The Golden Age: Unleashing Main Street through Deregulation (House Small Business Committee hearing, April 1, 2025)
Summary
Printed record of a hearing of the House Committee on Small Business held April 1, 2025, titled The Golden Age: Unleashing Main Street through Deregulation, Small Business Committee Document Number 119–006. Opening statements came from Chairman Roger Williams and Ranking Member Nydia Velázquez. Witnesses were Patrick Montalban, chairman and chief executive officer of Montalban Oil & Gas Operations, Inc.; Elden Johnson, owner of Elden Johnson Transportation; Buddy Hughes, chairman of the board of the National Association of Home Builders; and John Arensmeyer, founder and chief executive officer of Small Business Majority. Additional material for the record includes H.R. 1163, the PROVE IT Act of 2025, H.R. 974, the Small Business Regulatory Reduction Act, and submissions from Associated Builders and Contractors, NAHB and NH Business.
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“The Golden Age: Unleashing Main Street through Deregulation (House Small Business Committee hearing, April 1, 2025).”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/the-golden-age-unleashing-main-street-through-deregulation-house-small-a5f99ee4b2/
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THE GOLDEN AGE: UNLEASHING MAIN STREET
THROUGH DEREGULATION
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
HEARING HELD
APRIL 1, 2025
Small Business Committee Document Number 119–006
Available via the GPO Website: www.govinfo.gov
U.S. GOVERNMENT PUBLISHING OFFICE
59–819 WASHINGTON : 2025
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HOUSE COMMITTEE ON SMALL BUSINESS
ROGER WILLIAMS, Texas, Chairman
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
BETH VAN DUYNE, Texas
JAKE ELLZEY, Texas
MARK ALFORD, Missouri
NICK LALOTA, New York
BRAD FINSTAD, Minnesota
TONY WIED, Wisconsin
ROB BRESNAHAN, Pennsylvania
BRIAN JACK, Georgia
TROY DOWNING, Montana
KIMBERLYN KING-HINDS, Northern Marina Islands
DEREK SCHMIDT, Kansas
NYDIA VELÁZQUEZ, New York, Ranking Member
MORGAN MCGARVEY, Kentucky
HILLARY SCHOLTEN, Michigan
LAMONICA MCIVER, New Jersey
GIL CISNEROS, California
KELLY MORRISON, Minnesota
GEORGE LATIMER, New York
DEREK TRAN, California
LATEEFAH SIMON, California
JOHNNY OLSZEWSKI, Maryland
HERB CONAWAY, New Jersey
MAGGIE GOODLANDER, New Hampshire
LAUREN HOLMES, Majority Staff Director
MELISSA JUNG, Minority Staff Director
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CONTENTS
OPENING STATEMENTS
Page
Hon. Roger Williams ................................................................................................ 1
Hon. Nydia Velázquez ............................................................................................. 2
WITNESSES
Mr. Patrick Montalban, Chairman and Chief Executive Officer, Montalban
Oil & Gas Operations, Inc., Cut Bank, MT ........................................................ 5
Mr. Elden Johnson, Owner, Elden Johnson Transportation, Rush City, MN .... 7
Mr. Buddy Hughes, Chairman of the Board, National Association of Home
Builders, Lexington, NC ...................................................................................... 8
Mr. John Arensmeyer, Founder and Chief Executive Officer, Small Business
Majority, Washington, DC ................................................................................... 9
APPENDIX
Prepared Statements:
Mr. Patrick Montalban, Chairman and Chief Executive Officer,
Montalban Oil & Gas Operations, Inc., Cut Bank, MT ............................. 46
Mr. Elden Johnson, Owner, Elden Johnson Transportation, Rush City,
MN ................................................................................................................. 56
Mr. Buddy Hughes, Chairman of the Board, National Association of
Home Builders, Lexington, NC .................................................................... 62
Mr. John Arensmeyer, Founder and Chief Executive Officer, Small Busi-
ness Majority, Washington, DC ................................................................... 72
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
H.R. 1163 - PROVE IT Act of 2025 ................................................................. 82
H.R. 974 - Small Business Regulatory Reduction Act ................................... 95
Associated Builders and Contractors (ABC) ................................................... 98
National Association of Home Builders (NAHB) ........................................... 99
NH Business ..................................................................................................... 102
Small Business & Entrepreneurship Council (SBE) ..................................... 105
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THE GOLDEN AGE: UNLEASHING MAIN
STREET THROUGH DEREGULATION
TUESDAY, APRIL 1, 2025
HOUSE OF REPRESENTATIVES,
COMMITTEE ON SMALL BUSINESS,
Washington, DC.
The Committee met, pursuant to call, at 10:03 a.m., in Room
2360, Rayburn House Office Building, Hon. Roger Williams [chair-
man of the Committee] presiding.
Present: Representatives Williams, Stauber, Meuser, Van Duyne,
Alford, LaLota, Finstad, Wied, Bresnahan, Jack, Downing, King-
Hinds, Velázquez, McGarvey, Scholten, McIver, Cisneros, Morrison,
Latimer, Tran, Simon, Olszewski, Conaway, and Goodlander.
Chairman WILLIAMS. Okay, before we get started, I want to
recognize Congressman Olszewski from the great State of Mary-
land to lead us in the pledge and the prayer.
Mr. OLSZEWSKI. I pledge allegiance to the flag of the United
States of America, and to the Republic for which it stands, one na-
tion, under God, indivisible, with liberty and justice for all.
Dear God, we come before you this day with grateful hearts that
you opened our eyes, brought us to this place where we have the
opportunity to serve the American people. Lord, I pray that you put
your hand and protection over our Chairman, over our Ranking
Member, over my colleagues, over staff who worked so hard as we
seek to advance your will, keeping us a matter of gratitude and
service and love for those whom we serve. Remind us every day
what a blessing and honor it is to serve you, Lord. To your name
we pray, amen.
Chairman WILLIAMS. Good morning, everyone. And now I call
the Committee on Small Business to order.
Without objection, the Chair is authorized to declare a recess of
the Committee at any time.
I now recognize myself for my opening statement.
Welcome to today’s hearing, ‘‘The Golden Age: Unleashing Main
Street Through Deregulation.’’ I want to thank our witnesses for
being here today. Many of you have traveled a long way to share
your experiences and your perspectives, and we deeply value your
time and your voice.
Today we will focus on the need to unshackle small businesses
from burdensome regulations created by the previous administra-
tion and examine what actions the Trump administration and Con-
gress are taking to help free small businesses from this red tape.
Every small business owner knows that regulations limit their
ability to grow and succeed. Unfortunately, the Biden administra-
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tion has cost American businesses more than $1.8 trillion in addi-
tional regulatory costs over just the last 4 years.
As a car dealer myself for over 50 years, I know firsthand how
harmful regulations can be for small businesses and consumers
alike. In the car business, the cost of regulations directly impacts
the cost of the car. In fact, regulations could increase the cost for
the car by almost 20 percent. Emissions regulations and fuel effi-
ciency standards are among the most expensive to comply with,
which directly impacts consumers.
This mountain of red tape is uniquely costly to main street. On
average, small business owners pay 20 percent more than larger
companies to comply with the same regulation. While these small
business owners are experts in their fields, they are not experts in
regulatory compliance. Small businesses must dedicate as much as
they can and more significant portion of their workforce and funds
to regularly comply, drastically limiting their ability to grow and
discourage the creation of new small businesses.
Despite the serious headwinds small businesses face due to this
avalanche of regulations, there is reason for hope. The Trump ad-
ministration has already made progress in removing some of the
most harmful regulations imposed on our nation’s small businesses
by the Biden administration. President Trump’s pro-growth policies
have already begun to help our nation’s most prominent job cre-
ators and make them survive and thrive.
As a small businessowner, I know the consequences of stifling
regulations. That is why in my time as Chairman, one of the top
priorities of the Committee has been combatting the red tape that
impedes small businesses across America. This Committee is dedi-
cated to creating solutions that will unburden Main Street Amer-
ica, which is what the legislation included in our hearing today in-
tends to address. I hope our conversation today will further shape
the potential solutions.
I want to thank all of you again for being here. I look forward
to our conversation.
And with that, now I recognize my friend and Ranking Member
from New York, Ms. Velázquez, for her opening remarks.
Ms. VELÁZQUEZ. Thank you, Chairman Williams.
Good morning, everyone. Thank you to the witnesses for being
here today.
While some may argue that the golden age of deregulation will
pave a path to economic growth, we must recognize that the un-
checked removal of regulations can have lasting consequences. It is
important to understand that regulations provide a foundation that
ensures safety, fairness, and sustainability for all Americans as
well as small businesses.
Regulations make sure the food restaurants serve is safe, the
water craft breweries use to make beer is free of contaminants, and
the air we breathe is clean. Regulations also provide clear rules of
the road for small businesses, offering certainty and ensuring that
they can compete on a level playing field. Clear, consistent rules
help small firms understand what is expected, foster fair competi-
tion, and lead to success. Regulations promote innovation, espe-
cially in the energy and manufacturing sectors.
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The Bipartisan Infrastructure Law and Inflation Reduction Act
created the framework for accelerating clean energy development
and innovation. The accompanying regulations prioritized invest-
ment in renewable energy, energy efficiency, and clean tech-
nologies, driving innovation in the clean energy sectors.
With that said, I understand certain regulations can be onerous
and difficult for small employers to comply with, but deregulation
is not the answer. The chainsaw approach will roll back important
safeguards and cause uncertainty for small firms. Uncertainty
seems to be par for the course with this administration.
In 2 short months, reckless policies have wreaked havoc, chaos,
and confusion across the American landscape, harming main street.
On January 24, President Trump illegally fired the Inspector Gen-
eral who was committed to investigating and recovering fraudulent
funds. Days later, OMB released a memo requiring agencies to
freeze further funding, causing confusion for small businesses,
lenders, and contractors.
On February 3, Elon Musk and his team gained access to all of
SBA’s systems, including human resources, contract and payment
systems, endangering the private information of millions of Amer-
ican small businesses.
Then on Friday, February 7, hundreds of SBA employees re-
ceived termination notices, only to be told it was a mistake on Mon-
day, and then fired for real on Tuesday. A Maryland District Court
judge issued a temporary order reinstating probationary employees
through March 27. However, the SBA placed them on administra-
tive leave. This is not the way to lead.
On March 21, the President announced SBA will take over the
federal government’s student loan portfolio, which has nothing to
do with advancing the mission of the SBA. It is incomprehensible
that SBA will be asked to take on the servicing of more than $1.6
trillion in loans while the staff is being cut almost in half.
If the destruction of the government isn’t enough, Donald Trump
is picking a fight with Mexico and Canada using tariffs. Small re-
tailers, manufacturers, and farmers all over the country are reel-
ing. The uncertainty has left many small businesses struggling to
keep up.
Our focus today should be on the reckless policies of the Trump
administration that are sowing tariffs, confusion, and uncertainty
for small businesses. Mr. Chairman, so much for lowering inflation.
Thank you, and I yield back.
Chairman WILLIAMS. The gentlelady yields back.
I will now introduce our witnesses.
The first witness with us today is Patrick Montalban. Mr.
Montalban is the Chairman and Chief Executive Officer of
Montalban Oil & Gas Operations, Inc., in Cut Bank, Montana. Mr.
Montalban has overseen Montalban Oil & Gas operations for over
20 years, taking over from his father who started the company in
the fifties. He has also worked with Mountainview Energy Limited,
Genesis Energy, and Altamont Oil & Gas.
In addition, Mr. Montalban is the Chairman of the National
Stripper Well Association and a member of the American Associa-
tion of Petroleum Geologists, the Domestic Energy Producers Alli-
ance, and the Northern Montana Oil and Gas Association.
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Mr. Montalban holds a bachelor of arts in geology from the Uni-
versity of Montana and a bachelor of science in geology from Mon-
tana State University at Bozeman.
Thank you for joining us today. Looking forward to our conversa-
tion.
I now yield to the distinguished Member from Minnesota, Mr.
Stauber, to introduce the next witness from his district.
Mr. STAUBER. Thank you, Mr. Chair.
Our next witness here with us today is Mr. Elden Johnson. Mr.
Johnson is the owner and operator of Elden Johnson Transpor-
tation in Rush City, Minnesota, founded in 1999. Elden Johnson
Transportation is a major hub for trucking services in our region.
The company’s fleet of vehicles, manned by skilled drivers, ensures
the smooth transportation of goods across various distances and
terrains. The company has established itself as a go-to option for
businesses looking to move their products swiftly, safely, and se-
curely.
Mr. Johnson is a member of the National Federation of Inde-
pendent Business, and currently resides in Rush City Minnesota,
with his wife and son.
Thank you for joining us, Elden, today, and I am looking forward
to your comments.
And I yield.
Chairman WILLIAMS. The gentleman yields back.
And now our next witness here with us today is Mr. Buddy
Hughes. Mr. Hughes is the Chairman of the Board for the National
Association of Home Builders in Washington, D.C. As a third-gen-
eration builder, Mr. Hughes opened his own general contracting
business, Hughes Construction, in 1985. Mr. Hughes has been an
active principal in the National Association of Home Builders lead-
ership structure at that level and State and national levels. He cur-
rently serves as a life delegate of the Leadership Council and has
been a member of the board of directors for more than 20 years.
Mr. Hughes is an Eagle Scout and was awarded the Richie Scott
Award form the Insulating Concrete Form Association in 2007 and
the National Association of Home Builders S.A. Walters Award in
2018.
Thank you for joining us today. Looking forward to our conversa-
tion.
I now recognize the Ranking Member from New York, Ms.
Velázquez, to briefly introduce our last witness appearing before us
today.
Ms. VELÁZQUEZ. Thank you, Mr. Chairman.
I am pleased to introduce Mr. John Arensmeyer, the Founder
and CEO of the Small Business Majority. John launched the Small
Business Majority 20 years ago, and he has built it into a nation-
ally recognized organization focused on empowering America’s en-
trepreneurs to build a thriving and equitable economy. He has be-
come a leading advocate on critical policy issues affecting small
business.
Prior to that, John was the Founder and CEO of an award-win-
ning interactive communications company. With a background in
business and public policy, John will be able to discuss the chal-
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lenges and opportunities facing small businesses today. We are for-
tunate to have him here today.
Thank you. I yield back.
Chairman WILLIAMS. The gentlelady yields back.
And, again, we appreciate all of you being here today. And before
recognizing all of you, I want to remind you the way we operate
here, okay, that your oral testimony is restricted to 5 minutes in
length. If you see the light turn red in front of you, it means that
your 5 minutes is up and you need to conclude. If you don’t con-
clude, you are going to hear me doing this, okay? But it will be
fine.
