finally, help with the government brand by telling
+great stories about what's happening. Thank you so much.
+     [The prepared statement of Mr. Stier follows:]
+    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
+     Chairman Foster. And thank you. And I think your--the last
+thing--or second to last thing you said was spot on. The
+importance of having Members of Congress visit the agencies,
+you know, one of my biggest activities in Congress as the Co-
+Chair of the National Labs Caucus where I drag Members of
+Congress around to visit the Department of Energy national
+labs, which is--you know, they are without exception just blown
+away with the tremendous science that's being done there. And
+equally important would be in-person visits to all of the
+science operations in all of our Federal agencies, so I
+definitely agree with that.
+     And so next is Dr. Rosenberg.
+               TESTIMONY OF DR. ANDREW ROSENBERG,
+       DIRECTOR OF THE CENTER FOR SCIENCE AND DEMOCRACY,
+                 UNION OF CONCERNED SCIENTISTS
+     Dr. Rosenberg. Thank you, Chairman Foster and Ranking
+Member Obernolte and Members of the Subcommittee. My name is
+Andrew Rosenberg, and I direct the Center for Science and
+Democracy at the Union of Concerned Scientists.
+     Federal scientists are on the frontlines of our Nation's
+capability to respond to society's needs from forecasting
+natural disasters to natural resource management to responding
+to pandemics, and federally funded basic research that enables
+scientific discovery and innovation is critical to economic
+growth, employment, and sustainable development. All science-
+based agencies from the Defense Department to NASA to the
+Departments of Agriculture, Commerce, and Energy depend on a
+strong, continuously renewed scientific workforce.
+     The last 4 years have seen a significant reduction in the
+scientific workforce at many Federal agencies. Our report with
+the Federal brain drain found that five of the seven agencies
+we analyzed collectively lost more than 1,000 scientific staff.
+Few agencies fared worse than the Environmental Protection
+Agency. In the last 4 years EPA lost nearly 6 percent of its
+workforce and more than 670 staff, including in regional
+offices, especially in the West, Southwest, and Midwest.
+     For some agencies, growth stagnated. The CDC (Centers for
+Disease Control and Prevention) lost 187 scientific staff prior
+to the pandemic. That's a loss of 2.2 percent. Now, we
+recognize that demography was part of the driving force of this
+loss, but the inflow of new talent was squeezed as well.
+Fellowships were curtailed and recruitment was stagnant.
+     Morale matters, too, for retention, recruitment, and
+productivity. We tracked more than 119 instances of attacks on
+science during the Trump Administration, far outnumbering
+previous Administrations. When we surveyed more than 4,000
+Federal scientists in 2018, 80 percent of respondents said they
+noticed workforce reductions and nearly 90 percent reported
+that these losses made it difficult to fulfill their missions.
+And at the EPA fewer than 15 percent of surveyed scientists
+reported their morale is excellent or good.
+     In January, the Biden Administration issued a key
+memorandum on restoring trust to government agencies through
+scientific integrity and evidence-based policymaking. That's an
+important step for restoring morale but more is needed.
+Representative Tonko has reintroduced the Scientific Integrity
+Act, which would codify in statute the prevention of political
+interference or manipulation of scientific evidence.
+     The Administration and Congress need to rebuild and
+strengthen Federal science--scientific capacity, diversify the
+scientific workforce, and revitalize the pipeline that brings
+early career scientists into civil service. Specifically,
+increasing fellowship programs such as the management--
+Presidential Management Fellowship, the STAR, the Sea Grant,
+the Oak Ridge programs bring new talent to agencies, but they
+have been curtailed and need to expand again.
+     New fellowship programs should be created that tackle
+other science-related issues such as climate change or equity
+in environmental justice. And to diversify the workforce,
+agencies must also ensure that recruitment is broader and
+compensation resources and benefits for fellows are sufficient
+for those with economic challenges, not just the privileged
+few.
+     Recruitment must reach new audiences and counteract the
+tendency for hiring managers to recruit from a known set of
+institutions again and again. Every effort should be made to
+recruit by hosting far more events at historically Black,
+Hispanic, and tribal institutions. The Administration must
+learn from private and nonprofit sectors about recruiting
+tools. Job fairs and other techniques must target a wider array
+of institutions than in the past and account for historical
+disparities in recruitment and hiring. And agencies must learn
+to work effectively with institutions unaccustomed to steering
+students toward civil service. If you want to see how outdated
+the recruitment system is, just have a look at USA Jobs, the
+website that we currently use.
+     Reaching scientific capacity quickly will require not only
+recruiting and hiring to fill vacancies but also re-engaging
+with those that have retired from Federal service to regain
+lost knowledge, experience, and expertise. Federal agencies
+must train mid- and senior-level scientists in leadership of
+diverse staffs. Effective science leaders and mentors are not
+necessarily those who publish the most papers or have been in
+service the longest. These are learned skills critical for the
+effectiveness of any enterprise. And young scientists today are
+used to changing jobs and career paths frequently, so the civil
+service must evolve accordingly. More extensively utilizing
+programs for rotating assignments, remote work, joint
+appointments, and joint institutes increases career
+flexibility.
+     I appreciate the opportunity to share my views, and I'd be
+happy to answer any questions. Thank you.
+     [The prepared statement of Dr. Rosenberg follows:]
+    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
+     Chairman Foster. I have to unmute. Thank you. And next is
+Dr. Southerland.
+            TESTIMONY OF DR. ELIZABETH SOUTHERLAND,
+           FORMER DIRECTOR OF SCIENCE AND TECHNOLOGY,
+        OFFICE OF WATER, ENVIRONMENTAL PROTECTION AGENCY
+     Dr. Southerland. Thank you. Chairman and Ranking Member
+and distinguished Members of the Subcommittee, I had the
+privilege of working at EPA from 1984 until August of 2017.
+With my Ph.D. in environmental sciences and engineering, I
+worked first as a scientist and then as a manager of scientists
+in the EPA's water and superfund programs. Thank you for the
+opportunity to testify today.
+     While I know that EPA currently has a dedicated team of
+knowledgeable, highly qualified career professionals, today's
+staffing levels are the lowest they have been in 30 years. In
+addition, several hundred career scientists have reported over
+the past 2 years that their research findings were altered or
+suppressed for other than technical reasons.
+     As a result, I believe the complex environmental
+challenges of the 21st century cannot be successfully addressed
+unless Congress and the Administration work together to
+significantly increase EPA's staff levels, and EPA leadership
+rebuilds the morale of the workforce.
+     Since my retirement, I've been a member of the
+Environmental Protection Network, a bipartisan organization of
+EPA alumni volunteering their time to protect the integrity of
+EPA and its mission. I am here, however, in my personal
+capacity.
+     EPA has experienced years of declining resources with
+significant loss of buying power and reductions in staff
+despite the fact that congressionally mandated responsibilities
+have increased substantially over that time. In terms of
+inflation-adjusted dollars, Administrator Regan will have 1/2
+the resources that the agency had in 1980.
+     In 2013 and 2014 the Obama Administration gave early out
+retirements to certain senior scientists in order to reduce
+grade levels and the dollars for full-time equivalent (FTE)
+employees. EPA had not backfilled all of those vacated
+positions when the Trump Administration began. Former President
+Trump requested huge cuts in the agency staff every year, and
+his administrators did not authorize any significant hiring
+until 2020. By 2020, over 670 career scientists had left EPA.
+While Congress rejected President Trump's requested budget
+cuts, the Agency's appropriations were basically flatlined
+during these 4 years, further exacerbating the decline in
+buying power.
+     I can tell you from personal experience that managers and
+staff in the EPA are doing everything they can to compensate
+for the critically low staff levels, while also struggling with
+out-of-date information technology and lack of cutting-edge
+scientific equipment.
+     The lack of staff and resources has forced EPA to focus
+primarily on those rules with statutory or court-ordered
+deadlines. Rules without deadlines, no matter how important for
+public health and environmental protection, are often postponed
+for years or take years to propose and promulgate. One recent
+example of such a delayed rule is the Safe Drinking Water Act's
+lead and copper rule, which was not updated for almost 30
+years, despite the high risk lead poses to our children.
+     In order to fully restore the workforce, the new
+Administration should work with Congress to get agreement on a
+4-year goal to rebuild EPA's budget to its 40-year average
+level. This goal would represent a 40 percent increase from
+2021 funding levels.
+     Another key opportunity to restore the workforce is for
+the new EPA leadership to reinstate the collaborative working
+relationship with career staff that was lost during the Trump
+Administration. The new leaders should also move quickly to
+identify priority hires for entry-level and senior-level
+scientists, to use all available authorities to speed hiring,
+and invest in a hiring campaign over multiple years that's
+focused on hiring 1,000 of the best, brightest, diverse STEM
+graduates. They must also strengthen staff development and
+strengthen partnerships with EPA bargaining units.
+     In conclusion, it is my hope Congress will take concrete
+steps to provide the necessary funds to rebuild the staff and
+core programs and to support critical new initiatives
+addressing climate change and environmental justice. I look
+forward to answering your questions.
+     [The prepared statement of Dr. Southerland follows:]
+    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
+     Chairman Foster. Well, thank you. Thank you all. And at
+this point we'll begin our first round of questions. So the
+Chair will recognize himself for 5 minutes.
+     Before we get started, I have statements here from the
+American Federation of Government Employees, Local 3403,
+representing NSF employees in STEM fields, and from the Climate
+Science Legal Defense Fund to be entered into the hearing
+record. Without objection, so ordered.
+     I guess, you know, I concur with, I guess, all of our
+witnesses here that the Federal Government needs to embrace a
+more innovative and proactive approach in hiring and
+recruitment efforts, especially for young and diverse
+scientists. You know, there are really I think a real hunger
+among this generation of scientists coming out of the--our
+educational system to do something in public service. And
+they're--they really--you know, this is something I've had many
+discussions with about--professors. They said you should have a
+job fair or something like that to--you know, just to make this
+generation of scientists aware of the really tremendous
+opportunities.
+     And I think it's also underappreciated how influential an
+excellent scientist can be with a career at least partly in the
+Federal science oversight business because you have--you know,
+you have a tremendous influence that's not often appreciated
+even by the scientific community. And so this is really for--I
+guess for everyone on the panel. And how can things like job
+fairs enhance fellowship programs, streamline hiring
+procedures, and reduction of bureaucratic obstacles? What are
+the most promising initiatives here to really accelerate the
+rebuilding of the scientific workforce?
+     Mr. Stier, it looked like you were full of ideas here, so
+we'll start with you.
+     Mr. Stier. You're very kind. Chairman Foster, I think it's
+an excellent question, and my advice would be to not think
+about this as an individual intervention but rather think about
+a comprehensive strategy. The reality is is the system is
+breaking down along multiple points, and unless you actually
+deal with the full set of system failings, you'll wind up maybe
+improving the situation but ultimately running into another
+barrier simply further down the pike.
+     So absolutely career fairs are great if they're done at
+the right time. Oftentimes, Government comes in the spring
+rather than the fall when a lot of talent is actually thinking
+about what they want to do. But if the people coming to those
+fairs or even people more broadly at the university haven't
+been introduced to the opportunities that exist in government,
+if they're instead thinking about a brand that has been
+tarnished, then you haven't helped yourself a lot. If the
+process of hiring is so difficult that even if they're
+interested once they get to the career fair they're turned
+away, that's a big problem. If they ultimately get hired and
+they leave quickly, then you simply created a bad brand for the
+broader set of peers that they have.
+     So I think it's really important to be comprehensive in
+thinking about how to put your arms around this problem and to
+see it as a governmentwide issue for the STEM occupations and
+to create that governmentwide strategy that individual agencies
+can participate in but that they can collaborate in. Certainly,
+there are things you can do in the meanwhile, but I think if
+you really want to move the needle and recognizing the world is
+changing, you need to actually address all those pain points
+along the lifecycle of bringing talent in and keeping it.
+     Chairman Foster. Yes. Dr. Rosenberg?
+     Dr. Rosenberg. I certainly agree with that. I also think
+that we sometimes--we hurt ourselves with the rhetoric that's
+used around working for the Federal Government. It is really
+public service, and you get to do great science with great
+colleagues, but we need to help people understand that it
+really is a public service job. You are serving the country.
+     I also think we sometimes hurt ourselves by implying that
+there is a reduced pipeline. There actually isn't a reduced
+pipeline, and it is very diverse, but we don't recruit fully
+from that pipeline. So I mentioned recruiting from minority-
+serving institutions, for example. There are literally
+thousands of engineers, you know, Black engineers--we work with
+the Society for Black Engineers who work with a lot of
+historically Black colleges and universities. There are many,
+many highly trained engineers and other STEM fields across the
+country, but we're not reaching them because we go back to the
+same places to look for staff over and over and over again.
+     And then, as the Ranking Member noted, our recruitment
+methods and onboarding procedures are really archaic. And I
+know this as a government management from years ago. I also
+know it from my students when I was in academia subsequent to
+that. You know, the mechanisms for bringing people onboard
+erect so many barriers that by the time a real offer is in
+place, then they've had other offers if they're really
+excellent talent and really want to move forward.
+     So a lot of these are self-inflicted wounds. It's not
+because there aren't people. There is a very diverse workforce
+that we could bring onboard. It's just we're not doing it
+effectively.
+     Chairman Foster. Thank you. And I guess my time is up, so
+I'll now recognize Mr. Obernolte for 5 minutes.
+     Mr. Obernolte. Well, thank you very much. And thank you to
+all of our witnesses. This has been a fascinating discussion.
+     My first question is for Dr. Rosenberg. In your testimony
+you implied a causal relationship between the policies of the
+Trump Administration and the declines in scientific staffing at
+the EPA. And you mentioned the statistic that the scientific
+workforce at the EPA declined by 3.9 percent during the Trump
+Administration, but looking at a broader set of statistics,
+between 2009 and 2020, the scientific workforce at the EPA
+declined by about 16.6 percent. So on an annualized basis,
+those declines were higher during the Obama Administration than
+they were during the Trump Administration.
+     Now, I don't find that comforting. I find that alarming
+because that tells me that this wasn't an isolated incident
+just tied to the policies of one Administration. This is a
+long-term trend. So, I mean, do you share that concern? Is this
+isolated or is this long-term trend that we need to be
+concerned with?
+     Dr. Rosenberg. Well, I do share the concern that it's a
+long-term trend, and I did only very briefly mention the role
+of demographics in the staffing at agencies. So several things
+have happened at once, and I firmly believe that the policies
+of the Trump Administration, if you like, harmed the brand in
+those terms. But we also have many scientists of my generation
+if you like--I'm going to be 66 in a month or so--that are
+going to leave the workforce anyway. The question is do you
+replace them or do you replace them only with contractors? And
+so many previous Administrations have shifted to using contract
+staff. And while that in some cases can be efficient and it
+might be short-term cost-effective, it actually doesn't help
+build the strength of an agency to do the long-term work
+because contractors are always looking for the next opportunity
+or more permanence. And so this is a long-term trend with
+multiple factors involved.
+     Now, the Trump Administration isn't the only
+Administration that has had challenges on certain issues
+related to things like scientific integrity, the ability of
+scientists to do their work without political manipulation or
+censorship, but it was a more extreme circumstance. So all of
+those combining factors I think are things that need to be
+addressed to try to stabilize and improve the workforce. Now,
+that doesn't mean that every scientist coming in will be a 30-
+year Federal employee because that's not the way people go into
+their jobs these days. So we need to think of alternative ways
+for people to move in and out of government. And I happen to be
+one person who has moved in and out of government, and it's
+possible but difficult.
+     Mr. Obernolte. Great. Thank you. I completely agree with
+you.
+     And just following up on that, a question for Mr. Stier.
+You said something that I found absolutely fascinating about
+how we need to rebuild the Federal brand and make sure that our
+Federal branding is helping us recruit the talent that we need
+to. And I think Dr. Rosenberg just mentioned something along
+that same line. So I kind of think that we miss out sometimes
+on the opportunity to, as Dr. Rosenberg said, play up the fact
+that we are in the business of public service, so in addition
+to being able to do great science, we get the opportunity to
+serve our fellow constituent, you know, in ways that are
+impossible to do in academia and in the private sector.
+     So I just wanted to give you the balance of my time to
+talk about how we might go about restoring that brand and
+burnishing that brand because I think it's extremely important.
+     Mr. Stier. Thank you so much, and I think you're 100
+percent right. If you look at the data, our Best Places to Work
+rankings, what you'll see, as I mentioned earlier, that
+relative to the private sector, the employee engagement scores
+are on average 15 points lower in the Federal Government than
+they are in the private sector. But if you look at the mission
+commitment, it's the one place where the Federal workforce
+wherever you are, NASA, NOAA, NIST (National Institute of
+Standards and Technology), it just beats the private sector
+in--with a very big margin.
+     The government has something very special, and it's the
+reasons why you're all here as well is the ability to serve the
+American public, purpose, mission, and that mission is really
+the basis for an incredible value proposition. If you wanted--
+you look at, bluntly, the contractor firms, they try to present
+their mission as what the government should be doing. You're
+serving the American public, that's why you're here and on and
+on. So the government is not utilizing its core value
+proposition, and it needs to do that in a concentrated way. And
+part of the way it can do that is by telling the story of its
+own workforce. You think about the amazing people helping the
+American public in extraordinary ways, innovative ways. Those
+stories don't go out to the public. They don't even go out to
+the broader workforce inside the Federal Government. We do not
+have a recognition culture in government. There's a lot of
+infrastructure to find a problem, not a lot of infrastructure
+to find the good things. You actually build more strength and
+deal with your weaknesses if you have an upside and if you
+create that recognition culture. So that's where I would begin.
+Begin from the core strength around mission and around the
+achievements of the people that are there. Stories matter, and
+the government has a lot of them that we need to tell better.
+     Mr. Obernolte. Right, thank you. I completely agree. And
+just to tie into my opening, I think we need to be more
+entrepreneurial in our approach to recruiting top talent. We
+are never going to be able to compete in terms of salary with
+institutions in the private sector, but we do have a unique
+advantage in the mission that we fulfill, and I think that's
+why we're all in government is this desire to serve our fellow
+man.
+     So I want to thank you to all of our witnesses. It's been
+a fascinating discussion.
+     Chairman Foster. Thank you. And I will now recognize our
+colleague from Colorado, Mr. Perlmutter, for 5 minutes.
+     Mr. Perlmutter. Thanks, Mr. Chairman. And the Ranking
+Member, I appreciate the comments of both of you. And just a
+point, Mr. Obernolte said, you know, competition against the
+private sector, competition against academia, there's also
+competition with foreign governments. And we can't forget that.
+And I'll get back to that in a second.
+     But my first question is to you, Director Wright and to
+you, Dr. Rosenberg. You talked about contractors. And in my
+area we have the National Renewable Energy Lab, we have NIST
+labs, we have all sorts of labs, and we've seen the contractor
+population really grow. Is there a reason for that in terms of
+the law or what is it that's driving this move from civilian
+employment to contractor employment if you could? And start
+with you, Director Wright.
+     Ms. Wright. Thank you for that question, Congressman
+Perlmutter. So I would say that, you know, with regard to
+contractors, there could certainly be a more lucrative
+opportunity financially that they may see, you know, working in
+a contracting--contractor environment rather than in the
+Federal Government.
+     You know, our work certainly has shown, you know, that you
+really have to have good practices in place to retain employees
+so that they will feel a commitment to the mission, commitment
+to the work, and not necessarily, you know, just be focused on
+the financial aspects. You know, there is certainly the
+opportunity to really hone in on what the function of the
+government's mission is for the employees, and they might then,
+you know, consider Federal employment rather than, you know,
+pursuing opportunities with a contractor.
+     But I think Dr. Rosenberg had touched on the contractor
+issue, so I'll defer to him for additional comments.
+     Mr. Perlmutter. OK. Thank you.
+     Dr. Rosenberg. Thank you for the question, Congressman. I
+think there's a number of factors at play. Every Administration
+that I've been involved in, which is, you know, the last--going
+back to the first Bush Administration when I was in Federal
+Government beginning my Federal service--has wanted to be able
+to point to statistics showing that they've decreased the size
+of government. And one way you do that is you have fewer full-
+time employees but you replace them with contractors. And so
+there's a political reason here I would say, although you're a
+better judge of that than I am.
+     There also is a reason around the concern for pension
+obligations of course and for flexibility in staff as budgets
+go up and down, and so stability and agency budgets is an
+important part of this as well.
+     And more importantly every other sector, including the
+nonprofit sector and certainly the for-profit sector, is sort
+of thinking about jobs as what are the things that we need to
+do and we know we're going to need to do tomorrow and we're
+going to need to do in the long-term, and what are those things
+that are shorter-term and we need more flexibility to do them?
+And the government often doesn't do that.
+     So you hire more contractors at places like national labs
+and within the agencies even for long-term tasks because you're
+not allowed to bring on full-time employees under the hiring
+system because of the way that budgets are constructed and FTEs
+are allocated. And that does cause real problems because those
+scientists are going to look for more stable opportunities, and
+I know many young scientists who come in as contractors, and
+that unfortunately is their situation. They're always looking
+elsewhere.
+     Mr. Perlmutter. All right. Thank you. Let me ask one more
+question of Mr. Stier. I noticed that you worked for Jim Leach,
+and then you clerked for a Judge of the Second Circuit and the
+Supreme Court and you also touted internships. So do you want
+to expand on why you think internships or clerkships are
+important for recruiting talent?
+     Mr. Stier. Absolutely. And if I could for 2 seconds I just
+want to add that on the contractor point it's often a
+workaround. If the hiring system is broken, the only way you
+can get your talent is through contracting. It's obviously not
+the right motivation, but it's really important to understand
+that so much in government is about working around a crazy
+system, and this is an example of it.
+     Internships, to your question, is a very important issue.
+If you look at any knowledge-based organization in our country,
+they get their entry talent primarily through internships.
+That's true whether it's in the law like you just mentioned.
+It's true if you work on the Hill. It's true if you're an
+economist. It's true everywhere. That's not true in the
+executive branch, and that's a big problem. By and large,
+interns are not seen as a core piece or the core piece of the
+entry pipeline in the Federal Government, and if anything, the
+number of folks that are converting from internships into full-
+time employees has been--is being reduced.
+     Some of this has to do with the fact that, again, leaders
+don't own this, they don't see it as their responsibility, and
+as a result, they're not focused on the longer-term pipeline
+that they ought to be paying attention to. Some of it is just
+bad rules.
+     Mr. Perlmutter. Mr. Stier, sorry, my time is expired. I
+appreciate--I'm going to probably send you a note wanting you
+to expand on the internships. Thank you, Mr. Chair, for that
+extra time. I yield back.
+     Chairman Foster. Thank you. And we will now recognize our
+colleague from Texas, Mr. Sessions, for 5 minutes.
+     Mr. Sessions. Mr. Chairman, thank you very much,
+interesting discussion. I don't believe I have a different
+perspective than any of the other Members here, nor do I think
+I have a different perspective, but I'd like to throw some
+things in that simply acknowledge the parameters that we've
+been talking about. I am well aware that we either made a
+mistake or we did not when we made the R&D (research and
+development) tax credit permanent. That meant that companies
+that could not count on their R&D budget being a part of their
+regular write-off as an expense changed overnight, and
+companies began hiring long-term employees. That competed
+against a lot of universities, against a lot of medical
+institutions because the Federal Government does not in my
+opinion pay anything that would be an end-of-year bonus that
+competes with stock options or other things that other people
+provide.
+     My point is is that we've got institutions, medical
+institutions, we've got other areas, universities that just
+bust their hump to get what they need. And the numbers of
+people that are out there who are qualified is the issue.
+     And that's why I think, as I recall Ed, Dr. Bera, perhaps
+you, too, have been involved in science-based projects back in
+junior and senior high levels, Odyssey of the Mind, these robot
+competitions, things that bring people to science in 7th, 8th,
+9th, 10th grade with equivalent feel-good success stories that
+continued them through this process.
+     My son, who's now 31, went to one of the leading-edge
+institutions, private school, was a 35 out of 36 and was about
+midrange of his class. A number of people just--was a great
+school. He's the only one that chose to go into medicine.
+Everybody else chose to go where they could make money.
+     And so the opportunities that we need to understand I
+think, yes, they're in internships. I do agree with that, but
+we also I think need to robustly have, Mr. Chairman, someone
+who can tell us about the pipeline, about the pipeline of the
+types of contests--yes, I said that word, but they might be
+generated through competitions that bring these leading-edge
+people to want to build something better and see what the
+competition is through--and some of it is just double E,
+electrical sciences, but I think we ought to hear from people
+who also do understand the pipeline, junior high, high school,
+but, you know, I also think that, as I went to the labs in New
+Jersey, I was on the hiring team, and I'll just tell you, we
+went to University of Chicago, we went to MIT (Massachusetts
+Institute of Technology), and we went to Caltech, and we honed
+our science of what we were after. And I think that these
+institutions produce leading-edge people. We just need more
+people in the pipeline.
+     So I don't know if anybody, Elizabeth, you may have
+something on there. Andrew, you may have that--the young
+doctors that are here, but I really want to focus on the
+pipeline. Yes, we need to do a better job with the internships,
+but we really need to build the number of people who want
+science as opposed to us grinding each other down on the few
+that we get. Thank you, Mr. Chairman. I'll let panel take the
+remaining 2 seconds that I have.
+     Chairman Foster. It seems like 40 seconds are sort of de
+rigueur here, so if anyone wants to grab 40 seconds, that's
+legit. All right. Dr. Rosenberg.
+     Dr. Rosenberg. Thank you. And thank you for the question.
+I actually think that the pipeline is much bigger than people
+appreciate, but as you noted, Congressman, the--you know, if
+you go to the University of Chicago and MIT and Caltech and you
+keep going back to those places, you're only looking at a
+limited portion of the people who actually do STEM work.
+     On the other hand, you know, Texas Southern has great
+engineering and science programs. All of the Houston schools
+actually, you know, train scientists. But many agencies and
+many scientists only go back to the places they know repeatedly
+or the places that they were trained, and that's a very natural
+tendency. But--and I've seen it in every institution that I've
+worked in. But it does us a disservice when you're trying to
+expand the opportunity for candidates across a much broader set
+of institutions to think that it's only the elite institutions
+that are training people who could do the job, and so that's
+part of it.
+     Chairman Foster. I think the 40 seconds of forbearance are
+sufficient.
+     Dr. Rosenberg. OK. Sorry. Sorry.
+     Chairman Foster. Thank you. I'll now recognize our
+colleague from California, Dr. Bera, for 5 minutes.
+     Mr. Bera. Great, thanks, Mr. Chairman. And this is
+fascinating and certainly a long-term challenge. You know, one
+idea that we've toyed with and, you know, as we think about the
+debate that's taking place around student debt and whether you
+retire student debts, I've always thought that, you know,
+instead of just retiring that student debt and forgiving it, we
+ought to use that as a mechanism to try to get folks to serve,
+whether that's, you know, coming to work in the Federal
+Government fulfilling critical needs or going out and doing
+service, you know, through some other mechanism like the Peace
+Corps, AmeriCorps, or other programs. And, you know, again, I
+don't know that we get any benefit of just forgiving $50,000 of
+loans or $100,000 of loans, but if we could get someone to come
+fill a critical need and perhaps they work for 4 years and you
+forgive $50,000 or $100,000 of loans. By that time they have
+seen what they can do in the Federal Government. You know,
+they're accruing retirement, they're doing some things, and
+hopefully you can get a cohort of those young Americans to
+continue to stay and consider a career in the Federal
+Government. So that's one thing. And I think we ought to work
+on that as a Subcommittee perhaps to address this critical need
+and, you know, do something in a bipartisan way.
+     The second piece that, you know, we've thought a lot about
+is there is a talented workforce that has been serving our
+country in the military and in our armed services often doing
+high-level skills perhaps without a degree, but they're
+operating, you know, doing cybersecurity work, et cetera.
+They've learned on the job. When they leave the military, the
+challenge sometimes is we don't actually recognize and put a
+value on that skill set. I know most closely in the medical
+workforce where if folks are operating as EMTs (emergency
+medical technicians) and--but they don't actually have that
+formal degree, so now they come out, we don't actually provide
+a value to that. We may ask them to go back and get a 4-year
+college degree so then they can enter the workforce. I think it
+behooves us to think about ways to take some of these folks as
+they're exiting military service perhaps to figure out how to
+value that, bring them into government service, you know,
+provide some training while they, you know, continue to work,
+and I think that's also another potential pipeline of folks
+that, you know, have already demonstrated a commitment to
+serving the country and now, you know, we could do them a
+service by giving them a job, getting them--and perhaps while
+they're working, continue to upskill them.
+     I guess, you know, to any of the panelists, you know,
+thoughts on, you know, whether the idea of student loan
+forgiveness, should----
+     Ms. Wright. So----
+     Mr. Bera. I guess Mr. Stier if you want to----
+     Ms. Wright. OK.
+     Mr. Bera [continuing]. You know, take that.
+     Mr. Stier. Ms. Wright, do you want to go first, and then
+I'll go after you?
+     Ms. Wright. OK. So I was just going to note that,
+certainly, the student loan repayment is one of the pay
+authorities that agencies are using, and they do say that
+it's--you know, in our work we've heard from agencies that they
+do say that it is working well. What we don't know is the
+extent to which it's working in terms of how long--you know,
+what does it say about how long people will stay at the agency,
+and so that's something that we've called on OPM to, you know,
+look at the effectiveness of these various pay authorities and
+to understand the extent to which it is working and making an
+impact in recruitment and retention.
+     Mr. Stier. So just to follow up on Ms. Wright's comments
+there, there is authority. Agencies use it very unevenly and in
+my view not nearly enough. There's clearly more work, as Ms.
+Wright [inaudible] understand how effective is, but anecdotally
+we're seeing that this is a major deal for talent to be able to
+have their debt forgiven and by and large, again, there are
+very few agencies that use it to the extent they could.
+     If you want to think about this even more ambitiously,
+you--I think there is room to create a program like the ROTC
+(Reserve Officers' Training Corps) program that the military
+has for the civilian side where you're actually getting talent
+to come in with that service payoff commitment. You're helping
+them pay for their education while they're getting it with the
+expectation then that they will come serve their country in the
+government. And we've done a bunch of work around this and
+would love to talk to you if you're interested in that as a
+concept.
+     Mr. Bera. Absolutely. We will follow up on that.
+     So anyone else in the last 18 seconds? Dr. Rosenberg?
+     Dr. Rosenberg. Yes, I would just point out that many
+students that I talk to would like to go into public service,
+are more interested in the academic sector, which has become
+less attractive. And they want to do--you know, work for
+government because they want to make a difference, and it--you
+know, money is important, but there are huge barriers
+particularly for lower-income students to doing so, not only
+student loans but the ability to--for compensation on things
+like internships and fellowships, and that actually needs to be
+addressed so that you can, again, diversify the workforce but
+also just a bigger talent pool of people who can actually
+afford to take these opportunities.
+     Mr. Bera. Great, thank you, Chair, and I yield back, Mr.
+Chairman.
+     Chairman Foster. Thank you. And we will now recognize the
+Ranking Member of the Full Committee, Mr. Lucas from Oklahoma,
+for 5 minutes.
+     Mr. Lucas. Thank you, Mr. Chairman. Ms. Wright, in your
+testimony you note that in October of 2020 GAO reported that
+various factors such as unclear job application processes, long
+wait lines for job offers have been identified as contributing
+to the Federal Government's workforce deficiencies in certain
+areas and job categories. Can you please elaborate on these
+findings and how they relate to the USA Jobs portal?
+     Ms. Wright. Certainly, happy to take that question,
+Congressman. So I would say with regard to USA Jobs, it's
+certainly something that many people would say isn't the most
+user-friendly experience, and GAO actually did work, as you
+noted last year, looking at what steps OPM is taking to improve
+the website.
+     Certainly, a couple of things that we identified is that
+they have really taken a step looking toward looking at using
+data analytics, using web analytics I should say to understand
+where their users are coming from but also, too, putting in
+place different features that would allow you to understand--
+allow the applicant, I should say, to understand, you know,
+what the status is of their application because that was
+something that they were getting a lot of calls on.
+     There are other things that OPM is considering to help
+improve the experience with USA Jobs, which would include, you
+know, letting applicants know how many other applicants have
+applied and then also notifying applicants when jobs have been
+filled, so that's something that they're continuing to work on
+for the future. They recognize it's a problem, and are taking
+steps to try to improve the system.
+     Mr. Lucas. Is it true that sometimes it can take an
+average of 90 days or more for new hires to be onboarded?
+     Ms. Wright. We've certainly heard those average
+timeframes. I think one of the challenges is sort of
+understanding when one starts the clock for estimating the
+onboarding time. One of the things that we've heard is that is
+consistently a challenge is--and contributes to the delays are
+security clearances. That's something that GAO has reported on,
+you know, quite a bit in terms of the challenges with getting
+personnel security clearances on time, and we can see where
+that is contributing to delays in onboarding.
+     Mr. Lucas. Mr. Stier, can you provide some insights on how
+this may be discouraging especially to recent graduates and
+early career researchers just entering the workforce?
+     Mr. Stier. Yes, absolutely, I think it is a massive
+problem, and it's not only the time to hire which you've
+identified and it's a big problem. Great talent is going to
+have options, and they're going to take the option that is
+easier for them and more available than wait, especially when
+they don't know how long it's going to take. So there's no
+doubt that the government is losing out on a lot of talent.
+     I would note that there are other problems beyond that,
+including the fact that 90 percent of the job searches involve
+simply the review of self-reported qualifications or the
+resume, not actual subject matter experts looking at their
+resumes and talking to people to determine if they are in fact
+best qualified for the jobs. And then 50 percent of the
+searches wind up getting sent back and never even actually
+used. This is a deeply broken problem. The front door of USA
+Jobs is the starting point, but then there are a series of
+issues where this process breaks down that also have to be
+addressed.
+     Mr. Lucas. So it's fair to say that some of the brightest
+people in the country who may very well have many job
+opportunities, potential choices become essentially frustrated
+even at the very beginning, let alone before they become a part
+of the Federal process.
+     Mr. Stier. Absolutely.
+     Mr. Lucas. I can see why that would be so discouraging.
+     Staying with you, Mr. Stier, for a moment, I know we
+discussed a variety of topics this morning, but you acknowledge
+that internships are a critical component of the talent
+pipeline and confirm that Federal agencies should strategically
+recruit and hire college students, but you also emphasize the
+benefits of reaching future scientists earlier in their lives.
+Can you touch for a moment about how STEM education and
+exposure to the work of Federal scientists provides fundamental
+experiences for students at an early age, perhaps maybe even in
+elementary school?
+     Mr. Stier. Sure. And I think Congressman Sessions had it
+absolutely right that, you know, there is definite need for the
+Federal Government to do better in its recruiting and retaining
+top STEM talent, and we need to increase the pipeline more
+broadly for our country writ large. And the way you do that is
+starting earlier.
+     I would say the role model here is NASA. You know, you
+hear from Charlie Bolden. You know, he participated--former
+NASA Administrator for 8 years, astronaut. He did stuff early
+on in his education. It's the way that the best-in-class
+organizations actually encourage and improve their brand is to
+touch people very early on, and there are great ways for the
+Federal Government to do that.
+     Mr. Lucas. I'd say thank you to all of our witnesses, and
+I yield back, Mr. Chair.
+     Chairman Foster. Thank you. And the Chair will now
+recognize my colleague from Illinois, Mr. Casten, for 5
+minutes.
+     Mr. Casten. Thank you to my colleague from Illinois and
+our Chairman, and thank you so much to our panelists.
+     The--Dr. Rosenberg, I want to start with you and
+specifically about a report that UCS did in 2018 in part
+because it jibed so closely with my own experience in
+conversations with a lot of EPA staff. You have a report that
+was detailing the crisis of morale in certain Federal
+scientific agencies and specifically if I got this right nearly
+1/3 of the respondents at EPA felt that, quote, ``influences of
+political appointees in your agency or department or the
+influence of the White House were the greatest barriers to
+making science-based decisions at that agency.'' And it seemed
+to have a pretty clear impact on morale. In 2018 less than 15
+percent of EPA scientists surveyed by UCS indicated that their
+morale was excellent or even good, and that compared with
+nearly 40 percent who felt that way in 2007. As I mentioned,
+that was extremely consistent with the conversation I had--
+conversations I had informally with folks at EPA.
+     Could you just chat a bit with us about how scientific
+integrity violations and the politicization of science have
+contributed to staffing losses at those agencies, and I guess
+on a more optimistic side how a scientific integrity statute
+could help in retaining good scientists?
+     Dr. Rosenberg. Thank you for the question, Congressman.
+And you very accurately cited our survey results. And I should
+point out that we've been surveying Federal scientists for many
+years now. This was not a one-off efforts in 2018, and so we
+had the ability and have published the comparisons to previous
+surveys.
+     A couple of things happened. Certainly, the politicization
+of science was a concern with reports being altered or
+censored, and I think Dr. Southerland can speak to that very
+directly particularly at the EPA but not exclusively at the
+EPA. You may have seen the report yesterday that in an
+investigation at the CDC at least three major reports during
+the course of the pandemic were altered by political appointees
+or outside actors during the course of the pandemic that
+related to things such as school opening. But at the EPA either
+science was completely sidelined or censored or manipulated. It
+became a recurrent problem. And the second part of that problem
+was that for many decisions, the career professionals were not
+even in the room, were not even involved in the decisionmaking
+on some of the issues that we worked on. And I can see Dr.
+Southerland nodding, and she may want to expand on that.
+     So scientific integrity policies, if they are strengthened
+and codified in statute, can actually give scientists a way to
+ensure that their scientific evidence will not be politically
+manipulated. And while that's been articulated by the
+Presidential memorandum, it's not codified in statute right
+now, and so it could be backed away from in many cases or is
+less--carries less weight than if the Scientific Integrity Act
+went through. So that gives scientists more assurance that the
+work that they do will actually be--present--the evidence that
+they gather will actually be presented as scientific evidence,
+not be manipulated for other reasons. Now, lots of other things
+go into decisionmaking, but you shouldn't manipulate the
+scientific evidence to justify a decision.
+     Mr. Casten. So I know we're short on time, so let me put
+this--and I know that you have given a few shoutouts to Dr.
+Southerland, so let me just put this to either one of you who
+would like to answer. We need to atone for the sins of the
+past, but we also have to deal with the realities of where we
+are. And as we think about how to restore this workforce--and,
+again, my own experience is that, you know, we lost some good
+and senior talent. So how much of what we need to do going
+forward is attracting people back when they have left the
+agency early versus bringing new people in to fill those slots?
+And what does that mean? Because preparing for the workforce of
+the future is of course a little bit different than attracting
+people back who are late career stages. And if--I'm just
+curious if either of you have any comment about which of those
+you think is more important to prioritize given the set of
+cards we have dealt however much we may not like----
+     Dr. Southerland. So I think I'm finally unmuted by the
+host. I'm having a lot of trouble with verbal. I think the
+important thing will be to get the new employees. What we can
+do with people who have left is we have the ability to bring
+them on even as temporary mentors or part-time employees that
+can help restore the institutional knowledge at the Agency. But
+I think the real emphasis needs to be to get us new, qualified
+young people who can really revitalize the mission.
+     Mr. Casten. Thank you, and I yield back.
+     Chairman Foster. Thank you. And as we bring this to a
+close, I'd like to recognize the Ranking Member, Mr. Obernolte,
+for some brief closing comments.
+     Mr. Obernolte. Thank you, Mr. Chairman, and thank you to
+all four of our panelists. This has been an incredibly helpful
+discussion. I think we all share a unified belief that we need
+to enhance the role of scientists in our Federal workforce and
+to create an environment that is welcoming to them and that can
+be successfully competitive against the other entities that are
+seeking to hire this talent as it comes out of our schools and
+universities. So let's definitely continue this discussion as
+things move forward. I think there are lots of excellent ideas
+raised here today, we stand with you unified ready to try and
+implement some policy changes that will help us enhance the
+competitiveness of the Federal Government in that respect. So
+thank you, everyone. Happy St. Patrick's Day.
+     Chairman Foster. Thank you. And I'd like to reiterate our
+thanks to the--to our witnesses, you know, not only for your
+verbal testimony but the really high-quality written testimony,
+as well as the documents that they referred to. I confess I
+stayed up way too late last night reading your written
+testimony, and, you know, I commend it to my colleagues and
+their staff really because this is something that Congress and
+this Committee is going to have to come back to repeatedly,
+that when we hopefully come up with a plan to double the
+overall scientific effort, that that is accompanied by a plan
+to overcome the near-term emergency issues, as well as the
+structural changes to ensure that we have the strongest
+possible scientific workforce in our--for our government.
+     So I thank you all again, and before--and so the record
+will remain open for 2 weeks for additional statements from
+Members for any additional questions to the Committee that they
+may have for our witnesses. The witnesses are excused, and the
+hearing is now adjourned.
+     [Whereupon, at 11:20 a.m., the Subcommittee was
+adjourned.]
+                               Appendix I
+                              ----------
+                   Answers to Post-Hearing Questions
+Responses by Mr. Max Stier
+[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
+Responses by Dr. Andrew Rosenberg
+[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
+                              Appendix II
+                              ----------
+                   Additional Material for the Record
+             Report submitted by Representative Bill Foster
+[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
+           Statements submitted by Representative Bill Foster
+[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
+                Report submitted by Dr. Andrew Rosenberg
+[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
+                                 [all]
+</pre></body></html>

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+<html>
+<title> - A YEAR INTO THE PANDEMIC: THE STATE OF INTERNATIONAL DEVELOPMENT</title>
+<body><pre>
+[House Hearing, 117 Congress]
+[From the U.S. Government Publishing Office]
+    A YEAR INTO THE PANDEMIC: THE STATE OF INTERNATIONAL DEVELOPMENT
+=======================================================================
+                                HEARING
+                               BEFORE THE
+                            SUBCOMMITTEE ON
+   INTERNATIONAL DEVELOPMENT, INTERNATIONAL ORGANIZATIONS AND GLOBAL
+                        CORPORATE SOCIAL IMPACT
+                                 OF THE
+                      COMMITTEE ON FOREIGN AFFAIRS
+                        HOUSE OF REPRESENTATIVES
+                    ONE HUNDRED SEVENTEENTH CONGRESS
+                             FIRST SESSION
+                               __________
+                             MARCH 10, 2021
+                               __________
+                            Serial No. 117-6
+                               __________
+        Printed for the use of the Committee on Foreign Affairs
+ [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
+Available: http://www.foreignaffairs.house.gov/, http://docs.house.gov,
+                       or http://www.govinfo.gov
+                           ______
+              U.S. GOVERNMENT PUBLISHING OFFICE
+43-773PDF              WASHINGTON : 2022
+                      COMMITTEE ON FOREIGN AFFAIRS
+                  GREGORY W. MEEKS, New York, Chairman
+BRAD SHERMAN, California             MICHAEL T. McCAUL, Texas, Ranking
+ALBIO SIRES, New Jersey                  Member
+GERALD E. CONNOLLY, Virginia         CHRISTOPHER H. SMITH, New Jersey
+THEODORE E. DEUTCH, Florida          STEVE CHABOT, Ohio
+KAREN BASS, California               SCOTT PERRY, Pennsylvania
+WILLIAM KEATING, Massachusetts       DARRELL ISSA, California
+DAVID CICILLINE, Rhode Island        ADAM KINZINGER, Illinois
+AMI BERA, California                 LEE ZELDIN, New York
+JOAQUIN CASTRO, Texas                ANN WAGNER, Missouri
+DINA TITUS, Nevada                   BRIAN MAST, Florida
+TED LIEU, California                 BRIAN FITZPATRICK, Pennsylvania
+SUSAN WILD, Pennsylvania             KEN BUCK, Colorado
+DEAN PHILLIPS, Minnesota             TIM BURCHETT, Tennessee
+ILHAN OMAR, Minnesota                MARK GREEN, Tennessee
+COLIN ALLRED, Texas                  ANDY BARR, Kentucky
+ANDY LEVIN, Michigan                 GREG STEUBE, Florida
+ABIGAIL SPANBERGER, Virginia         DAN MEUSER, Pennsylvania
+CHRISSY HOULAHAN, Pennsylvania       AUGUST PFLUGER, Texas
+TOM MALINOWSKI, New Jersey           PETER MEIJER, Michigan
+ANDY KIM, New Jersey                 NICOLE MALLIOTAKIS, New York
+SARA JACOBS, California              RONNY JACKSON, Texas
+KATHY MANNING, North Carolina        YOUNG KIM, California
+JIM COSTA, California                MARIA ELVIRA SALAZAR, Florida
+JUAN VARGAS, California              JOE WILSON, South Carolina
+VICENTE GONZALEZ, Texas              RON WRIGHT, Texas
+BRAD SCHNEIDER, Illinois
+                    Sophia Lafarfue, Staff Director
+               Brendan Shields, Republican Staff Director
+                                 ------
+Subcommittee on International Development, International Organizations
+                   and Global Corporate Social Impact
+                    JOAQUIN CASTRO, Texas, Chairman
+SARA JACOBS, California              NICOLE MALLIOTAKIS, New York,
+BRAD SHERMAN, California                 Ranking Member
+ILHAN OMAR, Minnesota                CHRISTOPHER SMITH, New Jersey
+CHRISSY HOULAHAN, Pennsylvania       DARRELL ISSA, California
+ANDY KIM, New Jersey                 LEE ZELDIN, New York
+                            C O N T E N T S
+                              ----------
+                                                                   Page
+                               WITNESSES
+Shah, Rajiv J., President, Rockefeller Foundation, and Former
+  Administrator, United States Agency For International
+  Development....................................................     8
+Glick, Bonnie, Senior Advisor, Center For Strategic and
+  International Studies, Fellow, Harvard Kennedy School of
+  Government, Institute of Politics, and Former Deputy
+  Administrator and Chief Operating Officer, United States Agency
+  for International Development..................................    16
+                           ARTICLE SUBMITTED
+The Financial Times from the U.N. Economic Commission forAfrica,
+  Vera Songwe....................................................    35
+                                APPENDIX
+Hearing Notice...................................................    45
+Hearing Minutes..................................................    47
+Hearing Attendance...............................................    48
+    A YEAR INTO THE PANDEMIC: THE STATE OF INTERNATIONAL DEVELOPMENT
+                       Wednesday, March 10, 2021
+                          House of Representatives,
+         Subcommittee on International Development,
+             International Organizations and Global
+                           Corporate Social Impact,
+                      Committee on Foreign Affairs,
+                                                    Washington, DC.
+    The committee met, pursuant to notice, at 10:06 a.m., in
+room 2172, Rayburn House Office Building, Hon. Joaquin Castro
+(chairman of the subcommittee) presiding.
+    Mr. Castro [presiding]. The Subcommittee on International
+Development, International Organizations and Global Corporate
+Social Impact will come to order.
+    Good morning, everyone.
+    Two things first. We have members that are coming back from
+a vote on a motion to adjourn. And also, we will try to raise
+the volume a little bit so we can hear the folks off the
+computer a little bit better.
+    Thank you to our witnesses for being here today for our
+hearing entitled, ``A Year into the Pandemic: The State of
+International Development.''
+    Without objection, the chair is authorized to declare a
+recess of the committee at any point, and all members will have
+5 days to submit statements, extraneous material, and questions
+for the record, subject to the length limitation in the rules.
+To insert something into the record, please have your staff
+email the document to the previously mentioned address or
+contact our subcommittee staff.
+    As a reminder to members, staff, and all others physically
+present in the room, per recent guidance from the Office of the
+Attending Physician, masks must be worn at all times during
+today's hearing, although sometimes we take them off when we
+are speaking, and then, put them back on. Please also sanitize
+your seating area. The chair views these measures as a safety
+issue, and therefore, an important matter of order and decorum
+for this proceeding.
+    As a reminder to members joining remotely, please keep your
+video function on at all times, even when you are not
+recognized by the chair. Members are responsible for muting and
+unmuting themselves, and please remember to mute yourself after
+you finish speaking. Consistent with H.Res. 8 and the
+accompanying regulations, staff will only mute members and
+witnesses, as appropriate, when they are not under recognition
+to eliminate background noise.
+    I see that we have a quorum, and I will now recognize
+myself for opening remarks.
+    Thank you all for joining us today for this subcommittee's
+first hearing. I would like to thank Ranking Member Malliotakis
+and welcome all our subcommittee members, particularly members
+who are new to the Foreign Affairs Committee and to Congress.
+Our work will benefit from your unique perspectives and
+important contributions.
+    It has been 1 year since the COVID-19 pandemic changed our
+lives. Since then, we have all seen the world, and our standing
+in it, disrupted in ways we could hardly once imagine. The
+pandemic has created new challenges and exposed old weaknesses
+in America's capabilities abroad.
+    Our infrastructure for international development has been
+no exception to that. The United States contributions to global
+development, through USAID, the State Department, and our
+support for international organizations, such as the United
+Nations, as well as through the private sector, civil society,
+and the generosity of individual Americans, have all done
+incalculable good around the world. Now, however, these
+programs and institutions find themselves at a turning point.
+This hearing will serve to assess the damage, to identify
+developmental programs that may be at particular risk, and to
+chart a path toward rebuilding our Nation's development
+capacity.
+    As we begin to see the end of the pandemic in sight, we
+expect some of our capacity to bounce back naturally, as our
+people return to work in person, both in Washington and around
+the world. However, we must also identify areas in which the
+damage the pandemic caused threatens to be permanent, and then,
+work to direct resources toward rebuilding more resilient
+development systems that can survive the known and unknown
+crises to come.
+    This task is more important than ever. Rebuilding from
+COVID may well be as difficult and challenging as defeating the
+virus itself. Global poverty has risen for the first time in
+decades, and the pandemic's economic impact may last years in
+nations already suffering from high levels of inequality,
+instability, and underdevelopment.
+    Our government's efforts to foster development must address
+not just the direct impacts of the pandemic, but its secondary
+and even tertiary effects. Congress has already taken an
+important first step. Today, we will pass the American Rescue
+Plan Act, a bill that will bring much-needed relief to the
+American people. The bill also includes important funding for
+development priorities that I and this committee have been
+calling for.
+    That includes, for example, almost $10 billion for health
+programs, disaster relief, economic support, humanitarian
+assistance, multilateral assistance, and The Global Fund, an
+important international organization that has led the fight
+against HIV/AIDS, tuberculosis, and now, COVID-19. This hearing
+will inform our subcommittee's oversight over these programs.
+    It will also identify the long-term impacts of a pandemic,
+which I believe our Nation must lead in addressing. Early child
+development is one clear example of an issue that will have
+long-term consequences if we do not address it now. We know
+that the acute food insecurity faced by many children today
+will have a lifelong impact. Schools for nearly 170 million
+children have been closed for a year. Millions of children will
+never return to school, and most of them will be girls.
+    The impact of this pandemic so early in the lives of
+millions at home and around the world will affect health,
+education, and economic incomes for their entire lives, unless
+action is taken now. These impacts will be borne by entire
+societies and, indeed, by the world.
+    Our commitment to international development has always been
+bipartisan, particularly in Congress, where we successfully
+resisted cuts for the last 4 years. This bipartisanship will be
+essential for us to meet the challenges of this important
+moment.
+    If nothing else, COVID-19 has made clear that what happens
+over there affects us over here. Weak health care systems or
+poverty and instability that fuel extremism can all too easily
+reach our shores.
+    With these new challenges ahead of us, USAID must be
+willing to innovate and adapt to the very changed world we now
+inhabit. I have every faith that, with the proper resources and
+support, they will be up to the task.
+    I solicit the courage of America's international
+development work force that is in the field every single day.
+They are a critically important part of advancing our national
+interests and defending our national security, serving their
+country often in remote locations and under difficult
+circumstances.
+    Our challenge now is not only to defeat the pandemic
+everywhere, but also redouble our efforts to battle humanity's
+shared enemies--poverty, hunger, and disease--in partnership
+with peoples from around the world.
+    So, there is a lot of ground to cover this morning, and I
+look forward to hearing from each of our distinguished
+witnesses.
+    But, before that, I would like to turn it over to our
+Ranking Member Malliotakis for her opening remarks.
+    Ms. Malliotakis. Thank you, Chairman Castro. It is an honor
+to serve as ranking member of this subcommittee. I look forward
+to working with you and the rest of the committee members to
+conduct important oversight of our development programs and the
+United States' engagement in international organizations.
+    Over 2.5 million people around the world have died as a
+result of the COVID-19 pandemic. That includes over 500,000
+Americans. The pandemic has devastated communities and
+families, including many in my district. It has also had a
+crippling effect on food security, education systems, and
+global supply chains.
+    The creation of this subcommittee comes at a pivotal time.
+To date, the United States has given $3.6 billion to help
+control the spread and mitigate the impacts of COVID-19, and
+there is another $10 billion on the way through the American
+Rescue Plan.
+    Global efforts to stop the spread of COVID-19 make us safer
+here at home, especially as variants begin to emerge. We must
+continue to invest in global health security and ensure other
+countries can detect and respond to global health threats
+before outbreaks become a pandemic and reach our shores.
+    However, Americans here at home are struggling to pay their
+bills and feed their families. There is justified skepticism
+about our international spending with the immense needs here at
+home. We have an obligation to conduct rigorous oversight of
+U.S. foreign assistance and development programs. Every dollar
+of our aid must be targeted, strategic, and effective.
+    Unfortunately, the House Foreign Affairs Committee did not
+have the opportunity to mark up and debate the $10 billion
+foreign affairs title in the American Rescue Plan. During the
+Rules Committee markup, I offered a common-sense amendment to
+transfer funding from The Global Health Fund to ensure vaccines
+are available for all our diplomats and developmental
+professionals. Effective development requires getting out in
+the field and monitoring programs. We simply cannot expect our
+diplomatic service to do their jobs overseas without urgent
+access to vaccines. I would appreciate hearing from our
+witnesses what more we should be doing to ensure the safety of
+our work force overseas.
+    I am also particularly concerned about the impact of this
+pandemic on developing economies and international trade. The
+International Monetary Fund declared this crisis the worst
+economic fallout since the Great Depression. It is estimated
+that the pandemic has cost the global economy $11 trillion and
+global trade has declined 9.2 percent.
+    Latin America and the Caribbean will experience the worst
+economic contraction in the region's history. These
+contractions not only hurt local communities, but they also
+impact United States businesses looking to invest in emerging
+markets. The world's fastest growing companies are located in
+the global south, and many of them were hard hit by this
+pandemic.
+    USAID has done critical work over the last two decades to
+promote economic prosperity, build the capacity of trade
+partners, and create the environment for U.S. private sector
+investment. The COVID-19 pandemic threatens to undermine these
+gains, as backsliding and food security, health and economic
+systems, and governance ultimately hurts the investment climate
+and acts to commercial markets. I would appreciate hearing from
+the witnesses on how our development programs can address these
+issues.
+    Ultimately, foreign aid alone is not going to solve
+development challenges. Our development programs must be
+designed as partnerships, with the goal of creating stable,
+self-reliance communities that do not need foreign aid. That is
+why I support the important role of the U.S. private sector in
+building infrastructure, creating jobs, and advancing
+sustainable solutions to development challenges, both here and
+abroad.
+    Finally, the U.S. is not the only country offering aid. The
+Chinese Communist Party, who actively sought to undermine early
+investigations into the COVID-19 outbreak, is leveraging this
+pandemic to project their power and influence. Through
+shipments of the Sinopharm vaccine, faulty PPE, and by holding
+the purse strings of countries' debt relief, the CCP is looking
+to expand their Belt and Road Initiative, and ultimately, their
+influence in foreign capitals.
+    That is why USAID must ensure that this aid and our
+development programs are clearly branded as a gift from the
+American people. The United States is the most generous nation
+in the world, but we have a duty to the American taxpayer to
+ensure that our aid is targeted, strategic, and maximizing the
+positive impacts of every dollar we spend.
+    Again, I look forward to listening to the witnesses, and I
+thank them for being here.
+    Mr. Castro. Thank you, Ranking Member Malliotakis.
+    I will now introduce our distinguished witnesses for today.
+Our witnesses for today's hearing are Dr. Rajiv Shah, the
+president of the Rockefeller Foundation, and the former
+Administrator for the U.S. Agency for International
+Development, and Bonnie Glick, senior advisor at the Center for
+Strategic and International Studies, and fellow at the Harvard
+Kennedy School, who is also the former Deputy Administrator and
+Chief Operating Officer of the U.S. Agency for International
+Development.
+    I will now recognize each witness for 5 minutes. And
+without objection, your prepared written statements will be
+made part of the record.
+    And I will first call on Dr. Shah for his testimony. I
+think perhaps you are on mute, Dr. Shah.
+    STATEMENT OF DR. RAJIV J. SHAH, PRESIDENT, ROCKEFELLER
+FOUNDATION, AND FORMER ADMINISTRATOR, UNITED STATES AGENCY FOR
+                   INTERNATIONAL DEVELOPMENT,
+    Dr. Shah. Sorry, it seems I do that all day long.
+    Thank you, Chairman Castro, for having me, and thank you,
+Ranking Member Malliotakis, for your opening statement and for
+having me as well.
+    I see so many members of this subcommittee with whom I have
+had the chance to work when I served at USAID as the
+Administrator there for nearly 6 years. And I am thrilled to
+report that, during that period of time, I experienced an
+exceptional level of bipartisan support for the basic idea that
+American leadership around the world, particularly on disease,
+on hunger, and on creating opportunity for the world's most
+vulnerable people, became an area of strong bipartisan
+consensus, and I hope that tradition continues forward.
+    American leadership to tackle the crisis that had been
+identified by both the chairman and the ranking member in their
+opening statements will be absolutely critical; in fact, more
+needed now than ever, as we look to the future.
+    When I left USAID, I served in the private sector for a
+while, and now, I run the Rockefeller Foundation, which has,
+for more than 100 years worked to build public-private
+partnerships and leverage science, technology, and innovation
+to lift up those who are vulnerable. And I think we have
+learned through those efforts that, in fact, American
+leadership is indispensable on the global stage when it comes
+to tackling the challenges in front of us. And I would like to
+highlight three of those challenges that I believe warrant
+urgent leadership from the United States and from its foreign
+aid and assistance institutions.
+    The first, of course, is COVID. And while more than a half
+a million Americans have, tragically, been lost to this crisis,
+we know that millions have died around the world, and we know
+that, frankly, the crisis will continue for a much longer
+period of time in developing and emerging nations than in the
+United States, if current trends around vaccination, access to
+therapeutics, and the ability to be safe hold.
+    We know that, when you look around the world, we will
+expect to have large amounts of viral replication and viral
+presence and prevalence, even as the United States, hopefully
+sometime this year, achieves real herd immunity and starts to
+put the pandemic behind us. And that presents two major threats
+to the American people and the American economy.
+    First, estimates have ranged that we will lose $3 to $9
+trillion in economic value from disrupted supply chains and the
+presence of the COVID crisis around the world, even when the
+United States economy and society recover.
+    But, second, and perhaps much more worrying, is that new
+variants, which are almost certain to become a reality, have no
+ability to observe boundaries and borders. New variants already
+from the U.K. and South Africa present real risks and threats
+in the United States, and we expect that, especially as viral
+replication is so much more prominent, four to eight times more
+likely in the developing and emerging world than in the United
+States, we can expect that those new variants can present a
+real risk to the nature of the U.S. economic recovery and to
+the health of Americans that would like to put COVID-19 behind
+us.
+    For that reason, it is absolutely urgent that the world
+come up with a solution to the funding and operational gaps
+that are preventing a full-on effort to tackle COVID-19 in
+emerging economies and developing countries. In particular, the
+ACT Accelerator, which is the representation of global needs
+when it comes to fighting the pandemic, has highlighted a
+funding gap this year alone of $23 billion that still exists in
+order to help the world mount a full recovery.
+    The United States has been generous already, assuming the
+$4 billion for COVAX and the $10 billion that were referenced
+earlier go through and become the reality of law in the United
+States. However, the gap still remains. And in order for the
+U.S. to lead the world in tackling that gap, we will likely
+both have to do more and bring together multilateral partners
+through the World Bank, the International Monetary Fund, and
+other institutions where we can use our voice and our
+leadership to really solve this funding gap, and ensure that
+everyone around the world has access to safe and reliable and
+effective vaccines, therapeutics, and diagnostics, as that will
+be critical to tackling COVID-19 around the world.
