the reality of the global order today between them? >> thank you very much for your very good question. i think there are two types of international institutions. ..

we are ready to take on an important part in all these institutions. on the other hand there are the second kind of international mechanisms back to the g20. both china and the u.s. are important members to the g20 and the g20 is addressing international and economic issues at the top level. progress that china has made is very important in many aspects but the fact that the developed economies and the so-called emerging markets are sticking together around the same table on equal footing to discuss global issues is progress. we certainly support that.

so both institutions, so both parts of the institutions could play an effective role and contribute to the global cause of peace and stability and prosperity and china is certainly ready to take part in all these efforts. thank you. >> thank you. if i take the liberty of asking the second question, the audience -- [inaudible] the world, particularly u.s. and china face many potential crises and things that could escalate and get out of control. you think of north korea, taiwan, south china sea, east china sea and i guess my question is do you think the united states and china have adequate crisis management and avenues of communication where we can talk about alternatives and crisis management and hopefully crisis prevention before they occur? do you think we coordinate our governments internally adequately to manage these

complicated problems? >> well, huge bureaucracies are always not easy to manage so sometimes you shut them down. [laughter] [applause] >> let him finish this and next question you ask him. >> increasing communication and coordination between our two governments. many of the international regional issues. we are, i think doing a quite good job on this. but what is important as i said in my speech is to show full respect to each other's major concerns and interests. on that basis we can certainly coordinate our responses to the issues, and maybe work together for solving these, or at least some of these issues. >> i'll take hand as i see them.

yes, yes. young man here. and then i will alternate sides. >> thank you for your excellent presentation. i'm from china in the first year student here and my question is, what is your expectations for your personal role in the sino american relations as ambassador? is there any factors you want to contribute to this very important position? thank you. >> well, thank you for your question. thank you for your confidence in me. i think basically the role of the ambassador as i see it is a role of a messenger. the most important task for me is to facilitate communication, not only between the two governments but also between the two peoples. but sometimes the messenger also tries to be the message itself and my message here is very

clear. our two great countries have to work together, have to work with each other, not against each other. because this is the only option open for us if we want to have a win-win situation. i arrived in april so it is just over six months. i hope during my years here i will really do something in this regard. >> thank you. bonnie glazer. then we'll alternate sides and i will try to be equitable. >> thank you, ambassador. pleasure to see you and thank you for the ongoing contributions to u.s.-china relations. i would like to ask you a question about dunn xiaoping's guideline of many years ago, perhaps to 1991 when he had some

people say a 24 or 28-character expression, but the core of it, what was often referred to the four characters. to keep a low profile or what some people sometimes translate it as hide your capabilities and bide your time although i never thought that was a very good interpretation. they included this phrase in 2010 in a very important article that he wrote which was published both in chinese and then on english on your foreign ministry website. quite unusual for an official to actually use that phrase in writing. it has been done a couple of times but we haven't seen it since then. not mentioned in any major speech or any articles, so i wonder if you could comment on the relevance today for chinese foreign policy of this guideline of keeping a low profile? is it still important? thank you. >> thank you.

of course xiaoping did a lot of good things. but some of these have been misinterpreted even within china and certainly abroad. he was quite clear and quite simple. the most important task and the most important challenge to china is its own economic and social development. so china has concentrated on this. we can afford to divert resources for either purposes. so that is why we have to keep a relatively low profile internationally and not to get involved in disputes and conflicts that are not related to us. i think was a basic message hyped what he said whether it

was 24 characters or how many. but things are changing of course. china is developing. i think this was said in the late 1980s. so it is about a quarter century ago. china is more developed than than that time and a bit stronger than we were at that time. so we are fully aware of the needs to take up more international responsibilities and to make greater international contributions but this is a process. it will take time. and the basic philosophy behind xiaoping's teachings still applies. this is the basic philosophy of the chinese nation. you have to be modest. you don't overestimate your own capabilities, you try to do things within your limits. try to work with others and what i said about the concept.

thank you. >> thank you. i'll go to the back. i see a hand off on the far left there. yeah. the one that's waving. >> thank you for your speech mr. ambassador. my name is kalamov. i am from as per john. i work for the cultural center for the republic of azerbaijan. clear for everyone sitting here of the american dream. after the president of china, chinese president xi jinping he mentioned chinese regime. could you give us explanation,

what does chinese dream means? >> i don't think chinese dream is very different than american dream except for-[inaudible] i always believe people all over the world have very similar aspirations and very simple ones. they want to have a good job, stable, maybe increasing income, very good medical care, and good education for their kids and of course they want stability of their own country. so these are the things mentioned by president xi when he was elected general secretary of the party of the 18th congress november of last year. i think for all these things people in china, people in the

united states and elsewhere, they could have very similar dreams. the task for the government is to make sure that your people will be able to have their dreams come true. so i think don't think there is anything more profound or larger than that. it is very simple. if your people can enjoy a better life, if people could be better in the future than now, then you have your dreams come true. thank you. >> i saw a hand. david. stand up, david, so they can see. >> ambassador tiankai, i guess i will have to speak loudly. thank you for a very thoughtful

talk. david browne from sits. i'm a former diplomat. i think i know in diplomacy and foreign affairs the most difficulty questions arise when different aspects of your goals, your policies, your principles, come in conflict with each other. and you mentioned in your talk that china would be firm in defending its sovereignty and also be pursuing peaceful relations with your neighbors. a lot of us are concerned about situation in east china sea and the south china sea where sovereignty and peaceful relations seem not to easily be brought together and i wonder if you have any broad thoughts about how china and its neighbors can best come out with an outcome which all of the participants will see as harmonious and consistent with their own basic interests?

>> well, our policy towards our neighbors has been consistent. we certainly want to have a stable and friendly relationship with all our neighbors and we're working very hard for that. this is best illustrated by the recent visit of our president to some of the asian countries last week and visit by our premier to some of the other asean countries the next few days. we believe that we have to work together with our neighbors for common prosperity and for regional stability. of course we have so many neighbors and with some of them we do have tear tory disputes. in this regard i think the united states is very lucky. you have only two neighboring

countries. [laughter] you have oceans on both sides. but we certainly have more neighbors than you do and these territorial disputes are left over from history. they have been there for so many years or even some decades and we believe these disputes have to be worked out through bilateral negotiation and dialogue between china and the countries concerned. if the conditions are not ready yet we have the patience to wait. we're not a hurry to resolve all of them overnight. this is certainly not our intention but unfortunately when provocation is made we have to respond. we have to restate our position clearly. that is about all that we are doing. we're just responding to some of the provocations. we're certainly don't want to

see an escalation of tensions in our region but we hope that others will think alike and there will be a meeting of the mind. >> thank you. anybody in the back quadrant they want to get a hand up? okay, on the aisle in the far rear. >> hi. my name is zamil i'm a student here at zeiss. considering japan is a major treaty ally from the united states. there has been national anger in recent years by china towards japan. there is a lot of nationaling aist assertiveness vis-a-vis china. do you see this relationship improving and if so how? >> thank thank you for asking tt

question. i was ambassador to japan a few years ago. i still have a large number of friends in japan. china and japan, we are neighbors and you can not change your neighbors and you can not move away from any of them. [laughter] so we stand for a stable and friendly and cordial relationship with japan. of course in the past japan and china brought about huge suffering for the china piece people. we certainly don't want to see this happen again. 35 years ago china and japan conclude ad he bilateral treaty of peace and friendship and this treaty is still valid. five years ago two governments concluded a political statement for the establishment of a

strategic relationship of mutual benefit and we're still firmly committed to that document. what concerns us in japan is some disturbing tendencies in japanese politics. japan's outlook, history, what happened in the past. maybe there are a few people, a few politicians in japan who believe that japan lost the war in the second world war because of the atomic bomb be dropped by the united states and just because of that they believe if they don't antagonize the united states, everything will be okay for them. they don't have to take care of

the concerns of other countries. if that is really what they believe, i think this is very wrong and very dangerous. japan was defeated in the second world war not just by the two atomic bombs dropped by the u.s. but by all the peace-loving and countries of peeps, the people of the united nations including china and the united states of course. and japan was not defeated in that war just by some modern weapons but by the strong will and determination the peoples of asia, of the united states, and of europe. i think politicians in japan

