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As someone who grew up in small town Iowa, I am thrilled to be leading this important Subcommittee focused on rural development. We have an opportunity to give folks in districts like mine - and Ranking Member Joyce’s - a seat at the table for the important conversations like the one today on helping farmers and small businesses export their products.  

It is no secret that for rural entrepreneurs and family farmers, the ability to do business overseas is one key to economic success here at home in our communities. Fair trade should help us export goods, but also protect our workers and communities. 

However, despite the economic rewards that come with exporting products overseas, only one percent of our nation’s 30 million small businesses are able to do so.  

With 95 percent of the world’s consumers living outside of the United States, this means small businesses are missing out on opportunities to better support their families and communities, create jobs and expand our economy. 

Today, we have a chance to hear from some of our nation’s leading experts on a federal program that aims to help small business enter new markets around the globe. This initiative, the State Trade and Expansion Program, commonly referred to as STEP, was initially created in 2010 as a three-year pilot. Five years later, Congress enacted the Trade Facilitation and Trade Enforcement Act to make the STEP program permanent and authorize $30 million in funding through Fiscal Year 2020.  

STEP provides matching funds to states and territories to help small businesses enter new markets, access export financing, and go on trade missions. Since its inception, the Small Business Administration has awarded approximately $139 million in funding to almost every state in the country.  

In the 2018 annual report, SBA reported that the agency awarded 44 grants – totaling $18.9 million in fiscal year 2016. The rate of return was 31:1 – so for every dollar invested, states reported $31 in sales.  

STEP has the potential to unlock opportunities in the global marketplace for the small businesses in a town like Maquoketa in my district whose owner may want to do business overseas but lacks the staff capacity or doesn’t know where to start. 

Having said that, the reports and audits conducted by our nation’s watchdogs raise some concerns over the implementation of the STEP program and show areas for improvement as we look at the need for reauthorization in 2020. Work by the Government Accountability Office found that SBA lacks a strong process to ensure states are complying with the program’s requirements. GAO also found states face serious and ongoing challenges in trying to utilize the funds, with some even giving money back. Problems range from short application windows and difficult reporting requirements to a lack of timely communication from SBA.

The Inspector General’s audits uncovered similar problems and determined more work needs to be done to improve the program’s performance measures and oversight. Moreover, the report found that SBA is at risk of not fully realizing the potential of the program. 

We had a chance last week to hear from the Iowa Economic Development Authority about problems in utilizing the funds. In one instance, Iowa was awarded a STEP grant on September 21st, with a start date of September 29th, eight days later. 

In another instance, SBA announced a grant opportunity on April 2nd, only to post a second announcement with new and more accurate information on April 18th. SBA didn’t respond to Iowa’s questions about the application until April 27th but the deadline for applying for the STEP grant was May 16th.  That’s a pretty tight turnaround. 

While this is frustrating, STEP is a needed initiative, and I look forward to hearing about other states’ ideas for improving it and hopefully getting some of our states on record in the future about how we can make this work better. 

In Congress, we ought to be making it easier for farmers and small businesses to succeed in the international marketplace, not harder, while also protecting our workers. STEP has the potential to help Iowa’s entrepreneurs, and others around the country, tap into new markets. 

If utilized properly, this program stands to provide small businesses with the tools they desperately need to expand, create jobs and boost wages throughout rural America. 

Let me close by saying how grateful I am for the opportunity to chair this Subcommittee. I look forward to working with my colleagues on both sides of the aisle to harness the feedback we receive today to make critical and much needed improvements to the STEP program for our rural communities and small businesses. 

I want to thank the witnesses for being here for what I hope will be a productive discussion.