House Small Business subcommittee presses SBA on politicization, staffing and regional office moves

WASHINGTON — The House Small Business Subcommittee on Oversight, Investigations, and Regulations held a hearing focused on “restoring the SBA to its original mission of serving Main Street America,” the panel’s chair said, as members questioned agency stability, staffing changes and recent policy directions.

“Welcome to today's hearing, which will focus on restoring the SBA to its original mission of serving Main Street America,” Chairman Alford said in opening remarks. The hearing drew testimony from three outside witnesses and sustained questioning from members about terminations of staff, reported data access by outside actors, Office relocations and the role of partner organizations such as Small Business Development Centers.

The hearing's central theme was whether the U.S. Small Business Administration should be refocused on traditional counseling, loan support and access-to-capital work, witnesses and members said. Theodore “Tedje” Gutierrez, state director of the Missouri Small Business Development Center, described the SBDC network as “a proud part of the nationwide Small Business Development Center system of 63 networks with over 900 locations and over 3,000 professional counselors,” and said the centers provide one-on-one counseling and training that he called essential to Main Street businesses.

Allegations about operations inside the SBA drew sustained attention. Ranking Member Tran and other Democrats raised the committee's concern over recent personnel actions: members cited a range of between 400 and 700 employees who received termination notices over a short period, then were told the notices were errors, and later some were again terminated. Richard Trent, executive director of Main Street Alliance, warned that the firings and sudden program changes “have thrown thousands of entrepreneurs into limbo.”

Witnesses and members also raised two additional operational risks: a reported access to agency systems by an outside technology team and the administration's directive to relocate six regional offices out of selected large cities. Trent testified that the reported access to SBA systems by the so-called “Doge team” and technology entrepreneurs represented a threat to competition and small-business privacy, saying an outside party’s access to tax and banking information would be “an existential threat.” Committee members said they have sent letters to the agency seeking more information about the extent of systems access and potential exposure of small-business data.

Several Republican members and witnesses said the agency had drifted into political activity under the previous administration and prioritized initiatives such as voter registration and DEI programs over core services. Alfredo Ortiz, chief executive officer of Job Creators Network, urged moving more SBA staff and resources into regional offices and recommended better alignment with community lenders and private-sector training programs.

Democratic members and some witnesses cautioned that sudden staff cuts, office relocations and an inspector general vacancy risk reducing service to small businesses. Representative Nydia Velázquez, the committee’s ranking member, and Richard Trent said those changes could reduce access to loans, disaster assistance and counseling, especially for entrepreneurs who rely on face-to-face support.

Legislative proposals discussed included the Returning SBA to Main Street Act (a House companion introduced during the hearing), the Prove It Act to strengthen Regulatory Flexibility Act enforcement, and the Merit Act referenced by members seeking remedies for recently fired employees. Witnesses urged bipartisan solutions, saying SBDCs and other resource partners should be better funded and integrated into SBA planning.

Members pressed witnesses on specific programs. Gutierrez said Missouri’s SBDC had not been approached to carry out Community Navigators activities and described SBDCs' longstanding work on outreach and disaster recovery. Gutierrez told the committee that SBDCs delivered high return on investment in prior fiscal years and that demand for counseling remains elevated.

The subcommittee concluded with requests for written answers and additional documents; members were given five legislative days to submit follow-up questions. Chairman Alford closed the hearing by thanking witnesses and staff and adjourning the meeting.