have to realize this is the post-world war ii international order. you can not challenge that. so we're really concerned about such tendencies from japan and we believe what is at stake is the interests of china, of the united states, of other asian countries and of the global order. so i think that this is maybe the most important issue between china and japan and this is a matter of principle for us. i know such of you may not represent the majority of the japanese people. and our hope that the japanese people and maybe together with all of us here will make sure

that such a tendencies will not dominate the future direction of the country. thank you. >> jonathan. up front here. >> yes, joan than pollock of the brookings institution. ambassador, good to see you in the neighborhood again. i thought i would try to raise an issue, and i hope it doesn't sound overly academic but about the structure of international relations. china continues to resist any suggestion there is a g2. on the other hand as you nighted we're in kind after hybrid world where we have on the one hand the traditional institutions of the post-world war ii era and newer institutions we now grapple with. left unstated though is that china has emphasized the desire for a new, a new framework or a new concept of major power

relations. what i'm curious about whether or not the assumption of this framework applies only to the united states and china or is it something that we could generalize beyond these two states? and if so, if i could ask you, would you care to offer us an estimate of who are the great powers? who is entitled to a particular responsibility? just a question. so you can be a student again. [laughter] >> thank you very much for giving me another exam. well, you see one of the basic principles for china's foreign policy is that all countries are equal, large or small, weak or strong or rich or poor. this is still one of our principles. so we don't believe that the world, world affairs should be determined by only a few

so-called major powers alone. but on the other hand countries have different capabilities and they should take up some different responsibilities. i think that is why we have the g20. because 20 plus countries in that group account for maybe about 80% of global output and global trade and international finance and so on. so they have to work together to make sure that the global economy and finances are stable and they certainly have higher stakes than some of the other countries. so, i think we have to aim at kind of a balance between the principle of, the principles that all countries are equal and they should have a equal say in

international affairs on the one hand and the reality that some countries have greater capability and they should be ready to make greater contributions. >> very good. >> can i have a report? >> the young lady, midway in this section in the purple. >> hello. i'm a graduate of beijing foreign studies university atsa ias for studies. my question is a little bit personal. you are your dearest in chinese alumni and senior school mate and do you have any suggestions for all the zeiss students here who are american or asker buy

john -- azerbaijan, making contributions to the world peace and helping the chinese-american relationship after they graduate? thank you very much. >> we not emphasize our already career professional or, over a decade in china foreign service. so i knew what i was aiming at, what i needed. but i think most of the students here are just from, just college graduates or even undergraduates here. i think whatever you learn here would help you if you know how to make this useful in your career. but in the larger sense, what i talk about here, about this new model relationship, about china

the future and our common future, we're really up to you, to the younger generation. i think as the relations between our two countries have to be handled generation after generation. there are no guaranties that we can do everything within -- we are still working. you will have new problems, new challenges and the relations will face new tests and it's really up to you that we will finally reach the goal of this new type of relationship. so i hope that the students of sais will first of all, you have to pass all the exams given by your professors here and get very high marks here and then when you leave sais, whether you join the government or private sector or whatever, you can

really make sure that you and your children will have a better future and will have greater certainty in international situations. we still have too many unanswered in international today but the world is young. thank you. >> i saw a hand shoot up here. >> hi. i'm a second year student at sais and also a graduate from peking university. today i am so grateful to see thanks for the speech. my question is that, like realists always believe that war or military is sort of a zero-sum game but what you have really proposed and our country proposed as a new model of major country relations seems to be a win-win game and a non-zero-sum

game. so, what do you think on this or sort of new model can be applied to the strategic relations between china and the united states relations and how this could solve the zero-sum game problem, if there is any problem? >> i think this new model relationship is really a cause for either of the new realitities today. our two countries are so interrelated in many aspects. if the stocks in new york go up or go down it will affect the chinese economy and the american dollars go up or go down it will also affect china because we have huge amounts of american

debt. [laughter] >> why are you looking at me? >> i want to know whether this is good or not. so really, you can not have this kind of zero-sum game. you can not say that one side will be 100% winner and the other side 100% loser. this is not quite possible now. besides we're faced with so many challenges that can not be handled by any single country. not even the united states, the most powerful country in the world, like climate change. energy needs, disease, poverty, terrorism, all of these things. all country have to work together because this changes, transcends national boundaries. if we fail, we fail together.

if we prevail, we prevail together. also between china and the united states, direct major conflict, if something that neither can afford. something neither can win. and neither can afford to lose. so i think this issue is really the realities we face today. of course there are always people who would advocate this kind of zero-sum game. but who have to be careful because, what is at stake is our long-term interests. i'm quite confident that our two countries would have the wisdom to understand these issues, understand the new realities and we'll have the capability to build up this relationship. thank you. >> is there somebody in the back, then the distant back? i don't want to shortchange

them? i see a hand in the back. >> hi, i'm a second year ma student hire and again i would like to thank you for taking the time to speak with us. so my question is also related to japan as well. so, with the recent two plus two meeting in tokyo in which secretary hagel and secretary kerry discussed expanding the military cooperation between the united states and japan, and also taking into account japan's recent policy shift towards expanding their military capabilities, i was wondering what your comments or what your opinions are and how that affects china-japan relations but also and china strategic relations? >> well, thank you. first of all i want say i am

happy to so many promising people from china sais. also thank you for your question. i think basically they are two views, or two outlooks for asia-pacific. one beliefs that this region is economically the most promising, dynamic region of the world. so we should turn this into a huge marketplace, full of opportunities for everybody. that is why i have to concentrate on cooperation and economic development and economic integration. and the other view, the other outlook believes that this is a place full of conflicts, full of dangers. and, what they are really working at is to turn it into a possible battlefield.

so these two views represent two very different futures for asia-pacific. i hope everybody could make the right choice to follow a -- borrow a very familiar phrase from one of your former presidents to be on the right side of history. i think the first view is certainly represents the common interests of all the peoples in asia-pacific including china, the united states and japan. and the second future, the second outlook will certainly do a great deal of damage to all of us. so i think, i hope, all the people, especially the leaders of these countries an the politicians and the scholars, will be very careful about that and make the right choice. thank you. >> one last question. lady there, yes.

>> hi. my name is a tonya kim. like you i'm a sais alum from a long time ago. my question is china on north korea. do you think, what do you think will happen? will china continue to take some measures to put pressure on north korea or will they sort of stay where they are now? thank you. >> as i said we have so many neighbors. japan is one of them. korea is another. but we certainly have a long-standing relationship with korea, with the dprk but our position on the situation in the korean peninsula is quite clear. first we stand for denuclearization. we're against any nuclear program, nuclear weapons on the

peninsula. that's why we voted in favor of the united nations security council resolution on sanctions against the dpr. can when it conducted several nuclear tests. this is one of our fundamental goals on the korean peninsula. number two, we also stand for peace an stability. this is of course is in the interests of the korean people themselves but this is also in the national security interests of china. because we have a common borders with the dprk. we are neighbors. any conflict, armed conflict or war on the korean peninsula will certainly affect china's national security interests and we will never allow that to happen again. number three, we stand for negotiations and dialogue. because first of all this is

always our preferred option for addressing international disputes. and besides we don't believe any conflicts or maybe just pressure alone could really solve this problem, this nuclear issue on the korean peninsula. and the six-party talks made valuable efforts and contributions to resolving this issue. unfortunately it got stuck for the last few years. but still it offers the best, at least the most feasible mechanism for negotiations among all the parties concerned on this issue. so, i hope that the six-party talks could be resumed at an early date when conditions are

ready. of course and the six countries can really move forward towards a goal of denuclearization and work out a mechanism or some arrangement for long-term stability in northeast asia. thank you. >> well i hope you all will join me in thanking ambassador tiankai. >> thank you. [applause] the ambassador kindly agreed to stay for a short reception and it will be out in the lobby in that direction. thank you very much for coming. >> starting friday c-span radio

can be heard at its new location, channel 120 on xm radio. >> the senate small business committee small business owners affected by the government shutdown. this is 90 minutes. >> good afternoon, everyone. thank you all for making the effort to join us here today for this hearing and roundtable. to allow the voices of small business to be heard, and partners of small business in how this shutdown of the federal government is affecting you. we're now on day 15 of a

government shutdown and unfortunately only two days away from the possibility of the united states signaling to the world that we will not pay our bills. american express ceo ken chenault said, quote, if the united states hits the debt ceiling and is unable to pay its debts the consequences will be immediate and dramatic. the united states, he went on to say, is the wealthiest nation on the planet for 100 years. no one ever believed the united states would not pay its bills. if the u.s. defaults, the world financial system literally unwind. a harvard business school professor said this week the economic risk to the average american if the government defaults on its debts is to great i find it hard to believe policy-makers would ever allow it to happen.