And also, you might see Members coming and going in and out;
it has no reflection on your testimony or anything. There are other
hearings going on today. So you will hear everybody from me and
the Ranking Member and others stepping out and then stepping
back in.
So with that being said, I would like to recognize Mr. Montalban
for his 5-minute opening remarks.
STATEMENTS OF MR. PATRICK MONTALBAN, CHAIRMAN &
CEO, MONTALBAN OIL & GAS OPERATIONS, ON BEHALF OF
THE NATIONAL STRIPPER WELL ASSOCIATION; MR. ELDEN
JOHNSON, OWNER, ELDEN JOHNSON TRANSPORTATION, ON
BEHALF OF THE NATIONAL FEDERATION OF INDEPENDENT
BUSINESS; MR. BUDDY HUGHES, CHAIRMAN OF THE BOARD,
THE NATIONAL HOME BUILDERS ASSOCIATION; AND MR.
JOHN ARENSMEYER, FOUNDER & CEO, SMALL BUSINESS MA-
JORITY
STATEMENT OF PATRICK MONTALBAN
Mr. MONTALBAN. Thank you, Chairman Williams, Ranking
Member Velázquez, Vice Ranking Member McGarvey, and Mem-
bers of this Committee.
My name is Patrick Montalban. I reside in Cut Bank, Montana,
and I am the Chairman of the National Stripper Well Association.
We represent the small independents of America that produce
small wells, and we call them the ma and pa outfits in oil and gas
business.
A stripper well is 15 barrels a day or less or 90,000 MCF. We
produce about 13.6 million barrels in this fine country of ours, and
we produce about 10 percent of that production, or about 1.3 mil-
lion barrels. This production is produced out of 760,000 wells over
32 States, or about 80 percent of the production in this great coun-
try.
We call it the Strategic Petroleum Reserve, many of us, as we be-
lieve it is a very constant and ready for the citizens of this great
country. We generate great jobs in rural America and we provide
excellent jobs to our local communities. It takes as many people to
run a three-barrel-a-day well as it does a 300-barrel-a-day well.
We are not large integrated companies. We don’t produce oil, re-
fine oil, and sell oil. We receive a price at the well head or on the
site for what we produce.
We have been in this business for many years. One of the things
many people don’t think about are the royalty owners that are as-
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sociated with our business. Many people, such as farmees and re-
tirees, receive this extra income each month to help them pay their
bills. To give you an example, some of the royalty owners in Texas,
4.4 million; Minnesota, 71,000; Pennsylvania, 18,000; Kansas,
221,000; and my great State of Montana, Congressman Downing,
71,000.
I am Chairman and CEO of Montalban Oil and Gas. I had a de-
gree in geology from the University of Montana. My father started
this company in the 1950s. We have 17 full employees and pay $35
an hour. We pay a hundred percent of healthcare for our employees
and their families. We provide an excellent package for each and
every employee.
We are the largest producer on the Blackfeet Nation Indian Res-
ervation in Montana. We pay 19 to 25 percent royalty. A normal
royalty in the oil and gas business is 12.5 to 15 percent.
We are a community orientated company, and we give back to
the schools, to the hospitals, and all the local businesses.
We have been confronted for years on regulations. In the Obama
administration, we look back and we called that operating under
a thousand cuts. We got through those 8 years, but nothing was
like the Biden administration. The Biden administration wanted to
clearly put us out of business. And I had a few individuals in the
Department of Interior and the EPA tell me so.
Think about that, everyone at this Committee, if you would like
to have someone tell you that the government would like to put you
out of business. These are strong jobs in rural America.
How were they going to do this? They were going to do this with
the methane tax regulations by the EPA, the bonding requirements
with the Department of Interior, and dear to my heart, the UIC in-
jection program for water injectivity in our oil and gas business.
We operate under numerous levels in the State of Montana. We
have state, federal, tribal fee and numerous layers of regulations.
The three major concerns with the methane rules was the sub-
part W, or the reporting, or 0000b, OOOOc, which brought in the
small independents. This would have put every small independent
out of business in America. Don’t kid yourself.
The UIC program is the underground injection control program
operated by the EPA. Started in 1986, and it was a very good pro-
gram, but, unfortunately, they have gone over their bounds and
have hurt the small independents.
One of the hardest things for federal properties for the small
independents was how they changed the Department of Interior
bonding regulations. They took a 10,000 well dollars—excuse me.
They took a single well bond for $10,000 to $150,000, and a mul-
tiple well bond for, in other words two wells, from $25,000 to
$500,000. What this clearly did was take us out of operating on
small—or federal lands.
Thank you for this time. It is going to be a new golden age for
the small independents of America now that we have new adminis-
trators appointed by the Trump administration.
Chairman WILLIAMS. Thank you very much.
And I now recognize Mr. Johnson for his 5-minute opening re-
marks.
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STATEMENT OF ELDEN JOHNSON
Mr. JOHNSON. Chairman Williams, Ranking Member
Velázquez, and Members of the House Small Business Committee,
thank you for the opportunity to testify today on behalf of the
small business owners across America. My name is Elden Johnson.
I own Elden Johnson Transportation in Rush City, Minnesota,
which I started in 1999.
Over the last 4 years, small businesses have faced unprecedented
challenges, including COVID shutdowns, supply chain disruptions,
historic inflation, burdensome regulatory environment, and sys-
temic workforce shortages. These major challenges have fueled un-
certainty and reduced small business optimism.
One major headwind for small businesses is the unprecedented
regulation—regulatory burden imposed on us over the last 4 years.
The Biden administration has added $1.8 trillion in regulatory
compliance costs and added 356 million paperwork hours.
These compliance costs disproportionately impact businesses like
mine. I do not have compliance officers or lawyers to navigate com-
plex laws and regulations. Those responsibilities and many others
fall on me as a business owner.
Following the 2024 election, small business optimism surged.
Small businesses saw the election result as a major shift to the na-
tion’s economic and regulatory policy towards a more pro-business
environment.
Although small business remains optimistic, there are warning
signs on the horizon. The looming expiration of key provisions of
the 2017 Tax Cuts and Jobs Act, specifically the 20 percent small
business deduction, creates uncertainty about whether my taxes
will go up next year.
Congress can help small businesses like mine, like passing the
Main Street Tax Certainty Act, to prevent the massive high tax on
9 out of 10 small businesses.
In addition to uncertainty caused by looming tax hikes, the oner-
ous regulatory environment over the last 4 years has laid a wet
blanket over the economy.
Specifically, the EPA’s de facto electric vehicle mandates and the
Department of Labor’s independent contractor rule have the poten-
tial to shut my business down for good. These regulations ignore
the reality. The entire industry relies on longstanding work ar-
rangements like independent contractors or to an all-electric fleet
that is simply not feasible. In rural Minnesota where I live, there
is no infrastructure to support these vehicles, and industries like
trucking can’t wait for hours for batteries to recharge to go back
to work.
The Federal Motor Carrier Administration has also put signifi-
cant strain on the trucking industry from their overregulation.
Their proposed speed limit regulation and electronic logging regula-
tion would impose one-size-fits-all mandates. They will make our
roads less efficient and less safe.
I understand the well-intentioned nature of the rules; however,
the one-size-fits-all approach from Washington ignores that safety
is my number one priority. Truckers want to get home safely to
their families, as we want the others that share the road with us
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too. We do not need Congress or federal agencies to order us to be
safe. We already are.
Lastly, the Biden administration beneficial ownership reporting
requirements mandated 32.6 small businesses register with the
federal government or face penalties of up $10,000 and 2 years in
prison. Thankfully, President Trump stopped enforcement, cor-
rectly calling the mandate outrageous, invasive, and an economic
menace. This action has saved small businesses from devastating
civil and criminal penalties.
Congress must make this win permanent by passing and repeal-
ing the Big Brother Overreach Act and destroy beneficial owner-
ship data that has already been collected from U.S. small busi-
nesses.
Small businesses are optimistic that the Trump administration
and Congress will deliver pro-growth, economic, and regulatory re-
form policies. However, doing so requires Congress to roll up its
sleeves and go to work.
Congress must enact much-needed regulatory protections for
small businesses like the PROVE It Act, and eliminate vague stat-
utes like the Corporate Transparency Act. Most importantly, Con-
gress must provide small businesses an economic certainty that
taxes will not increase at the end of the year. This certainty will
give my business the comfort to expand and increase the opportuni-
ties we can offer our associates and workforce.
Thank you for the opportunity to discuss this, the impact of these
burdensome regulations on small businesses, and I look forward to
your questions.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Hughes for his 5-minute opening remarks.
STATEMENT OF BUDDY HUGHES
Mr. HUGHES. Chair Williams, Ranking Member Velázquez, and
Members of the Committee, thank you for the opportunity to testify
today on behalf of the National Association of Home Builders.
America is experiencing a housing affordability crisis. Overly
burdensome and, in some cases, unnecessary government regula-
tions bear some of the responsibility for driving up construction
costs and contributing to our housing affordability crisis.
Nearly 25 percent of the price of newly built single-family homes
and 41 percent of apartment development costs are due to regula-
tions. It does not need to be like this. We can have an effective reg-
ulatory environment while minimizing burdens on small busi-
nesses.
Unfortunately, rulemaking agencies fail to consider how regula-
tions will affect small businesses and often flat out ignore the Reg-
ulatory Flexibility Act. Last year, this Committee’s own RFA com-
pliance investigation highlighted how widespread this problem is.
That investigation also pointed to potential paths to reform and
strengthen the 45-year-old law, which we support.
One example of the lack of RFA compliance is Waters of the U.S.
regulation. This rule directly impacts builders who need to deter-
mine if a water feature is subject to federal or state regulation.
While over 60,000 permit applications for such activities are proc-
essed each year, the EPA certified that the 2023 proposed rule
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would not have a significant impact on a substantial number of
small entities, allowing the agency to skip the compliance with as-
pects of the RFA. This finding defies all common sense.
Legislation such as Representative Finstad’s PROVE It Act
would go a long way to correcting this by increasing small business
input into the rulemaking process and holding agencies account-
able.
The Trump administration is also taking action to eliminate un-
necessary regulations. NAHB commends this. And I want to point
out three regulations in the pipeline that deserve greater scrutiny.
First, HUD and USDA’s April of 2024 rule to require homes fi-
nanced through the agencies to comply with excessive minimum
energy standards. This will not only drive up costs, in some cases,
by more than $30,000 per unit, but only nine States have fully or
partially adopted the new requirements, which means we won’t be
able to deliver much-needed housing using these programs. We
urge Congress to support legislation prohibiting HUD and USDA
from adopting any energy standards.
Second, OSHA’s August of 2024 proposed one-size-fits-all rule to
establish a federal heat standard contains many elements that
would be infeasible for small businesses in the construction indus-
try. NAHB urges OSHA to withdraw this proposed rule. Instead,
OSHA should continue encouraging employers to follow the prin-
ciples outlined in OSHA’s long-promoted water, rest, and shade
campaign.
Third, HUD’s April of 2024 rule to implement a Federal Flood
Risk Management Standards expands floodplain management re-
quirements and fundamentally threatens access to FHA mortgage
insurance programs for single-family home buyers and multifamily
builders. For these reasons, we urge HUD to repeal its FFRMS
rule. An improved regulatory environment will unlock economic
growth and open the door for the millions of Americans who are
priced out of the housing market.
NAHB applauds this Committee for highlighting the lack of
agency compliance with the RFA and ways to improve our rule-
making process. NAHB stands ready to work with this Committee
to unleash main street through deregulation.
Thanks again for this opportunity.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Arensmeyer for his 5-minute opening re-
marks.
STATEMENT OF JOHN ARENSMEYER
Mr. ARENSMEYER. Chairman Williams, Ranking Member
Velázquez, and Committee Members, thank you for inviting me
here today to speak to you.
At Small Business Majority, we engage our network of more than
85,000 small businesses and 1,500 partner organizations to advo-
cate for public policy solutions and deliver resources to entre-
preneurs in order to promote dynamic small business growth.
Twenty-one million new businesses have been created in the past
4 years. We need to be doing everything we can to support these
new enterprises by focusing on the issues that are impacting them
the most.
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Regulation certainly can be a pain, but small business owners
consistently rank regulations near the bottom of the list of many
challenges they face. I will be addressing some of the regulatory
issues in a bit, but I want to make the point that businesses are
much more concerned with the devastating impact for the Trump
administration’s slash-and-burn economic policies than they are
about federal regulations. This is fueling extreme uncertainty and
a severe drop in business confidence in surveys conducted by orga-
nizations across the ideological spectrum.
Our own most recent survey shows a drop by one-third in opti-
mism in the past 2 months alone, and more than doubling in pes-
simism. For the first time in a long time, pessimism outranks opti-
mism, and 44 percent have experienced revenue declines.
On a daily basis we are hearing fear and horror about the ad-
ministration’s arbitrary, chaotic, and unpredictable actions that are
destabilizing the economy. These actions include onerous infla-
tionary tariffs, terminating vital federal programs supporting en-
trepreneurs, slashing the SBA’s workforce by 43 percent while pil-
ing on $1.6 trillion of unrelated students loan responsibilities, and
mass deportations that exacerbate small businesses’ existing work-
force challenges.
The tariffs are perhaps what we are hearing about the most. Sev-
enty-seven percent of small businesses say the expanded tariffs will
be detrimental to our economy. Nikki Bravo, owner of Momentum
Coffee in Chicago; Margo Clayson, owner of The Mighty Microgreen
in Inkom, Idaho; and Mike Roach, owner of Paloma Clothing in
Portland, Oregon, are worried that new tariffs could be devastating
to their businesses.
The same survey finds that two-thirds oppose the administra-
tion’s policies, with more than three-quarters opposed to the SBA
cuts.
But back to regulations. Regulations are a necessary fact of life
for small businesses. From food safety to responsible workplace
practices to mitigating environmental harm to preventing financial
scams, there is a legitimate need for government to ensure a
healthy competitive business landscape undergirded by a level
playing field.
The debate over regulations should not be ideological; rather, it
must be based on a case-by-case pragmatic analysis. Because regu-
lations can sometimes be burdensome, it is essential that we have
a process to assess their costs and benefits. A one-size-fits-all indis-
criminate deregulatory policy, such as eliminating 10 regulations
for every one enacted, reflects a performative slash-and-burn ap-
proach to governing that has no relationship to actual business re-
alities.
Small businesses value fair and reasonable regulations that help
them compete with large companies and establish clear, easy-to-fol-
low rules of the road. They repeatedly point to the importance of
regulations in both fostering competition and holding large corpora-
tions accountable.