+    I look forward to sharing some specific thoughts on how to
+do that, but let me just say, from my own experience, I am
+convinced that American leadership on that specific topic will
+be the only way the world tackles the funding gap that exists
+and the only way the world can come together to access the
+supplies, the tools, and the technologies needed to beat COVID-
+19 across the planet.
+    Second, we face a continued hunger pandemic. We have seen
+the number of people hungry around the world go up. Acute
+hunger is now estimated to be 270 million. I saw firsthand
+during famines and crises and droughts how hunger, in
+particular, leads to migration, instability, and social
+breakdown in ways that present real threats to the United
+States and to the global community. Hunger creates instability,
+and hunger creates massive amounts of unnecessary suffering.
+    America has, from the inception of its foreign aid work,
+been the world's undisputed leader in fighting hunger, and that
+will have to continue. That will mean more resources for the
+World Food Program, but it will also mean renewed support for
+programs like Feed the Future and efforts to have science and
+enterprise-led agricultural development be a major component of
+America's leadership in the era going forward. I hope that we
+can reinvigorate those efforts and reinvest in those
+enterprises and those projects, because, as was mentioned
+previously, they have been proven to work. We know how to
+measure the results of those efforts, and we know that they
+sustainably and reliably help lift up communities.
+    Finally, there will be the need for much greater assistance
+in a coordinated global economic recovery. It is true that
+developing countries and emerging economies have been hit hard
+by the pandemic, and it is also true that, while we have done
+20 to 30 percent of GDP in fiscal and monetary responses across
+wealthier nations, emerging markets have done 6 percent and
+developing countries have done less than 2 percent in order to
+support a real economic recovery. That is simply not enough,
+and it is not done in a coordinated manner. And it will not
+allow for a global economic recovery to be full and inclusive.
+So, American leadership on that topic, particularly through
+partners like the World Bank and the International Monetary
+Fund, will be critical to success.
+    I will close by just saying I have had the chance to speak
+to Americans in churches across the country, at universities
+like Clemson and Rutgers, and food companies in Minneapolis.
+And I am always struck by the fact that most Americans think we
+do so much more in foreign aid than we do. The perception is we
+do 20 percent of our budget in foreign aid. The reality is we
+do 1 percent. And when we explain what we get as results, I am
+always amazed by how most American families have expressed even
+more support for stronger and more effective American foreign
+assistance to deal with the challenges we face. I think the
+time is now to make that real and to make it meaningful in the
+context of the COVID response.
+    Thank you.
+    [The prepared statement of Dr. Shah follows:]
+[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
+    Mr. Castro. Thank you. Thank you very much for your
+testimony.
+    And I think for our witnesses and the members that are
+online, at least a minute ago the online timer had gone out.
+So, we will try to help you stay on time from here.
+    But, also, let me go over now to Ms. Glick, and if you want
+to take a little extra time also, please feel free. We have
+only got two witnesses today, so we should be okay on time.
+STATEMENT OF BONNIE GLICK, SENIOR ADVISOR, CENTER FOR STRATEGIC
+  AND INTERNATIONAL STUDIES FELLOW, HARVARD KENNEDY SCHOOL OF
+     GOVERNMENT, INSTITUTE OF POLITICS, AND FORMER DEPUTY
+ADMINISTRATOR AND CHIEF OPERATING OFFICER, UNITED STATES AGENCY
+                 FOR INTERNATIONAL DEVELOPMENT
+    Ms. Glick. Thank you, Chairman Castro; thank you, Ranking
+Member Malliotakis, and members of the committee.
+    I will not speak a million miles an hour then, as I go
+forward.
+    Thank you all for the invitation to speak with the
+subcommittee today about some of the challenges facing USAID in
+the current environment that includes the COVID-19 pandemic and
+the global response to it.
+    I served as the Deputy USAID Administrator and Chief
+Operating Officer of the agency from January 2019 to November
+2020. The remarks I make today are solely in my personal
+capacity.
+    Consistent bipartisan support for U.S. foreign assistance,
+regardless of the party in the White House or the majority
+party in the House or Senate, has been the hallmark of our
+foreign policy and one of the greatest examples of American
+generosity that we can point to overseas. The American people
+and their representatives understand that, even as we have
+domestic needs at home, our lengthy and historic generosity
+overseas is never in doubt.
+    That said, our fiscal well is not bottomless. Priorities
+change. Unforeseen crises erupt all the time and call for U.S.
+action. Yet, despite the merits of responding to these
+challenges, the urgency and the need for flexibility to respond
+are constrained as more and more of USAID's programmatic
+activities are scripted and predetermined.
+    Regardless of what else is discussed here today, the
+continued failure to address the harmful aspects of
+congressional earmarks would be insincere. And while others may
+focus on where the U.S. should be funding in the near future, I
+want to discuss key issues relating to how the U.S. should fund
+and implement these programs. This includes partnerships with
+new allied donors as well as with the private sector. It also
+includes the increased use of innovation and digital
+technologies to apply 21st century solutions to today's
+problems.
+    And while vaccine delivery to developing countries is
+clearly a health-related issue, the mechanism that underlies it
+is not, a secure and reliable supply chain with redundancy
+built into it. USAID has been lucky, since the earliest days of
+the President's Emergency Plan for AIDS Relief, or PEPFAR, in
+2003, to have recognized the need to invest in robust and
+secure supply chain capabilities. From a U.S. national security
+perspective, we must ensure that USAID and other government
+agencies focus on the safety and security of the global
+distribution of goods by moving to onshore, nearshore, and
+allied-shore our manufacturing and production basis.
+    Because what happens if we do not make these critical
+onshore, nearshore, and allied-shore moves? The People's
+Republic of China will fill the void. We have seen this time
+and again. Development is a key area of our strategic
+competition with the PRC. The U.S. needs a development agency
+equipped to win that competition, which requires a change in
+mindset at USAID and Congress' help to realize the agency's
+full potential.
+    USAID missions spend an enormous amount of time focused on
+how a single project can address multiple earmarks, thereby,
+allowing dollars generously funded by Congress to extend
+further. But this gymnastics exercise diverts attention from
+the big-picture funding opportunities, where USAID can be used
+as an effective and strategic tool to counter a resurgent
+China. USAID will turn 60 this year. I strongly recommend that
+USAID think bigger. Larger-scale projects in fewer countries
+may be the wave of the next 60 years.
+    And while USAID focuses on fewer, but larger projects, this
+is a perfect opportunity for burden-sharing with our allies and
+partners. It is important to discuss the expansion of our
+alliances. Given COVID and the trillions of dollars that the
+U.S. has taken on in debt for our own relief, it is important
+to embrace more and new donors.
+    We worked closely when I was at USAID, for example, with
+Israel, India, the United Arab Emirates, Kuwait, and others to
+broaden the tent of donor countries. We should continue in
+those efforts, particularly as countries like India move away
+from being aid recipients to being aid donors.
+    We should recognize and celebrate other donors'
+contributions. And in the wake of the Abraham Accords, we
+should certainly celebrate that donor countries like the UAE
+and Israel are now able to collaborate jointly on aid programs
+around the world. Fostering this kind of creativity and
+creative thinking, particularly by engaging with the private
+sector, will go a long way to making the Abraham Accords
+permanent and to maintaining a very warm peace.
+    Creative thinking through partnership with private industry
+and through the use of digital technology will also stretch
+scarce budget dollars more effectively and assist in job
+creation in parts of the world that were terribly impacted
+economically by COVID-19.
+    The non-health imperatives for development are clear. They
+include food insecurity, diminished livelihoods, increased out-
+migration, and uptick in violence against women, and others
+that we haven't even considered yet. USAID should focus its
+resources on where it can have the greatest impact and partner
+with allied countries when it makes more sense for them to be
+the primary donors. If we do not fund jointly with our allies,
+we risk ceding the table to China.
+    We have spent the entirety of the modern era as the most
+generous nation in the history of the world. It is a role that
+is uniquely American and should remain American.
+    Thank you very much, and I look forward to the opportunity
+to answer your questions.
+    [The prepared statement of Ms. Glick follows:]
+[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
+    Mr. Castro. Thank you, Ms. Glick, and thank you to both our
+witnesses for your testimony.
+    I will now recognize members for 5 minutes each. And
+pursuant to House rules, all time yielded is for the purposes
+of questioning our witnesses. Because of the hybrid format of
+this hearing, I will recognize members by committee seniority,
+alternating between majority and the minority members. If you
+miss your turn, please let our staff know, and we will circle
+back to you. If you seek recognition, you must unmute your
+microphone and address the chair verbally.
+    And I will start by recognizing myself.
+    This, of course, is the first hearing of this subcommittee,
+and we have a new President and a new Congress. And so, I want
+to start off with a broad question for either of our witnesses,
+or both of our witnesses, if you would like to take a shot at
+it.
+    The testimony today makes clear that the United States
+leadership on development must be an important part of our
+global COVID-19 response. In the next few months, the
+administration will submit its budget request for Fiscal Year
+2022, and the Congress will review that request. Given the
+scale of the challenge described in the testimony today, how
+important is it that we see a request for greater funding
+levels for development programs? And are there specific
+programs where you would put more money or move money? What are
+your recommendations?
+    Dr. Shah. Bonnie, I am happy to start, but I did not want
+to interrupt if you were intending to.
+    I would just say thank you, Chairman, for the question. I
+do think American leadership needs to be elevated to tackle the
+challenges that exist, and the challenges that exist go far
+beyond what American foreign affairs funding is going to be
+capable of solving directly. So, for that purpose, I would say
+three things.
+    The first is the budget should be strong and it should be a
+reinvestment in building the types of alliances that Bonnie
+mentioned and making sure that we lead with our own approach,
+which is making bigger investments in tackling COVID-19 around
+the world. It is not just buying the vaccines through COVAX,
+which we have already made a big commitment to, but also
+investing in training community health workers and building out
+health systems, so that you really can reach everyone. We
+learned during the Ebola crisis in 2014 that that was actually
+the critical investment necessary in order to successfully
+protect the population from the virus.
+    I would say, second, programs that have a documented track
+record of being public-private partnerships and delivering
+results--Feed the Future, Power or Electrify Africa, other
+enterprise collaborations that I know Bonnie led when she was
+at USAID--are all the types of programs that have real data to
+document their effectiveness, and in my view, should be
+invested in.
+    And the final area is around technology and innovation. We
+are seeing it right now with American ingenuity being so
+critical to the fight against COVID-19. But USAID created the
+U.S. Global Development Lab, which has earned strong bipartisan
+support from Congress, in order to reinvigorate America's
+capability to make innovation, science, and technology a driver
+of American foreign assistance. And I hope that that theme can
+be extended and carried forward in a much more significant way,
+because the challenges we face demand it, and because, frankly,
+American companies, American scientists, and American
+universities, including students on those university campuses,
+are eager to participate in this mission.
+    Mr. Castro. Thank you, Dr. Shah.
+    I have got about a minute 45 seconds under my time left. I
+am going to try to keep myself on time.
+    Ms. Glick, did you want to weigh in?
+    Ms. Glick. I will just say very quickly that we have never
+lived in times like this in modern history. And so, yes, the
+focus on COVAX and vaccine distribution is the critical moment
+for the short term. As Raj said, it is accurate that being able
+to depend on digital technology is going to be vital, and
+American ingenuity that comes along with that.
+    And so, that involves engaging with the private sector, and
+it involves, too, an eye toward who else is in this space. And
+the answer to that, as I noted, is the People's Republic of
+China. And our ability to act alongside our partners and
+genuinely with the private sector is going to be the way that
+we come up with the best solutions for the world. We have done
+this before and we can do it again, but we have to recognize
+that there is a disinformation campaign coming out of China
+that is discrediting American vaccines--a little bit crazy.
+    And we have to ensure that our staff, as Raj said, have the
+skills and technical ability to roll out distributions
+worldwide. Health systems strengthening is something that
+helped save countless lives in Ebola in 2014 and in Ebola today
+in the eastern Congo. And investing in those systems is going
+to be what helps us get through COVID worldwide.
+    Mr. Castro. Thank you, Ms. Glick.
+    All right. Ranking Member Malliotakis?
+    Ms. Malliotakis. Thank you very much. I very much
+appreciate the testimony. It was enlightening. And I just had a
+few questions.
+    My first question is really about, because both of you come
+from USAID, and my first question would be, based on your
+experience there, what kind of safeguards can we put in place
+just to make sure that the money is used most effectively. As I
+said in my remarks, our aid needs to be targeted. It needs to
+be strategic. It needs to be impactful. Do you have any
+recommendations on what we could be doing to ensure that?
+    Ms. Glick. I will jump on this one. Ranking Member
+Malliotakis, one of the most important things is the
+partnership that USAID has with Congress and the relationship
+that AID has with the Members to understand what we are doing
+in foreign assistance and how it impacts your districts. And
+so, the congressional oversight that you and your staffs
+demonstrate is always going to be something that helps keep
+USAID on the ball in terms of being able to respond to the
+needs while also being responsible stewards of taxpayer
+dollars.
+    Dr. Shah. I would just quickly add that I do think there
+are a handful of programs, perhaps more than a handful, where
+USAID sets the standard on measuring results and documenting
+performance. And I think you can learn from those efforts and
+extend those practices across the full range of American
+foreign assistance efforts.
+    One of the benefits of strong bilateral assistance
+programs, like many of the ones that USAID implements--and
+frankly, where the Rockefeller Foundation and others partner
+with USAID and so many others--is you can go out and do surveys
+at the beginning of a project and understand the nature of the
+population you are trying to serve. And then, you can do annual
+assessments, and three or four or 5 years later, do end-of-
+project assessments, and actually quantify the impact you are
+having.
+    We do this every day at the Rockefeller Foundation, which
+is how we know the 500,000 people we serve in northern India
+with renewable electricity access have used that access to
+increase their incomes by 60-70 percent and create new jobs and
+launch new businesses and enterprises. And that basic
+discipline is, I think, critical to this entire field, no
+matter which institution is charged with the responsibility of
+carrying it out.
+    Ms. Malliotakis. Thank you.
+    How can we best work with America's private sector? I know
+that so many companies or global entities, that they are
+building infrastructure; they are creating jobs; they are
+advancing sustainable solutions. How can we best utilize them
+as partners? Either one of you want to answer that?
+    Ms. Glick. I think one of the most important things that we
+did at USAID when I was there was to highlight the role of the
+private sector in development. And as part of the aid
+transformation, we set up a private sector engagement hub, so
+that there is a one-stop shop for private companies of all
+sizes--large corporates down to small businesses--in the United
+States, so that they can become involved in the delivery of
+foreign assistance around the world. It is job creator for us
+here at home, but it is also recognition that the private
+sector is the strongest force in world history for lifting
+people's lives and for giving people livelihoods that they can
+depend on for themselves and for their families. And so, that
+added focus at USAID has been something that I would recommend
+leveraging into the future.
+    Dr. Shah. And I would add I agree entirely with Bonnie, and
+I think there are two additional tools that I would ask
+Congress to support as much as possible. One is, during my
+tenure, we used a tool called the Global Development Alliance
+Structure that allowed USAID to partner with the private
+sector, frankly, in more creative ways than many other parts of
+the U.S. Government. And while that is a small share of USAID
+programming, I hope it can grow into a larger share.
+    And the second one is the U.S. Global Development Lab. By
+creating a lab that focused on building technology partnerships
+and bringing kind of modern science to the tasks at hand, we
+were able to build partnerships with firms that we otherwise
+would not have been able to, and frankly, attract a certain
+kind of talent to the institution in a way that is unique. So,
+I would call out both of those tools in addition.
+    Ms. Malliotakis. Thank you. I had one more question, but I
+will go----
+    Mr. Castro. Go ahead. Sure.
+    Ms. Malliotakis. The chairman is being gracious with our
+time.
+    I did have one last question regarding the supply chain, if
+you had any thoughts on COVID's impact on the supply chain,
+both from a manufacturing and a distribution standpoint? You
+may or may not. I just thought I would throw it out there to
+see if you--both of you are very wise and perhaps have your own
+recommendations there in how we can address that issue.
+    Dr. Shah. Maybe I will jump in on this. I do think, if you
+look at the estimates of what will cause disruption to the
+global economy post-the United States and other industrial
+nations achieving herd immunity through vaccination, it is the
+sanctity of global supply chains that are causing the estimates
+to be between $3 and $9 trillion of economic loss as a result
+of, basically, disrupted supply chains.
+    USAID has lots of partnerships with companies as parts of
+its programs that build and support those types of supply
+chains. So, I think that is yet another reason why the
+institution should be sort of strengthened and invested in in
+this period going forward, which, frankly, will be a longer
+period than I think most people realize. It is not just a
+threat for 6 months or 12 months. It is probably a threat for
+three to 5 years, because that is, most likely, the timeframe
+required to really get ahead of COVID-19 in the emerging world.
+    Mr. Castro. All right.
+    Ms. Glick. Let me just add to that, real quick, that the
+criticality of securing the supply chain, which is the most
+sophisticated supply chain on earth and capable of delivering
+lifesaving medications to the village level around the world,
+the criticality of investing in that, and also, ensuring that,
+through onshoring, nearshoring, and allied-shoring our products
+and manufacturing from the United States and our allies to
+bring it closer to the village level, is what is going to make
+a monumental difference in being able to distribute vaccines
+and everything else that is needed to rebuild global economies.
+    Mr. Castro. Thank you.
+    All right. I am going to go now to the vice chair of the
+subcommittee, Representative Jacobs.
+    Ms. Jacobs. Thank you so much, Mr. Chair.
+    And thank you to our witnesses for being here.
+    I want to go to a specific problem that we are seeing
+around the world. I think the pandemic has exposed just how
+difficult digital learning can be, both here in the U.S. and
+abroad. But it is not new. USAID and others have had many
+programs over the years to distribute computers and tablets and
+internet connectivity to underserved communities. In my
+estimation, some of these programs, such as One Laptop Per
+Child, sound really great in theory, but when you actually look
+at the data, have had very mixed successes.
+    And so, I was wondering, in both of your opinions, if you
+think USAID is adequately applying the lessons learned from
+those past failures in digital learning projects to meet these
+new challenges, what you think those lessons are and what more
+we can do here to ensure, as we are implementing these
+projects, we are doing it in the best way possible.
+    Ms. Glick. So, one of the areas of extreme focus when I was
+USAID, because I came from a technology background, was a focus
+on digital technology in the application and rollout of USAID
+programs. In order for the agency to be equipped for the 21st
+century, we launched a digital strategy 11 months ago. It was
+supposed to be in person and, of course, it was virtual, which
+seems appropriate, of course.
+    And what we have focused on is an approach at USAID that is
+digital first. Look for ways to apply solutions using digital
+technologies that are available. But the critical technology
+that has to reach the shores of the developing countries in
+order for countries to become self-reliant and competitive in
+global markets is 5G. And in order for 5G to be rolled out in a
+democratic manner, one of the things that we focused on was
+ensuring that secure 5G solutions were available around the
+world. We can get into the software that can enable this as
+well as the infrastructure, but 5G, and secure 5G, is the
+critical element for digital technology in bringing education,
+job opportunities, et cetera, to emerging markets.
+    Ms. Jacobs. Former Administrator Shah, do you have anything
+to add, particularly on how we are getting these digital
+learning techniques out to the hardest-to-reach students around
+the world?
+    Dr. Shah. Well, I want to thank you for the question.
+During my time there, I found that it is true that some
+programs that get a lot of visibility were not necessarily able
+to deliver quite as much. But there are plenty of efforts
+within U.S. investments in education access that were quietly
+very successful at getting new tools and technologies to very,
+very remote communities, and I had a chance to visit many of
+them, one in rural Nepal, for example. And I was struck by both
+the effectiveness and the measurement they had put in place to
+track third and fourth grade literacy and match scores
+associated with that, and made that a sort of practice we try
+to replicate broadly.
+    The other thing I would say is this is not the kind of task
+that I think America should try to handle in just a bilateral
+context. Investing in digitalization and digital
+infrastructure, broadband access, and 5G is a task that America
+can help lead together with the World Bank, and potentially,
+together with the use of certain types of IMF resources that
+seem like they will be made available to lower-income nations,
+because this can all be part of a focused recovery effort to
+restart the economy and create kind of a jobs-rich economic
+recovery in many emerging economies. So, I hope that the
+approach can be bilateral and multilateral.
+    Ms. Jacobs. Great. Thank you.
+    My next question is kind of addressing that poverty. We
+have seen that this pandemic has erased 10 years of the income
+gains for the first time since the 1990's, and global poverty
+rates are increasing, as you have mentioned in your testimony.
+I was wondering, besides additional funding, which I think we
+all recognize is an issue, what more can USAID programs be
+doing, with our partners or otherwise, to combat poverty, and
+what can we do to support USAID to meet those goals?
+    Dr. Shah. Well, maybe I will start with that. I think there
+are two big things I think that we can do besides funding. The
+first is really work with multilateral institutions to
+coordinate the impact of rescue and recovery packages. So, for
+example, if the International Monetary Fund is able to provide
+an allocation of what are called special drawing rights, but,
+basically, new resources to emerging economies, in that
+context, it would be great to see USAID and other bilateral
+institutions sort of partnering with the World Bank and the IMF
+and the development banks to make sure those many billions of
+dollars are deployed effectively and are really focused on the
+response and the recovery.
+    I think the second component is making sure that we have a
+longer time horizon on these efforts. There is a big risk that
+the programming we do is sort of 1-year timeframe kind of
+programming. And the reality is the recovery needed to avoid
+the loss of two decades of human development progress is going
+to take five, six, seven, 8 years. And I would love to see more
+long-term thinking applied because this moment calls for it.
+Otherwise, as you point out, we will lose one or two decades of
+progress fighting poverty, fighting disease, and fighting the
+lack of educational access for girls across the world.
+    Ms. Glick. And I agree wholeheartedly with that, and
+particularly, working with multilateral institutions. One of
+the things that we saw in the fall meetings at the World Bank
+was a call by World Bank President Malpass for debt relief for
+the poorest countries that have been impacted by COVID. And
+this is an area, too, where these same countries that have been
+so severely impacted on many levels have been impacted because
+they have bought into the Chinese Belt and Road Initiative, and
+they are heavily, heavily indebted to the People's Republic of
+China. It is a great opportunity for the world to focus on debt
+relief for the most indebted countries and to call on the
+People's Republic of China for debt relief.
+    Ms. Jacobs. Thank you. I yield back.
+    Mr. Castro. Thank you.
+    We will go now to Representative Issa.
+    Mr. Issa. Thank you, Mr. Chairman.
+    Ms. Glick, under your leadership at USAID, the agency
+developed key strategies and policy documents such as the
+Digital Strategy and Private Sector Engagement Policy. And you
+comment on recommendations for the Biden administration to
+continue or expand your initiatives?
+    Ms. Glick. Congressman Issa, thank you so much for the
+question, and it is really an important one for all
+administrations to recognize. I worked hard at USAID to bring
+it into the 21st century. And I am hopeful that the
+noncontroversial, highly lauded efforts that were undertaken to
+engage with the private sector as true partners around using
+digital tools to deliver development, including the recognition
+that 5G is an imperative, not just for developed economies, but
+for emerging markets, too, I hope and I trust that the momentum
+behind these efforts carries forward.
+    We socialized private sector engagement in our approach to
+5G, to food distribution, to supply chain management, with
+other donors, as well as across the U.S. Government. We had a
+particular engagement with the Federal Communications
+Commission. In fact, I signed an MOU with former FCC Chair Ajit
+Pai to have our two agencies collaborate on the rollout of 4G
+and 5G systems to developing countries.
+    There is broad recognition that in the 21st century no
+country will develop if it does not have appropriate digital
+tools and if children are not educated on the use of these
+tools. So, this is where USAID can partner effectively with the
+private sector, particularly with local private sectors, to
+deliver solutions worldwide.
+    For the Biden team, I will just say that the career staff
+at USAID is excited and more than capable to continue their
+focus on private sector engagement and on the digital strategy.
+They feel it is relevant and connected to the goals of self-
+reliance, and they are leading the agency into the 21st
+century, and others are eagerly joining in.
+    Mr. Issa. Thank you.
+    And hopefully, this is a quick yes-or-no question. One of
+the anomalies in the USAID package continues to be in excess of
+a million dollars a year that it spent on Cypress, a member of
+the European Union and certainly not a developing nation. Would
+it be fair to say that Congress needs to at least address the
+question of whether that pot of money, the USAID pot, should be
+spent on a disagreement, continued tension between the Greeks
+and Turks in Cypress, or whether, if we are going to make that
+investment, it should be made in some other way, particularly
+since it is a contingent expenditure?
+    Ms. Glick. Sir, it is a great question, and I would just
+say that this is really where congressional oversight is so
+important, and I urge that.
+    Mr. Issa. Thank you.
+    Last--and this is for both our witnesses--having spent 2
+years associated with the Trade Development Agency, one of your
+sister organizations, and beginning to realize from the time I
+was originally nominated for it that TDA, USAID, the EXIM Bank,
+our entire plethora of agencies is dwarfed by China's
+engagement in Belt and Road. And you mentioned 5G, and their
+obvious desire to dominate 5G and to dominate, if you will, the
+information-gathering behind those systems they install. Could
+you each give us your view of what the vision should be for
+Congress and for this administration to create a system,
+through any or all of those agencies, that would be able to
+compete aggressively and fairly for those system developments
+throughout the world?
+    Dr. Shah. Sure. Congressman, it is wonderful to see you
+again.
+    And I would just say you are right, the Belt and Road
+Initiative is a trillion dollar public-private, if you can call
+it that, collaboration in China that----
+    Mr. Issa. ``Public-public'' we might call it.
+    Dr. Shah. You might call it ``public-public,'' exactly. But
+there is a significant amount of commercial capital included in
+that trillion dollars. And it is funding everything from 108
+gigawatts of new coal development to all kinds of projects that
+have less-than-transparent documentation with respect to
+meeting basic Western standards for anti-corruption and
+transparency around public-private investments.
+    So, there is a tremendous need for the United States, in my
+view, to continue to invest in elevating the U.S. Development
+Finance Corporation and ensuring that America's foreign
+assistance agencies are working in concert with that
+institution, as well as with the World Bank and the IMF, that
+do focus on putting forward, you know, call it Western
+standards of governance of the economy and of economic
+transactions, and making sure that Bretton Woods system,
+together with the United States, can actually be an effective
+alternative proposition to the 23 or 26 countries that are
+currently actively participating in the Belt and Road
+Initiative.
+    And to do that, we have to focus more on making
+concessional finance available at much larger levels. We have
+to focus more on the kinds of industries countries value, like
+energy generation and electricity distribution and access. And
+we have to be much more focused on public-private
+collaborations to that end.
+    And the Rockefeller Foundation actually works on exactly
+those issues and would be happy to collaborate. But I do think
+that is what it will take to present a counter that is
+meaningful, given the scale of the Belt and Road Initiative.
+    Ms. Glick. And Congressman----
+    Mr. Castro. Ms. Glick, do you want to give Congressman Issa
+a quick answer on that also?
+    Ms. Glick. Congressman, the quick answer on that, too, is
+the one component that China leaves out, and we do not, is the
+$60 trillion of U.S. industry that are involved in the rollout
+of large-scale infrastructure around the world. So, while U.S.
+Government is dwarfed by the PRC, and as you rightly noted is a
+public-public partnership with companies like Huawei and ZTE,
+the public-private engagement to bring in the private sector of
+the United States bumps our numbers up tenfold, at least, over
+potential Chinese investments. And so, that is where I would
+urge that the Congress focus, that agencies focus, is on true
+partnership with the private sector.
+    Mr. Castro. Thank you.
+    Mr. Issa. Thank you, Mr. Chairman.
+    Mr. Castro. Thank you.
+    Representative Omar.
+    Ms. Omar. Thank you. I just wanted to start out thanking
+you, Chairman and the Ranking Member, for holding this
+important hearing. It is exciting to be here for the first
+hearing of this new committee. I am looking forward to doing
+great work together.
+    The World Poverty Clock estimates that up to 120 million
+people have been thrown into extreme poverty because of COVID,
+extreme poverty meaning that their households live on less than
+$1.90 a day. The people bearing the burden of this life live in
+the south, the global south, especially Sub-Saharan Africa and
+South Asia.
+    Last year, I lead a letter with Senator Bernie Sanders and
+more than 300 parliamentarians around the world to the World
+Bank, the IMF, and G20 country leaders. Our letter asked for
+serious consideration of debt cancellation as a way to address
+the rise of global poverty. One of the things we asked was for
+the IMF to issue special drawing rights, which could provide
+hundreds of millions of dollars in immediate relief to the
+world's poorest countries.
+    Mr. Chairman, I would like to introduce into the record
+this article in The Financial Times from the U.N. Economic
+Commission for Africa, Vera Songwe, making the case for using
+SDRs for Africa.
+    Mr. Castro. Without objection, it is entered into the
+record.
+    [The information referred to follows:]
+ [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
+    Ms. Omar. Dr. Shah, you have been supportive of special
+drawing rights as a way to alleviate the economic crisis.
+Secretary Yellen has also shown support for this policy. Dr.
+Shah, can you explain how the IMF issuing SDRs will help ensure
+countries in Africa respond to the pandemic?
+    Dr. Shah. Sure. Thank you, Congresswoman, for your
+leadership on this issues and your commitment.
+    In particular, the opportunity for the United States to
+support a G20-led coalition to enable the IMF to allocate
+greater special drawing rights across its member nations would
+create, depending on the scale of that issuance, potentially,
+up to $600 or $700 billion of value that can, then, be
+allocated to nations based on their shares of the IMF.
+    And in the past, we saw this coming out of the crisis when
+Gordon Brown was Prime Minister, coming out of the global
+financial crisis, and we saw some smaller actions on this front
+last year. Wealthier nations, then, would have the opportunity
+to take those SDRs, as they are referenced, and donate them or
+unlend them back to the IMF's Poverty Reduction Growth Trust to
+be used for nations that have much greater need in this moment.
+And that, effectively, does not cost the wealthier nations
+anything in the current moment.
+    So, it is a way of generating fiscal support for developing
+countries at a scale that is much greater than what I suspect
+America can do by acting bilaterally alone. And it is an
+effort, then, to make sure those additional resources that go
+to those developing nations are, then, used for health and
+economic recovery, so that COVID-19 can be tackled on the
+ground and can be dealt with, and the recovery can be much
+stronger.
+    I would say two points for this committee to sort of
+consider, and perhaps encourage. The first is America's
+participation in this effort would send such a powerful signal
+to the rest of the world that we are willing to work through
+multilateral institutions to, in a very efficient way, make
+resources available during a crisis.
+    And the second is America, by partnering its bilateral and
+multilateral agencies and efforts, has the opportunity to, in
+particular, ensure that these resources, which could be tens of
+billions of new dollars for the health response specifically,
+are used effectively to fill this ACT Accelerator-identified
+gap of $23 billion that I spoke about in my opening statement.
+    So, right now, as we look across the world at the
+Rockefeller Foundation, this is one of the few tools the planet
+has to relatively quickly put resources into play at that
+scale, and we hope that it can move forward.
+    Ms. Omar. Wonderful. And I know we are running out of time,
+but I wanted you to quickly maybe tell us what should the
+United States do to make sure vaccines are distributed quickly
+to Africa, Latin America, and the rest of the global staff.
+    Dr. Shah. Well, I think two things. The first is the
+immediate injection of the $4 billion to COVAX and the Global
+Alliance for Vaccines will make it possible to achieve the
+procurement goals GAVI has set or COVAX has set. As you know,
+that is still only trying to achieve 20 percent coverage for
+vaccination, and you need to get to 60, 70, 80 percent to
+really get herd immunity.
+    So, the two things I think is the U.S. needs to continue to
+make sure some of these multilateral tools like SDRs can be
+linked to further efforts to expand vaccination. And the second
+one is America has been a leader in investing through USAID, in
+particular, and PEPFAR, in particular, at building the health
+systems needed on the ground to make sure these products are
+actually delivered to people in need. And now seems like a
+moment where continued American leadership on that specific
+task can be of tremendous value to the world.
+    Ms. Omar. Yes. Thank you, Dr. Shah.
+    Thank you, Chairman. I yield back.
+    Mr. Castro. Thank you, Representative Omar.
+    Let's go to Representative Sherman.
+    Mr. Sherman. Thank you.
+    Today, we are going to pass a $1.9 trillion bill. Less than
+1 percent of that is there to help the world deal with this
+problem. And yet, that less than 1 percent has been subject to
+the most scathing, cheap political attacks. The fact is we have
+a strong interest in getting the world immunized.
+    A diplomat would tell you that our standing in the world is
+dependent upon our contribution to world immunization. A
+theologian would tell you that we must help the least of these
+and that we have a moral obligation. An economist would point
+out that our economy cannot fully recover while our trading
+partners are sheltering in place. And a virologist will tell
+you that, with over 7 billion people in the world, until they
+all get immunity or the benefits of herd immunity, the virus
+has a chance to infect; where it infects, it replicates; where
+it replicates, it mutates, and it could easily mutate into a
+form that, then, is a problem for the United States. So, if we
+were interested only in ourselves, we would work toward world
+immunization as quickly as possible.
+    Yet, there are two issues here. One is the distribution,
+and I think that will be dealt with by others in this hearing.
+And the other is the shortage of vaccine. And here's where the
+United States has been particularly shortsighted.
+    There are research studies that I think will show that, at
+least for people under age 55, only half the dosage is needed.
+Yet, there are those who say we should not fund those studies
+because we will not have the results until May, and by then,
+Americans will be immunized, and who cares about the rest of
+the world. That is stupid.
+    Right now, we are wasting over 10 percent of the vaccine
+because the FDA instructs people who are administering the
+vaccine, if there if half a dosage left in the bottle, to throw
+away the bottle, rather than get half the dosage from this
+bottle and half the dosage from the next bottle, which are part
+of the same manufacturing lot.
+    So, Dr. Shah, it is great to see you back before our
+committee, now in a new role.
+    Are we doing enough to study how we can stretch the
+existing vaccine and how we can manufacture vaccine more
+quickly, not with the finish line being May 31st, because that
+is when Americans are vaccinated, but with a goal of immunizing
+the vast majority of the people in the world?
+    Dr. Shah. Thank you, Congressman, for your statement, and
+it is good to see you again.
+    I do agree that the need to identify vaccine efficacy
+strategies via research will continue to be a significant
+requirement, certainly well beyond May, and potentially, for
+years to come. And I think you might think of it as covering a
+number of different areas of research and inquiry.
+    The first, as you point out, is the efficacy of current
+vaccines against current variants that are present in the viral
+population. And both are going to be changing over time. So, it
+is really not something you can just end the research on. You
+have to continue to do it.
+    The second is actually monitoring the variants that emerge
+from developing and emerging economies, and frankly, in the
+United States. Now, in the United States, the CDC has crafted,
+together with the NIH, a very strong plan for raising the level
+of genomic surveillance to track viral variants.
+    Mr. Sherman. I would point out they have been very late to
+do that, but now----
+    Dr. Shah. Yes, they have been very late to do it, but now
+there is a plan to do it. I think the country that has done it
+best is the United Kingdom, and they have done it in a public-
+private partnership with the Wellcome Trust and others.
+    We are working with--and we hope the U.S. can play a very
+big role--replicating what they have done there in emerging
+environments and developing countries around the world where
+very little to no viral genomic surveillance is taking place.
+And I would say that is just as important as the other question
+of vaccine efficacy.
+    And then, finally, as part of all of this, there need to be
+ways to constantly test existing vaccines and convalescent
+plasma against the new variants that do emerge, and that is
+another area that will require continued research. So, I think
+the research enterprise here has to be global and has to
+persist, frankly, for many years after most people, hopefully,
+move beyond thinking of COVID-19 as a day-to-day challenge.
+    Mr. Sherman. Thank you.
+    I would just comment that there is nothing that is more
+penny-wise and pound-foolish than us to fail to spend on the
+things you identify that, if we can get people vaccinated
+against the variants that we are aware of, that will reduce the
+replications and mutations that can give us a variant that does
+not yet exist. And it is perhaps the best expenditure of
+American resources to do a lot more than 1 percent of our
+expenditures on stopping this worldwide.
+    I also want to take a moment to commend Mr. Castro, our
+chair, on being the first to chair any hearing of this
+subcommittee in history, and I look forward to more greats as
+good as this one.
+    And I yield back.
+    Mr. Castro. Thank you, Mr. Sherman.
+    All right. Let's go over to Ms. Houlahan.
+    Ms. Houlahan. Thank you. And I want to echo Mr. Sherman's
+commendation. This is a really important and exciting new
+subcommittee. And I actually want to focus on the title or the
+name of the subcommittee with having it ``Global Corporate
+Social Impact.''
+    And my question, first question, is for Mr. Shah. I really
+am interested in corporate accountability. Are companies/
+corporations across the globe
+    [audio interference] about social impact and
+responsibility?
+    Mr. Castro. It looks like Ms. Houlahan's video froze there.
+Let's see if we can get her back here for a few seconds. And if
+not, then we will go--why do not we go to Mr. Kim, and then, we
+will come right back to Ms. Houlahan.
+    Mr. Kim of New Jersey. Thank you.
+    Mr. Castro. Mr. Kim.
+    Mr. Kim of New Jersey. Yes, thank you, Chairman, for
+pulling this together.
+    And we will turn it back to my colleague, Chrissy Houlahan,
+after this; hopefully, her bandwidth gets it.
+    I was looking through your testimony, and you give some
+really thoughtful remarks about some of the things that we
+should be doing, especially when it comes to China. And one of
+them was about the World Health Organization, and you are
+proposing some different reforms there on that level. I have
+heard that from both people who have been supporters and
+critics of the WHO, that we be looking into reforms.
+    What I want to
+    [audio interference] coordinating body. In the aftermath of
+the pandemic, can we think about what do we need as a global
+structure to be able to make sure that we are better prepared
+for the next time around? And I think I want to just kind of
+hear a little more from you because some of the language you
+use is really spot-on, but also some of it, like when you say
+kind of a trimmed-back WHO, it concerns me because, in the
+aftermath of a pandemic, wouldn't we want to have more
+abilities to be able to engage globally when it comes to
+health? And I am sure that is something you agree with as well,
+but perhaps it means a different entity or a different
+structure is put into place. So, if you can just kind of
+elaborate on that a little further?
+    Ms. Glick. So, there was a little bit of a lag there, and I
+am not sure I heard the entirety of your question, Congressman,
+but I think it was directed to me. And I want to thank you for,
+one, reading the testimony, and two, for the very thoughtful
+question about the World Health Organization.
+    When the Trump administration made the decision to leave
+the WHO, there really was a lot of consternation in the
+international donor community, but there was no other time
+during which a U.S. exit from what is a malfunctioning
+international organization could have had a greater impact than
+during the pandemic itself. WHO has been on a slow slog toward
+complete dysfunction. And while this was made manifest to the
+world during the initial COVID-19 outbreak, it was obvious to
+global health practitioners and to people who were suffering
+from the Ebola outbreak in eastern Congo before COVID-19 hit
+the world stage. The WHO was broken.
+    So, the focused attention that the Trump administration
+brought to WHO's failings in Wuhan has, hopefully, gone a long
+way to starting the reform of it. And I hope that a U.S.
+reentry into WHO will live up to its original mandate of global
+health coordination, but it needs some significant reforms.
+    The Biden administration should continue to press for
+reform. WHO does not have to be all things health-related to
+nations all over the world, but, rather, it should maintain the
+high-level coordinating function that it was established to
+have.
+    So, we may have forced some tough medicine onto the WHO,
+but I do think that, as you noted, a trimmed-back WHO may be a
+better coordinating body than the current WHO that is dispersed
+in 150 countries around the world and really micro-focused
+rather than focused on broad global concerns.
+    Thank you so much for the question.
+    Mr. Kim of New Jersey. Yes, thank you, Ms. Glick.
+    I mean, look, I am open to looking at some of these reforms
+and looking for how we can improve the coordination when it
+comes to the WHO and the function there. But, again, while we
+are thinking about that, I would also need to just understand
+more clearly going forward what other structures that we could
+put in place to have some of the oversight. You know, if some
+of the problem was the lack of the WHO to be able to do proper
+inspections and oversights, and aspects like that, I worry
+about trimming back. I worry about that kind of language in
+terms of how we push on that. So, that is what I was just
+trying to get at.
+    Perhaps it is not the WHO that needs to play those
+functions, but we need to put sort of a bigger apparatus
+together on how we move forward in the aftermath of this
+pandemic, once we are able to really assess on that. And I hope
+you are right that the Biden team thinks very thoughtfully and
+carefully about how we can structure that.
+    So, if you do not mind, I would love to just stay in touch
+with you, Ms. Glick and Dr. Shah, about that in terms of just
+understanding that broader ecosystem in which we pull together
+what kind of public health and global health foundation and
+infrastructure we need going forward.
+    And with that, I will turn it back to the chairman.
+    Mr. Castro. Thank you, Mr. Kim.
+    All right. We are going to circle back to Ms. Houlahan.
+Hopefully, we got the technical issues solved.
+    Ms. Houlahan? There is still a lag perhaps?
+    Ms. Glick. I think you are muted.
+    Ms. Houlahan. Can you hear me? Hello. Can you guys hear me?
+Yes?
+    Mr. Castro. Yes, we can hear you.
+    Ms. Houlahan. Excellent. Excellent.
+    I really want to direct my question, the first one, to Dr.
+Shah. One of the things that excites me most about the new
+committee has to do with its emphasis on global corporate
+social responsibility and interest. And my question is,
+considering kind of the power of the for-profit sector of our
+economy and the global economy, how can we, Dr. Shah, help to
+drive corporate accountability for the social impact that many
+of our companies have the ability to have?
+    A lot of our companies, particularly when we speak to the
+pandemic and their opportunities to help on a global scale and
+to help address these issues, talk a really big game, but they
+do not necessarily follow through on it. And so, I was
+wondering if you might be able to comment on the importance of
+global social and environmental responsibility on the part of
+the for-profit sector, if that is something that you might be
+able to comment on for us.
+    Dr. Shah. Sure. Thank you for that question, and I am glad
+that that concept is built into the structure of this
+committee.
+    It is true that there have been a number of different
+efforts to enable companies to, in a more systematic manner,
+report regularly on their performance on economic, social, and
+governance issues as it relates both to domestic and
+international priorities. And I think we need to continue to
+encourage and establish those types of standards of reporting.
+    And Rockefeller does a fair amount of this work, and as a
+social investor, is also actively investing in ESG or companies
+that claim to do better on economic, social, and governance
+issues. The challenge there has always been transparency and
+reporting. So, a company that pays very low wages or contracts
+out much of its work, and avoids most labor protections in
+doing so, can also have a very attractive marketing campaign
+around a few special projects and create the impression that
+they are doing well across all these issues.
+    There are some indices out there. In particular, JUST
+Capital is a platform that I think is doing very good work on
+creating indicators and rankings of companies, in that case
+across the Russell 1000, that is a more sophisticated way of
+understanding corporate social responsibility and impact
+related to it. And I think an outstanding path forward for our
+country would be having some of those types of more serious
+reporting requirements built into corporate accounting very
+broadly and required in one form or another.
+    Ms. Houlahan. I really appreciate that, and I appreciate
+the connection that we have today and hope to be able to
+followup with you on this particular subject.
+    And I know I have a short amount of time. So, if it is OK,
+I would like to send this one over to a different subject which
+I am very passionate about, which is women and girls. This
+pandemic has been really devastating to everyone, but I think
+particularly to women and girls across this country and the
+globe.
+    I was wondering, what is the most important thing that we
+can be doing with USAID to address the gender and
+    [audio interference] of this pandemic? Where should we be
+focusing our efforts on both issues? Perhaps we will start with
+Ms. Glick.
+    Ms. Glick. Sure. And thanks for the great question and for
+that genuine level of concern.
+    We know that women and girls are the most vulnerable
+populations. And one of the things that is predicted to be one
+of the secondary or tertiary impacts of COVID-19 is going to be
+the impact that it has on livelihoods, on gender-based
+violence, and on basic education.
+    And the real concern is access, access to livelihoods for
+women, out-migration very often of their male partners to other
+countries in search of higher wages, and to girls in terms of
+access to education. One of the areas where USAID can make a
+difference, I believe, again, is in the provision of education
+through digital technology. We are seeing creative ways,
+working with important partners like UNICEF, to bring education
+to internally displaced people, to refugee camps, using
+technology in a way that it has never been used before. So,
+there is keen awareness that the issues as they relate to
+girls, to their continuing education, to gender-based violence,
+as well as to the needs for women to be active and engaged in
+the marketplace, are really felt within USAID, I believe.
+    One of the areas, too, where the United States shines, and
+USAID really shines, I will say, is in the delivery of the
+maternal and child health systems around the world. Because of
+the investments that have been made by the United States, more
+and more women and girls have access to health care and family
+planning.
+    One of the other areas where we have made investments, and
+this Congress is upping those investments, is with GAVI, the
+global vaccine alliance, and ensuring that children have access
+in some of the poorest countries to vaccinations, which will
+allow us to move from those levels of malnutrition and poor
+health as children into healthier young adults, and then, into
+engaged members of the economy.
+    Ms. Houlahan. Thank you. I really appreciate it. I know I
+have run out of time, but I did want to put focus on the
+importance of health in women and girls, and I look forward to
+reintroducing my bill on funding the UNFPA again.
+    And with that, I yield back.
+    Mr. Castro. Thank you, Ms. Houlahan.
+    And that concludes the questions from our Members of
+Congress to our witnesses.
+    I would like to thank everyone again for joining us for our
+subcommittee's first hearing. And I would particularly like to
+thank our witnesses for their expert testimony. You have given
+this Congress a lot to consider as we seek to rebuild our
+Nation's international development capacity and work force.
+    For the past year, the COVID-19 pandemic has done much to
+expose and widen the fractures in societies around the world.
+Even as the pandemic causes new challenges for U.S. development
+policy, we find that American leadership in this space is more
+necessary than ever.
+    I trust that the work force of USAID and the State
+Department are up to the challenge, and I am committed to
+ensuring that this Congress provides them with the support they
+need.
+    Working together with international partners and
+organizations, I am confident we can build a safer, healthier,
+and more prosperous world for all of our people, and in so
+doing, ensure the safety, health, and prosperity of our own
+nation. And we look forward to the work ahead.
+    Thank you.
+    And with that, we are adjourned.
+    [Whereupon, at 11:29 a.m., the subcommittee was adjourned.]
+                                APPENDIX
+[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
+                                 <all>
+</pre></body></html>

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+<html>
+<title> - THE ROLE OF COMMUNITY NAVIGATORS IN REACHING UNDERSERVED BUSINESSES</title>
+<body><pre>
+[House Hearing, 117 Congress]
+[From the U.S. Government Publishing Office]
+                     THE ROLE OF COMMUNITY NAVIGATORS IN
+                       REACHING UNDERSERVED BUSINESSES
+=======================================================================
+                                HEARING
+                               BEFORE THE
+               SUBCOMMITTEE ON UNDERSERVED, AGRICULTURAL,
+                     AND RURAL BUSINESS DEVELOPMENT
+                                 OF THE
+                      COMMITTEE ON SMALL BUSINESS
+                             UNITED STATES
+                        HOUSE OF REPRESENTATIVES
+                    ONE HUNDRED SEVENTEENTH CONGRESS
+                             FIRST SESSION
+                               __________
+                              HEARING HELD
+                             MARCH 18, 2021
+                               __________
+[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
+            Small Business Committee Document Number 117-006
+             Available via the GPO Website: www.govinfo.gov
+                               __________
+                    U.S. GOVERNMENT PUBLISHING OFFICE
+43-802                      WASHINGTON : 2021
+-----------------------------------------------------------------------------------
+                   HOUSE COMMITTEE ON SMALL BUSINESS
+                 NYDIA VELAZQUEZ, New York, Chairwoman
+                          JARED GOLDEN, Maine
+                          JASON CROW, Colorado
+                         SHARICE DAVIDS, Kansas
+                         KWEISI MFUME, Maryland
+                        DEAN PHILLIPS, Minnesota
+                         MARIE NEWMAN, Illinois
+                       CAROLYN BOURDEAUX, Georgia
+                          JUDY CHU, California
+                       DWIGHT EVANS, Pennsylvania
+                       ANTONIO DELGADO, New York
+                     CHRISSY HOULAHAN, Pennsylvania
+                          ANDY KIM, New Jersey
+                         ANGIE CRAIG, Minnesota
+              BLAINE LUETKEMEYER, Missouri, Ranking Member
+                         ROGER WILLIAMS, Texas
+                        JIM HAGEDORN, Minnesota
+                        PETE STAUBER, Minnesota
+                        DAN MEUSER, Pennsylvania
+                        CLAUDIA TENNEY, New York
+                       ANDREW GARBARINO, New York
+                         YOUNG KIM, California
+                         BETH VAN DUYNE, Texas
+                         BYRON DONALDS, Florida
+                         MARIA SALAZAR, Florida
+                      SCOTT FITZGERALD, Wisconsin
+                 Melissa Jung, Majority Staff Director
+            Ellen Harrington, Majority Deputy Staff Director
+                     David Planning, Staff Director
+                           C O N T E N T S
+                           OPENING STATEMENTS
+                                                                   Page
+Hon. Jared Golden................................................     1
+Hon. Jim Hagedorn................................................     3
+                               WITNESSES
+Ms. Rebecca Shi, Executive Director, American Business
+  Immigration Coalition, Chicago, IL.............................     6
+Ms. Bridget Weston, Chief Executive Officer, Service Corps of
+  Retired Executives (SCORE), Herndon, VA........................     7
+Ms. Pilar Guzman Zavala, Chief Executive Officer, Half Moon
+  Empanadas, Miami, FL...........................................     9
+Mr. Bruce Strong, State Director, Minnesota Small Business
+  Development Center (SBDC), St. Paul, MN........................    11
+                                APPENDIX
+Prepared Statements:
+    Ms. Rebecca Shi, Executive Director, American Business
+      Immigration Coalition, Chicago, IL.........................    29
+    Ms. Bridget Weston, Chief Executive Officer, Service Corps of
+      Retired Executives (SCORE), Herndon, VA....................    34
+    Ms. Pilar Guzman Zavala, Chief Executive Officer, Half Moon
+      Empanadas, Miami, FL.......................................    45
+    Mr. Bruce Strong, State Director, Minnesota Small Business
+      Development Center (SBDC), St. Paul, MN....................    47
+Questions and Answers for the Record:
+    Questions from Hon. Jared Golden to Ms. Bridget Weston and
+      Answers from Ms. Bridget Weston............................    50
+    Questions from Hon. Jared Golden to Ms. Rebecca Shi and
+      Answers from Ms. Rebecca Shi...............................    52
+    Questions from Hon. Jared Golden to Mr. Bruce Strong and
+      Answers from Mr. Bruce Strong..............................    58
+Additional Material for the Record:
+    America's SBDC Missouri......................................    59
+  THE ROLE OF COMMUNITY NAVIGATORS IN REACHING UNDERSERVED BUSINESSES
+                              ----------
+                        THURSDAY, MARCH 18, 2021
+              House of Representatives,
+               Committee on Small Business,
+         Subcommittee on Underserved, Agricultural,
+                            and Rural Business Development,
+                                                    Washington, DC.
+    The Subcommittee met, pursuant to call, at 10:00 a.m., in
+Room 2360, Rayburn House Office Building, Hon. Jared Golden
+[chairman of the Subcommittee] presiding.
+    Present: Representatives Golden, Crow, Delgado, Hagedorn,
+Williams, Stauber, Tenney, and Salazar.
+    Also Present: Representative Luetkemeyer.
+    Chairman GOLDEN. I call this hearing to order.
+    I want to make sure to note a couple of important
+requirements before we get going. Let me first say that
+standing House and committee rules and practice continue to
+apply during hybrid proceedings. All Members are reminded that
+they are expected to adhere to these standing rules, including
+decorum.
+    House regulations require Members to be visible through a
+video connection throughout the proceedings, so please keep
+your cameras on. Also please remember to remain muted until
+recognized to minimize background noise. If you have to
+participate in another proceeding, please exit this one and log
+back in later. In the event a Member encounters technical
+issues that prevent them from being recognized for questions I
+will move to the next available Member of the same party and
+recognize that Member at the next appropriate time slot
+provided they have returned to the proceeding.
+    For those Members physically present in the Committee room
+today, we will also be following health and safety guidelines
+issued by the House attending physician. That includes social
+distancing and the use of masks. Members and staff are expected
+to wear masks at all times while in the hearing room. And I
+thank you in advance for your commitment to a safe environment
+for all here today.
+    I am proud to serve as Chair of this Subcommittee.
+    Underserved, agricultural, and rural small businesses have
+experienced some of the harshest outcomes of the COVID-19
+pandemic. The road to recovery they face is long and we should
+ensure to advance policies that will prioritize them so that
+they are not left behind. I hope to use this Subcommittee's
+first hearing during the 117th Congress to examine the newly
+created Community Navigator Program.
+    Throughout the COVID crisis large numbers of minority-owned
+and rural small businesses found themselves on the outside
+looking in when trying to access emergency relief. During the
+early days of the Paycheck Protection Program and Economic
+Injury Disaster Loan Advances, large financial institutions
+often prioritized larger customers at the expense of
+underserved rural small businesses. This lack of access to
+relief added insult to injury for small businesses bearing the
+brunt of the pandemic's economic impact.
+    When COVID struck, many small businesses in rural areas
+were still financially and structurally rebounding from the
+Great Recession. During 2020 slow rural population growth and
+declining labor force participation led to a much slower
+employment rate in rural areas than elsewhere. Rural businesses
+also face a lack of access to capital in general, as well as
+broadband connectivity, making pivoting to digital offerings
+and adapting to the COVID business environment much more
+difficult.
+    Minority-owned businesses have also been devastated by this
+crisis. Last year the number of actively working self-employed
+business owners fell dramatically across the black, Hispanic,
+and Asian American communities. And minority-owned firms that
+had been fortunate enough to avoid closure faced harsher
+financial conditions and have less cash on hand than white
+firms do.
+    These are the realities that led to the creation of the
+Community Navigator Program. Congress authorized the program as
+part of the American Rescue Plan Act of 2021. It will provide
+$100 million for grants to organizations to participate in the
+program and $75 million to support outreach and education. The
+funding for education and outreach will go towards offering
+services in the 10 most common languages other than English,
+making improvements to the SBA's website, implementing
+immediate campaign to educate underserved communities, and
+establishing an SBA call center.
+    The Community Navigator Program will supply grants to
+traditional business assistance organizations, like small
+business development centers, women's business centers, and its
+core chapters. These institutions have deep ties to the
+communities they operate in and will engage trusted, culturally
+knowledgeable partners to conduct targeted outreach to specific
+sectors of the small business community.
+    This outreach can manifest in various ways, including
+hiring dedicated staff to focus on these individual
+communities, or partnering with specialized community
+organizations and chambers of commerce via a hub and spoke
+model. The Community Navigator Program seeks to engage with
+underserved communities by providing technical assistance and
+enhanced outreach.
+    For this program to meet its stated goal Congress must
+closely monitor its roll out and work with the Administration
+to make the program operate as effectively as possible. That is
+why this hearing today is important.
+    I look forward to hearing from our witnesses about the
+potential impact of the program on underserved and rural small
+businesses and ways the Subcommittee can ensure as many small
+businesses benefit as possible.
+    With that, I will now yield to the Ranking Member, Mr.
+Hagedorn, for his opening statement.
+    Mr. HAGEDORN. Well, thank you, Mr. Chairman, and
+congratulations on your appointment as Chair of this
+Subcommittee. And on behalf of the Republican Members and
+myself we look forward to working with you during this Congress
+to especially help our small businesses and those in the rural
+communities and the agricultural sector.
+    Chairman GOLDEN. I very much look forward to working with
+you too and I am blessed to be two Congresses in a row working
+on a Subcommittee with a Member from Minnesota. And you got the
+other one sitting right in front of you.
+    Mr. HAGEDORN. And I know Congressman Stauber had a good
+working relationship with you as well.
+    So small businesses from all sectors of the economy have
+turned to the U.S. Small Business Administration programs for
+relief during the COVID-19 pandemic. Following the launch of
+the Paycheck Protection Program created by Congress in March of
+last year, the SBA processed more than 14 years-worth of loans
+in less than 14 days, serving or assisting over 50 million
+small business jobs during the program's first run. That is
+just unbelievable when you think about it, the amount of work
+and loans that were run through in such a short period of time.
+    The success of recovery programs like PPP is undeniable.
+However, there is no doubt that inconsistent guidance,
+burdensome paperwork, and administrative holes and delays have
+caused confusion for small businesses looking to utilize these
+programs. As Democrats continue to exploit the COVID-19
+pandemic as an excuse to ram through their massive spending
+package and create new government programs, I believe Congress
+should focus on targeted and efficient relief that will aid
+small businesses as we reopen the economy.
+    The partisan $1.9 trillion so called American Rescue Plan
+Act of 2021 directed the SBA to establish a Community Navigator
+Pilot Program. This program will issue grants or contracts with
+nonprofits, resource partners, states, and localities,
+providing free assistance and resources to small businesses for
+programs made available during the COVID-19 pandemic. It is my
+hope that any new program created by Congress will aid existing
+SBA resource partners in their outreach to all communities and
+not duplicate current efforts.
+    Southern Minnesota is home to a diverse group of small
+businesses. In my district it is important that rural
+communities have the resources needed to contribute to the food
+supply, fuel rural America, and support other local businesses.
+    As we move past the pandemic it is critical that we ensure
+farmers and ranchers have access to the resources needed to
+maintain operations. To support rural communities and
+agricultural small businesses, I have introduced H.R. 1411, the
+Bipartisan PPP Flexibility for Farmers and Ranchers Act, which
+would allow farmers and ranchers categorized as partnerships to
+utilize gross income when calculating PPP loans. I hope the
+Members will support me on that bill. I think it can really
+help over 100,000 farm partnerships as we move forward.
+    Today's hearing will explore the role of community
+navigators in researching underserved communities. I look
+forward to hearing from our witnesses on the outreach completed
+by existing SBA resource partners, like small business
+development centers, during the pandemic and how they have
+reached underserved areas, including remote and rural
+communities. I look forward to discussing the Community
+Navigator pilot program's objectives and deliverables in
+addition to the standards which the navigators will need to
+uphold.
+    Congress has appropriated $175 million for this program and
+we must ensure that we be proper stewards of the taxpayers'
+dollars and that the Navigator program yields beneficial
+results for small businesses.
+    With the economy in recovery and egregious and arbitrary
+lock downs finally coming to an end, new and existing federal
+COVID tools, such as the Community Navigator pilot program,
+need to be closely examined to determine the most effective,
+economical, and efficient next steps.
+    Thank you for being here today to discuss this important
+topic. I yield back.
+    Chairman GOLDEN. Thank you, Mr. Hagedorn.
+    Very quickly I will explain how this hearing will proceed.
+Each witness will have 5 minutes to provide a statement and
+each Committee Member will have 5 minutes for questions. Please
+ensure your microphone is on when you begin speaking and that
+you return to mute when finished.
+    With that, let us introduce our witnesses.
+    Our first witness today is Ms. Rebecca Shi, executive
+director of the American Business Immigration Coalition. As
+executive director of ABIC Ms. Shi works directly with a
+steering committee of over 350 CEOs, university presidents,
+chambers of commerce, and immigrant advocates to support the
+passage of pro immigrant policy at the state and federal
+levels.
+    Welcome, Ms. Shi.
+    Our second witness--one moment. Just for one second. Our
+second witness is Ms. Bridget Weston. Ms. Weston is the CEO of
+SCORE. As CEO Ms. Weston provides executive leadership and
+works directly and collaboratively with the board of directors
+to establish the vision and direction of SCORE.
+    In her 10 years with the organization she has developed an
+in depth understanding of the needs and challenges facing
+SCORE's staff, its 300 chapters, and over 10,000 volunteers.
+    Welcome back, Ms. Weston.
+    I would now like to yield to Ms. Salazar to introduce our
+third witness.
+    Ms. SALAZAR. Thank you, Mr. Chairman, for this opportunity.
+    And I would like to introduce my constituent, Ms. Pilar
+Guzman Zavala. Ms. Zavala is a small business owner in the City
+of Miami that I represent and the CEO of Half Moon Empanadas,
+an Argentinian style restaurant based in my district. She is
+also a mentor for women entrepreneurs in the City of Miami with
+the WIN Lab Miami from Babson College and the Florida
+International University StartUP program.