the entire crisis is entirely unnecessary and avoidable. yet we are here today, still facing this potential catastrophic crisis because of, in my view, a small minority from one party in one house decided to hold the federal government and the global economy hostage to defund or delay a health care law they find objectionable, a health care law that passed the senate on december 2th, 2009, passed the house on march 21st, 2010, was signed into law by president obama on march 23rd and upheld by the supreme court on june 28th, 2012. hundreds of committees held hearings on this law. over a span of 40 years. this committee held several hearings on this law, one just recently where we had people come in and talk about what they liked about it, what they didn't like about it. i will refer to that in a minute. at our recent hearing we heard from one small business owner

from maryland. he stated, i always wanted health insurance and being self-employed we couldn't afford it. i don't want to go back to that. he went on to say, the status quote was completely unacceptable. doing nothing would have wreaked havoc on my business and other small businesses like it. we had at that time a stream of testimony on this record and public record of business owners saying how pleased they were with many parts of the law. we had some on record that said they didn't like parts of the law. but what we find ourselves here today is because a small group couldn't get it, amended, repealed, et cetera, have now shut down the government. and i wanted to give voice to small businesses today regardless of what you're feeling is about that particular act or health care in general. we want to hear from small businesses about how the federal government when it furloughs almost 800,000 people, and puts a stop to contracts, projects, et cetera, how it affects small business, maybe there is no

effect. we'll hear from you all today. i think there is. so this hearing will attempt to focus attention on the current government shutdown on america's small businesses and there are 27 million of them. 20 million self-employed. about 7 to 8 million small businesses, and we have thousands of banks represented here that lend to those businesses. we're going to get some of this on the record today. our witnesses, all of you, come from a variety of different industries. you come from the tourism industry, from the high-tech efficiency first, from i.t., from cyber security firms. you represent the health care sector and even a small manufacture you are of gun parts is here to testify how the shutdown is affecting your business. some of my colleagues that have joined me and recognize them in a minute and thank them for being here.

everyone's own a tight time frame today. but some of their firms that they represent in their states have expressed a strong, given strong letters of support for this hearing and expressed their views. here, are just some that we collected and i will do this briefly. one of my small business owners in donaldsonville, louisiana, sent me a letter. he works in sugar industry. owner of a small consulting business. wanted to open grapevine cafe in donaldsonville. we're famous for restaurants, and always good food. not always fancy but they're always good. i have no doubt his would have been one. he complete ad application for 504 loan which he would use to purchase the restaurant. the sba has not approved the loan yet. the restaurant he is buying has 15 employees. if his plan he would add five new jobs within 90 to 120 days of purchase. that job hiring has been delayed

because his own application can not be approved because this just one of 500 agencies of the federal government that are closed down and not operating properly. another one of our businesses, in business a long time, perez and associates, from the 19 '40s. it has grown into a national company. this company happens to now be owned by women and minority-owned. their government clients include the corps of engineers, department of agriculture, us air force, more than 50% of their work is federal contract but 50% is private. they are losing, they have testified to me, more than $41,000 a day. and 40 employees are affected by this shutdown. another louisiana company, gulf coast bank, that i'm well aware of, has, been one of our strongest small business lenders. they're one of the largest mortgage lenders in south louisiana. they have closed over 1300 loans

totaling 230 million to date. they're on target this year to close 300 million because of the market is picking up and things are moving forward, yet every day they said they are losing, they are saying no to $1.8 million in lending because of this closure. i'm going to read just one more off that is not from louisiana, that is from philadelphia, pennsylvania, and then turn it over to my colleagues for brief opening remarks as we get to our panel. but in "the wall street journal" just this week, charlotte camelz was planning to use $150,000 sba loan to open her second french restaurant in philadelphia. but before the loan can close, her lender, which is susquehanna bank, must confirm her legal immigration status that process begins with the sba the federal immigration agency which remains open because they're under an exception, stopped receiving requests because they can't get

what they need from the sba. which brings to the point that just because a few agencies have been deemed essential under the emergency, doesn't mean by any chance that operations are going smoothly and it is stopping a lot of economic work in our nation. . . the export-import bank is under the wheelhouse of this committee. what about that bank? last year, 88% of export-import

bank's transactions were for small businesses totaling $6.1 billion. that bank today is not currently operating. translate that the 16.7 million a day of lost transactions for small businesses all over america. let's take the irs. i promise you this will not be on the favorite list of house republicans to open it up. it's not one of my favorites, agencies either. however, many small mortgage lenders and real estate agencies are in danger of same transaction put an old because by law any mortgage loan uprooted subject to the review but a mortgage lender of at least one years worth of federal tax returns. if they can't get one years worth of federal tax returns verified by the irs, all of these mortgages and loans are tied up. so that you can see what our situation is here. so let me come in closing, say we have a wonderful selection of small business owners today who

i know you're eager to tell your stories. i look forward from hearing you all. am going to turn to my ranking member when he arrives, but until then let me, in order of appearance, recognized the senators just for a very brief one minute or two opening remarks and then i would like to introduce our panel us. senator heitkamp. >> so much, chairwoman landrieu for putting this thing together in such a short bit of time but i want to assure the witnesses we understand your time is valuable but your stories are extraordinarily important. and this opportunity to really tell those stories i think is critical to impressing upon people that there is more than is hurt and just feelings here. there's more than once hurt and just our emotion. this may come as a surprise. this committee is a committee that i worked very hard to be on because north dakota, in fact, is affected almost more than any

other state with the sba shut down. my home state of north dakota actually ranks number one in the number of loans per capita based on dollar values secured through the sba. agency reported in fiscal year 2012, it granted almost $28 million, or $152 per resident of loans in north dakota. and in the first four months of the current fiscal year, the sba provided twice as much financing compared to the same period in 12. you might know that north dakota is undergoing a huge apple cannot make -- a huge economic boom. what is tragic here is that this opportunity that small business people have of taking advantage of this economic opportunity in north dakota is being stifled every day. tragically the places where it is being hit the hardest is our indian reservations. i could tell you very sad stories but i think it's important that we hear your

individual stories and not really the ones that we have from home. so i would ask that my fault opening statement be available for the record. >> without objection. thank you. senator cardin. >> chairman landrieu, thank you very much for bringing us together. and thank you for pointing out so frequently on the floor of the senate, in our caucus, and to the american people harm being caused to this country as a result of the shutdown of government. i represent the state of maryland. we have 10% over workforce that works for the federal government. 10% of our workforce. that's had huge impact on the maryland economy. so we know about that 10%. we know about that 125 or 30,000 federal workers who are furloughed. but it's having a major impact on small businesses in our state. i stopped at a restaurant last week near the baltimore beltway, and i know the owner and asked him how things are going. he said terrible.

he said we don't have the federal workers usually come in and have lunch. i don't know how much longer we can deal with our current situation with the government shutdown. so businesses are hurting. i want to thank al all of the guests that we have heard today that are going to relay their particular stories. i'm particularly please we have so many on the panel that have a maryland connection. we talk about the federal workers, but how about the employers that do contract work for the federal government. that's a huge number in my state, and around the country, so i'm glad that lisa firestone who is here that will be up to talk about the fact that 90% of the revenues are in jeopardy because of the shut down. she helped save money for the federal government in the work that you do for lost days and the worker comp cost. we know the great work that you do. we want to see you at full strength, and to sabrina poole, a small business, 25% over

revenues are jeopardized because of the shutdown. i also want to thank sally robertson and ronald paul for being here to explain what this will mean from the point of view of the sba and activities as it effects the business is done by their financial institutions. this is important for us to get your story and i thank you for being here. >> senator levin. >> madam chairman, thank you for your great leadership. as small business is getting clobbered by this government shutdown. each of us have probably dozens of stories. i have about a dozen in my statement which i would ask that you put in the record. i would just use one of those stories, and that's trying to pick out the one here which may be somehow or rather will resonate. a little ferry service that runs up in the northwest part o of te lower peninsula, a little ferry service that runs hunters and hikers and bikers to a little

island in the sleeping bear dunes national lakeshore. that service can't run. five runs a week is all it was doing, 50 people on each ferry. 250 people and about $35 each to that's the income of that ferry service. it can't run. it's about a thousand dollars in lost affairs per week, small business, one of a can a dozen that i am setting out here in my opening statement. the only point i would make other than that, madam chairwoman, is this. everybody wants us to negotiate. it's obvious we should negotiate. it's obvious the negotiations have to be bipartisan. the real issue is whether government is going to be functioning while we negotiate. and of that, everybody ought to join in and say, of course government should be functioning while you negotiate. that's the issue. i would help our small business people will let their own representatives and senators

know how important it is that government reopen, negotiate of course but for heaven's sake, pay our bills while we negotiate, but please, please get government open again while these negotiations take place. so again my thanks to you, madam chairman, for your tremendous leadership. not just in this committee but publicly on the floor of the senate and sony other ways, you are indispensable in this effort. >> thank you, senator. i appreciate that. you have been a leader for many years yourself. i'm going to ask each member, because with a large panel and its unusual, but we set it up this way so we could both be formal if necessary and informal in questions in back and forth. let's start with you, miss smith, if you could. just introduce yourself and for one minute give kind of your views about your business that is being affected. then i've got questions to throw out to all of you as we continue this hour and half hearing.