Our polling shows that 86 percent of small business owners
agree that some regulation of business is necessary in a modern
economy, and 93 percent agree that their business can live with
regulations if they are fair, manageable, and reasonable. As such,
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we support efforts to ensure small business owners are more in-
volved in the promulgation and implementation of new regulations.
Existing regulatory structures should be strengthened, such as
those under the Regulatory Flexibility Act, which requires a review
of rules that will have significant impact on a substantial number
of businesses within a 10-year period. Following the RFA, along
with proper coordination with the SBA’s Independent Office of Ad-
vocacy, enables agencies to ensure that regulations are not overly
burdensome. Moreover, the Office of Information and Regulatory
Affairs provides additional insight in the federal rulemaking proc-
ess. The previous administration recognized the importance of
OIRA’s key functions through an executive order encouraging agen-
cies to take necessary steps to strengthen the regulatory review
process with public involvement in rulemaking.
Finally, Congress should consider solutions to help main street
work within the regulatory requirements of their respective indus-
tries while maintaining a commitment to health, safety, and com-
mercial standards.
Small businesses need certainty, consistency, and clear guide-
lines from the government, not chaos and confusion. Congress
should be hyper-focused on helping small business owners navigate
the ever-changing and increasingly challenging economy while
helping them find relief from tariffs and draconian budget cuts.
I look forward to answering your questions.
Chairman WILLIAMS. The gentleman yields back.
And we will now move to the Member questions under the 5-
minute rule. I recognize myself for the first 5 minutes.
Whether by enacting a late-minute halt on domestic drilling on
federal lands or purposely slowing his administration’s approval
process for oil and gas projects, one thing was clear, President
Biden’s actions threatened American energy independence. This
regulatory assault was particularly painful for Main Street Amer-
ica. Small businesses and overly regulated industries had to beg
the federal government for approval to simply conduct business.
So, Mr. Montalban, how did the Biden administration’s with-
holding of your project approvals and other administrative prohibi-
tions harm the oil and gas industry?
Mr. MONTALBAN. Thank you, Mr. Chairman.
It started out with the Department of Interior, and the bonding
was critical to the small independents, as I mentioned before. They
stopped the drilling because of the bonding, and they stopped any
transaction between independents on trying to buy or sell any fed-
eral properties.
Chairman WILLIAMS. Did you ever hear from the government
agency officials why an approval was withheld or delayed? Did you
ever hear from them?
Mr. MONTALBAN. We have had numerous situations in our
business over the last 4 years why permitting—permits to drill,
permits to inject water—have not gone through the process, and we
have never heard back.
Chairman WILLIAMS. During the Biden administration, Amer-
ican businesses were saddled by—we have heard this figure al-
ready—$1.8 trillion in additional regulatory costs. Small businesses
do not have enough resource to hire high-priced attorneys like
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large corporations do. Because of that, compliance has often left the
owner or an employee who will have trouble navigating the com-
plex language of these rules. And even worse, most industries face
regulations from different agencies that may be conflicting. This
has caused confusion, uncertainty to small businesses trying to
navigate the regulatory minefield.
So, Mr. Johnson, tell us about your experience navigating the
regulatory landscape. What has been the cost to your business and
the impact to your employees?
Mr. JOHNSON. There are numerous regulations. A lot of them
are—I guess the EPA-related are the most expensive and trouble-
some for us. I don’t know if you want the specific. One of them is
the EPA mandate for the diesel motors called death fluid, which is
burdensome; sometimes putting our trucks in the shop for weeks
at a time, and some of the repair bills up to like $17- to $20,000,
plus the time that our trucks are not moving.
Chairman WILLIAMS. Yeah, and you don’t have time to hire
outside auditors and all that to come in.
Mr. JOHNSON. No. Heavens no.
Chairman WILLIAMS. Creates a heck of a burden for you.
Mr. JOHNSON. Can’t do it. Can’t do it.
Chairman WILLIAMS. Thank you.
An essential part of the American Dream is homeownership. Un-
fortunately, the cost of housing and building has continued to grow
year over year. Studies by the National Home Builders Association
found that 25 percent of the cost of a house is attributed to the reg-
ulations. This has pushed an estimated 14 million Americans away
from their home being—having a dream home and owning one.
So, Mr. Hughes, can you explain how burdensome regulations
cause such a substantial cost increase for home builders, and what
should be done to reduce these regulatory barriers?
Mr. HUGHES. Well, unfortunately, there is a plethora of reasons
and regulations. The one that I deal with the most is burdensome
codes. We have just gone too far with energy regulations, and a lot
of that 25 percent. And it may help to put that into perspective to
say the dollar amount. That 25 percent is $94,000. So the first
$94,000 is just regulations, and a lot of that is codes.
Other things is—Mr. Arensmeyer mentioned the one-size-fits-all.
Too many times our engineering and storm water regulations for
small subdivisions, which I deal with a lot more, are way too bur-
densome. And it is not a one size fits all.
Chairman WILLIAMS. Well, and they get passed on to the po-
tential buyer——
Mr. HUGHES. Sure.
Chairman WILLIAMS.—who has to go to the bank, borrow that
much money, pay that much more interest.
Mr. HUGHES. Correct.
Chairman WILLIAMS. And it hurts, doesn’t it?
But if the government would stay out of your business, we might
see a price reduction.
Mr. HUGHES. Oh, that is——
Chairman WILLIAMS. You are on record,
Mr. HUGHES. Yes.
Chairman WILLIAMS. Okay.
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Mr. HUGHES. Absolutely. I would love to see the federal govern-
ment get out of the codes business.
Chairman WILLIAMS. All right. Thank you very much.
I now recognize the Ranking Member for 5 minutes of her ques-
tioning.
Ms. VELÁZQUEZ. Thank you, Mr. Chairman.
Mr. Arensmeyer, what are your opinion polls showing? Are bur-
densome regulations one of the top priorities?
Mr. ARENSMEYER. Ranking Member, we have been conducting
polls of small business owners and surveys around the network for
the last 20 years. And we talked with small businesses every day.
We do not hear certainly federal regulations listed as a top concern.
It is access to capital, healthcare. Childcare is now a big issue, un-
fair competition and all of the——
Ms. VELÁZQUEZ. Is it fair to say that small employers are wor-
ried about tariffs?
Mr. ARENSMEYER. They are incredibly worried about tariffs.
Ms. VELÁZQUEZ. Are small businesses concerned about remain-
ing competitive and turning a profit?
Mr. ARENSMEYER. Absolutely. The level of fear and uncer-
tainty right now is incredible. We are hearing it every day.
Ms. VELÁZQUEZ. Mr. Hughes, are home builders anxious about
the Trump tariffs being levied against construction imports, like
Canadian lumber, aluminum, and steel? Yes or no?
Mr. HUGHES. Yes.
Ms. VELÁZQUEZ. Builder confidence ticked down in February to
the lowest level in 7 months. Is that partly due to the economic un-
certainty? Yes or no?
Mr. HUGHES. Yes.
Ms. VELÁZQUEZ. It seems to me that the top concern of small
businesses is the economic uncertainty stemming from the Trump
administration’s reckless policies.
I would like to enter into the record, Mr. Chairman, a press re-
lease, May 17, from the National Association of Home Builders.
Chairman WILLIAMS. So moved.
Ms. VELÁZQUEZ. Mr. Arensmeyer, in your testimony, you men-
tioned small employers need certainty. Could you describe how the
policies of the Trump administration have sown confusion and dis-
ruption to small businesses?
Mr. ARENSMEYER. Small business owners have no idea what
is happening on a day-to-day basis. They don’t know what tariffs
they are going to be hit with. They don’t know if their employees
are going to be—legal immigrants are going to get rounded up from
their businesses. And they don’t know what next agency is going
to be slashed. They cannot plan in this kind of environment.
Ms. VELÁZQUEZ. President Trump announced SBA will be tak-
ing on the $1.7 trillion student loan program. So I ask you, is SBA
equipped, if that is the core mission of the Small Businesses Ad-
ministration?
It exists to help small businesses access capital, federal procure-
ment. $1.7 trillion student loan program. Do you think this is con-
sistent with the core mission of SBA, Mr. Hughes?
Mr. HUGHES. I am sorry. Not my area of expertise.
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Ms. VELÁZQUEZ. Student loans? The Small Business Adminis-
tration is in the business of providing access to capital, it is tech-
nical assistance, capacity building for small businesses.
What do student loan programs have to do with small busi-
nesses? Nothing.
Do you believe the SBA can effectively support small businesses
while taking on the student loan program and cutting staff by more
than 40 percent? Mr. Arensmeyer?
Mr. ARENSMEYER. It is mystifying, Congresswoman. We can’t
figure it out at all. I have talked about the growth in small busi-
nesses over the last 4 years. We need to be making sure we are
supporting those businesses, and we need sufficient staff to do that.
And why anybody thinks we take on a $1.6 trillion student loan
program, it boggles the mind.
Ms. VELÁZQUEZ. This Committee has jurisdiction over the
Small Business Administration.
Mr. Chairman, when are we going to have a hearing to bring the
Administrator in and to explain to us how she will be able to han-
dle the needs of small businesses who need certainty and the stu-
dent loan program? When will you be asking her to come into this
Committee and discuss the reorganization of the Small Business
Administration?
I sent—we the Committee Democrats have sent five letters to the
Administrator. We haven’t received one answer. Remember when
you really got upset, Mr. Chairman——
Chairman WILLIAMS. No.
Ms. VELÁZQUEZ.—when the previous Administrator didn’t an-
swer your question—your letters? I even joined with you. So I ex-
pect the same here.
Later this month, we will be marking up the PROVE It Act.
John, do you have a position on this bill?
Mr. ARENSMEYER. Our feeling is that the structures that are
in place right now are sufficient. If they are not being—we have
heard that perhaps the RFA is not being sufficiently enforced—let’s
increase enforcement. The previous administration took steps to
improve the OIRA process.
So if we layer another structure on top of this, there is going to
be more confusion and more uncertainty for small businesses.
Ms. VELÁZQUEZ. Thank you. I yield back.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Mr. Alford from the great State of Missouri for
5 minutes.
Mr. ALFORD. Well, thank you. That was interesting.
Thank you, Chairman Williams and Ranking Member Velázquez.
The last 4 years, small businesses have been under attack from
an administration determined to crush main street under the boot
of Big Government. In the previous administration, federal agen-
cies finalized more than 1,000 regulations, costing taxpayers $1.8
trillion in compliance. That is the same as the entire federal discre-
tionary budget for fiscal year 2023.
It is unacceptable that federal agencies can put this burden on
the taxpayers of this country. This outrageous abuse of power by
the executive branch is what the American people rejected when
they overwhelmingly elected Donald J. Trump as President.
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I am proud to support the efforts of the President and the patri-
ots at DOGE working to rightsize our government and ensure that
no future administration can unilaterally place such a burden on
main street. And yes, I am optimistic. I am optimistic that things
are going to turn around in America finally.
I don’t have a woe is me attitude. I am glad we are getting the
$1.7 trillion loan portfolio over to the Small Business Administra-
tion. Finally, maybe 300,000 square feet of office space that was
previously unfilled will be filled with people actually at their desk
working for the American people.
The student loan program should never have been the business
of the federal government to begin with. But now we have it. Let’s
do something about it, along with the Pell grants.
Mr. Montalban, Biden’s war on fossil fuels cost jobs, as you
know. It is estimated that it cost up to 59,000 jobs, either people
laid off from pipelines and fracking or jobs not realized. And yet,
in less than 3 months, DOGE, the Department of Government Effi-
ciency, has laid off some 30,000 federal workers out of some 33 mil-
lion. That is less than 1 percent. And yet, there is all this outcry.
Are federal workers guaranteed a job for life, sir?
Mr. MONTALBAN. No, Congressman.
Mr. ALFORD. Are workers in the fossil fuel industry entitled to
a job for life.
Mr. MONTALBAN. No.
Mr. ALFORD. Why do you think that there is so much outrage
over less than 1 percent of the federal workforce being laid off and
no one gave a hoot about 59,000 workers, and also farmers who
have gone out of business because of the high-input cost from fer-
tilizer that is made out of natural gas? All these implications. The
President of the United States targeted the fossil fuel industry, but
he trained the crosshairs on the backs of our farmers and the backs
of people who work for you. Why is that? Why the discrepancy?
Mr. MONTALBAN. Well, first of all, it is nice to have common
sense back in government. And second of all, I don’t think that we
should be paying any student loans. I put myself through college.
But the bottom line is, in our industry, with Department of Inte-
rior Doug Burgum; Chris Wright with the Department of Energy;
and Lee Zeldin, head of the EPA, we think we have a new future
in the oil and gas industry as small independents, sir.
Mr. ALFORD. Thank you.
Mr. Hughes, I am glad you are here today. $95,000 in added
costs. In my area, in the Kansas City market, 6 months before the
policies, the green new scam was initiated and these codes were
adopted by Kansas City, they were averaging 85 single-family per-
mits per month. Six months after the policy implementation, only
26 single-family permits were issued in total. That is crazy.
Do you have anything against if someone wants to build a nice
home for them to add these more efficient measures to their home
at their own expense?
Mr. HUGHES. Absolutely not. And I have been dealing with
what we would call innovative products since the mid-nineties.
More efficient, structurally sound products that we are doing enve-
lopes (ph) out of. It is a much stronger and more efficient structure.
The bottom line is it costs more.
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And I deal with a lot of folks that have that extra money when
they are building their second or third home, but it is not practical
to require that of first-time home buyers.
Mr. ALFORD. And yet it is stifling homeownership in America.
The American Dream is at risk because this past President, this
past administration decided to put their foot on the neck of home
builders, tying them up, shackling them with those overburden-
some regulations, which is killing the housing market in America.
That is why Tracey Mann and I led a letter to the USDA to pause
the implementation of these very burdensome regulations so we
can keep the American Dream alive.
Mr. HUGHES. The dollar mark on that added—2021 IECC—was
around $30,000. $30,000.
Mr. ALFORD. Thank you, sir.
Thank you all for being here today on your own time and your
own dime. God bless you.
I yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Olszewski from the great State of Maryland
for 5 minutes.
Mr. OLSZEWSKI. Well, thank you, Mr. Chairman. And thank
you all for your time today.
I don’t know where to start, so I am going to just try to work
this. Hopefully, we can have a bit of a quick conversation in my
time today.
I will just start by an observation. I think done right and done
in partnership, government regulation can save lives and can boost
economic output, done right, in partnership. I hope that is some-
thing we can all sort of agree to as a general principle as we go
about this work.
I think we can also agree there is certainly opportunities to reas-
sess and to reevaluate, change repeal of regulations that were not
done right. And I will just say, I will speak for myself, and I am
sure some of my colleagues, we welcome that conversation.