+    She is a Ricardo Salinas Scholarship recipient for the
+Aspen Institute and a Young American Leaders Program Fellow
+from the Harvard School of Business.
+    Additionally, Ms. Zavala is a Venture Cafe board Member and
+a Miami leadership and a Miami fellow graduate.
+    Small businesses are the foundation of our community. And
+during these difficult times our local job creators have been
+absolutely devastated. I am committed to restoring our economy
+and delivering much needed COVID relief for our struggling
+small business owners in South Florida.
+    Ms. Zavala's story is truly one of the American dream, just
+like mine. But her story is also one of the trials and
+tribulations. And we look forward to hearing from your
+experiences, Ms. Zavala.
+    Thank you so much for joining us today and to all of you
+for doing everything you are doing for our community. Your
+determination over the last year is an example to all of us
+small business owners. And I specifically and my staff are
+looking forward to visiting Half Moon Empanadas on our next
+trip to Miami.
+    Thank you, Ms. Zavala. I yield back.
+    Chairman GOLDEN. Thank you, Congresswoman Salazar.
+    With snow still on the ground in Maine and I am guessing in
+Minnesota too, the background in Florida there looks pretty
+warm and looks nice.
+    But thank you for the introduction and welcome to Ms.
+Zavala.
+    And I would now like to yield to the Ranking Member, Mr.
+Hagedorn, to introduce our final witness.
+    Mr. HAGEDORN. Thank you, Mr. Chairman.
+    Our next witness is Bruce Strong, who I believe you have
+met in the past and have worked with. And you were highly
+complementary of his previous testimony. I am looking forward
+to today.
+    Mr. Strong is the State Director for the Minnesota Small
+Business Development Center Network. He has extensive
+experience in community and economic development and in the
+mortgage lending and banking industries. Mr. Strong is an Air
+Force veteran and graduated summa cum laude from National
+College with a degree in business administration and marketing.
+    Yesterday, on March 17, the nation celebrated Small
+Business Development Centers Day. Small business development
+centers provide valuable resources to our small business
+constituents across the country. And I thank Mr. Strong and his
+SBDC colleagues for their critical work to promote
+entrepreneurship, small business growth, and the U.S. economy.
+    Mr. Strong, thank you for joining us today and thank you
+for your service to our great country.
+    Chairman GOLDEN. Thank you, Mr. Hagedorn.
+    Thank you all for joining us today. And why don't we begin
+with opening statements from our witnesses. First I will
+recognize Ms. Shi for 5 minutes.
+    STATEMENTS OF REBECCA SHI, EXECUTIVE DIRECTOR, AMERICAN
+BUSINESS IMMIGRATION COALITION; BRIDGET WESTON, CHIEF EXECUTIVE
+  OFFICER, SERVICE CORPS OF RETIRED EXECUTIVES (SCORE); PILAR
+ GUZMAN ZAVALA, CHIEF EXECUTIVE OFFICER, HALF MOON EMPANADAS;
+    BRUCE STRONG, STATE DIRECTOR, MINNESOTA SMALL BUSINESS
+                   DEVELOPMENT CENTER (SBDC)
+                    STATEMENT OF REBECCA SHI
+    Ms. SHI. Good morning, Chairman Golden, Ranking Member
+Hagedorn. My name is Rebecca Shi and I am the executive
+director of the American Business Immigration Coalition.
+    ABIC believes that the economy recovery of our nation's
+small and underserved businesses is necessary to ensure our
+nation's recovery from the COVID-19 pandemic. Small business
+owners, especially African American, immigrant, rural, and
+other underserved and isolated businesses are the engines of
+their local economies.
+    ABIC is a bipartisan coalition of 1,200 employers, CEOs,
+and business associations across 13 states, including Florida,
+Texas, Maine, Colorado, New York, Arizona, Nevada, Utah,
+Illinois, Massachusetts, Wisconsin, North and South Carolina.
+Over the last 11 months ABIC created and implemented a small
+business recovery technical assistance program, leveraging a
+community navigator model. This program provides one-to-one
+technical assistance for small, underserved minority-owned
+businesses and growers to access critical resources, including
+but not limited to the Paycheck Protection program, federal and
+state small business loans and grants.
+    ABIC thanks Congress and President Biden for including $100
+million for community navigators in the American Recovery. We
+also thank Chairman Ben Cardin, Senators Marco Rubio and Susan
+Collins, and Chairwoman Nydia Velazquez for working tirelessly
+over the last 11 months to make improvements to the PPP,
+especially for the smallest borrowers, growers, and their
+lenders, like CDFIs and MDIs.
+    The community navigator model utilizes local nonprofits or
+501(c)(3)s in a complementary non-competitive fashion with
+existing SBA technical assistance programs, like SBDCs, the
+NDCs, and SCORE. The unparalleled magnitude of the COVID-19
+pandemic forced shutdowns and disproportionate impact of small
+minority-owned rural business and growers required a
+comprehensive, common sense, grassroots response. This
+community navigator model we utilize in Illinois, Florida,
+Texas, and South Carolina to assist growers, black and
+immigrant entrepreneurs.
+    This program assisted Pilar Guzman, whom you will hear
+later, introduced by Congresswoman Salazar, the owner of Half
+Moon Empanadas. We also assisted Chalmers Carr, the owner of
+Titan Farms, the largest peach grower in the country, based in
+South Carolina. He was denied a PPP loan by his bank because
+they did not understand how to calculate his 1,200 H2A workers.
+And Stacey Armstrong, an African American woman entrepreneur, a
+single mother, who employees less than 10 people at her gourmet
+popcorn shop, and she was denied a PPP first because her bank
+prioritized larger firms.
+    Each of these of entrepreneurs was ultimately assisted in
+getting a PPP loan by a community navigator and the self-help
+federal Credit Union, a CDFI that understands how to work with
+small and rural businesses.
+    Through this model ABIC directly assisted 219 small
+businesses and growers to receive over $8.1 million in PPP
+loans with an average amount of $37,000. This community
+navigator model was later adopted by the State of Illinois'
+Department of Commerce and the Cook County Illinois Economic
+Recovery Initiative to disperse local business recovery grants
+allocated by the CARES Act. The State of Illinois awarded $88
+million in business recovery grants to black, rural, and
+immigrant entrepreneurs.
+    I have a chart that I submitted as evidence just to show
+that using the community navigator model we were able to ramp
+up access to these grants to small, minority-owned, and rural
+businesses.
+    A couple of things I just wanted to point out, that as the
+navigator model ramped up from October to December of 2020,
+black participation increased by 25 percent and Latino
+participation increased between 30 and 46 percent. Over half of
+the applications for black and Hispanic applicants were
+received in November and December as a result of the
+navigator's program technical assistance. And over two-thirds,
+nearly 70 percent of our Spanish applications came in November
+and December as the navigators did outreach and document
+preparation for these borrowers.
+    In sum, our community navigators had over 20,000
+applications by the end of October and throughout the rest of
+December and we were able to award, as I said, up to $88
+million.
+    The last thing that I would just mention is the mechanics
+of this navigator model. It is a hub and spoke model. The hub
+is the lead nonprofit responsible for capacity building, train
+the trainers. The spokes are the grassroots nonprofits, sort of
+your boots on the ground conducting direct technical
+assistance, document preparation for the businesses. A
+successful hub and spoke system creates an assembly line that
+feeds directly into a financial institution, a CDFI, and the
+goal is that the application is in excellent shape by the time
+it is received by that financial institution, so we can ensure
+efficiency in processing at scale.
+    The second piece is there is a high accountability
+structure to this model. As you all know, nearly every CDFI, or
+financial institution sends a processing number to the PPP
+applicant when the application has been received. And so what
+we require is not just, you know, general outreach or numbers
+of emails sent or just webinars, we ask that each navigator
+must demonstrate the receipts for the outreach so that we know
+that money is getting deposited in the banks.
+    So I will just wrap up and just say thank you very much for
+the opportunity to testify on behalf of this model.
+    Chairman GOLDEN. Thank you.
+    Ms. Weston, you are now recognized for 5 minutes.
+                  STATEMENT OF BRIDGET WESTON
+    Ms. WESTON. Chairman Golden, Ranking Member Hagedorn, and
+Members of the Subcommittee, thank you for the opportunity to
+offer testimony today.
+    SCORE is the nation's largest network of volunteer business
+mentors, with more than 10,000 volunteers across 240 chapters,
+offering free and confidential advice and educational workshops
+to small business owners.
+    Founded in 1964 as a resource partner of the SBA, SCORE has
+helped more than 11 million entrepreneurs to start, grow, or
+troubleshoot their small business. Last year SCORE helped its
+clients to start over 45,000 new businesses and create nearly
+75,000 new jobs. And despite the challenging business climate
+of this pandemic, SCORE helped 89 percent of our clients stay
+in business throughout the year. SCORE is the most effective,
+efficient business formation and job creation engine funded by
+the federal government.
+    In 2020, our costs to create a new job was $156 and $259 to
+create a new business. And for every one dollar appropriated to
+SCORE, our clients return $67 in new federal tax revenue,
+further demonstrating that SCORE is a good steward of the
+federal dollar.
+    SCORE volunteers are the life blood of our organization and
+are passionate about helping small businesses succeed. Our
+volunteers come from all across the country with diverse
+backgrounds and experience in different industries. Our core
+services are mentoring, educational workshops, and online
+resources. Last year, SCORE volunteers held over 315,000
+mentoring sessions, guiding and supporting our clients through
+the tremendous challenges brought on by the pandemic.
+    Many business owners told us they would to have applied for
+a PPP or an IDA loan without a SCORE mentor to walk them
+through the process. And our high rates of client satisfaction
+are captured by our net promoter score of 87, with 70 being
+considered excellent.
+    In addition to mentoring, SCORE provides virtual webinars
+on our website and our SCORE chapters offer local workshops
+that are in person or virtual. These workshops drew over
+464,000 attendees last year.
+    Knowing that the pandemic has hit some businesses harder
+than others, one of SCORE's key areas of focus is fostering
+diversity, equity, and inclusion, both for clients and
+volunteers. Women and minority volunteers climbed to 38 percent
+of total volunteers last year, and this 5 percent increase
+represents the single biggest annual growth since we began
+tracking these metrics in 2012. SCORE currently serves a
+diverse range of small business owners; 60 percent of our
+clients are women and 46 percent are minorities. Early this
+year we launched SCORE for black entrepreneurs as part of our
+SCORE For All initiative, to help serve disadvantaged
+businesses. We plan to add more SCORE For All campaigns to help
+these businesses survive and thrive, supporting women, rural
+entrepreneurs, veterans, the 50 and older community, and
+disabled entrepreneurs.
+    SCORE is working harder than ever to reach underserved
+entrepreneurs, leveraging our community relationships
+nationally and locally. National partnerships include the BIPOC
+Support Foundation, Women Entrepreneurs Grow Global, and the
+Latino Coalition who introduce SCORE to new communities of
+small business owners. Across the nation our SCORE chapters are
+already operating as effective community navigators by working
+in local communities to help underserved business owners. For
+example, over the past year SCORE Cleveland has rededicated
+itself to bring its services to the minority business
+community. The chapter has partnered with leading nonprofits
+that target these communities and services have more than
+doubled over last year.
+    When the pandemic hit, SCORE pivoted to deliver virtual
+mentoring and education without missing a day of service. And
+we accommodated a 30 percent increase in services last year
+without any increase in funding. Now, we are at capacity and
+will not be able to grow without additional resources. Based on
+SCORE's continued demonstrated impact, increased demand for
+services, and our plans to reach more business owners in
+underserved and disadvantaged communities, SCORE is
+respectfully respecting an increase, a $9.5 million in funding,
+for a total FY2 appropriation of $21.7 million. That additional
+funding would be spent to increase mentoring and education by
+reducing the administrative burden on volunteers, provide more
+direct funding to local chapters for community outreach, and
+focus to help more underserved businesses.
+    With this relatively small investment we can provide even
+greater value to the business owners and the economy. The
+increased funding would allow us to deliver more than half a
+million client services, with a projected outcome of 100,000
+additional new businesses started or jobs created.
+    SCORE's mentoring and education are critical to helping
+small businesses overcome their challenges and succeed. SCORE
+stands ready to help our nation's most vulnerable small
+business owners so they can keep their doors open and keep
+people employed.
+    Thank you very much for your time, and I look forward to
+your questions.
+    Chairman GOLDEN. Thank you.
+    Ms. Zavala, you are now recognized for 5 minutes.
+                STATEMENT OF PILAR GUZMAN ZAVALA
+    Ms. ZAVALA. Hello. Hi, everybody. It is an honor to be
+speaking with you all today. Thank you, everyone, for taking
+the time to listen to my story. I think it is a story that
+reflects, you know, the reality of many small businesses like
+mine.
+    Thank you, Congresswoman Salazar, for that kind
+introduction. I am here in Miami, 77 degrees. But so my name is
+Pilar Guzman Zavala and I am the CEO of Half Moon Empanadas. I
+represent one of the almost, you know, more than 30 billion
+small businesses in America. I also represent today the
+minority in every sense, you know, I am a woman, I am Hispanic,
+I am an immigrant. And now my company is in an industry where
+there have been so much suffering and torture that I am also
+one of the, you know, minority restaurants that are still open.
+    You know, I came to America from Mexico when I was 22 years
+old, right after college. I went to Georgetown School of
+Foreign Service because I wanted to understand how to create
+economic development, how to elevate poverty. Little did I know
+back then that I would end up creating, you know, an impact as
+an entrepreneur in Miami and that my dreams will become clear
+in a, you know, in a new food category in America with
+empanadas, and that this immigrant that has a hard time
+speaking in English in Georgetown would end up picking the
+President of the United States.
+    You know, Half Moon Empanadas, it is a small business in
+Miami with a concept of empanadas. Before the pandemic--we have
+been in business 12 years, before the pandemic was had 14
+stores open. The Miami Airport, the University of Miami,
+different non-traditional locations here. And, you know, our
+story wasn't easy. We took us--from the beginning, it took us 7
+years to get a paycheck from our company. We did everything
+wrong and we almost went bankrupt. It took us 10 banks locally
+to actually get us our first financing for our store in the
+airport. So I do know what it is to go through a financial
+system and understand how that works.
+    You know, when COVID hit, it was literally a year ago,
+March 13. That week we saw all of our stores closed. In a week,
+everything was like what happened. It was really scary and I
+see how great and how blessed we are to live in this country
+because we were able to apply to PPP. It took us three banks.
+It took us three banks to get noes because the large fund was
+not very--it was not responsive. The medium bank was
+overwhelmed. And so I--thanks to the community navigator, I was
+able to get, you know, the support that we needed. You know,
+they connected us with a local bank that approved us quickly. I
+think 2 days we were approved. This helped us to stay afloat
+and keep our salaries, you know, people in payroll. And because
+I am also a mentor here in the community, and I am part of a
+network of businesses, I joined the effort, too. And we were
+able to help with ABIC, with Becca's team and Impact Fund here
+in Miami, other women and Hispanic-owned companies, to get the
+support. From processing documentation and gathering paperwork.
+We actually got a lot of these businesses approved for PPP.
+    And so besides the PPP, we though we entrepreneurs don't
+stop we don't like to stay still. You know, we didn't stop
+there as a company. We did not only rely on help of the
+government, we reinvented ourselves, we became a restaurant in
+Miami making meals for seniors through our Miami-Dade County
+contract and we started our efforts in the digital space, you
+know, to send empanadas locally and nationally.
+    So when I think about this whole year, I actually was
+thinking about [inaudible]. It must have been so hard for all
+you guys, government officials, you know, trying to figure out
+what to do and coming up with an entire package to save our
+economy and our community. So I wanted to at least to take 2
+seconds to thank you for the work you have done and for the
+effort, because it truly has made a difference in many
+businesses like mine.
+    I had the honor to speak to President Biden twice in the
+last month. On our first call, you know, I raised my hand. My
+husband could not believe that I actually interrupted the
+President and I said could I please give you a suggestion. And
+my suggestion to him was please remember that the small
+businesses are not the large 300 businesses, it is--there are a
+lot of tiny businesses that are what I consider truly a small,
+of one, five, ten, twenty people, and that we need to focus on
+that because we are--we sustain the economy.
+    So as we speak today, I am opening one store in
+Congresswoman Salazar's district. I cannot express to you how
+challenging it has been to open that store, because of COVID,
+because how hard it has been to hire. It is just really
+difficult compared to before. But I am a believer and I believe
+change is possible and I truly believe that challenges bring
+opportunities. And so I think this whole crisis has shown us,
+you know, all of us how to work together and how to actually
+focus on the things that really matter.
+    I am thankful for President Biden's leadership and for you
+guys' leadership, for Congress to approve, you know, the help.
+I do believe that this Community Navigator Program was helpful
+to me and to many here locally and that we should, you know,
+continue to do this kind of work.
+    Thank you so much for your time and your support.
+    Chairman GOLDEN. Thank you.
+    And finally we will recognize Mr. Strong for 5 minutes.
+                   STATEMENT OF BRUCE STRONG
+    Mr. STRONG. Thank you, Chairman Golden. Thanks also to
+Ranking Member Jim Hagedorn and Member Pete Stauber, who are
+both from the great State of Minnesota, where I live and work.
+I would also like to recognize Nydia Velazquez, Chairwoman of
+the House Small Business Committee, Ranking Member Blaine
+Luetkemeyer, and Representatives Angie Craig and Dean Phillips,
+who are also from Minnesota, for their many years of service
+and tireless support of small businesses throughout the
+country.
+    My name is Bruce Strong and I am the state director of the
+Minnesota Small Business Development Network, or SBDC.
+    SBDCs have been operating throughout the country for more
+than 40 years and in Minnesota alone during that time we've
+provided more than 960,000 professional consulting hours to
+help 95,000 clients start 5,200 businesses, helped more than
+80,000 existing businesses, and helped them all to secure $3.2
+billion in new business capital. Since March of last year our
+staff has worked tirelessly and literally day and night to
+double the number of clients that we served in a typical year
+in response to the COVID pandemic. Demand for SBDC assistance
+skyrocketed as business owners needed help with applications
+for the PPP and EIDL loan programs, or to reimagine their
+businesses due to government-ordered shutdowns.
+    Recently the U.S. Small Business Administration introduced
+the Community Navigators Program. They state the intent of the
+program is to broaden and intensify outreach and technical
+assistance to targeted sectors of the small business community,
+including persons with disabilities, women, veterans, and/or
+those in minority, immigrant, rural, or other underserved
+communities using a hub and spoke delivery model. We don't yet
+have the details as to exactly how the program will operate,
+but several SBDCs, including Minnesota, are working with SBA on
+a pilot of the program to build models for the future of this
+effort. A total of $175 million has been allocated to the
+program under the American Rescue Plan. This is a significant
+sum and we are pleased to be working with SBA to develop the
+program. Assuming, that is, there is no requirement to provide
+matching funds for the program.
+    SBDCs have long worked with other community organizations
+to reach rural and underserved markets, but like other
+businesses, the pandemic forced us to reimagine our own
+business model. To continue meeting the surge in demand, we are
+creating even more partnerships between the SBDC and local
+community organizations. In Minnesota, for instance, we just
+signed a contract with First Children's Finance to provide
+specialized assistance to new and existing childcare
+businesses. We are working to complete a similar contract with
+the African Development Center to increase their services
+throughout the state, and I am seeking to create even more
+partnerships.
+    The Northern California SBDC has just launched a new
+inclusivity project that provides a simple but effective
+approach to reach out to the black and African community there.
+It goes beyond simply providing outreach by creating an actual
+challenge for the SBDC and local partners to provide real
+social change to obtain capital and start new black-owned
+businesses. The project has seen tremendous early success and
+was met with great enthusiasm when presented to SBDC state
+directors across the country just last week. So much so, that
+we will be soon adopting this project for implementation in
+America's SBDCs everywhere.
+    America's SBDC wishes to express strong support for the
+Community Navigators Program and we envision it will fit
+perfectly into these plans. We are particularly supportive of
+the outreach portion of the funding. SBDCs have too long been a
+``best-kept secret''. We have been prohibited from marketing
+our services and that has truly hampered our outreach. That
+prohibition has only recently been lifted by the SBA. The
+Community Navigator Program will ensure that entrepreneurship
+education reaches all parts of the small business community,
+and it will go a long way to help our efforts to reopen the
+economy.
+    Thank you and I look forward to your questions.
+    Chairman GOLDEN. Thank you to all of our witnesses and we
+appreciate all the testimony that you shared with us.
+    I will now move to questions and I will begin by
+recognizing myself for 5 minutes.
+    I think I will begin with Mr. Strong. I did want to point
+out that I agree with Mr. Hagedorn that the PPP program worked
+well. For that matter, I agree with pretty much everyone that
+has joined us and testified today about that as well. I also
+look forward to hearing a little bit about H.R. 1411, your bill
+on PPP in support of farm partnerships. Last Congress you
+joined me, Congressman Hagedorn, in cosponsoring the SBDC
+Reauthorization legislation, which we passed through the House.
+Did not get taken up by the Small Business Committee in the
+Senate, so hopefully we can continue that work in this
+congress, but.
+    Mr. Strong, obviously there are some who might naturally
+conclude that some of the groups out there, like SBDCs or
+SCORE, could view the creation of a new program such as this
+one as potentially duplicative or in competition with the
+services you provide. You just ended up by putting forward
+really an endorsement of the program. So I wanted to give you
+the opportunity to say a little bit more about the potential
+effects of the program, how you think it will interact with
+SBDCs. And also if you have any concerns that should be avoided
+in order to make sure that the programs are really
+complementary.
+    Mr. STRONG. Thank you, Chairman Golden.
+    I don't view the program as being duplicative or
+competitive with what we are already doing. Rather, I view it
+as being complementary to what we are already doing. As I
+mentioned, we have long had partnerships with other local
+organizations to help broaden the reach of the SBDC and
+particularly to provide deep reach into those markets that have
+typically been underserved. We have worked with the
+Metropolitan Economic Development Association, or MEDA, with
+the Neighborhood Development Center, with other local nonprofit
+groups and specifically those that serve communities and
+communities of color.
+    So, again, I believe that the Navigator Program will help
+us reach even more community organizations and partner with
+more organizations as we have recently done with the African
+Development Center and First Children's Finance here in
+Minnesota.
+    Chairman GOLDEN. Thank you very much. And you made a great
+point, by the way about previous prohibitions on marketing and
+outreach. What good are these services to businesses if they
+don't know that they exist in the first place. So look forward
+to continue to work with the SBDCs and SCORE and others on
+fixing that problem in this Congress as well.
+    Next I guess I would direct a question to Ms. Weston from
+SCORE.
+    Through your work with underserved and rural small business
+owners and entrepreneurs, what resources and technical support
+are most often requested? And how do you think this new
+partnership with the Community Navigator Program can help
+address these?
+    Ms. WESTON. Thank you for the question, Chairman.
+    And with SCORE mentors seeing tens of thousands of small
+business owners each year we really do have a pulse on what the
+challenges that small business owners are facing. In our
+mentoring sessions the common themes that our mentors hear do
+relate to funding. Do these small business have position
+funding or cash flow, and, along those lines too, attracting
+and retaining customers. Those are the two biggest challenges
+that we see.
+    With SCORE partnering across the country with local
+community partners, as well as nationally with some of the
+partnerships I had mentioned previously, it helps connect those
+business owners struggling with funding opportunities, access
+to capital, cash flow questions, or customer questions with
+those people that have been there, done that expertise. We have
+seen that the PPP and EIDL programs were more successful when
+they were partnered with a mentor like SCORE, SBDC. And we want
+these new federally funded opportunities, which are extremely
+valuable to these business owners, be able to take advantage of
+it. And SCORE mentors are ready to help those most vulnerable
+business owners navigate. The key is to make sure that they are
+connected to those disadvantaged and underserved communities.
+    We are doing that already across SCORE chapters. Maine, for
+example, partners with a number or organizations like the USDA,
+the Maine Farmland Trust, to make sure that that one-on-one
+business mentoring service is provided to make sure they have
+the best opportunity for success.
+    Chairman GOLDEN. Thank you very much for that. And I hear
+repeatedly from business owners in Maine about how valuable the
+programs and services offered by SCORE are in starting
+businesses and making tough decision to keep them going as
+well. So thank you for that partnership in Maine.
+    My time has expired and the Ranking Member, Mr. Hagedorn,
+is now recognized for 5 minutes.
+    Mr. HAGEDORN. Thank you, Mr. Chairman.
+    You know, I was listening to testimony, especially from Ms.
+Shi and Ms. Zavala, and they were saying how important it is to
+make sure that our small businesses, all of them, have access
+to especially Paycheck Protection Program and everything else
+needed in order to get, especially at this time, from one side
+of the Coronavirus to the other. And so I think the work of the
+Committee, led by our Committee Chairwoman Velazquez and
+ranking Republican Luetkemeyer, was--and you, Mr. Chairman as
+well, and many Members of this Subcommittee, all of them, I
+think to extend the Paycheck Protection Program by 60 days,
+that bill that was just passed this week, pretty important. So
+hopefully we can work with our Senate colleagues and get that
+done and make sure that all of our businesses are cared for and
+have proper access to the program.
+    So, you know, Mr. Strong, I listened to your testimony. It
+is very good. And I certainly am supportive of small business
+development centers and women's business centers, veteran's
+business center, SCORE, you know, all of it. But you said you
+think this is more of a cooperative deal, these navigators, it
+is not going to be competition with you. What do you foresee
+them going out and basically bringing the business back to you?
+Is that kind of the concept? Or could you, you know, let me
+know what your thoughts are on that?
+    Mr. STRONG. Sure. Thank you, Representative Hagedorn and
+Chairman Golden for that question.
+    Again, the vision for the delivery is a hub and spoke
+model. In my estimation that is the SBDC acting as the hub and
+these local community partners acting as the spokes. That is
+similar to how our model has worked in the past. Oftentimes,
+particularly with communities of color, underserved markets and
+rural markets, folks really want to talk to somebody from their
+own community. They want someone that looks like them that can
+identify with them, and that is the strength in my estimation
+of the community partners in this hub and spoke and approach.
+    So I do believe it is going to be effective. I think the
+outreach can actually be a combination of that provided by the
+hub, by the SBDC, to make sure that folks are aware that the
+Community Navigator Program exists and what it does, but then
+also those local partners who can reach out specifically to the
+groups within their local markets and bring clients into the
+program that way as well.
+    Mr. HAGEDORN. Thank you. I do really appreciate the work
+that you do on behalf of Minnesotans and have spoken to many of
+your clients over the last several years who have been, you
+know, very much aided by the work that you perform.
+    And during the Obama Administration we had Obamacare and we
+had these community navigators then and there were some
+problems with, you know, fraud and just other types of things.
+Are there standards in place do you think with the Small
+Business Administration that we can make sure that these folks
+are going to be trained up properly and we won't have any legal
+or ethical problems?
+    Mr. Strong, that is for you again.
+    Mr. STRONG. Representative Hagedorn, yes, I do--I believe
+SBA does a great job of oversight of the program that we
+currently run, our regular core program that has been in
+operation for 40 years. They have strong measures in terms of
+metrics and goals that we must achieve under that program. I
+believe the same will be true under the Navigator Program. And
+as long as we have a clear objective as to what this program is
+to do and what it is to accomplish, I am fully confident that
+the SBDCs will absolutely come to bat and make sure this
+program is successful, that it meets the actual challenges.
+That is already being demonstrated most recently in this
+Northern California SBDC program.
+    So, absolutely, I believe we will--once we set clear
+objectives and metrics for the program, we will be able to
+accomplish them.
+    Mr. HAGEDORN. I hope Members on both sides would make sure
+we do the proper oversight and follow up on that and make sure
+what you are saying is going to work out.
+    Lastly, real quickly, on broadband access--and I will stay
+with you, Mr. Strong, since we only have about 30 seconds--how
+important it is that we make sure that folks, not just in rural
+communities, but all across the country, wherever they might
+be, have access to broadband and high speed access in order to
+do their work and to market their businesses and so forth?
+    Mr. STRONG. Thanks again for that question, Representative
+Hagedorn.
+    Clearly the COVID pandemic underlined the importance of a
+strong broadband network. When we are all confined to our homes
+and required to work from our homes, without a strong broadband
+network, we are sunk. And that is why I believe that support
+for broadband funding is critical. Here in Minnesota the
+legislature is contemplating large scale programs to improve
+and increase the broadband network. I hope that the same--I
+trust the same is happening in other states across the country
+and I hope nationally we can come to a broadband program that
+helps provide a stronger network across the entire country.
+    Mr. HAGEDORN. Thank you. I am out of time. Appreciate it.
+    Chairman GOLDEN. Thank you. The gentleman's time has
+expired. The gentleman yields back.
+    I will now recognize Representative Jason Crow, Chairman of
+the Subcommittee on Innovation, Entrepreneurship, and Workforce
+Development.
+    Mr. CROW. Thank you, Chairman. Thank you to all the
+witnesses for coming in today. Really great testimony and
+really good information for us to look at these programs and
+how to better improve them.
+    You know, when I think about the Community Navigator
+Program I am reminded of this program in my district where the
+City of Aurora actually partners with the local nonprofit, the
+Village Exchange Center; has a program called the Natural
+Helpers Program where immigrants and refugees who have been
+here longer actually help fellow immigrants and refugees who
+have recently arrived actually navigate nonprofit resources and
+find their way around the community and better integrate it.
+And I think it is within that spirit that the Community
+Navigator pilot program is trying to help our underserved
+businesses the most.
+    So in that vein, starting with Ms. Shi, Ms. Shi, can you
+just tell me your thoughts on what types of private, nonprofit
+that are best suited to serve as community navigators?
+    Ms. SHI. Thank you so much for the question, Congressman.
+    We had the same experience at the start of the pandemic.
+After the Paycheck Protection Program was rolled out, immigrant
+owned businesses, refugee owned businesses, black owned
+businesses, you know, came to us and they had not heard about
+these other SBA programs or SBDCs. And so we trained local
+nonprofits, so nonprofits that they know in their community,
+that perhaps that they have gone there for English classes or
+citizenship classes. And so they started doing the one-to-one
+document preparation, outreach, and education about the PPP and
+[Audio malfunction.]. Sometimes you can open [Audio
+malfunction.] and, as you know, unique SBA processes where
+there will be a host of hand holding and to get them access
+[Audio malfunction.] three lenders that denied her until we had
+a navigator that assisted her. And Pilar is much more
+sophisticated compared to some of our small businesses and sole
+proprietors [Audio malfunction.] to do this kind of work for
+the ones that have the grassroots [Audio malfunction.] to our
+businesses, our sole proprietors, to all [Audio malfunction.]
+say do you know about these programs [Audio malfunction.]. And
+thanks to all of you [Audio malfunction.] PPP, but also be
+retroactive [Audio malfunction.]. This is the kind of outreach
+that is important and one they are made aware of the program,
+then our navigators like hold their hand and go through the
+entire document preparation for them. You know, because of the
+pandemic, for a lot of these smallest businesses, this is their
+first interaction with a government loan or a grant program,
+right. And so, you know, they are afraid, they are concerned
+and it is--you know, we all know if you check the wrong box,
+right, that affects your credit score. And then, you know,
+getting them access to a lender.
+    So I would say the best types of nonprofits are not so
+much--you know, in our experience, the ones that have done this
+work before, but really are willing to get in the gutter and be
+on the ground and hold the hands of our small businesses and
+get them through from the beginning to the end. And we have a
+very, very rigorous accountability measure. Because like with
+Pilar, we need to show that the money--so.
+    Mr. CROW. Ms. Shi, I will--yeah, I will stop you there. I
+want to give Ms. Zavala an opportunity to weigh in as well. But
+I appreciate that perspective and your thoughts on that very
+much.
+    Ms. Zavala, any thoughts on what you think would be the
+best nonprofits that could perform these types of services?
+    Ms. ZAVALA. Yes. Thank you for the question.
+    I saw that the CDFIs, the small--really small one branch,
+you know, banks, the Axiom--which now I think it is a different
+name--those are organizations that are close to the small--what
+I mean when I say close is they understand the issues they have
+with not having the perfect P&L, right. I have a perfect P&L. I
+didn't have it 10 years ago. So understanding--I think what is
+good about working with the local organizations is that they
+understand how to work on the context of that small business,
+which banks don't understand.
+    So and I think the issue of--you know, it is an issue of
+capacity. There is a lot of--there is the SBA, but is there the
+capacity to serve all of these? I think the numbers show that
+there is not the capacity. We need more.
+    Mr. CROW. Yeah. Thank you. Thank you. I am out of time, but
+really, really great thoughts.
+    Ms. ZAVALA. Thank you.
+    Mr. CROW. Thank you very much.
+    Mr. Chairman, I yield back.
+    Chairman GOLDEN. The gentleman yields.
+    I will now recognize Representative Roger Williams, Vice
+Ranking Member of the full Committee.
+    Mr. WILLIAMS. Thank you, Mr. Chairman. Thank you for your
+leadership. Ranking Member, thank you. And our witnesses, thank
+all of you for being here today.
+    I am a small business owner myself. I have been in business
+50 years and still have my business and employ hundreds of
+people back in Texas. And I appreciate your stories. They are
+just so--they show the power of this great country.
+    Attending a trade school and learning a skill can be just
+as valuable as going to a traditional four year college. I am a
+strong advocate of career and technical education programs and
+push back against the belief that a college degree is necessary
+to get ahead in America. If someone learns a skill they are on
+their way to eventually translating their abilities into
+starting their own small business. However, learning how to run
+a small business is not easy task, as we all know.
+    So my question, to start out with, Ms. Weston, you touched
+a little bit about this earlier, but maybe you can go deeper,
+can you discuss some of the largest challenges you see from
+young entrepreneurs who come to your organization wanting to
+take a chance and start their own businesses and how any way
+the SBA can better utilize resources to spur new business
+creation? Because at the end of the day, risk and reward is the
+American dream.
+    Ms. WESTON. Thank you for the question, Congressman.
+    And we know at SCORE that being an entrepreneur or a small
+business owner--and you know this too--is challenging under the
+best of circumstances. And this year has been hard on everyone.
+    SCORE has data that there are some groups of businesses
+that have struggled more than others, but being a business
+owner and an entrepreneur you feel that you have to be that
+person who does everything, that you--you know, you are the
+Jack or Jill of all trades and you have to wear all of the
+hats. What SCORE and SBDC and other organizations that provide
+technical support do, is we are that step by step guide to
+these businesses that help them fill those gaps when they don't
+have that information on the P&L, like small business centers
+do. You might be an expert as, you know, a plumber or a hair
+stylist, but you don't necessarily have that knowledge about
+how to do your accounting. That is where SCORE and the SBA
+resources come into play. SCORE stands ready for small business
+support for everyone. Some business owners do have unique
+challenges. We have been talking about historically under-
+represented groups and rural business owners and there are some
+needs that those groups have a greater need for, and we can
+address those too.
+    The important thing is, with 30 million small business
+owners out there that we as the resource partners and the
+technical assistance, get out there, get the word out, connect
+with these community organizations that have the reach into
+those communities so that these business owners know SCORE and
+other resource partners are here to help and provide that
+support. And when the business owner steps away and uses a
+mentor to answer those questions, they are much more likely to
+successful.
+    Mr. WILLIAMS. That is great. I think your support find
+there is a big difference between the sale of dollar and the
+gross of dollar. So thank you for helping on that.
+    Secondly, I think the Navigator Program has the potential
+to help a large number of small businesses realize the
+resources that they have at their disposal. However, in the
+past, there have been some serious issues of fraud, and we have
+talked about that this morning, and of leaking sensitive
+consumer information that led to some security threats against
+individuals.
+    Since we just allocated $100 million to this program, we
+must make sure that we are making good--or being good stewards
+of taxpayer dollars and not repeating the mistakes of the past.
+    So, Ms. Shi, for you can you discuss what safeguards the
+SBA should put in place to ensure that this program is not
+opening itself up to waste, fraud, and abuse?
+    Ms. SHI. Yeah, absolutely. And thank you so much,
+Congressman, for that question. And that is extremely
+important.
+    So when we ran the navigator model in several states,
+including Texas, Florida, and South Carolina, we asked all of
+our navigators to show receipts for the PPP received by their
+small businesses. So that is part of our accountability
+structure. You know, I think it is very easy just to send a
+whole bunch of emails and do a webinar and say that, you know,
+we assisted businesses, right, but we actually--especially
+during this global pandemic as our businesses are struggling--
+we need to see that these funds are getting into the bank
+accounts of our small businesses as well as staying with them
+to go through the forgiveness process to turn the loan into a
+grant. So that is number one.
+    And number two is working with a trusted CDFI--and the I--
+or financial institution, to make sure that, you know, all the
+Ts are crossed, Is are dotted. And, you know, as we know with
+our financial institutions, there are also multiple layers of
+assurance and accountability.
+    But, so that is extremely important to us and this is
+taxpayer dollars and these are the local engines of our
+economy. And so we need to make sure that these funds are
+getting to the folks that need it the most.
+    Mr. WILLIAMS. Okay. Thank you to the witness. And I yield
+my time back.
+    Chairman GOLDEN. The gentleman yields.
+    I will now recognize Representative Pete Stauber from
+Minnesota's 8th District.
+    Mr. STAUBER. Thank you, Mr. Chair. And thanks to all the
+witnesses for providing the testimony today.
+    And, Mr. Strong, thanks once again for coming to our Small
+Business Committee hearing and testifying. I am sure all the
+Minnesota Members really appreciate you coming here again and
+giving us quality time.
+    I would just like to give you a moment to share what worked
+for the Minnesota SBDCs, what has it looked like during the
+pandemic, and how has it changed from what you had done prior
+to the pandemic?
+    Mr. STRONG. Thank you, Representative Stauber. Thank you
+for those kind words.
+    What has changed for us is the sheer volume of the
+questions and the demand that we are receiving from the public.
+Obviously the Paycheck Protection Program and the EIDL loan
+programs were critical to those small businesses that were most
+affected as a result of the pandemic. And helping those
+businesses wade through the myriad regulations for both
+programs, both the PPP and EIDL loan programs, and the changing
+requirements that occurred during the launch of those programs,
+just caused so much confusion in the marketplace. We spent a
+great deal of time just trying to decipher those changes
+ourselves and then interpret those changes to the small
+business community so that we could most effectively help them
+apply for their loan, or help them apply for forgiveness under
+the Paycheck Protection Program. We are still to some extent
+struggling with issues regarding that. And this latest deadline
+of the Paycheck Protection Program expiring and hopefully being
+extended just kind of creates ripples throughout that program.
+    As Chairman Golden stated, SBA processed 14 years-worth of
+loan applications in a 14-day period of time.
+    Mr. STAUBER. Mr. Strong----
+    Mr. STRONG. That, you know, by itself is going to cause
+problems.
+    Mr. STAUBER. Mr. Strong, I want to just thank you and your
+organization for helping out the small businesses and helping
+with the lending institutions, because when we passed that
+legislation there were some blind spots. And when we knew
+better, we did better with the flexibility portion afterwards.
+    Mr. Strong, prior to the pandemic northern Minnesota was
+plagued with a childcare desert. The situation got worse during
+the pandemic. In your testimony you mentioned that Minnesota
+SBDC signed a contract with First Children's Finance to provide
+specialized assistance to new and existing childcare
+businesses.
+    Can you elaborate on this? On the work you are doing?
+    Mr. STRONG. Certainly. Thank you again for the question.
+    First Children's Finance has been around for a long time.
+They are a nonprofit group, they are a CDFI as well. They
+specialize in helping childcare businesses with all of the
+nuances, the legislation, and the requirements that are
+expected of a childcare business. And so partnering with them
+the SBDC will help broaden--the outreach will help broaden
+their outreach. It helps bring funding to them so they can pay
+additional counselors to come alongside. But it also helps the
+SBDC because we can help with the business aspect of running a
+childcare business, even though we may not necessarily
+understand all of the nuances of those requirements.
+    And you are exactly right, the childcare industry was
+struggling even pre-COVID. In Minnesota we found that small
+businesses were unable to grow because their employees weren't
+able to find adequate childcare, particularly in rural markets.
+    We are hoping and trusting--we believe that partnering with
+First Children's Finance will be of great benefit to the SBDC
+and all Minnesota businesses.
+    Mr. STAUBER. And, Mr. Strong, I think that is really great
+news because we know when there is adequate, secure childcare
+that benefits the economy, especially coming out of this COVID
+crisis. We want to make sure that the workforce is there to be
+had and having safe, secure childcare is certainly a priority.
+    So, Mr. Strong, once again, thank you for your testimony,
+and we will see you shortly.
+    And, Mr. Chair, I yield back.
+    Mr. STRONG. Thank you.
+    Chairman GOLDEN. The gentleman yields.
+    I will now recognize Representative Claudia Tenney from New
+York's 22nd.
+    Ms. TENNEY. Thank you, Mr. Chairman, and thank you to
+Ranking Member Hagedorn, and the witnesses as well. Great to
+hear from all of you. And thank you for holding this important
+hearing.
+    Obviously the COVID-19 situation has been challenging for
+all of us, all Americans, and especially our small business
+community, which are truly the backbone of our economy. And I
+can't emphasize that enough. As a small business owner in New
+York's 22nd District, over 94 percent of the workforce in my
+district come from small businesses. So our community's
+success, our economic success, depends on the success of our
+small businesses.
+    Last week I launched a small business outreach tour to meet
+with business leaders and employers across the 22nd District.
+So far I have met with over 30 businesses, have spoken with
+hundreds in the past, and have had the opportunity to discuss
+their priorities and their needs for relief and recovery.
+    The two common questions that I get are what programs and
+resources are available and, second, how do we navigate some of
+these cumbersome applications processes and rules. And I know
+as a business owner, also as an attorney, federal programs, you
+know, have helped thousands of businesses in my state,
+particularly in our underserved and rural communities, which my
+district is. We must continue to reach out to these underserved
+communities and educate our employers on how to use these
+resources and their employees. It is also imperative to
+understand that these programs need to be made simpler and
+easier to use because so many small business owners are so busy
+running their businesses they really don't have time to hire
+compliance teams and teams of lawyers. And I know that as my
+business was started over 75 years ago and I have been one of
+the owners for over 35 years, so I understand how complex this
+can be. And I really appreciate our witnesses.
+    And my first question--and some of these have been
+answered--I would like to address to Ms. Weston. And first I
+want to say thank you so much for SCORE. I have--as a business
+owner also, many of my colleagues have used SCORE and it has
+been a wonderful asset to people in the business community. So
+I just wanted to ask you, so many of these business owners have
+said this is--getting the money and the Navigator Program has
+been so daunting. What do you consider the biggest barrier and
+what recommendations do you have to fix those issues? Briefly,
+if you could.
+    Ms. WESTON. Well, thank you so much for the question,
+Congresswoman. And maybe one day you will consider becoming a
+SCORE volunteer since you are a small business owner yourself.
+    So one of the things that we heard from our clients,
+especially as it relates to PPP and EIDL, was just that
+Congress acted so quickly, there was such a drive to help these
+small business owners, and when things were really done quickly
+there was confusion--how to apply, who can apply for these
+loans, what that process is. And so what SCORE was able to do
+is set up our small business resilience program, which paired
+mentoring, check list, and step-by-step guides that were
+industry specific to help these businesses navigate the
+challenges they are facing.
+    So we saw nearly 600,000 people through that portal to help
+answer questions in a timely, specific, guided fashion so that
+we could get them to the right lender, the right program, the
+right resource. What we have seen is that these guides, mentors
+from SCORE or other resource programs, are what can really help
+make these federally funded programs successful. And the
+communication would be helpful across lines collaborating with
+other resource partners and other agencies.
+    Ms. TENNEY. And as you say that, I know you recommend more
+communication. We also have state programs that are now going
+to be enhancing some of the federal programs. And so that is
+where I consider SCORE would be a great resource for us to be
+able to access them.
+    Thank you, though. I appreciate that.
+    And for Mr. Strong, I wanted to ask a question about
+childcare, which is really important to me as a single mom, how
+important it is to have reliable safe childcare. But Mr.
+Stauber hit that question, but I was just going to ask you in
+looking at this model, a lot of businesses--this pandemic is
+forcing everyone to reimagine their business model. And in
+response to the demand, what would you say for the SBDC, what
+could we implement in a rural setting to help people in a
+pandemic for the future and how do we best reach out to some of
+these people in rural settings? I am running out of time, but
+if you could answer real quick, I would appreciate it.
+    Thank you.
+    I guess I will yield my time back. I am sorry.
+    Mr. STRONG. I lost your audio. I couldn't get the question.
+    Ms. TENNEY. Mr. Chairman, we will address it in another
+meeting.
+    Thank you so much. We will catch up with you in a private
+setting.
+    Thank you.
+    Chairman GOLDEN. The gentlewoman yields. Sorry about the
+technical difficulties. And we can submit it for the record if
+you like.
+    Ms. TENNEY. Absolutely. You need more broadband. Thank you.
+    Chairman GOLDEN. That is the truth.
+    I will now recognize the Ranking Member of the full
+Committee, Blaine Luetkemeyer from Missouri's 3rd Congressional
+District.
+    Welcome, Ranking Member Luetkemeyer.
+    Mr. LUETKEMEYER. Thank you, Mr. Chairman. And thank you all
+of the witnesses.
+    I have been listening in my office and trying to keep a lot
+of balls in the air this morning here. I apologize for getting
+here a little late. But, you know, one of the things that
+concerns me are--that I have been watching here is that, you
+know, I had a meeting this week with an SBIC group, a small
+business investor, and they were telling me that they were
+doing basically what the navigator proposal in this CARES Act,
+or the funding bill, actually was doing. So I mean I am
+curious--you know, they were trying to bring together all the
+different groups, whether the chamber or the libraries--in fact
+is one of the groups they were talking about, as well as
+historic and black colleges that they were working with and
+some other partners. So if they are already doing this, is this
+really necessary? What is your--can you explain to me? Mr.
+Strong, for instance, can you give me the reason why this is a
+good deal? Or should we continue it or change it around? Or
+what is your suggestion here?
+    Mr. STRONG. I am sorry, Congressman. I lost the last part
+of your question.
+    Mr. LUETKEMEYER. Okay. I was curious as to whether you
+believed--or what your opinion would be with regards to the
+necessity of the Community Navigators pilot program here in the
+COVID relief bill because I was talking with some folks in SBIC
+this week and they do the same thing--some SBDC folks that are
+doing the same thing.
+    So are we duplicating services I guess is my question?
+    Mr. STRONG. Well, thank you, Congressman. I appreciate the
+question.
+    And, again, it is going to be a challenge. It is always a
+challenge, especially when Congress is trying to act in as
+robust a fashion as they are. It seems like a lot of these
+programs are duplicative, but I think it is simply going to
+help increase the outreach and the effectiveness of the
+partnerships between SCORE, the SBDCs, the Women's Business
+Centers, and all of their local community organizations to
+provide even greater outreach into markets that haven't
+historically been very well served.
+    We continue to hear about underserved markets, particularly
+in communities of color and in rural markets. The more folks we
+can have out there helping the existing small businesses and
+potential small businesses, I think the better.
+    Mr. LUETKEMEYER. Can you explain to me who all is going to
+qualify for this money and how they get it?
+    Mr. STRONG. No, I am afraid I can't. We haven't gotten the
+details of the program yet. I have only seen it in concept
+form. We are anxiously awaiting what the actual details of the
+program will be, eligibility criteria, and more importantly, or
+just as importantly, the metrics and goals that we hope to
+achieve through the program. I think that speaks to your
+question about effective use of this funding. We need to have
+clear cut goals, we need to have clear cut eligibility, and we
+need to have clear cut metrics for the outcomes of the program
+to evaluate its success.
+    Mr. LUETKEMEYER. If we are delaying--and SBA has got a lot
+of balls in the air right now. They have got a lot on their
+plate and I am very concerned about that. I am working with
+them on a lot of other issues right now. And if it is going to
+be a delay in getting this information out, putting this
+program together, how worthwhile is it if you wait until
+September to get it done, for instance? If we wait, you know, 4
+or 5 months here, is it still going to be effective? Or is it--
+at that point we will be over the hump, so to speak, such that
+it is not going to be necessary?
+    Mr. STRONG. Thanks again, Congressman for the question.
+    I believe that the problem with underserved markets has
+been around a lot longer than the COVID pandemic. I think
+anything that we can do to help increase outreach to those
+markets is going to be beneficial. You know, if a delay--and
+hopefully it won't be 4 or 5 months before we get clearer
+marching orders on the pilot program isn't necessarily going to
+have an overall impact on its effectiveness.
+    Mr. LUETKEMEYER. Just a quick question for you with regards
+to the other programs that are out there. I am not sure you are
+involved with them, but just to kind of get your opinion on
+them real quickly. With regards to the restaurant program, for
+instance, are you working with any of the groups? Do you think
+that is going to be pretty impactful, those restaurant grants?
+    Mr. STRONG. I don't think there is a more important program
+out there than the restaurant grants. But, again, we have seen
+absolutely no details on what it will do or how it will work.
+But I can tell you--and Minnesota is not unique here--the
+hospitality industry has been decimated as a result of COVID
+and the required business closures that took effect as a result
+of that.
+    So absolutely we must provide some support to the
+restaurants and hospitality industry.
+    Mr. LUETKEMEYER. Well, I think the key--I thank the
+Chairman for his diligence here--but I think the key is going
+to be how these grants are doled out, how they are applied for,
+and how they--what kind of oversight is provided over them
+because I think it is a situation that is ripe for fraud if we
+are not careful. And I think hopefully you will work with us to
+provide some expertise in this so we can find a way to minimize
+that.
+    With that, I yield back the balance of my time.
+    Thank you.
+    Chairman GOLDEN. Thank you. The gentleman yields.
+    And we would now recognize Representative Maria Salazar
+from Florida's 27th for 5 minutes.
+    Ms. SALAZAR. Yes, and thank you very much, Chairman.
+    I want to congratulate Ms. Pilar Guzman because I think you
+are the epitome of the American dream and we need more people
+like you in this country. People that came with really not
+knowing any English, as you said, but willing to work and to
+take advantage of this fantastic American dream, or the
+American system that the Founding Fathers put together for
+people like you and me. So I think that we not only have love,
+but gratitude for this country. And I am sure that you feel the
+same way.
+    And, look, not only were you able to come, you were able to
+stay, you learned the language, you went to school, and then
+you put together a business, came COVID, and the government
+gave you money so you could keep that business. Where does that
+happen? Nowhere else. Is that true? Nowhere else. And that is
+why I congratulate you and I think that we Hispanic Americans,
+first generation, we should celebrate what a fantastic country
+we have. And that is why I am in Congress, because--and you are
+in business--because we want to keep this system for the future
+of our children.
+    Am I right?
+    Ms. ZAVALA. Yes, I support that 100 percent.
+    Ms. SALAZAR. and I just wanted to ask you, in which way we
+could spread the word and help other businesses like yours,
+specifically in our district, Miami and south Florida in order
+to--what else do you think we could do in order to send a
+message and give the info to people like you in order to
+continue living the American dream?
+    Ms. ZAVALA. Yeah, thank you for that question,
+Congresswoman.
+    I think that it is crucial that we support groups like
+ABIC, like Impact Fund here in Miami. I saw how hard it was for
+me, and I am a little bit sophisticated in the sense of, you
+know, I have systems in place, I have, you know, financials in
+place. It is so hard as a small business to understand what the
+PPP was, how to apply to it. You know, the bank wasn't
+replying. So, you know, ABIC in that sense helped me connect to
+the opportunity because I couldn't get in. With all my network
+in Miami, I could not get the PPP. So imagine the majority of
+the businesses that don't have that network, that are not
+mentors to other businesses, that don't have the community
+connections, they need ABIC, they need Impact Fund.
+    And what I say is, you know, it is great with the SBA, you
+know, has done, you know, during the crisis and before, but we
+must recognize that the numbers don't lie. This is not about
+parties or emotions, it is about numbers. And so we need to
+look at the numbers, who is getting the finance help. And why
+is it that the underserved, you know, communities don't have
+that access to financing. And in this case the PPP--the PPP
+just highlighted the systemic problem we have.
+    And so I think that one of the challenges is that we need
+more technical assistance, we need more, you know, guidance in
+how to getting a small loan, because we are lost. Access to
+information and having these local partners working one-on-one
+with businesses that already know them, it is important.
+    Ms. SALAZAR. And I thank you, because that is why I created
+a prosperity center within my congressional office. And I am
+glad that you are telling me that information is power. Because
+the more info that we put out there into the community for
+people like you--because like you said, that you had certain
+knowledge. There are many other businesses that are not as
+sophisticated or have as much information as you have.
+    So thank you for that.
+    I am not sure if I have to yield my time back or if I have
+a few more minutes. I don't have the----
+    Chairman GOLDEN. You still have a minute to go if you would
+like to ask another question.
+    Ms. SALAZAR. I could have--yeah.
+    And now let me ask you this, what about the--like you were
+saying, I have to definitely recognize the local people in the
+Impact Fund, our local partners who are with the American
+Business Immigration Council, ABIC, to help you connect and to
+give you those tools and that information, that technology or
+know that information, basic knowledge in order to be able to
+navigate the system and get to the money.
+    Now, the info in Spanish, even though you were
+knowledgeable in English, what else can we do for those people
+that also want to live the American dream but still do not
+understand the literature in English? What have you found out
+there? Do we need to promote more material in Spanish?
+    Ms. ZAVALA. Yes. I mean I think that first we need to just
+have the information available. You know, people were just lost
+in the process. Like nobody knew what to do with the PPP. And
+so, yes, it will be very helpful to have it in Spanish as, you
+know, the majority of our businesses here locally are Spanish
+speaker businesses. So certainly that is important and that is
+I think one of the barriers for many of our businesses.
+    Ms. SALAZAR. Thank you very much for that info. Thank you
+Ms. Guzman. Looking forward to meet you when I go down to
+Miami.
+    Ms. ZAVALA. Thank you, Congresswoman.
+    Ms. SALAZAR. I wish you a lot more success in opening up
+many more Half Moon Empanadas shops.
+    Ms. ZAVALA. Thank you.
+    Ms. SALAZAR. I yield back. Thank you, Chairman.
+    Chairman GOLDEN. Thank you very much.
+    I am going to ask a few more questions, so second round if
+Members can bear with me. I certainly recognize if you are not
+able to stick it out, however, Mr. Hagedorn, but if you do have
+more questions, I am happy to recognize you after.
+    Thank you to the witnesses. Just a few more questions.
+    One of them--I guess I will just follow up with you, Ms.
+Zavala, because that was a really good exchange right there.
+You know, early on in the pandemic my office was hearing from
+many, many businesses who were very eager for help from EIDL,
+from PPP, had a lot of questions. SBA staff were very busy
+working with the Treasury trying to build the program, and as a
+result people were really struggling to get information.
+    One of the things that the American Rescue Plan authorizes
+at SBA is a call center, where business owners such as yourself
+could call to get information, how do I apply, you know, what
+are the guidelines, you know. Many people were very concerned
+about taking the loan not knowing how they might qualify for
+forgiveness. These types of questions were everywhere. And as
+you said earlier, people were very concerned.
+    Do you think that having a call center that you could have
+called at the beginning when you were contemplating the
+Paycheck Protection Program and things like EIDL, would have
+been helpful? And would you have called it if it had existed?
+    Ms. ZAVALA. Thank you for the question, Chairman.
+    Yes. I mean I think that as the information is what was
+missing, the access is what--sometimes people were lost. Even
+before the pandemic, think about it, like where do you get
+financing. I get those questions all the time when I do
+mentorship. I get texts from companies, from people, I need
+support for this financing wise. Like there is a lack of
+information. And so, yes, a call center--there was an effort
+here in Miami led by the city Foundation where they put
+together a website with like specific questions about where to
+get the help during COVID, the loans or the individual help.
+And so, of course, those are important efforts.
+    Chairman GOLDEN. Thank you very much.
+    You know, I also wanted to say just thinking about the
+early weeks and months of the pandemic and the emergency it
+caused for a lot of small businesses, I actually had almost my
+entire team establish what we called a task force completely
+focused on aiding small businesses and accessing the EIDL and
+PPP. Even my D.C. staff were on the phone lines trying to
+develop expertise to connect business owners with assistance.
+    And, you know, I think it was one of the beautiful things
+that this Committee really took part in early on. Having had
+the PPP established--it wasn't perfect, we had to roll it out.
+And there was a lot of great oversight done by the entire
+Committee that resulted in follow on actions that improved the
+program over time and more, you know, accurately targeted it
+where it needed to be to have the biggest impact as time went
+on. A really important effort.
+    And one thing I--you may be aware, maybe you are not--I
+actually voted against the American Rescue Plan, but as
+Chairman of the Subcommittee I certainly intend to take part in
+that kind of collaborative oversight to make sure that these
+programs are very successful for all the businesses that are
+out there. Certainly there is a lot of need that remains.
+    So another question I wanted to ask for Ms. Shi, you ran
+the pilot program on the Community Navigator Program in various
+different states, could you talk a little bit about some of the
+issues you came across that SBA and this Committee should be
+aware of in order to avoid those same mistakes occurring as the
+program rolls out nationally?
+    You are muted. I am sorry, ma'am. Go ahead, try again.
+Looks like we may have some technical difficulties. We will
+submit that one for the record.
+    Ms. SHI. Is this better?
+    Chairman GOLDEN. Yes.
+    Ms. SHI. Oh, I am so sorry about that.
+    Yes, so some of the issues that we identified were the
+access to lenders, were for the sole proprietors, the Schedule
+C issues of not being able to have a fuller relief through the
+calculating with the gross income. And I would just say that
+because these were the boots on ground, it sounds similar,
+Chairman, with your office. Almost seems like you had your
+whole team as navigators. But really holding these small
+businesses' hands to get these loans and then helping to turn
+the loans into the grants were some of the issues and that we
+reflected back to the Committee, to the Chairwoman Velazquez--
+and thank you for her leadership on this--and to try to get the
+program major improvements over time as we have seen.
+    And just the other issue I think a couple of times that has
+come up about the accountability and the anti fraud measures.
+The other thing that we did in our program is to make sure the
+navigators and organizations that weren't producing, that were
+not helping businesses get the money in the bank, were defunded
+from the program, right. So that this is--we are in a pandemic,
+we are in an emergency, we require high performance and that
+these businesses like Pilar's, and even smaller employers, do
+get the funds that they deserve and do it quickly, so.
+    Chairman GOLDEN. Thank you. My time has expired on the
+second round. So I did want to make sure to offer an
+opportunity for further questions to the Ranking Member.
+    Mr. HAGEDORN. I have no more questions at this time. I
+would be happy to yield to our Ranking Member for any further
+question.
+    But thank you.
+    Chairman GOLDEN. Very good.
+    Well, I want to thank all of our witnesses for joining us
+today and all of the feedback that you provided. And certainly
+appreciate you bearing with us through all the technical
+difficulties that exist out there. Some people have commented
+on the side here more evidence of the need for this Committee
+to stay focused on access to high speed internet, particularly
+for small business owners all over America. And I think I heard
+the Ranking Member comment he looks forward to having everyone
+back in the Committee. I couldn't agree more.
+    But, with that, just some closing remarks.
+    You know, to the witnesses, your testimony today will be
+valuable as the Administration and this Committee moves forward
+to stand up and fine tune the Community Navigator Program. For
+a nearly a year COVID has hit underserved, agricultural, and
+rural small businesses particularly hard. Congress has taken
+many steps to make relief programs such as the Paycheck
+Protection Program, EIDL, and others there for small businesses
+more accessible, equitable, and to ensure that our small
+businesses get the greatest, you know, help out of this
+Congress and these programs as possible. But certainly there is
+always room to continue to make improvements.
+    Today we have heard about the impact that this program
+could have in underserved small businesses. That is why
+Committee Members need to do everything we can to ensure that
+the program is sped up and run effectively and efficiently
+without waste on getting the help into the hands of those who
+need it the most.
+    So, with that, I look forward to continuing to work with my
+fellow Committee Members and the Committee staff as we take a
+look at the roll out of this program and continue to support
+things like the Paycheck Protection Program, as we just
+extended the ability of small businesses to access that program
+through the remainder of the month of March.