thank you. >> okay. >> and jeff to speak right into this microphone, because it's a little bit difficult. you have to kind of lean in and speak right into the microphone. >> okay. my name is johnny smith. i president and ceo of global commerce and services. we are an information technology company raised in new organs louisiana. i am currently in d.c. because i had meetings with private industry clients. originally i planned on meeting with federal government agencies clients. however, they are unavailable due to the shutdown. we are not able to meet with our small business representatives, are contracting officers and our contracting officer representatives at the agency's to get assistance since they are furloughed as well. gcs was started with me being an independent contractor while working my own contracts before branching out to other agencies.

we managed to get a line of credit for our business while using my property as collateral. i've been asked to talk about the impact of the shutdown and how it has affected me and my company. the most compelling thing that is happen as a result of the shutdown is having my resources at home, and not building my usda contract in new orleans. that contract started september 1, 2013, with 3 resources. and we received a stop work order two weeks ago. usda is one of our major agencies we work with. in the interim, we are still paying salaries, health insurance, and other benefits for resources, with hope of starting back on our contracts and. we currently have a total of 17 resources covering our contracts. gcs is a $2 million company in

revenue. payroll is $33,000 per month, and insurance is $3800 per month. we have approximately $60,000 in reserves that we can use for payroll. we are doing our best to keep our employees working, since they have already started to contract before the furlough. another two weeks of the furlough, it will make it tough for us to continue to pay out employees who are not global at this time. another three or four weeks of the furlough, we will definitely have to have our own furlough. there are contracts which we are anticipating awards. however, they have been placed on hold because of the furlough. gcs is pushing for the furlough to end so we can put our people back to work. >> thank you. mr. leh?

>> thank you, madam chairwoman. senators and fellow entrepreneurs, i want to take a quick moment to thank you for the opportunity to tell my story about the success and the plight of my company, tl technologies. tl technologies is a specialty manufacturer of precision metal components supplying brand name manufacturers and worldwide markets. since its inception the business has grown rapidly from an idea and is now recently awarded projects to double in size in 2014. to truly appreciate the predicament that we find ourselves in today, i believe it's important for you to understand investment that i, my family, and a business partner have made to build tl technologies to be a $1.2 million company. we currently employ three people in the manufacturing sector. we were about four weeks into the process of securing additional capital to support the new business, and we were

being act by an sba 7a loan, and we missed the window when the government shut down. so we cannot proceed with the purchasing of our equipment. we had to stop about $600,000 worth of equipment from moving. we idled rigors, electricians, employees. we are already extended to offers of employment to highly educated machinists who would make combined source of around $130,000 a year with full medical benefits. we had to resend of those offers, and what a completely and absolutely in a stall mode at this point. >> thank you. ms. firestone. >> chairman landrieu and distinguished members of the committee, thank you for this opportunity to testify this afternoon. my name is lisa firestone become president and ceo and owner of managed care advisers, a woman

owned small business founded in 1997 specializing in employee benefits and worker's compensation. i also sit on the board of women impacting public policy, we specialize in reducing the risk associate with work-related injuries and illnesses. since 2005 our federal agency customers have projected worker's compensation savings of more than $100 million. which includes 440,000 avoided lost time this. today wield six federal contracts, accounting for approximately 90% of our revenue. we have 39 employees in 16 states. we expect to hire more than 25 additional employees during 2014. in many ways our growth through public sector contracting is a success story that this committee seeks to promote. yet our company has been thrown into turmoil since the government shut down. the new stuff we've hired cannot complete the required security

clearance, so i'm forced to carry them longer than anticipated. new hires are also held up because the e-verify system is not operational to the shutdown. my 39 employees are working. however, it's uncertain when the company will be paid. in order to meet our financial obligations, we will be drawn on our line of credit which we estimate can cover us for 60 to 90 days, and no longer. and we are paying an interest rate of 4.5%. during wipp's annual meeting in washington, d.c. last week, many women came forward to plea to congress to open the cover. they came from both political parties and made it very clear that we are not interested in assigning blame, that we just wanted a solution. small businesses like in ca who are draining our resources to cover the governments obligations need to know whether there's a plan in place for expediting the payment of past the invoices when congress reopens a government. i'd like to end with a favorite

quote. nobody can go back and start a new beginning, but anyone can start today and make a new ending to i urge the congress to work together in a bipartisan fashion to make a new ending, one that benefits all of us. thank you very much for the invitation to speak today. i look forward to questions. >> thank you very much. spent thank you chairwoman landrieu and all the members of the committee. i really appreciate you having the foresight to have us come here and tell our stories, and hopefully we'll make it clear that this is devastating to small businesses. i am the founder and ceo of a small tour operator located in salt lake city, utah. we operate tours, and they are customized group travel tours for other tour operators and special interest groups. most of our tours operate in the western united states, and

consequently, we include national parks, monuments and recreation areas in almost all of our tour programs. it would be pretty hard to overstate the adverse economic effects the shutdown in the government and the national parks has had on small businesses and encourage increase of the western united states. i'm here not just represent my company, which is managing to hang in there for the moment, but there are thousands of small businesses that are related to the tourism industry. it is an industry which is populated mostly by small and very small businesses. and as a tour operator, we use these businesses on every program we operate. everything from hotels, attractions, modell's, gift shops, restaurants. these businesses were immediately affected by the shutdown and they are suffering and many of their workers will

never see this money come back and certainly the companies won't be the. this isn't something they will get back paid for. if you work in a restaurant and jamaicans for a living and no one shows up to your restaurant, you don't get that money back. so it is the type of thing that truly has been difficult for the tourism industry. the first years of the 21st century have been very difficult for the tourism industry, and we have as a small tour operator at wes we still suffer from all of these. the first one was the terrible events of september 11, 2001. it took us about three years to recover from that. and fortunately we had loans from the small business administration to get through that time frame. the natural disasters that it comes from hurricane katrina, which i'm sure senator landrieu would be more than familiar with, western forest fires, superstorm sandy, and onto the economic difficult time to 2008 which have just this year we have seen turn the corner where

tourism businesses are coming back to where they were before that. people had confidence. they began to spend their money on travel again. and no now we have a government shutdown of 2013, which is just one more devastating blow to the small businesses, not just in the western united states, but certainly throughout america. thank you. >> thank you. ms. poole. >> good afternoon, on a vulture, ranking member and members of the committee. i am sabrina poole, president and ceo of serdi, a small disadvantage technology firm providing i.t. consulting services to the federal government. so basically the federal government is our number one, you know, source. i'm pleased to be here today to discuss the impact of what the shutdown has done to my company. i can't even begin to speak because it's been quite from one extreme to the other. we had to lay off our billable

and nonbillable staff which means that the current contracts that we do have that is ongoing where we haven't had to stop work orders, we don't have anyone to oversee the contracts which is on the dod site. this means that our revenue is going to be down and we are not compared to large companies, we don't have deep pockets where we can afford to have folks stay on the payrolls, so we are forced to layoff and we couldn't do like you did and keep them on the payrolls for an extended amount of time. the financial impact has been really horrible. our revenues are down about 25%, and its continued to go down from there. our employees are not billable which means we have a big decrease in revenue, and we will see this decrease for several months because as the government invoice cycle continues to progress into new contracts we have one, there's no orders on them. we think that it will probably