The sense I got from some of the testimony today was that there
should not be a one-size-fits-all approach to regulation. Is that a
fair sort of observation or takeaway?
Okay. Thank you.
So I would just, I guess, put out there that, perhaps as we con-
sider and have these conversations, we shouldn’t take a one-size
approach to peeling them back either. So let’s take that same ap-
proach to unwinding regulations that may be onerous unneces-
sarily.
And just like we had a conversation today, I do want to associate
myself with the comments of the Ranking Member. I truly do, and
I mean this authentically, welcome a conversation with the admin-
istrator. Hope that she would be willing to answer questions that
are proposed by any Member of this Committee, because I think
that is how we get to some of that work.
My colleague mentioned outrage about prior employees of the
federal government. My guess to the President’s joint address was
actually a federal employee who was helping those farmers that
were mentioned earlier. She worked for U.S. Fish and Wildlife,
helping assist farmers in Maryland. She was hired under President
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Trump’s first administration and she was let go under his second
administration because she was promoted. She did such a good job
that she was on probation. And so I hope, again, we cannot take
this one-size approach in the work that we do.
You know, I guess—you know, I also wanted to lean in. I wasn’t
planning on doing this on the student loan piece, because for count-
less businesses, these training programs, these pathways are life-
lines and pathways to prosperity for so many people. And so I do
think it is critical that we find ways to support that, just as I think
we need to do more for homeownership. Homeownership is a great
frontier.
So, Mr. Hughes, I think we talked about this a little bit. Is it fair
to say that the tariffs that are being talked about might raise the
cost of building a single-family home anywhere from $7,500 to
$10,000? Any sense of what we are looking at for increased costs?
Mr. HUGHES. A dollar amount, it would be hard to say because
it covers so many different products.
Mr. OLSZEWSKI. Okay.
Mr. HUGHES. Who knows where it is going. We have been deal-
ing with tariffs for years, truthfully. Lumber coming out of Can-
ada——
Mr. OLSZEWSKI. Sure.
Mr. HUGHES.—has been tariffed to death already. We are con-
cerned.
Mr. OLSZEWSKI. Yeah. And I heard, you know, the conversa-
tions earlier about the costs. We obviously—we don’t want to un-
necessarily increase costs, but we can agree that increasing costs
through tariffs would be another cost that would impact businesses
and consumers. Is that fair across the board here?
Mr. HUGHES. Yes.
Mr. OLSZEWSKI. Okay. And I guess just to that point of em-
ployees, I do want to, I guess, reemphasize the point of I am uncer-
tain how we can do more to work with businesses as we are peeling
away half the workforce of the Small Business Administration, up-
ending offices, moving people.
So, again, I think I just wanted to lead today with reenforcing
that we would welcome the conversation with you and with others.
So as I have done with prior witnesses, if there are specific regula-
tions that you all would like this Committee to consider reviewing,
perhaps repealing, if you could just as a followup submit for the
record some of those recommendations, I truly would welcome that,
and I know that we as a Committee would be welcoming those con-
versations.
So I really appreciate everyone’s time today.
I will do something rare, Mr. Chairman. I will yield back the bal-
ance of my time.
Mr. MEUSER. [Presiding.] The gentleman yields.
I now recognize Ms. Van Duyne from Texas for 5 minutes.
Ms. VAN DUYNE. Thank you very much, Mr. Chairman. Thank
you to our witnesses for joining us today.
Small businesses are the foundation, as you know, of the Amer-
ican economy, comprising 99 percent of all U.S. farms and employ-
ing nearly half of the nation’s workforce. They are instrumental in
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fostering innovation, creating jobs, and driving economic growth
within our communities.
Unfortunately, in 2022, regulatory burdens reached an all-time
high of an estimated $3 trillion or approximately 12 percent of the
U.S. GDP. And rather than providing the relief, Biden administra-
tion added an additional $1.8 trillion in regulatory costs. And as I
have emphasized before, every dollar an hour that is spent on com-
pliance is a dollar not invested in hiring employees, expanding fa-
cilities, or fostering innovation. Small businesses with their limited
resources are particularly vulnerable to these impediments.
President Trump and Administrator Loeffler and congressional
Republicans are committed to streamlining government and elimi-
nating burdensome regulations. To date, the administration has
halted over $180 billion worth of regulations. And Congress has an
important role to play as we explore additional reforms necessary
to free up small businesses and promote economic growth.
As a Member of the Oversight Subcommittee, I have consistently
worked to ensure that small business owners are not buried under
bureaucratic red tape. Earlier this year, I reintroduced the Small
Business Regulatory Reduction Act which mandates that cost neu-
trality in the SBA’s regulations and also requires the agency to re-
port to Congress on the financial impact of other financial federal
regulations on small businesses.
Without objection, I move to enter a letter from the Small Busi-
ness and Entrepreneurial Council into the record in support of the
bill.
Mr. MEUSER. So moved.
Ms. VAN DUYNE. Mr. Hughes, the price of homes has sky-
rocketed. You are having issues now with actually being able to get
a mortgage. Mortgage rates are high. And as you noted, the regu-
latory burdens accounted for nearly 25 percent of the price of a
typically new-built, single-family home. And I would actually do
you one further. I think it depends in what State. While in Texas
it may be 25 percent, in places like California it is actually 40 per-
cent.
So what are some of the regulations at the federal level that con-
tribute to this issue?
Mr. HUGHES. Codes. I keep going back to codes. But energy
codes in specific. Eighty percent of codes we don’t argue about.
Health and safety engineering, those things don’t change much.
But it is when the administration’s climate agenda entered into it.
Like I say, just one new code, the 2021 IECC, which is the energy
code, came in to being. That is when it jumped—jumped an aver-
age of $30,000 per house. And that is small houses. Large houses,
$30,000. It is hard to swallow.
Ms. VAN DUYNE. How have the home builders in your associa-
tion responded to President Trump and the congressional Repub-
licans to regulatory commitments?
Mr. HUGHES. Everybody is excited, very excited about the hope
that we can get beyond some of these regulations, particularly—
and it goes—it goes farther than codes too.
In my home county, we had a town hall meeting a couple of
weeks ago with three of our Senators, and some folks showed up
in the grading business. We have a severe shortage of lots,
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buildable lots that small builders like myself can buy to build a
house on. And the reason for that is storm water regulations, EPA
regulations. And the number that jumped out at me—I have
done—I have only done five or six subdivisions over my career, and
all very small subdivisions, 20 lots or less, and we didn’t have to
spend a lot of money in the early nineties for engineering. The
number today, the average is $1,000 per lot per—just for engineer-
ing.
Ms. VAN DUYNE. That is great information to know. Thank
you.
Mr. Johnson, in your testimony, you alluded an issue of a signifi-
cant noncompliance for the Regulatory Flexibility Act. Would you
agree that it is time that the SBA take stock of agencies’ compli-
ance and issue a report to Congress so that we can act on these
findings?
Mr. JOHNSON. Yes.
Ms. VAN DUYNE. Excellent.
All right. I yield the rest of my time. And thank you very much
to our witnesses.
Mr. MEUSER. The gentlelady yields.
I now recognize Dr. Conaway from New Jersey for 5 minutes.
Mr. CONAWAY. Thank you, Mr. Chairman.
And before I get to my prepared questions, I just have to com-
ment on some of these energy regulations. I happen to have up-
graded the energy situation in my own home recently, and it was
due to a State program helping with that cost. But the reason I did
it was because those—that more efficient heating and air-condi-
tioning system saves money over time and would enhance the re-
sale value of my house. In fact, I bought my own home because
there were solar panels up on it. I knew it would—I am sure I paid
for that in my purchase price, but, you know, it certainty saved me
substantial amounts of energy costs, particularly electricity costs,
for my home.
And so I think there is a—I guess there is just another side to
tell. I am not asking as a question, just making a statement. En-
ergy efficiency has its place. And I guess, you know, when it is ap-
plied and when people decide in order to try to achieve those sav-
ings, leave it to the individual. But I think the more that home-
owners do that, the better off we will be on multiple fronts. The
homeowner will save money and will do hopefully better about pre-
serving our Earth for future generations.
I will get to my statement. The United States is part of a global
economy that ripples its way through the largest corporations to
the smallest businesses on main street. According to government
statistics, a total of 20,072 companies exported from New Jersey lo-
cations in 2022. And of that number, 18,331 or 91 percent were
small-, medium-sized enterprises with fewer than 500 employees.
Furthermore, New Jersey’s largest market was Canada. My
home State exported $8.4 billion in goods to Canada in 2024, and
this represents 20 percent of New Jersey’s total goods exported.
The Trump administration’s continued rollout of tariffs against
our closest trading partners, such as Canada and Mexico, have
been unpredictable, to say the least. In fact, I was at a meeting just
last night talking to ministers from Europe who are now consid-
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ering how to de-risk themselves from the United States market be-
cause of the chaos they are seeing with respect to tariff policy. It
is here, it is there, it is everywhere.
And as I understand it, it was on this Committee just dealing
with the small businesses in my community at home, predictability
is one of the main things businesses need in order to decide about
their investments to grow employees, to bring on new technologies,
et cetera. So this unpredictability hurts the American economy and
it inherently hurts main street businesses across the country.
Mr. Arensmeyer, in your testimony, you speak on how unpredict-
able—the unpredictable nature of Trump administration’s tariffs
hurt small businesses. Can you speak more specifically about what
you have heard from small businesses and what tariffs mean for
local economies—we have heard some of that here in our Com-
mittee, I can tell you—and how tariffs might make economic plan-
ning increasingly difficult for such businesses?
Mr. ARENSMEYER. We are hearing from small businesses on a
regular basis that they have no idea how to plan. They have abso-
lutely no idea how to plan. They are worried about costs. They
worry when dealing with inflation. And now they have to worry
about, you know, further inflation, if you will.
You know, we have $3.3 trillion worth of imports into this coun-
try, and it is just all through the economy. So, you know, the aver-
age small business owner has all sorts of different ways that they
are actually going to be impacted directly or indirectly with these
tariffs, and they can’t even begin to, you know, think about it. They
have to think about all their different supplies, all the different
things that they put into their product. And they have no time to
plan. And they don’t know, it could change tomorrow.
So it has been—it is probably the single biggest thing we are
hearing from businesses right now.
Mr. CONAWAY. Thank you.
On March 19, the President signed an executive order that seeks
to dismantle the Department of Education. And we are going to say
more about the significant impacts on New Jersey meeting with the
Governor and others here later this week.
And on top of that it is adding—it is cutting employees and add-
ing $1.6 trillion in outstanding student loan debt to SBA’s responsi-
bility. Workforce reductions, 43 percent, as I have alluded to. And
this change, and I know this legislation is seeking to effectuate
that. But you have a shrinking workforce, increase in responsi-
bility, and one wonders how the agency can possibly manage that
change.
How can SBA do this job, taking on new responsibilities while
cutting the workforce by a significant percentage?
And I will yield back. I will await your answer, sir.
Mr. MEUSER. The gentleman’s time has expired.
I now recognize Mr. Stauber from Minnesota for 5 minutes.
Mr. STAUBER. Thank you very much, Mr. Chair. And thanks to
all the witnesses for being here and your testimony.
Minnesota’s Eighth Congressional District is home to hard-
working minors, truckers, loggers, home builders, and energy work-
ers. As their Representative, I hear one thing time and time again:
Washington is making it harder for us to do our jobs. These men
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and women aren’t asking for handouts; they are simply asking the
government to get out of the way.
As I mentioned earlier, I am glad to have one of my constituents
joining us today, Mr. Elden Johnson. He is not just a business
owner, he is a main street success story, a voice for rural America,
and a firsthand witness to how Washington’s red tape affects our
way of life in northern Minnesota.
Mr. Johnson, thank you for making the trip out here.
Mr. Johnson, you have had to navigate the mandates related to
heavy-duty vehicles. Are electric trucks a feasible option in rural
America, and how would these rules affect your ability to deliver
goods across Minnesota and the upper Midwest?
Mr. JOHNSON. They are not feasible. In a word, no, not feasible.
And if I was to comply with that, I would be completely out of busi-
ness. We would have to close the doors. The one size fits all doesn’t
fit here in rural America with no infrastructure.
Mr. STAUBER. So you have a truck loading up by Peterson
Wood treating out of Superior, Wisconsin, when it is 25 below, you
are not going to go to Ishpeming, Michigan, with an electric truck,
are you?
Mr. JOHNSON. Well, I personally wouldn’t want to.
Mr. STAUBER. You won’t get there. Thank you.
Mr. Hughes, nearly a quarter of the cost of a new home is now
regulatory. Yet rulemaking agencies often tell small businesses
that it won’t cost much to comply with proposed regulation.
You just gave an example in your earlier testimony that one en-
ergy rule or regulation, that Congress never voted on, cost a home
$30,000, whether it is a bigger home or a smaller home. Can you
elaborate on that?
Mr. HUGHES. Well, as we said, it is not a one size fits all. And
I am all about energy-efficient products and construction. But it ab-
solutely has to be choice. It can’t be mandated.
I have three grandsons under the age of 10, and I am worried,
at the pace we are going, they are not going to be able to own their
own home——
Mr. STAUBER. Right.
Mr. HUGHES.—even if pawpaw builds it.
Mr. STAUBER. You know, we just had one of my colleagues talk
about his personal experience with his own home. That is an exam-
ple of personal choice.
Mr. HUGHES. Correct.
Mr. STAUBER. He wasn’t forced to do it; he chose to do it.
You know, under the Biden administration, they put rules and
regulations to the tune of 1.3 rules and regulations per day across
their administration that affected each and every one of you. We
didn’t get a vote on it. These are just rules and regulations that
the bureaucrats in the back room think it is a good idea.
We always talk about Main Street America. Small businesses are
the engine of our economy. We have to support that.
I have owned a small business for 31 years. We have since sold
it. It is amazing the rules and regulations that came out of St.
Paul, Minnesota, and our nation’s capital.
Mr. Johnson, that makes it more difficult for you to succeed and
more difficult for these services to be provided to rural America.
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Mr. JOHNSON. Absolutely, without a doubt.
Mr. STAUBER. I will just say that as we go into this next ad-
ministration, President Trump has stated that for every rule or
regulation that comes forward, 10 are going to be removed.
You had one of my colleagues, and I think in good faith, say,
which are the rules and regulations that are bothersome to you? I
challenge you to bring those, all of them, to us. Bring 10 or 20 a
week. We can talk about them. Because every time that I have
asked somebody in a Small Business hearing, do you need more or
less rules or regulations, they always say less. It is disruptive.
So the four of you, raise your hand if you think that you need
more rules and regulations on your small businesses to succeed.
Raise your hand.