+    With that, I think I will go ahead and close it out and ask
+unanimous consent that Members have 5 legislative days to
+submit statements and supporting materials for the record. And,
+without objection, so ordered.
+    [Whereupon, at 11:34 a.m., the subcommittee was adjourned.]
+    [Ms. Pilar Guzman Zavala did not submit her QFR's in a
+timely manner.]
+                            A P P E N D I X
+[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
+                                 [all]
+</pre></body></html>

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+<html>
+<title> - THE INTERACTION BETWEEN THE PAYCHECK PROTECTION PROGRAM AND FEDERAL ACQUISITION RULES: WHAT IT MEANS FOR GOVERNMENT CONTRACTORS</title>
+<body><pre>
+[House Hearing, 117 Congress]
+[From the U.S. Government Publishing Office]
+                  THE INTERACTION BETWEEN THE PAYCHECK
+                   PROTECTION PROGRAM AND FEDERAL
+                   ACQUISITION RULES: WHAT IT MEANS FOR
+                   GOVERNMENT CONTRACTORS
+=======================================================================
+                                 HEARING
+                               BEFORE THE
+             SUBCOMMITTEE ON CONTRACTING AND INFRASTRUCTURE
+                                 OF THE
+                      COMMITTEE ON SMALL BUSINESS
+                             UNITED STATES
+                        HOUSE OF REPRESENTATIVES
+                    ONE HUNDRED SEVENTEENTH CONGRESS
+                             FIRST SESSION
+                               __________
+                              HEARING HELD
+                             MARCH 23, 2021
+                               __________
+[GRAPHIC NOT AVAILABLE IN TIFF FORMAT
+            Small Business Committee Document Number 117-007
+             Available via the GPO Website: www.govinfo.gov
+                               __________
+                    U.S. GOVERNMENT PUBLISHING OFFICE
+43-803                       WASHINGTON : 2021
+--------------------------------------------------------------------------------------
+                   HOUSE COMMITTEE ON SMALL BUSINESS
+                 NYDIA VELAZQUEZ, New York, Chairwoman
+                          JARED GOLDEN, Maine
+                          JASON CROW, Colorado
+                         SHARICE DAVIDS, Kansas
+                         KWEISI MFUME, Maryland
+                        DEAN PHILLIPS, Minnesota
+                         MARIE NEWMAN, Illinois
+                       CAROLYN BOURDEAUX, Georgia
+                          JUDY CHU, California
+                       DWIGHT EVANS, Pennsylvania
+                       ANTONIO DELGADO, New York
+                     CHRISSY HOULAHAN, Pennsylvania
+                          ANDY KIM, New Jersey
+                         ANGIE CRAIG, Minnesota
+              BLAINE LUETKEMEYER, Missouri, Ranking Member
+                         ROGER WILLIAMS, Texas
+                        JIM HAGEDORN, Minnesota
+                        PETE STAUBER, Minnesota
+                        DAN MEUSER, Pennsylvania
+                        CLAUDIA TENNEY, New York
+                       ANDREW GARBARINO, New York
+                         YOUNG KIM, California
+                         BETH VAN DUYNE, Texas
+                         BYRON DONALDS, Florida
+                         MARIA SALAZAR, Florida
+                      SCOTT FITZGERALD, Wisconsin
+                 Melissa Jung, Majority Staff Director
+            Ellen Harrington, Majority Deputy Staff Director
+                     David Planning, Staff Director
+                            C O N T E N T S
+                           OPENING STATEMENTS
+                                                                   Page
+Hon. Kweisi Mfume................................................     1
+Hon. Maria Salazar...............................................     2
+                               WITNESSES
+Mr. Greg Bingham, Partner, HKA, Washington, DC...................     5
+Ms. Susan Moser, Partner, Cherry Bekaert, Tysons, VA.............     7
+Ms. Robin Greenleaf, PE, Chief Executive Officer, Architectural
+  Engineers, Boston, MA, testifying on behalf of the American
+  Council of Engineering Companies (ACEC)........................     9
+Mr. Carlos A. Penin, PE, President, CAP Engineering, Coral
+  Gables, FL.....................................................    10
+                                APPENDIX
+Prepared Statements:
+    Mr. Greg Bingham, Partner, HKA, Washington, DC...............    23
+    Ms. Susan Moser, Partner, Cherry Bekaert, Tysons, VA.........    30
+    Ms. Robin Greenleaf, PE, Chief Executive Officer,
+      Architectural Engineers, Boston, MA, testifying on behalf
+      of the American Council of Engineering Companies (ACEC)....    35
+    Mr. Carlos A. Penin, PE, President, CAP Engineering, Coral
+      Gables, FL.................................................    40
+Questions for the Record:
+    None.
+Answers for the Record:
+    None.
+Additional Material for the Record:
+    AIA - American Institute of Architects.......................    41
+  THE INTERACTION BETWEEN THE PAYCHECK PROTECTION PROGRAM AND FEDERAL
+      ACQUISITION RULES: WHAT IT MEANS FOR GOVERNMENT CONTRACTORS
+                              ----------
+                        TUESDAY, MARCH 23, 2021
+                  House of Representatives,
+               Committee on Small Business,
+    Subcommittee on Contracting and Infrastructure,
+                                                    Washington, DC.
+    The Subcommittee met, pursuant to call, at 12:00 p.m., via
+Webex, Hon. Kweisi Mfume [chairman of the Subcommittee]
+presiding.
+    Present: Representatives Mfume, Golden, Newman, Salazar,
+Stauber, Meuser, Fitzgerald, Andy Kim, Schneider, and Hagedorn
+    Chairman MFUME. Ladies and gentlemen, good afternoon since
+it is technically a few minutes after noon.
+    I want to call this meeting to order officially and I want
+to make some important announcements which also are
+requirements.
+    Let me begin by saying that the standing House and
+Committee rules and practices will continue to apply during
+these remote hearings. All members are reminded that they are
+expected to adhere to these standing rules, including the rules
+that cover decorum.
+    House regulations, as most of you know, require members to
+be visible through a video connection throughout the entire
+proceeding, so to the extent possible, please keep your cameras
+on. Also, please remember to remain muted until you are
+recognized in order to minimize background noise. If you have
+to participate in another proceeding that might be going on
+simultaneously, please exit this one and then log back in if
+you can later.
+    In the event that a member encounters technical issues that
+prevent them from being recognized for their questioning, I
+will move to the next available member of the same party and I
+will recognize that member at the next appropriate time if he
+or she is able to correct the problem.
+    Again, I know all of you have busy schedules. I appreciate
+everybody taking time to be here. I am going to formally
+introduce our witnesses in just a few moments but let me just
+underscore the fact that this hearing on the Subcommittee on
+Contracting and Infrastructure for the 117th Congress is our
+first. And for our opening hearing I thought it was very
+important to examine an issue that is a priority for government
+contractors and that is the interplay between the Federal
+Acquisition Regulation, also known as the FAR, and the Paycheck
+Protection Program, also known as PPP.
+    The FAR serves as a primary set of rules governing all
+executive agencies and their acquisitions of goods and
+services. And so today we will focus on part 31 of Far, which
+helps contractors determine which costs are, in fact,
+reimbursable.
+    Specifically, we will be taking a look at an aspect of the
+credit cause, which can impact Federal contractors who have
+taken advantage of the Paycheck Protection Program. Congress
+created the PPP to help, as we know, small businesses, meet
+payroll costs and other expenses. These loans were designed to
+be fully forgivable if small businesses spent loan proceeds on
+these purposes.
+    However, Federal contractors, mainly those with false
+reimbursable contracts, may find themselves owing the
+government a credit if the PPP loan has been forgiven and it
+was used to pay for costs that were under a government
+contract.
+    So this is by far some of the virtue of FAR credits and the
+motion of the credit clause, which is included in these type of
+arrangements and more specifically I should say, in these type
+of contracts.
+    In April 2020, shortly after PPP's launch, the Department
+of Defense issued guidance stating that the loan amounts could
+constitute credits. In essence, the government's position has
+been to take a credit that is due to avoid duplication of
+payments. With that said, some small contractors will argue
+that this is antithetical to the PPP program's intent which is
+to help struggling firms during a time of crises.
+    Contractors contend that if the government forces them to
+repay portions of the loan through credits, then the PPP loan
+was not truly forgivable.
+    So today, we will have an opportunity to examine the
+varying positions on this critical issue, and during the
+hearing it will be very important to note that the Defense
+Contract Audit Agency has issued additional guidance on the
+treatments of credits. And while there is certainly room for
+more guidance, this one represents, I think, an important first
+step because it clarifies that when a contractors receives PPP
+loan forgiveness, only the amount of the loan forgiveness
+allocable to a government contract results in a credit.
+    So moreover, it clarifies other matters that help ensure
+appropriate application of credits of which we will learn more
+about today in the hearing that is now beginning.
+    It is clear that this is a complex issue with significant
+ramifications for small government contractors. I hope that
+today's hearing will allow us to dive deep into the subject and
+to better understand all sides of the issue, as well as
+available guidance that might come to us or that might shed
+light on this subject just as the new guidance did today.
+    This hearing is an essential first step in coming to a
+resolution that does not inflict further harm on the small
+businesses already suffering from this pandemic across the
+country.
+    So again, I want to thank the witness for joining us here
+today, and now I would like to yield to the Ranking Member, Ms.
+Salazar of Florida for her opening statement.
+    Ms. SALAZAR. Thank you, Chairman.
+    It is undeniable that small business contractors play a
+critical role in the Federal sphere. As you have said, these
+businesses are innovators. They drive down the costs by
+promoting competition and their flexibility allows them to be
+agile and adaptable, while continuing to deliver excellent
+results often faster and cheaper than their larger
+counterparts.
+    That is why protecting these essential members of our
+workforce is critical to maintain Federal operations at a best
+and optimal level.
+    But they are not immune, and they have not been immune to
+the far-reaching effects of the COVID-19 pandemic. Indeed,
+small businesses everywhere, specifically in District 27, have
+suffered from the governmental imposition of endless lockdowns
+and restrictions. And many have suffered from cuts to billable
+hours, widespread project cancellations, significant
+disruptions in cashflow, and interruptions in their ability to
+perform on the contract.
+    I have spoken to many of my small business contractors in
+District 27 in South Florida that I represent in Congress, and
+many of them have shared their concerns, including my
+constituent, Mr. Carlos Penin, who is here with us today as a
+witness.
+    Many small contractors have turned to their Paycheck
+Protection Program (PPP), anticipating they may be able to
+receive loan forgiveness provided they comply with the criteria
+that has been established by the government.
+    But apparently, the rules have changed. When the Department
+of Defense (DOD) issued in April 2020 a memorandum applying
+Federal Acquisition regulations cost principles to the PPP
+forgiveness, DoD had classified forgiveness of the PPP loan as
+a credit allowed under contract. Now, the DoD has dictated that
+the contractor must give this amount back to the government.
+    According to the Department of Defense, this application of
+the Federal Acquisition Regulation may be necessary to prevent
+against potential abuse by contractors who are seeking a
+windfall by billing the government twice. This activity is
+known as double dipping, and we are here, elected in Congress,
+to prevent exactly that and to help safeguard taxpayers' money.
+    However, the contracting community has raised several
+concerns with the DoD's strategy. Some contractors argue that
+the DoD's disposition contradicts congressional intent on the
+PPP. Others have taken the view that this unfairly impacts
+certain contract types triggering a requirement for payment of
+the PPP for some contractors but not for others.
+    So many take issue with the DoD's change of rules
+expressing their concerns and that they were surprised. This
+was a surprise decision which was made unilaterally without
+their consent. Now as we know, the deadline for forgiveness is
+around the corner and they must decide what to do with their
+loan. For some, PPP may be a welcome and necessary supplement
+to their existing cashflow, but for others it may not be worth
+the trouble, particularly in light of how application of the
+Federal Acquisition Regulation credit may negatively affect
+future revenues.
+    So I hope, and I am sure you do, Chairman, through the
+insight of our distinguished panelists, we will be able to gain
+a better understanding of the DoD's stated policy, its
+potential effects on small contractors, and identify flexible
+solutions in a bipartisan fashion.
+    Thank you for your time, and I yield back, Chairman.
+    Chairman MFUME. Thank you very much. The Ranking Member
+yields back. And I want to thank her for her comments and thank
+again all of you who are here joining us.
+    By the way, if Committee members have an opening statement
+prepared, we would ask that they be submitted for the record.
+    And while I am at it, I am going to ask unanimous consent
+that every member has 5 legislative days to revise and extend
+their remarks.
+    I would like to just take a moment to explain how this
+remote hearing will proceed. Each witness will have 5 minutes
+to provide a statement and each Committee member will receive 5
+minutes for questions. Please ensure again that your microphone
+is on when you begin speaking and that you return to mute when,
+in fact, you are finished.
+    So I would now like to now introduce our witnesses. Our
+first witness today is Greg Bingham, a partner at KHA and a co-
+lead of their Government Contracts group. He is a forensic
+accounting and quantum expert with over 33 years of experience
+in the field of business consulting primarily for government
+and construction contractors. Mr. Bingham is an authority on
+government contracts, having served as an adjunct professor at
+the George Washington University, and among his professional
+memberships, Mr. Bingham is also a member of GW's Government
+Contracts Advisory Board. He holds a Bachelor of Science degree
+in Electrical Engineering and an MBA degree as well. Welcome,
+Mr. Bingham.
+    Our second witness is Ms. Susan Moser. Moser. I am getting
+that wrong but I will say Moser until I am corrected. And if I
+am wrong, please forgive me. Ms. Moser is a partner at Cherry
+Bekaert and the leader and founder of their Government
+Contracting Services Group. Ms. Moser has 36 years of
+professional experiences and advises contractors in multiple
+areas. She also serves as a regional market leader of the
+Cherry Bekaert's Virginia, D.C., and Maryland practices, and is
+a board member of the Northern Virginia Chamber of Commerce.
+She holds a Bachelor of Science degree in Engineering--in
+accounting, excuse me--and is a certified public accountant and
+a certified information technology professor. Thank you very,
+very much, Ms. Moser. Again, forgive me if I am mispronouncing
+your name.
+    Our third witness today is Ms. Robin Greenleaf. Ms.
+Greenleaf has more than 30 years of professional experience and
+is the chief executive officer and founder of the Architectural
+Engineers in Boston. She is a professional engineer and an LEED
+accredited professional. Ms. Greenleaf holds a Bachelor of
+Science in Civil Engineering and a Master of Science in
+Structural Engineering. She is the Co-Chair elect of the
+American Council of Engineering Companies. Welcome again, Ms.
+Greenleaf.
+    Our final witness before I yield back, and Mr. Penin.
+Please bear with me because I am just making sure that I have a
+bio on you. I did not see one here. Okay.
+    Ms. SALAZAR. Chairman, I have it here.
+    Chairman MFUME. I have it. Oh, no, I do not. You do have
+it?
+    Ms. SALAZAR. Yes. Yes, I do.
+    Chairman MFUME. Please, please, please introduce him, would
+you?
+    Ms. SALAZAR. All right. Absolutely. Thank you. Thank you,
+Chairman.
+    I would like to welcome our final witness who is from my
+district, District 27 in Florida, Mr. Carlos Penin. Mr. Penin
+is the president and founder of CAP Engineering. CAP is a
+minority-owned consulting firm specializing in providing
+engineering services for government clients. Under his
+leadership, CAP Engineering has earned a stellar reputation for
+the professional management of its infrastructure projects and
+this has resulted in 30 years of dependable services to satisfy
+government clients. Mr. Penin has an extensive resume with over
+40 years of direct project experience and managerial expertise.
+Among his many accomplishments, Mr. Penin worked on several
+major architectural and engineering projects in South Florida,
+including Joe Robbie Stadium, the widening of the Julia Tuttle
+Causeway and the reconstruction of SW Eighth Street. Lastly, I
+would like to congratulate Mr. Penin on his recent appointment
+by Florida Governor Ron DeSantis to the South Florida Regional
+Transportation Authority Governing Board. I wish you well in
+your new role, and thank you for all that you have done, not
+only for our district, District 27, but for the United States
+and for this magnificent country who opened its arms to you and
+to your family when you were a little boy. Same case with me,
+and that is why we are so grateful, and I am delighted to have
+you here talking to us and explaining, and giving us your
+experience in this last 40 years.
+    Now I yield back, Mr. Chairman. Thank you.
+    Chairman MFUME. Thank you, Ms. Salazar. Hopefully, we will
+make a great one-two punch throughout the 117th Congress and I
+appreciate you stepping up and doing what you could in terms of
+properly introducing Mr. Penin. And Mr. Penin, thank you very
+much, as with all the witnesses again for being here today.
+    Madam Salazar, I am going to move to start introducing or
+calling for remarks of the witnesses unless you have a question
+or comment or observation at this point.
+    Ms. SALAZAR. You can proceed with all the witnesses. Thank
+you, Chairman.
+    Chairman MFUME. Thank you.
+    Mr. Bingham, you are now recognized for 5 minutes, sir.
+STATEMENTS OF GREG BINGHAM, PARTNER, HKA; SUSAN MOSER, PARTNER,
+ CHERRY BEKAERT; ROBIN GREENLEAF, PE, CHIEF EXECUTIVE OFFICER,
+ ARCHITECTURAL ENGINEERS; CARLOS A. PENIN, PE, PRESIDENT, CAP
+                          ENGINEERING
+                   STATEMENT OF GREG BINGHAM
+    Mr. BINGHAM. Thank you. Thank you. This is quite an honor
+to get to testify here today.
+    As you mentioned, the FAR, the Federal Acquisition
+Regulation is the primary set of rules used by the U.S.
+Government Executive Branch agency. The FAR has 53 parts and
+FAR 31 is dedicated to cost principles and procedures.
+    A key part of FAR 31 is what is the composition of total
+cost of a contract and that is key to this credit issue. The
+cost of a contract is the sum of allowable direct costs,
+allowable indirect costs, less any allocable credit. And so
+there is more about this credit point in the credit clause,
+which is at FAR 31.201-5. Examples of credits are things like
+state tax refunds.
+    This credit clause is not new. It has been in the FAR since
+the FAR began in 1984. It was in the Armed Services Procurement
+Regulation as early as 1948 in essentially the same form as it
+is today.
+    The impact of the FAR credits clause is different on cost
+reimbursement contracts than on fixed price contracts. If a
+contractor incurs $1,000 in cost generally speaking on a cost
+reimbursement contract, they will be reimbursed $1,000. Any
+event that reduces the allowable cost incurred on a contract
+will reduce the amount reimbursed under a typical cost
+reimbursement contract. And a credit is an example of something
+that would reduce the cost on a cost reimbursement contract.
+    The impact of the credit clause is different on fixed price
+contracts. In fixed price contracts, the invoicing and payment
+provisions generally focus on the contractor demonstrating they
+have provided some specified product or service and requesting
+payment of a predetermined price. And so if the contractor
+incurs more cost or less cost, they still get that
+predetermined price on a fixed price contract.
+    So a credit will reduce a particular contract's cost and
+reduce the amount paid on a cost reimbursement contract but not
+on a fixed price contract.
+    As an example, let's say Contractor A works solely with the
+Federal government and holds only fixed price contracts.
+Contractor A has a PPP loan worth $1 million forgiven in 2020.
+There would be no repayment to the government for any of the
+forgiven loan in this example. Contractor B works solely with
+the Federal government and holds only cost reimbursement
+contracts. Contractor B had a PPP loan worth $1 million
+forgiven in 2020. Contractor B would repay the government for
+this loan under this scenario.
+    There are different types of costs. The major categories of
+cost are direct and indirect. And direct costs are for people
+that are actually working on contracts. Sometimes the labor of
+people working on contracts is referred to as touch labor
+because the mechanic's hands are actually touching the car or
+on the assembly line people are actually performing the work.
+Indirect costs are for costs that are not working on the
+contractor and more for the growing concern of the company. And
+so typical indirect costs are things like facility rent or the
+salary and benefits of the office administrator that works in
+the office and benefits all contracts, does not work on any
+particular contract but on all contracts.
+    Indirect costs are often expressed in terms of an indirect
+cost rate. So an indirect cost rate is the ratio of indirect
+costs to direct costs. So remember numerator, denominator, top
+of the ratio, bottom of the ratio. You have got indirect costs
+on top and the direct costs on the bottom in a typical example.
+And so it might be expressed as something like 5 percent.
+    For years that have already passed, a company can determine
+all of the direct costs and indirect costs that were incurred
+in this prior year. And so in a typical process, after these
+costs are audited by the government, the company and the
+government negotiate a final settlement of what was the
+indirect cost rate for that prior year. There are things called
+forward pricing rates. And so for years that are not yet
+completed, as 2021 is now not completed, and for years which
+have not yet commenced, government contractors often develop
+estimates of the total amount of indirect and direct costs that
+will be incurred over the course of the year.
+    It should not be assumed that future years will have
+exactly the same indirect cost rate as a prior year. There can
+be nonrecurring events and the forgiveness of a PPP loan in
+2020 may well be a nonrecurring event. Maybe an event that
+occurs in 2020 that you do not anticipate will occur in future
+years. And if that is the case, then the indirect rates for
+2021 and future years should not be based at all, solely or
+blindly on whatever the experience was in 2020.
+    And with that I will----
+    Chairman MFUME. You probably looked at the clock and
+started wrapping up, but we have exhausted the amount of time
+for you. If you would let us get through the others I am sure
+there are going to be some questions directed your again. And
+again, I appreciate your understanding.
+    Mr. BINGHAM. Certainly. Certainly. Thank you for this
+opportunity.
+    Chairman MFUME. Sure. Sure.
+    The question is now for Ms. Moser. Ms. Moser, again, I know
+I have said it several times, if I am mispronouncing your name,
+please correct me because with a name like mine I cannot afford
+to do that.
+    Ms. MOSER. Thank you.
+    Chairman MFUME. You are mute.
+                    STATEMENT OF SUSAN MOSER
+    Ms. MOSER. Thank you. Chairman Mfume, Ranking Member
+Salazar, and members of the Committee, thank you for the
+opportunity to speak today.
+    My name is Susan Moser and I would like to take this
+opportunity to talk about the government's guidance on PPP
+forgiveness and its impacts on contractors today and moving
+forward.
+    As was previously mentioned, the interaction between the
+FAR and PPP was first addressed in April 2020 when DoD answered
+a frequently asked question and made clear that DoD expected
+PPP loan forgiveness would result in a credit to the government
+on flexibly priced contracts. Subsequent to this guidance,
+confusion began as most companies have a mix of flexibly priced
+and firm-fixed price contracts and many contractors plan to
+only seek forgiveness of certain costs which could be a mix of
+direct and indirect costs.
+    While the impact of PPP forgiveness on flexibly priced
+contracts has been made clear, the contractor community needs
+clarity around how to handle forgiven costs under other
+contract arrangements, including contracts with state
+transportation agencies. To date, agencies have issued limited
+guidance with conflicting information that contractors are
+struggling to understand and apply. DCAA did issue guidance,
+revised guidance in January of 2021 that confirmed that credits
+should be recorded based on how costs were recorded when
+incurred. DCAA also stated that a PPP loan forgiveness credit
+should be allocated to the accounting period in which it is
+received.
+    The guidance is contrary to generally accepted accounting
+principles and at least two decisions by the Court of Federal
+Claims and its predecessor court. For most companies,
+forgiveness for costs incurred in 2020 will occur in 2021.
+    I would also like to note that the impact of the Employee
+Retention Credit creates the same challenges for contractors.
+Much of the concern regarding guidance has come from
+architecture and engineering or A&E firms doing business with
+state transportation agencies who receive funding from the
+Federal Highway Administration. These contracts carry many FAR
+requirements. There is concern with potential draft guidance
+being considered by the Highway Administration that would
+require all PPP forgiveness credits to be applied to indirect
+costs. Accounting for credits in this way is inconsistent with
+FAR Part 31 and would result in reduced indirect cost rates for
+the year in which the credit is applied, but could also apply
+throughout the life of multiple year contracts awarded in the
+year in which the reduced rates were established, potentially
+resulting in reduced indirect rates for multiple years.
+    Understandably, many A&E firms are concerned with the
+implications of this anticipated guidance. Most states'
+Department of Transportation agencies require A&E firms to have
+an indirect rate audit conducted by a CPA firm. Our firm
+performs many of these types of audits.
+    State DOTs are trying to get guidance from the Federal
+Highway Administration, but absent that are advising to rely on
+existing regulations in determining credits.
+    There are three areas where guidance could assist
+contractors. First, standardizing the period in which the PPP
+credit should be reported and included in any indirect rate
+audit. The credit should be included in the same year costs
+were incurred.
+    Second, I recommend that any contractors that are receiving
+PPP funds disclose in the notes to their indirect rate audit
+the calculated rate both with and without forgiveness
+considered.
+    Lastly, inform procurement agencies, particularly
+transportation, the rates included in indirect rate audits
+should be used in negotiations, but that final prices can and
+should incorporate consideration of the impact of PPP
+forgiveness. Specifically, while the rate including PPP
+forgiveness can be used in year one of a multiple year
+contract, subsequent years should be renegotiated using rates
+that are not impacted by the PPP credit. Contracting agencies
+should also incorporate business judgment in negotiating a
+price that is fair and reasonable to both parties.
+    These recommendations, I believe, align with generally
+accepted accounting principles, the FAR Cost Principles and
+would help alleviate negative financial impacts in subsequent
+years. Further, this would reduce confusion while also ensuring
+contractors receive the benefit originally intended by the
+CARES Act but without the potential to ``double dip'' and allow
+some contractors to receive a greater benefit than companies
+who do not contract with the government.
+    Thank you very much for your time today.
+    Ms. SALAZAR. Mr. Mfume, you are muted.
+    Chairman MFUME. I was thanking all the witnesses for their
+testimony so far and reminding people that we all have their
+written testimony. If they have it nearby I would urge that you
+hold on to it because there may be some questions, comments and
+observations that go directly back to that.
+    I would like to recognize Ms. Greenleaf at the current
+moment. Ms. Greenleaf, you have 5 minutes. The floor is yours.
+                  STATEMENT OF ROBIN GREENLEAF
+    Ms. GREENLEAF. Thank you very much, Chairman Mfume, and
+Ranking Member Salazar. Thank you for the opportunity to
+testify before the Subcommittee today.
+    My name is Robin Greenleaf. I am the CEO of Architectural
+Engineers, Inc., a woman-owned engineering firm in Boston. We
+have 33 employees who provide mechanical and electrical
+engineering services to Federal, state, and local agencies and
+private companies and owners. I am also the Chair-elect of the
+American Council of Engineering Companies and I have the
+privilege of serving as National Chair starting in April. It is
+an honor to represent my colleagues here today.
+    I cannot overstate how important this issue is to small
+business engineering firms across the country right now. My
+2020 experience is typical of hundreds and hundreds of my
+colleagues in the industry. We relied on the PPP loan to keep
+our entire staff on the payroll even in the face of significant
+business disruptions and revenue loss. And the program was
+successful. It met its intended objective.
+    But now those of us who contract for government clients are
+facing the imposition of a credit under the FAR and we think
+this is completely misguided. Congress already made clear that
+forgiven PPP loans are not to be treated as income for tax
+purposes and then further clarified that covered expenses are
+deductible. In the same way, forgiven PPP loans ought not to
+count as income under the FAR. This was emergency relief to
+support employers and businesses ought to be able to take full
+advantage of the program.
+    There are numerous challenges with this policy that I want
+to highlight for you. One, if this credit is applied to reduce
+our overhead rate as opposed by the Federal Highway
+Administration, we are going to be working at a discounted
+rate, not only in the coming year but potentially for several
+years. Many of our clients lock in the indirect cost rate over
+the life of a multi-year contract. On my $594,000 PPP loan on
+which we just received forgiveness last week, I am looking at
+32 percent drop in my overheard rate resulting in the loss of
+at least $129,000 per year. Only about 15 percent of my firm's
+work is with public agencies using our FAR rate. For firms that
+do predominately DOT work, it is easy to see how the losses
+will far exceed the value of the loan.
+    This leads to my second point. The impact of the credit
+will fall most heavily on small, minority-owned, and women-
+owned firms that needed the assistance the most and have come
+to perform a higher percentage of government contracting.
+    I have documented a few examples in my written testimony
+and I hear from more colleagues every day. And so the basic
+outcome of this policy is that our state and local clients will
+be benefitting from the PPP, not us. We are passing the loan
+through to them through discounted billing rates. If unchanged,
+he application of this credit will create a disincentive for
+women-owned firms, minority-owned firms, DBEs, and other small
+businesses to compete for work for public agencies. It will
+derive the government of qualified engineering services and
+will hamper efforts to expand small business and DBE
+contracting opportunities.
+    Let me also say that the inequity here with our
+counterparts in the infrastructure market is frustrating. Other
+contractors working on Federal aid projects are not subject to
+these same requirements. Fixed price contracts are not impacted
+by the FAR credits clause. While my rates are reduced, other
+businesses working on the same infrastructure projects have
+been able to retain the full benefit of the PPP. This uneven
+treatment does not seem fair or equitable.
+    There is a real sense of urgency in the industry to get
+this issue resolved. Firms that already received forgiveness
+are starting the annual audit process and seeing the impact of
+the credit on their rates. Some business owners are already
+questioning whether they can continue to keep all their
+employees that they supported with the PPP loan. Those that
+have not yet applied for forgiveness are coming up on the 10
+month deadline to start repaying those loans. Banks are
+pressuring them to decide whether to apply for forgiveness. Our
+small business owners need to make critical business decisions
+about the impact on their rates and projected revenues and
+employment ramifications.
+    At a time when the industry is very eager to work with your
+colleagues to deliver a robust infrastructure-based economic
+recovery agenda, your prospects for these opportunities are
+dimmer because of this credit holding us back.
+    Thank you for the opportunity to testify.
+    Chairman MFUME. Thank you very much, Ms. Greenleaf.
+    Mr. Penin, you are now recognized for 5 minutes.
+                  STATEMENT OF CARLOS A. PENIN
+    Mr. PENIN. Good afternoon, Chairman, Ranking Member
+Salazar, all congressional members of the Subcommittee on
+Contracting and Infrastructure and everyone present.
+    My name is Carlos Penin. I arrived from Cuba in 1962 at the
+age of six. I think I am giving away my age. I am a proud Cuban
+American who pursued a career in engineering and ended up
+fulfilling my American dream of starting my own business. The
+company that I started, CAP Engineering is a small, minority-
+owned business that has been in operation in the city of Coral
+Gables, District 27, for almost 33 years. Today, I am
+addressing this Committee as the founder and president of my
+company representing my employees, but also as a former
+president of ACEC Florida, the organization that represents
+member engineering firms in the state of Florida.
+    In Florida, we have hurricanes, and I have survived
+multiple hurricanes during our company's history, sometimes
+multiple hurricanes in the same years. The devastation from
+this pandemic has been far worse and nobody could have even
+predicted it, nobody saw it coming, and the severe impact that
+it has had.
+    In the early months of the pandemic, we applied for and
+received assistance from the PPP. The assistance that we
+received was applied as intended to help keep our loyal staff
+employed so that they, in turn, could keep their families fed,
+safe, and healthy.
+    The interpretation of the Federal Acquisition Regulation,
+the FAR clause, would reverse the benefits received from the
+PPP and could have a negative impact for our company and any
+company that pursues Federal or state contracting for years to
+come.
+    As Robin so well pointed out, if the PPP loan forgiveness
+is unallowed and therefore subtracted from the indirect labor
+cost, then in our case our overheard rate would be reduced by
+approximately 25 percent. If we had multiple year contracts,
+the lower overhead rate would be applied for multiple years and
+for multiple contracts. This reduction would be higher than the
+original loan amount that we received, thus negating the
+original intent of the PPP loan which was to help companies
+such as ours keep our employees and thus help our families.
+    I ask you to please consider our industry's request that
+this unintended consequence be eliminated. And as good
+engineers, we are supposed to finish on time and under budget
+and I yield back with 2 minutes and some seconds left over in
+my presentation. Thank you very much.
+    Chairman MFUME. Thank you, and my thanks to all of the
+witnesses.
+    We are going to begin the open session of questions and
+comments with members who are present today. And I would like
+to recognize myself for 5 minutes.
+    Mr. Bingham, could you go back and elaborate on what the
+credit clause is and how it is supposed to work and how a
+Federal contractor is bound by the principle clause?
+    Mr. BINGHAM. Certainly. A key issue for reimbursement of
+cost and just cost accounting generally is what is the cost
+recorded on a contract. And the cost recorded on a contract is
+direct cost plus indirect cost and less any credit. So the
+issues that are being discussed here relate--when people talk
+about paying their employees, that may well be a direct cost.
+It is hard to know if there are indirect employees but it could
+well be direct cost of performance. If they talk about paying
+for facilities cost or their indirect personnel, then that
+would be, you know, part of their indirect cost. But the
+credits, wherever the credits, wherever the loan money is
+spent, that is where the credit should go. If a company uses
+the loan for a particular contract, only to reimburse employees
+on a particular cost, then the credit should go to that
+particular contract, not other contracts, not on overhead. If
+the credit went all to facility cost and overhead, then the
+forgiveness should go only to overhead.
+    I hope that helps you understand that in determining the
+cost on a contract, the credit has to be reduced from wherever
+the loan was spent. That is where the reduction occurs.
+    Chairman MFUME. Okay. And Ms. Moser, I am just going to
+stay on the matter regarding these credits. You mentioned in
+your testimony that DCAA issued guidance on how the credits
+should, in fact, be applied. Could you take a moment and expand
+on the major points of that guidance and how it really works in
+practice?
+    Ms. MOSER. Yes. I would be happy to.
+    So DCAA issued its guidance in January which had a number
+of different areas that they addressed. The first area is they
+were clear, and this is consistent with the earlier DoD
+guidance and consistent with the testimony we just heard, that
+loan forgiveness proceeds should be applied in the same manner
+in which the original cost was occurred. So just as we heard
+before, if direct salaries were used and it could be for
+commercial work or on direct cost reimbursable work, that
+portion of the credit should go back to that where it was
+originally incurred. If it was included in the overhead, that
+is where it should be incurred. So that was pretty
+straightforward and I think consistent with FAR.
+    DCAA's guidance suggested or stated that--and DCAA, when
+they issue guidance, they are actually issuing guidance to
+their auditors. The general public and contractors certainly
+use that as a reference but they are issuing guidance to their
+auditors. But they also stated that when the credit is received
+is the year in which it should be applied. So that creates some
+inconsistency as companies have incurred the loan forgiveness
+of PPP during 2020 and they are going to get proceeds or
+forgiveness in 2021. That matching, that inconsistent matching,
+I believe is not correct.
+    They also did address a number of other areas in their
+guidance including guidance on contractors doing forward
+pricing. So a forward pricing rate agreement is a forward
+looking forecast of rates that is used for certain types of
+contracts. It is typically used in negotiating fixed price task
+orders or change orders. So they did include in their guidance
+that consideration should be given to--2020 we have all
+acknowledged was an unusual year with unusual circumstances.
+And costs incurred and credits incurred in this year should be
+considered in looking at forward looking. Just because
+historical reference is not necessarily the prediction of what
+the future rates would be. So those were the specific areas
+they addressed.
+    Chairman MFUME. Thank you very much, Ms. Moser.
+    My time has expired. The Chair will recognize the Ranking
+Member, Ms. Salazar.
+    Ms. SALAZAR. Thank you, Chairman.
+    I think I want to use my 5 minutes. Maybe I can ask the
+same question to the different witnesses. And I would start
+with Mr. Penin and then I can ask Ms. Moser.
+    I think that the main concern the government has is to
+avoid the double dipping. So if you were in our position, what
+would be your recommendation? I am sure Mr. Penin, Ms. Moser, I
+am sure that all of you do not want that happening. We do not
+want to have to pay twice. So in which way could we be able to
+be fair to you but at the same time not pay you double?
+    We will start with you, Mr. Penin.
+    Mr. PENIN. Thank you very much for the question, Ranking
+Member Salazar.
+    That is more of an accounting function. I do not think that
+it is double dipping. We used the loan for what it was intended
+to be used, which was to save our employees, and we did that.
+When we sought the PPP funding, we looked at it as the lifeline
+to get to the other side of the pandemic and that, as we have
+heard oftentimes, that goalpost kept moving on us over and over
+again. So it was a vital opportunity for us to be able to stay
+alive, stay afloat during this last year.
+    As far as the FAR and how that is used, as I mentioned in
+my testimony before, that has a negative impact on the bottom
+line because what happens is it gets applied to the indirect
+labor cost, and therefore, it pushes our multiplier down. And
+in some cases as we will experience in my company, it will put
+us at 25 percent below what we are currently doing today.
+    So we see this as a loan, a forgivable loan that has
+carried us through last year. It is not reoccurring but the
+unintended consequence could reoccur for multiple years to
+come. I hope that answers your question.
+    Ms. SALAZAR. Sure. Yes. Thank you.
+    Why do we not then ask Ms. Moser? Ms. Moser?
+    Ms. MOSER. Yes. So the FAR incorporates the cost principles
+into certain types of contracts. So specifically, the flexibly
+priced contracts, cost-type contracts, time and materials
+contracts. And I do not think waving the credits clause cart
+blanche related to PPP is the appropriate thing to do because
+it could lead to unintended consequences and it could provide a
+situation where contractors that have only flexibly-priced
+contracts would double dip. Basically, they are billing the
+government for all of their costs incurred and then they are
+getting the forgiveness. And so I do not think people want that
+to happen, certainly not as a tax payer. I think the challenge
+is that the cost principles are referenced in many other types
+of contracts and a lot of what we are hearing is regarding
+state transportation contracts. And so my recommendation is not
+a waiver of the FAR credits clause; it is really about issuing
+better guidance and explaining the situation so that
+contractors negotiating with state transportation agencies, for
+example, have all of the information about the impacts that,
+you know, the rate needs to be calculated as the rate is
+consistent with the FAR, but how that rate is utilized in
+subsequent years I think is really where the guidance is
+needed. So, you know, the timing of the guidance from DCAA I
+think is a problem and then I think the lack of guidance or
+concerns about proposed guidance that might be issued from the
+Highway Administration--that is really where I think the focus
+is.
+    When guidance is issued by audit agencies, they do not seek
+public comments. And with lots of proposed regulations, there
+is public comment and an opportunity for people to weigh in.
+And I think, you know, that certainly could be helpful to this
+process to improve upon.
+    Ms. SALAZAR. So it is not necessarily an accounting issue
+according to what you are saying but it is just clarification?
+    Ms. MOSER. So I think the accounting in terms of how the
+credits clause should be applied is clear and does not require
+a change. I think it is the application of how those rates are
+utilized in subsequent years' contracts.
+    Ms. SALAZAR. Thank you. I yield back.
+    Chairman MFUME. Thank you, Ranking Member.
+    The Chair would like to recognize Representative Golden
+from the state of Maine. Mr. Golden?
+    Mr. GOLDEN. Thank you, Mr. Chair.
+    I think I will start with Ms. Moser. And I wanted to ask if
+there are other examples out there in addition to the PPP
+program where we have COVID-related Federal assistance for
+which a contractor might have to provide the government with a
+credit. And if the answer is yes, could you also elaborate a
+little bit about why?
+    Ms. MOSER. Yes. I would be happy to.
+    I think the most immediate additional assistance is the
+employee retention credit. So when the employee retention
+credit was first incorporated into the CARES Act, companies
+that received PPP loans were not eligible for the employee
+retention credit. So for most contractors, you know, PPP was
+that lifeline, that immediate assistance that they were seeking
+so they really didn't focus on the employee retention credit.
+With the legislation that passed in December, that made
+available the employee retention credits for companies that
+also received PPP loans.
+    The employee retention credit is a credit against payroll
+taxes. So it is consistent with the credits clause--so a
+company that is a contractor that has flexibly priced
+contracts, cost contracts. If they are eligible to receive an
+employee retention credit, it is a reduction against the
+payroll taxes that they pay. So it would be treated
+consistently if they originally recorded the payroll taxes say
+in 2020 when they paid them, it would go to a fringe. Usually
+that is an indirect expense considered a fringe benefit. When
+you receive the credit, it should be applied back the same in a
+similar manner. So it is a very similar situation.
+    Mr. GOLDEN. Thank you. I think that is helpful.
+    Ms. Greenleaf, you testified that engineering firms
+particularly have difficulty compared to other contractors that
+also do business with state departments of transportation. And
+I wanted to ask you if you could elaborate a little bit further
+on that. And secondly, I wanted to ask if you felt that should
+Congress mandate DOT to issue guidance that would ensure that
+indirect cost rates were trued up based on what a firm's real
+indirect costs were for the year impacted by the credit, would
+that address ACEC's concerns?
+    Ms. GREENLEAF. To answer your first question, I think that
+the engineering firms in general, many of us work for state
+DOTs. And so the guidance, the draft guidance that has come out
+from Federal Highway at this point is taking a very hardcore
+approach to how to deal with the PPP credit. So it is one
+reason why we were pushing back so hard on this issue.
+    We are part of a very narrow band of impacted professionals
+that are feeling the pressure from the FAR credit clause. It
+does not extend far beyond just those of us who work for state
+DOTs. And so based on that, that is why we are wanting to just
+see the loan be completely forgiven and not have to apply the
+credit.
+    So having said that, I am going to need to ask you to
+repeat your second part of your question and then I will come
+right back to you.
+    Mr. GOLDEN. Yes. If Congress were to mandate that the
+Federal Department of Transportation issue guidance that would
+ensure that indirect cost rates were more accurately reflecting
+a firm's real indirect costs for the year impacted by the
+credit, would that in any way address the concerns of your
+organization?
+    Ms. GREENLEAF. I do not know that it does. The reason for
+that is that the state DOTs, and that is largely who we are
+talking about, are inconsistent across the country in their
+ability to do the truing up on an annual basis. And I can tell
+you from personal experience in Massachusetts that the work
+that I do here, we are put in what is the equivalent of multi-
+year contracts. The overhead rate does not change. It is very
+difficult to get an audit to request the change. And I think
+that based on that what we could expect is just a lot of
+inconsistency across the DOT's abilities to do the truing up
+and to do annual audits.
+    Mr. GOLDEN. That is very helpful.
+    I see I only have 10 seconds left so I will yield back the
+8 seconds.
+    Chairman MFUME. Thank you very much, Representative Golden.
+    The Chair would now recognize Mr. Stauber. Did we lose him?
+Okay, maybe he will jump back in. Okay, Mr. Stauber is out.
+    Ms. Salazar, I do not see any other members from your side
+of the aisle. Am I missing someone?
+    Ms. SALAZAR. Yeah, they had other Committee meetings going
+on at the same time. And myself, I have to go to Foreign
+Relations. But I am staying here with you until you have
+finished with all the testimonies.
+    Chairman MFUME. Thank you. Mr. Fitzgerald is here though,
+and I would like to recognize Mr. Fitzgerald for 5 minutes.
+Thank you, sir.
+    Mr. FITZGERALD. Thank you. Thank you. Just real quick to
+Mr. Carlos Penin.
+    I understand today we are kind of focused on the PPP stuff,
+but in the COVID bill that recently passed it did include some
+language on section 36.10 that authorizes agencies to address
+contractor employee salaries. I was wondering if you had any
+comments on that. You know, it is kind of related to
+catastrophic events and what my understanding is. I do not know
+more than that about it. But I just wonder if you could provide
+any insight into the impact that that may have.
+    Mr. PENIN. Thank you for the question, Congressman
+Fitzgerald. I am not familiar with the new legislation and I am
+not going to be helpful to you on that. I have not read it.
+    Mr. FITZGERALD. Very good. Yeah, it is kind of a struggle
+and I think a lot of us have been caught off guard because of
+the legislation just signed into law. But I would urge the
+Chair and the Ranking Member, I think it is something that we
+need to probably take a look at and hopefully, because it seems
+to be boiling up right now. So thank you, and I will yield
+back. Thank you.
+    Ms. SALAZAR. Chairman?
+    Chairman MFUME. Yes.
+    Ms. SALAZAR. I think we do have Congressman Meuser with us.
+Is that correct? So we can recognize him?
+    Chairman MFUME. I see him. Yes. Yes.
+    We will first recognize Ms. Newman for her 5 minutes and
+then we will come back to Representative Meuser.
+    Ms. Newman?
+    Ms. NEWMAN. Thank you, Chairman. And thank you, Ranking
+Member Salazar.
+    This is a very timely issue in my district. Dozens of small
+businesses have come forward to talk about this with us, so I
+am so glad for the testimony today. And thank you to all the
+witnesses. It has been very helpful to dimensionalize this for
+me.
+    I have a couple of questions and I think I would like Ms.
+Moser and Mr. Penin to answer them. And I will go to Mr. Penin
+first.
+    So it clearly seems like there is an issue here that can be
+addressed, and I do not think it has to be brain surgery. What
+is your recommendation? Does it need to be a clarification of
+rules? Is it regulatory? Or do you think it requires
+congressional intervention? And I will go to Mr. Penin first.
+    Mr. PENIN. Thank you very much, Congresswoman Newman. And
+thank you for your concerns for your district as well. I think
+that for us it is probably a clarification of the language and
+how it is being applied more so than an act of Congress. I am
+trying to keep it simplified because, you know, if you started
+getting too many people involved, you know, it starts to muddle
+the situation. But I would think that it is something that can
+be handled as long as there is a clarification of the
+interpretation. And I think that that would be the easiest way
+of handling it. And it certainly would serve our purpose on the
+industry side to have that resolved.
+    I hope that answered your question.
+    Ms. NEWMAN. Yes. Yes. And then I need to go to Ms. Moser.
+From a technical standpoint, or from an accounting perspective,
+what would your remedy be?
+    Ms. MOSER. Yes, thank you.
+    So I agree with Mr. Penin. I do not believe that there is
+legislative action that is needed to rectify this situation. I
+think that could end up with unintended consequences. I really
+think it is an issue of clarification on guidance.
+    The DCAA, as I mentioned, their guidance is issued to
+auditors. So, while I disagree and I think it is an incorrect
+guidance on the timing of the application, ultimately
+contracting officers make those recommendations. The DCAA is
+making recommendations to its auditors; contractors if they do
+not agree with that, ultimately, it is up to the contracting
+officer to make a decision on that.
+    I think the biggest issue, and I think what we have really
+heard here today is really related to Federal Highway
+Administration and that guidance because that does flow down
+to, as you heard, the state agencies. And I think that is
+really where the majority of the angst and the concern is that
+without additional guidance and recommendations to state
+agencies there is going to be unintended consequences longer
+term than just this year.
+    Ms. NEWMAN. So just to clarify that, Ms. Moser, you are
+saying that the clarification should be some recommendation
+from Congress with regard to the PPP program but then also
+instruct the state and local agencies as such as well, both
+steps?
+    Ms. MOSER. Well, I do not think necessarily that Congress
+has, other than trying to get the agencies to issue the
+guidance, I think that is really what is needed. And then
+really it is the guidance that they issue because all of the
+state agencies are looking to Federal Highway Administration
+for guidance. So I think really the guidance is needed with
+clarity from the Highway Administration.
+    Ms. NEWMAN. Thank you for clarifying that.
+    I yield back. Thank you, Chairman.
+    Chairman MFUME. Thank you very much.
+    I would like to at this time recognize the gentleman from
+Pennsylvania, Mr. Meuser.
+    Mr. MEUSER. Thanks, Mr. Chairman. Thank you all to the
+testifiers. Appreciate it. It is an important subject, clearly.
+Very financially important situation that needs clarification.
+No question.
+    So I ask, and I will start with Ms. Moser and I will also
+ask others as well, what was understood by you at the time that
+you submitted for what was described as a forgivable business
+loan? Was it understood that this was to be completely
+forgivable under the conditions of retaining your employees?
+    Ms. MOSER. Hi, since you asked me to address first, so I am
+an advisor. I am a partner in an accounting firm and so I
+advise clients, so I was not applying for a PPP loan. You know,
+I think like just with most of our clients at the time, you
+know, it was a lifeline, and so I think most companies, you
+know, had no idea what was going to happen and so did apply.
+That was generally our recommendation.
+    Mr. MEUSER. Right.
+    Ms. MOSER. Obviously, there has been much guidance since
+then but I think that the forgiveness issue is really for
+contractors. There has been much analysis and angst, frankly,
+on whether they should or should not apply for forgiveness,
+again, depending on really their contract nicks in terms of how
+that is going to----
+    Mr. MEUSER. So you advise that, yes, they should take loans
+under the understanding of the requirements for PPP and
+therefore, it would be forgivable if they met those
+requirements?
+    Ms. MOSER. Yes, generally if they met the requirements.
+Yes.
+    Mr. MEUSER. Mr. Penin, is that what you understood from the
+original language of the provision in the legislation?
+    Mr. PENIN. Congressman Meuser, thank you very much. Yes,
+that was our understanding. And as I mentioned in my testimony,
+this was our lifeline. And then the interpretation came after
+the fact. And I think that is kind of where we are today. It
+was an interpretation given after the fact and that is kind of
+what surprised a number of us in passing the torch.
+    Mr. MEUSER. And I realize there are many, many dynamics. In
+fact, there is facing a business, any business, engineering
+contract, whatever it might be, particularly with a pandemic
+coming along, particularly even in my state where outdoor
+construction was shut down for a while with state contracts,
+contracts with employees not able to come in out of fear, out
+of having COVID, out of family members, out of children at
+home. So it was a very upheaveled period. And I am certainly on
+the side of small business.
+    But let me ask you this. If there is a guaranteed revenue
+stream that would be ascertained and made clear, the whole idea
+behind PPP was to sustain a small business during a loss of
+revenue period for the purpose of not losing them over the
+short term and the long term and not having them go on
+unemployment.
+    Now, that being the case, is all your business by the way
+contracted this way or is it just a percentage? Is it 50
+percent of your revenue comes from the contracts that are
+affecting the potential PPP?
+    Mr. PENIN. Yes, sir. I assume that question is for me. Yes,
+sir. I would say that the majority of our work comes from
+government contracting. We are a small company. Most of that is
+as a subconsultant to larger state and national or
+international companies. But it passes down to us because we
+still have to go through our FDOT in our case audit. And that
+is where this interpretation is going to be implemented. So
+yes, sir, most of our business is government-based. The long-
+term contracts are essential for small businesses because of
+the stability that it provides.
+    Mr. MEUSER. Right. I am just trying to get to where the
+revenue loss--did you suffer revenue loss during this time
+period?
+    Mr. PENIN. Yes. Yes, we did. Yes. We kept our employees. We
+kept our employees but we had tremendous losses in revenue
+because, I mean, we came to a screeching halt.
+    Mr. MEUSER. Okay. Well, that pretty much answers my
+question then and should uncover any doubts that the original
+intent of this PPP should be upheld.
+    What about the second round of PPP, did you apply for that?
+    Mr. PENIN. We have not applied for that. We have not
+applied for that.
+    Mr. MEUSER. Okay. Very good.
+    Mr. Chairman, I do not have any more questions. I yield
+back. Thank you.
+    Chairman MFUME. Thank you, Mr. Meuser.
+    We are going to start the second round of questioning, and
+I will lead that off by asking Mr. Bingham if he would help put
+some context into this discussion. I think we all know what the
+purpose or the stated purpose of FAR 31 is, but can you tell me
+when the principles of FAR, part 31 kick in? Is there a certain
+requirement, number of requirements, or something else that you
+might be able to share with us in terms of its implementation?
+    Mr. BINGHAM. Yes. Yes. Thank you for the question.
+    The requirements of FAR 31 kick in when there is a sole
+source or when there is procurement of a cost reimbursement
+contract or a sole source procurement where it is a situation
+where the contractor has to provide cost information, you know,
+the cost estimate to the government customer. And so it is
+under circumstances of that nature. If a contractor, if there
+are sealed bids, in other words, there was adequate
+competition, then the government buyer is supposed to base its
+decisions on the price offered by various competent contractors
+and not get into what their cost history is or what their
+indirect costs are or their direct costs, any of that type of
+information. That is the way they are intended to focus it.
+    And I will just add to the discussion about the indirect
+cost rates. The intended approach in the FAR with regard to
+future indirect cost rates is not that you just take the
+indirect rate for a past year and assume that it will be
+matched going forward. That would be contrary in my
+interpretation to both the FAR and the audit guidance from the
+DCAA, for example. And so the issues seem to be related to this
+idea that some agencies, some state-related agencies are just
+forcing the situation where whatever the past indirect rate
+was, that indirect rate will be all that is allowed in some
+future year.
+    I hope I answered your question.
+    Chairman MFUME. You did, but I am going to ask you to step
+out on a limb and tell us how you would fix this if you had the
+ability to do so overnight.
+    Mr. BINGHAM. Yeah, I think I agree with Ms. Moser in the
+idea of guidance. I think if the state departments of
+transportation, if they did more what the Federal government
+auditors do, the DCAA auditors do looking at the guidance
+there, you know, it is in FAR 42 and 44, I believe, and then
+not this recent DCAA memorandum to regional directors but back
+to the DCAA's contract audit manual on how you audit indirect
+rates and how you audit forward pricing rates, these indirect
+rate that are going into the future. If they follow that type
+of guidance, my impression is that would solve a lot of this. I
+do not think they are following that type of guidance right
+now. I think it sounds like they are imposing that the same
+past indirect rate must be used going forward. So that would be
+my ``I am out on a limb.'' That is about as far out on the limb
+as I will go. Thank you.
+    Chairman MFUME. Well, thank you, sir.
+    I want to yield to the Ranking Member, Ms. Salazar.
+    Ms. SALAZAR. This question is for Mr. Bingham and for Ms.
+Moser as well and Mr. Penin, three of you.
+    If by any chance this interpretation of the FAR stance and
+the DoD does not change, they cease the way that they do
+business with you, in which way not only will it affect your
+decision to continue working with the government, or will you
+then decide to seek other work in the private sector alone? How
+will this change your future is basically what I would like to
+hear from you?
+    And we will start with you, Mr. Penin.
+    Mr. PENIN. thank you very much for the question.
+    If the interpretation of the FAR stands, it will adversely
+affect our multiplier and therefore, our ability to continue to
+work on government contracts.
+    I mentioned earlier, in our case, in our particular case it
+would be approximately 25 percent of our multiplier would be
+affected. We would go from 1.25 to 1.0 and that is a huge
+impact on our business. The minority companies and small
+businesses rely on the government because of the long-term
+contracts that we can obtain from government. In this case, if
+this rate were to go on for further years then we would be
+punished by the same percentage for multiple year contracts and
+in some cases it would impact multiple contracts. So for us
+that would be a deterrent from pursuing government contracts.
+    The private sector is on a rebound. Whether we would
+concentrate on that alone would have to be a financial decision
+that I am not 100 percent sure right now that I can make but we
+see that if we cannot rely on one. You know, we have to be
+resilient. That is what makes us survive. I told you we have
+been in business for 32 years. So we will look for whatever
+opportunity we can to get to next year and the next year and so
+forth and so on. But I would say that it would certainly impact
+our ability to, and our desire to contract with government
+under those conditions. Thank you.
+    Ms. SALAZAR. Ms. Moser?
+    Ms. MOSER. So again, I do not contract directly with the
+government. I just advise companies that do. So I am really not
+in a position to address the issue.
+    Ms. SALAZAR. What would be your advice to those clients?
+What would be your advice?
+    Ms. MOSER. So, again, I really think the issue, if the
+Federal Highway Administration issued guidance, each of the
+state agencies, and our firm does these indirect rate audits
+for many engineering firms and deals with many state auditors,
+the state DOT agencies are looking for guidance. We have
+reached out to all of them. They are asking for guidance from
+Federal Highway Administration so I think absent any guidance
+then they feel like they do not really have a choice on what
+they do. So I really think Highway providing guidance and
+recommendations on what is the purpose of the indirect rate
+audit and how should it be used going forward into future----
+    Ms. SALAZAR. I am going to interrupt you so I can give the
+opportunity to Ms. Greenleaf, which I did not recognize and
+then to Mr. Bingham.
+    Ms. GREENLEAF. Thank you for the----
+    Ms. SALAZAR. You have 2 minutes. Yeah.
+    Ms. GREENLEAF. Thank you for the opportunity to respond.
+    I think the one point I would like to make is when I took
+my PPP loan, it was really under enormous duress. Our business
+was disrupted. We had to work remotely. And the idea that we
+would end up as part of a very, very small sector of the entire
+PPP universe that would not be able to take full advantage of
+the PPP loan and the original intent is what is driving my
+being here today. So, I agree with what Ms. Moser is saying
+about good guidance coming from a possible [inaudible] step in
+the right direction, but I think for ACEC, what I would like to
+drive home is that we would like to be treated like every other
+company that took a PPP loan out.
+    Ms. SALAZAR. Just 1 minute 35 seconds to Mr. Bingham.
+    Mr. BINGHAM. Thank you for this opportunity to respond. I
+will just say, and I am an advisor to companies as well, but I
+think the guidance in FAR 42-7 and the DCAA's guidance on this
+point about the indirect rates, that you do not blindly accept
+their past year as the future year and forecast that into the
+future. I think if a government entity was telling me that they
+were going to force me to have the same rate in the past as the
+future, I think I may be able to read them passages from FAR
+42-7 in the DCAR manual to show them why that is inappropriate.
+Thank you.
+    Ms. SALAZAR. Thank you. And I would like to recognize
+Member Stauber. He just joined as Chairman.
+    Chairman MFUME. Yes. Yes. I will do that in his turn. He
+actually, for the record, was with us earlier and stepped away
+so we are glad that you are back, Ms. Stauber.
+    The Chair at this point will recognize the gentlewoman from
+Illinois, Ms. Newman, for the second round.
+    Ms. Newman? Are you back with us?
+    Okay, so let's do this. I will go to the gentleman from
+Minnesota, Mr. Stauber.
+    Mr. STAUBER. Thank you, Mr. Chair. And thank you for all
+the witnesses. I really appreciate your time.
+    You know, at a time when our small businesses are trying to
+recover from the crisis, for small contractors, the continued
+changes in guidance and memorandums from government agencies
+have caused a lot of headaches and confusion.
+    Mr. Penin, what is your reaction or your thoughts to the
+government's motive of prevention of double dipping?
+    Mr. PENIN. Thank you very much, Congressman.
+    I do not believe that double dipping applies, and I say
+that simply because when we applied for the PPP loan and we
+processed our paperwork for forgiveness, we consider that as a
+self-standing item and not something that we were going to be
+penalized for later.
+    Mr. STAUBER. Okay. Thank you.
+    My next question is for Ms. Greenleaf. Given your position
+with ACEC, what are you seeing from this particular group of
+businesses? Are many of them seeking loan forgiveness or not?
+And have any of your members decided to forgo forgiveness or
+even give the loans back due to this confusion?
+    Ms. GREENLEAF. Yeah, I think that is a great question, and
+thank you for asking it.
+    I think our members are waiting to see what comes out of
+Federal Highway for final guidance. For me, I did apply for
+forgiveness and my firm did receive it, but I have been
+checking with colleagues and it is a very inconsistent
+approach. People would like to apply for forgiveness. They
+would like to understand the ramifications if they do. Some of
+the smaller firms like mine, I may have to make some business
+decisions about who my clients might be for the next year or
+two and point out that on top of the need to really reach a
+conclusion that we can all make decisions from is the fact that
+the administration is trying to push a very, very large and
+serious infrastructure bill out over the summer and we are the
+firms that will be hopefully having a part in designing all of
+these new transportation projects that may come out. And yet,
+if what we were trying to do is knowing that we are getting
+into these at a potentially greatly reduced rate. It is a very,
+very difficult position to be in.
+    Mr. STAUBER. Thank you. And then Ms. Greenleaf, again,
+could you speak to how this could impact small businesses
+working on state and local transportation projects?
+    Ms. GREENLEAF. So a firm like mine, we have already done
+the math. I know what the reduction in overhead rate and
+corresponding hourly rates will be if I choose to continue to
+work for our state DOT. And you know, for me they are a very
+valued client and I want to find a way to continue supporting
+them. Many of the larger projects at the state level are
+comprised of very large teams, so it could have very large
+engineering firms that are driving the projects. The team is
+very diverse and there might be, you know, 10 firms just like
+mine that are all seeking to gain experience on large projects.
+So it is a big impact.
+    Mr. STAUBER. You know, I look forward to discussions on the
+infrastructure project. I certainly hope it is bipartisan and I
+certainly hope that the minority has input on it because I
+think it has a potential to be really good legislation. We know
+that it has been needed and we just want to have input on it.