take us a year to recoup for some of the losses we have had. we worked for the last six months to capture work, which you spend six months capturing and winning work. we won the work in september at the usda, the same thing happen. they pulled the plug. the state department has been ongoing for essential personnel. the faa pulled the old -- pull the plug. the irs pulled the plug and my employees i have them on unemployment. our staff has been laid off and they are going for unemployment benefits. there's been a lot of talk about the federal workers being paid. i've yet to hear about the contracting staff. so they know they will not be paid for this time off. ultimately, my fear is that a lot of my good employees, my good, qualified employers will be looking for work in the commercial industry, and some of them will have security clearances they can't afford to pay the bills. it will impact them as they come

up for reinvestigation. because as part of the investigation for security clearance you cannot be laid on any bills. most of my contracts have security or tsa level clearances. so i'm really concerned about that. my last point is i am really concerned that before -- i'll be forced to close my business if the resolution is not reached quickly. myself and others will businesses may be forced to close our doors. and my fear is also if one company closes its door, then a handful of folks are impacted. if numerous companies are forced out of business, then it becomes, the large business takeover of which puts the small business exactly where we were before, where we fought over the last 10 years for me personally to get too. in conclusion, we have sacrificed, struggled, and slowly make progress as a woman owned small business. this is wiping away 10 years of sacrifice. i am an i.t. expert or i can always go back to work.

it's not something i want to do but if that's what i have to do i will do to feed my family. to me it is disturbing that the government has caused mine and others will businesses to lose employees and significant impact of our revenue. how can we make up for the loss of revenue? how about our employees going to pay their mortgages and feed their families? and lastly, how are small businesses supposed to survive? i agree with the rest of the panel members. i don't care about democrats or republicans. i just want a solution and i'm praying to god that one comes very quickly. thank you very much. >> thank you. mr. singh. [inaudible] >> a boston-based web startup helping someone of our most pressing challenges, but improve the efficiency of the buildings in which we live and work. in just over three years we have grown from idea to initially with over 30 to employees and

contractors. we have or positions across the country uncover safe which greets new jobs for auditors and contractors can reduce expenses for building owners and increased tenet cover. by drastically reducing energy consumption were supporting our nation's energy independent goals. many of our customers manage market rates and the private sector at the same time we're proud to have helped our home state of massachusetts identified over $301 of potential energy savings and affordable housing. the city of new orleans and los angeles. we are proud participants in the american dream of entrepreneurship. it's about a company like ours with innovation and hard work to thrive and to transform society for the better. we are a mission-driven for-profit enterprise mean weekly business you provide meaningful values in a self-sustaining way. our model of information relies on a supportive public sector. government has been vital to the interest. every household most about buying an energy star plan.

the same things happening today with buildings themselves. the portfolio managed to provide zemeckis for buildings to receive the energy star. the government is essential helping the market work the way it was meant to work. by presenting consumers with clear information and economic activity. the shutdown has prevented the epa from offering its energy star services. anyone relying on these tools is being forced to defer decisions regarding building efficiency upgrades. these upgrades great local jobs that cannot be outsourced. these are the jobs of the new economy and building efficiency to build a trillion dollars and create 3.3 million jobs to the economy. the shutdown is from the growth of this vital sector. we have investigated significant resources integrating technology to integrate with portfolio managers. we delayed one contract. our companies like ours can't investments we make in product

development, marketing and this comes from a very limited set of resources and we're sensitive to changes in cashel. entrepreneurs and small businesses owners already face tremendous odds and government has a role to fostering success. the current shutdown at a significant amount of uncertainty to the market which increases our risk and makes it difficult to grow our business. thank you. >> thank you, mr. singh. i'm glad senator shaheen came in right before your test win. she's been a leader on building efficiency here in the senate. we recognize your leadership, and thank you very much. ms. robertson. >> thank you, chairman landrieu. i wanted -- >> speak into my back if you would. leaned forward. >> site. thank you very much, chairman landrieu. it's a pleasure to be a today and i thank you and the members for the opportunity to speak their i also wanted to let you know how much we appreciate the example that you have set in this committee for the rest of congress in working together in compromising to bring back 504 debt refinancing which is in the

best interest of small business to the impact -- first, i'm sally robertson, the president of business finance group. we're a nonprofit certified development company providing 504 financing in maryland, d.c., virginia and west virginia. i'm also the chairman of the national association for developing countries and our 270 cdc members to 95% of the 504 loan volume in the country. the government shutdown has had a very large impact on the 504 lending. clearly there are no new loan applications being approved. one thing that is often overlooked is that we are a fixed asset financing come as a borrowers enter into contracts to buy fixed assets. those borrowers have deposits at risk. if they're unable to make, meet some deadlines because they don't have financing in place or because other postapproval documents haven't been approved by sba, they are at risk of losing not only those deposits

but all the feasibility cause that they poured into these projects. and to say these borrowers are also expanding their businesses and they are losing opportunities for growth. if we are not able to get their applications released so that they can close on their transaction. additionally, 504 businesses create jobs and none of those jobs are going to be created. we fund our projects through a bond sale process. should the federal government default on its obligations, we have no idea what value that full faith and credit guarantee of the u.s. agency will be in the marketplace. we risk much higher rates for our borrowers forward into the future, and we are very concerned that our november bond sale may not occur if sba doesn't return to work very shortly. our deadline is now for sba to be moving packages forward into the bond sale process. hundreds of loans are already

close on a nationwide basis in anticipation that sale will occur. should it not occur, those loans will have to be we closed at somebody's cost. unfortunate that small business would have to pay for it. and then we run the risk of what is the procession of our bank partners if they don't receive their pay down in a timely fashion? are they going to charge small businesses more for income loans in the future? and if investors deal it's not a dependable, time the product, are they going to continue to buy at the same rate? we are look at much higher cost for our small businesses. and that would be a tragedy i think for 504 program which is so valuable for small businesses that are expanding and creating jobs. thank you very much for the opportunity to talk today, and i'd be happy to answer questions. >> thank you very much, ms. robertson, for that detailed explanation of how this program affects so many entities.

mr. ford. >> good afternoon and thank you very much, madam chair, and committee. minus and one ford, president and ceo of enlightened ink. and on the presence gaza for u.s. black chamber. enlightened specialist and savagery, and softwood government and never lets great growth over the last 14 years. serving primary the federal government. i'm here to tell you how this government shutdown and the fight over the debt ceiling are continually causing company layoffs and reduced production on government contracts. as a small business owner i'm deeply impacted by the events that unfolded over the last two weeks that a force our employees and their families to cope with the realities of this government shutdown. they now know what means other jobs and financial security place in jeopardy by events that are wholly outside of their control. as a result of the shutdown and light and has made difficult choices in the way we manage our human capital. comment layoffs due to comment

shutdowns have become commonplace forcing us to say goodbye to some of our best and brightest employees. we were forced to furlough to employees due to loss of work at the department of justice and another 25 in the 14 days since october 1. those not presently affected by the layoffs live with the real danger of losing their jobs. meanwhile, they watch their elected representatives battle want another in a war of uncompromising positions. not only do i fear losing established personnel but my company faces an equally daunting challenge of attracting new talent to a field in a government that has become increasing unreliable employer for us. the our long-term effects to this temporary shutdown. in the short and long-term, and lighten suffered with 70% of our workforce from the federal government has become and possible to depend on reliable stream from federal agencies that may or may not have been canceled, reopened or canceled again. or postpone and death. our existing contracts were work

has been praised faces a real possibility of not being renewed. enlightened cannot afford to wait and wait and wait while our government leaders and congressman bishop our livelihood. enlightened is providing services to settle federal agency. however, one customer in particular is critical to my success. enlightened is assisting opm with modernizing system that provides background checks were federal government employees and their contractors. to date this contract has not been affected but if it is stopped, enlightened would not give to recover. this could be the death blow for the company. as an i.t. answer to provide i'm concerned. several agencies have made contingencies from some productive measures during government shutdown. their plans cal call for heavily scaled down the i.t. teams to maintain and manage and protect government i.t. infrastructure. contingencies are seldom as strong as the original. agencies that we do work for

such as the department of veterans affairs, hud and opm have had layoffs to cyber professionals to protect the nation's infrastructure. most other federal agencies are expected to have similar staff and other essential personnel to run the infrastructure, and this is a problem. with the potential that the government will default on our federal debt, enlightened would not receive any payments from our federal contractors, accounting for 70% of our business. in turn, we would not be able to pay our employees, our bills, nor our line of credit and just like congress, in who elected to shut down the government, we would be forced to go out of business with no financial guaranty available to recover. small businesses cannot borrow where there is no collateral. i'm here today testifying before you representing and we respect your decision having every day -- like myself and countless other americans. we have to end this before the backbone of america breaks.