Just like the other ones. It is just like the other hearings. Not
one person raised their hands. And what we have to do is we have
to make sure that our small businesses can succeed. And these bu-
reaucrats in the back room in Washington that are putting these
rules and regulations on you, it has to stop.
And listen, it just didn’t start overnight. It has been going this
way for a long, long time. We have to, in a bipartisan fashion, stop
this—stop these unnecessary rules and regulations that are pun-
ishing you. You are the engine of our economy. Ninety-nine percent
of our businesses are small business.
And I yield back.
Mr. MEUSER. The gentleman yields.
I now recognize Mr. Cisneros from California for 5 minutes.
Mr. CISNEROS. Thank you, Mr. Chairman.
Look, I believe when done right, deregulation means increased
competition and improves quality of goods and services and price
decreases. When done right, deregulation can stimulate economic
growth, reduce cost, and make businesses more difficult. But to-
day’s hearing is not about deregulation or how we can work across
the aisle to actually help businesses. This hearing is an info-
mercial.
As a coequal branch of government, we should be actively trying
to shape how Congress wants support for small business to look
like and not just seek to appease the executive by stating the name
of our congressional hearing with ‘‘the golden age.’’
Our Committee also has oversight authority. We should be able
to hold agencies accountable, and their leadership should come to
this Committee room and explain actions or inactions.
I have joined my colleagues in sending letters to the SBA, and
they go unanswered. We sit through hearings to listen to what
agencies, particularly the SBA, are doing and not doing; we ask
witnesses questions to gouge the impact of actions by the SBA and
the administration. But we need to bring the director of the SBA
here.
So with my time now, I am calling on this Committee to bring
the administrator here to publicly answer our questions.
If the administrator were here, I would want the following ques-
tions answered: What was the extent of DOGE’s access to SBA
headquarters and systems, and what was done the SBA to ensure
that systems were not abused or accessed by individuals without
clearance? What specific offices or departments within the SBA are
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affected by the announcement of 43 percent reduction in the work-
force? Where is the SBA relocating the six regional offices, and will
any other offices be closed in the future? How are we appropriating
funds being used—or how are appropriated funds being used or not
used with the SBA undergoing such drastic changes that Congress
has not authorized? What is the SBA’s plan to handle $1.7 trillion
student loan portfolio with less staff and staff not trained to work
with such a complex student loan system?
In announcing the Made in America Manufacturing Initiative,
you claim you will find $100 billion in cuts to regulations. Where
are you going to find it, and how are you going to ensure cuts don’t
negatively impact small business owners? Also, in announcing the
Made in America Manufacturing Initiative, did the SBA actively
mislead Americans by stating that the previous administration was
losing an average of 9,000 manufacturing jobs per month?
On the last question, the SBA ignored the fact that manufac-
turing jobs rose by 721,000 during the first 3 years of the Biden
administration. Some was part of the comeback from the pandemic-
era job losses, but the Biden administration’s final month numbers
was still 12,000 manufacturing jobs higher than the last pre-pan-
demic month of President Trump’s first term in office.
The manufacturing employment gains under President Biden
were in fact the strongest in 72 years. I sincerely hope the adminis-
trator comes before this Committee to work with us to help small
businesses flourish because small businesses have fewer options
than larger companies to navigate and survive the chaotic actions
of the Trump administration.
And with that, I yield back.
Mr. MEUSER. The gentleman yields back.
I now recognize Mr. Wied from Wisconsin for 5 minutes.
Mr. WIED. That you, Mr. Chairman, for holding this hearing.
And thank you to all of our witnesses for sharing their experiences
with us today.
It is undeniable that the previous administration was anti-busi-
ness, anti-innovation, and anti-free market. I would like to once
again highlight the $1.8 trillion of additional regulations that were
needlessly imposed on businesses across this nation.
To comply with these regulations, businesses were subjected to
360 million extra hours of paperwork. As a former small business
owner, I know firsthand the disproportionate burden small busi-
nesses face to comply with additional regulations.
When the government needlessly increases the cost of operating
a business, those that cannot keep up are forced to close their
doors. Those who do manage to stay open, spend their time focus-
ing on staying afloat, while innovation and growing their busi-
nesses take a backseat.
Working with the Trump administration, Republicans are com-
mitted to repealing these harmful regulations and reorienting the
Small Business Administration to, first and foremost, help support
small business owners instead of continuing to crush them with
regulation after regulation.
In just over 2 months, the Trump administration has stopped an
additional $180 billion in regulations proposed by the Biden admin-
istration.
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I look forward to continuing our work to reverse the Biden ad-
ministration’s burdensome regulatory war and allow small busi-
nesses to grow, innovate, and prosper.
So, Mr. Montalban, the Republicans on this Committee are
steadfast in their mission to reduce the massive number in regula-
tions imposed by the previous administration and to promote the
extension of the Tax Cuts and Jobs Act signed into law by Presi-
dent Trump.
If taxes and regulatory burdens levied on your businesses are re-
duced, what are the downstream effects for your customers?
Mr. MONTALBAN. Well, Congressman, unfortunately, we are
just the producer of crude oil and natural gas that comes to your
home or to your vehicles. But I can tell you that the regulations
that have been brought upon us over the last 4 years were to put
us out of business, and they were done through the EPA. This cost
us literally, personally on a couple of wells over 100,000 on one
well and over 400,000 on another well. So the bottom line was they
were doing everything they could to put us out of business through
regulations.
Mr. WIED. Thank you.
Mr. Hughes, what current impacts are home buyers facing as a
result of increased regulations place on home builders?
As you know, homes can take several years to construct. It is
very difficult to, you know, even to buy land to develop property
because of all of the regulations. How do the current regulations
hinder the construction of new homes in the coming years?
Mr. HUGHES. I guess mainly the added cost, also added time.
And there have just been no thought to that added cost. And what
that does to—especially the beginner or the first-time homeowner
that I mentioned before. It has just about put them out.
Our numbers suggest that every time we add $1,000 to the cost
of a new home, you force 100,000—it is actually a little over
100,000—116,000 buyers out of the market.
Mr. WIED. Thank you.
Mr. Arensmeyer, on your organization’s website, you mention en-
trenched discriminatory policies that create obstacles for businesses
owned by people of color, women, and immigrants. So what is a
specific SBA policy that has this discrimination written into law,
and why hasn’t the Biden administration repealed that policy?
Mr. ARENSMEYER. I don’t believe, Congressman, we are refer-
ring to actions like government. I think we are referring to situa-
tions in the market that have created dislocations and differences
in opportunities. And our organization is dedicated at looking to
where those issues are, regardless. And we believe government has
an obligation to kind of focus on where the need is the greatest.
So it isn’t so much about accusing the government of doing some-
thing, it is truly just stating a reality, an economic reality.
Mr. WIED. So you weren’t referring to the SBA on your website
specifically?
Mr. ARENSMEYER. Not that the SBA was doing anything dis-
criminatory, no.
Mr. WIED. Okay.
Mr. ARENSMEYER. If I understand your question.
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Mr. WIED. Okay. No, I was just—on your website—it said, Yet
these entrepreneurs encounter many obstacles due to entrenched
discriminatory policies and practices, challenges that have only
been exacerbated by the COVID-19 pandemic. I didn’t know if you
were referring to the SBA specifically.
Mr. ARENSMEYER. I don’t believe we were.
Mr. WIED. You weren’t. Okay. So if a policy or practice explicitly
favors a certain category of people over others, would you consider
that to be discriminatory?
Mr. ARENSMEYER. I think it is an obligation of government to
look at where the need is the greatest and look at the economic
need. And you find the greatest economic need in, you know, cer-
tain communities, urban communities, rural opportunities. It is not
limited to a particular race or demographic. And there are pro-
grams in place that address those needs, and we support those.
Mr. MEUSER. The gentleman’s time has expired.
Mr. WIED. I yield back. Thank you.
Mr. MEUSER. The gentleman yields.
I now recognize Mr. Tran from California for 5 minutes.
Mr. TRAN. Thank you, Mr. Chair. Thank you, Ranking Member.
To all the witnesses, I appreciate you being here today.
Mr. Arensmeyer, many of my colleagues on this Committee make
regulations out to be this unyielding bureaucratic bogeyman for
small businesses. But regulations can also benefit the economy
through leveling the playing field, incentivizing innovation, and
protecting American innovation from threats like the Chinese Com-
munist Party stealing our intellectual property.
Can you share some of the stories from small businesses within
your organization?
Mr. ARENSMEYER. I mean, again, it is about setting up a level
playing field. For example, in terms of lending, we see a lot of irre-
sponsible lending going on targeting the most vulnerable small
business owners, and you need regulations in order to guard
against that.
Price discrimination, the SEC was attempting to deal with.
Again, it is the role of government to step in and try to create a
level playing field.
So franchise, unequal franchise relationships, you know, the list
goes on. And that is a function of government to do that.
And that is why we—we heard a lot about the cost of regulations,
but it is really about a cost-benefit analysis. We are the first to
argue that perhaps there are regulations out there where the cost
is greater than the benefit, and we should look at those.
But you have got to look at the benefit side. If you only look at
the cost side of things, we wouldn’t have had the PPP. Yes, the
PPP created some obligations for small businesses, but it was a
huge benefit as well.
So just looking at the cost side of the Biden policies, there was
a lot of manufacturing and other money that was—passed by this
Congress. Obviously, regulations came along with that. So, again,
across the board, we need to be looking at what are the benefits
and what are the costs. And we are certain there are cases where
the costs outweigh the benefits, and those should be addressed.
Mr. TRAN. I agree with that. And thank you.
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To continue on, Mr. Arensmeyer. On March 14 of 2025, the Presi-
dent issued an executive directing that Minority Business Develop-
ment Agency, MBDA, be eliminated to the maximum extent con-
sistent with applicable law. The Agency which was created by
President Nixon in 1969 and codified into law by Congress with bi-
partisan support in 2021 has been widely successful. In fact, in fis-
cal year 2024 alone, the Agency helped the country’s more than 12
million minority businesses access $1.5 billion in capital and create
or retain approximately 23,000 jobs.
What message is the Trump administration sending to small
businesses by eliminating the Minority Business Development
Agency?
Mr. ARENSMEYER. Well, as you mentioned, Congressman, the
MBDA has done a lot of good work. They have 26 offices across the
country that are serving small businesses. And on top of that, they
are a conduit for a large chunk of the State Small Business Credit
Initiative technical assistance money that, by the way, they haven’t
distributed all of it. You have got about $62 million sitting there.
With them going away, who knows if that is going to get distrib-
uted.
So they have performed a valuable function. Just to sort of wipe
them off the face of the Earth is absolutely not the way you are
going to help small businesses.
Mr. TRAN. Thank you, Chairman. I yield back.
Chairman WILLIAMS. [Presiding.] The gentleman yields back.
I now recognize Mr. Meuser from the great State of Pennsylvania
for 5 minutes.
Mr. MEUSER. I appreciate that, Mr. Chairman. And thanks to
all of you very much.
You know, obviously, our Committee has oversight over the SBA,
but we are also about advocating and fighting for small businesses.
We are really the only Committee here in Congress. That is our
focus. Not just the SBA, but working for you.
And what I am hearing here today is what I hear when I go to
my chamber events, when I am doing my main street walkabouts,
during COVID, post-COVID, these days, that during the last 4
years have been very, very tough on small businesses. That is just
the reality. You know, there is nothing political there. I mean, in-
flation, supplies were difficult. We had excessive IRS and OSHA
drive-bys because they didn’t’ have any better systems to do any-
thing with, so they were just stopping in on small businesses and
creating all kinds of havoc.
Of course, inflation. Okay. Twenty percent during the course over
the last 4 years. Energy, up and down to keep your company going,
to the cost of logistics and distribution. Workforce issues. I mean,
taxes. Taxes. We have lost—taxes have gone up from bonus depre-
ciation to the R&D tax credit. The list goes on.
And now, you know, 199-A is in jeopardy if we don’t pass the in-
coming tax relief that our friends to the left like saying, oh, that
is nothing but tax cuts for the rich. Okay. You know, no, it is for
all the small businesses that have the 199-A.
And by the way, sir, your organization advocates against 199-A.
So I don’t even know what to make of that. That is a 20 percent—
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I have it in writing, okay. You want a $25,000 tax relief for small
businesses and doing away with 199-A.
So let’s just get real, as some of our colleagues said. Look, we
need to work on the regulatory cost. That is what this administra-
tion is going to be about. I mean, things like the beneficial owner-
ship rule that took place. The CFPB. My God, I don’t think there
is anybody on Earth or in America that was favorable to the CFPB,
except maybe someone on the political end of things. The 1071 final
rule. A lot of problems that we need to fix.
So, Mr. Hughes, you mentioned that approximately 25 percent of
the cost to a new home is attributable to government regulations.
Can you discuss, if you wouldn’t mind, briefly, how regulations
have led to increased—these housing costs?
Mr. HUGHES. Well, touch on the same things. Added codes,
added storm water regulations that simply aren’t needed. When
storm water regulations were first put into practice, they were, and
large enough projects they are. But, again, using the same term,
one size doesn’t fit all.
So added regulations from the ground up. Impact fees, which
vary tremendously over the country. We are fortunate in North
Carolina, we don’t have a lot of impact fees. But it has been a bat-
tle since the mid-1980s.
Mr. MEUSER. Right. What about HUD’s minimum energy stand-
ard? I don’t mean to interrupt you, but——
Mr. HUGHES. That is fine. And that goes right back to that
added cost to comply with IECC 21. We are looking at $30,000 to
$35,000 added cost per house.
Mr. MEUSER. Right. Thank you. We are going to work on it.
The regulatory onslaught, Mr. Montalban, if you could try to sum
up regarding energy development in the U.S. I mean, obviously,
you have been talking about it. Maybe you would just share some
other real-life situations.
Mr. MONTALBAN. Thank you, Congressman.
The bottom line with the small independents is they are trying
to regulate us through the EPA on the underground injection con-
trol program and the Department of Interior on the bonding pro-
gram. And the key issues for the small independents would be per-
centage depletion and the intangible drilling costs.
Mr. MEUSER. All right. Thank you.
The idea of cutting 10 regulations for each new regulation, cer-
tainly after the last four years, that is not very difficult.
Mr. Johnson, share with us two or three of the regulations that
you find are most harmful to your business.
Mr. JOHNSON. The ELD mandate, the electric logging mandate,
some of the EPA regs, and the electric vehicle mandate that is com-
ing is the three that scare us the most.
Mr. MEUSER. All right. Great. Thanks for sharing that.
Now, the TCJA, the Tax Cuts and Jobs Act, of course, most
Democrats hate just because it was implemented during the Trump
administration. How important is that to your business?
