Linda McMahon sailed through a smooth and non-contentious Senate hearing on her nomination to head the U.S. Small Business Administration this morning, echoing bipartisan support for reduced regulations, a less-byzantine government procurement process, increased mentoring for young founders, and more help for women, veteran and minority entrepreneurs. The only surprise was her emphasis on improving the SBA's response to natural disasters, which McMahon called the first area she would address if confirmed.
The hearing started with a rare exercise of civility in which Senators Richard Blumenthal and Chris Murphy, the Connecticut Democrats who bested McMahon in two separate runs for the Senate, praised her as an experienced business leader and "tenacious fighter," in Blumenthal's words. McMahon is the former CEO of World Wrestling Entertainment (WWE), but anyone expecting a grudge match among these once fierce opponents was disappointed.
In her opening statement, McMahon traced her empathy for entrepreneurs to WWE's startup days when "every month I had to decide whether I should continue to lease a typewriter or whether I could finally afford to buy it. Like all small business owners," said McMahon. "I know what it's like to take a risk on an idea, manage cash flow, navigate regulations and tax laws, and create jobs."
Later, she described the experience, early in her career, of losing her house and car to bankruptcy.
McMahon's response to a question about her first order of business if confirmed was unexpected: "I want to take a look at our disaster relief program," she said. "We have to be ready... when our small businesses are put out of business. We need to get those funds to them." McMahon's focus on disaster relief stems partly from what she called a delay in SBA response after Hurricane Sandy devastated parts of Connecticut.
When Senator Ed Markey of Massachusetts later asked whether her concern extended to the potential damage wrought by climate change, which President Trump has called a hoax, McMahon mentioned the effects of warming waters around New England on the fishing industry. "I want to learn more about it not only as it relates to Massachusetts but [elsewhere] in our country where small business can be affected," she said. "We should take a more active role."
Several questions addressed strengthening the Office of Advocacy, which represents the interests of small business before The White House, Congress, and other federal agencies. Senators criticized in particular the office's ineffectiveness against an EPA regulation expanding federal oversight of waterways that many small businesses, farms and ranches object to. McMahon agreed that "those teeth aren't there. And I need to find out why."
McMahon also said she wanted to reduce the number and complexity of regulations but did not offer a blanket condemnation of rules. "We have to know their negative and positive impacts so we can change them or enhance them," she said. She agreed substantial changes are needed in the government procurement process, where bundling of contracts and confusing jargon-ridden web sites reduce opportunities for small companies.
McMahon called for strong representation of small business within infrastructure projects. And she expressed interest in permanent authorization for the Small Business Innovative Research (SBIR) program, which stimulates private-sector research and development.
In response to questions, McMahon talked about the importance of creating opportunities for women and veteran entrepreneurs. She has worked with both groups, as co-founder of the women's empowerment organization Women's Leadership Live and as a board member for American Corporate Partners, which mentors returning military. She also described the need to mentor young founders, instilling discipline and business savvy. As an example she cited her work as a board member at Sacred Heart University in Connecticut, which incubates student businesses.
A rare contentious question came from New Hampshire Democrat Jeanne Shaheen, who asked McMahon about her comment, while running for Senate, that the SBA could be merged into the Department of Commerce. McMahon said she was speaking more in general terms: not recommending that SBA be eliminated but rather "focused on the concept of merging agencies or reducing duplicative programs so that we could reduce those costs. I am a firm believer that SBA needs to be a standalone agency," she said.
Although Shaheen noted in her opening remarks that small business loans have dropped by 20% since the financial crisis, a statistic she attributed to Harvard Business School, there was relatively little discussion of how the SBA could increase access to funding.
"Should I have the honor of being confirmed to lead the SBA, I will work to revitalize a spirit of entrepreneurship in America," said McMahon. "Small businesses want to feel they can take a risk on an expansion or a new hire without fearing onerous new regulations or unexpected taxes, fees, and fines that will make such growth unaffordable. We want to renew optimism in our economy."
The U.S. Senate Committee on Small Business and Entrepreneurship is expected to try to move the nomination of committee next week and then it would go to the full Senate for a vote.