this backbone is small business owners, the backbone is entrepreneurs, hard-working americans. let's put america back to work. >> thank you. charles withee. >> yes. thank you, chairwoman landrieu come and thank you to the my senator shaheen for having here today. i am charles withee, president of the provident bank, a commercial community bank up in new hampshire in massachusetts. we, too, are a small business. we are 130 employees. we share concerns, the deep concerns of a small businesses around the table here. and the 7a loan program and the 504 loan program are the backbone of what we do at provident bank. oftentimes very promising businesses come forward, have a lot of promise but don't have all of the attributes that traditional lending serves. and we use these programs to help them get over the finish line. and currently we have 12 loans

representing 2.7 million dollars in limbo just like mr. leh indicated, very summer stories and very tragic stories. because these companies are not large corporate america that have lots of cash in the balance sheet consisting. they lived day-to-day. they want other will make payroll, keep the lights on. we are there to try to help with the. this government shutdown is indeed a process. i'm also very concerned about the shutdown temporary move forward. i hope it happens. i hope it happens today. but i am concerned also with what's coming up. february is the next deadline. this creates a lot of uncertainty. there's a lot of people that are affected by this. that inserting will affect it in the future and you can rest assured that that uncertainty will have an impact on our economy. given the size of small business in the economy. and that's really why i'm here today, folks. thank you. >> thank you very much,

particularly focusing on the uncertainty, which is very important. mr. paul. >> chairwoman landrieu, and distinguished image of the committee, good afternoon. my name is ron paul, no relationship to senator paul nor congressman paul. [laughter] i'm chairman and chief executive officer of eagle banks, a profitable three -- had coded nearby in bethesda, maryland. we are very active lender with a strong loan growth of 21% in 2012, with a $3 billion loan portfolio and pride ourselves of having loan size of under $2 million. and represent thousands of small businesses. we are very active in sba lending. were a preferred sba lender and ranked number one amongst banks headquartered in metropolitan washington, d.c. nationwide, sba lends close-knit $109 in loans every day. right now the program is frozen.

at the bank we have over 30 nude sba loans in process totaling $37 million, but we can't proceed because the sba has close its doors. when they reopen there will be uncertainty as to when loans will be ready to close since we don't know how big of a backlog there will be. among others, government contractors and their subcontractors and vendors are not being paid. if you are a small business, a janitorial service or an i.t. consultant, you typically don't have capital and reserves to carry your employees and overhead. the result in close offices and laid off workers. the furloughed workers at a security company and the restaurant across from a government center in each of their employees just lost all their income. they no longer have disposable dollars to go ahead to the local hardware store or local restaurant, or local clothing store. remember, this lost income can never be recovered.

the government leases millions of square feet from the private sector. if the shutdown continues into november, these rent checks will not coming. but their loan payments are still do. potentially resulting in loan defaults and credit quality issues throughout the banking industry. another consequence of the shutdown is the impact on nonprofit organizations. because of the shutdowns turned it on funding, one of eagle banks customers, a youth center in the district of columbia, had to furloughed 90 of its staff of 145 people. the ripple effect is enormous. that's just deal with the shutdown. now at all the potential consequences of not raising the debt ceiling and done. if congress does not act within days, interest rates will go up, resulting in the likelihood of small businesses being less able to borrow money and at higher costs.

investment values will come down. confidence will be severely shaken. and a nationwide uncertainty resulting from any short-term kick the can down the road and non-legislation will be devastating. consumer confidence already shaken will dramatically fall. at eagle bank we have let our customers and the local kindred at large know we will work to help them in this short term cash flow needs, but every customer we work with it doesn't make a loan payment timely results in us having less cash to lend to our other customers. as interest rates rise because of concerns over the stability of the united states, the valley of our investment portfolio and, therefore, our ability to borrow to fund loans goes down. it is our hope for the sake of small businesses and the workers nationwide, the few of the nation's economy, that congress can find a way to reopen the government and enable people to get back to work. thank you for the opportunity to

speak today, and i look forward to any further questions. >> thank you very much. i'm going to start with one one question and through it outcome and if you want to be recognized just stand up your placard, and then going to ask each colleague to take a turn as well. let me acknowledge senator hagan, senator shaheen that are here. we did opening statements. would you prefer to wait for the questions? okay. you know, some of our colleagues, first of all let me say that all of your testimony was very critical to the immediate issue at hand, and very compelling. getting the and the members that are here and others that are watching a great deal to think about. i've heard some people in washington describe the government shutdown as a pinprick to the economy. i didn't hear that today from any of you.

would any of you like to comment and just elaborate and underscore that what is happening is a great deal more than a pinprick? or how would you describe what's happening to you, if it's not a pinprick? >> i would be happy to address that. i've seen a number of studies, and particularly the tourism industry is a major driver in 44 of the 50 states, and as an economic driver to use travel association released a new analysis that shows that this pinprick is now costing this travel industry 152 men dollars per day. that's growing very quickly. and it is affecting 450,000 americans who have jobs in this industry. the national tour association did a quick survey after it started and showed that they were affects in all but four of the states by their 3000

members. and these effects are dramatic, immediate, and unrecoverable. but more important, this type of man-made crisis does create and the effects are small businesses, and all of their employees. it creates long-term effects which everybody has talked to here, taken even further depress the travel market in the future, which is our number one services export. and we have a number of emerging markets, such as china and brazil, that are increasingly coming to america. we have finally started a brand you as a program, it's about two years old that's just starting to make an effect, and this will have long-term, lasting, negative effects on all of those markets. and certainly all of the thousands of small businesses that are parts of this industry. >> mr. leh, how would you describe it? doesn't feel like a pinprick do

you speak was no. it's deathly not a pinprick. i think what's important to convey is the small business owner is, when you go and borrow large sums of money, you put up and collateralized everything that you own in the world. everything that i've worked for my entire life is in, behind that loan. with the uncertainty that's being created right now, if interest rates go up 1% on the size alone that i'm dealing with, over the life of my loan, that's $76,000. that's and employ. that may be me not being able to cover the bank note. that may be me losing my house. that's just one percentage point. so we go to this game in washington where every time it's time to time without we are going to raise the debt ceiling, we argued about it. it's ridiculous. and it has an immediate impact on our ability to not lose everything that we have put forth and risked.

so in my particular situation right now, i had an excellent program to finance, if interest rate goes up 2%, i may not be able to do that. >> thank you. excellent. ms. robertson, i'm going to do over and then get mr. paul and they will ask more questions. [inaudible] spent on the grounds are in terms of the government shutdown. being right here in the heart of the d.c. and metropolitan area. we see in the newspaper yesterday, two large defense contractors announced they were going to reduce the upcoming lay off the 5000 people. those people aren't going to get back they once they're gone. they're going to have to pay for benefits out of pocket. they are not going to have money to spend on day care, on entertainment to all of that trickles down to main street businesses. and the reality is that the conversation that's been going on for months about the shutdown, about the problems, about the debt ceiling.

ceos have been taken into account for months. they had been making quite cut backs. i have been making layoffs, furloughs. to our economy has been suffering for months in this particular area. our lending activity is down 30% from last you. that's a very large number. that's small businesses that are not buying buildings or equipment to expand that will not create jobs. so we think that it is much bigger than a small pinprick but we think it's a very major problem. >> mr. paul. >> thank you. i don't also believe it's a pinprick. i believe it's the beginning of a hemorrhage. i think what we've experienced over the past couple of weeks, the number of locals that the bank has received from hundreds and many, many of our borrowers come in making sure that they have their lines of credit that are available to them. this has resulted in the bank making sure that we have our own liquidity issues that are available to us to continue to fund these lines of credit.