+    So Mr. Chair, thank you very much and I yield back to you.
+    Chairman MFUME. Thank you very much, Mr. Stauber.
+    I am going to attempt to go to Ms. Newman again. I do not
+know if she has her speaker system on. I have seen her go by
+her camera a couple of times. And Ms. Newman are you there?
+    I guess she is not.
+    The Chair recognizes Mr. Fitzgerald.
+    Mr. FITZGERALD. Thank you, Mr. Chair. I have no further
+questions at this time. I would yield back. Thank you.
+    Chairman MFUME. Okay. And Ms. Salazar, any further comments
+from you?
+    Ms. SALAZAR. I think that we have gathered a lot of
+information between you, we definitely will fit and figure out
+how we can make this work for the private sector with more
+clarification as some of them have said and with the accounting
+process having been reviewed. And I think that is our duty and
+our job to make it easy for them, for the private sector and at
+the same time avoid any type of double dipping which that is
+what we are here for.
+    So I am looking forward to working with you, Mr. Chairman.
+I yield back.
+    Chairman MFUME. Well stated, and the feeling is mutual.
+    I want to thank you again. I want to also thank all of our
+witnesses who have made time to be with us. Your expert
+testimony, in my opinion, has been invaluable and given the
+members of this Subcommittee a greater understanding of how
+this complex issue impacts small businesses. Small contractors
+as we all know have been devastated by this pandemic. And so it
+is important that we ensure that they are not inflicted with
+any further harm, and at a minimum we must ensure consistency
+in the application of the rules that govern Federal
+contracting.
+    So I look forward to working with today's witnesses and
+Subcommittee members to find a path forward so that we might be
+able to come up with an equitable solution for these small
+businesses.
+    And I would ask, as I have mentioned earlier, unanimous
+consent that members have 5 legislative days to submit
+statements and supporting materials for the record.
+    Without objection, it is so ordered.
+    If there is no further business to come before the
+Committee, we officially stand adjourned. Thank you all. Have a
+good day.
+    [Whereupon, at 1:21 p.m., the subcommittee was adjourned.]
+                           A P P E N D I X
+[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
+                                 [all]
+</pre></body></html>

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+<html>
+<title> - THE SPECIAL INSPECTOR GENERAL FOR AFGHANISTAN RECONSTRUCTION'S 2021 HIGH-RISK LIST</title>
+<body><pre>
+[House Hearing, 117 Congress]
+[From the U.S. Government Publishing Office]
+                     THE SPECIAL INSPECTOR GENERAL
+                    FOR AFGHANISTAN RECONSTRUCTION'S
+                          2021 HIGH-RISK LIST
+=======================================================================
+                                HEARING
+                               BEFORE THE
+                   SUBCOMMITTEE ON NATIONAL SECURITY
+                                 OF THE
+                   COMMITTEE ON OVERSIGHT AND REFORM
+                        HOUSE OF REPRESENTATIVES
+                    ONE HUNDRED SEVENTEENTH CONGRESS
+                             FIRST SESSION
+                               __________
+                             MARCH 16, 2021
+                               __________
+                            Serial No. 117-8
+                               __________
+      Printed for the use of the Committee on Oversight and Reform
+ [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
+                       Available on: govinfo.gov,
+                         oversight.house.gov or
+                             docs.house.gov
+                            ______
+              U.S. GOVERNMENT PUBLISHING OFFICE
+43-959 PDF             WASHINGTON : 2021
+                   COMMITTEE ON OVERSIGHT AND REFORM
+                CAROLYN B. MALONEY, New York, Chairwoman
+Eleanor Holmes Norton, District of   James Comer, Kentucky, Ranking
+    Columbia                             Minority Member
+Stephen F. Lynch, Massachusetts      Jim Jordan, Ohio
+Jim Cooper, Tennessee                Paul A. Gosar, Arizona
+Gerald E. Connolly, Virginia         Virginia Foxx, North Carolina
+Raja Krishnamoorthi, Illinois        Jody B. Hice, Georgia
+Jamie Raskin, Maryland               Glenn Grothman, Wisconsin
+Ro Khanna, California                Michael Cloud, Texas
+Kweisi Mfume, Maryland               Bob Gibbs, Ohio
+Alexandria Ocasio-Cortez, New York   Clay Higgins, Louisiana
+Rashida Tlaib, Michigan              Ralph Norman, South Carolina
+Katie Porter, California             Pete Sessions, Texas
+Cori Bush, Missouri                  Fred Keller, Pennsylvania
+Danny K. Davis, Illinois             Andy Biggs, Arizona
+Debbie Wasserman Schultz, Florida    Andrew Clyde, Georgia
+Peter Welch, Vermont                 Nancy Mace, South Carolina
+Henry C. ``Hank'' Johnson, Jr.,      Scott Franklin, Florida
+    Georgia                          Jake LaTurner, Kansas
+John P. Sarbanes, Maryland           Pat Fallon, Texas
+Jackie Speier, California            Yvette Herrell, New Mexico
+Robin L. Kelly, Illinois             Byron Donalds, Florida
+Brenda L. Lawrence, Michigan
+Mark DeSaulnier, California
+Jimmy Gomez, California
+Ayanna Pressley, Massachusetts
+Vacancy
+                     David Rapallo, Staff Director
+                Dan Rebnord, Subcommittee Staff Director
+                       Elisa LaNier, Chief Clerk
+                      Contact Number: 202-225-5051
+                  Mark Marin, Minority Staff Director
+                                 ------
+                   Subcommittee on National Security
+               Stephen F. Lynch, Massachusetts, Chairman
+Peter Welch, Vermont                 Glenn Grothman, Wisconsin, Ranking
+Henry C. ``Hank'' Johnson, Jr.,          Minority Member
+    Georgia                          Paul A. Gosar, Arizona
+Mark DeSaulnier, California          Virginia Foxx, North Carolina
+Kweisi Mfume, Maryland               Bob Gibbs, Ohio
+Debbie Wasserman Schultz, Florida    Clay Higgins, Louisiana
+Jackie Speier, California
+                         C  O  N  T  E  N  T  S
+                              ----------
+                                                                   Page
+Hearing held on March 16, 2021...................................     1
+                                Witness
+The Honorable John F. Sopko, Special Inspector General for
+  Afghanistan Reconstruction
+Oral Statement...................................................     4
+Written opening statements and statements for the witness are
+  available on the U.S. House of Representatives Document
+  Repository at: docs.house.gov.
+                           Index of Documents
+                              ----------
+Documents entered into the record during this hearing and
+  Questions for the Record (QFR's) are listed below.
+  * QFR's to: Sopko; submitted by Chairman Lynch.
+ Documents are available at: docs.house.gov.
+                     THE SPECIAL INSPECTOR GENERAL
+                    FOR AFGHANISTAN RECONSTRUCTION'S
+                          2021 HIGH-RISK LIST
+                              ----------
+                        Tuesday, March 16, 2021
+                   House of Representatives
+                  Committee on Oversight and Reform
+                          Subcommittee on National Security
+                                                   Washington, D.C.
+    The subcommittee met, pursuant to notice, at 11:08 a.m.,
+via Webex, Hon. Stephen Lynch (chairman of the subcommittee)
+presiding.
+    Present: Representatives Lynch, Welch, Johnson, DeSaulnier,
+Wasserman Schultz, Speier, Grothman, Higgins, and Comer.
+    The committee will now come to order. Without objection,
+the chair is authorized to declare a recess of the committee at
+any time. I now recognize myself for a brief opening statement.
+    Good morning, everyone. I would like to thank Special
+Inspector General for Afghanistan Reconstruction John Sopko to
+join us once again as we examine SIGAR's 2021 High-Risk List.
+This biennial report identifies key areas of Afghanistan
+reconstruction that are especially vulnerable to waste, fraud,
+abuse, and corruption.
+    As underscored by our recent hearings with U.S. Special
+Representative for Afghanistan Reconciliation, Zalmay
+Khalilzad, and the co-chairs of the Afghan Study Group, the
+issue of U.S. military involvement in Afghanistan has reached a
+moment of great consequence.
+    More than a year after the Trump administration and the
+Taliban signed a putative agreement for bringing peace to
+Afghanistan, insurgent violence against Afghan forces and a
+campaign of terror, including assassinations against government
+leaders, teachers, prominent women leaders, and humanitarian
+workers has continued unrelenting to the present day.
+    Despite the lack of progress in deescalating Taliban
+violence, President Biden is now forced to decide whether to
+withdraw the remaining 2,500 U.S. troops and approximately
+13,500 U.S. contractors, and third-county--excuse me, third-
+country contractors from Afghanistan by May 1 as envisioned by
+the Trump-Taliban agreement, we are in a very difficult
+position.
+    Alternatively, with less than six weeks before the May 1
+deadline, the Biden administration can attempt to negotiate an
+extension of the February 2020 agreement or, as has been
+recently circulated, convene a coalition partner group of
+countries to engage with both the Afghan government and the
+Taliban with the goal of initiating a detailed discussion for a
+peaceful transition and reconciliation between those two sides.
+    These talks are happening at a moment of great uncertainty
+for the people of Afghanistan. In his 2021 High-Risk List,
+Inspector General Sopko warns that a highly unstable security
+environment, coupled with the scheduled withdrawal of U.S. and
+international forces in the midst of a global pandemic, have
+all placed the U.S. reconstruction mission in Afghanistan,
+quote, ``at a greater risk than ever before.''
+    Since 2002, the United States has spent over $88 billion or
+an estimated 62 percent of total U.S. reconstruction assistance
+on training and equipment for the Afghan National Defense and
+Security Forces.
+    Yet, despite this expenditure and our best efforts to
+strengthen the Afghan government's military and police forces,
+levels of violence in Afghanistan remain unacceptably high and
+the enduring presence of al-Qaeda, the Islamic State Khorasan,
+and other terrorist organizations all continue to threaten to
+overtake the already fragile negotiations between the Afghan
+government and the Taliban.
+    Nascent gains of Afghan women and girls, who have made
+historic progress in their ongoing struggle for gender equality
+throughout the past two decades, while there were zero women
+and girls attending school during the previous period of
+Taliban controlling Afghanistan, today it is estimated that
+approximately 3 million women and girls are able to safely do
+so.
+    With the support of at least $787 million in U.S. direct
+assistance, Afghan women have gained expanded legal
+protections, increased access to social services, and they are
+now able to access--are now able to meaningfully participate in
+Afghan politics.
+    Unfortunately, as Special Inspector General Sopko reminds
+us in his latest report that, quote, ``Afghanistan remains one
+of the most challenging places in the world to be a woman,''
+closed quote. And again, he identifies women's rights as high
+risk, especially given the potential for Taliban's
+reintegration into Afghan civil society and government.
+    So, let me be clear. The prospects for a sustainable and
+lasting peace in Afghanistan will inevitably depend on whether
+the Taliban and the Afghan government can reach a political
+agreement that respects the rights of all Afghans, including
+women and girls.
+    So, I was pleased to see the Biden administration
+prioritize the rights of Afghan women and girls in the guiding
+principles document that it reportedly provided to the Afghan
+government and the Taliban in recent weeks.
+    And to conclude, Inspector General Sopko writes, quote,
+``Whether or not the United States continues to withdraw its
+troops, the new administration and Congress will have to decide
+whether and to what extent reconstruction will continue,''
+closed quote.
+    So, as we work with the Biden administration to determine
+our best path forward in Afghanistan, we must inform--we must
+afford meaningful consideration to how their approach might
+impact the high-risk reconstruction areas that are identified
+in SIGAR's report.
+    I look forward to today's discussion with Inspector General
+Sopko, and I now yield to the ranking member from the great
+state of Wisconsin, Mr. Grothman, for his opening statement.
+    Mr. Grothman. A great state it is. Thank you very much.
+    I want to thank you for holding this hearing and for Mr.
+Sopko being with us today. Your continued efforts to oversee
+billions of U.S. taxpayer dollars are commendable and
+necessary.
+    This year will be the 20th anniversary of the United States
+being attacked by al-Qaeda on September 11, 2001. These
+unprecedented attacks took the lives of nearly 3,000 innocent
+Americans in New York, Pennsylvania, and at the Pentagon. Days
+later, on October 7, the United States launched Operation
+Enduring Freedom and invaded Afghanistan, leading to the
+toppling of the Taliban's regime.
+    The United States has had a presence in Afghanistan ever
+since. Unfortunately, every time we need to discuss ongoing
+efforts, the same--the same issues come up.
+    To date, the American taxpayer has sent $1 trillion to
+Afghanistan through supporting combat or reconstruction. In
+America's longest war, we are just starting to see the light at
+the end of the tunnel.
+    President Trump reduced Americans--the American footprint
+in Afghanistan from over 100,000 during the Obama
+Administration to just a few thousand. On February 29 of last
+year, under a strong--under the strong leadership of President
+Trump, the United States signed a peace agreement to gradually
+withdraw remaining Americans from Afghanistan.
+    This agreement will help create a safe and prosperous
+Afghanistan by ensuring that it will not provide safe harbor to
+terrorists.
+    Now I understand it will be--and I will be the first to
+admit that just packing our bags and leaving is dangerous. That
+type of withdrawal will create a vacuum for terrorism and
+potentially set back the social and governmental gains in
+Afghanistan.
+    What I do believe is that it should be our goal to reduce
+our global military footprint and bring troops home.
+    Your report highlights numerous issues that we must take
+very seriously, including the corruption, the illegal
+narcotics, the increasing insecurity, and the inadequate
+oversight. Each of these issues hinders the ability to
+effectively track and manage American taxpayer funds in
+Afghanistan.
+    This is an issue at the heart of this committee's
+jurisdiction. We must continue to work together to ensure that
+we know where investments go and to make sure they are spent on
+legal activities.
+    I hope that will be a bipartisan goal. Once again, thank
+you, Mr. Sopko, for being here and I look forward to your
+testimony.
+    I yield back.
+    Mr. Lynch. The gentleman yields back.
+    I will now introduce and swear in our witness.
+    Today, our witness is the Honorable John F. Sopko, who is
+the undaunted Special Inspector General for Afghanistan
+reconstruction and has been a frequent flyer to this committee
+and the subcommittee, and we deeply appreciate the wonderful
+work that he and his staff have done throughout a difficult
+period in Afghanistan, including in the midst of this pandemic.
+    So, Mr. Sopko, could you please raise your right hand?
+    Mr. Sopko, do you swear or affirm that the testimony you
+are about to give is the truth, the whole truth, and nothing
+but the truth, so help you God?
+    [Witness is sworn.]
+    Mr. Lynch. Let the record show that the witness has
+answered in the affirmative. Thank you, and without objection,
+your written statement will be made part of the record as will
+your report--your High-Risk Report.
+    With that, Inspector General Sopko, you are now recognized
+to give an oral presentation of your testimony for five
+minutes.
+  STATEMENT OF THE HONORABLE JOHN F. SOPKO, SPECIAL INSPECTOR
+             GENERAL FOR AFGHANISTAN RECONSTRUCTION
+    Mr. Sopko. Thank you very much, and good morning, Chairman
+Lynch, Ranking Member Grothman, and Congressman Welch.
+    Thank you for inviting me to discuss SIGAR's new High-Risk
+List for Congress and the administration. This report
+identifies eight key threats to our $143 billion reconstruction
+effort that, since 2002, has been an essential part of the U.S.
+strategy to return peace and stability to Afghanistan.
+    Today's report comes at an opportune time, as the Biden
+administration is deciding on the future of both our counter-
+terrorism and reconstruction missions in Afghanistan.
+    The May 1 deadline to withdraw U.S. forces and other
+personnel is a mere 46 days away. Whether or not the U.S.
+withdraws its troops, the new administration and Congress will
+need to decide and whether and to what extent reconstruction
+will continue.
+    It could be a very critical decision, for we must remember
+that it was not the withdrawal of Soviet troops in 1989 but the
+withdrawal of Soviet rubles that led to the collapse of the
+Afghan regime in 1992.
+    But let me be clear before we go any further. As an
+inspector general, neither I nor SIGAR nor this High-Risk List
+takes a position on the future presence of U.S. forces in
+Afghanistan.
+    That is beyond what an inspector general should discuss.
+That is policy and that is the purview of the policymakers in
+Congress and the Biden administration to determine.
+    However, I believe most would agree with our report that
+achieving our counter-terrorism and reconstruction objectives
+depends on a strong, stable, democratic, and self-reliant
+Afghanistan.
+    Unfortunately, as our report discusses in great detail,
+Afghanistan is far from that reality and may be fighting for
+its very survival.
+    Taliban attacks and assassinations increased since the
+U.S.-Taliban agreement was signed last February. Afghan
+security forces are nowhere near achieving self-sufficiency, as
+they cannot maintain their equipment, manage their supply
+chains, or train new soldiers, pilots, and policemen without
+the 13,000 DOD contractors that, under the terms of the same
+February agreement, may be obliged to leave Afghanistan on May
+1 also.
+    Highlighting the critical nature of that support, DOD
+estimates that no Afghan airframe can maintain combat
+effectiveness for more than a few months if contractor support
+is withdrawn.
+    Likewise, Afghanistan is heavily dependent on foreign
+financial assistance. Roughly, 80 percent of Afghanistan's
+public expenditures have to be covered by international donors,
+including the U.S. taxpayer.
+    Yet, as we report, because international donors have,
+largely, lacked the will to impose and, more importantly,
+enforce concrete conditions on their assistance, the Afghan
+government that has made little if any progress in combating
+corruption or illicit narcotics production, both of which
+provide critical oxygen to the insurgency.
+    In that regard, we believe a key opportunity was missed at
+last November's international donor pledging conference for
+Afghanistan, where donor nations, including the United States,
+failed to outline specific financial and other consequences
+that the Afghan government would face if they failed to meet
+its anti-corruption and counter-narcotics commitments.
+    If, at that pivotal time, just a few months ago, donors did
+not have either the bureaucratic or political will to place
+hard concrete conditions on future Afghan assistance, we must
+ask the critical question, when will we, and this is
+particularly troubling now, as many believe we must use
+continued financial assistance for Afghanistan as leverage to
+ensure that the Afghan government does the right thing on a
+number of issues, including protecting the rights of Afghan
+women and girls.
+    So, in conclusion, as our report indicates, if
+conditionality isn't critical for future assistance, then we
+and other donors have to do better than we have done over the
+last 19 years in truly enforcing concrete conditions on any
+post-peace Afghan government, especially if it includes the
+Taliban.
+    Thank you very much, and I look forward to your questions.
+    Mr. Lynch. Thank you very much, Inspector General Sopko,
+and again, my thanks to your staff for the great work that they
+continue to do every day in Afghanistan.
+    The chair now yields himself five minutes for questions. I
+guess, you know, the $64,000 question is the administration,
+the Biden administration, is in a position now where they have
+to, because of the preexisting agreement between the Trump
+administration and the Taliban, they have got to decide whether
+they pull the plug on May 1.
+    So, let us talk about that. Based on your time in
+Afghanistan and the review of your incredible staff, what
+happens? What does it look like?
+    Tell me what to expect if the administration, indeed,
+pulled the remaining 2,500 troops out, but more importantly, as
+you pointed out, pulled the thousands and thousands of
+contractors out?
+    So, can I ask you about that? Can you tell me what the
+makeup of the contractor population is there? I know we have
+some home country nationals. There is a small percentage of
+those, I think, from Afghanistan. Then there are third-country
+nationals. Then there are U.S. contractors.
+    So, tell me about the makeup of that contractor force, and
+again, the main question is, what happens on May 1 if we pull
+the plug and come out?
+    Mr. Sopko. Thank you, sir. It is a--that is an important
+question.
+    As I indicated, it is about 18,000 contractors all
+together--DOD contractors. Thirteen thousand of them would,
+pursuant to the February agreement, have to leave with our
+troops, and that breaks down to about 6,000 U.S. citizens and
+about 7,000 or more who are non-Afghan but third-party
+nationals from other countries.
+    What would happen if--if the troops, our troops, leave that
+is going to hurt the Afghan government in its fight against--
+and, again, if there is no peace agreement. If there is a peace
+agreement, this changes.
+    But if there is no peace agreement on May 1, the Afghan
+government will probably lose the capability of flying any of
+its aircraft within months--few months, and to be quite blunt,
+it probably would face collapse, especially if we also withdraw
+the funding.
+    Remember, 80 percent of that government comes from the
+United States and our donors, including salaries for troops,
+money to buy fuel, money to buy bullets, et cetera. So, if that
+happens, if you combine those three, it is a disaster for
+Afghanistan.
+    Mr. Lynch. OK. Let me ask you then, is there a--so thus
+far, there is--apart from this agreement, there is no
+transition agreement in terms of what the--what the level of
+participation or the nature of participation on the part of the
+Taliban will be post May 1. Is that--is that correct?
+    Mr. Sopko. As far as we know, there is nothing in the--they
+still have to negotiate it. So, we don't know what the role of
+the Taliban will be, if any. That has to be agreed to by the
+Afghan government and the Taliban.
+    Mr. Lynch. But based on the--based on the campaign of
+assassinations that we have seen, mainly, they have gone after
+a government officials, a lot of women in the press and women
+in government. We have seen attacks on humanitarian groups as
+well.
+    What is your--what is your assessment in terms of the
+stability of the government if there is an entree on the part
+of the Taliban coming into--coming into the government? They
+seem to expect a role that they will play after May 1.
+    Mr. Sopko. I definitely think they expect a role to play in
+the new government, and while the negotiations have been going
+on, they have been attacking very aggressively Afghan soldiers
+and police, in particular, in certain geographical zones. They
+are trying to take back more of Afghanistan, probably for
+negotiating purposes. So, that will continue.
+    Mr. Lynch. And if we unilaterally decide that we are going
+to extend this, do you have a sense of what the response of the
+Taliban might be, going forward?
+    Mr. Sopko. Public statements that have been made have been
+diverse. On the one hand, the Taliban have indicated they are
+looking at this proposal. We don't know all the exact
+particulars of the proposal that the Biden administration has
+made.
+    But at the other hand, some of their spokesmen have talked
+about they want us out May 1 and the deal is off if we don't
+leave by May 1.
+    So, I can't give you a definite answer on that, Mr.
+Chairman.
+    Mr. Lynch. OK. My time has expired.
+    The chair now recognizes the gentleman from Wisconsin, the
+ranking member, Mr. Grothman, for five minutes for his
+questions.
+    Mr. Grothman. Sure, a few questions.
+    First of all, is the Taliban a monolith? Do you feel that
+when we negotiate them, they can even make an agreement stick,
+given what you have just told us about, you know, attacks on
+humanitarian groups, attacks on women, what have you?
+    Mr. Sopko. That is a really good question, and it is mixed.
+There was some indication during the early part of the
+negotiation for withdrawal, that the Taliban issued an order
+not to fight and it kind of held all over the country.
+    But I--what we are told and what our experts say it is
+still not a monolithic organization and you got individual
+groups that will go off and frolic
+    [inaudible.] at will.
+    So I would say, again, we haven't done an audit, sir. But I
+would say it is not monolithic and I don't know if they can
+control all their troops.
+    Mr. Grothman. OK. To what degree are Russia and Pakistan
+and Iran--I guess those are the big four poking around
+Afghanistan right now--if we would leave to what degree with
+those four kinds of put Afghanistan in their sphere of
+influence?
+    Mr. Sopko. Well, again, we haven't done an audit, per se,
+but all of those countries you mentioned are playing a role and
+have played a role historically, either funding insurgents or
+funding warlords or, you know, corrupting officials in
+Afghanistan.
+    I would only assume that they would play a role, going
+forward, with a post-peace government. But I can't tell you for
+sure what that role will be.
+    They all have an interest in Afghanistan for their own--
+remember, they surround Afghanistan. So, they have that
+interest. And, particularly, Iran has a lot of influence to the
+west because of economic reasons.
+    Mr. Grothman. OK.
+    Mr. Sopko. The west part of Afghanistan.
+    Mr. Grothman. Which country, economically or otherwise, is
+it Pakistan or Iran--I am assuming it is Pakistan, but I don't
+know--right now, economically and otherwise, kind of is more
+involved in Iran? And are those the two major countries? I am
+assuming they are. They have the biggest borders.
+    Mr. Sopko. I am sorry, Mr. Grothman. I lost your beginning.
+Actually, I am losing connectivity right now.
+    Mr. Grothman. OK. I am assuming--yes, I am assuming the two
+countries that have the biggest current influence in
+Afghanistan, because they have such long borders, are Iran and
+Pakistan.
+    And I wondered which one of those two right now has bigger
+influence, you know, more economic relationship, more cultural
+relationship, what have you. And if we would leave, therefore,
+which one of those would kind of be more predisposed to kind of
+put Afghanistan in their sphere of influence?
+    Mr. Sopko. It is hard for me to say. I would think
+Pakistan. I would probably answer Pakistan because of the
+border, because of their long ties with Afghanistan.
+    But as I said before, Iran has a very strong influence,
+particularly in the area around Herat and to the west of the
+country. But it is a close call, sir. Those are the two major
+countries.
+    Mr. Grothman. OK. Can you explain to us this ghost soldier
+problem and to what degree it still is a problem?
+    Mr. Sopko. Again, I apologize, sir. You broke up on the----
+    Mr. Grothman. I am sorry. Ghost soldiers, that phrase. We
+have heard it before. Is it still a problem? To what degree is
+it a problem?
+    Mr. Sopko. We think it is still a major problem. That is
+the reporting we are getting from people we know in the Afghan
+government and Afghan civil society.
+    We haven't been able to document it because we haven't been
+able to get out and check on it. The U.S. Government, I think,
+considers this a problem because after spending millions of
+dollars to develop a personnel system which could track the
+soldiers, they, basically, said the Afghan government can't run
+it on their own.
+    So, it is still a problem. The officials steal salaries,
+they don't pay the salaries of soldiers and police, and it is
+pretty widespread.
+    Mr. Grothman. OK. I will give you one more question because
+I am sure I am near my five minutes.
+    One of the things that bothers me about the ghost soldiers,
+in addition to the money you are spending, goes to the degree
+to which there is pride in such a thing as an Afghan government
+and whether their soldiers feel there is something worth
+fighting for there.
+    And that is the problem we have all over the region because
+I am sure at one time the very borders of Afghanistan were
+probably drawn by the British or somebody that didn't--you
+know, didn't necessarily represent an ethnic group like, say, a
+France or a more traditional country.
+    Do you believe there is such a thing as a pride in an
+Afghan country, that they are capable of defending or securing
+their current borders?
+    Is there that pride in Afghanistan or is it just a bunch of
+people who have to--happened to grow up there and collect a
+paycheck there but, really, I guess, to what degree is there
+Afghan pride? Will they protect Afghanistan or protect those
+borders?
+    Mr. Sopko. There is Afghan pride and I don't want to
+denigrate the Afghan fighting spirit. The Afghans have fought
+and will continue to fight.
+    The problem is pride in what we call the Afghanistan or the
+central government, and that is where you have got a morale
+issue and that is why your point about ghost soldiers and
+salaries.
+    If you don't pay the soldier, if you don't pay the widows
+and orphans that the soldiers and policemen killed, and if I am
+an Afghan soldier and I see my money going to some warlord or
+some captain or colonel or general who never shows up but gets
+part of my salary, or as bad as it was down south, where the
+Afghan general was, basically, stealing the food that was paid
+for by the government and forcing the soldiers to buy their own
+food, then you lose morale.
+    No, the Afghans will fight. The question is will they fight
+for a corrupt incompetent government, and that is the big
+question. But there is a will to fight and there are a lot of
+honest brave Afghans who have fought for their country.
+    But you just--we don't know on morale. We don't know
+because we are not collecting the data. We don't have the
+people to collect the data on what regions are controlled by
+the Taliban or other terrorist groups, or what districts are
+controlled.
+    I think that is something that Chairman Lynch and a number
+of you inserted, finally, into, I think, last year's either
+defense bill or the appropriations bill that we are now going
+to start collecting that data so we at least know and you in
+Congress know where we stand in this fight against the
+terrorists.
+    Mr. Lynch. The gentleman's time has now expired.
+    The chair now recognizes the gentleman from Vermont, Mr.
+Welch, for five minutes.
+    Mr. Welch. Thank you very much, Mr. Chairman and Mr.
+Grothman.
+    And Mr.--John, Mr. Sopko--what am I doing calling you John
+at the hearing, but I will.
+    You know, I really appreciate--we all do--the work you have
+done over the years. It has been steady and really something we
+can rely on.
+    We are moving into this new phase where whether the Biden
+administration follows through on the date set by the Trump
+administration or tries to renegotiate, we are leaving in that
+is pretty clear. It is just a question of when.
+    And, Mr. Sopko, you have documented how corruption is
+endemic and according to your 2021 High-Risk Report, corruption
+threatens all U.S. and international efforts in Afghanistan.
+    And just succinctly, because I want to follow with other
+questions, can you describe that threat of corruption to the
+peace and stability of the future Afghan state post-U.S.
+occupation?
+    Mr. Sopko. Well, I think corruption is the threat, just
+like I talked about before. It not only is a loss of our
+money--you know, the dollar we give for reconstruction, if it
+is diverted, it doesn't help the reconstruction. Doesn't buy
+the boots, doesn't help the government build the road.
+    But it also is fueling the insurgency, to some extent,
+because the Taliban and other terrorist groups point to it and
+point to the warlords and point to the corrupt officials and
+point to the fact that there is immunity.
+    We basically--there is, basically, immunity. If you are a
+high official in Afghanistan and you are corrupt, you ain't
+going to jail, and that is what our, basically, said.
+    Mr. Welch. Let me followup on that. You know, you document
+how the Afghan government makes paper reforms such as drafting
+regulations, but they don't take tangible actions. You have
+been on this for a number of years. Has that changed up until
+this point?
+    Mr. Sopko. Not really, and we will be issuing another
+report next month, pursuant to requests in Congress, and we
+document it. It is, basically, they are very good at attending
+meetings, writing legislation, or writing policies or creating
+organizations but not too good at actually catching crooks and
+sending them to jail if they are important Afghans.
+    Mr. Welch. So, it just continues--it just continues the
+cycle of eroding trust and strengthening the Taliban. You have
+said and you have been saying this for all your time, Mr.
+Sopko, what conditions--you have said, A, that we need
+conditions.
+    But, B, now that we are moving in this new phase, can you
+specify the types of conditions you think would be essential to
+giving us confidence and, frankly, the Afghan people confidence
+that the money was being used for their benefit, not for the
+private profit of the government officials?
+    Mr. Sopko. There are many conditions and it is really based
+upon understanding who you are dealing with in the Afghan
+government and what do they want. Right now, we know the
+current government wants elections in September.
+    I am not saying we should or shouldn't have elections in
+September. OK. What do we get in return for that? We know a lot
+of Afghan officials want to send their kids to school in the
+West. They need visas.
+    What are we getting for that? Those are the type of
+conditions. That is called smart conditionality. There was a
+general in Afghanistan who once talked to me about this,
+General Semonite, who was head of CSTCA.
+    It was only about five years ago. He was the first guy to
+talk about conditionality in Afghanistan. So, it is
+understanding. It is like if we build a new office. This was
+one of the examples I gave to you.
+    I mean, the head of MOD, I believe, wanted a fancy new
+office and we really rebuilt an entire office for him. What did
+we get out of it? Did we get a--it is a quid pro quo. So, it is
+understanding what the Afghan officials, corrupt or otherwise,
+want, and then condition on it.
+    You know, it is very interesting. You had a hearing last
+week, I believe, with the Afghan Study Group, and if you look
+at their testimony, what they are talking about they,
+basically, talk about smart conditionality.
+    Mr. Welch. Right. Right.
+    Mr. Sopko. And they talk about some examples. There are
+many things we can do but we haven't done it. I mean, it is so
+frustrating. I feel like it is Groundhog Day in that movie.
+    Mr. Welch. Right.
+    Mr. Sopko. I keep coming back and repeating the same thing,
+and all of our Ambassadors say, oh, it is horrible about
+corruption and narcotics. But they don't put any conditions.
+    Mr. Welch. Right.
+    Mr. Sopko. They talk about conditions.
+    Mr. Welch. My time is--my time is up.
+    Mr. Sopko. Do you realize from the donor--I am sorry. I
+apologize. You can see I am really upset about that. We don't
+follow through with smart conditionality.
+    Mr. Welch. Well, I am upset too, because you have been
+providing the roadmap for years and we haven't followed it, to
+our peril.
+    Thank you very much, and I yield back, Mr. Chairman.
+    Mr. Lynch. The gentleman yields back.
+    The chair now recognizes the gentleman from Louisiana, Mr.
+Higgins, for five minutes.
+    Mr. Higgins. Thank you, Mr. Chairman. Thank you for having
+this hearing today.
+    Since 2008, Congress has appropriated about $110 billion
+for humanitarian, security, and reconstruction assistance to
+Afghanistan. Yet, over the last 20 years, from my perspective
+and most of my constituents, little progress has been made and
+the Nation is still heavily dependent on donor and foreign aid.
+    We have had meetings and discussions about this for four
+years now, my office with boots on the ground in Afghanistan,
+and men and women of just distinguished accomplishment that
+have their background of expertise in the region.
+    And, personally, I am of the opinion that we have--we have
+done enough. I mean, if we--if we haven't taught the Afghan
+people how to care for themselves in 20 years, you know, what
+makes us think we are going to do it in two more.
+    And I asked--I asked a troop commander last week, why would
+we have boots on the ground out there? We have naval response,
+rapid deployment forces in the region. Why would we need boots
+on the ground?
+    He said, well, you need to be able to respond very, very
+quickly to what is happening. Well, what about the guys that we
+trained for 20 years? They live there. They are on the ground.
+They can respond immediately.
+    And, again, if we haven't trained them in 20 years, what
+makes us think we are going to train them in two?
+    As the Biden administration moves forward with peace talks
+with the Taliban and the Afghan government, I think we should
+be focused on terrorist activity.
+    True success in Afghanistan will only be achieved if we
+build upon the progress by the Trump administration, promote a
+free and self-sustaining direction for the region and
+protection for our allies like Israel.
+    Mr. Sopko, as stated in your report and supported by DOD,
+pervasive corruption throughout the Afghan government
+undermines its own legitimacy.
+    Please, based upon--my opening remarks was, granted, that
+is my opinion. That is not the opinion of this committee. That
+is my personal observation.
+    But many, many Americans feel the same way. With pervasive
+corruption in the Afghan government and we have been there for
+20 years, we have invested billions upon billions of dollars of
+American treasure, seems we have gotten nothing out of it,
+please explain to the American people why we should remain in
+Afghanistan and what our focus should be.
+    I will give you my remaining time so you have over two
+minutes. Tell us why we need to be there.
+    Mr. Sopko. Well, sir, I appreciate your question and I
+appreciate your concerns, and that is something that I think
+that every administration has faced.
+    I don't argue either which way. I am really agnostic on
+this as an inspector general. I don't do--you got the tough
+decision, Congressman----
+    Mr. Higgins. Right.
+    Mr. Sopko [continuing]. and the administration. Whether it
+was the Trump administration, Biden administration, Obama
+Administration, it is a tough decision because these are the
+issues you face.
+    Let me just throw out some things that you may want to
+consider. Again, I am not a proponent for staying or going. I
+am just telling you what is going to happen, you know, and what
+has happened and what we can learn from that.
+    Mr. Higgins. Fair enough.
+    Mr. Sopko. There are some diplomatic reasons we should be
+there, and I think somebody from State Department can explain
+that better than me. But, you know, are we going to look like
+we cut and run?
+    Now, people can say, hey, you have been there 20 years. You
+didn't cut and run for 20 years. Why would you now? But that is
+something to consider.
+    Do some of our allies in the region think that if you
+leave, it is destabilized? Another question that can be
+raised--and again, you need to talk to the counter-terrorism
+experts, not me.
+    We don't do counter-terrorism. We do reconstruction. But it
+could be that having boots on the ground actually is helpful
+and being able to work with them is helpful.
+    The other thing is we have invested a lot of money in
+reconstruction and rebuilding. If we leave immediately, we lose
+everything. Not only are women and girls but a lot of people
+who have supported us in jeopardy.
+    The other thing is we have brought NATO with us and we have
+NATO troops working with us. Did they buy a bill of goods with
+us? Do they feel like they have been cheated out of this? Why
+did they spend their time?
+    So, those are some of the things you have to consider. A
+destabilized Afghanistan could be a problem for us in the
+future. But again, I don't--these are arguments that can be
+made probably by better people than me. Again, I just do
+process. I tell you what have we gotten so far.
+    So, I don't know if that answers the question, but I am not
+a good advocate. You need to talk to somebody at state or AID
+or DOD on answering those questions.
+    Mr. Higgins. Yes, sir, and I do speak to those gentlemen
+consistently. Thank you for your answer. We appreciate your
+opinion as a solid, a wise man with a great deal of experience
+in the region.
+    Mr. Chairman, my time has expired and I yield.
+    Mr. Lynch. The gentleman yields back.
+    The chair now recognizes the gentleman from California by
+way of Massachusetts, Mr. DeSaulnier, for five minutes.
+    Mr. DeSaulnier. Thank you, Mr. Chairman, for recognizing
+that I was from the correct western state. I appreciate the
+hearing.
+    Mr. Sopko, it is hard not to watch you and feel very
+sensitive to your frustration, as others have said. So, our
+options are we spent a lot of time with the study group talking
+about what leverage we had vis-`-vis the Taliban and the May
+deadline.
+    My question is what kind of leverage, given our history and
+the history of the British and Russians and other countries in
+Afghanistan in history with the--with the Afghan government?
+    If we do say--if we make it conditional that this funding
+continues, doesn't seem, based on history, that is at least a
+good faith last effort.
+    But do you expect that they would actually perform if we
+had the right conditionality if we stayed--the Afghan
+government, or will they continue to be corrupt?
+    Mr. Sopko. That is the $60,000--probably $6 million or $6
+billion question. I don't know. We do know right now it is an
+opportune time.
+    As pessimistic as I sound, the opportune time is everybody
+who is a player in Afghanistan realizes they need foreign
+assistance. OK. You may want to say we got them over the
+barrel. You know, 80 percent of that government is paid for by
+the American taxpayer, British taxpayer, et cetera, et cetera.
+    So, if not now, when can we try real conditionality? So, we
+got that out. We know the Taliban want foreign assistance.
+    Now, the Taliban wants some other things, too. They want to
+be recognized independent--as a--internationally. They want to
+be removed from all the terrorist designations.
+    So, there is a number of things that they want, and they
+also want a piece of the government. If we can come up with
+proper conditions and if we enforce them and if we are willing
+to say, we lead, I mean, all of us have dealt with conditions
+on employment or even with our kids. You have to be willing to
+say no, and up to now we have failed to do that time and time
+again.
+    So, the answer is, I don't know. But this is a great
+opportunity to try true conditionality. But you need people who
+really want to enforce it.
+    Mr. DeSaulnier. So, we are playing with people who played
+this diplomatic poker with the West for multiple generations,
+centuries. So, let us go to plan B. We try. They fail. Still
+corruption.
+    We leave, and as to who has got who over the barrel, I
+guess I would respectfully, maybe skeptically, disagree. They
+know it is going to be destabilizing. They know there is
+potential al-Qaeda starting again.
+    Is that in our best interest? We have stayed in Europe--I
+know, a different situation--since World War II. Is our plan B
+being we have got to stay there in some form or function in
+terms of our best calculus on what protects the American public
+and the international order?
+    So we try. If we fail, are we stuck with, basically--and
+should we--maybe we should pay the--give the extortion or
+support directly to the warlords, which we have tried in the
+past, rather to just bypass the government.
+    So, I am sort of looking at give it the best shot, but most
+likely, given history, we are going to be stuck with this other
+situation.
+    And then last, there was some hope in our discussion with
+the study group that, demographically, younger people, because
+of the effects of globalization and our influence for the last
+20 years, might be more open to asserting themselves to really
+establish a government that is functional.
+    So as I look at it, that sort of seems like the probable
+playing out, based on the study group and your great work.
+    Mr. Sopko. You may be right, sir. I don't know. I mean,
+the--I do agree with you about the youth of Afghanistan. The
+young have been exposed to us, good or bad. Particularly in the
+cities, a lot of them have been exposed to democracy, to an
+attempt at rule of law, to a free and open press. A lot of
+women and girls have been removed from the shackles of the 4th
+century and have tasted freedom.
+    I don't know if that is going to be enough. I don't have an
+answer on that. We haven't done work on it. And again, just let
+me apologize if I defer.
+    I mean, as an inspector general, I like to speak for either
+an audit or an inspection or a report. You are asking--a lot of
+these are personal questions. One member has asked me to,
+basically become diplomatic and make an argument on behalf of
+the State Department or USAID. I am not the witness for that.
+    But this is the kind of discussion that I assume is
+happening right now in the embassy and in the White House, and
+this is the kind of discussion I think is necessary for
+Congress to have.
+    Mr. DeSaulnier. Thank you. I appreciate it.
+    I will yield back to the pride of South Boston, Mr.
+Chairman.
+    Mr. Lynch. You are very kind. Very kind.
+    The chair now recognizes the full committee ranking member,
+the gentleman from Kentucky, Mr. Comer, for five minutes.
+    Mr. Comer. Thank you, Mr. Chairman.
+    And I want to try to get as many questions in as I can in a
+brief amount of time.
+    Let us start with corruption. Does Afghanistan still have
+serious issues with corruption?
+    Mr. Sopko. Yes.
+    Mr. Comer. Does this corruption threaten U.S. construction
+efforts--reconstruction efforts?
+    Mr. Sopko. Yes. Yes.
+    Mr. Comer. Congress directed you to evaluate the Afghan
+anti-corruption strategy. Was this strategy sufficient?
+    Mr. Sopko. No.
+    Mr. Comer. Your report also says that current oversight
+mechanisms are inadequate. How much U.S. money has already
+spent on Afghan reconstruction?
+    Mr. Sopko. The total amount on reconstruction is $143.27
+billion.
+    Mr. Comer. Do we know for certain that all the money of
+that $143 billion actually made it to where it was intended to
+go in Afghanistan?
+    Mr. Sopko. Oh, we know quite a bit of it didn't end up
+there. We actually did a report for a number of Congressmen,
+including Congressman Welch, who asked us to look at how much
+was wasted, stolen, and whatever, and I think we reported back
+in July 2018 just looking at what we looked at, and that was
+about one-third of the money that we looked at that our agency
+did was wasted, stolen, or didn't accomplish anything.
+    Mr. Comer. Is it possible that some of this money made it
+into terror groups?
+    Mr. Sopko. Of course. Yes, of course.
+    Mr. Comer. What about the illicit drug trade?
+    Mr. Sopko. Oh, that supports the Taliban and supports
+corruption. That is what I said. Corruption and narcotics is
+the oxygen that keeps the terrorist groups alive in
+Afghanistan, and many Taliban are working in the narcotics
+fields.
+    Mr. Comer. So, do you share my concern that U.S. taxpayer
+dollars are fronting billions of dollars to a corrupt country
+with no truly effective means of tracking it?
+    Mr. Sopko. Yes, we are very concerned about that, and if
+you continue, that is why we say one of the risks is oversight.
+You got to have some oversight. Otherwise, you may as well just
+burn the money in Massoud Circle.
+    Mr. Comer. Well, I understand the difficulty of tracking
+money in a foreign country. The purpose of this committee, the
+Oversight Committee, is to ensure that taxpayer funds are spent
+efficiently and effectively.
+    To do this, we have to know where the money is going. I
+appreciate your work on the issue. But just for the record, and
+I have said this each of the four years I have been in
+Congress, I really don't see a viable long-term strategy for
+the United States in Afghanistan and I strongly support
+withdrawing the troops.
+    And I understand the problems that that country is going to
+have when the--when troops are gone. But, you know, the
+American taxpayers don't want to spend any more money in
+Afghanistan. This has been the sentiment from a majority of my
+constituents and I think a majority of Americans for many,
+many, many years now.
+    But I appreciate your work. Look forward to working with
+you in the future, and please let us know what we can do on
+this committee to be of assistance to you in tracking our U.S.
+taxpayer dollars.
+    Mr. Sopko. Thank you.
+    Mr. Lynch. The gentleman yields.
+    The chair now recognizes the gentlewoman from Florida, Ms.
+Wasserman Schultz, for five minutes.
+    Ms. Wasserman Schultz. Thank you, Mr. Chairman.
+    In addition to reports like the biennial High-Risk List and
+the Lessons Learned program, SIGAR regularly sheds light on
+areas where our reconstruction efforts in Afghanistan have,
+unfortunately, come up short.
+    For instance, Mr. Sopko, in September 2019, Chairman Lynch
+asked you to review facilities in Afghanistan that were
+constructed or financed by American taxpayers. Earlier this
+month, you released the final results of that review and you
+reported that billions of dollars that Congress had
+appropriated for reconstruction programs in Afghanistan went to
+facilities that have been underutilized and, in some cases,
+went completely unused or have deteriorated beyond repair.
+    For example, during followup inspections, SIGAR found that
+vehicle scanners at two border crossing points, purchased by
+DOD for $2.8 million, was sitting unused. One scanner was,
+quote, ``riddled with bullet holes'' and a rocket had rendered
+it inoperable.
+    According to Afghan government officials, no one has been
+made responsible for fixing the scanners or even knew how to do
+that.
+    Mr. Sopko, as a senior member of the House Appropriations
+Committee, these reports of wasteful spending cause me great
+concern, and we have several other members on Appropriations on
+this--on this committee.
+    Can you provide some other examples of assets that SIGAR
+recently inspected that have gone unused or underutilized?
+    Mr. Sopko. Well, I mean, one example is I believe we
+identified a number of dormitories for Afghan female soldiers
+or police that are empty, basically, because the Afghan
+government has not recruited nor are they interested in
+recruiting the women.
+    One example which I highlighted just less than a month ago
+was that we gave money-counting machines and bought them for
+the Afghan Ministry of Interior to put at the Karzai
+International Airport to count money, and they still haven't
+even been plugged in.
+    So this is years ago. This is the second time we reported
+on it. So, we do no checking of cash going--we, I mean, the
+Afghan government doesn't at the VIP and VVIP lounges at the
+airport.
+    So, there are a number of examples like that, ma'am, that
+just stuff is not being used.
+    Ms. Wasserman Schultz. OK. Well, that is pretty troubling,
+and your report indicates that the most common reason these
+facilities and assets were not used or maintained was that the
+beneficiary, quote, ``lacked the resources or capabilities to
+do so.''
+    What does that tell you about the reconstruction projects
+the U.S. Government has funded and then turned over to the
+Afghan government?
+    Does it suggest that U.S. agencies didn't plan
+appropriately for what the Afghan government needed or could
+effectively use? And what can Congress do to help ensure that
+any future funding appropriated for reconstruction projects is
+spent efficiently and effectively?
+    Mr. Sopko. I think you hit it on the nail. We are the
+problem in those situations because we don't require our
+agencies to look at sustainability.
+    You know, this is something we also raised--I think I
+raised within a year of coming on the job about a decade ago,
+that we should require, before any capital asset is provided,
+that the Afghan government even knows it, wants it, says they
+will use it, and they have the resources to keep using it. And
+those are the types of things we need to push and I think
+Congress needs to push.
+    And not just in Afghanistan. I would think the problem we
+have identified is a problem worldwide, and if we want to get a
+bigger bang for development budget we should require that
+outside of Afghanistan, too.
+    Ms. Wasserman Schultz. Mr. Chairman, it feels like we are
+lighting money on fire. This is the classic definition of
+insanity.
+    We are appropriating funds for things that no one is
+checking to see whether the Afghan government will actually
+need or use them, has the ability to sustain them, or maintain
+their upkeep, and, like, it just feels like a black hole.
+    And I appreciate the opportunity to ask this question
+because that is what the Oversight Committee is for. Hopefully,
+we are going to be able to see our colleagues, and I can
+certainly followup as an appropriator, to make sure that we
+don't continue this vicious cycle of appropriating funds for
+things that go unused or break and are never fixed, or never
+wanted.
+    So, I appreciate the opportunity to ask those questions and
+really, Mr. Sopko, thanks to--thanks to you and your staff for
+doing the important work you are doing.
+    I yield.
+    Mr. Sopko. Congresswoman, could I just add one thing that
+you may be interested in and the appropriators should?
+    Mr. Lynch. Very briefly. Very briefly. Very briefly.
+    Mr. Sopko. I know, right. It is a problem with me. I talk
+too much. We are releasing a Lessons Learned report in another
+two months on monitoring and evaluation and what lessons have
+we learned, and I think you, as an appropriator, and, I think,
+authorizers would be very interested when that report comes
+out. We are happy to brief you when that report comes out.
+    Ms. Wasserman Schultz. Thank you. I look forward to that.
+    Thank you so much, Mr. Chairman. I yield back.
+    Mr. Lynch. The gentlelady yields, and we do appreciate the
+direction and the spirit of your questions. And I think that
+the new administration, as did the previous administration,
+struggles with that, that whole problem.
+    So, that is the heart of this hearing.
+    The chair now recognizes the gentlelady from California,
+Ms. Speier, for five minutes.
+    Ms. Speier. Thank you, Mr. Chairman.
+    Inspector General Sopko, once again, I would just like to
+sing your praises. You have been, really, an important voice
+for us to evaluate how our money is being spent and how it has
+been spent poorly.
+    Let me ask you a couple of questions on the outset. You
+said there are 18,000 contractors from the United States in
+Afghanistan, correct?
+    Mr. Sopko. Well, 18,000 defense contractors. Only about
+7,000--excuse me, 13,000 are U.S.
+    Ms. Speier. Thirteen thousand are U.S.?
+    Mr. Sopko. Yes, ma'am.
+    Ms. Speier. And is it your expectation that if our service
+members leave, we are still going to have 13,000 contractors
+there?
+    Mr. Sopko. Pursuant to the agreement, as far as we know,
+they have to leave on May 1 also. So, the only ones left would
+be Afghan nationals. So, the 13,000 U.S. would leave as well as
+the--I am sorry, 6,000 U.S. and 7,000 third-country nationals,
+so 13,000 total.
+    Ms. Speier. My concern is, in the end, we may be funding
+contractors in Afghanistan once we take our troops out. But
+that is probably a separate question.
+    Your report talks about the fact that we have spent about
+$800 million on women and girls in 18 years. There are a third
+of the girls now in school in Afghanistan, which wasn't the
+case before.
+    There are 86 women in parliament. Ten thousand women are
+now doctors, medical professionals. The midwives have gone from
+400 to 4,000, so now 60 percent of the women in Afghanistan
+have a medical professional present when they deliver.
+    But I fear that all of that is going to come to an end. A
+letter we just received from the Afghan women suggests that the
+Taliban has increased threats against NGO's, informing them in
+writing that no program can be run in which it involves women
+leaving the home.
+    The Taliban has also required the removal of community
+development councils to which people's views and needs are
+represented.
+    As a result of direct threats and attacks on those working
+in girls' education, hundreds of schools have been closed.
+Since the signing of the agreement in February 2020, civic
+leaders and their families have been targeted and murdered. Two
+women judges were killed on the way to work.
+    So, it sounds like no matter what happens, women and girls
+are at grave risk. Can you speak more about that, please?
+    Mr. Sopko. Of course.
+    The issues and the numbers you raise are scary and it kind
+of tells you a little bit about the country we are in. Despite
+everything we have done, it is one of the worst places to be a
+woman in Afghanistan, particularly a rural--living in a rural
+environment.
+    It is only in the cities where we have seen some real good
+improvement and we--and the Taliban have not indicated much
+that makes you feel comfortable that if they are in the
+government they are going to support women and girls.
+    But the one thing to keep in mind is even the Afghan
+government, the current Afghan government, hasn't really done a
+lot. I mean, there just was an announcement--I don't know if
+you saw it, ma'am--that the Ministry of Education banned Afghan
+girls singing the national anthem with Afghan boys. No
+explanation. That came out of the blue. But that sort of tells
+you about a cultural divide between the views of many Afghans,
+including Afghans in the government.
+    Ms. Speier. You know, for the longest time, Walter Jones
+was the only Republican that wanted to see us out of
+Afghanistan. But it is interesting to see Ranking Member Comer
+speak about the importance of getting out.
+    I, obviously, have been interested in seeing us leave
+Afghanistan, but I have also come to believe that if we don't
+have ears on the ground, al-Qaeda will be able to blossom.
+Blossom is the wrong word. Will be able to grow again and we
+will be at grave risk.
+    So, I have come to believe we need some, you know, boots on
+the ground to just protect ourselves and that that requires
+committing some money to Afghanistan. I am willing to do it.
+    Would you comment on that and what your take is on what
+happens to us, in 28 seconds?
+    Mr. Sopko. If there are no boots on the ground, we lose a
+leverage for all of these issues--women, girls, and all that.
+And if there is no oversight, you can just forget about any of
+that money that we appropriate for women and girls ending up
+helping women and girls. I agree totally with you, ma'am. We
+need it.
+    Ms. Speier. My time has expired. I yield back.
+    Mr. Lynch. The gentlewoman yields.
+    The chair now recognizes the gentleman from Georgia. Mr.
+Johnson, for five minutes.
+    Mr. Johnson of Georgia. Thank you, Mr. Chairman. And, Mr.
+Sopko, thank you for being here today to speak about your
+report and the role that the United States must play in the
+reconstruction of Afghanistan.
+    Though our goal is to remove U.S. civilian and military
+presence from Afghanistan, I do agree with Congresswoman Jackie
+Speier. I have evolved on that issue, and we cannot create a
+vacuum of power in the wake of our absence that would
+destabilize the region and our rebuilding efforts.
+    This committee will play a crucial role in ensuring that
+U.S. tax dollars overseas, which currently number at more than
+a billion dollars, are being used effectively to assist in the
+pathway to democracy, a task that will be more difficult
+without a present on the ground.
+    Mr. Sopko, in your 2021 High-Risk List, you write, quote,
+``A reduced U.S. civilian and military presence in Afghanistan,
+amid a deteriorating security environment, could create new
+challenges for conducting effective oversight of U.S.-funded
+programs, grants, and contracts for reconstruction work,'' end
+quote.
+    Sir, can you briefly describe the role that the U.S.
+military plays in overseeing reconstruction work in
+Afghanistan, and also, how has COVID-19 created barriers to the
+performance of this important work?
+    Mr. Sopko. The U.S. military delivers. Now, when we talk
+about reconstruction, it is not just building roads and paying
+for clinics and education. We are talking about the training
+and supporting the Afghan military and police.
+    So, the military role there is important in doing the
+training and advising and then helping the Afghans actually use
+the weapons and use the material we give them. So, they play an
+important role.
+    COVID has been detrimental to that because we don't want
+our soldiers to get hurt with COVID and a lot of them have come
+down. So, that has limited their capability getting out.
+    Likewise, it has limited our ability, being SIGAR, as well
+as state and AID employees from getting out. So, COVID has been
+very detrimental, and also detrimental to the Afghan economy.
+    Mr. Johnson of Georgia. Thank you.
+    What partnerships in the region do we have that will play
+key roles in assisting our continued oversight of
+reconstruction if all U.S. troops should be withdrawn from
+Afghanistan, and how could we conduct oversight if the
+remaining troops currently on the ground are withdrawn?
+    Mr. Sopko. It would be very difficult to keep conducting
+oversight although, you know, we can do it, we being the U.S.
+Government, if we have the support of security officials at the
+State Department regional security office.
+    When you asked the question about regional governments
+helping us to do oversight, I would personally say none of them
+can help us. I don't think we want an Iranian inspector
+inspecting to see whether our funds are being performed, or a
+Pakistani inspector and definitely not a Russian inspector, or
+Chinese.
+    So, if we can't--I, personally, as an inspector general
+would not recommend turning over our oversight function to
+either the Russians, the Iranians, the Pakistanis, or the
+Chinese.
+    Mr. Johnson of Georgia. Yes. How are you planning to carry
+out your oversight responsibilities if U.S. forces do,
+ultimately, leave Afghanistan as planned on May 1?
+    Mr. Sopko. It is going to be extremely difficult. We have
+reached out and have in the past utilized certain
+technologies--drone satellite technology. That helps a bit.
+    We have also had a very strong relationship and done a lot
+of training with some Afghan civil society organizations, and
+they help us get out to places we are not permitted to go to.
+    But we would probably continue doing that, but we would be
+seeking your help and the help of Congress to get additional
+security funding and security support from the U.S. State
+Department, which has regional security officers to help us if
+we need to get out.
+    You need to get out there and kick the boots--get boots on
+the ground and kick the tires, and it is extremely difficult.
+The best we got is some Afghan civil society organizations we
+have trained and we monitor who have done that for us.
+    Mr. Johnson of Georgia. Thank you. My time has expired and
+I yield back.
+    Mr. Lynch. I thank the gentleman. The gentleman yields
+back.
+    First of all, I want to thank all the members who
+participated in today's hearing. I realize that today is the
+travel day for Congress. That was not the case when we
+originally scheduled this hearing.
+    I want to give great credit to Inspector General Sopko for
+his work and for the work of his staff. We really do appreciate
+you and the way you have handled this under very, very
+difficult circumstances.
+    So, in closing, I want to thank our panelist.
+    Mr. Grothman. I would like to say something.
+    Mr. Lynch. It is a travel day so we are all running for
+flights.
+    Mr. Grothman, if I go back to you, I am going to have to go
+back to every other member. You know what I mean?
+    So, I want to thank our panelists for their remarks. I want
+to commend my colleagues for participating in this important
+conversation.
+    Mr. Grothman. I am going to object.
+    Mr. Lynch. Without objection, all members will have five
+legislative days within which to submit additional questions
+for the witnesses to the chair, which will be forwarded to the
+witnesses for their response, and I ask our witness to please
+respond as promptly as you are able.
+    This hearing is adjourned and, again, I thank the gentleman
+for his attendance and for all his incredibly hard work. Thank
+you.
+    This hearing is now adjourned.
+    Mr. Grothman. Congressman Lynch?
+    Mr. Lynch. Yes?
+    Mr. Grothman. Can I just say something to you?
+    Mr. Lynch. Oh, sure.
+    Mr. Grothman. I was cutting you off.
+    I didn't say--I did want to say something that was relative
+important and the reason I want to say it is I do believe that
+if the Biden administration stays, I will not be critical of
+them.
+    OK. I certainly understand we have an obligation to our
+allies. We have an obligation to our friends in the Afghan
+government, and we don't want to strengthen our opponents.
+    And I think it is an important thing for me to say. I wish
+I could have said it when the other people were listening
+because they think some Republicans were--you know, kind of
+trying to put Biden in a box there. But I wanted to make clear,
+as the ranking member of the subcommittee, that that was my
+opinion.
+    Mr. Lynch. And I appreciate--I appreciate the spirit in
+which the gentleman makes those remarks and they are welcome.
+They are welcome, and I think the gentleman fully understands
+the difficulty of the administration. And we certainly
+appreciate the courtesy and the spirit in which the gentleman
+states his position.
+    Thank you.
+    [Whereupon, at 12:17 p.m., the subcommittee was adjourned.]