Mr. JOHNSON. Well, I am not sure how to answer that one, sir.
Mr. MEUSER. Okay. The 199A, 20 percent small business tax
relief bonus depreciation.
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Mr. JOHNSON. Oh, yes. It is a big part. My business saved
$11,000 last year. Very, very small business, saved $11,000 last
year alone.
Mr. MEUSER. And what did you do with that money? You put
it back into your business, grew, became stronger, maybe hired
somebody?
Mr. JOHNSON. Yes. It just goes right back in. It all goes right
back into the business. It isn’t some golden nest egg.
Mr. MEUSER. Exactly. Thank you, sir.
I yield back, Mr. Chairman.
Chairman WILLIAMS. Gentleman yields back.
I now recognize Ms. Simon from the great State of California for
5 minutes.
Ms. SIMON. Thank you, Chair, and thank you, Ranking Member
Velázquez.
And thank you, witnesses, for coming in. I have learned a lot in
the short period of time about real hurdles that I think it is impor-
tant for us all to acknowledge.
But before I get into my comments, what I am struck by is we
are talking about regulations and the causation of hurting main
street all over the country. And I am so excited to serve on this
Committee because in this moment in time, clearly, there are ways
that we could be supporting small businesses with more efficiency.
That said, I find it difficult to talk about regulation being sort
of the poisonous factor in the economy when right now, in this mo-
ment, the SBA just took on work that it knows that it cannot do.
And for small business owners like the ones represented here
today, because of SBA making the decision to shutter offices in crit-
ical areas in the United States, fire thousands of workers who are
critical to those small business owners being able to access the
small opportunities that we provide, they are not huge opportuni-
ties, they keep businesses moving, we are firing staff, we are shut-
tering offices, and, lastly, we have made the decision to take on fed-
eral student loan provision in the SBA.
You tell me who is directing the ship if we truly are about sup-
porting mom-and-pop businesses in the United States of America?
A couple of weeks ago, I hosted an event for over seven chambers
in my district. Those key leaders were clear to me that it wasn’t
regulation that was keeping businesses shuttered. These challenges
that these chamber leaders representing thousands of businesses in
my district, they lifted up that it was the lack of access to capital,
and that already, when they called the SBA, it was hard to get
through, the websites weren’t working.
They talked about issues that the SBA could do better in pro-
viding in real time, like translation services. These chambers
talked about the work that they have had to do almost alone to lift
up main streets and broadways across my district since COVID.
None of them talked about overregulation as a challenge.
So, in fact, three out of four small businesses want government
to do more, to come in, to chip in, to answer the phone, to follow
up on the website inquiry. But, no, we are shutting offices; no, we
are firing staff; no, we are taking on hundreds of thousands of stu-
dent loans.
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So I ask us, what are we really here doing? What are we really
talking about? If we really cared about small business, we would
be having a very different conversation.
I am curious, to the witness, the Democratic witness—thank you,
sir, for coming today. I know one of the issues that many of us in
the United States Congress are struggling with is with the shat-
tering of the CFPB.
The work that the organization did, this federal agency did, was
to protect not just elderly people fighting scams, but the small busi-
ness owner. And I know the CFPB worked in conjunction with the
SBA.
I am curious, how would you in this moment, sir, explain how
the regulations preventing medical debt, for instance, from being
reported on credit score reports might help a small business?
Mr. ARENSMEYER. Well, Congresswoman, as everyone at this
table can attest, your personal credit is absolutely essential, espe-
cially when you are starting a small business, and for many years
of growing a small business.
So if medical debt reduces your credit rating, inability to get
loans because of your credit situation, that absolutely impacts busi-
ness.
And there is a real intersection, especially with smaller busi-
nesses and a lot of new businesses that have been started, self-em-
ployed businesses, where personal and business debt are essen-
tially the same thing.
The only regulation, the only provision of Dodd-Frank that re-
lated directly to small businesses was 1071, which was simply
track where you are making the loan so we know, so we get infor-
mation, so we can do a better job, so the industry can do a better
job targeting people and making sure there is a broader range of
credits available.
So the CFPB was actually beneficial to small business, both in
terms of 1071 and in terms of helping entrepreneurs avoid scams
and be able to improve their credit.
Ms. SIMON. Thank you. You have just made my point, that we
are making work harder for small business owners. We are making
their lives less equitable in this moment.
And I want to thank all of you all for being here today. Thank
you.
Chairman WILLIAMS. Gentlelady yields back.
I now recognize Mr. Bresnahan from the great State of Pennsyl-
vania for 5 minutes.
Mr. BRESNAHAN. Thank you, Chairman Williams, for holding
today’s hearing.
As many of our witnesses pointed out today, the last 4 years
have been brutal for our small businesses, from COVID shutdowns
and supply chain issues to runaway inflation, and we will focus on
today, an overburdensome regulatory environment.
Many of our small businesses were crushed by this wave and did
not survive. Many of those that did survive only did so by the skin
on their teeth.
We must begin now to get back to our small businesses and en-
trepreneurs who are disproportionately affected by this mountain
of regulation.
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The current state of regulation in America is an opportunity cost.
Just a few months ago I was in the same situation as our wit-
nesses, balancing my company’s budget and being forced to make
tough decisions that affected the future of my company.
I could give a laundry list of what I wished I could do with the
profits, but too often I was forced to divert funds and working
hours towards compliance of the complex and often unnecessary
network of regulations.
Large corporations can survive this. Another fee to a lawyer or
hiring an additional compliance officer or even a government af-
fairs team won’t make a dent on their income statement. To our
small businesses, however, the legal fees and fines from regulations
are make-or-break costs.
I look forward to working with our small businesses, this Com-
mittee, and the administration to cut the red tape holding back
economic growth in America.
Now I would like to ask a few questions to the panel.
Mr. Johnson, I am sure if your business is anything like mine,
taking a day to come to Washington, D.C., here to testify means
a lot. So I do appreciate you coming here to hear firsthand what
it is like for small businesses to go through.
But I was a heavy highway electrical contractor in my past life.
We had about 350 pieces of equipment on the road.
Are there any specific regulatory challenges that you would hope
to see ease through this administration?
Mr. JOHNSON. Just the EPA mandates. The ones that we have
are not working. I am sure that there are better solutions than
what we had. What we have isn’t working. That is our biggest hur-
dle, I believe.
Mr. BRESNAHAN. What was it like—I mean, what was it, 2008,
when the dry DPF took into a place? I know we ran a bunch of
Ford F-550 bucket trucks with the old 7.3 inside of them. And, I
mean, constantly we were dealing with the DPF filter and needing
to go into the D-rate situation.
Has the compliance or at least the wet DPF been any more bene-
ficial or easier to run?
Mr. JOHNSON. No, no. Very troublesome. Repair bills all the
time. Trucks down all the time. One of my constituents in northern
Minnesota had 21 trucks in the logging industry, and he said he
needed 21 to keep 15 on the road every day just because of the sen-
sors in the cold weather. And these things don’t work, one size fits
all doesn’t work in our industry.
Mr. BRESNAHAN. I appreciate that and echo your comments
and concerns.
And, actually, the city of Philadelphia implemented a diesel par-
ticulate filter requirement for anything over 50 horsepower where
you have to go to a Tier 4 diesel. And if you can even acquire or
procure that specific piece of equipment, it was hard to come by,
specifically during the COVID era.
How have the regulations affected your business’ ability to com-
pete with larger firms?
Mr. JOHNSON. Well, we don’t have a lot of DEF trucks, only a
few. I think we are all on the same level. They are suffering just
as much as we are. The big companies still have the same prob-
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lems, it is still the same trucks, it is still the same issues, it is still
the same repair bill, it is still the same employee that goes home
that day without work.
Mr. BRESNAHAN. I will redirect my questions to Mr.
Montalban.
I recently had the EPA Administrator, Lee Zeldin, in my district
to talk about the energy demands needed to grow our manufac-
turing base and economy.
How have the Biden administration’s regulations held back our
energy industry? And what can Congress do to unleash our domes-
tic energy production to meet the demands of the 21st century
economy?
And the reason I ask that is I am from northeastern Pennsyl-
vania. Wayne County, by some estimates, has $900 million worth
of natural gas under our own feet. And with the explosion of AI
data centers we are constantly looking for increased energy produc-
tion, specifically for electricity.
But can you point to one regulation that totally crippled our abil-
ity to produce domestically?
Mr. MONTALBAN. Thank you, Congressman.
It is very easy. The methane rules and how the methane rules,
both subpart W and the Quato B and Quato C, brought us into the
regulations to put us out of business.
And I would like to touch with the other Members of this Com-
mittee that we are regulated, and we work with the EPA, the port
of oil and gas, the Department of Interior.
Chairman WILLIAMS. Gentleman’s time is up.
Mr. MONTALBAN. And so we have many regulatory bodies.
Chairman WILLIAMS. Gentleman’s time is up.
Mr. BRESNAHAN. Thank you. I yield back.
Chairman WILLIAMS. I now recognize Mrs. McIver from the
great State of New Jersey for 5 minutes.
Mrs. MCIVER. Thank you, Chairman, and to my
Ranking Member Velázquez, for having this hearing.
And thank you to our witnesses for joining us today.
At a time when small businesses are driving economic growth,
the role of smart, effective regulations has never been more critical.
Regulations provide the foundation for fair competition, ensuring
that entrepreneurs, no matter their background, have a real chance
to succeed. Strong regulations protect small businesses from preda-
tory practices, promote access to capital, and create an environ-
ment where innovation can thrive.
In my home district, the 10th Congressional District of New Jer-
sey, we saw firsthand how regulatory safeguards put in place by
the Biden-Harris administration helped usher in the historic
growth among small businesses.
We must continue to ensure that critical protections remain in
place to protect small businesses against large corporations, help
create jobs, and preserve the American dream for future genera-
tions of entrepreneurs.
With that being said, I have a few follow-up questions to some
of the comments that were made today.
Mr. Hughes, specifically you spent a lot of time talking about the
cost on building and how it hasn’t increased.
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Do you think that the cost of building was cheaper before
COVID-19?
Mr. HUGHES. Sure, it was. It was cheaper prior. But I don’t feel
like there was a connection with COVID that had——
Mrs. MCIVER. Thank you. So basically it was cheaper to build
before COVID-19. You have not mentioned that through all of your
talks about some of the elements of the cost of housing.
I know in the 10th Congressional District, and in New Jersey
specifically, we have a shortage of about 200,000 affordable housing
units specifically that we are dealing with right now. And many
times when I speak to small developers, they talk about the cost
around COVID-19, before COVID-19, and how materials went up
and the cost of that.
But you have not mentioned that in talking about some of the
cost of that, some of the reasons for the cost now based off the past
administration and now.
With the new tariffs being introduced, Mr. Hughes, what kind of
impact do you see, especially on steel and lumber?
Mr. HUGHES. It will have a huge impact because it involves so
many of the materials that we use—copper, aluminum, steel, lum-
ber.
And like I said earlier, we have dealt with tariffs for years. That
is nothing new for us. And as has been mentioned, it makes it very
unpredictable, hard for us to know where the cost is going.
Mrs. MCIVER. However, but these new tariffs on lumber specifi-
cally and steel are based upon this current administration, the
Trump administration, not previously.
Mr. HUGHES. Sure.
Mrs. MCIVER. Just want to put that out there on the record.
And then, secondly, I do want to mention something. You spent
a lot of time, and I heard one of my Members across the aisle talk
about it, too, about the waste of some of the standards that we
have now and how that drives costs up, which I could understand
that.
And I think that different agencies, especially ones that we gov-
ern in Congress, should do something more to be able to help small
developers in some of these standards, but it doesn’t mean that the
standards are a waste of time.
Specifically, I want to point out for those that may not be aware
and just for their own knowledge the importance of energy stand-
ards.
One, energy efficiency construction. We need that especially in
our urban cities.
Energy savings for renters. I am sure many families would love
to save on energy, especially in my district who are seeing the costs
go up in energy.
Enhancing comfort and health, always very important with the
new energy standards being introduced.
And lastly, reducing the carbon footprint, which is very impor-
tant. We need eco-friendly housing in our communities, especially
in those that I represent in New Jersey.
With that, I yield.
Chairman WILLIAMS. The lady yields back.
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I now recognize Mr. Downing from the great State of Montana
for 5 minutes.
Mr. DOWNING. Thank you, Mr. Chair.
And thank you to the witnesses.
My background, I have built businesses in highly regulated in-
dustries. You may say I am a glutton for punishment. I have done
it in securities and insurance and alcohol. So I have seen how
heavy-handed regulation can cause problems, not just in running
a business but also in raising capital.
When you are trying to attract capital, if you have a bar that is
always changing in the regulatory environment, it is hard to get
capital if they don’t know where that bar is going to be. You can
always plan a business to a bar being someplace.
So I have seen how that—how heavy-handed regulation can stifle
growth, stifle investment, stifle job creation, stifle innovation, and
how ambiguity in this regulation causes the problems I talked
about of attracting capital.
And end of the day, you want to build a business, you need to
somehow find out how to fund it. Money is what drives so many
things in this regulatory environment and cause problems.
I am particularly excited to be joined here by a fellow Montanan,
Mr. Montalban—thank you for being here—deeply rooted in Mon-
tana’s energy sector, and I appreciate that.
Thank you for being here today.
And I want to talk to you about how the last administration has
deeply hampered American energy production, hurting our ability
to provide affordable, reliable, resilient power to our communities.
I think about that all the time in energy. Reliable, affordable is im-
portant to building that American dream.
So I want to just quickly, how did the Biden administration’s
overbearing environmental regulations make it difficult for Mon-
tana oil and gas producers like yourself to operate?
Mr. MONTALBAN. Thank you, Congressman Downing.
The methane rules with subpart W and Quato B, Quato C bring-
ing us into testing of all the wells in Montana was critical and very
damaging to the small independent.
But the biggest one that we are seeing now is the EPA with the
underground injection control program and holding up permits in
Region 8 in Denver, Colorado.
Mr. DOWNING. Thank you.
Last year, the Biden administration’s Bureau of Land Manage-
ment, BLM, released its final fluid mineral leases and leasing proc-
ess rule. This rule significantly increased the financial bonding re-
quirements for oil and gas operations in order to cover for the
abandonment of wells.
Again to Mr. Montalban, how has this rule disproportionately im-
pacted your business and smaller oil and gas operations across our
country?
Mr. MONTALBAN. Thank you again, Congressman Downing.
As we mentioned earlier, a single well bond went from 10,000 to
150,000; multiple well bond went from 25,000 to 500,000.
We cannot by surety bonds, you are well aware of that.
Mr. DOWNING. Right, right.