i think if you fast forward this, if we should get this passed through february, what's going to happen between now and february i think is going to be equally as ugly as what's happened over the last couple of weeks. we have a situation right now that the consumer is going to be sitting and saying, we're not going to go out to dinner, when the going to go to the movies, we're not going to buy a house. new home sales will dramatically be impacted because you'll have people over the next three months that will be so paranoid about what's going to happen. i think it's an absent embarrassment to this country. i think it's a trickle-down effect has yet to be felt. i think the economy if i was turned get on its feet will be devastated as a result of this kicking the can down the road. >> let me get the other three of you, but about the pinprick comes to that but also talk about, some people around you are saying, well, we will pay the federal workers back they, and that will supposedly solve the problem or make the problem go away.

so when you enter this, talk about that as well because i think that's missing a big point that some of your small businesses, they are not going to be in that payback discussion. i don't think they're included in that. ms. robertson, and ms. smith, is that what you're hearing? >> [inaudible] distinct lean into your mic. >> i am hearing that as well and yes, it is more than a pinprick. we have companies decreasing the revenue. we have many small businesses that may have to close their doors. small businesses, we are the lifeline of the economy and the key to recovery. so yes, it's deathly more than a pinprick. >> mr. withee, then mr. ford and then i'll go to the others for questions. >> yes, i would agree it's much more than a pinprick, and less it's a very large pinprick the majority of the employment in this country is by small businesses like the people we

have around this table, and like many of the clients i have at the bank. two-thirds of the economy is consumer driven. it was mentioned a moment ago about the uncertainty creating problems with that part of the economy. i believe that's real. i believe that's large. so this really is not a pinprick. >> mr. ford. >> i certainly agree to your point, senator. small businesses will not be paid for the work that we've lost now. that is lost revenue. that will not return. it would look at contracts that we have come as soon as we do go back to work those contracts will have to be modified because those contracts have deliverables that are time-based. those contracts need to be modified which delays the process because we have to get new contracts and again, that will not be paid. we are a graduated country. if you're an eight a company, that time that is lost is lost. you'll not get that change.

so if i meant 88 country i would be concerned because that time is not coming back. if we look at the concept of a pinprick we're talking about when we had to lay people off and get a look in the eyes of somebody that you know you have a family, i know about the kids, the people we had to lay off. these are people that -- does not a pinprick to when you're talking about people whom i have to go on assistance of a government that they don't trust anymore, they also lose confidence in small businesses which are the innovators of america. that is not a pinprick. we looked at the fact that as you talked about, my line of credit is based on the credit worthiness of myself and my partners. everything i've had over 14 years has been put into this business. my home has been put into this business. that is what my banking friend who used as collateral. if i go out of business, everything that my three kids are working for goes away anyway. this is not a pinprick spent and nobody will reimburse you for this? >> there is no bill for this at

all. >> i am struck because we're talking not only about the shutdown but we are also talking about his uncertainty about the debt limit, and what interest rates, how they all affect all of you. now, on top of things that it's a pinprick, i'm also sure you've heard there's a number of amateur economist out there who have been telling us all that the debt limit can be managed by simply paying our interest. the debt limit, those are false and we don't need to worry about it. we recently had a hearing in the banking committee where we heard from the realtors who told us that they believe that if we miss this default deadline, home mortgages will go up at least 1%, if not more. we already seeing our treasuries being discounted as high as almost 70 basis point. so my question is to all of you that we include this discussion, as you have, about what the debt

limit means and this constant uncertainty. and i really would appreciate comments on, you know, the proposal which a lot of you have referenced of only going out to february as opposed to looking at a long-term deal. and really encourage you to encourage us to look at something much longer than that, to give you the certainty that you need. for anyone who wants to comment on the debt limit, i would appreciate that. >> being that we are in a start up world on the web where i think venture backing, uncertainty is a part of what we signed up for. but we do assume that the full faith and credit of the u.s. government is something we don't have to be uncertain about. the decisions that investors make, the decisions that the capital markets make, reflect on what startups get found. to reflect on whether they happen in this country or whether they have been summer

else weather is more confidence. i find it to be, especially when this is a manufactured crisis, these are things that we can control, and it's almost callous to call it a pinprick to the people who are directly affected and whether that means they're on government assistance and they can't be part of economy because they don't have income and more of whether they get laid off from the job but also further down the line all those people are engaged, although small businesses that are directly affected by the products of the small business are producing. so there is a this domino effect where it's not just one business shutting down. it's the five or six other businesses down the chain that it affects. >> ms. firestone. >> thank you. i think my comments are more related to the short-term -- >> push this down if you would. >> the short term fix for countries like mine who we just got a very large contract in october and it's expected that we will hire a lot of people which is great for the economy.

but do i have the confidence that in three months i'm not going to be shut down? then what happens to my business that i've worked over the last 16 years to grow? its hiring good people. we hire doctors. we hire nurses. we hire and less. there's a lot of competition for that talent. and now i'm faced with having to hire, which is a really good problem, but on the other hand, how are we supposed to handle that? in three months if we have to let them go. >> ms. firestone, just for the record what would you say a doctor are some of your medical professionals like the range of which are often people in that contract? >> our average salary for our nursing staff, we have nurses across the country is somewhere in the range of $70,000 i $70,0t average salary. and the physicians, is probably twice that. >> unbelievable. mr. griffall? >> as i said many times, it's

hard to overestimate the pain this causes to a lot of people. that if we don't assure the american people, and particularly the rest of the world, that this isn't going to be a recurring event, we will have absolutely no confidence in traveling to america, or even dealing with america if we get a little farther than that. and that's been a giant issue. someone who sells tourism to china, a former employee of mine who works for the national tour association, she said compared to other countries that utilize creative ways to lower chinese tourists, the shutdown will shatter the confidence of international travel companies. and that's been shown again and again, that when they have bad events here, it creates long, long-term effects that will obviously affect all of us, but most importantly, we need to

assure everybody that this isn't something that's just going to continue because, if we have to do that, every single time i go through this process, we will have no confidence to buy anything in american. but more importantly, travel is a seasonal business. most of the companies i deal with, which are all small businesses, make their money very quickly in three or four months. those businesses have to have that profit in order to make it to the next year. so not only are we going to not be paid back wages, these companies may not survive to the next year when they are already planning for the travel season. >> i know there's never a good time to go through what we are going through, but you can think about the particulaparticula r month of november and december, october, november and december being very substantial retail months, which everyone is aware of. you don't need a special degree to understand that.

and that is the season that we are coming into, some very seasonal, and states that have seasonal activities. let me get mr. withee and then we'll turn to senator shaheen for her questions. >> okay. mr. singh is absolutely right. investors and bankers make decisions uncertainty and unpredictability. and you can just walk down the hall and talk to your friends at the fdic and the occ if you want verification on that. but before the shutdown, our bank, like mr. paul's bank, experienced record loan growth, and we are a commercial lender really by trade. and that means that small business had a lot of confidence and wanted to invest and wanted to borrow to do that investment. i'm very concerned about this temporary fix because that confidence is going to go away. and what has started to become a real energized recovery is going

to be stalled, and i fear worst than that. that you can roll back into recessionary times. which would be really unfortunate because i heard earlier the term manufactured, and this is a manufactured problem. and that's too bad. i would like to see it and spent senator shaheen. >> thank you very much, jan lu, and thank you for holding this hearing. and thank you to each and every one of you who were here representing your businesses and the small business communities in your states. i have heard from so many small business people in hampshire which has 96% of our employers are considered small businesses. who are expensing the same kinds of challenges that you talked about today. i want to specially recognize the president of provident bank which has four branches in new hampshire and does a great job of linking and participating in

the sba lending program. so thank you for being here as well. i want to make a point of saying to all of you that i think everyone of us here are as frustrated and upset about the irresponsible and reckless behavior on the part of some members of congress that have led us to this point. and we all believe we need to start the government back up immediately, that we need to put in place a long-term solution to raise the debt ceiling so that we can reassure, not only people in this country but around the world, that america's going to pay its bills, and that we should in these manufactured crises and get on with the business of governing the country. so please know that everyone of us here is working toward that end. and very distressed, as i know all of you are. chuck, i want to go back to your

initial testimony where you talked about some of the loans that are being held up because of the shutdown. do you also have new borrowers were coming in the door who you can't help? and when you look at the kinds of projects that they're looking for help on, do you expect those will be able to continue after the shutdown, that you'll be able to help them? or are we looking at a long-term impact for the people that you're working with? >> well, that's a great question. we are seeing continual need for the sba loan program. just because of the shutdown doesn't mean people were not coming in after the numbers i gave you, were in the process and stalled. there are a number of folks looking at business acquisition opportunities, permanent working capital and equipment that are stalled as well. what do i see? i see perhaps some of those still coming through, but others