+                                 <all>
+</pre></body></html>

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+<html>
+<title> - ROOTING OUT FRAUD IN SMALL-BUSINESS RELIEF PROGRAMS</title>
+<body><pre>
+[House Hearing, 117 Congress]
+[From the U.S. Government Publishing Office]
+                          ROOTING OUT FRAUD IN
+                      SMALL-BUSINESS RELIEF PROGRAMS
+=======================================================================
+                                HEARING
+                               BEFORE THE
+             SELECT SUBCOMMITTEE ON THE CORONAVIRUS CRISIS
+                                 OF THE
+                   COMMITTEE ON OVERSIGHT AND REFORM
+                        HOUSE OF REPRESENTATIVES
+                    ONE HUNDRED SEVENTEENTH CONGRESS
+                             FIRST SESSION
+                               __________
+                             MARCH 25, 2021
+                               __________
+                           Serial No. 117-12
+                               __________
+      Printed for the use of the Committee on Oversight and Reform
+[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
+                     Available on: www.govinfo.gov,
+                         oversight.house.gov or
+                             docs.house.gov
+                               __________
+                    U.S. GOVERNMENT PUBLISHING OFFICE
+43-986 PDF                  WASHINGTON : 2021
+--------------------------------------------------------------------------------------
+                   COMMITTEE ON OVERSIGHT AND REFORM
+                CAROLYN B. MALONEY, New York, Chairwoman
+Eleanor Holmes Norton, District of   James Comer, Kentucky, Ranking
+    Columbia                             Minority Member
+Stephen F. Lynch, Massachusetts      Jim Jordan, Ohio
+Jim Cooper, Tennessee                Paul A. Gosar, Arizona
+Gerald E. Connolly, Virginia         Virginia Foxx, North Carolina
+Raja Krishnamoorthi, Illinois        Jody B. Hice, Georgia
+Jamie Raskin, Maryland               Glenn Grothman, Wisconsin
+Ro Khanna, California                Michael Cloud, Texas
+Kweisi Mfume, Maryland               Bob Gibbs, Ohio
+Alexandria Ocasio-Cortez, New York   Clay Higgins, Louisiana
+Rashida Tlaib, Michigan              Ralph Norman, South Carolina
+Katie Porter, California             Pete Sessions, Texas
+Cori Bush, Missouri                  Fred Keller, Pennsylvania
+Danny K. Davis, Illinois             Andy Biggs, Arizona
+Debbie Wasserman Schultz, Florida    Andrew Clyde, Georgia
+Peter Welch, Vermont                 Nancy Mace, South Carolina
+Henry C. ``Hank'' Johnson, Jr.,      Scott Franklin, Florida
+    Georgia                          Jake LaTurner, Kansas
+John P. Sarbanes, Maryland           Pat Fallon, Texas
+Jackie Speier, California            Yvette Herrell, New Mexico
+Robin L. Kelly, Illinois             Byron Donalds, Florida
+Brenda L. Lawrence, Michigan
+Mark DeSaulnier, California
+Jimmy Gomez, California
+Ayanna Pressley, Massachusetts
+Vacancy
+             David Hickton, Select Committee Staff Director
+                     Russell Anello, Chief Counsel
+                   Senam Okpattah, Deputy Chief Clerk
+                      Contact Number: 202-225-5051
+                  Mark Marin, Minority Staff Director
+             Select Subcommittee On The Coronavirus Crisis
+               James E. Clyburn, South Carolina, Chairman
+Maxine Waters, California            Steve Scalise, Louisiana, Ranking
+Carolyn B. Maloney, New York             Minority Member
+Nydia M. Velazquez, New York         Jim Jordan, Ohio
+Bill Foster, Illinois                Mark E. Green, Tennessee
+Jamie Raskin, Maryland               Nicole Malliotakis, New York
+Raja Krishnamoorthi, Illinois        Mariannette Miller-Meeks, Iowa
+                         C  O  N  T  E  N  T  S
+                              ----------
+                                                                   Page
+Hearing held on March 25, 2021...................................     1
+                               Witnesses
+The Honorable Hannibal ``Mike'' Ware, Inspector General, Small
+  Business Administration
+Oral Statement...................................................     4
+The Honorable Michael E. Horowitz, Chair, Pandemic Response
+  Accountability Committee, Inspector General, Department of
+  Justice
+Oral Statement...................................................     6
+William B. Shear, PhD, Director, Financial Markets and Community
+  Investment, Government Accountability Office
+Oral Statement...................................................     8
+Written opening statements and the written statements of the
+  witnesses are available on the U.S. House of Representatives
+  Document Repository at: docs.house.gov.
+                           Index of Documents
+No additional documents were entered into the record during this
+  hearing.
+                          ROOTING OUT FRAUD IN
+                     SMALL-BUSINESS RELIEF PROGRAMS
+                              ----------
+                        Thursday, March 25, 2021
+                   House of Representatives
+      Select Subcommittee on the Coronavirus Crisis
+                          Committee on Oversight and Reform
+                                                   Washington, D.C.
+    The subcommittee met, pursuant to notice, at 2:05 p.m., via
+WebEx, Hon. James E. Clyburn (chairman of the subcommittee)
+presiding.
+    Present: Representatives Clyburn, Waters, Maloney, Foster,
+Raskin, Krishnamoorthi, Jordan, Green, and Miller-Meeks.
+    Chairman Clyburn. Good morning. The committee will come to
+order.
+    Without objection, the chair is authorized to declare a
+recess of the committee at any time.
+    I now recognize myself for an opening statement.
+    The Paycheck Protection Program, or PPP, and the Economic
+Injury Disaster Loan Program, or EIDL, have been essential
+lifelines for millions of small businesses harmed by the
+coronavirus pandemic. More than $1 trillion has been disbursed
+by these programs, with good reason given the scale of the
+crisis. With so many tax dollars expended, it is vital that we
+ensure that the money is being used for its intended purposes
+and not diverted to fraud.
+    Unfortunately, the Trump administration failed to take
+basic steps to prevent fraud when it implemented these programs
+last year. Thanks to the work of this committee and our
+oversight partners, we now know that this failure led to nearly
+$84 billion in potential fraud, including $79 billion in
+potentially fraudulent EIDL loans and grants and $4.6 billion
+in PPP loans. That means billions in taxpayer dollars may not
+have reached the small businesses that most urgently needed
+support.
+    Last October, the SBA Inspector General found that the
+Trump administration--I'm quoting him here--``lowered the
+guardrails'' by removing or weakening controls in the EIDL
+Program. Specifically, the administration ignored flags of
+potential fraud, approved loans in batches with little to no
+vetting, and abandoned a rule that required two SBA employees
+to approve each loan application. According to the IG, these
+actions increased fraud risk significantly.
+    In a staff report last year, this committee identified more
+than 22,500 PPP loans worth $4 billion that may have been
+subject to fraud. The SBA Inspector General has since found at
+least $4.6 billion in potentially fraudulent loans because the
+Trump administration refused to implement internal controls
+that--and I quote here again--``could have reduced the
+likelihood of an ineligible or fraudulent business obtaining a
+PPP loan,'' end of quote.
+    As a result of the lack of controls, the Inspector General
+uncovered tens of thousands of PPP loans that exceeded the
+maximum loan amount that had been approved to businesses
+registered under the program cutoff date or were mailed to
+businesses that exceeded the program's size standards.
+    Earlier this year, GAO added PPP and EIDL to its High Risk
+List, citing the failure to implement adequate controls or make
+recommended improvements.
+    Former Treasury Secretary Steven Mnuchin asserted last year
+that, given the need to get relief money out quickly, it was
+inevitable that the programs ran into a lot of issues. Let me
+be clear: That is a false choice. Americans should not have to,
+and did not have to, choose between quickly getting aid during
+a crisis and preventing the theft or waste of billions of tax
+dollars.
+    While disbursing PPP and EIDL funds quickly was rightly
+prioritized during the crisis, this committee and the oversight
+bodies before us today all outline simple steps that the prior
+administration could've taken to prevent oversight--or to
+provide oversight and prevent fraud without causing harmful
+delays.
+    The Trump administration not only ignored these
+recommendations, but it resisted legitimate oversight by
+removing and bullying Inspectors General and withholding basic
+information from Congress. As The Washington Post reported
+earlier this week, we now know that this was a widespread
+problem in the prior administration. Today, we face the
+challenge of fixing the resulting damage.
+    Our committee released a staff memo this morning showing
+just how vast a challenge this is. The SBA has referred a
+staggering 1,340,000 claims of potential fraud concerning EIDL
+loans and advances to the agency's Inspector General. The SBA
+Inspector General has received another 148,000 complaints on
+its fraud hotline. The Inspector General already has more than
+200 open investigations related to PPP and EIDL.
+    And it is not just a single inspector general playing a
+role. Given the scope of the problem, 32 Federal and state
+agencies have been pulled into investigations involving the
+small-business relief programs.
+    Fortunately, the Biden-Harris administration is taking the
+risk of fraud seriously and investing in oversight. President
+Biden has called for, in his words, fastidious oversight of
+pandemic relief funds and charged his administration to--and I
+quote him here--``make sure the relief arrives quickly,
+equitably, and efficiently, with no waste or fraud,'' end of
+quote.
+    The American Rescue Plan will further enhance transparency
+and accountability by investing $142 million to support
+critical oversight by the Pandemic Response Accountability
+Committee, or PRAC, the inspector general community, and the
+Government Accountability Office.
+    Today, I am pleased to welcome distinguished
+representatives of these watchdogs who are appearing before the
+select subcommittee. With us this afternoon is Hannibal
+``Mike'' Ware, the SBA Inspector General; Michael Horowitz, the
+Inspector General for the Department of Justice and Chair of
+the PRAC; and William Shear, the Director of Financial Markets
+and Community Investment at GAO.
+    I'm also pleased to welcome the select subcommittee's
+newest member, Mrs. Miller-Meeks.
+    I look forward to hearing how our panelists plan to use the
+funds provided in the American Rescue Act to combat fraud in
+small-business relief programs and how we can continue to work
+together to ensure that our Nation's response to the pandemic
+is effective, efficient, and equitable.
+    In the ranking member's absence, I now yield to Mr. Jordan
+for any public opening statement he may wish to make.
+    Mr. Jordan.
+    Mr. Jordan. Thank you, Mr. Chairman. Thanks to you and to
+our witnesses for appearing virtually today.
+    [Inaudible] we continue to hold only virtual hearings in
+this subcommittee, even though four members of the majority
+celebrated the $1.9 trillion spending bill in person at the
+White House just two weeks ago.
+    I want to also welcome our new Republican member to the
+select committee, Representative Mariannette Miller-Meeks from
+the great state of Iowa. We appreciate Mrs. Meeks' hard work on
+behalf of her constituents, especially as Speaker Pelosi and
+the Democrats are currently challenging Dr. Miller-Meeks'
+election.
+    Mrs. Miller-Meeks won the general, she won the recount, and
+the state of Iowa certified her results, but her opponent
+skipped the courts and ran straight to the Speaker and
+congressional Democrats to try to overturn the will of the
+people in the state of Iowa. It's wrong, what they're doing.
+It's a dangerous game that the Democrats are playing with this
+election.
+    Adding Dr. Miller-Meeks, we now have our second medical
+doctor on the select subcommittee, which I think is a good
+thing.
+    Today we're here to talk about fraud. Anyone that commits
+fraud and steals taxpayer dollars from hardworking Americans
+should be punished to the fullest extent of the law, and the
+money should be recouped for the taxpayers.
+    The Trump administration harnessed the full force of the
+Federal Government to find and prosecute fraud, particularly in
+the PPP program. In fact, the Trump Department of Justice stood
+up a PPP fraud task force, which brought us its first fraud
+case within one month of the program starting. This enforcement
+pace is unmatched in the history of the Department's white-
+collar prosecution efforts.
+    So far, the FBI has opened 537 fraud cases, arrested 111
+people, and began the process of recouping millions of stolen
+dollars. This is good. This is how the justice system is
+supposed to work.
+    The Democrats will claim that the PPP program is rife with
+fraud, when, in fact, it is just the opposite. Using the
+Democrats' own statistics, over 99 percent of PPP money got to
+the correct recipient and has been used appropriately. This is
+a better rate than the private insurance--or, excuse me,
+private mortgage market.
+    The Democrats will also ignore the massive successes of the
+program. PPP supported 51 million jobs, over 80 percent of
+America's small businesses, and saved almost 19 million jobs
+from permanent loss. That is truly unprecedented.
+    Of course, it can't go on forever. It's time to reopen our
+states, even the blue states. We must get people back to work
+and get kids back to school. Just this week, the Federal
+Reserve Board Governor in charge of community banking said the
+economy must reopen and lockdowns must be lifted.
+    Florida reopened and was vilified. New York and Governor
+Cuomo shut down and were praised. The facts are clear now,
+though: Florida is successful, and Governor Cuomo is under
+criminal investigation. Florida protected seniors, while
+Governor Cuomo sent the virus to seniors. Florida's death rate
+among seniors is 50 percent lower than that of the state of New
+York's. Of course, instead of investigating Cuomo's actions,
+Democrats rewarded him with a $13 billion bailout.
+    Contrary to the chairman's own statements, this
+subcommittee remains focused on politics. It is past time we
+hold in-person hearings on getting kids back to school, getting
+vaccines to rural communities, on Cuomo's nursing-home
+disaster, and the health crisis at our southern border.
+Instead, this subcommittee is focused on attempting to tear
+down a bipartisan program that kept the economy afloat during
+the early and toughest days of the pandemic.
+    We all agree fraud is bad, but we should all agree that a
+99-percent success record is unprecedented, and we have
+President Trump to thank for that.
+    Mr. Chairman, thank you, and I yield back and look forward
+to hearing from our witnesses.
+    Chairman Clyburn. Thank you very much, Mr. Jordan.
+    The witnesses will now be unmuted so we can swear them in.
+    Please raise your right hands.
+    Do you swear or affirm that the testimony you are about to
+give is the truth, the whole truth, and nothing but the truth,
+so help you God?
+    Mr. Horowitz. I do.
+    Mr. Ware. I do.
+    Mr. Shear. I do.
+    Chairman Clyburn. Let the record show that the witnesses
+answered in the affirmative.
+    Thank you. Without objection, your written statements will
+be made part of the record.
+    With that, Mr. Ware, you are now recognized to provide your
+testimony.
+    STATEMENT OF THE HON. HANNIBAL ``MIKE'' WARE, INSPECTOR
+             GENERAL, SMALL BUSINESS ADMINISTRATION
+    Mr. Ware. Thank you very much.
+    Chairman Clyburn, Ranking Member Scalise, and distinguished
+members of the subcommittee, thank you for inviting me to speak
+with you today and for your continued support of my office.
+    I come before you today in the midst of a historic
+challenge to the Nation, a challenge for which the SBA has a
+pivotal and unprecedented role in stabilizing the U.S. economy.
+The men and women of my office have been working diligently to
+provide oversight of SBA's pandemic response. I am always proud
+to represent them publicly and to speak to you about our
+important work. We share in the Nation's grief for those lost
+to the pandemic and are keenly aware that nothing short of the
+public's trust is at stake in our oversight efforts.
+    SBA is managing over a trillion dollars in lending
+authority through the PPP and the EIDL programs, with the most
+recent tranche of lending authority being contained within the
+American Rescue Plan Act. As with my office, the men and women
+of SBA have been running at a sprinter's pace; however, the
+race we are running has been more of a marathon. Nonetheless,
+we have sought to have an aggressive and focused approach to
+our oversight to ensure our work is properly calibrated and
+relevant.
+    The Congress recognized that the oversight required of the
+pandemic response was outsized for existing oversight resources
+across government, to include my office, and we have received
+three supplemental appropriations to increase our oversight
+capacity.
+    Initially, we focused on the recruitment of a mix of
+auditors, analysts, and criminal investigators to provide
+immediate and timely insight into those programs.
+    In December, we received funding directed to oversight of
+the EIDL Program that seeks to address the rampant fraud
+identified by my office. These funds are being used to increase
+our investigative staff and enhance our data analytics
+capacity.
+    We received our most recent supplemental increase a couple
+of weeks ago, and those funds will be used to further increase
+our investigative capacity to combat fraud. Fraud
+investigations will be a decade-long effort due to the
+performance of these loans within SBA's portfolios and the
+statute of limitations for fraud.
+    Our office will have approximately 40 percent more staff on
+board after our hiring surges for EIDL and ARPA conclude than
+we had before March 2020.
+    Even still, we recognized from the beginning that the level
+of oversight required will take a whole-of-government approach.
+We partnered with law enforcement entities across government
+and joined multiple task forces to multiply our reach. Since
+the outset of the pandemic response, our strategy has been to
+prevent and deter fraud, waste, and abuse and to identify and
+combat instances of the same.
+    The first step was the issuance of three reports sharing
+risks and lessons learned from our past oversight work,
+principally, that most closely related, which is of the
+American Recovery and Reinvestment Act of 2009. These reports
+as well as a fraud and scam alert were published before SBA
+made the first PPP and EIDL loans.
+    Recognizing the speed at which lending was occurring in
+both these programs, we developed innovative report products to
+provide timely insight to our stakeholders. Our first flash
+report was published just a little over 30 days of PPP's
+implementation. Our next report would come out in July, which
+found significant deficiencies in internal controls and rampant
+fraud within the EIDL Program. We have issued 11 reports on
+SBA's PPP and EIDL programs to date, with two more near
+issuance.
+    While our audit work was ongoing, our criminal
+investigators were aggressively pursuing fraud. On May 5, just
+a little over a month after the first PPP loans, the first-in-
+the-Nation fraud charges were announced against an individual
+fraudulently seeking a PPP loan. We have since initiated over
+420 investigations, and, together with our law enforcement
+partners, the Department of Justice has announced over 100
+charges against individuals committing fraud against the PPP
+and EIDL programs.
+    Now, if I may, I would like to clarify a number I mentioned
+at a hearing yesterday before the Senate. Together with our law
+enforcement partners and with SBA and with the financial
+institutions, we have realized approximately $2.5 billion in
+moneys being returned and seized that were associated with
+fraud and suspicious activities.
+    We have received nearly 150,000 complaints on our hotline
+since March of last year. This is over 150 years' worth of
+complaints when compared to prior years. We have sought and
+obtained assistance from the PRAC to catalogue complaints being
+received outside of our online complaint submission system. As
+we continue to address our processing backlog, we will employ
+data analytics to further triage and guide these efforts.
+    I look forward to discussing our most recent published work
+surrounding implementation of PPP and EIDL, but I must tell you
+that data analytics has made a difference in our office's
+ability to keep our stakeholders currently and fully informed
+in a timely manner.
+    Thank you for the opportunity to speak to you today, and I
+am happy to answer any questions you may have of me.
+    Chairman Clyburn. Thank you very much, Mr. Ware. That was
+perfect timing.
+    The chair now recognizes Mr. Horowitz.
+ STATEMENT OF THE HON. MICHAEL E. HOROWITZ, PANDEMIC RESPONSE
+  ACCOUNTABILITY COMMITTEE, INSPECTOR GENERAL, DEPARTMENT OF
+                            JUSTICE
+    Mr. Horowitz. Thank you, Chairman Clyburn, Ranking Member
+Scalise, members of the subcommittee. Appreciate you inviting
+me to testify at today's important hearing. And we appreciate
+the strong, bipartisan support for our work from Congress.
+    The Pandemic Response Accountability Committee, or PRAC,
+was created by Congress one year ago and is comprised of 22
+Federal inspectors general working collaboratively to oversee
+the more than $5 trillion in pandemic relief emergency
+spending.
+    The PRAC's mission is to promote transparency and to work
+with the IGs to ensure that taxpayer money is used effectively
+and efficiently to address pandemic-related public health and
+economic needs. Let me briefly highlight some of our
+independent oversight work to date.
+    First, we've advanced transparency of the Federal
+Government's pandemic-related spending through the launch of
+our robust website, pandemicoversight.gov. The website makes
+publicly available a wide range of spending data and is
+currently the only place where certain spending data is
+available to the public. The website also contains
+accountability information, including information about OIG
+audits, inspections, and investigations, as well as GAO
+reports.
+    Second, we've issued crosscutting reports on issues that
+transcend Federal agencies. For example, in February 2021, the
+PRAC issued a ``Top Challenges in Pandemic Relief and
+Response'' report highlighting management challenges facing
+Federal agencies during the pandemic, and we recently issued a
+report on COVID-19 testing.
+    Third, the PRAC has played an important role facilitating
+coordination and collaboration among IGs and other oversight
+partners, including GAO and state and local auditors.
+    Fourth, the PRAC is using the resources and tools Congress
+gave us to enhance shared services across the IG community. For
+example, we have, among other things, provided resources to
+PRAC members to combat fraud in pandemic relief programs,
+including with regard to the PPP and EIDL programs.
+    Fifth, the IG community is actively engaged in combating
+fraud and criminal behavior. To date, the community has led or
+participated in investigations leading to over 240 indictments
+or complaints, 190 arrests, and 36 convictions. We're looking
+to use all of the tools available to us--criminal prosecution,
+civil enforcement, and suspension and debarment--to ensure that
+those who engage in fraud and wrongdoing are held accountable.
+    Having highlighted some of our work to date, let me briefly
+discuss some of the initiatives we have ongoing.
+    First, in order to fulfill the PRAC's mission, we need
+better technological tools for IGs and our oversight partners,
+including the use of advanced data analytics. To that end, the
+PRAC is developing the Pandemic Analytics Center of Excellence,
+or PACE, to conduct data analysis, to provide fraud-fighting
+tools to the IG community, to enable the sharing of data
+analytics and leading practices across our community, and to
+broadly assist the IG community's audit and investigative work.
+    Second, the PRAC is continuing to develop crosscutting
+oversight projects. We have three ongoing currently, and we're
+developing more, and you will see more from us in the months
+ahead.
+    Third, the PRAC has established a fraud task force to serve
+as a deconfliction and coordination tool to assist IGs in their
+investigative efforts, to serve as a coordinating body with the
+Department of Justice and other law enforcement agencies, and
+to allow IGs to tap into investigative resources from across
+the IG community.
+    Fourth, we're working with OMB and Federal agencies to
+address data gaps that we have identified and reported on.
+Having necessary data is critical to advancing transparency and
+accountability and to be able to assess programmatic impacts.
+    Fifth and finally, we're looking to use the Program Fraud
+Civil Remedies Act, or PFCRA, to fight pandemic-related relief.
+However, our ability to do so is limited and would be greatly
+enhanced if certain amendments were made to PFCRA. We look
+forward to working with Congress to enact those important
+changes.
+    Thank you again for the strong, bipartisan support for our
+work. I would be pleased to answer any questions the committee
+may have.
+    Chairman Clyburn. Thank you very much, Mr. Horowitz. That's
+even more perfect with your timing. Thank you very much.
+    The chair now recognizes Mr. Shear.
+    And let me see how perfect you can be.
+STATEMENT OF WILLIAM B. SHEAR, DIRECTOR, FINANCIAL MARKETS AND
+     COMMUNITY INVESTMENT, GOVERNMENT ACCOUNTABILITY OFFICE
+    Mr. Shear. I'll try my best.
+    Chairman Clyburn, Ranking Member Scalise, and members of
+the subcommittee, I am pleased to be here today to discuss our
+work on SBA's PPP and EIDL programs.
+    SBA has made or guaranteed more than 17 million loans and
+grants, providing about $910 billion to help small businesses
+adversely affected by COVID-19. Over time, we have found the
+following:
+    First, as far as PPP oversight, given the immediate need
+for PPP loans, SBA implemented limited safeguards for approving
+those loans. Because of ongoing oversight--because ongoing
+oversight is crucial, we recommended in June 2020 that SBA
+develop plans to assess PPP risk. SBA has since developed plans
+to review PPP loans and has recently provided us detailed
+information about its oversight process.
+    Second, analysis of EIDL data. We reported in January 2021
+that SBA had provided about 5,000 advances totaling about $26
+billion and approved at least 3,000 loans totaling about $156
+million for potentially ineligible businesses. Therefore, we
+recommended that SBA conduct portfolio-level analysis to detect
+potentially ineligible applications.
+    Third, assessment of fraud risk. Although SBA has taken
+some steps to mitigate fraud risk to PPP and EIDL, such as
+conducting PPP loan reviews and implementing new EIDL controls,
+the agency has not yet conducted a formal fraud risk assessment
+for either program.
+    Suspicious activity reports. From April through October
+2020, financial institutions filed more than 21,000 suspicious
+activity reports related to PPP. From May through October 2020,
+financial institutions filed more than 20,000 such reports
+related to EIDL.
+    Department of Justice charges. From May 2020 through
+February 2021, the Department of Justice publicly announced
+charges in over 100 fraud-related cases associated with PPP
+loans and 30 fraud-related cases associated with EIDL loans.
+I'll refer to, I'm glad to be here with SBA's Inspector
+General. And I'll just say that, in October 2020, he reported
+that there were strong indicators of widespread potential fraud
+in the EIDL Program.
+    The financial statement audit. In December 2020, SBA's
+independent financial statement auditor issued a disclaimer of
+opinion on SBA's Fiscal Year 2020 consolidated financial
+statements because SBA could not provide adequate documentation
+to support a significant number of transactions and account
+balances related to PPP and EIDL.
+    Since June 2020, we have reported on the potential for
+fraud in both programs. Further, as we have reported multiple
+times, SBA's failure to provide us with data and documentation
+on PPP and EIDL in a timely manner has impeded efforts to
+ensure transparency and accountability for the programs. This
+includes delays in our obtaining key information from SBA, such
+as detailed oversight plans and documentation for estimating
+improper payments.
+    Results of SBA's most recent financial statement audit are
+consistent with our findings. As a result, we included these
+programs as a new area on our High Risk List in March 2021
+because of their potential for fraud, significant program
+integrity risk, and need for much-improved program management
+and better oversight.
+    According to Federal internal control standards and our
+fraud-risk framework, managers in executive-branch agencies are
+responsible for managing fraud risk and implementing practices
+for mitigating those risks. When fraud risk can be identified
+and mitigated, fraud may be less likely to occur. Risk
+management is a formal and disciplined practice for addressing
+risk and reducing it to an acceptable level.
+    In addition to our previous recommendations, we anticipate
+making four recommendations on fraud risk in PPP and EIDL and
+one on EIDL oversight in our March 2021 report, to be issued
+next week, on the Federal COVID-19 response. SBA agreed with
+the recommendations, stating it would implement fraud-risk
+assessments for both programs and an oversight plan for EIDL.
+    This concludes my statement. I would be glad to answer any
+questions.
+    Chairman Clyburn. Thank you very much, Mr. Shear. You did
+it. Thank you.
+    Mr. Shear. Thank you.
+    Chairman Clyburn. Let me thank all of our witnesses here
+today.
+    Now, each member will have five minutes for questions. And,
+with that, I will now recognize myself for my five minutes.
+    Now, as I stated earlier, the Trump administration's
+failure to implement robust fraud controls in the EIDL Program
+and PPP has led to nearly $84 billion in potentially fraudulent
+loans.
+    We were making all kinds of recommendations as to what
+steps need to be taken, but, instead of taking these steps, the
+Trump administration--and I'm quoting the Inspector General
+here--``lowered the guardrails'' on the EIDL Program, leading
+to $79 billion in potentially fraudulent loans in the program
+alone.
+    Mr. Ware, your report found that SBA removed or weakened
+existing controls in EIDL last year. Would you please describe
+how SBA's actions contributed to an increased risk of fraud?
+    Mr. Ware. Thank you for that question.
+    Well, initially, we knew--we had a feeling that this would
+happen. Or, more than a feeling, we knew this would happen
+based on our prior experience and the prior reports that we had
+done. And that's why we notified SBA up front that, ``Hey, this
+is the time where we have to strengthen our controls.''
+    What happened was, when they started doing the batch
+processing, a lot of the controls that should've gone in place
+up front, especially to address very, very early indicators
+that fraud was in place--I mean, almost immediately the banks
+were contacting us. We had over 5,000 contacts from banks
+almost off the bat. And that's where we sat down with the
+executives here at SBA to say, ``We have a problem.'' And
+that's when we started to see what was going on with the
+reduced controls.
+    So, definitely, any proper control environment--any type of
+fraud mitigation has to begin with an internal control
+environment. And that was reduced up front to expedite the
+funds going out, which--we understood the need for the funds
+going out, but we were requiring that SBA strike a balance, a
+delicate balance, between the two. Plus, we thought the things
+we were asking to be done, if implemented correctly, would not
+slow the program down at all.
+    Chairman Clyburn. Thank you.
+    Now, what recommendations did you offer SBA? And please
+share with us what the administration's response was.
+    Mr. Ware. So, we made quite a bit of recommendations, and
+they had to do with--I could probably--some specifics off the
+top of my head:
+    We wanted them to assess vulnerabilities--right?--for the
+purpose of strengthening and implementing internal controls to
+address the notices of potential fraud that we had.
+    We wanted them to create a process or a method for lenders
+to be able to report suspected fraud to ODA and for how to
+recover the funds. That was not in place.
+    We wanted them to review all the loans that had--especially
+the ones that had the bank account number changed from what was
+shown on the original application to determine if those changes
+were indeed legitimate or fraudulent.
+    And then we wanted their assistance in recovering the funds
+and de-obligating the funds.
+    We just needed them to completely strengthen the internal
+control environment. And we offered, I mean, dozens of
+recommendations for how to do that.
+    So, initially--well, it depends on what we're talking
+about. For the Paycheck Protection Program, the Office of Cap
+Access, they were on top of it, in terms of putting in these
+controls and getting ahead of things, which is why, to date,
+we've found less fraud, or less potential for fraud, than we
+have in the EIDL Program. Because with the EIDL Program,
+although some of the changes were made up front, many were not,
+mainly because it wasn't taken as seriously.
+    Chairman Clyburn. Well, thank you.
+    My time has almost expired. I'm going to yield now to Mr.
+Jordan and let him have 17 seconds of my time.
+    Mr. Jordan?
+    Mr. Jordan. Thank you, Mr. Chairman.
+    Mr. Horowitz, are Democrats the only people allowed to
+object to election results?
+    Mr. Horowitz. I'm not sure how to answer that, Congressman.
+    Mr. Jordan. Well, I mean, you're a--I've worked with you
+numerous times. You do great work. You're a lawyer. You're the
+Inspector General at the Justice Department. You're a guy who I
+know cares deeply about fairness.
+    And I'm just wondering--you know, Democrats criticized
+Republicans for objecting to the Presidential electors being
+counted on January 6, 2021, but they objected to every
+Republican Presidential winner this century.
+    In fact, on January 6, Mr. Horowitz, the Democrat chair of
+the Rules Committee objected to the counting of Alabama.
+President Trump won--January 6, 2017, they objected--a state
+President Trump won by 30 points. A member of this committee,
+on January 6, 2017, the lead impeachment manager, in fact,
+objected to the state of Florida. And on January 6, 2017, the
+Democrat chair of the Financial Services Committee objected to
+the state of Wyoming--Wyoming, a state President Trump won by
+40 points.
+    And now they're trying to kick off the newest member of
+this committee--trying to kick--the newest member of this
+committee they're trying to kick out of Congress.
+    And so, I'm just wondering, are they the only ones allowed
+to object, or can Republicans object as well?
+    Mr. Horowitz. Well, Congressman, I'm sure anybody of
+whatever political background they want can make an objection.
+    I'll just say, I have enough oversight issues at the
+Justice Department. I, fortunately, don't have oversight over
+the election apparatus. So, I'll stick to what I'm doing there
+as well as with the PRAC.
+    Mr. Jordan. Yes. Well, I appreciate the work you do. And I
+just find what the Democrats are attempting to do to one of our
+newest colleagues, who is now a member of this select
+subcommittee, I just find this unbelievable, particularly in
+light of the statements they have made over the last several
+months. And so, we just wanted to raise that point.
+    I do appreciate the work that you do and you have done for
+our government over the last several years, and appreciate the
+work you do for all the Inspector Generals in our government.
+    With that, Mr. Chairman, I appreciate you yielding me the
+17 seconds, but I don't need it. I have to run to another
+engagement. So, I will yield back the balance of my time.
+    Chairman Clyburn. Thank you very much for yielding back the
+17 seconds. I'll take that to remind my friend that we might be
+following suit. If my memory serves, he cast a vote against our
+new President.
+    Thank you.
+    Mr. Jordan. No. The point is, Mr. Chairman, let's be
+consistent. If you're going to criticize Republicans for
+exercising our constitutional duty and doing--and objecting to
+the unconstitutional way some states change their election law,
+let's be consistent with what happened on January 6, 2017, and
+what the Democrats are attempting to do to the newest member,
+Dr. Miller-Meeks, Lieutenant Colonel Miller-Meeks, the newest
+member of this committee. That's my point.
+    Chairman Clyburn. I understand your point, and I accept
+service.
+    With that, the chair now recognizes for five minutes Ms.
+Waters.
+    Ms. Waters. Thank you very much, Mr. Chairman.
+    And I'm so sorry that Mr. Jordan, you know, takes up time
+on this committee, where you're dealing with, you know,
+substantive matters, particularly relating to fraudulency in
+the PPP program, with election matters that have no business in
+this committee.
+    And so----
+    Mr. Jordan. Mrs. Miller-Meeks thinks it's substantive, I
+will tell you that, Madam Chair. Mrs. Miller-Meeks thinks it's
+substantive.
+    Ms. Waters. Reclaiming my time, I'm not talking to you. I'm
+addressing the chair.
+    Mr. Chairman, I'm going to go on with my question. And I'm
+hopeful that we can stay on point on the issues that you have
+organized thus far today in this hearing.
+    I believe the tradeoff between speed and program integrity
+is a false one. Our government should be able to help Americans
+quickly without losing billions to fraud.
+    Mr. Horowitz, in what ways could the Trump administration
+have instituted stronger controls in PPP while still issuing
+loans quickly and efficiently?
+    Mr. Horowitz. Congresswoman, I think several of those
+points--several of those items have been identified by IG Ware.
+I think there could have been efforts beyond, in some of the
+programs--and I'll let IG Ware speak to the PPP specifically--
+but, in some of the programs, simply relying, for example, on
+self-certification. That's an issue that we've identified as
+IGs--IG Ware has, others have, GAO has.
+    There were additional steps that could have been
+undertaken, that recommendations were made to undertake, that
+would not have significantly slowed down, in our view in the
+oversight community, the delivery of funds to the public.
+    Ms. Waters. I'm also concerned that the sheer number of
+potentially fraudulent PPP transactions presents an enforcement
+challenge. As highlighted in today's staff memo, of the 7.9
+million PPP loans issued to date, only 242 individuals have
+been criminally charged. And, of the nearly $84 billion of
+potentially fraudulent transactions in PPP and EIDL, only $626
+million, less than one percent, has been recovered.
+    Mr. Horowitz, as a former fraud prosecutor, can you
+describe some of the challenges with addressing fraud on this
+scale through criminal prosecutions?
+    Mr. Horowitz. It's an important question, Congresswoman,
+and you're exactly right. One of the substantial challenges is,
+with hundreds of billions and trillions of dollars out there
+and the scope and level of the fraud, it's going to take us
+months and years as we pursue it.
+    What we're trying to do is leverage, for example, data
+analytics. We very much appreciate the funding that was given
+to us that the chairman mentioned that will allow us to
+undertake that effort, because it will help us focus our
+efforts and find the fraud more specifically. That's what data
+analytics helps us do.
+    We've also set up a fraud task force and are working to
+help IGs like IG Ware and others across the community by
+leveraging the tools and looking at this, Congresswoman, as a
+whole-of-government approach by the IGs so that we're
+leveraging resources.
+    Ms. Waters. Thank you very much.
+    I am interested in learning whether or not there was
+organized crime involved in this, where operations were set up
+supposedly to help many of the PPP applicants, who really
+didn't know government, had not understood government very
+well, had not been involved in the past, but they went to and
+were directed to an organized effort that was turning out these
+applications for unsuspecting individuals.
+    Have you detected any of that, Mr. Horowitz?
+    Mr. Horowitz. You know what? I'm going to ask on PPP
+specifically if IG Ware wants to jump in on that, because----
+    Mr. Ware. Yes.
+    Mr. Horowitz [continuing]. His agents have been on top of
+that issue.
+    Mr. Ware. If it's OK.
+    I am very aware of that. That was something we found very,
+very early on, that that wasn't the case. In the complaints we
+were getting, particularly from the banks early on, from the
+onset, it was that, when they asked a followup question
+relative to the money, the people had no idea, they never had a
+business, they had nothing like that. They said that they were
+contacted by people who they didn't know, said the government
+was giving out free money.
+    We also found this on the dark web, in terms of free money,
+free government money to be had, where they would contact
+people, tell them the government is giving out this money, and,
+for a percentage of the money, they could have the money placed
+in their accounts, the persons who were contacted, and then
+they'll get the money and then pay the organizers behind the
+scheme.
+    So, we found that that was a regular occurrence.
+    Ms. Waters. Well, my time really is up, but I just want to
+say, there are a lot of the small-business people who could end
+up, you know, being accused of fraud. I want the big boys. I
+want the organized efforts. I want those who have misused this
+program and misled these small-business people, rather than
+going out and locking up and indicting a whole bunch of little,
+little business people who just didn't know. So, I'm hopeful
+that that avenue will be, you know, approached and dealt with.
+    I yield back.
+    Chairman Clyburn. Thank you very much, Chair Waters.
+    The chair now recognizes for five minutes Dr. Green.
+    Mr. Green. Thank you, Chairman Clyburn and Ranking Member
+Scalise. Can you guys hear my OK?
+    Chairman Clyburn. Yes.
+    Mr. Green. I want to thank our witnesses for being here
+today.
+    You know, one year ago this week, as the pandemic struck
+our Nation, Congress passed and President Trump signed into law
+the CARES Act. At the time, we knew that the economic danger we
+were facing threatened to overwhelm small businesses across the
+Nation. Unemployment claims reached record levels----
+    [Audio interruption.]
+    Mr. Green. Sorry. I'm in three different committee meetings
+at the same time here.
+    The centerpiece of the CARES Act was the popular PPP
+program that gave small businesses access to forgivable loans
+to cover payroll expenses and saved millions of jobs. The
+program was a lifeline to small businesses hit hardest by
+strict lockdown orders in many cities and states.
+    According to the U.S. Census Bureau, nearly 75 percent of
+all small businesses received PPP loans. This was not a bailout
+of special interests; it was a-broad based effort that played a
+critical role in saving tens of millions of American jobs.
+    The PPP included significant mechanisms to protect against
+fraud and ensure taxpayer money went to the intended
+recipients. Leaders had to abide by existing Federal know-your-
+customer, anti-money-laundering, and bank-secrecy laws.
+    Now, any program swiftly arranged to spend hundreds of
+billions of dollars will inevitably incur fraud. That's just a
+fact. But the Trump administration made serious governmentwide
+efforts to investigate and prosecute COVID-19-related fraud
+starting from day one. The DOJ Criminal Division immediately
+set up a team specifically to root out and prosecute PPP fraud.
+By September, the DOJ announced that it had initiated multiple
+separate PPP fraud cases.
+    And fraud can happen in many ways, such as false
+information on an application, misuse of funds for personal
+use. And those who take advantage of a national crisis for
+their own corrupt ends should be held accountable. However,
+according to calculations from the majority on this committee,
+the fraud rate within PPP was lower than the fraud in several
+other programs, such as the Pandemic Unemployment Assistance
+Program and the EIDL Program.
+    By every possible measure, the PPP was a success that saved
+untold millions of jobs. But these mechanisms were not in place
+to capture two of the most outrageous frauds from this past
+year.
+    What happens when a Governor deliberately misleads the
+public and covers up the number of COVID-related nursing home
+deaths? The Attorney General of New York found that Governor
+Cuomo's administration undercounted nursing home deaths by 50
+percent. And for months now, my colleagues and I have been
+calling for an investigation of Governor Cuomo and his false
+statements and policies, but silence from the majority.
+    Or take another example. What of the fraud perpetrated on
+the American taxpayer under the false pretenses of COVID
+stimulus? Democrat leadership larded up a bill with handouts
+for special interests and their political cronies. Blue-state
+Governors that crushed their economies with lockdowns get
+rewarded with money to bail out years of mismanagement. This
+includes over $100 billion for schools that are closed, most of
+which doesn't even get paid in the near term.
+    Ninety percent of the $1.9 trillion spending spree has
+nothing to do with public health. Instead, congressional
+Democrats viewed this as a--and I quote--``tremendous
+opportunity,'' end quote, to push their political agenda in the
+Trojan horse of a misnamed American Rescue Plan. But it's the
+taxpayers who will be footing the bill for generations to come.
+That's fraud by any definition.
+    Thank you, Mr. Chairman, and I yield.
+    [Audio interruption.]
+    Chairman Clyburn [continuing]. Five minutes.
+    Bill? Bill Foster? You are now recognized for five minutes.
+You need to unmute, I think.
+    Mr. Foster. Oh, my apologies, Mr. Chairman. I was unaware
+of the order we're operating under. I'm happy to proceed.
+    Chairman Clyburn. Thank you.
+    Mr. Foster. In its January 2021 High Risk List, the GAO
+made recommendations to the Small Business Administration to
+provide greater oversight of the PPP and EIDL programs to
+reduce fraud in both programs, including using data analytics
+to identify potentially ineligible businesses.
+    And I was encouraged to hear Mr. Ware cite the use of data
+analytics as one of the force multipliers that allowed the SBA
+and its OIG to more effectively identify fraud.
+    Mr. Ware, can you go into some more detail about how data
+analytics have been used to detect fraud in the PPP and EIDL
+programs and what future plans are?
+    Mr. Ware. Yes. Thank you very much.
+    With access to the data warehouse that SBA has,
+particularly on the PPP side--because we are just working out a
+more direct relationship within EIDL--we were able to overlay a
+lot of the data coming in. For example, working with the Do Not
+Pay list with the Department of Treasury, working with the
+Department of Treasury on that, we were able to see that quite
+a bit of money went out to folks who should never have gotten
+paid.
+    Using data analytics, we were also able to capture quite a
+bit of duplicate payments as well.
+    And the speed by which you see law enforcement moving right
+now is unprecedented, as was stated earlier by--I can't
+remember who. But the reason it's allowed to move as quickly as
+it is because of access to data, transparent data, and the
+ability of data analysts and data scientists within our office
+and within the community to be able to quickly overlay
+information and get it in the hands of criminal investigators.
+    Mr. Foster. Yes.
+    Well, I'm particularly concerned about identity theft and
+synthetic identity fraud in the PPP and EIDL programs as well
+as other areas in our government. You know, fraudsters may
+improperly use the personal information of hardworking
+Americans, such as names, addresses, Social Security numbers,
+to fraudulently apply for pandemic relief loans.
+    And the situation is compounded by the lack of a coherent
+approach to identity in this country, so that, for example, the
+list of bad actors who may be known to Treasury or to financial
+regulators or to the individual states may not be automatically
+known to the SBA.
+    And, last Congress, I sponsored a bill called the Improving
+Digital Identity Act of 2020, which would modernize systems
+that provide driver's licenses and other identity credentials
+in our country and upgrade digital identity verification tools
+in citizens' interactions with government.
+    Mr. Ware, has the SBA OIG found identity theft or identity
+fraud to be a problem in the PPP and EIDL programs? And what
+are the common forms of that fraud that you see?
+    Mr. Ware. Right. So, we have found--identity theft is
+probably the most common underlying cause of the fraud that
+we're finding, particularly in the EIDL Program. As a matter of
+fact, it's really showing up itself in PPP now with the
+inclusion of Schedule C's. This is a major issue for us.
+    And the way that is happening is, of course they have many
+of the romance-type schemes, many of the social media schemes
+by which people gain access to other people's identity. Most of
+it came to us when people were--victims received letters from
+SBA saying, ``There's a deferment on your loan,'' when they had
+never, ever applied for any type of loan. So, we've got quite a
+bit of that.
+    We're up to, what, well over a million applications flagged
+for identity theft right now in these programs.
+    Mr. Foster. Wow.
+    And what are the better identity verification tools that
+you think would make a real difference in this?
+    Mr. Ware. Well, it's simply verifying that the person that
+you're giving the money to actually exists. I honestly don't
+believe it's that much of a lift, but it is. I guess it could
+be a little bit more time-consuming.
+    Mr. Foster. Yes.
+    I'm struck by how other countries that have more rational
+systems to identify their citizens have not had the same kind
+of problem with, you know, fraudulent--everything from stimulus
+checks to other payments.
+    And so, any conclusions that you come up with as to what
+tools would really make your life easier here would be very
+appreciated.
+    Thank you. I'm basically out of time, so I'll yield back.
+    Chairman Clyburn. Thank you very much, Mr. Foster, for
+yielding back.
+    The chair now recognizes for five minutes Mrs. Miller-
+Meeks.
+    Mrs. Miller-Meeks. Thank you very much, Chair Clyburn.
+    And thank you to our witnesses speaking about the very
+important programs that were initiated in response to this
+pandemic.
+    Mr. Horowitz, your oversight testimony had a link to it
+regarding COVID-19 testing. And this was COVID-19 testing that
+was done at Federal agencies, so I realize that it's limited.
+And it was from February to August 2020. And it indicates in
+that link that 10.7 million tests were completed at Federal
+healthcare agencies at a cost of $659.5 million. And that was
+underestimate because it doesn't include the VA.
+    Would you have an idea of how much has been--how many tests
+or how much has been spent now on testing at those agencies or
+in general for all testing in the U.S.?
+    Mr. Horowitz. Congresswoman, I don't have that with me. I
+can certainly followup with my colleague at HHS OIG and see
+what the latest data is. We cut it off at that time so that we
+could obviously move forward and start doing analysis.
+    Mrs. Miller-Meeks. The reason for my question is, as a
+physician and a former director of the Iowa Department of
+Public Health, I closely monitor what's happening with the
+number of cases, the number of hospitalizations, the number of
+deaths, the number of those who recovered who would have
+natural immunity, and then the vaccinations, at least here in
+Iowa. And given everything that I have seen since the
+vaccination was first approved in November, which is
+remarkable--and then now we have a total of three
+vaccinations--I've seen this decline very rapidly and
+exponentially and feel that we're very close to herd immunity.
+    In this most recent American Rescue Plan for COVID-19,
+there is allocated $47.8 billion in testing and another $7
+billion to go to community health centers for testing. And it
+seems to me that with the decline that we're having that that
+amount of funding may be excessive. Do you have any, you know,
+suggestion or comment on that?
+    Mr. Horowitz. So, I wouldn't be in a position, necessarily,
+to comment on how much money should or shouldn't have gone.
+I'll leave it to other policymakers to decide that.
+    I will say that what we've found and I've seen at DOJ, for
+example--because I have oversight over the Federal prison
+system. And what we found a year ago, in the first several
+months of this, was, the absence of testing impaired the
+ability of the BOP to identify asymptomatic inmates so that
+they could segregate those individuals rather than simply wait
+for them to develop symptoms.
+    And so, we certainly think there will continue to need to
+be testing available, much like there is for other diseases----
+    Mrs. Miller-Meeks. And I think there's more recent data
+that shows that there is not the transmission of asymptomatic
+that we originally thought there was.
+    I'm hoping that some of this money can be used in
+accordance with a bill that I introduced, H.R. 1897, that would
+do COVID-19 testing for those migrants coming across our
+borders, which is not done now.
+    So, thank so much.
+    Mr. Ware, I'm going to direct this to you. The PPP program
+to the individuals, both when I was a state senator helping
+small businesses get PPP and then those I've talked to, has
+been an extremely successful program.
+    To be eligible, an applicant had to have not more than 500
+employees. And because of large chains receiving loans
+designated for small businesses, the SBA had instituted an
+affiliation rule. If the parent exerted control or had the
+power to exert control over the affiliates, the entirety of
+their employees should be counted toward that limit.
+    So, is having affiliates using the same bylaws as the
+parent ``exerting control''?
+    Mr. Ware. We have not taken a look as yet into how that
+works out and if it's the same or not, but----
+    Mrs. Miller-Meeks. Or----
+    Mr. Ware [continuing]. We did--sorry. Go ahead.
+    Mrs. Miller-Meeks. Are having affiliates apply for
+accreditation from the parent company ``exerting control,'' the
+parent company imposing performance policies on the affiliate
+``exerting control,'' or the parent mandating certain services
+be performed at the affiliate, are those things ``exerting
+control''?
+    Mr. Ware. Without the work to actually dig into it, I'm
+unable to answer the question at this time.
+    Mrs. Miller-Meeks. Well, Planned Parenthood across the
+Nation had 16,000 employees nationwide, but they got more than
+$80 million in PPP loans. Even their own lobbyist admitted that
+the rules made their affiliates ineligible when they said the
+CARES Act money had broad discretion to exclude Planned
+Parenthood.
+    Has Planned Parenthood returned any of that money?
+    Mr. Ware. We have not taken a look at Planned Parenthood
+specifically. We have a series of reviews in the queue dealing
+with eligibility across these programs.
+    Mrs. Miller-Meeks. Thank you. That was going to be my next
+question, if there was a reviewing of the affiliation status.
+Thank you so much for your testimony.
+    Thank you, Chair Clyburn. I yield back my time.
+    Mr. Ware. Thank you.
+    Chairman Clyburn. Thank you very much for yielding back.
+    The chair now recognizes Mr. Raskin for five minutes.
+    Mr. Raskin. Mr. Chairman, thank you for calling this very
+important hearing about more than $80 billion lost in fraud and
+rip-offs of the taxpayers within these programs. And some of
+our colleagues prefer to minimize the damage, saying, oh, well,
+it's less than one percent or two percent.
+    Mr. Horowitz, let me start with you. Is that the right way
+to look at it, to say, well, it's a small percentage of an
+overall amount of money, or do we look at and say, that's $80
+billion that could've gone to small businesses that deserved it
+and people who needed the money?
+    Mr. Horowitz. Well, I think the way we look at it from the
+accountability community is, could there have been steps taken
+that would have reduced the fraud to a greater degree, or the
+risks to a greater degree? And, as you've heard, GAO and the IG
+at SBA made important recommendations to try and do that. So
+that's really the issue that we look at.
+    Mr. Raskin. And those were ignored by the Trump
+administration. So, I'm glad that we've got a President in who
+is serious about cracking down on fraud and making the
+government actually work for the people.
+    I've had a number of constituents reach out to me for help
+after their identities were just, out of the blue, fraudulently
+used to obtain SBA loans for some of these criminals. One of my
+constituents is currently getting payment notices from the SBA
+on a $150,000 EIDL loan that was taken out in his name without
+his knowledge. He didn't know anything about it. And he got one
+letter saying that SBA was reviewing the case, but, otherwise,
+he hasn't gotten any updates or info from SBA at all about how
+this is going to be remedied.
+    And so, the SBA I don't think is addressing this with
+serious enough concern and attention. It's one thing if there
+are people out there ripping off the government. OK, let's go
+after them, and if it takes a little time, it takes a little
+time. But if they're ripping off the government using other
+people's names, that's an emergency for my constituents whose
+names are being used, whose credit is being ruined, and who
+have a shadow cast over their name.
+    So, Mr. Ware, is there anything that I can tell my
+constituents about what to expect in this situation? What steps
+is the SBA's Office of IG taking to respond to and remedy
+complaints about identity theft? And can you set up a special
+unit just to respond to these kinds of cases?
+    Because, believe me, it's a dire thing in the lives of
+people. Imagine if your name was used by somebody else with
+your Social Security number to get an SBA loan.
+    Mr. Ware. Yes----
+    [Audio interruption.]
+    Mr. Ware. Thank you. I know that we're having connection
+problems because----
+    Chairman Clyburn. Yes, we are having a bit of a problem.
+Mr. Ware?
+    Mr. Ware. Yes? Can you hear me?
+    Chairman Clyburn. I hear you now.
+    Mr. Ware. OK. Sorry. I don't know what's happening. I'll
+blame it on SBA's technological advances. Just teasing, just
+teasing.
+    No, but if you can hear me now, I think I got the gist of
+the question, although on my screen Representative Raskin is
+completely frozen. So, I hope I got it, in terms of what is my
+office doing to assist the victims of identity theft.
+    Now, clearly, we've heard countless stories and complaints
+involving identity theft to fraudulently obtain those loans,
+but it's important to understand a couple of things.
+    We don't have principal jurisdiction on investigations
+involving identity theft. That belongs to the Federal Trade
+Commission. What we've done is work with SBA to set up a system
+where people could receive assistance and have moved to
+investigate many of these complaints.
+    We do have a report that will be coming out very, very
+shortly on SBA's handling of identity theft. By ``very, very
+shortly,'' it's next month, by end of next month. And, at that
+time----
+    Mr. Raskin. OK.
+    Mr. Ware [continuing]. A lot of information----
+    Mr. Raskin. OK. Well, I appreciate if you would followup
+with me on this. And we would like a way that we can get to
+your office the names of our constituents who are having a
+serious problem with this. Obviously, we want it prosecuted by
+the FTC, but we also want it to stop and make sure that the
+names of our constituents are cleared.
+    Mr. Clyburn, if I could say one final thing--and I'm sorry
+about all these technical snafus we're having. Congresswoman
+Waters correctly pointed out that Mr. Jordan's original
+provocation in this hearing was an irrelevant distraction from
+the matter at hand. But she shows a lot more patience than me,
+and I want to address specifically what he said.
+    It is true that Republicans and Democrats alike have issued
+technical challenges under the electoral college over the
+course of the last century. But only one President has incited
+a violent insurrection, a mob, to attack Congress and to try to
+overthrow the election result.And that's what he's excusing
+with that completely false equation of his.
+    And, meantime, he also knows that there's a Federal
+statute, the Federal Contested Elections Act from 1969, by
+which both Republicans and Democrats have brought challenges to
+congressional elections. There's an entire procedure in place
+guaranteeing due process to people on all sides.
+    And if he's prepared to vote to overturn an election that
+was decided by 7 million votes, more than 7 million votes, for
+Joe Biden, certainly he would accept the regularity of hearing
+an election contest where there was a six-vote difference
+between the two sides under a Federal statute. That is regular
+order.
+    And I yield back to you, Mr. Chairman.
+    Chairman Clyburn. I thank the gentleman for yielding back.
+    The chair now recognizes Mr. Krishnamoorthi for five
+minutes.
+    Mr. Krishnamoorthi. Thank you, Mr. Chair. Can you hear me?
+    Chairman Clyburn. Yes, I can.
+    Mr. Krishnamoorthi. Very good.
+    Well, first of all, I wanted to point out some very
+interesting aspects of the SBA OIG report.
+    Mr. Ware, I noticed in the report, my staff and I noticed,
+that at one point you said almost 320,000 potentially
+fraudulent COVID-19 EIDL loans totaling almost $25 billion were
+disbursed to people with the same email addresses.
+    You give one example where one applicant with one email
+address received 10 loans in the name of 10 different bathroom
+renovation companies in one city, and when you went back and
+looked, you couldn't find any of those bathroom renovation
+companies in that city. Instead, you were able to find that the
+email address was for a burrito restaurant which was located in
+that city.
+    Just a basic question: What are we doing to make sure that
+folks can't apply for multiple loans from the same email
+address?
+    Mr. Ware. Well, that's one of the things that we've been
+working hard with the Office of Disaster Assistance to fight
+against. And the Office of Disaster Assistance has assured us
+that they have a secondary review process in place to make that
+very assurance.
+    We have not verified or validated that that is in place and
+working as yet, but--they have not provided that information to
+us as yet, but----
+    Mr. Krishnamoorthi. Let me jump in, because I think that's
+really important. I think the American people don't want
+multiple loans to be applied for from one email address or from
+one IP address, meaning probably one computer, or from one
+physical address. And so, these EIDL loans, I think, deserve a
+lot more scrutiny, and I hope that you are going back to check
+that these EIDL loans don't come from the same address, the
+applications.
+    Can you rule out, given the staggering potential amount of
+fraud in the EIDL Program, that there was any coordination
+between applicants and insiders at the SBA?
+    Mr. Ware. No, I cannot rule that out, because I know for a
+fact----
+    Mr. Krishnamoorthi. OK. I just going to--I'm going to be
+going through a rapid-fire series of questions here.
+    Can you rule out that any foreign actors or entities
+received money through the EIDL Program?
+    Mr. Ware. No.
+    Mr. Krishnamoorthi. Can you rule out that--I'm from
+Illinois, so I have to ask this question. Can you rule out that
+any deceased people received money through the EIDL Program?
+    Mr. Ware. No.
+    Mr. Krishnamoorthi. Can you rule out that people under the
+age of 18 received money from the EIDL Program?
+    Mr. Ware. No.
+    Mr. Krishnamoorthi. What claims are being made that you're
+aware of under the False Claims Act, also known as qui tam,
+related to the EIDL Program?
+    Mr. Ware. Well, I won't be able to speak to any of those
+that's active. Many of those are sealed.
+    Mr. Krishnamoorthi. Let me ask Mr. Horowitz, our expert,
+probably, on this issue of whistleblowing and so forth.
+    Is there anything that can be done to encourage folks that
+know about fraud within these programs, maybe even people at
+the SBA right now, to come forward and make a False Claims Act
+claim or a qui tam claim related to what I perceive to be just
+staggering amounts of fraud in the EIDL Program?
+    Mr. Horowitz. Absolutely, Congressman. First, come to our
+website, pandemicoversight.gov. They'll see a link there to
+report electronically to us. They can get in contact with us
+through other means, but electronically is the best way to do
+it.
+    We'll get on top of it, and we'll make sure that whatever
+IG has jurisdiction over the program they care about, we'll get
+it to them and we'll work together with them.
+    Mr. Krishnamoorthi. And just let's educate people who might
+be viewing this. When we refer to False Claims Act or qui tam
+claims, the claimant, through a confidential process, if the
+claim is validated, could receive between 15 and 30 percent of
+the recovered amounts, right?
+    Mr. Horowitz. That's correct.
+    Mr. Krishnamoorthi. So, Mr. Horowitz, do you know how much
+has been recovered overall through your investigations, your
+collective investigations, into fraud in the EIDL Program and
+then separately into PPP program?
+    Mr. Horowitz. I don't know separately as to those two
+programs. I know it's tens of millions of dollars overall. I
+could get back to you on----
+    Mr. Krishnamoorthi. But that's an incredibly small portion
+of the sizable potential amount of fraud, right?
+    Mr. Horowitz. At this time, it is. But I would just make
+sure that the public is aware and assure all of you, obviously,
+prosecutions take time, and we are using the tools we have,
+whether it's criminal prosecution, civil, forfeiture, and, by
+the way, suspension and debarment for entities that are here,
+that aren't fraudulent entities themselves. They're risking
+their ability to do business with the government going forward,
+period.
+    Mr. Krishnamoorthi. Thank you.
+    I yield back.
+    Chairman Clyburn. I thank the gentleman for yielding back
+his time.
+    I notice that all members who are present have been allowed
+time to ask questions and to make comments. There are several
+other members who we expected to join us, but the time seems to
+have run out, and so we aren't going to prolong this.
+    At this point, we usually give the ranking member an
+opportunity to make a closing statement, and, in his absence,
+whoever he may designate. But I think Mr. Jordan, who made the
+opening statement, indicated that he had to go off to other
+business, and I don't see that he's here with us. So, I'm going
+to now proceed to my closing statement, and hopefully we'll be
+able to conclude this hearing.
+    I want to thank all of our witnesses who are here today,
+and we appreciate the invaluable expertise that you've shared
+this afternoon on how we can better identify and eliminate
+fraud in the pandemic relief programs.
+    This select subcommittee is modeled after the Truman
+Committee during World War II. In a speech to the Senate upon
+the establishment of that committee, then-Senator Truman said,
+and I quote, ``I consider public funds to be sacred funds, and
+I think they ought to have every safeguard possible to prevent
+their being misused and mishandled,'' end of quote. I
+wholeheartedly agree with Truman.
+    Unfortunately, today's hearing has made clear that the
+Trump administration failed to institute the necessary
+safeguards to prevent public funds from being misused and
+mishandled in key small-business relief programs, leading to
+the loss of billions of dollars through fraud.
+    I agree very much with Chair Waters, whose interest it is
+to go after what seems to be some pretty sophisticated
+fraudulent activity. And hopefully we'll get to the bottom of
+the source of all of this and not pat ourselves on the back for
+sending small, unsuspecting businesses out of business or into
+jail.
+    Fraud should have real consequences. Diverting funds that
+were intended to help Americans struggling to save their
+businesses, feed their families, and stay in their homes is
+just something that needs to be dealt with.
+    But it is not too late to act. The Biden administration has
+already taken significant steps to reduce fraud by instituting
+stronger controls when using PPP loans. And the administration
+has encouraged Federal agents to work with, not against,
+inspectors general and congressional oversight.
+    The Biden administration and Congress have also worked
+together to ensure that critical oversight bodies like the
+PRAC, GAO, and IG community have the resources and tools they
+need to do their jobs. The $142 million allocated to the
+oversight community in the American Rescue Plan will go a long
+way toward accomplishing that goal.
+    There is much more to do to prevent fraud and prosecute
+those who engage in it. I look forward to using what we have
+learned from our witnesses today to make the small-business
+relief programs more effective, efficient, and equitable. Those
+are the standards that must be met when we are spending sacred
+public funds.
+    With that, and without objection, all members will have
+five legislative days within which to submit additional written
+questions for the witnesses to the chair, which will be
+forwarded to the witnesses for their response.
+    Chairman Clyburn. This hearing is adjourned.
+    [Whereupon, at 1:20 p.m., the subcommittee was adjourned.]
