President Trump’s Budget Cuts Would Create More Barriers to Small Business Success
Statement by John Arensmeyer, Founder & CEO of Small Business Majority, in reaction to President Donald Trump’s budget proposal for fiscal year 2018 that calls for reductions to Medicaid, the U.S. Small Business Administration and the Consumer Development Financial Institutions Fund
President Trump’s proposed budget for 2018 would hit small businesses hard. If enacted, today’s plan would slash Medicaid, the U.S. Small Business Administration (SBA) and the Community Development Financial Institutions (CDFI) Fund — all programs that small businesses depend on.
The most egregious cut in the White House’s proposal is the gutting of Medicaid, a program that delivers health coverage to millions of small business employees nationwide and self-employed entrepreneurs. In fact, Medicaid expansion under the Affordable Care Act grew the number of small business employees receiving insurance through that program by 1.7 million between 2013 and 2015 alone, according to the Center on Budget and Policy Priorities. Those gains would be reversed under the president’s plan, however, as approximately 10 million people would lose coverage thanks to Medicaid cuts. This would harm the low-income self-employed and self-employed entrepreneurs who are getting their businesses off the ground, as well as small businesses that are unable to offer health coverage to employees.
Another major problem for small employers would be the president’s proposed cuts to the CDFI Fund, which is the single-largest source of capital for CDFIs. Eliminating this funding would drastically decrease investment in small businesses in underserved communities; for every $1 awarded by the CDFI Fund, $12 in financing is generated. Under the White House’s proposed budget, the CDFI Fund would be virtually wiped out. Should that happen, fledgling small businesses in need of loans will find it extremely difficult to get much-needed funding, and entrepreneurs looking to start new businesses will be unable to get their firms off the ground.
President Trump’s proposal also includes a 5 percent reduction for the SBA. Under the plan, the SBA would see a $12 million decrease in available grants for programs that provide education, resources and growth opportunities for small businesses.
It’s notable that all of these cuts assume the Affordable Care Act will be repealed and replaced, and that President Trump’s outlined tax reform will be enacted. Since these proposals would also hurt small businesses, it seems the president is attacking entrepreneurs from all sides.
President Trump’s budget shows that he either does not understand the needs of small businesses, or he has no interest in helping them succeed. Lawmakers must reject this budget proposal and should instead craft a plan that will actually enable the success of America’s job creators.
About Small Business Majority
Small Business Majority was founded and is run by small business owners to focus on solving the biggest problems facing small businesses today. Since 2005, we have actively engaged small business owners and policymakers in support of public policy solutions, and have delivered information and resources to entrepreneurs that promote small business growth and drive a strong economy. We regularly engage our network of 55,000 small business owners along with a formal strategic partnership program of more than 150 business organizations, enabling us to reach more than 500,000 entrepreneurs. Our extensive scientific polling, focus groups and economic research help us educate and inform policymakers, the media and other stakeholders about key issues impacting small businesses and freelancers, including access to capital, taxes, healthcare, retirement, entrepreneurship and workforce development. Learn more about us on our website and follow us on Twitter, Facebook and Instagram.