not. day in and day out, it's permanent working capital and weeks on end go by, opportunity goes by as well. .. you lose credibility if you can't deliver. that is a big problem. also, we embark on a micro loan program. we hired a specialist to take

this son and literally was about to lunch. it is really $10,000 to $100,000 loan for the micro small-businesses and everyone around this table those at some point you were there and we have very abbreviated process. we were about to launch it but relieve this week and we have stalled that because it is based on the use of the 7 a loan program. that is real. that is of real issue and that is problematic. do i see that coming back? i do because we really want it but it is predicated on the u.s. government getting back to work and the sba loans being available. >> thank you very much. >> let me thank you all for your comments and putting a face on the issue. we hear the numbers, thousands of people, hundreds of thousands of people, millions of people but until you put a face on it

so people can recognize it is their neighbors, their community that has been impacted it makes it difficult. let me just urge you, i would be interested in specific about those companies that have not been able to complete their loans. and you talk about consumer confidence, driving course in the economy. and is manufactured prices, consumer confidence adversely affected in natural disasters. and the attack on the country on 9/11 as far as consumer confidence issues. and to get you engaged, we want to make sure government is open-end we don't default on our obligations. the best case scenario right

now, we will work out short-term solution to keeping government open, and a budget agreement. if that happens the pressure will remain on congress to get a budget agreement. so the we eliminate this short-term governments from crisis to crisis. consumer confidence will only be restored if they believe we have our act together. i would urge you not to leave the debate later this week if you are successful in getting government open and not defaulting on our debt but to get engaged in a process of working out the budget agreement, and i agree with those who said you got to come together, democrats and republicans. democrats won't get their way, republicans won't get their way

and those who won't compromise, this country on the brink of disaster. we have got to make the system work and compromise and get things done and i urge you to do this. let me reenforce the point that you made, the small company that won't get the microloan and may have discovered a new way of innovating cybersecurity and service industry, that is competitiveness that is forever lost in america and the young scientist who might have gone into an ihl and gotten an award this year but because of the government shutdown that reward was not coming chooses to go to a different field or a different country, that is lost forever in this country. we have hurt ourselves. there is no question about the damage that has been done to individual businesses and competitiveness of america.

we all have a responsibility to figure out a way to get beyond this. it is frustrating for you, just as frustrating for us. i don't understand how people could be night government staying open and paying our bills, why put that on america but we are where we are. i guess my comment, further identify the type of companies that would be helpful, put more of a face on this, let us know the types of businesses that can't get loans as a result of this and that means in rockville, make it as personal as you can to your community, that would be helpful to us. >> mr. paul? >> thank you for the great work you do in the great state of maryland. one topic that is important as you heard from small-business

owner is they put up everything they have to borrow those funds. we all know in 2008-2009 when the value of real-estate limited there was little equity remaining in their homes so now which i believe will happen over the next few months especially if we kick the can down the road consumer confidence will drop the value of home loans will go down and the home equity is going to dissipate. what happens to that customer, that borrow were looking to start his own business or a current borrow were looking for the sba loan that doesn't have the equity in their home any longer. all of a sudden that equity they have always been able to leverage against with this country has built upon by being able to borrow through the net worth goes away. so i just believe, i am not an economist but i do believe interest rates will go up. what ever appreciation we have seen in real-estate values not

necessarily a result of real-estate values going up but interest rates going down and therefore the ability to buy homes has increased. when that equity drops and interest rates go up you will be back to a recessionary discussion in terms of the slowdown in our economy and this is not a democratic or republican issue, this is a u.s. issue and the embarrassment we have caused ourselves, who knows whether or not, we all know listening to ben bernanke in terms of how we artificially have dropped interest rates. we have only been able to artificially dropped interest rates because our international friends have been willing to buy our debt. will they continue under the current circumstances we are in? i think not at the current levels. is not worth the risk so i think that will be one more reason rates will go up. as much of the macro issue as the micro issue. >> miss robertson and mr. ford

in answer to the question about the face on people and the impact. >> i have a couple 504 stories i would like to share with you. one is the borrower in maryland, constructing a new holiday inn express which will create 20 new jobs. they have been through a due diligence for new construction projects, their loan application is waiting for approval. they can't break ground. they are dependent on the tourist season. if they don't playground for the the hotel won't be built in time to take advantage of the tour season and he will face major losses their first year in business. that is a very detrimental thing for small-business. a couple of my colleagues share couple projects in massachusetts. one is for an existing 504 borrow were purchasing a second location for expansion. they are buying the building currently in foreclosure so it is an and utilize the building so it is bringing a building back into the economy.

they have posted $149,000 deposit that they will lose along with the opportunity to buy the building at this discounted price and 25 new jobs would have been created. we have another buying a larger facility, needs a new and bigger printing press that won't fit in his current space. he has a pretty $5,000 deposit on the building and another $35,000 deposit on a printing press. if he can't close by nov. fourth he loses the building and has to cancel the order for the press because he has no place to put it. there's another $75,000 he lost, two jobs for his business and those are good paying jobs. there is a lot of impact all over the country for small-business owners. we can come up with a lot more stories but it is just incredible. >> i would add the loss of the machinery is heart wrenching and devastating to families. the loss of faith in their

government is hard to measure. mr. ford. >> i will be quick on these other populations that you talked-about, technology, looking at programs where we are woefully behind in the technology area. those programs are not being funded. people doing research and development in cybersecurity where we want to protect our country those companies are going out of business. small-business innovation and research that have done incredible things to advance this country are not being performed right now and so those companies that are focused in those areas are companies that are going out of business, companies that are moving the needle for this country are not being supported. those are the faces that are being impacted by this country. >> we're going to close at 4:00. we have a few more minutes. >> thank you. this is a very important meeting and everybody here, i hope the

nation understands we feel this is a manufactured crisis that doesn't need to take place. and it is from my standpoint very disturbing to hear the stories, the real stories that are happening across the united states each and every day especially with our small businesses. barun singh's risks, you are willing to take a calculated risk, there will be good days and bad days but you shouldn't have to calculate into that risk whether the united states government is true with its full faith and credit of the debt and the borrowings. that should not be a part of the equation at all or ever. senator landrieu's comment about the tourist season, national parks close, there is a report that has just come out that said

the great smoky mountains national park, the first weekend days of that closing has affected $33 million in lost revenue just in the western part of north carolina. you add that to the fishing off the coast of north carolina, the campgrounds that are closed in national parks and the number of visitors that are going to go hike in our national parks, staying at local hotels and restaurants and they are not doing that. why go when all of those areas are closed. and irresponsible, manufactured crisis. this is not the floods in south dakota or the snow. this is something we should be able to take care of without a second thought. miss smith, in north carolina, we have the third largest military subset in the nation and i know we have 8% of the population employed as civilians

by the department of defense, 416,000 jobs. following secretary hazel's decision to recall these workers the you understand how the department of defense is providing guidance on how they intend to proceed with new contracts that are in the pipeline? >> press your button if you would. if anyone wants to comment on this, you start. >> some contracts are put on hold. it is out there on the twenty-seventh of october and we are getting ready for these current rags that are going to come out. and a lot of contracts are. >> that has a detrimental impact to small business.

>> i think the reason is not only is it important but a huge buyer of goods and services and what we are trying to get people to understand, every federal worker came back to the department of defense but if you don't give a signal to your contractors which are your partners in every department but particularly in this department it is significant. you want to comment and mr. paul and i will end with one question. >> as you know being a view of the contractor the excellence you need to provide is high, the uncertainty that we face is what services they need to support. as we look at as warfare has changed it is the reliance on people and technology and processes required to ensure war fighters have the best they have to offer but when we talk to the dot classmate tell us you need to wait because we don't

understand what we can do and that is the most difficult part because we have been engaged in 18 months in what types of services we can offer to them and they obviously like various contractors, we wouldn't be here but we would not know how to proceed. we don't want uncertainty but it needs to be certain on one side or the other you know you need the services, you don't know when and don't know how. >> and we don't have a budget. haven't had a long-term budget. i will get senator sheen -- jeanne shaheen for question. >> we know how important home construction is to our economy. the realignment that is taking place in maryland is enormous. a number of construction jobs have taken place in the areas throughout the state of maryland and what we see very quickly is a drop in draw requests that are happening from the home builders