+                                 [all]
+</pre></body></html>

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+<html>
+<title> - HOW INVIDIOUS DISCRIMINATION WORKS AND HURTS: AN EXAMINATION OF LENDING DISCRIMINATION AND ITS LONG-TERM ECONOMIC IMPACTS ON BORROWERS OF COLOR</title>
+<body><pre>
+[House Hearing, 117 Congress]
+[From the U.S. Government Publishing Office]
+                      HOW INVIDIOUS DISCRIMINATION
+                    WORKS AND HURTS: AN EXAMINATION
+                     OF LENDING DISCRIMINATION AND
+                     ITS LONG-TERM ECONOMIC IMPACTS
+                         ON BORROWERS OF COLOR
+=======================================================================
+                            VIRTUAL HEARING
+                               BEFORE THE
+                       SUBCOMMITTEE ON OVERSIGHT
+                           AND INVESTIGATIONS
+                                 OF THE
+                    COMMITTEE ON FINANCIAL SERVICES
+                     U.S. HOUSE OF REPRESENTATIVES
+                    ONE HUNDRED SEVENTEENTH CONGRESS
+                             FIRST SESSION
+                               __________
+                           FEBRUARY 24, 2021
+                               __________
+       Printed for the use of the Committee on Financial Services
+                            Serial No. 117-5
+  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
+                            ______
+               U.S. GOVERNMENT PUBLISHING OFFICE
+ 43-992 PDF            WASHINGTON : 2021
+                 HOUSE COMMITTEE ON FINANCIAL SERVICES
+                 MAXINE WATERS, California, Chairwoman
+CAROLYN B. MALONEY, New York         PATRICK McHENRY, North Carolina,
+NYDIA M. VELAZQUEZ, New York             Ranking Member
+BRAD SHERMAN, California             FRANK D. LUCAS, Oklahoma
+GREGORY W. MEEKS, New York           BILL POSEY, Florida
+DAVID SCOTT, Georgia                 BLAINE LUETKEMEYER, Missouri
+AL GREEN, Texas                      BILL HUIZENGA, Michigan
+EMANUEL CLEAVER, Missouri            STEVE STIVERS, Ohio
+ED PERLMUTTER, Colorado              ANN WAGNER, Missouri
+JIM A. HIMES, Connecticut            ANDY BARR, Kentucky
+BILL FOSTER, Illinois                ROGER WILLIAMS, Texas
+JOYCE BEATTY, Ohio                   FRENCH HILL, Arkansas
+JUAN VARGAS, California              TOM EMMER, Minnesota
+JOSH GOTTHEIMER, New Jersey          LEE M. ZELDIN, New York
+VICENTE GONZALEZ, Texas              BARRY LOUDERMILK, Georgia
+AL LAWSON, Florida                   ALEXANDER X. MOONEY, West Virginia
+MICHAEL SAN NICOLAS, Guam            WARREN DAVIDSON, Ohio
+CINDY AXNE, Iowa                     TED BUDD, North Carolina
+SEAN CASTEN, Illinois                DAVID KUSTOFF, Tennessee
+AYANNA PRESSLEY, Massachusetts       TREY HOLLINGSWORTH, Indiana
+RITCHIE TORRES, New York             ANTHONY GONZALEZ, Ohio
+STEPHEN F. LYNCH, Massachusetts      JOHN ROSE, Tennessee
+ALMA ADAMS, North Carolina           BRYAN STEIL, Wisconsin
+RASHIDA TLAIB, Michigan              LANCE GOODEN, Texas
+MADELEINE DEAN, Pennsylvania         WILLIAM TIMMONS, South Carolina
+ALEXANDRIA OCASIO-CORTEZ, New York   VAN TAYLOR, Texas
+JESUS ``CHUY'' GARCIA, Illinois
+SYLVIA GARCIA, Texas
+NIKEMA WILLIAMS, Georgia
+JAKE AUCHINCLOSS, Massachusetts
+                   Charla Ouertatani, Staff Director
+              Subcommittee on Oversight and Investigations
+                        AL GREEN, Texas Chairman
+EMANUEL CLEAVER, Missouri            ANDY BARR, Kentucky, Ranking
+ALMA ADAMS, North Carolina               Member
+RASHIDA TLAIB, Michigan              BARRY LOUDERMILK, Georgia
+JESUS ``CHUY'' GARCIA, Illinois      ALEXANDER X. MOONEY, West Virginia
+SYLVIA GARCIA, Texas                 DAVID KUSTOFF, Tennessee
+NIKEMA WILLIAMS, Georgia             WILLIAM TIMMONS, South Carolina,
+                                         Vice Ranking Member
+                            C O N T E N T S
+                              ----------
+                                                                   Page
+Hearing held on:
+    February 24, 2021............................................     1
+Appendix:
+    February 24, 2021............................................    31
+                               WITNESSES
+                      Wednesday, February 24, 2021
+Cooper, Cheryl R., Analyst, Financial Economics Division,
+  Congressional Research Service.................................    12
+Darity, William, Jr., Professor of Public Policy, African and
+  African-American Studies, and Economics, Duke University; and
+  Director, Samuel DuBois Cook Center on Social Equity...........     5
+Espinoza, Frances, Executive Director, North Texas Fair Housing
+  Center.........................................................    10
+Perry, Andre M., Senior Fellow, Metropolitan Policy Program, the
+  Brookings Institution..........................................     9
+Rice, Lisa, President and CEO, National Fair Housing Alliance
+  (NFHA).........................................................     7
+                                APPENDIX
+Prepared statements:
+    Cooper, Cheryl R.............................................    32
+    Darity, William, Jr..........................................    44
+    Espinoza, Frances............................................    50
+    Perry, Andre M...............................................    52
+    Rice, Lisa...................................................    60
+              Additional Material Submitted for the Record
+Green, Hon. Al:
+    Written statement of the Appraisal Institute.................    77
+    Written statement of Engine..................................    79
+    ``Financial Resilience Challenges During the Pandemic,''
+      Federal Reserve Bank of Atlanta............................   112
+    ``Mortgage Prepayment, Race, and Monetary Policy,'' Federal
+      Reserve Bank of Boston.....................................   115
+    GAO study, ``Fair Lending, Access, and Retirement Security...   196
+                      HOW INVIDIOUS DISCRIMINATION
+                    WORKS AND HURTS: AN EXAMINATION
+                     OF LENDING DISCRIMINATION AND
+                     ITS LONG-TERM ECONOMIC IMPACTS
+                         ON BORROWERS OF COLOR
+                              ----------
+                      Wednesday, February 24, 2021
+             U.S. House of Representatives,
+                          Subcommittee on Oversight
+                                and Investigations,
+                           Committee on Financial Services,
+                                                   Washington, D.C.
+    The subcommittee met, pursuant to notice, at 3:05 p.m., via
+Webex, Hon. Al Green [chairman of the subcommittee] presiding.
+    Members present: Representatives Green, Cleaver, Adams,
+Tlaib, Garcia of Illinois, Williams of Georgia; Barr,
+Loudermilk, Mooney, and Taylor.
+    Ex officio present: Representative Waters.
+    Chairman Green. The Oversight and Investigations
+Subcommittee will come to order.
+    Without objection, the Chair is authorized to declare a
+recess of the subcommittee at any time. Also, without
+objection, members of the full Financial Services Committee who
+are not members of this subcommittee are authorized to
+participate in today's hearing.
+    As a reminder, I ask all Members to keep themselves muted
+when they are not being recognized by the Chair to minimize
+disturbances while Members are asking questions of our
+witnesses. The staff has been instructed not to mute Members,
+except when a Member is not being recognized by the Chair and
+there is inadvertent background noise.
+    Members are also reminded that all House rules relating to
+order and decorum apply to this remote hearing. And Members may
+only participate in only one remote proceeding at a time. If
+you are participating today, please keep your camera on, and if
+you choose to attend a different remote proceeding, please turn
+your camera off.
+    If Members wish to be recognized during the hearing, please
+identify yourself by name to facilitate recognition by the
+Chair.
+    The title of today's hearing is, ``How Invidious
+Discrimination Works and Hurts: An Examination of Lending
+Discrimination and Its Long-Term Economic Impacts on Borrowers
+of Color.''
+    We will now move to opening statements, and, in so doing, I
+will recognize myself for 4 minutes for an opening statement,
+with the understanding that the Chair of the Full Committee,
+Chairwoman Waters, will be present at some point, and will
+receive 1 minute of the additional time that we have for
+opening statements.
+    Friends, lie on a mortgage application to secure a loan,
+and you are likely to get caught and criminally prosecuted for
+mortgage fraud, with jail time as a consequence. Lie as a loan
+originator to deny a loan to a person of color, and you are not
+likely to get caught, and if you do get caught, a civil
+monetary fine is likely the consequence, and little more than
+the cost of doing business.
+    H.R. 166, the Fair Lending for All Act, provides the best
+tool available--testing--to catch, prosecute, and deter these
+predatory criminal lenders.
+    First, H.R. 166 would provide critical tools for detecting,
+ending, and sanctioning discrimination that would otherwise go
+undetected. It would deter the predatory lending that
+perpetuates race-based differences in wealth, asset
+accumulations, income, and financial security.
+    There is no enforcement tool--some things bear repeating--
+there is no enforcement tool with the utility of matched-pair
+testing. This is why H.R. 166 creates a dedicated Federal
+office within the Consumer Financial Protection Bureau (CFPB),
+which would be charged with conducting such testing.
+    Second, H.R. 166 would expand the Equal Credit Opportunity
+Act's (ECOA's) terms to expressly prohibit lending
+discrimination against LGBTQ+ persons.
+    Finally, H.R. 166 would establish criminal penalties for
+lenders and lending officials who engage in knowing and willful
+discrimination in violation of ECOA.
+    This concludes my opening statement.
+    At this time, without objection, I would like to place in
+the record the following documents: a GAO report dated February
+24, 2021; a document styled, ``Financial Resilience Challenges
+During the Pandemic,'' which is an article from the Atlanta
+Federal Reserve Bank examining the history of discriminatory
+policies that leave many Black and Hispanic households less
+resilient in the face of economic shock caused by the pandemic;
+and a document styled, ``Mortgage Prepayment, Race, and
+Monetary Policy,'' a working paper from the Boston Federal
+Reserve Bank which finds that Black and Hispanic borrowers pay
+more than 50-basis-points-higher interest rates than White
+borrowers in a large representative sample of loans insured by
+Fannie Mae and Freddie Mac.
+    Without objection, it is so ordered.
+    Having made my opening statement, it is now my honor to
+yield to the ranking member of the subcommittee, Mr. Barr, for
+5 minutes for his opening statement.
+    Mr. Barr. Thank you, Mr. Chairman. I appreciate you
+yielding, and I appreciate you holding today's hearing.
+    Thank you also to our witnesses for appearing today.
+    Discrimination in lending and other financial services is
+wrong, it is illegal, and it should not be tolerated. There is
+no room for compromise on that point.
+    While discrimination is illegal, that does not mean that
+there are not large pockets of the population who continue to
+be left behind by our banking system. It is important that we
+review and address those problems holistically. Our discussion
+on the economic impacts of inequities in the financial system
+should extend to all unbanked and underbanked groups.
+    Economic recovery is well under way in the wake of the
+COVID pandemic. Unfortunately, many Americans continue to
+struggle financially. The pandemic has exposed and exacerbated
+certain weaknesses in our financial system, highlighting how
+large portions of the population still have trouble accessing
+credit. Every American should have equal access to our
+financial system regardless of their race or gender, whether
+they live in urban or in rural America, or any other factor.
+    One area of particular concern to me is the access to
+capital and other financial services in rural areas. According
+to a recent FDIC study, people in rural areas are more likely
+than their urban and suburban counterparts to visit a bank
+branch in person to do their banking. Unfortunately, the number
+of bank branches across the country continues to decrease, and
+the pace of de novo bank formation has slowed significantly
+compared to pre-financial crisis levels.
+    As there has been a movement towards online banking, we
+know the challenges that rural Americans face with respect to
+rural broadband, and that is another impediment.
+    There were 181 de novo charters granted in 2007, but
+between 2010 and 2019, an average of fewer than 10 new banks
+opened per year. A recent Federal Reserve study shows that 51
+percent of the 3,114 counties in the United States saw net
+declines in the number of bank branches between 2012 and 2017.
+These declines in bank branches disproportionately hit rural
+communities. A total of 794 rural counties lost a combined
+1,553 bank branches over the 5-year period, a 14-percent
+decline.
+    The negative financial impacts on rural counties of branch
+closures are perpetuated by the continuing difficulties due to
+burdensome regulations and other roadblocks of de novo
+community bank formation.
+    The Federal Reserve report identified 44 counties
+considered deeply affected by trends in bank closures and
+consolidation, which it defines as counties that had 10 or
+fewer branches in 2012, and lost at least 50 percent of those
+branches by 2017. Eighty-nine percent of the deeply affected
+counties are rural counties, including Nicholas County in my
+district, and counties in the districts of several of my
+colleagues.
+    The current framework of Federal, State, and local laws
+prohibits discrimination of any kind in lending. Financial
+regulators have developed robust tools to ensure that regulated
+firms play by those rules. To the extent that firms are failing
+to comply with those rules, or that additional statutory
+authority is needed to combat discrimination, we must act.
+    However, we must also be cautious about imposing additional
+restrictions and regulations on lenders that do not accomplish
+a specific goal, and monitor potential impacts of our actions
+on the widespread availability of financing to creditworthy
+borrowers.
+    Emerging technology has allowed people previously outside
+the banking system to access financial services and has
+enhanced lenders' ability to tailor their products to the
+specific characteristics of the borrower based on race-blind
+metrics. Meaningful restrictions on risk-based pricing will do
+more harm than good, as creditworthy borrowers pay more for the
+capital they need.
+    Promoting across-the-board financial inclusion should be a
+top bipartisan priority for this subcommittee. I appreciate the
+opportunity to discuss ways to ensure that more people,
+including those currently underserved in the market, have easy,
+fair, and safe access to financial services.
+    I look forward to working with Chairman Green to ensure
+that discrimination does not occur in lending, and to promote
+policies that expand access to credit and lead to long-term
+economic growth. And, again, the warning is to not do away with
+risk-based pricing, which I think would curtail and restrict
+access to credit for creditworthy borrowers.
+    I look forward to hearing from our witnesses today, and I
+yield back the balance of my time.
+    Chairman Green. Thank you, Mr. Ranking Member. I appreciate
+your commentary, and I look forward to working with you.
+    I am told that the Chair of the Full Committee, Chairwoman
+Waters, has arrived, so I will now yield to Chairwoman Maxine
+Waters for 1 minute.
+    Chairwoman Waters. Thank you so very much. Good afternoon,
+Chairman Green.
+    The discriminatory lending practices of the 20th Century
+continue to affect minority communities long after they are
+repealed. The effects of decades of government-sanctioned
+discrimination continue to plague our housing and lending
+markets today, ultimately hindering the ability of households
+of color to build equity and accumulate wealth through
+homeownership relative to White households.
+    Since home equity is the primary source of wealth for most
+families, disparities in homeownership and home equity are key
+drivers of the racial wealth gap. So, I look forward to hearing
+from our witnesses today about what we can do to remedy the
+continuing economic effects of discrimination.
+    Thank you, and I yield back the balance of my time.
+    Chairman Green. Thank you, Madam Chairwoman.
+    Let me make an announcement, if I may. We will have
+additional votes, and the staff has indicated that we will make
+a great attempt to wait until the first vote has expired, or
+nearly expired. This way, we will be able to cast two votes and
+then come back to the hearing. My hope is that we will get this
+done as expeditiously as possible.
+    Today, I would like to welcome each of our witnesses. And I
+am pleased to introduce this panel: William Darity, Jr.,
+professor of public policy, African and African-American
+studies, and economics at Duke University, as well as the
+director of the Samuel DuBois Cook Center on Social Equity;
+Lisa Rice, president and CEO of the National Fair Housing
+Alliance; Andre Perry, senior fellow at the Metropolitan Policy
+Program at the Brookings Institution; Frances Espinoza,
+executive director of the North Texas Fair Housing Center; and
+Cheryl Cooper, an analyst for the Financial Economics Division
+at the Congressional Research Service.
+    Witnesses are reminded that your oral testimony will be
+limited to 5 minutes. You should be able to see a timer--and
+this timer should be on your screen--that will indicate how
+much time you have left, and a chime will go off at the end of
+your time. I would ask that you be mindful of the timer, and
+quickly wrap up your testimony if you hear the chime, so that
+we can be respectful of both the witnesses' and the committee
+members' time. And without objection, your written statements
+will be made a part of the record.
+    Once the witnesses finish their testimony, each Member will
+have 5 minutes to ask questions. And may I remind Members to
+please get your questions and answers in within that 5-minute
+time period. Let me restate this differently; you should not,
+at the end of your 5 minutes, have multiple questions to be
+answered. Please be mindful of the time of other Members in
+trying to get your time in within the 5 minutes.
+    Professor Darity, you are now recognized for 5 minutes to
+give an oral presentation of your testimony.
+ STATEMENT OF WILLIAM DARITY, JR., PROFESSOR OF PUBLIC POLICY,
+   AFRICAN AND AFRICAN-AMERICAN STUDIES, AND ECONOMICS, DUKE
+ UNIVERSITY; AND DIRECTOR, SAMUEL DUBOIS COOK CENTER ON SOCIAL
+                             EQUITY
+    Mr. Darity. Thank you, Chairman Green, Ranking Member Barr,
+and members of the subcommittee.
+    Discrimination in access to credit and the terms of credit
+is an important barrier to Black wealth accumulation.
+Elimination of this barrier, albeit wholly desirable, will not
+eliminate the gaping chasm in wealth between Black and White
+Americans.
+    The fundamental reason for Black-White differences in
+wealth is not high Black indebtedness. The fundamental reason
+is low Black asset holdings.
+    A Prosperity Now study in 2019 reported that median Black
+household liabilities were $30,800, while the median White
+household liabilities were more than twice as large, at
+$73,800. However, White households had a median level of assets
+valued in excess of $260,000, in contrast with the median Black
+households' assets, valued at $55,900.
+    The median Black household had 40 percent of the debt of
+the median White household but only 20 percent of the assets.
+Correspondingly, the ratio of assets to debts for Black
+households was 1.6, versus 2.8 for White households, both
+measured at the median.
+    The magnitude of the racial wealth gap, driven
+predominantly by a racial difference in asset ownership, is
+staggering. The 2019 Survey of Consumer Finances indicates that
+the Black-White wealth gap at the median was $164,000, and at
+the mean, it was substantially larger, at $840,900.
+    Assuming an average household size of 3 persons, the median
+gap per person was $52,500 and the mean gap was $280,000. These
+are conservative estimates of per-capita differentials because
+the average White household size is actually less than 3
+people.
+    Many observers treat the median gap as the target for
+closing the racial wealth gap in the United States. In this
+context, it may be more appropriate to set the more demanding
+target at the mean.
+    Wealth is so densely concentrated in the United States that
+90 percent of the wealth held by White Americans is in the
+possession of White households with a net worth above the White
+median. Close to 99 percent of White household wealth is held
+by those with a net worth above the national median,
+approximately $100,000. Twenty-five percent of White households
+have a net worth in excessive of $1 million, in contrast with
+only 4 percent of Black households.
+    The limitations of an exclusive focus on debt reduction
+rather than asset building comes into stark relief when
+considering a policy of student loan relief. Whether one
+eliminates student debt by trying to erase the difference at
+the median or the mean, there will be at best an incremental
+effect on the racial wealth differential.
+    The net reduction in the gap will be $1,856 after we adjust
+for the enrollment rates that are different between the two
+communities. And, therefore, the reduction amounts to only 3
+percent of the total median gap of $52,500. It amounts to less
+than 1 percent at the mean gap of $280,000.
+    Indeed, the key to understanding the sources of the racial
+wealth gap is government policy that supported the
+underdevelopment of asset accumulation in the Black community.
+    In January 1865, General William T. Sherman, after
+Secretary of War Edwin Stanton and he held a consultation with
+a group of Black leaders in Savannah, Georgia, issued Special
+Order No. 15. His directive assigned 5.3 million acres of land,
+stretching from the Sea Islands of South Carolina to the
+portion of northern Florida bordered by the St. Johns River, as
+a site for settlement and property for the newly emancipated.
+    Here was an intended preliminary phase of a substantial
+land reform on behalf of the formerly enslaved that would have
+amounted to at least 40 million acres of land for the 4 million
+persons released from bondage.
+    Ultimately, only 40,000 persons settled on 400,000 acres,
+but even that small allotment was lost by the end of the year.
+Andrew Johnson, Lincoln's successor, ended the land allocation
+program and restored the properties to the former slaveholders.
+The promise of 40-acre land grants remained unfulfilled.
+    Simultaneously, the Federal Government, under the auspices
+of the Homestead Act of 1862, was distributing 160-acre tracts
+of lands to upwards of 1.5 million White families in the
+western territories. This huge asset-building policy resulted
+in benefits carrying over to a conservative estimate of 45
+million White living descendants of Homestead Act patents.
+    The racial wealth gap in the United States originates with
+the failure to give the formerly enslaved 40 acres, while White
+Americans, including new immigrants, were given 160 acres of
+land.
+    Conditions worsened with wave upon wave of White massacres
+that took place between the end of the Civil War and World War
+II. In the Red Summer of 1919, upwards of 35 White terrorist
+actions took place across the country in locations ranging from
+Chicago, Illinois; to Omaha, Nebraska; to Washington, D.C.; to
+Elaine, Arkansas.
+    The most famous of these--
+    Chairman Green. Professor, I am going to have to ask that
+you summarize quickly, please.
+    Mr. Darity. Okay--took place in Tulsa, Oklahoma, in 1921.
+    I would add that the destruction of Black property and the
+appropriation of Black property that was lost in that period of
+time was compounded by the policies in the 20th Century that
+discriminatorily provided support for asset building in the
+form of homeownership.
+    Indeed, the effects of these disparities transmitted across
+generations resulted in the contemporary Black-White wealth
+gap. And the disproportionate growth in Black debt matters in
+explaining America's racial wealth gap, but the
+disproportionate deprivation of Black assets matters far more.
+    By all means, we should take steps to make the credit
+market more racially equitable, but if our goal is to eliminate
+the Black-White difference in wealth, the focus must be placed
+on building Black assets to a level consistent with White asset
+ownership.
+    [The prepared statement of Mr. Darity can be found on page
+44 of the appendix.]
+    Chairman Green. Thank you, Professor.
+    Ms. Rice, you are now recognized for 5 minutes to give your
+oral presentation.
+   STATEMENT OF LISA RICE, PRESIDENT AND CEO, NATIONAL FAIR
+                    HOUSING ALLIANCE (NFHA)
+    Ms. Rice. Chairwoman Waters, Subcommittee Chair Green,
+Subcommittee Ranking Member Barr, and other members of the
+subcommittee, I want to first thank you for inviting me to talk
+about this really important issue.
+    Housing and lending discrimination have been a part of the
+United States since its inception, and have helped create the
+racial wealth and homeownership gaps that Professor Darity has
+just spoken about.
+    Due to government-sanctioned discriminatory policies as
+well as private-market practices, underserved groups have been
+systemically excluded from wealth-building opportunities such
+as homeownership.
+    These groups still experience high levels of
+discrimination. There are over 4 million instances of housing
+discrimination each year. Redlining, which persists in various
+forms today, real estate sales discrimination, appraisal bias,
+lending discrimination, and tech bias are significant barriers
+that keep the dream of homeownership from becoming a reality
+for many people, and contribute to the racial wealth gap.
+    Moreover, structural barriers, such as the dual credit
+market, segregation, and restrictive zoning ordinances, create
+systemic impediments which significantly prohibit the ability
+of people of color to access fair housing and fair lending
+opportunities and perpetuates the racial wealth and
+homeownership gaps.
+    The segregation of people based on race, coupled with the
+segregation of resources, drives many of the disparities in
+health, education, wealth, and many other areas. And these
+structural barriers, these structural inequities are a reason
+that Blacks, Latinos, and Native Americans are contracting and
+dying from the COVID virus at disproportionately higher rates
+than their White counterparts.
+    Segregation is also a driver of the racial homeownership
+gaps. The homeownership rate for Black Americans, for example,
+is where it was when the Fair Housing Act was passed in 1968.
+And the homeownership gap between Blacks and Whites is as wide
+today as it was in 1890.
+    There are many ways that invidious discrimination harms
+communities. For example, many of the technologies used in the
+housing and financial services space are biased, and
+discriminate against consumers of color. Tenant screening
+selection tools, automated underwriting systems, credit scoring
+models, risk-based pricing systems, and digital marketing
+platforms all have discriminatory outcomes and lock people out
+of housing opportunities.
+    Too many people experience discrimination when they seek to
+access housing and housing-related opportunities. Newsday
+recently completed an in-depth testing project on Long Island,
+New York, in which they found that 49 percent of African
+Americans, 39 percent of Hispanics, and 19 percent of Asian
+Americans experienced discrimination, including racial
+steering.
+    Real estate discrimination can take on myriad forms, and
+our recent lawsuit against Redfin illustrates that: NFHA and
+nine of our member organizations conducted a comprehensive
+investigation of Redfin, one of the nation's largest real
+estate companies. The investigation uncovered disturbing
+practices that suggested really wide-scale discrimination and
+modern-day technology-based real estate redlining. The groups
+found that Redfin offered its best available service at
+significantly higher rates in extremely White communities, and
+offered no service for homes in communities of color at much
+greater rates than in predominantly White areas.
+    Appraisal bias and lending discrimination are also still
+too common. Analysis of Home Mortgage Disclosure Act (HMDA)
+data revealed that communities of color are still being
+redlined by mainstream financial institutions.
+    One way to overcome discrimination is to increase funds for
+testing programs. And the Supreme Court has stated that testing
+is one of the best mechanisms for ferreting out discrimination.
+    This is why the National Fair Housing Alliance supports the
+Fair Lending for All Act, which would help address longstanding
+barriers to fair and equal credit by adding sexual orientation
+and gender identity protections to the Equal Credit Opportunity
+Act, but would also make it illegal to discriminate against
+people based on geographical location, and re-empower the
+Consumer Financial Protection Bureau (CFPB) to address fair-
+lending issues and to test for fair-lending violations.
+    And I thank you.
+    [The prepared statement of Ms. Rice can be found on page 60
+of the appendix.]
+    Chairman Green. Thank you very much, Ms. Rice, for your
+testimony.
+    Mr. Perry, you are now recognized for 5 minutes to give an
+oral presentation of your testimony.
+STATEMENT OF ANDRE M. PERRY, SENIOR FELLOW, METROPOLITAN POLICY
+               PROGRAM, THE BROOKINGS INSTITUTION
+    Mr. Perry. Chairwoman Waters, Chairman Green, Ranking
+Member Barr, Vice Ranking Member Timmons, thank you for
+inviting me to testify today on this extremely important issue
+that affects millions of people across the country.
+    ``We are here today because we are tired. We are tired of
+paying more for less.''
+    Dr. Martin Luther King, Jr., said those words in 1966, to
+35,000 people in Chicago's Soldier Field, as part of the
+Chicago Freedom Movement, also known as the Chicago Open
+Housing Movement. Dr. King went on to relay housing price
+differences that resulted in Black people paying higher rents
+in Black-majority communities for worse housing than their
+White counterparts.
+    ``Now is the time to make real the promises of democracy,''
+Dr. King declared. ``Now is the time to open the doors of
+opportunity to all of God's children.''
+    More than half a century later, now is still the time.
+According to the most recent Census figures, the Black
+homeownership rate in America is 46 percent, almost the exact
+same level that it was when Dr. King spoke in 1966. This is
+compared to the White homeownership rate, which is roughly 74
+percent.
+    Even as overall U.S. homeownership has grown over the last
+2 decades, there has been a catastrophic loss of homeownership
+in key cities that have large shares of Black residents.
+    When people in Black neighborhoods do own homes, we accrue
+less wealth. Homeowners in disproportionately Black and Latino
+neighborhoods are gaining wealth at about half the speed of
+homeowners in predominantly White neighborhoods.
+    One of the reasons is that these homes are devalued. In the
+2018 Brookings report, ``The Devaluation of Assets in Black
+Neighborhoods,'' Jonathan Rothwell, David Harshbarger, and I
+found that, even after accounting for structural
+characteristics such as square footage, age, and number of
+bedrooms, as well as neighborhood characteristics such as crime
+and school quality, homes in Black neighborhoods were valued,
+on average, $48,000 less than they would have been if the
+residents of the neighborhood were mostly White. That is a
+cumulative loss of $156 billion nationwide.
+    And we witness viral news stories revealing how appraisers
+value Black and White homeowners differently. In Jacksonville,
+Florida, a mixed-race family looking to sell their home in a
+predominantly White neighborhood received an original appraisal
+of $330,000. After presenting a White owner, a second appraisal
+came in $135,000 higher.
+    A similar incident occurred in Denver. Again, after the
+family removed indicators of Blackness, the home increased in
+value by $145,000. In San Francisco, a second appraisal
+increased its value by $500,000.
+    ``We are here today because we are tired. We are tired of
+paying more for less.''
+    These seemingly individual acts of racism are part and
+parcel of a structural problem. The housing market is
+structured to disproportionately exclude Black and Brown
+households.
+    For instance, our zoning codes and building practices are
+streamlined to deliver large, single-family homes. My
+colleague, Tracy Loh, and I showed in a recent study that, for
+decades, the very largest houses--four or more bedrooms--have
+grown as a share of all housing inventory, while smaller homes,
+which are more affordable for low-wealth families, have
+stagnated or declined.
+    Over 6 million Black and Brown millennials would be
+considered mortgage-ready if there were any attainable homes
+for sale in prime locations.
+    Black buyers are subjected to racist steering practices
+when looking for a home. When applying for a loan, Black buyers
+are perceived as higher-risk, leading to more denials and
+higher interest rates.
+    Devaluation limits the amount of gain from refinancing. As
+we have heard, bad appraisals also rob families of wealth.
+    And all of these housing industry actors blame each other
+for the problem.
+    ``We are here today because we are tired. We are tired of
+paying more for less.''
+    We made individual racism in the housing market illegal,
+and when it finds its way back in, we make a headline. But
+structural racism rigs the game from the start. The root cause
+for these negative trends is structural racism, which is
+systemic. To unlock the potential of Black neighborhoods and
+their residents, systemic racism must be pulled at its roots,
+rather than trimmed neatly, only to grow again.
+    Thank you for my time.
+    [The prepared statement of Mr. Perry can be found on page
+52 of the appendix.]
+    Chairman Green. Thank you, Mr. Perry.
+    Ms. Espinoza, you are now recognized for 5 minutes to give
+an oral presentation of your testimony.
+STATEMENT OF FRANCES ESPINOZA, EXECUTIVE DIRECTOR, NORTH TEXAS
+                      FAIR HOUSING CENTER
+    Ms. Espinoza. Thank you, Chairman Green, Ranking Member
+Barr, and subcommittee members.
+    The North Texas Fair Housing Center is a nonprofit
+organization that provides fair-housing services to residents
+of north Texas. Our services consist of fair-housing
+counseling, intake, and investigation of housing discrimination
+complaints, and fair-housing education.
+    It has been 50 years since the Federal Fair Housing Act
+banned racial discrimination in lending, yet African-American
+and Latino applicants continue to be routinely denied
+conventional mortgage loans at rates far higher than their
+White counterparts.
+    In 2011, the North Texas Fair Housing Center did an
+analysis of Home Mortgage Disclosure Act data and found that
+African-American and Latino mortgage applicants were denied
+conventional mortgages at much higher rates than Whites in the
+Dallas-Fort Worth market.
+    For example, African-American mortgage applicants to Wells
+Fargo Bank were 57 percent less likely to get a home purchase
+loan when compared to White applicants. Latino mortgage
+applicants to Chase Bank were 64 percent less likely to get a
+loan than were White applicants. Home Mortgage Disclosure Act
+data from 2015 and 2016 confirmed the same pattern.
+    One of the most valuable tools we use to investigate
+housing discrimination is testing. Testing allows us to compare
+how applicants of color are treated as compared to their White
+counterparts.
+    As part of our enforcement program, we use the results of
+testing as evidence in housing discrimination complaints. We
+file both administrative complaints with the U.S. Department of
+Housing and Urban Development and lawsuits in Federal court.
+    The most common form of testing we do is rental testing. In
+2011, we conducted rental testing which showed that African
+Americans who were otherwise qualified encountered
+discrimination in 37 percent of their housing searches. This
+means that African Americans face discrimination in two out of
+every five housing searches.
+    The testing also showed that Latinos experienced
+discrimination in 33 percent of their housing searches, or at
+least once in every three housing searches.
+    In our most recent enforcement initiative in 2019, we
+conducted tests to measure how veterans with Housing Choice
+Vouchers were treated in the housing market in Dallas, Texas.
+We conducted a total of 35 tests, and the results of 32 of them
+showed evidence of discrimination. We filed housing
+discrimination administrative complaints for all 32 tests.
+    The next most common form of testing that we do is sales
+testing. These tests measure how real estate agents treat
+buyers of color as compared to their White counterparts. In
+2018, we conducted sales tests which showed that African-
+American testers are still being steered, based on their race,
+to neighborhoods that are predominantly African-American and
+steered away from neighborhoods that are majority-White.
+    Unlike rental and sales testing, mortgage lending testing
+is very resource-intensive. One of the challenges is the
+significant amount of time that testers must devote to each
+test. Unlike rental tests, which can be completed rather
+quickly, lending interviews involve several complex financial
+components, even at the pre-application stage. Testers must
+also be knowledgeable about the entire lending process.
+    Rental, sales, and lending testing can all be used to
+uncover practices that lead to segregation of neighborhoods.
+However, there is a particular need to devote resources to
+lending testing because it is so resource-intensive.
+    There is also a need for enforcement of complaints based on
+lending testing evidence. Because lending testing cases are
+more complex, they sometimes languish in the administrative
+process. There is a need for a strong entity with an expertise
+in lending discrimination that can take the testing evidence
+generated by local fair-housing organizations and move forward
+with enforcement that will thwart illegal practices.
+    Thank you for inviting me. My statement is complete.
+    [The prepared statement of Ms. Espinoza can be found on
+page 50 of the appendix.]
+    Chairman Green. Thank you very much, Ms. Espinoza.
+    Ms. Cooper, you are now recognized for 5 minutes to give an
+oral presentation of your testimony.
+  STATEMENT OF CHERYL R. COOPER, ANALYST, FINANCIAL ECONOMICS
+            DIVISION, CONGRESSIONAL RESEARCH SERVICE
+    Ms. Cooper. Chairman Green, Ranking Member Barr, and
+members of the subcommittee, thank you for the opportunity to
+testify today.
+    My name is Cheryl Cooper, and I am an analyst in financial
+economics at the Congressional Research Service (CRS), focusing
+on consumer finance markets and policy issues. For those who
+might be unfamiliar with CRS, our role is to provide objective,
+nonpartisan research and analysis to Congress.
+    Any arguments presented in my testimony are for the
+purposes of informing Congress and not to advocate for a
+particular policy outcome.
+    My testimony today will focus on disparities in access to
+financial products and services, including racial, ethnic,
+income, age, and geographic disparities. In particular, I will
+focus on discussing disparities in access to banking services
+and disparities in inclusion in the credit reporting system.
+These areas are generally considered foundational for
+households to successfully manage their financial affairs and
+to graduate to wealth-building activities in the future, like
+homeownership.
+    Consumers often rely on family or community connections to
+get their first bank account, establish a credit history, and
+gain access to affordable credit. However, research suggests
+that disparities in family wealth or in community relationships
+with financial institutions can potentially persist across
+generations.
+    A factor that may be influencing racial disparities is the
+intergenerational effects of discrimination--for example,
+historical mortgage lending practices, redlining practices.
+    Moreover, violations in fair-lending laws can cause harm to
+consumers who do not get access to financial services. This is
+important because safe and affordable financial services are an
+important tool for most American households to help them avoid
+financial hardship and build assets over the course of their
+lives.
+    According to the FDIC's 2019 survey, over 5 percent of
+households in the United States were unbanked, meaning that
+these households did not have a bank account. In addition, over
+17 percent of households used a nonbank financial transaction
+service, like a money order, a check-cashing, or a bill payment
+service.
+    These households are disproportionately of a racial or
+ethnic minority and tend to be lower-income, younger, and have
+less formal education. Urban and rural households are more
+likely to be unbanked, compared to suburban households.
+    Unbanked households report that they do not have a bank
+account because they do not have enough money, they don't trust
+banks, they have privacy concerns, and they want to avoid high
+and unpredictable bank fees.
+    These disparities in access are significant because some
+research suggests the importance of emergency savings and
+affordable payment transactions. Also, developing a
+relationship with a bank can sometimes lead to access to other
+financial products, helping young consumers develop a credit
+history.
+    A limited credit history may serve as a barrier to
+achieving affordable credit, yet consumers also can't develop a
+credit history without access to credit products. This chicken-
+and-egg situation can make it difficult for some people to
+enter the credit reporting system.
+    According to the CFPB, credit scores can't be generated for
+approximately 20 percent of the U.S. population due to their
+limited credit histories. Limited credit history is correlated
+with age, income, race, and ethnicity. Many of these consumers
+are young. For example, 40 percent of credit invisibles are
+under 25-years-old. These consumers are disproportionately
+Black or Latino and live in lower-income or rural
+neighborhoods.
+    Most young adults transition into the credit reporting
+system in their early twenties. Young adults in lower-income
+and rural neighborhoods tend to make the transition to credit
+visibility at older ages than young adults in higher-income
+areas. And, notably, in lower-income communities, it is less
+common to enter the credit reporting system through what is
+called, ``piggybacking,'' or becoming a joint account holder or
+authorized user on another person's account, such as a parent's
+account.
+    The disparities in inclusion to the credit reporting system
+are significant because it is generally a precursor to gain
+access to affordable credit and eventually to homeownership.
+    Thank you for your time, and I am happy to answer any
+questions that you have.
+    [The prepared statement of Ms. Cooper can be found on page
+32 of the appendix.]
+    Chairman Green. Thank you very much, Ms. Cooper.
+    The Chair will now recognize Members for questions.
+    The gentleman from Missouri, Mr. Cleaver, who is also the
+Chair of our Subcommittee on Housing, Community Development,
+and Insurance, is now recognized for 5 minutes.
+    Mr. Cleaver. Thank you, Mr. Chairman. I appreciate this
+opportunity. And I think this is exactly the kind of hearing
+that we need, so thank you.
+    Where I would like to center my discussion, my questions,
+is on the fact that the current Federal public policies operate
+to perpetuate or expand the racial wealth gap.
+    So, I would like to ask any of the panelists, are there
+Federal public policies that actually contribute to the
+exclusion of African Americans, Brown people, people of color?
+And what impact does it have on the wealth gap? I am talking
+about Federal policies.
+    Mr. Perry. I will take a stab at that.
+    One of the things I am noticing is that current legislation
+does not address wealth in this country. We measure almost
+everything by income. And by doing so, you essentially abdicate
+responsibilities of dealing with the structures that created
+the gaps in the first place. In many different systems--
+housing, education, and other areas--if you don't address the
+wealth gap, you essentially gloss over the problem.
+    In addition, we also have a race and space problem. Because
+racist policies have followed Black people, we see
+discrimination in rural communities, in urban communities, in
+suburbs. And, for my take, it is hard to not have a race and
+place approach to change.
+    And so, for me, it is not necessarily what the Federal
+Government is doing; it is what the Federal Government is not
+doing, not measuring, not testing. Because we have ample data
+that shows the impact of our policies, but what we have not
+done is really get at the reasons, the causes for these
+disparities.
+    Mr. Cleaver. Yes. I think you are making a case for the
+increase of the minimum wage, and I think that is going to--
+that is a debate we are having right now.
+    Ms. Rice. Congressman, if I can add to that, too, there are
+a lot of policies that perpetuate racial disparity. So, in
+terms of Federal policies: the recently promulgated cap rule
+that was promulgated by the Federal Housing Finance Agency; the
+GSE LLPA structure, the loan-level pricing adjustment
+structure, discriminates against communities of color; the
+current Affirmatively Furthering Fair Housing rule that was
+promulgated several months ago by the Department of Housing and
+Urban Development, which really eviscerates our civil rights
+rules; and the current Disparate Impact rule that was
+promulgated by the Department of Housing and Urban Development
+several months ago, which also eviscerates a major civil rights
+tool that we have for addressing discriminatory policies.
+    So, there are many, many Federal policies that right now,
+work to perpetuate discriminatory outcomes.
+    Mr. Cleaver. Thank you.
+    I think my time is running down, so I appreciate both you
+and Mr. Perry for your comments. Thank you.
+    Chairman Green. The gentleman yields back.
+    The Chair now recognizes the ranking member of the
+subcommittee, Mr. Barr, for 5 minutes.
+    Mr. Barr. Thank you, Mr. Chairman.
+    Last year, I introduced H.R. 8410, the Promoting Access to
+Capital in Underbanked Communities Act, which is designed to
+spur de novo bank formation and promote banking services in
+underserved areas.
+    The bill would ease the up-front burden of opening a bank,
+and provide incentives for banks to open and operate in rural
+areas. The bill is intended to address the problem of deeply
+affected counties that I referenced in my opening statement,
+which have lost a large portion of their bank branches.
+    Ms. Cooper, how have bank closures in rural communities
+impacted customers living in those areas? What long-term issues
+will arise if rural communities continue to face an
+unprecedented number of bank closures? And we anticipate that,
+given the trend of bank consolidation. Could a bill like the
+one I just referenced, designed to promote more banking
+activity in rural and otherwise underserved areas, help with
+those problems?
+    Ms. Cooper. Thank you so much for your question,
+Congressman.
+    As I mentioned in my oral statement, there are geographic
+disparities that exist in terms of access to financial
+products. And as you mentioned and I mentioned, research
+suggests that, for consumers living in rural areas, these
+consumers may be living farther from bank branches or also may
+be less likely to have access to high-speed internet, and both
+of these factors could possibly make it more difficult for
+consumers to access quality banking services.
+    We at CRS don't advocate for a particular policy outcome,
+but I would be happy, after this hearing, to look at the bill
+with some of my CRS colleagues.
+    Also, in general, around trends in terms of consolidation
+in the banking industry, this has been happening for decades.
+We have seen a reduction in community banks for the past few
+decades, particularly a reduction in bank branch openings in
+the past decade.
+    And there are a lot of different factors that are leading
+to this trend. In general, economists would say that you are
+starting to see economies of scale, which basically means that
+big banks are becoming more profitable than smaller banks to
+operate. And that is probably part of the reason why we are
+seeing this consolidation in the banking industry.
+    Mr. Barr. Ms. Cooper, I did see, though--and I respect that
+CRS doesn't make policy endorsements, but I did see in your
+testimony, in the, ``Possible Policy Responses'' section,
+``Bank Regulation Changes,'' that you mentioned the Community
+Reinvestment Act (CRA). And I think, for our friends and
+neighbors in underserved parts of our country in both urban and
+rural areas, this is something that I think would be welcome,
+to give banks more credit for bank account outreach activities
+in those underserved areas.
+    Do you have any specifics on that? We saw an effort by the
+OCC, and Lael Brainard at the Federal Reserve, to update the
+CRA, but how can we give incumbent banks and new banks in these
+underserved areas credit for originating loans under the CRA?
+    Ms. Cooper. Yes. Thank you so much for that question.
+    You are right, one of the things that I mentioned in terms
+of possible policy options for expanding access to credit was
+possible proposed changes to bank regulation. So, this is one
+of the areas where we see proposals on this.
+    For example, I know the bank regulators have stated that
+they were considering changes to the Community Reinvestment Act
+to give banks more credit for bank account outreach activities
+in underserved communities. But I think there are trade-offs to
+these type of policies.
+    The positive, as you were saying, is that it can encourage
+bank outreach and connect more consumers to banks. But I think
+the flip side to it is, also, it could give credit for what
+some may consider effectively marketing, rather than the
+intention of the law, which was to encourage lending in
+underserved communities.
+    Mr. Barr. Thank you.
+    Ms. Cooper. This is an area where there--
+    Mr. Barr. Thank you.
+    And just reclaiming my time, in the final time I have, how
+is compliance under the Equal Credit Opportunity Act currently
+tested? And is there any indication that the testing regime
+needs to be strengthened? Or do regulators currently have
+enough authority to enforce that law?
+    And that is again to you, Ms. Cooper.
+    Ms. Cooper. Yes. Thank you so much for that question. And
+we are running out of time, so let me get back to you with
+that. I am happy to answer that question with one of my CRS
+colleagues.
+    Mr. Barr. Mr. Chairman, my time has expired, and I know
+that is a subject or a topic that is part of your legislation,
+so I invite any or all of the witnesses to comment on that and
+how we can make sure the ECOA is tested.
+    With that, I yield back.
+    Chairman Green. The gentleman's time has expired. And the
+witness may respond in writing to the gentleman's question.
+    The Chair will now recognize Ms. Adams, the gentlelady from
+North Carolina.
+    Ms. Adams. Thank you, Mr. Chairman.
+    And thank you to our witnesses for your testimony today.
+    Mr. Darity and Mr. Perry, you have both have done extensive
+research and writing on economic and racial inequity in the
+United States. In today's hearing, we focus primarily on how
+lending discrimination harms individual borrowers of color, but
+I am curious to hear your thoughts on how the same dynamics,
+primarily racism, also impact institutions of color, such as
+Historically Black Colleges and Universities (HBCUs).
+    In December of 2019, a study in the Journal of Financial
+Economics found that HBCUs pay higher underwriting fees to
+issue tax-exempt bonds compared with similar non-HBCUs,
+apparently reflecting higher costs of finding willing buyers.
+The effect is 3 times larger in the Deep South, where racial
+animus remains the most severe.
+    For example, identical fee differences are observed between
+HBCUs and non-HBCUs with triple-A ratings or when insured by
+the same company, even before the 2007-2009 financial crisis.
+HBCU-issued bonds are also more expensive to trade in secondary
+markets and, when they do, sit in inventory longer.
+    So are you familiar with this type of institutional lending
+discrimination? And what policy steps can we take to collect
+more data on the prevalence of this issue and ultimately to
+eradicate this type of harmful discrimination in lending for
+institutions that have been historically underserved and
+undervalued?
+    Mr. Darity. It is my impression that this is a serious
+problem, but I think it is compounded or generated by the fact
+that Historically Black Colleges and Universities have such low
+endowment levels that they are then pressured to go into the
+credit market, a discriminatory credit market, to gain
+resources.
+    Another way to think about improving their circumstances is
+something that I think is applicable to individual households
+as well, which is, we need to build the wealth position of
+those institutions in such a way that they don't have the same
+type of pressure to seek predatory lending options to try to
+maintain their operations.
+    And we should think about how we could go about building
+the endowments of Historically Black Colleges and Universities
+so that they are comparable to the endowment levels that exist
+for White institutions in the United States. That is where we
+have a very glaring and dramatic difference.
+    In addition, of course, I think that we do have to confront
+these kinds of discriminatory practices. And it may be
+necessary for the Federal Government to take the step of
+providing public banking services in competition with the
+private sector to offset the types of behavior that we are
+observing that the private sector is undertaking.
+    And one final comment in this context. I said that this
+parallels the conditions that we observe for households,
+because the reason why households are pushed into trying to
+seek high levels of credit under very, very difficult
+circumstances, discriminatory circumstances, is, again, because
+their initial levels of wealth are so low. So, again, I would
+say, we have to think about asset building in addition to
+trying to improve credit market conditions.
+    Ms. Adams. Thank you, sir.
+    Mr. Perry, did you want to comment?
+    Mr. Perry. I think Mr. Darity said everything I was going
+to say. In a nutshell, I think Black institutions are treated
+like Black people. And you have school boards and universities
+that, because of their wealth position, have to take
+essentially subprime market products, for all of the reasons
+that Mr. Darity indicated.
+    But I will just leave it there.
+    Ms. Adams. Okay. Thank you, sir.
+    Let me move on quickly. Ms. Rice, Ms. Espinoza, just how
+pervasive is lending discrimination in the United States? Is it
+widescale, or is it just a small problem?
+    Ms. Rice?
+    Ms. Rice. Sure. I am happy to answer that.
+    Yes, it is very widescale, especially when you consider,
+Congresswoman Adams, that almost all of the technologies that
+we use in the lending space--automated underwriting systems,
+risk-based pricing systems and credit scoring systems--
+discriminate against consumers of color and other underserved
+groups.
+    So the discrimination is very prevalent, which is why we
+have to really work to de-bias all of these technologies that
+we are using in the housing and financial services space.
+    Ms. Adams. Okay. Is the answer--
+    Chairman Green. The gentlelady's time has expired.
+    Ms. Adams. Okay. Thank you very much, and, Mr. Chairman, I
+yield back.
+    Chairman Green. The gentlelady's question can be answered
+in writing.
+    Ms. Adams. Great. Thank you.
+    Chairman Green. The gentleman from Georgia, Mr. Loudermilk,
+is now recognized for 5 minutes.
+    Mr. Loudermilk. Thank you, Mr. Chairman.
+    As I was preparing for this hearing, I was trying to think
+of ways that we as policymakers can help the minority
+communities have more access to financial services and wealth
+building. One thing that immediately came to mind, which is
+something that I have been working on for a long time, is
+fintech.
+    In recent years, developments in the financial technology
+arena have made enormous strides toward giving minority
+consumers access to the banking system. Let me just go through
+a few of these.
+    The first is mobile banking. It makes it easier than ever
+to open a checking account without having to go into a bank
+branch.
+    The second is online lending. It uses fintech platforms and
+even incorporates artificial intelligence in underwriting and
+has expanded access to credit to millions of consumers who were
+credit-invisible and didn't qualify for a traditional bank
+loan.
+    Prepaid cards are another. They have enabled consumers who
+do not have credit or debit cards to access e-commerce.
+    And the list goes on and on.
+    And it is not just in consumer finance. A recent study by
+New York University showed that fintech companies are by far
+the number-one source of Paycheck Protection Program (PPP)
+loans for Black-owned small businesses, exceeding Minority
+Depository Institutions (MDIs) and Community Development
+Financial Institutions (CDFIs). Fintechs have also been the
+number-one source of PPP lending to Hispanic-owned businesses.
+    As a result of this, I offered an amendment at this
+committee's markup of the stimulus bill that would allow
+fintech companies to participate in the State Small Business
+Credit Initiative (SSBCI). Unfortunately, it was rejected by
+the Majority. I would just say, if my colleagues are interested
+in improving access to financial services for minority
+consumers, I would suggest embracing fintech instead of
+opposing it.
+    Ms. Cooper, in your testimony, you said that new technology
+can provide more affordable financial products to consumers.
+Can you discuss how fintech has expanded access to credit for
+minority consumers?
+    Ms. Cooper. Thank you so much for that question,
+Congressman.
+    So, yes, as you just stated, I think new technology could
+potentially provide more affordable financial products to
+underserved communities, but it also could introduce consumer
+protection risks as well.
+    And this is similar to what you were saying. One example of
+this, for example, would be internet-based or mobile financial
+products, which, for example, could lower the cost to provide
+payment services or other types of products, but these types of
+products could have, for example, cybersecurity or privacy
+risks as well.
+    So, I think there is always a trade-off there when you are
+thinking about this stuff.
+    Mr. Loudermilk. Thank you for that, and I appreciate it.
+    On another note, because of these developments and what you
+have laid out, data security and data privacy laws, I think,
+need to be updated, and we need a uniform national standard. Do
+you have any thoughts on that?
+    Ms. Cooper. No. In general, I would say that CRS does not
+advocate for any particular policy outcome. And I personally am
+not the one at CRS who covers those issues, but I would be
+happy to put you in touch with the CRS analyst who does, to
+work with you and your staffers.
+    Mr. Loudermilk. I appreciate that.
+    And as we continue to hopefully promote fintech, since it
+is very beneficial in underserved areas of our nation and
+underserved demographics, we do have to address some
+limitations, which could be the data security, because we are
+looking at more than 50 different standards with which we have
+to deal.
+    So, I appreciate the time here, Mr. Chairman, and I yield
+back.
+    Chairman Green. The gentleman yields back.
+    The Chair now recognizes the gentlelady from Michigan, Ms.
+Tlaib, for 5 minutes.
+    Ms. Tlaib. Thank you, Mr. Chairman.
+    And thank you all so much for being with us.
+    As we all know, despite decades of civil rights laws on the
+books, Black homeownership is plunging across the nation, with
+the worst losses happening right here in Michigan. Detroit has
+seen a dramatic shift from a city of homeowners where Black
+family members could build intergenerational wealth to, now, a
+city of renters. And the predatory lenders on Wall Street who
+crashed the economy in 2007-2008, as we know, got bailed out,
+while many of my residents got foreclosed on by the thousands.
+    Redlining never ended in Detroit. In 2019, in a city of
+more than 650,000 people, there were only 1,535 mortgages
+issued. And that is up from 2012, when we only had 244
+mortgages that were reported. When mortgages are issued in
+Detroit, they go towards those who are White borrowers, who are
+a small minority of the population.
+    And so, unwillingness of banks to lend in Detroit and other
+majority-Black communities pushes our residents into riskier
+arrangements, like land contracts, which offer opportunities
+but also fewer protections and have been abused by predatory
+sellers.
+    Ms. Rice, we know banks aren't drawing red lines on a map
+anymore but that discrimination still persists. Can you
+describe some of the tactics and technology that lenders use
+now to perpetuate racial redlining?
+    Ms. Rice. Sure. Thank you so much for that question, and it
+is a critically important issue.
+    I am from Toledo, Ohio, and so I am very familiar with the
+Detroit market and other markets like it. One major problem
+that we have in cities like Detroit is that a lot of the
+housing stock is very affordable and is priced under $100,000.
+And, for a variety of reasons, it is extremely difficult in
+today's marketplace for consumers to access mortgage credit in
+the financial mainstream when you are trying to get what we
+call a smaller-dollar loan.
+    The qualified mortgage rule, coupled with the LLPAs from
+the GSEs, coupled with other Federal policies, really restrict
+credit access for more affordable loans. So, that is a major
+problem.
+    The other problem is the industry's overreliance on credit
+scores. Back when I was underwriting mortgages years ago, two
+of the key things that I relied on to determine a borrower's
+creditworthiness were: What are your current housing payments?
+Have you been paying your rent on time? And if you have been
+paying your current housing bill on time, you are a very good
+candidate. And, also, what is your housing payment shock? So,
+is the new mortgage that you are going to be paying appreciably
+different from the housing payment that you have been used to
+making? And if you have been paying your rent on time, and if
+there is really no housing payment shock, you are a very good
+candidate for getting credit.
+    But we don't use those two indicators anymore. Today, we
+overrely on algorithmic-based systems, like credit scores,
+automated underwriting systems, that don't include those kind
+of indicators.
+    And you heard one of the other panelists already testify
+that consumers of color are disproportionately credit
+invisible. So, just the systems that we have in place in order
+to give people an entrance into the financial mainstream are
+blocking folks out because those systems do not work for
+underserved communities.
+    Ms. Tlaib. Thank you, Ms. Rice.
+    I am not sure how much time I have, but I just want folks
+on the panel and just the public to notice that none of this
+discrimination that we are talking about today is explicitly
+spelled out in some sort of company handbook, but it is all
+implicit and cloaked in, like, proxies and codewords and
+misguided assumptions. And its effect, regardless of the
+intent, is to disproportionately deny homeownership
+opportunities to Black and Brown folks.
+    We have the tools to fight it. Just last year, though,
+unfortunately, President Trump struck a huge blow to fair-
+housing protection with this disparate impact final rule which
+failed to comply with the Supreme Court's Inclusive Communities
+decision. And we need to address that, Mr. Chairman.
+    We also know that, as recently as 2015, the Supreme Court
+recognized the continuing availability of disparate impact
+litigation on the Fair Housing Act. We need to restore these
+protections. They are getting watered down by conservative
+courts and decisions. And so, I just hope our subcommittee can
+proceed and be very intentional about addressing this
+discrimination that leaves a lot of my residents out of
+opportunities for economic stability.
+    Thank you, and I yield back.
+    Chairman Green. The gentlelady's time has expired.
+    We will now hear from Mr. Mooney from West Virginia for 5
+minutes, and then, we will take our break. So if you are after
+Mr. Mooney, you might want to go cast your vote now. And we
+will cast our second vote as well. That is two votes before we
+return.
+    So, please, now, Mr. Mooney, you are now recognized for 5
+minutes.
+    Mr. Mooney. Thank you, Mr. Chairman.
+    My concerns are going to address access to rural banking,
+generally speaking. And I am going to direct a question to Ms.
+Cooper. But I want to highlight some of the concerns related to
+getting my constituents in rural West Virginia, and others,
+access to loans, credit, and banking, any and all banking
+services in general.
+    According to a survey by the FDIC, 7.8 percent of West
+Virginia households are unbanked. This puts West Virginia in
+the bottom 10 in the nation in terms of unbanked households.
+    Ms. Cooper, what can we do to help rural Americans get
+access to credit and basic financial services?
+    And just as a quick follow-up to that, after you answer
+that one, how do you feel the COVID-19 pandemic has affected
+efforts to reach the unbanked?
+    Ms. Cooper. Thank you so much for your questions,
+Congressman.
+    So, yes, in general, I know we have already spoken about
+this, and in my oral and written statements I have mentioned,
+kind of, the geographic disparity, the fact that research
+suggests consumers living in rural areas may be living farther
+from bank branches, and are less likely to have access to high-
+speed internet, and these reasons might make it more difficult
+for them to access quality banking services.
+    In general, in my written testimony, I talk about some
+policy options that are often discussed in this space just
+generally to increase access to credit to consumers.
+    And there are five broad types of policy approaches in this
+space: first, possible changes to bank regulation to further
+encourage banks to serve underserved communities; second,
+payment system improvements that may make bank products more
+attractive; third, financial technologies to potentially
+increase access to consumers; fourth, the government directly
+providing certain financial products directly to consumers; and
+fifth, financial education programs.
+    And I would say, in terms of all of these policy options,
+they all have costs and benefits and potential unintended
+impacts and risks, but they are all things that could be
+potential places to explore in this space if you are interested
+in expanding access to credit.
+    Thank you so much. And then your second question was around
+the COVID-19 pandemic? Is that correct?
+    Mr. Mooney. That is correct, how you feel that affects
+efforts to reach the unbanked?
+    Ms. Cooper. Yes. Thank you so much for that question.
+    I am actually not aware of that much data, since the COVID-
+19 pandemic is something that has happened in this past year,
+and the FDIC's survey that they do regularly was most recently
+done in 2019.
+    But, yes, I think at least at the beginning of the
+pandemic, there were a lot of reports of more people accessing
+banking services online, given the pandemic. That pattern makes
+sense. So, I do think that is an interesting trend in this
+space.
+    Mr. Mooney. Okay.
+    Thank you, Mr. Chairman. I yield back.
+    Chairman Green. The gentleman yields back.
+    At this time, we will stand in recess for the Members to
+cast two votes and then return.
+    [brief recess]
+    Chairman Green. Thank you, everyone, for your patience,
+especially our witnesses. Thank you so much. It is not unusual
+for Members to have to rush out and vote, and we try to do it
+as expeditiously as possible, because we know that your time is
+very valuable
+    Let me just see if Mr. Garcia of Illinois is present.
+    Mr. Garcia, are you with us? If so, I will yield 5 minutes
+to you for your questions.
+    We will stand in recess for a bit longer. We are awaiting
+the arrival of our ranking member and additional members, so
+please be a little bit patient with us. Thank you so much.
+    [brief recess]
+    Chairman Green. Friends, just to give you a quick update,
+we are not waiting on Mr. Garcia, so that you won't think that
+we are. We are waiting on our ranking member, Mr. Barr. I
+assume that he will be arriving shortly, so please continue to
+be patient with us while we await his arrival.
+    Mr. Garcia of Illinois. And Mr. Garcia is on standby, Mr.
+Chairman.
+    Chairman Green. Yes, sir. I have noted that you are here.
+As soon as Mr. Barr arrives, we will come right to you. Thank
+you so much, Mr. Garcia.
+    Friends, if I may have your attention, please, the hearing
+will now return to order.
+    We will continue with questions. And next in order for
+questions will be Mr. Garcia of Illinois. Mr. Garcia, you are
+recognized for 5 minutes to ask your questions.
+    Mr. Garcia of Illinois. Thank you so much, Mr. Chairman,
+for convening this important meeting.
