Good morning, and welcome to today's hearing.

First, I want to acknowledge Senator Snowe for her outstanding work as Chairman of this Committee the last two years. Under her chairmanship, we were able to tackle many of the issues facing our small business community, and I look forward to continuing to work together to address the issues facing the nation's small businesses.

I would also like to publicly welcome our new members-Senators Cardin, Corker and Tester. They bring a tremendous amount of experience and knowledge to this committee and we are fortunate to have them join us.

Today's hearing is very important to me. I know that every chairman says that about every hearing, but this hearing is especially important and timely. As we speak, more than 128,000 of our men and women are in the deserts of the Middle East and another 21,500 are in Afghanistan. They are enduring uncomfortable situations and strange surroundings. They are being asked to do an incredibly difficult task under impossible circumstances. And they are doing their duty because they committed themselves to serve their nation and to go wherever they were sent. The truth is that they are not unique in this matter. They are but the last in a long line of men and women who have been called to serve their country from the Revolutionary War until today. The only thing that they ask is that we support them while they're there and don't forget them when they come home. This hearing is in part a reminder to those who have served and those who are now serving that we won't forget you when you come home.

The reason this hearing is timely is because at last count more than 22,000 of our military personnel have been wounded in combat. Furthermore, there are more veterans returning each day because of the war on terror - 800,000 veterans were discharged between 2002 and 2005 – and ensuring that these individuals have a secure financial future is not just a matter of fairness but of national security. The treatment of our troops affects the nation's ability to recruit and retain the best and brightest. This hearing is an attempt to ensure that the government is doing all it can to help those who have served succeed in realizing the American dream they have fought to protect.

In this hearing, we want to find out what agencies are doing to meet their obligation to veteran business owners and how they can be more effective in their efforts. We also want to look at ways that we can help those Reservists and Guardsmen who are small business owners keep the doors open while they are deployed.

There are presently 3 million veteran small business owners. In addition, 22 percent of veterans in the United States are either purchasing or starting a new business or considering purchasing or starting one. The facts tell us we need resources in place to help veterans, service disabled veterans and reservists as they open and maintain their small businesses.

This hearing will look at the government's response to supporting service-disabled veterans who have or want to start a small business. Service-disabled vets are growing in number, now the most we have seen since Vietnam, and unemployment for the recently discharged remains high, at 11.9 percent. That is more than double the overall national unemployment rate of 4.6 percent.

We will also look at the strain that frequent and sustained call-ups have on our guard and reservists who are small business owners. Over the past decade, the Department of Defense has increased its reliance on the National Guard and reserves. During the Persian Gulf War, they accounted for 46 percent of our total forces. This has intensified since September 11th and increased deployments are expected to continue. These call-ups often hurt small businesses and reservist small business owners. How to mitigate financial distress of reservists who are fighting and the small businesses who employ them is a question I would like to address.

I've been working on legislation that I believe will help with the strain call-ups have on our reservists and guardsman. Today Senator Gordon Smith and I are introducing the Active Duty Military Tax Relief Act of 2007 which provides a tax credit to small businesses with less than 100 employees and the self employed to help with the cost of paying the salary of their reservists employees when they are called up to active duty. This legislation provides an additional tax credit to help offset the cost of hiring a temporary replacement employee. Many reservists who own their own business return to a business that is floundering. These tax credits should help reservists who own their own business hire temporary replacement employees while they are called up and help small businesses with the impact of having an essential employee called up for active duty.

In addition to helping small businesses, the Active Duty Military Tax Relief of 2007 includes additional tax provisions to help ease the finance burden of military families.

Finally, we want to look at the problem of contracting. The Federal government does more than $376 billion in purchasing in 2005 alone, and veterans only get crumbs, and service-disabled get even less. The federal government has a goal of three percent contracting with service disabled veterans but, they got less than one percent -- .6 percent in 2005. That is up from .383 percent in 2004, and I am glad to see progress, but what is so hard about doing business with men and women who have sacrificed so much for our country?

I know we can do better by these men and women, and I hope that this hearing will help us identify what's working and what we can do better.

I thank the witnesses for their testimony here today and I now recognize my colleague, Senator Snowe.