Senator (D-Md.), Chair of the Senate Committee on Small Business and Entrepreneurship, unveiled a report on May 19, 2023, outlining the potentially catastrophic impact of federal budget cuts on small businesses across America. The report, titled “Impacts of Budget Cuts and Brinkmanship on Small Businesses,” is particularly pertinent as negotiations on the debt ceiling continue.
The report delves into the difficulties small businesses may encounter should the nation default on its debt. It also dissects the potential harm caused by significant budget cuts and scrutinizes how the Default on America Act, also known as the Limit, Save, Grow Act, could significantly restrict services, resources, and incentives for current and prospective entrepreneurs and small business owners.
Chair Cardin said, “This report shows that spending cuts would hurt our small businesses at a time when they need our support the most. Now is not the time to abandon them.” He expressed concern that proposed Republican budget cuts would lead small business owners to struggle to keep their doors open. He added, “Already burdened with rebuilding from COVID-19, this would put them over the edge.”
Key excerpts from the report shed light on potential issues:
- Cuts to the Small Business Administration could significantly impact small business owners, particularly veteran owners.
- A freeze on Entrepreneurial Development program funding at the fiscal year 2022 levels would represent a $29.9 million cut from fiscal year 2023 levels, leading to 125,000 fewer small businesses and entrepreneurs reached.
- Minority and underserved small businesses, which often operate on thin profit margins, would feel these effects most acutely.
The report also underscored historical instances of bipartisan agreement on raising the debt limit, pointing to the 78 instances of debt limit increases since 1960, including three times under the Trump Administration.
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This article, "Potential Budget Cuts Threaten Small Businesses, Says Senate Report" was first published on Small Business Trends