+    When we talk about wealth in this country and opportunities
+to build wealth, we have to talk about housing. So when I think
+about the wealth gap, I think about neighborhoods like mine. I
+represent a working class, mostly Latino community in Chicago.
+I have lived here for more than 50 years. Most of my
+constituents are renters, and the housing crisis they are
+facing now under COVID-19 isn't new.
+    My neighbors are squeezed. On the one hand, our community
+can't get the investment they need. On the other hand, working-
+class Latino and Black people are being pushed out of their own
+neighborhoods by wealthier White residents who do have access
+to capital. So, I am glad to talk with you today to learn more
+about what is driving that and what we can do to support
+working-class communities and communities of color especially.
+I thank all of the witnesses for being here.
+    I would like to ask Ms. Espinoza a question on bank
+mergers. This country had 12,000 banks in 1990, and now it has
+fewer than 5,000. The Fed and the Department of Justice rubber-
+stamped bank merger applications without a second thought, even
+though mergers can often close down local bank branches and
+leave communities underserved.
+    Do you find that consolidation in the banking industry has
+a negative impact on marginalized communities, and does it hurt
+access to credit in communities like mine?
+    Ms. Espinoza. It does hurt access to credit, and one of the
+things that we have seen here with the bank mergers is that the
+Community Reinvestment Act (CRA) requirements don't change when
+banks merge. Instead of them having to do twice the amount, for
+example, by merging, they are actually having to do less under
+the CRA. So, it is definitely hurting people, and it hurts
+people of color because as they merge, they seem to close down
+branches in minority neighborhoods that are predominantly
+African American and Latino.
+    Mr. Garcia of Illinois. Okay. Thank you.
+    Mr. Perry, in your testimony, you mentioned recent high-
+profile instances of the appraisal gap, that is, when a
+family's home is appraised at a low value because of racial
+discrimination. This is a huge problem in my City of Chicago.
+    Could you talk a little bit more about how the appraisal
+gap hurts communities that have always had a hard time getting
+loans, and what can Congress and housing advocates do to get
+help?
+    Mr. Perry. Yes, that is a difficult one, because Congress
+does not authorize appraisals. However, there are some key
+areas that we know are at fault. We know that the price
+comparison model in which homes are compared to other homes in
+similar neighborhoods essentially recycles racism, because if
+you are essentially measuring homes against other homes that
+have been impacted by discrimination, you really never get a
+sense of values.
+    The other area that is clear that home improvements are not
+treated the same in Black and Brown communities as they are in
+White communities, and we see that time and time again.
+    And there is one other area, and this is the area--the
+Dodd-Frank Act created an arm's-length relationship between
+appraisers and lenders, and it seems that in some communities,
+it is very strict, where lenders and appraisers don't talk at
+all, and it results in loans falling through, where in White
+communities, there seems to be enough communication to come to
+an agreed-upon price. And so those are the three areas where I
+see of some of the biggest problems.
+    Mr. Garcia of Illinois. Thank you very much.
+    Mr. Chairman, I don't have any more questions at this time.
+I have to go vote.
+    Chairman Green. The gentleman yields back. Thank you, Mr.
+Garcia.
+    The Chair now recognizes the vice ranking member, Mr.
+Timmons from South Carolina, for 5 minutes.
+    Mr. Timmons. Thank you, Mr. Chairman.
+    Ms. Cooper, since the 1990s, the median wealth among
+minority families has plateaued, while it has increased roughly
+50 percent for White families. This is a huge problem, as White
+families on average now have 41 times the wealth of Black
+families and 22 times the wealth of Latino families. I think we
+can all agree that that is a major problem.
+    A friend of mine, who is Black, explained it to me in a way
+that really stuck with me. He said, imagine a game of monopoly.
+Certain families have been playing for generations. They have
+been passing go, collecting $200. They have been purchasing
+property, building houses, building hotels, buying the
+railroads, and certain families have started much later. And it
+is challenging to play the game, it is challenging to compete,
+it is challenging to have a chance when you are faced with
+those kind of odds.
+    So, a racial wealth gap has always been an issue. But why
+has it gotten worse over the last few decades, and does it have
+anything to do with lending practices of financial
+institutions?
+    Ms. Cooper. Thanks for that question. As I was saying in my
+oral testimony, as you were describing, research suggests that
+disparities in family wealth or in community relationships with
+financial institutions can potentially persist across
+generations. For example, from parents to children, influencing
+children's financial outcomes, so, for example, children's
+credit history or homeownership status. And in this way, past
+discrimination can cause intergenerational effects, and as I
+described, these disparities exist in terms of access to
+financial products.
+    I will say in general, I am not aware of research around
+increases or decreases in some of these disparities. Over time,
+a lot of this research, particularly around intergenerational
+effects, is relatively new. But I would be happy to do some
+more research on that question and get back to you.
+    Mr. Timmons. Thank you.
+    Mr. Darity. I would like to comment on this, if I may, to
+say that the widening gap that we have observed is in part
+attributable to the adverse effects of the Great Recession, but
+more significantly is due to the cumulative nature of wealth
+accumulation and decumulation across generations. That is to
+say, wealth begets wealth and lack of wealth begets lack of
+wealth.
+    And so communities that have been subjected to denial and
+deprivation have less of an opportunity to transfer resources
+across generations and, therefore, we observe a widening gap
+over the course of time. It is a fact that is associated with
+the very way in which people acquire additional assets.
+    Mr. Timmons. Sure. And, Mr. Darity, let me follow up on
+that. I appreciate you jumping in.
+    Mr. Darity. Yes.
+    Mr. Timmons. Would you agree that it is a worthy endeavor
+to try to find ways to give people opportunities, who have not
+had opportunities in the past, without necessarily putting
+people who do not fall into that category at a disadvantage?
+    I am in the military. I am in the South Carolina Air
+National Guard, and we talk a lot about these issues, and the
+question becomes, not everyone is in the same box, and if you
+are going to try to give people opportunities who have not had
+opportunities in the past, that is a worthy endeavor, and I
+actually support that. My concern is that there are people who
+would be lumped in with the people who theoretically have had
+opportunities, who really haven't had opportunities.
+    So while we look at these statistics, and I agree they are
+actually quite terrible and we need to take steps, the question
+is, if someone is not necessarily in the bucket of, wealth
+begets wealth, they are struggling just like anyone else, how
+do we not disadvantage that person? Does that question make
+sense to you, sir?
+    Mr. Darity. It makes sense to me, but I think that we have
+to recognize that those differences in opportunity historically
+have been racialized to the point that Whites who are in the
+bottom 20 percent of the income distribution have a higher
+median level of wealth than all Black Americans taken together.
+And so, I would argue that there is a racial differential that
+needs to be addressed.
+    Mr. Timmons. And I will do everything I can to help address
+that, because I do agree with you, in large part.
+    And I guess my next question is, would you segment out--
+    Chairman Green. The gentleman's time has expired. Excuse
+me. I'm sorry.
+    Mr. Timmons. Oh, I will yield back, Mr. Chairman. Thank
+you.
+    Chairman Green. Okay. Because we are trying to end before
+this next vote. The gentleman's time has expired.
+    And we will move on now to Ms. Garcia of Texas. You are now
+recognized for 5 minutes.
+    Ms. Garcia of Texas. Thank you, Mr. Chairman, and thank you
+so much for hosting this hearing.
+    And thank you to all of the witnesses. And most of all,
+thank you for your patience as we struggle through these votes.
+    I want to start with Ms. Rice. Ms. Rice, the Center for
+Investigative Reporting report revealed that out of 31 million
+Home Mortgage Disclosure Act records, that modern-day redlining
+still exists in 61 metro areas in our country. As compared to
+White borrowers, lenders denied African-American borrowers in
+significantly higher rates in 48 cities, Latinos in 25 cities,
+Asian Americans in 9 cities, and Native Americans in 3 cities.
+    Still, 98 percent of the banks nationally received a
+passing grade in the Community Reinvestment Act examination.
+What is wrong here? Do you think that we need to redo how we
+grade for the Community Reinvestment Act, and would moving from
+a pass/fail system to a more transparent letter grade be
+better?
+    Ms. Rice. Thank you so much, Congresswoman Garcia, for that
+question. One of the challenges that we face with the Community
+Reinvestment Act and the CRA examinations is that it is not
+automatically a given that if there are fair-lending violations
+at a financial institution, that it will translate into a lower
+score for the financial institution.
+    And so, oftentimes, fair-lending violations are not even
+considered in terms of being reflected in the ultimate score
+for the financial institution. And that is why you have seen,
+since 1977, when the Community Reinvestment Act was enacted,
+multiple examples over and over again of financial institutions
+who have been found to violate the Fair Housing Act, they have
+been found to have engaged in discrimination, and received an
+outstanding CRA grade.
+    Part of that is because CRA is tied to income. The
+Community Reinvestment Act says that lenders are supposed to be
+meeting the credit needs of their entire delineated community,
+including low-income areas. And it just depends on the guidance
+at the regulatory agencies at the particular time, but for some
+reason, the part that says that the banks are supposed to meet
+the credit needs of their entire community--somehow,
+communities of color don't get picked up in that definition.
+    Ms. Garcia of Texas. Should we look at other punishment, if
+you will? Should we look at criminal sanctions for intentional
+discrimination by the landlords, the builders, the mortgage
+companies?
+    Ms. Rice. We can certainly look at that, whether or not
+there should be criminal violations. But I think one of the
+first steps that should be taken is we should add race as a
+consideration explicitly in the Community Reinvestment Act, so
+it makes it clear that lenders cannot redline communities of
+color, they cannot avoid serving communities of color in order
+to get the higher grades in the CRA designations.
+    And also, lenders should be required to include communities
+of color in their service area. In other words, you shouldn't
+be able to carve out neighborhoods of color when you are
+designating what is your service area.
+    Ms. Garcia of Texas. Okay. But as my colleague, Ms. Tlaib,
+mentioned, nobody goes around and says, ``Okay neighborhood A,
+you are being redlined.'' It is a lot more subtle. And with
+algorithms and the technology that is being used now, it is
+hard to find, and it is hard to find the appropriate
+enforcement tool. But thank you for that.
+    And I wanted to ask quickly, Ms. Espinoza, because I know I
+am running out of time, you mentioned the three different kinds
+of testing that you all do and look at. I think you said there
+was rental testing, self testing, and mortgage testing. How
+complicated is that, and about how much money do you all need
+for more testing so that we can more easily prove some of these
+cases?
+    Ms. Espinoza. Well--
+    Chairman Green. If I may, Ms. Espinoza, the gentlelady's
+time has expired, and we are trying to get back for the next
+vote.
+    Ms. Espinoza. Oh, okay. I can address that in writing.
+    Ms. Garcia of Texas. Thank you, Ms. Espinoza.
+    I yield back, Mr. Chairman. I apologize.
+    Chairman Green. That is quite all right. We are trying to
+get to everybody.
+    We will now go to Ms. Williams from Georgia for 5 minutes.
+And my apologies to everyone, but we do want to finish before
+the next vote.
+    Ms. Williams of Georgia. Thank you, Chairman Green, and
+thank you for convening this hearing today.
+    In my district and across the country, we see racial wealth
+disparities brought on by barriers like invidious
+discrimination. In 2019, the median wealth in Black households
+was about $24,000, compared to $188,000 for White households,
+with the gaps sure to continue to widen because of the
+disproportionate impact of COVID-19.
+    I have an obligation in Congress to work to break down
+these barriers and ensure communities of color have a fair
+chance to buy homes, start their own businesses, and even send
+their kids to college without taking on the massive debt that I
+have had to incur. When fewer of us face barriers to building
+wealth and long-term prosperity, the better off our economy,
+our communities, and our people will be.
+    Professor Darity, student debt certainly stands in the way
+of closing the racial wealth gap, but in your testimony, you
+mention that there are some limitations to focusing exclusively
+on debt reduction. What are some next steps that we should
+consider from an asset-building perspective to lessen the
+financial burden of things like going to college for
+communities of color?
+    Mr. Darity. Historically, the United States has practiced
+asset-building policies. Representative of these are the 19th
+Century policies that involved land allocation. In the 20th
+Century, the policies were focused primarily on supporting
+homeownership.
+    I would argue, though, that since the 1960s, the entire
+emphasis of Federal policy has been on income supports rather
+than wealth building or asset building. And so, if we are
+really concerned about improving opportunities for all
+Americans to engage in the widest range of opportunities, there
+needs to be a shift back towards asset-building opportunities.
+    And I would think that if we are thinking about individuals
+having an opportunity to go to college and to leave college on
+a debt-free basis, either we have to eliminate the expense of
+attending college altogether, as some people have advocated
+zero tuition for attending State universities. I think that is
+an idea that should be explored.
+    But on the other hand, I think that we tend to think about
+education as driving wealth, but we really should think about
+wealth as driving educational achievement. So, if we could
+alter the foundation for assets that are held by a large number
+of wealth-poor families in the United States, we would create
+greater opportunities for their kids to go further in school
+and not have to do so on the basis of the acquisition of
+extraordinary levels of indebtedness.
+    Mr. Perry. And, Representative Williams, I just wanted to
+add that there are a number of innovative products going on
+right now which are enabling people to get a mortgage and
+cancel a student loan debt at the same time, and I think those
+are the kind of products we need to see in communities.
+    Ms. Williams of Georgia. Thank you so much.
+    And, Professor Darity, I appreciate that.
+    Ms. Rice, I do have a quick question for you. As we have
+heard today, we must break down the discriminatory barriers to
+things like owning a home if we really want to close the racial
+wealth gap. In your testimony, you offered some suggestions to
+increase diversity in the real estate industry. Do you have any
+additional recommendations for increasing diversity in other
+parts of the financial services industry that impact how
+communities of color access housing?
+    Ms. Rice. Yes, absolutely. One of the first things we have
+to do is break down barriers to credit access and the
+overreliance on things like credit scores. Credit scores are a
+major factor that preclude people of color from being able to
+access financial services. People of color disproportionately
+live in credit deserts. They also disproportionately live in
+communities where there is a hyper concentration of
+nontraditional financial services providers who do not report
+positive behavior to the credit repositories.
+    So, that is a huge thing that we need to break down, and we
+can actually use new artificially intelligent tools in order to
+do that. But we do need more support from regulators and
+Congress in order to onboard those new debiasing, tech
+debiasing methodologies so that we can expand opportunities for
+people.
+    Ms. Williams of Georgia. Thank you.
+    Ms. Cooper. And I will just--
+    Ms. Williams of Georgia. We are out of time, because we
+only get 5 minutes, but I appreciate everyone being here today.
+And I look forward to working with everyone on the subcommittee
+as we continue to address these disparities.
+    Thank you, Mr. Chairman. I yield back the balance of my
+time.
+    Chairman Green. And thank you very much for being a little
+bit conscious of the time. I greatly appreciate it.
+    Let me move expeditiously and yield myself 5 minutes, so
+that we may quickly get to the next vote.
+    I was here in 2008 when we had the downturn in the economy,
+and one of the questions that we asked quite consistently was,
+would anyone go to jail for the predatory lending that took
+place? The answer to the question is, yes, someone did: one
+person. One person went to jail for that long line of predatory
+lending that took place. In fact, we had one CEO of a major
+bank who settled out of court with the Justice Department, and
+the bank's board of directors gave this CEO a 74 percent raise
+in salary, amounting to about $20 million.
+    So, the question becomes this: Do we want to continue to
+allow persons who make loan applications to be punished
+criminally for falsifying information on a loan application
+while the loan originator does not face any charges if the loan
+originator denies a person credit? That is predatory lending,
+by the way. If you intentionally deny a person credit who is
+qualified for that credit, you are engaging in predatory
+lending, which is a crime.
+    But the question becomes, how do we deal with it? And
+testing is the means by which we can acquire the empirical
+evidence necessary to prosecute these crimes.
+    Let me start with you, Ms. Rice. Would you give me some
+indication as to how efficacious testing is, in your opinion,
+with reference to bringing forth the empirical evidence
+necessary to prosecute?
+    Ms. Rice. Testing is extremely efficacious for that
+purpose. And thank you so much, Congressman Green, for that
+question. The Supreme Court actually has stated that testing is
+one of the most verifiable and efficient ways of ferreting out
+discrimination.
+    Part of the challenge though, is that we don't have
+sufficient funding to support testing in the United States, and
+it is private fair housing organizations who engage in testing
+in a consistent fashion, as you have heard Frances Espinoza
+already testify to. But the challenge is that, some years we
+have very, very little funding to support testing and in some
+years we have more funding, but we never have sufficient
+funding.
+    The other thing that--
+    Chairman Green. Let me intercede for just a quick second. I
+am familiar with the Fair Housing Initiatives Program (FHIP)
+and the Fair Housing Assistance Program (FHAP). Here is
+something that is important. In H.R. 166, we provide for, in
+the Consumer Financial Protection Bureau (CFPB), an entity to
+conduct these tests. We want to formalize it to a greater
+degree.
+    I still support FHIP and FHAP. That is a great program, so
+I am going to support it. But what I would like to know is, if
+we put this together with the CFPB, does that give you some
+greater degree of belief that we can police and deter those who
+would intentionally deny people loans? Ms. Rice?
+    Ms. Rice. Yes, I do. And we vehemently support the bill
+that you referenced, the Fair Lending for All Act. It
+definitely will, and it is important for Congress to include
+protections, guardrails, so that the testing program can be
+ongoing no matter who is in control or who is at the helm of
+the organization.
+    Chairman Green. Let me move quickly to Ms. Espinoza. Ms.
+Espinoza, would you agree that testing is an efficacious
+methodology, and would you support H.R. 166 as we propose
+having testing take place through the CFPB?
+    Ms. Espinoza. Yes. Testing is the best way to uncover these
+predatory practices in fair housing investigations, so I do
+support--
+    Chairman Green. Okay. And let me ask Mr. Perry, would you
+agree as well?
+    Mr. Perry. Yes. And, in fact, journalists and individuals
+are doing it.
+    Chairman Green. I hate to do this to you, but I am going to
+have to accept your yes, because I am running out of time.
+    Mr. Perry. Yes.
+    Chairman Green. And I can't be unfair to others by giving
+myself more time.
+    Just let me say, Professor, I am very much familiar with
+Andrew Johnson and what happened, especially as it relates to
+him in 1868 when there was an effort to impeach him. I would
+add that he was the bigot of his time, and he denied the newly
+free persons the opportunity to start to amass wealth with the
+land that would have been accorded them. I can only say this, I
+don't pretend to say that this is the silver bullet, but this
+will at least help us with some of the credit issues. I do
+agree with you that the wealth issue is something that is
+paramount for us.
+    With that said, my time has expired, friends. I do
+appreciate all of the witnesses for being here today. Your
+being here and being patient with us has meant a lot to us. I
+regret that we had to intercede with votes, but these things
+happen, and we now have another vote that we have to deal with.
+So thank you, all of you.
+    The hearing is now adjourned, after I read a statement,
+excuse me. There is a statement that I have to read before we
+can adjourn this hearing, so please be patient as I move to the
+statement.
+    I thank the witnesses for their testimony and for devoting
+their time and resources to share their expertise with this
+subcommittee. Their testimony today will help to advance the
+important work of this subcommittee and of Congress in
+addressing lending discrimination and systemic racial
+inequality.
+    The Chair notes that some Members may have additional
+questions for this panel, which they may wish to submit in
+writing. Without objection, the hearing record will remain open
+for 5 legislative days for Members to submit written questions
+to these witnesses and to place their responses in the record.
+Also, without objection, Members will have 5 legislative days
+to submit extraneous materials to the Chair for inclusion in
+the record.
+    This hearing is now adjourned. Thank you so much.
+    [Whereupon, at 5:23 p.m., the hearing was adjourned.]
+                            A P P E N D I X
+                           February 24, 2021
+[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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+<html>
+<title> - ORGANIZATIONAL MEETING FOR THE 117TH CONGRESS</title>
+<body><pre>
+[House Hearing, 117 Congress]
+[From the U.S. Government Publishing Office]
+                     ORGANIZATIONAL MEETING FOR THE
+                             117TH CONGRESS
+=======================================================================
+                                MEETING
+                                 OF THE
+                        SELECT COMMITTEE ON THE
+                             CLIMATE CRISIS
+                    ONE HUNDRED SEVENTEENTH CONGRESS
+                             FIRST SESSION
+                               __________
+                              MEETING HELD
+                             MARCH 19, 2021
+                               __________
+                            Serial No. 117-1
+[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
+                            www.govinfo.gov
+   Printed for the use of the Select Committee on the Climate Crisis
+                              __________
+                    U.S. GOVERNMENT PUBLISHING OFFICE
+44-077                       WASHINGTON : 2021
+--------------------------------------------------------------------------------------
+                 SELECT COMMITTEE ON THE CLIMATE CRISIS
+                    One Hundred Seventeenth Congress
+                      KATHY CASTOR, Florida, Chair
+SUZANNE BONAMICI, Oregon             GARRET GRAVES, Louisiana,
+JULIA BROWNLEY, California             Ranking Member
+JARED HUFFMAN, California            GARY PALMER, Alabama
+A. DONALD McEACHIN, Virginia         BUDDY CARTER, Georgia
+MIKE LEVIN, California               CAROL MILLER, West Virginia
+SEAN CASTEN, Illinois                KELLY ARMSTRONG, North Dakota
+JOE NEGUSE, Colorado                 DAN CRENSHAW, Texas
+VERONICA ESCOBAR, Texas              ANTHONY GONZALEZ, Ohio
+                                 ------
+                Ana Unruh Cohen, Majority Staff Director
+                  Marty Hall, Minority Staff Director
+                        climatecrisis.house.gov
+                            C O N T E N T S
+                              ----------
+                   STATEMENTS OF MEMBERS OF CONGRESS
+                                                                   Page
+Hon. Kathy Castor, a Representative in Congress from the State of
+  Florida, and Chair, Select Committee on the Climate Crisis:
+    Opening Statement............................................     1
+    Prepared Statement...........................................     3
+Hon. Garret Graves, a Representative in Congress from the State
+  of Louisiana, and Ranking Member, Select Committee on the
+  Climate Crisis:
+    Opening Statement............................................     4
+                           COMMITTEE BUSINESS
+Proposed Rules for the 117th Congress............................     7
+                         ORGANIZATIONAL MEETING
+                              ----------
+                         FRIDAY, MARCH 19, 2021
+                          House of Representatives,
+                    Select Committee on the Climate Crisis,
+                                                    Washington, DC.
+    The committee met, pursuant to call, at 9:54 a.m., via
+Webex, Hon. Kathy Castor [chairwoman of the committee]
+presiding.
+    Present: Representatives Castor, Bonamici, Brownley,
+Huffman, Levin, Casten, Neguse, Escobar, Graves, Palmer,
+Carter, Miller, Armstrong, Crenshaw, and Gonzalez.
+    Ms. Castor. The committee will come to order.
+    Without objection, the chair is authorized to declare a
+recess of the committee at any time.
+    As a reminder, members participating in a hearing remotely
+should be visible on camera throughout the meeting. And as with
+in person meetings, members are responsible for controlling
+their own microphones. Members can be muted by staff only to
+avoid inadvertent background noise.
+    In addition, statements, documents, or motions must be
+submitted to the electronic repository immediately upon
+introduction to <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="7e2d3d3d3d500c1b0e110d170a110c073e131f17125016110b0d1b50191108">[email&#160;protected]</a> for circulation
+to committee members.
+    Finally, members or witnesses experiencing technical
+problems should inform committee staff immediately.
+    I now recognize myself for 5 minutes to give an opening
+statement.
+    Well, good morning, everyone. I am thrilled to welcome you
+to the organizational meeting of the House Select Committee on
+the Climate Crisis, our first in the 117th Congress. I would
+like to express my gratitude to Speaker Pelosi for her deep
+commitment to solving the climate crisis and for allowing the
+Select Committee to continue building on our work for the
+American people.
+    Last year, our Select Committee Democratic members released
+a comprehensive set of recommendations for the Congress in a
+staff report entitled, ``Solving the Climate Crisis: The
+Congressional Action Plan for Clean Energy Economy and a
+Healthy, Resilient, and Just America,'' where we highlighted
+bills, including bipartisan bills, to the standing committees.
+    This plan would put the United States on a path to net zero
+by 2050 or earlier. It would create much needed jobs in clean
+energy, infrastructure, conservation, manufacturing,
+construction, and other important industries. It would protect
+millions of families and small businesses from costly climate-
+fueled risks and harms, and it would advance environmental
+justice for Black, Brown, Native, and low income Americans.
+    Our climate crisis action plan has been described as the
+most detailed and well thought out plan for addressing climate
+change that has ever been part of U.S. politics. Now, the work
+ahead of us is clear: We must waste no time in turning our
+recommendations into policy. Families across America have given
+us this strong mandate to act on climate, and younger
+generations are watching. They know their futures hang in the
+balance.
+    Our sole item of business today, before we consider the
+committee rules, will be to talk about our jurisdiction, and
+then we will take a moment to introduce our Democratic members,
+and then I will give Ranking Member Graves an opportunity to
+give an opening statement and introduce our Republican members.
+    So first on our jurisdiction, it is simple. It is pretty
+straightforward. According to House Resolution 8, our Select
+Committee will have investigative jurisdiction over policies,
+strategies, and innovations to achieve substantial and
+permanent reductions in pollution and other activities that
+contribute to the climate crisis. It is my hope that our Select
+Committee will continue to be a forum to advance important
+solutions for the American people, to find common ground, to
+follow the science, and to approach our differences
+constructively.
+    Now I would like to introduce our fabulous Democratic
+members, and at the end, I am going to give our new member,
+Rep. Escobar, an opportunity to introduce herself to the
+committee.
+    So, Democratic members include Suzanne Bonamici from
+Oregon. She serves on the Science Committee, where she is
+leading the fight for ocean climate action, and she serves on
+the Committee on Education and Labor.
+    Rep. Julia Brownley from California, she serves on the
+Committee on Transportation and Infrastructure, where she is
+pushing for cleaner public transit systems and expanding our
+use of zero-emission vehicles. And Rep. Brownley also serves on
+the Veterans' Affairs Committee.
+    Rep. Jared Huffman of California, he is the chair of Water,
+Ocean, and Wildlife Subcommittee in the House Natural Resources
+Committee, where he is a strong champion for public lands and
+waters. He serves, as well, on the Transportation and
+Infrastructure Committee.
+    Rep. Don McEachin of Virginia serves on the Energy and
+Commerce Committee, where he has led the charge on securing
+environmental justice for all. He also serves on the Natural
+Resources Committee.
+    Congressman Mike Levin of California serves on the Natural
+Resources Committee, where he works to advance safeguards
+against drought, heat waves, and rising sea levels. Rep. Levin
+also is a member of the Veterans' Affairs Committee.
+    Rep. Sean Casten of Illinois serves on the Financial
+Services Committee, where he is working to reduce climate risk
+in the financial sector. He also serves on the Science and
+Technology Committee.
+    And Rep. Joe Neguse of Colorado is the chair of the
+Subcommittee on National Parks, Forests, and Public Lands in
+the Natural Resources Committee, where he advances protections
+for his communities from climate fueled wildfires and much
+more. Rep. Neguse also serves on the Judiciary Committee.
+    And we are so pleased to welcome our newest Democratic
+member, Congresswoman Veronica Escobar of Texas. She is a
+member of the Armed Services Committee, where she is working to
+ensure that our military stands ready to face the climate
+crisis, and she has long championed economic opportunities in
+clean energy. She also serves on the Judiciary Committee.
+    Rep. Escobar, as the newest Democratic member of the Select
+Committee, welcome. We are thrilled to have you, along with our
+two new Republican members. Please take a minute to introduce
+yourself to the committee, and the floor is yours.
+    [The statement of Ms. Castor follows:]
+                Opening Statement of Chair Kathy Castor
+             Organizational Meeting for the 117th Congress
+                 Select Committee on the Climate Crisis
+                             March 19, 2021
+                        As Prepared for Delivery
+    Thank you all for joining us. I'm thrilled to welcome you to the
+first meeting of the House Select Committee on the Climate Crisis in
+the 117th Congress. Before we begin, I'd like to express my gratitude
+to Speaker Pelosi for her deep commitment to solving the climate
+crisis--and for allowing our Select Committee to continue building on
+our work for the American people.
+    Last year, our Select Committee's Democratic Members released a
+comprehensive set of recommendations for Congressional action in the
+staff report titled `Solving The Climate Crisis: The Congressional
+Action Plan for a Clean Energy Economy and a Healthy, Resilient, and
+Just America'. This plan would put the United States on a path to net
+zero by 2050 or earlier. It would create much-needed jobs in clean
+energy, infrastructure, conservation, manufacturing, construction, and
+a number of other industries. It would protect millions of families and
+small businesses from climate-fueled risks and harms. And it would
+advance environmental justice for Black, brown, Native, and low-income
+Americans.
+    Our Climate Crisis Action Plan has been described as ``the most
+detailed climate plan in United States political history.'' Now, the
+work ahead of us is clear: we must waste no time turning our
+recommendations into policy. Families across America have given us a
+strong mandate to act on climate. And entire generations are watching,
+knowing their futures hang in the balance.
+    Before we consider our committee rules, I'll quickly go over our
+jurisdiction and take a moment to introduce our Democratic members. I
+will then give our Ranking Member an opportunity to give an opening
+statement and introduce our Republican members.
+    According to House Resolution 8, our Select Committee will have
+investigative jurisdiction over policies, strategies, and innovations
+to achieve substantial and permanent reductions in pollution and other
+activities that contribute to the climate crisis. It is my hope that
+our Select Committee will continue to be a forum to advance important
+solutions for the American people, to find common ground, to follow the
+science, and to approach our differences constructively.
+    With that, I would like to introduce our Democratic members:
+    Suzanne Bonamici from Oregon. She serves on the Science Committee,
+where she is leading the fight for ocean climate action, and on the
+Committee on Education and Labor.
+    Julia Brownley from California. She serves on the Committee on
+Transportation and Infrastructure, where she is pushing for cleaner
+public transit systems and expanding our use of zero-emission vehicles,
+and she also serves on the Veterans Affairs Committee.
+    Jared Huffman from California. He is the Chair of the Water, Ocean
+and Wildlife subcommittee in the House Natural Resources Committee,
+where he is a strong champion for our public lands and water. He also
+serves on the Transportation and Infrastructure Committee.
+    Donald McEachin from Virginia. He serves on the Energy and Commerce
+Committee, where he has led the charge on securing environmental
+justice. He also serves on the Natural Resources Committee.
+    Mike Levin from California. He serves on the Natural Resources
+Committee, where he works to advance safeguards against droughts, heat
+waves, and rising sea levels. He's also a member of the Veterans'
+Affairs Committee.
+    Sean Casten from Illinois. He serves on the Financial Services
+Committee, where he is working to reduce climate risk in the financial
+sector. He also serves on the Science and Technology Committee.
+    Joe Neguse from Colorado. He is the Chair of the Subcommittee on
+National Parks, Forests, and Public Lands in the Natural Resources
+Committee, where he can advance protections for his communities from
+climate-fueled wildfires. He also serves on the Judiciary Committee.
+    And our newest member, Veronica Escobar from Texas. She is a member
+of the Armed Services Committee, where she is working to ensure our
+military stands ready to face the climate crisis, and she has long
+championed the economic opportunities in clean energy. She also serves
+on the Judiciary Committee.
+    Rep. Escobar, as the newest Democratic member of the Select
+Committee, let me give you a minute to introduce yourself.
+    [Rep. Escobar speaks]
+    Now I'd like to give Ranking Member Graves the opportunity to
+provide some opening remarks and introduce the rest of our members.
+    Ms. Escobar. Thank you so much, Madam Chair, and apologies
+for being a few minutes late at the top of the meeting.
+    You know, the only thing that I would add is it really is
+an honor to serve on this committee, and I truly do hope that
+we are able to work together to address some of the greatest
+challenges that our communities face, our globe faces, our
+military installations.
+    And as the member from the border, from El Paso, Texas, I
+can tell you, so many of the families that I talk to who are
+arriving at our front door from Central America are fleeing the
+ravages of the climate crisis. You know, they don't talk about
+it in that way, but they talk about food insecurity, they talk
+about being unable to farm on their land, they talk about the
+impact of hurricanes and natural disasters.
+    So I think over the long term, the work that we do will not
+just help create a greater planet, but it will create stability
+for people in their home countries. So really looking forward
+to the work ahead with everyone.
+    I yield back.
+    Ms. Castor. Thank you, Rep. Escobar, and welcome again.
+    Now I would like to give Ranking Member Graves the
+opportunity to provide some opening remarks and introduce the
+Republican side of the aisle, including our two new Republican
+members.
+    Ranking Member Graves.
+    Mr. Graves. Thanks.
+    Ms. Castor. You are recognized.
+    Mr. Graves. Hey, Madam Chair. Thank you.
+    Welcome, everyone, to the committee. Really excited to get
+back to work as quickly as possible, and I hope that we are
+able to actually get together and meet in person very soon so
+we can begin addressing some of the very important issues that
+are in front of us.
+    The climate issue has always been very important, but I
+think some of the recent actions by this administration,
+executive orders and others, have had a significant impact on
+our energy industry. And whether that is renewable energy or
+conventional fuels, it has had a significant impact on our
+energy industry, on energy prices in a very short period of
+time, which makes this issue even more urgent.
+    Madam Chair, as you know, we have discussed in the past
+that all of us are committed to an American based clean energy
+future, and it is important that as we move forward, we come up
+with informed policies that are based upon science, based upon
+evidence, based upon data, and perhaps building upon some of
+the successes that the United States has been able to achieve
+in being the largest emissions reducing country in the world.
+    As a matter of fact, President Obama had established the
+Clean Power Plan, which was intended to reduce emissions by 32
+percent from a 2005 baseline, and we were supposed to hit that
+target, according to the Clean Power Plan, by 2030. And even
+during the Trump administration, which, of course, perception
+perhaps was very different, we hit that 2030 target in 2019.
+And, Madam Chair, we did that without the mandates, without
+restrictions, without coming in and trying to pick energy
+technology winners and losers. We did it by letting the market
+do what it does and, again, just blew away some of these
+targets.
+    Madam Chair, you and I--and I hope I am not disclosing a
+private conversation, but we had a great conversation yesterday
+talking about areas where we can work together and cooperate,
+areas like resiliency and adaptation. We both represent
+important coastal communities in this Nation. Areas like
+ensuring that our research and development strategy complies or
+is based upon America's resources and some of the opportunities
+before us to continue reducing emissions and ensure affordable,
+exportable energy, clean energy solutions. Talking about energy
+efficiency and conservation and building upon some of the
+successes.
+    And so I am very hopeful that we can move forward, again,
+in an evidence based direction, in a bipartisan direction, that
+truly yields the best American based clean energy future that
+we can have.
+    Madam Chair, we have a number of returning rock stars on
+our side as well. I am really looking forward to working with a
+number of your members that I am very close with.
+    We have our Republican policy chairman, Gary Palmer from
+Alabama, who is back.
+    We have our pharmacist, Buddy Carter from Georgia, who
+likes to remind folks that he represents the entire coast of
+Georgia and that Georgia has--they are in the top 50 in terms
+of timber-producing states in the United States, and they have
+the third largest St. Patrick's Day parade in Georgia. Sorry.
+    We have Congressman Kelly Armstrong from North Dakota that
+has an extensive energy background, particularly on the natural
+gas side, and has just been a wealth of knowledge for the
+committee.
+    We have Carol Miller from West Virginia, who, once again,
+coming from a coal state, a mining state, is really the face of
+this kind of energy future and how we do it in a way that is
+very sensitive to the needs of our communities across the
+United States, and, again, we ensure an energy policy based
+upon our resources here in America.
+    Madam Chair, we also have two new members that I am very
+excited to welcome to the committee. We have Congressman
+Anthony Gonzalez from Ohio. And Congressman Gonzalez has an
+extensive background, not just in professional sports, but also
+in business and technology. And, Congressman--and by the way,
+Ohio is, once again, one of those states that has been fueling
+America's energy revolution.
+    And last but not least, we have Congressman Dan Crenshaw
+from Texas, that, once again, not just brings the--Texas,
+which, you know, one of our biggest energy producing states in
+America--not just brings that perspective to the table, but
+also, very importantly, Madam Chair, brings a national security
+perspective to the table, which I think is really important as
+we think about our energy future.
+    So with that, I assume it is okay to yield to them for
+quick introductions?
+    Ms. Castor. Please do.
+    Mr. Graves. Congressman Gonzalez.
+    Mr. Gonzalez. Sure. I will be very quick.
+    So, great to be on this Select Committee. Great to work
+with everybody on both sides, Republican and Democrat.
+    As Garret said, I am from northeast Ohio, and, you know,
+while admittedly the climate situation is not one that is top
+of mind for most of my constituents, reliable and affordable
+energy certainly is, and so is having an economy where
+everybody has an opportunity to succeed no matter what your
+skill level is.
+    And so the way that I have come into the climate debate is
+by focusing a lot on Lake Erie, which is right in my backyard,
+where we have had rising water levels. We have had increased
+flooding. From when I was a child, we had almost no flooding,
+whereas now I get flooded at least three or four times a year,
+and everybody sort of notices that.
+    And so the perspective I will bring to this debate is one
+that focuses on understanding the tradeoffs between our
+economic security and our climate goals, and also being a big
+proponent of finding and facilitating the R&D discoveries that
+are going to help power us through this.
+    So, again, thank you all for having me. It is great to be
+with everybody, and I will yield back.
+    Mr. Graves. Congressman Crenshaw.
+    Mr. Crenshaw. Thank you. Thanks for having me here. It is
+an honor to be a part of this, such an important issue. It is
+an important issue to get right. The solutions are what I am
+after. And last Congress, I was able to pass two bipartisan
+bills, LEADING Act and the New Energy Frontier, both associated
+with carbon capture and carbon utilization.
+    Looking--I am going to be hitting on a few themes. One,
+always talking about the tradeoffs and the costs and the
+benefits. Over and over and over again, I see too often that
+there is a preferred solution that--and then the tendency when
+you have a preferred solution is to exaggerate the benefits of
+that solution and diminish the cost associated with it.
+    This should be our focus, what works and what doesn't. What
+has worked in the past, both in the United States and in other
+countries, and what has not. We talk about energy--or we talk
+about environmental justice all the time. I am going to talk to
+you about energy justice and what that means to people, people
+trying to get out of poverty, people who can't afford higher
+electric bills, people who want reliable energy when it gets
+cold or hot. This has to be part of the discussion, and in many
+cases, it hasn't been. So really happy to be a part of this and
+be solutions oriented for things that will work to solve this
+problem.
+    Thank you for having me.
+    Mr. Graves. I yield back.
+    Ms. Castor. All right. Well, welcome, Rep. Escobar, Rep.
+Gonzalez, Rep. Crenshaw. We are thrilled that you all have
+joined the Climate Committee.
+    We are going to have some great debates, and we do intend
+to be solutions oriented. And I hope, if you haven't had an
+opportunity to review our climate action plan that was released
+last year, I encourage you to do it. There are a lot of good
+bipartisan solutions in there, and we need to build bipartisan
+support to press ahead.
+    So now we will move to our first order of business, the
+consideration and adoption of the Select Committee's rules for
+the 117th Congress. I ask for unanimous consent that the
+proposed rules be considered read and open for amendment at any
+point.
+    [The information follows:]
+             In the Select Committee on the Climate Crisis
+                      117th Congress, 1st Session
+                             March 19, 2021
+                                ------
+                              A Resolution
+                         Offered by Ms. Castor
+ To adopt rules of the Select Committee on the Climate Crisis pursuant
+                                  to
+   clause 2 of rule XI of the Rules of the House of Representatives.
+    Resolved, That the Rules of the Select Committee on the Climate
+Crisis for the 117th Congress shall be:
+RULE 1. GENERAL PROVISIONS.
+    (a) The provisions of section 4(d) of H. Res. 8 (117th Congress)
+governing the proceedings of the Select Committee on the Climate Crisis
+(hereinafter referred to as the ``Committee'') are hereby incorporated
+by reference and nothing herein shall be construed as superseding any
+provision of that section. The Rules of the House of Representatives
+shall apply to the Committee to the extent that they are not
+inconsistent with that title.
+    (b) The rules of the Committee shall be made publicly available in
+electronic form and published in the Congressional Record not later
+than 30 days after the Committee adopts its rules.
+RULE 2. MEETINGS.
+    (a) In General.--
+        (1) The regular meeting date of the Committee shall be the
+        first Tuesday of every month when the House is in session in
+        accordance with clause 2(b) of rule XI of the Rules of the
+        House of Representatives. If the House is not in session on the
+        first Tuesday of a month, the regular meeting date shall be the
+        third Tuesday of that month. A regular meeting of the Committee
+        may be dispensed with if, in the judgment of the Chair of the
+        Committee, there is no need for the meeting.
+        (2) Additional meetings may be called by the Chair of the
+        Committee as the Chair considers necessary, in accordance with
+        clause 2(g)(3) of rule XI of the Rules of the House of
+        Representatives.
+    (b) Meetings of the Committee shall be called to order and presided
+over by the Chair or, in the Chair's absence, by a member designated by
+the Chair to carry out such duties.
+    (c) Notification.--
+        (1) Pursuant to clause 2(g)(3) of Rule XI of the Rules of the
+        House, the Chair shall make a public announcement of the date,
+        place, and subject matter of a Committee meeting (other than a
+        hearing), which may not commence earlier than the third
+        calendar day (excluding Saturdays, Sundays, or legal holidays
+        except when the House is in session on such a day) on which
+        members have notice thereof.
+        (2) The agenda for each Committee meeting, setting out all
+        items of business to be considered, shall be established by the
+        Chair and provided to each member of the Committee at least 36
+        hours (exclusive of Saturdays, Sundays, and legal holidays
+        except when the House is in session on such days) in advance of
+        the commencement of such meeting.
+    (d) The requirements of paragraph (c) may be waived by a majority
+vote of those present, a quorum being present, or by the Chair with the
+concurrence of the Ranking Member. If the requirements of paragraph (c)
+are waived, the Chair shall notify the members of the Committee at the
+earliest possible time.
+RULE 3. HEARINGS.
+    (a) Announcement of Hearings.--
+        (1) Pursuant to clause 2(g)(3) of Rule XI of the Rules of the
+        House, the Chair shall announce the date, time, place, and
+        subject matter of any hearing of the Committee, which may not
+        commence earlier than one week after such notice.
+        (2) A hearing may commence sooner than specified in (a)(1) if
+        the Chair, with the concurrence of the Ranking Member,
+        determines there is good cause or the Committee so determines
+        by majority vote, a quorum being present. The Chair shall
+        announce the hearing at the earliest possible time.
+    (b) Written Witness Statement; Oral Testimony.--
+        (1) Filing of Statement.--To the greatest extent practicable,
+        each witness who is to appear before the Committee shall file
+        with the clerk of the Committee a written statement of his or
+        her proposed testimony at least two business days in advance of
+        his or her appearance. The clerk of the Committee shall
+        distribute this testimony to the Members of the Committee as
+        soon as is practicable and at least one business day before the
+        hearing. The requirements of this subparagraph may be waived or
+        modified by the Chair after consultation with the Ranking
+        Member.
+        (2) Each witness shall limit his or her oral presentation of
+        testimony to no more than five minutes.
+        (3) Truth in Testimony.--Each witness appearing in a
+        nongovernmental capacity shall include with the written
+        statement of his or her proposed testimony a curriculum vitae;
+        a disclosure of any Federal grants or contracts, or contracts,
+        or grants, or payments originating with a foreign government,
+        received during the past 36 months by the witness or by an
+        entity represented by the witness and related to the subject
+        matter of the hearing; and a disclosure of whether the witness
+        is a fiduciary (including, but not limited to, a director,
+        officer, advisor, or resident agent) of any organization or
+        entity that has an interest in the subject matter of a hearing.
+        The disclosure shall include (A) the amount and country of
+        origin of any payment or contract related to the subject matter
+        of the hearing originating with a foreign government; and (B)
+        the amount and country of origin of any payment or contract
+        related to the subject matter of the hearing originating with a
+        foreign government.
+        (4) Availability of Information.--Statements filed under this
+        paragraph shall be made publicly available in electronic form
+        not later than one day after the witness appears.
+    (c) Notification of Subject Matter.--As soon as practicable but no
+later than 36 hours before the commencement of a hearing, the Chair
+shall make available to the public and all Members of the Committee a
+concise summary of the subject matter under consideration at the
+hearing, any relevant reports from departments or agencies on such
+matters, and a list of witnesses, including minority witnesses.
+    (d) Minority Witnesses.--When any hearing is conducted by the
+Committee on any measure or matter, the minority party members on the
+Committee shall be entitled, upon request to the Chair by a majority of
+those members, to call at least one witness, as selected by the
+minority members, to testify with respect to that measure or matter
+along with witnesses selected by the Chair.
+    (e) Opening Statements.--
+        (1) Chair and Ranking Member.--At any hearing of the Committee,
+        the Chair and Ranking Member shall each control five minutes
+        for opening statements. The Chair and Ranking Member may
+        recognize other members within their respective five minutes.
+        (2) Other Members.--The Chair may allow other members of the
+        Committee to deliver oral opening statements, as appropriate,
+        with the concurrence of the Ranking Member. Such statements
+        shall not exceed five minutes in length and are to be equally
+        distributed between majority and minority members to the extent
+        practicable given the party makeup of the members present.
+        Members not recognized by the Chair for oral opening statements
+        may submit written opening statements for the record.
+    (f) Questioning of Witnesses.--The Chair shall initiate the right
+to question witnesses before the Committee, followed by the Ranking
+Member and all other members thereafter.
+        (1) Order of Member Recognition.--The right to question the
+        witnesses before the Committee shall alternate between majority
+        and minority members. A member of the Committee may question a
+        witness only when recognized by the Chair for that purpose. The
+        Chair shall recognize in order of appearance members who were
+        not present when the meeting was called to order after all
+        members who were present when the meeting was called to order
+        have been recognized in the order of seniority on the
+        Committee.
+        (2) Procedures for Questioning of Witnesses by Members.--Each
+        member shall be limited to 5 minutes in the questioning of
+        witnesses and shall limit his or her remarks to the subject
+        matter of the hearing. After consultation with the Ranking
+        Member, the Chair may recognize members who have already had an
+        opportunity to question the witness for a second period of 5
+        minutes once each member of the Committee present has been
+        recognized once for that purpose.
+        (3) Extended Questioning of Witnesses by Members.--Following
+        the questioning of witnesses described in (f)(2) above, the
+        Chair, with the concurrence of the Ranking Member or the
+        Committee by motion, may permit a specified number of members
+        to question one or more witnesses for a specified period of
+        time not to exceed 60 minutes in the aggregate, equally divided
+        between and controlled by the Chair and the Ranking Member.
+        (4) Questions for the Record.--Each member may submit to the
+        Chair additional questions for the record to be answered by the
+        witnesses who have appeared. Each member shall provide a copy
+        of the questions in an electronic format to the Committee no
+        later than 10 business days following a hearing. The Chair
+        shall transmit all questions received from members of the
+        Committee to the appropriate witnesses and include the
+        transmittal letter and the responses from the witnesses in the
+        hearing record. After consultation with the Ranking Member, the
+        Chair is authorized to close the hearing record no earlier than
+        15 business days from the date the questions were transmitted
+        to the appropriate witnesses.
+    (g) Hearings of the Committee shall be called to order and presided
+over by the Chair or, in the Chair's absence, by a member designated by
+the Chair to carry out such duties.
+    (h) Oaths.--The Chair of the Committee, or a member designated by
+the Chair, may administer oaths to any witness before the Committee.
+The Chair or his or her designee may administer the following oath to
+all witnesses prior to receiving testimony: ``Do you solemnly swear or
+affirm, under penalty of law, that the testimony you are about to give
+is the truth, the whole truth, and nothing but the truth, so help you
+God?''
+    (i) Claims of Privilege.--Claims of common-law privilege made by
+witnesses in hearings, or by interviewees in investigations or
+inquiries, are applicable only at the discretion of the Chair, subject
+to appeal to the Committee.
+RULE 4. OPEN PROCEEDINGS.
+    (a) Meetings for the transaction of business and hearings of the
+Committee shall be open to the public, including radio, television, and
+still photography coverage, unless closed in accordance with clause
+2(g) of rule XI of the Rules of the House of Representatives.
+    (b) The audio and video coverage of Committee proceeding permitted
+under clause 4 of rule XI of the Rules of the House of Representatives
+shall apply to the Committee.
+RULE 5. REPORTS.
+    (a) Approval of Official Committee Reports.--Any report completed
+pursuant to section 4(d) of H. Res. 8 (117th Congress) that purports to
+express the views, findings, conclusions, or recommendations of the
+Committee must be approved by a majority vote of the Committee at a
+meeting at which a quorum is present, in accordance with Committee Rule
+7(a)(3). The total number of votes cast for and against, and the names
+of those voting for and against, shall be included in the Committee
+report on the matter.
+    (b) Notice of Committee Reports.--Any report described in (a) shall
+not be considered in the Committee unless the proposed report has been
+available to the members of the Committee for at least three business
+days before consideration of such report in the Committee.
+    (c) Additional Views.--If, at the time of approval of a report, a
+member of the Committee gives notice of intent to file supplemental,
+minority, additional, or dissenting views for inclusion in the report,
+all members of the Committee shall be entitled to no less than two
+business days after such notice to file such views following clause
+2(l) of rule XI of the Rules of the House.
+    (d) Availability of Publications.--Pursuant to clause 2(e)(4) of
+Rule XI of the Rules of the House, the Committee shall make its
+publications available in electronic form to the maximum extent
+feasible. Pursuant to section 4(d) of H. Res. 8 (117th Congress), the
+Committee shall make its publications available to the general public
+in widely accessible formats not later than 30 calendar days following
+the respective dates for completion.
+RULE 6. COMMITTEE RECORDS.
+    (a) Availability.--Documents reflecting the proceedings of the
+Committee shall be made publicly available in electronic form on the
+Committee's website and in the Committee office for inspection by the
+public, as provided in clause 2(e) of rule XI of the Rules of the House
+of Representatives, within 48 hours of such recorded vote after each
+meeting has adjourned, including a record showing those present at each
+meeting; and a record of the vote on any question on which a recorded
+vote is demanded, including a description of the motion, order, or
+other proposition, the name of each member voting for and each member
+voting against such motion, order, or proposition, and the names of
+those members of the Committee present but not voting.
+    (b) Archived Records.--The records of the Committee deposited at
+the National Archives shall be made available for public use in
+accordance with Rule VII of the Rules of the House. The Chair shall
+notify the Ranking Member of any decision, pursuant to clause 3(b)(3)
+or clause 4(b) of such rule, to withhold a record otherwise available.
+Upon written request of any member of the Committee, the Chair shall
+present the matter to the Committee for a determination, which shall be
+subject to
+the same requirements for conduct of Committee business under Committee
+Rule 2.
+RULE 7. QUORUMS AND RECORDED VOTES; POSTPONEMENT OF VOTES.
+    (a) Establishment of a Quorum.--
+        (1) For the purpose of taking testimony and receiving evidence,
+        no fewer than two members of the Committee shall constitute a
+        quorum.
+        (2) A majority of the members of the Committee shall constitute
+        a quorum for those actions for which the Rules of the House of
+        Representatives require a majority quorum.
+        (3) A majority of the members of the Committee shall constitute
+        a quorum for issuing an official Committee report pursuant to
+        Rule 5 of the Committee rules and section 4(d) of H. Res. 8
+        (117th Congress).
+        (4) For the purposes of taking any other action, one-third of
+        the members of the Committee shall constitute a quorum.
+    (b) Recorded Votes.--A recorded vote may be demanded by one-fifth
+of the members present.
+    (c) Postponement of Votes.--Pursuant to clause 2(h)(4) of the Rules
+of the House, the Chair, after consultation with the Ranking Member,
+may postpone further proceedings when a recorded vote is ordered on the
+question of approving any measure or matter or adopting an amendment
+and may resume proceedings on a postponed vote at any time after
+reasonable notice to Members by the Clerk or other designee of the
+Chair. When proceedings resume on a postponed question, notwithstanding
+any intervening order for the previous question, an underlying
+proposition shall remain subject to further debate or amendment to the
+same extent as when the question was postponed.
+RULE 8. COMMITTEE STAFF.
+    (a) Professional and other staff of the Committee are subject to
+the provisions of clause 9 of rule X of the Rules of the House of
+Representatives.
+    (b) Majority Staff.--The Chair shall appoint and determine the
+remuneration of, and may remove, the employees of the Committee not
+assigned to the minority. The staff of the Committee not assigned to
+the minority shall be under the general supervision and direction of
+the Chair, who shall establish and assign the duties and
+responsibilities of such staff members and delegate such authority as
+he or she determines appropriate.
+    (c) Minority Staff.--The Ranking Member shall appoint and determine
+the remuneration of, and may remove, the staff assigned to the minority
+within the budget approved for such purposes. The staff assigned to the
+minority shall be under the general supervision and direction of the
+Ranking Member, who may delegate any authority he or she determines
+appropriate.
+    (d) The Chair and Ranking Member have the right to secure one or
+more detailees to assist with the work of the Committee.
+RULE 9. BUDGET.
+    (a) The Chair, in consultation with the Ranking Member, shall
+prepare a budget providing amounts for staff, committee travel, field
+hearings, investigation, and other expenses of the Committee. Funds
+authorized for the Committee as provided in clause 6 of Rule X are for
+expenses incurred in the activities of the Committee.
+    (b) Consistent with clause 9 of Rule X, the Chair shall designate
+an amount equal to 1/3 of the amount provided to the Committee in the
+primary expense resolution adopted by the House of Representatives to
+be under the direction of the Ranking Member for the compensation of
+the minority staff, travel expenses of minority members and staff, and
+minority office expenses. All expenses of minority members and staff
+shall be paid for out of the amount so set aside.
+RULE 10. TRAVEL.
+    (a) The Chair may authorize travel for any member and any staff
+member of the Committee in connection with activities or subject
+matters under the general jurisdiction of the Committee. Travel to be
+reimbursed from funds set aside for the Committee for any member of
+staff member shall be paid only upon the prior authorization of the
+Chair. Before such authorization is granted, there shall be submitted
+to the Chair in writing the following:
+        (1) The purpose of the travel.
+        (2) The dates during which the travel is to occur.
+        (3) The names of the states or countries to be visited and the
+        length of time to be spent in each.
+        (4) An agenda of anticipated activities.
+        (5) The names of members and staff of the Committee for whom
+        the authorization is sought.
+    (b) Members and staff of the Committee shall make a written report
+to the Chair on any travel they have conducted under this subsection,
+including a description of their itinerary, expenses, and activities,
+and of pertinent information gained as a result of such travel.
+    (c) Members and staff of the Committee performing authorized travel
+on official business shall be governed by applicable laws, resolutions,
+and regulations of the House and of the Committee on House
+Administration.
+RULE 11. WEBSITE.
+    The Chair shall maintain an official Committee website for the
+purpose of carrying out the official responsibilities of the Committee,
+including communicating information about the Committee's activities.
+The Ranking Member may maintain a minority website. To the maximum
+extent feasible, the Committee shall make its publications available in
+electronic form on the official Committee website maintained by the
+Chair.
+    The proposed rules were circulated electronically to
+members on Tuesday morning and again yesterday. The proposed
+rules include technical and conforming changes to the rules the
+Select Committee adopted last Congress.
+    So I wonder if we have any proposed amendments?
+    Without objection, the further reading--okay. Let's see, no
+amendments? Great.
+    Mr. Graves. Madam Chair.
+    Ms. Castor. Rep. Graves, you are recognized.
+    Mr. Graves. Thank you.
+    Madam Chair, as you and I discussed this and I told you
+that we were okay with the rules package, I have one request.
+In the truth in testimony section, which is (b)(3), I
+understand that this is one of the greatest revisions in the
+rules, and it is my understanding that this was done in order
+to comply with revisions in House rules related to truth in
+testimony, and obviously those things need to be aligned.
+    One of our members brought up an issue this morning, and I
+just want to ask would it be okay if our staffs can get
+together to work to reconcile this. The intention of these
+revisions are to ensure that we have full disclosure of any
+foreign agents or foreign interests that are testifying or
+operating before the committee, which certainly makes sense.
+    As we know, some countries operate through surrogates, and
+we have seen that some companies have--excuse me, some
+countries--use companies or not-for-profits and others to
+convey their message and effectively operate in a subversive
+manner.
+    And I just--in reading this, it is clearly the intent to
+capture those sorts of folks that may not be fully transparent
+in their background or their motives. And I just wanted to ask
+if it would be okay if our staffs could take a fresh look at
+this provision and just ensure that it would capture anyone
+that is operating on behalf of a foreign government but perhaps
+doing it through a surrogate like a company or something along
+those lines.
+    Ms. Castor. Yeah, I appreciate that. And I know Rep. Palmer
+had raised a question on that account.
+    So, first of all, thank you for reading the rules and
+thinking them through. The changes relating to that section
+reflect the changes to the House rules, so we like to keep in
+sync with the House rules so to avoid confusion. But I get your
+point. So we will--our staff can discuss and talk about this,
+and if we need to go back to the Rules Committee and have some
+clarification, we can do that. We will also give the bipartisan
+staff the ability to make any technical changes and bring them
+back to us if we need to do that.
+    Mr. Graves. Thank you. Thank you, Madam Chair. If my WiFi
+wasn't out and Netflix didn't work, I am not sure I would have
+read them. But thank you.
+    Ms. Castor. Okay. Any other questions or comments or
+proposed amendments?
+    Seeing none, the question is now on the adoption of the
+rules.
+    All those in favor, say aye.
+    Those opposed, say no.
+    In the opinion of the chair, the ayes have it, the rules
+are adopted.
+    And without objection, the motion to reconsider is laid
+upon the table.
+    I now ask for unanimous consent that the staff be allowed
+to make any technical and conforming changes to the rules
+subject to approval of the minority.
+    Hearing no objections, it is so ordered.
+    And guess what? We have no further business.
+    I would like to thank everyone for attending today's
+meeting. I look forward to a productive year ahead. We are
+going to be developing a number of upcoming hearings, if you
+all have--we welcome any input from all members of the
+committee, so please don't hesitate to pass those along.
+    Again, welcome to our new members. Thank you all for
+helping us go through this organizational meeting in a very
+smooth way.
+    And, without objection, this meeting is adjourned. Thanks,
+everybody.
+    Mr. Casten. Madam Chair, before we adjourn, can I make one
+comment?
+    Ms. Castor. Rep. Casten, you are recognized.
+    Mr. Casten. So, look, this is a comment mostly to my
+Democratic members. Our illustrious chair, as some of you may
+not be aware, is also the chair of the Congressional Soccer
+Caucus. And with the addition of Reps. Gonzalez and Crenshaw, I
+believe that we now have, maybe with the exception of Rep.
+LaHood, all of the Republican players on the congressional
+soccer team last year.
+    We have the coach on our side and myself, and so to my
+Democratic colleagues, we need to beef up the squad, and I
+would encourage you to join the Congressional Soccer Caucus and
+play once we get to a COVID point again, because there is far
+too much leaning to one side of the aisle in this----
+    Mr. Huffman. You don't want to see me playing soccer, Sean,
+but if we ever have a tennis match or if anyone wants to play
+volleyball, we will talk.
+    Mr. Casten. I think it was myself and Rick Larsen and a lot
+of much younger staff on the Democratic side last year, so our
+Republicans are doing a better job at getting the old creaky
+knees out on the field, and I think we have an obligation to
+match their exuberance.
+    Mr. Graves. Well, you know what, Congressman Casten, I left
+two ligaments on the field, so you will see those, I can tell
+you.
+    Ms. Castor. Yes, that is right.
+    Ms. Bonamici. Well, and as the representative of----
+    Mr. Casten. That is right. I take it back, Garret. I wanted
+to man up on you.
+    Ms. Bonamici. I represent Nike, and they typically sponsor,
+and so I am getting pretty good at the coin toss, but I don't
+think you will see me doing much else on the field. May the
+best team win.
+    Ms. Castor. Excellent. Okay. Thanks, everybody.
+    Without objection, the meeting is adjourned. Have a great
+weekend.
+    [Whereupon, at 10:17 a.m., the committee was adjourned.]
+                            [all]
+</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body></html>