Mr. MONTALBAN. So these are cash bonds.
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And on the other side of that, we are also well bonded on the
EPA, the BLM, the State of Montana side.
So the bottom line is that that has taken away all possibilities
of buying and selling transaction on federal lands.
Mr. DOWNING. Thank you.
Do you believe that the BLM under the Biden administration
adequately consulted and took into consideration the concerns of
the oil and gas producers while drafting this rule?
Mr. MONTALBAN. Congressman Downing, indeed, great ques-
tion. I can give you an example of Bill Fulton out of Billings, Mon-
tana, that contacted the BLM during this process, and he wanted
more time to give his partners and royalty owners time to answer
and ask questions about this, and they would not even allow him
to do that.
Mr. DOWNING. Thank you.
Going back to one of my themes, on the American Dream, I think
of the American Dream as being able to buy your first home, and
I wonder how young families are able to do this.
So I am going to move on here to Mr. Hughes.
One of the things that struck me in your testimony is pointing
out that over 100,000 households would be priced out of the hous-
ing market if the median new home price in the United States
raises by a thousand dollars. This is while 75 percent of U.S.
households already are unable to afford a median price new home.
That is incredibly concerning to me.
So, Mr. Hughes, in this environment, do we need more or less
regulation in the home construction industry?
Mr. HUGHES. Well, obviously, we think we need a lot less. And
there are other things that we could focus on rather than con-
tinuing to increase the regulation.
The reality is that homes that we have built in the last 20 years
really performed very well. But the existing stock is where a lot of
our energy is wasted. And we would like to see more focus put on
that.
Mr. DOWNING. Right. And in the Biden-Granholm Department
of Energy, they created numerous restrictive energy efficiency
standards for household appliances, like refrigerators, air condi-
tioners, lighting.
How have these regulations impacted the home builders and the
average American family’s ability to buy a home?
Mr. HUGHES. Well, just the increased regulation on appliances
is a whole nother can of worms that we could talk on forever. And
we do see those starting to back off some.
Mr. DOWNING. I have run out of time. Thank you for your an-
swers.
I yield, Mr. Chair.
Chairman WILLIAMS. The gentleman yields.
I now recognize Dr. Morrison from the great State of Minnesota
for 5 minutes.
Ms. MORRISON. Thank you, Mr. Chair, for holding this hearing.
And thanks to our witnesses for your testimony.
I acknowledge that regulations can create additional require-
ments for small businesses, and as a physician, I am also acutely
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aware of the important role that regulations play in keeping Amer-
icans safe and healthy.
Heat is a leading cause of weather-related deaths in the United
States. Excessive heat in the workplace can cause heat stroke and
even death if not treated properly. Heat injury and illness preven-
tion standards help prevent workers from succumbing to heat-re-
lated illnesses and being hospitalized.
Flooding is the most frequent and costly natural disaster in the
United States. Flood risk management standards help reduce the
effects of current and future flood hazards, helping prevent our
homes from being destroyed by flooding.
As climate change intensifies storms and increases the severity
of hurricanes, we need federal standards to ensure that our com-
munities are more resilient to extreme flooding. Many EPA regula-
tions ensure that toxins do not end up in our environment, our air
and our water.
EPA’s underground injection program’s regulations do ensure
that the brine from oil and gas extraction that contain toxic metals
and radioactive substances does not contaminate people’s drinking
water.
These are just a few of the many examples of why regulations,
when implemented correctly, are important tools for reducing
harm.
One way we can reduce the burden of regulations on small busi-
nesses is by creating a consistent and predictable regulatory envi-
ronment.
Mr. Arensmeyer, during your testimony you said that small busi-
ness owners across the country look to their representatives in gov-
ernment to help provide certainty, predictability, and stability in
the business environment in which they operate.
How does the unpredictable and haphazard rolling back of regu-
lations impact small businesses and affect their ability to plan for
the future?
Mr. ARENSMEYER. Well, small businesses, as we have said,
really need as much predictability and certainty as possible. And
we all recognize there may be need to address regulations. But
once regulations are in place and you have kind of gone through
the analysis, you want to lock them in. And small businesses then
will adapt.
And, as heard, it is sometimes costly for them to change. So if
you have certain regulations governing a certain way to do things
and all of a sudden you come in and say, well, maybe that wasn’t
so good, we are going to change it, that is actually a cost to small
business.
So we need to look at not only the sort of cost of the original reg-
ulation, but you need to look at costs of going in and tinkering with
that.
Ms. MORRISON. Thank you, sir.
In addition to introducing regulatory uncertainty, the Trump ad-
ministration’s trade policies have been erratic and unpredictable, I
think, at best. Proposing, then pausing, then ultimately imple-
menting tariffs on Canada and Mexico has created uncertainty for
small businesses and consumers.
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I worry that President Trump’s volatile trade policies will have
dreadful consequences for our economy, with President Trump him-
self admitting that his tariffs will cause a period of transition.
Small businesses often operate on smaller margins than larger
businesses, so a period of transition could be enough to force small
businesses to close their doors permanently.
Mr. Arensmeyer, again, could you describe how economic periods
of short-term pain caused by tariffs will be especially impactful on
small businesses?
Mr. ARENSMEYER. Well, we have already seen a whipsawing
of this dating back even before President Trump took office. Small
businesses all of a sudden were saying we have got to go out and
buy extra inventory, which is also inefficient in many cases; in
some cases the businesses don’t have the cash to do that.
And since President Trump has come into office, we have seen
this whipsawing back and forth. Even today—tomorrow, I guess, is
the big day—we are not really sure what is going to happen.
And as I mentioned, you have got so many different elements in
the supply chain that are impacted by these; in many cases for
small businesses might have multiple ones. They don’t really know,
depending the country it comes from, depending on what the prod-
uct is. We have got an ice cream shop in our network, and he gets
his sprinkles from Canada. I mean, who knew?
So it is everywhere. And the more volatility you have, the more
uncertainty based on country, based on product. It just makes it
impossible for small businesses to do any kind of planning.
Ms. MORRISON. Thank you, sir.
Thank you, Mr. Chair, and to all of our witnesses.
I just want to end by saying that I hope that we can all agree
that we should reduce regulations where costs outweigh the bene-
fits and cut down on unnecessary bureaucratic red tape, and that
we should issue this in a responsible—we should approach this in
a responsible manner. And I am open to working with my Repub-
lican colleagues to do just that.
And with that, thank you, Mr. Chair. I see that my time has ex-
pired, so I will yield back.
Chairman WILLIAMS. Gentlelady yields back.
I now recognize Mr. Finstad from the great State of Minnesota
for 5 minutes.
Mr. FINSTAD. Thank you, Chairman Williams, and thank you
for holding this Committee hearing today.
Thank you to our witnesses for taking time away from your busi-
nesses to come here and share your stories with us.
As a small business owner myself, I have seen the impact of reg-
ulations and the mounting compliance costs and what they can
have on a small business.
The Biden administration alone—and we have heard it over and
over again today—has added in the last 4 years over $1.8 trillion
in new regulatory compliance costs.
But a point that hasn’t been talked about that is as important
and as devastating, I think, to small businesses is over the 356 mil-
lion hours in paperwork that it has caused small businesses. The
last 4 years have been the most burdensome regulatory environ-
ment in history.
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In 1980, Congress passed the Regulatory Flexibility Act to pro-
tect small businesses from these type of burdens. Unfortunately,
the Biden administration disregarded the law to push a far left
agenda that has hurt our small businesses and communities.
So with that being said, I want to talk to a fellow Minnesotan,
Mr. Johnson. And that couldn’t be more of a Minnesota name.
There are about 10,000 Mr. Johnsons in Minnesota.
So, Mr. Johnson, as a fellow Minnesotan small business owner,
you know firsthand the impact of overregulation and what it has
had on small business owners. Last year the House passed my leg-
islation, the PROVE IT Act, to strengthen the RFA and protect
small businesses from these impacts.
In part, the PROVE IT Act would force agencies to consider the
true cost of their regulations, force agencies to comply with the
RFA, and give small businesses a seat at the table in the regu-
latory process. If agencies fail to comply with the law, small busi-
nesses would be exempt from that regulation.
Do you think, Mr. Johnson, that federal agencies should be re-
quired to comply with existing law that requires them to limit their
impact on small businesses?
Mr. JOHNSON. Yes. Agencies are not lawmakers. They need to
be held accountable when they disregard protections for the small
businesses that have been enacted by Congress and signed by the
President.
Mr. FINSTAD. So you have all talked about different regulations
maybe in general, but there has been some specifics.
Mr. Johnson, do you know by name the faceless, maybe nameless
bureaucrat that is establishing those rules or regulations that you
have to comply with?
Mr. JOHNSON. No, sir, I do not.
Mr. FINSTAD. So come election time, you can’t throw them out
of office?
Mr. JOHNSON. No, I cannot.
Mr. FINSTAD. Right. Okay.
In your opinion, do you believe agencies should consider both the
direct and indirect costs, like the paperwork hours, that their regu-
lations put on small businesses?
Mr. JOHNSON. Yeah. The true cost of regulations is actually be-
hind the scenes in all the time it takes to comply with it, the pa-
perwork hours and just simply the filings and filings and filings
that never end.
Mr. FINSTAD. So, Mr. Johnson, as I said earlier, I am a small
business owner myself. And I would assume it is probably similar
to you; you don’t have a stable full of lawyers, compliance officers,
regulatory specialists. You go down the list.
Mr. JOHNSON. All of the above, right here.
Mr. FINSTAD. So it is safe to say that you are the janitor, the
carpenter, the mechanic, the HR professional, the legal adviser, the
master time card keeper, all of it.
Mr. JOHNSON. Absolutely. And what I can’t do, I have to hire
done with compliance companies. You have to have compliance
companies to keep you compliant now because of all the rules.
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Mr. FINSTAD. So, lastly, Mr. Johnson, do you think small busi-
ness owners like yourself should have a larger voice in our nation’s
regulatory process?
Mr. JOHNSON. Yes. I believe we should be heard. And maybe
they should be tailored to meet our needs, not just a one size fits
all.
Mr. FINSTAD. Yeah, and that is a good point. And I heard some
of my colleagues in the minority that had talked about regulations
as a way to level the playing field. And the fact of the matter is,
if you are a small mom-and-pop business, Small Business America,
it isn’t leveling the playing field, because you are the carpenter, the
janitor, the timekeeper, the HR director, the everything, and you
don’t have the man-hours, where maybe a large business can take
that cost over their bandwidth. And so it does put us, as a small
business, on an unlevel playing field.
So I want to just thank you all again for being here. I know this
costs time and money and effort. I am sure some of you woke up
this morning making sure your employees were at work, where
your trucks were heading today, and I know that is a stressful situ-
ation. So I appreciate you taking time.
Mr. Chair, I would also like to submit into the record a letter
from the Associated Builders and Contractors, a letter of support
of the PROVE IT Act.
Chairman WILLIAMS. So moved.
Mr. FINSTAD. Thank you, Mr. Chair.
And, again, thank you, witnesses, for being here.
I yield back.
Chairman WILLIAMS. Gentleman yields back.
I now recognize Ms. Scholten from the great State of Michigan
for 5 minutes.
Ms. SCHOLTEN. Thank you, Mr. Chair.
Gentlemen, thank you so much for being here.
Two years ago a groundbreaking story broke out in my district
about children, some as young as my two boys, working in factories
where foods like the breakfast cereals that many of us eat across
America, Lucky Charms and Cheerios, are packaged.
These children were handling machinery that could tear their
fingers off. The company used a staffing agency to hire workers for
this plant, but did not require the agency to verify ages against So-
cial Security numbers.
Regulations keep us safe. Regulations protect some of the most
vulnerable among us. Regulations protect our children. Regulations
themselves are not the enemy. But regulations that are overly bur-
densome, overly cumbersome, and don’t do the work that they set
out to do are the problem, and we need to be clear-eyed when we
talk about that.
Mr. Arensmeyer, how can Congress do a better job of ensuring
businesses know the, quote, ‘‘rules of the road’’ when it comes to
regulations that keep workers safe?
Mr. ARENSMEYER. Well, a couple things.
First of all, Congress has an oversight role. And we have heard
again that the RFA may not be working all that well. Congress has
an opportunity to identify that and to make suggestions.
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Congress can also make sure there is enough funding to help
small businesses, to support the Office of Ombudsman at the SBA,
to make sure small businesses understand and get the support that
they need.
A lot of the time some small businesses simply need to know—
they need help, they need understanding. So making sure that
those resources are in place.
So it is the oversight and making sure that there is enough
money being allocated to make sure the regulations are being im-
plemented in a fair way.
Ms. SCHOLTEN. Thank you.
My district in west Michigan is home to one of our State’s 46
Community Development Financial Institutions, or CDFIs. These
CDFIs have deployed billions in loans in my home State, resulting
in over 41,000 permanent jobs and 27 million square feet of real
estate development. There are about 25,000 small and micro busi-
nesses in Michigan that have benefited from the support of a CDFI.
Mr. Arensmeyer, coming back to you. Your testimony highlights
how the Trump administration’s recent executive order to dis-
mantle CDFI funds which provide funding to CDFIs around the
country would impact small firms.
If the CDFI Fund cannot support CDFIs like the one in my dis-
trict, what kind of impact can we expect on our local economy?
Mr. ARENSMEYER. Well, small businesses—the marketplace
has frozen out a lot of businesses who don’t have the collateral,
don’t have the credit score of some better-off businesses. And so
there are government programs that support that.
And the CDFI, the CRA, the Community Reinvestment Act, pro-
vides for private financial institutions to put money into a system
where that is more mission-driven. But the CDFI Fund also sup-
ports that.
And, again, it is a cut that is directly impacting the most
underresourced businesses. There is no other way to put it. And we
are pleased to see that in the Senate there is actually bipartisan
pushback on that, really pretty strong bipartisan pushback.
So hopefully—we are hoping that perhaps the House will also
take a look at that because these are—CDFIs exist in every red,
blue, and otherwise district in this country.
Ms. SCHOLTEN. Thank you.
One last comment and question for you.
Another thing that regulations can do is provide a stable eco-
nomic environment helping people to understand that there are
rules of the road to follow.
I just came back from hosting two in-person town halls in my
district last week, hundreds and hundreds of people showing up at
each one.
My constituents are worried about the myriad of uncertainties
coming out of this administration, one of them being the detain-
ment of individuals who are legally working here, detained just be-
cause of the color of their skin, they happen to have a tattoo that,
God forbid, promotes autism awareness or celebrates their mom
and dad.
In Michigan, our service and hospitality industries rely heavily
on immigrant workers.
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Mr. Arensmeyer, can you speak to the economic impact these in-
dustries will face if they are unable to find and keep the workers
that they need?
Mr. ARENSMEYER. Well, small businesses are already facing
huge pressures on workforce coming out of the pandemic, and that
has continued. And now to not only have employees rounded up,
but the fear of that happening so they don’t even come to work has
created—it has impacted operations. And, again, it gets back to
this whole issue of certainty, if you don’t know that you have got
a workforce.
Chairman WILLIAMS. The gentlelady’s time is up.
Ms. SCHOLTEN. Thank you, Mr. Arensmeyer.
Mr. ARENSMEYER. Big impact.
Ms. SCHOLTEN. Appreciate it.
Yield back.
Chairman WILLIAMS. Gentlelady yields back.
I now recognize Ms. Goodlander from the great State of New
Hampshire for 5 minutes.
Ms. GOODLANDER. Thank you, Mr. Chairman.
And thank you to our witnesses for being here today.
I want to pick up where you just left off, sir. You, in your written
testimony, pointed out that the National Federation of Independent
Business has released last month its uncertainty index, which rose
to the second-highest reading on record last month.
Can you speak to—I have traveled all across New Hampshire. If
I had to capture the word that describes how small businesses are
feeling across my State, it is ‘‘uncertain.’’ It is the crippling uncer-
tainty of a trade war with Canada, our neighbor to the north. New
Hampshire shares a 58-mile border with Canada. So many of our
small businesses rely on that partnership, which has been a model
for the world.
Can you tell us more, why do you think we are at record high
levels of uncertainty in this country?
Mr. ARENSMEYER. Well, for all the reasons you have stated.
The fear of not knowing what is happening with tariffs, the attacks
on a workforce that small business owners need, the gutting of pro-
grams that are vital to small businesses.
And it is coming like a tsunami. I mean, this is not like a little
bit here, a little bit there. This is like in the last two months, it
has just been hurtling at small businesses.
And they are really, I will tell you, they are really scared. We
talk to them every day. They are petrified. And they don’t know
where it is going.
And as I said before, we have this big sort of event tomorrow and
they don’t even know what is going to happen. The administra-
tion—the President could change his mind and decide I am not
going to have this tariff this month; maybe next month.
So it is—we have never seen anything like this before.
Ms. GOODLANDER. I heard from one of my constituents in
Hopkinton, New Hampshire, who wrote to me to say that the
threat of a trade war and the tariffs that have been imposed so far
are causing customers to cancel projects and suppliers to preemp-
tively raise prices for tariffs that may or may not materialize.
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Can you talk to us about how consumers are going to feel the
pain of a trade war with Canada?
Mr. ARENSMEYER. Well, absolutely. If this impacts businesses’
ability to deliver products, then that is going to impact consumers.
And one way or the other, you are going to see price increases.
The whole notion that somehow everything we are doing is to bring
down inflation, it is the exact opposite. If you can’t get workers, if
you are getting huge price hikes and you don’t know if you are
going to get huge price hikes and so you are making business deci-
sions that are inefficient, ultimately, that is going to be reflected
in higher prices as well. So consumers are absolutely going to feel
the pain.
Ms. GOODLANDER. We have got a housing crisis in New Hamp-
shire, and we have got a real imperative to build tens of thousands
more homes in the next 5 years. This is a problem that I have
found partnership with people at every level of government in New
Hampshire, and it is a problem that I am really committed to ad-
dressing.
There was some talk about the median single family home price
in this country. In New Hampshire, it is above $500,000.
I wanted to ask you, Mr. Hughes, I am all about cutting red tape
and creating efficiencies wherever we possibly can. If you had to
advise this Committee on the top three changes that we could
make to make home building more efficient and effective in this
country, what would you prioritize?
Mr. HUGHES. First of all, I keep going back to codes, that there
is no question the increase in energy codes or IECC, energy and
conservation codes, that was the sharpest increase that we have ex-
perienced in years. So we would like to roll that back, most of all.
Ms. GOODLANDER. Has the threat of a trade war with Canada
had an impact on home builders in this country?
I want to submit, Mr. Chairman, for the record an article from
the Boston Globe this month entitled, ‘‘Tariffs could drive up New
Hampshire housing costs even more, developers warn.’’ Your orga-
nization is quoted here.
Home builders in my State have sounded the alarm on the costs
that this trade war is going to exact on home building and on
homebuyers.
So can you please speak to that?
Mr. HUGHES. Sure. Like I have mentioned earlier, we have
dealt with tariffs for years. And it is going to be another 25 per-
cent. It is going to be terrible, to say the least. But we have had
to deal with it for decades because——
Ms. GOODLANDER. What would you say is the closest prece-
dent that we should look to? Because, as I understand it, we have
never seen the threat of this kind of trade war with Canada before.
So when you say we have dealt with this before, what should we
be looking to?
Mr. HUGHES. We have just dealt with tariffs on Canadian lum-
ber because—and this goes back into the 1990s with the first
softwood lumber agreement. And it was all over dumping of prod-
ucts from Canada that harmed domestic lumber mills. And so we
have been paying those tariffs forever.
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Now, to get into the particulars or the weeds about what is fair
and what is not fair between the two countries, I am not that ex-
pert. But like I say, it is—yeah, we are very concerned about addi-
tional tariffs, but we have been dealing with it for a long time.
Ms. GOODLANDER. Thank you. The people of New Hampshire
share your concern.
And with that, Mr. Chairman, I yield back.
Chairman WILLIAMS. Gentlelady yields back.
I now recognize Mr. McGarvey from the great State of Kentucky
for 5 minutes.
Mr. MCGARVEY. Thank you, Mr. Chairman.
Appreciate everybody being here today.
Look, I am going to read the headline from The Wall Street Jour-
nal in a story written last night on its website. It just says simply,
‘‘U.S. stocks post worst quarter since 2022 on threat of trade war.’’
In Q1 of 2025, the S&P 500 dropped 5.1 percent and the
NASDAQ fell 10.3 percent and the DOW sunk 2.3 percent.
On Sunday of this week, Goldman Sachs predicted that higher
tariffs, weak economic growth, and greater than expected inflation
would depress the S&P another 5 percent and just might cause a
recession. In fact, they gave that a one-in-three chance.
It is not just Wall Street feeling this. I think what we know in
this Committee, that main street feels this too. Data released last
week from the University of Michigan’s Consumer Sentiment Index
shows main street feels it and that Americans are more worried
about their economic well-being than at any time since the pan-
demic.
Concerns about the job market are greater than they have been
at any point since 2009. I know this. I spoke to a home builder in
Kentucky over the weekend who said they are raising their prices,
and he feels a recession is coming.
This is not a golden age that is being ushered in.
And people’s anxiety right now doesn’t just come from regula-
tions. Go to any small business in any district in America, and I
promise you, they are going to find regulations and tell you about
regulations they don’t like and don’t make sense.
But I think what they will also tell you is they want certainty.
And so what you are seeing right now out of the White House is
the opposite of certainty. You are seeing a reckless and revelrous
approach to governing, and it is not just putting uncertainty in the
regulatory environment; it is putting in every single part of our
economy. Of course it is.
Every week right now we are seeing people who work for the
President go on TV and say they have no idea whether he is going
to follow through on his threats to annex Greenland, impose a 200
percent tax on Guinness, or get rid of FEMA.
If his closest people don’t know what he is doing, how do we ex-
pect the small business owners in our district to know what is
going to happen?
So, Mr. Arensmeyer, a question for you. What do you think is
toughest for small businesses to operate under, smart, well-crafted
policies that agencies take years to write and implement or the
Trump administration’s whiplash economic policies that are mak-
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ing everything more expensive, destroying supply chains, and cut-
ting off critical export markets?
Mr. ARENSMEYER. Well, we have never seen anything in the
20 years I have been running the Small Business Majority, we
have never seen anything like this in such a short period of time.
Our own—we just got these numbers yesterday, didn’t make it
into my written testimony. The confidence levels are just plum-
meting in the regular surveying we do of our network.
So compared to a smart regulatory system, there is no choice. I
mean, this is really—I have never had a small business—and, yes,
there are regulations, a lot of them are State and local. And we are
very active in pushing back on regulations at the local level or
State licensing regulations that are too onerous to keep small en-
trepreneurs out.
But overall, regulations have never been that important in terms
of the lists of stuff. And right now, believe me, we are not hearing
a word about regulations from anyone out there. We are hearing
about tariffs, we are hearing about mass deportations, we are hear-
ing about slashing of programs, and that is where it is at right
now.
Mr. MCGARVEY. Yeah. And this brings me no joy to bring this
report.
And at the end of the day, I root for America. I want our econ-
omy to be doing well. I want our trade policies to be doing well.
I want our small businesses to be doing well and people’s 401(k)s
to be doing well. They are not right now under the uncertainty that
is being caused by this administration.
I know this. Companies in my district are already hurting from
this trade war.
Just quickly about the trade, tariffs aren’t good or bad. Tariffs
are a tool. A hammer is a tool. It is a good tool for putting a nail
in a wall. It is not so great to use it to fix your iPad. How you use
these things matters.
And these indiscriminate trade wars right now we are feeling the
impact of in my district, the bourbon industry in particular. Under
a 25 percent retaliatory tariff from Trump’s first term as President,
their exports were cut in half. Now they are talking about a 50 per-
cent tariff that is set to go into effect tomorrow.
And he is raising all of our prices and hurting the economy. And
for what? For what? A tax package that isn’t going to help main
street. It is going to help the richest executives and companies on
Wall Street.
With that, Mr. Chairman, I yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Jack from the great State of Georgia for 5
minutes.
Mr. JACK. Well, Mr. Chairman, I appreciate you saving the best
for last. I am very grateful for this hearing.
And if I could, Mr. Hughes, I would love to start my line of ques-
tioning with you.
First and foremost, want to thank your association for its leader-
ship in trying to generate affordable homes and to make housing
more affordable for my constituents and, really, all Georgians.
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But specifically, I really welcome your testimony. And I am curi-
ous, how would you say burdensome regulations limit your ability
to meet the growing demand for single-family homes, and what pol-
icy changes would most effectively encourage additional private in-
vestment in this sector?
Mr. HUGHES. Well, just the cost and affordability of homes is
the biggest hurdle that we all have to deal with. And higher inter-
est rates right now. Of course, we expect those to fluctuate.
But just the overburdensome of—and I hate to keep going back
to codes, but that is the thing that has affected us the most in the
short period of time.
Mr. JACK. Helpful context.
And in your testimony, you spoke to something that means a lot
to me, and that is the Congressional Review Act. You talked about
specifically National Association of Home Builder’s support for H.J.
Res. 20, which I will talk about in a moment.
But would welcome thoughts and really open it to the panel on
how Congress can better use the Congressional Review Act to make
housing more affordable.
Mr. HUGHES. I am not that expert. So if you have someone else,
that would be great.
Mr. JACK. Sure.
Anybody else want to take that question?
Well, I will speak to—in your testimony you outlined support for
H.J. Res. 20.
And just to walk the witnesses through, we repealed a regulation
that would have effectively outlawed a very specific type of
tankless water heater.
Rinnai America Corporation is a company within my congres-
sional district that is headquartered in my hometown of Peachtree
City. And it about 4 years ago opened a state-of-the-art facility in
Griffin, Georgia, that manufactures what is called a gas-fired in-
stantaneous water heater, noncondensing tankless water heater,
but regardless, a tankless water heater.
And the Biden administration issued a rule in late December, on
December 26, the day after Christmas, that would have effectively
outlawed production of this type of water heater, thus endangering
about 500 jobs within my congressional district.
And I am proud to report that the House took action on this in
late February. Eleven Democrats voted along with House Repub-
licans to overturn this rule. But to me it is an effective usage of
the Congressional Review Act, and I welcomed that from your testi-
mony.
If I can ask just the panel writ large, and we will start just going
down the line—since we only have 2 minutes left—but if there was
one regulation that you think that Congress could address that
would help your industry, we would welcome your thoughts as we
go down.
Mr. MONTALBAN. Thank you, Congressman Jack.
Made it very clear today that those are the methane emission
rules and regulations against the small independents. And want to
tell you that the small independents of America are excited, we are
happy, we are looking forward to develop the natural resources of
this great country.
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Mr. JACK. Thank you.
Sir?
Mr. JOHNSON. I guess 20 percent small business tax deduction
is probably the most important one to me right at this moment.
Mr. JACK. Wonderful. Thank you.
Mr. Hughes?
Mr. HUGHES. I am sorry. I thought I had already commented.
And the question again?
Mr. JACK. I was just saying if there is—just in closing—if there
is one regulation you would love to see us work to relieve that bur-
den for you, what would it be?
Mr. HUGHES. Well, I hate to keep going back to the burdensome
codes that have hit us all at once. But to be honest, I would like
to see, like Mr. Johnson, I would like to see the cost of fuel come
down.
Took a picture the day Mr. Biden went into office, fuel in my
area was $1.87 a gallon. That has had a huge impact to our indus-
try, whether it is gas or diesel fuel.
Mr. JACK. Wonderful.
And, Mr. Arensmeyer?
Mr. ARENSMEYER. Well, we heard a lot about the cost of hous-
ing, so I am sure there are some regulations out there related to
housing that could be looked at, absolutely. I am not an expert like
Mr. Hughes on that, but I am sure there are, and I think that is
a big issue.
The one thing I want to mention, Mr. Johnson mentioned the
TCJA, the 199A, and also one of your colleagues mentioned it. I
want to be clear, we support 199A, we support reforming it and
making it where the benefit is benefiting those at the bottom.
Right now 73 percent of the benefit goes to the top 4 percent of
pass-through entities. We don’t want to eliminate it. We want to
reform it. I want to be very clear about that.
Mr. JACK. Well, thank you all very much for testifying. I think
the whole Committee appreciates your thoughtful comments today.
And I yield back to our distinguished Chairman, Mr. Williams.
Chairman WILLIAMS. Gentleman yields back.
And I would like to thank our witnesses for your testimony today
and for your being with us.
Without objection, Members have 5 legislative days to submit ad-
ditional materials and written questions for the witnesses to the
Chair, which will be forwarded to the witnesses.
And I want to ask the witnesses to please respond promptly if
that happens.
No further business, without objection, this Committee is ad-
journed.
[Whereupon, at 12:20 p.m., the Committee was adjourned.]
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APPENDIX
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Æ
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File and source
- File
- CHRG-119hhrg59819.pdf
- Size
- 21,760,629 bytes
- SHA-256
- be479f95f5a9f5e7e1706c038eb045b0ba566f673b00ff36d28f467df47590b3
- Our copy
- CHRG-119hhrg59819.pdf
- Original
- www.govinfo.gov