Programs that support small businesses and empower their economic growth are at risk. In recent months, we have witnessed serious threats to a number of government agencies and programs, including a mass reduction in Small Business Administration (SBA) staff and funding freezes across the government. And, more is likely to come. Also at risk is the Minority Business Development Agency, CDFI Fund and the State Small Business Credit Initiative, as well as other government programs that provide capital, business services, procurement support and disaster relief to support small businesses. These cuts, along with widespread tariffs, mass deportations of immigrants and possible cuts to Medicaid, threaten to undo the historic growth in new small business ownership we’ve seen in recent years.
In response, Small Business Majority has built the Small Business Rapid Response Coalition to communicate the impact of these policies on our nation’s small businesses. The coalition, which consists of more than 170 and counting local, state and national organizations, is amplifying the voices of small business owners and trusted business support organizations, and engaging with policymakers to demonstrate the real-world impact of these proposed cuts and policies.
Small Business Majority is also conducting research to understand how federal actions are impacting our nation’s entrepreneurs, and communicating these impacts to the White House, Capitol Hill and the media.
On April 1, Small Business Majority Founder & CEO John Arensmeyer testified before the U.S. House Committee on Small Business during a hearing titled “The Golden Age: Unleashing Main Street Through Deregulation.” In his testimony, John emphasized that small businesses nationwide are more concerned about burdensome tariffs, federal funding freezes, cuts to essential federal agencies supporting small businesses, and mass deportations than the effects of federal regulations.
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The U.S. Department of Health and Human Services’ plan to cut about 10,000 staff on top of 10,000 staffers who have already agreed to resign raises serious questions about the future of the Affordable Care Act (ACA) and its ability to deliver for small businesses. This is a major concern for small business owners because so many entrepreneurs and their employees rely on the ACA for quality, affordable health insurance. In fact, more than 6.2 million small business and self-employed workers have gained coverage under the ACA. Thanks to the ACA, the uninsured rate for small business employees dropped from 25.2% in 2013 to 16.3% in 2022. Similarly, the uninsured rate for self-employed individuals fell from 27.3% in 2013 to 16.4% in 2022. None of this would have been possible without the ACA.
On March 20, Small Business Majority and 19 state and national business organizations sent a letter to President Trump and Office of Management and Budget (OMB) Director Russell Vought in strong opposition to the March 14 executive order, Continuing the Reduction of the Federal Bureaucracy, which attempts to dismantle several agencies including the Community Development Financial Institution (Fund) and the Minority Business Development Agency (MBDA).
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The Trump administration’s move to reduce the U.S. Small Business Administration’s workforce by 43% is a decision that is as devastating as it is unnecessary. SBA in recent years has provided critical resources to entrepreneurs despite being understaffed. Yet, this administration bafflingly concluded that the best way to support small businesses is through fewer workers. It’s also asking SBA to do more with less, as the agency would now be responsible for overseeing student loans in addition to small business lending, according to the administration’s announcement.
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We’re deeply worried about the future of anti-monopoly and fair competition enforcement at the Federal Trade Commission following President Trump’s decision to fire Commissioners Rebecca Kelly Slaughter and Alvaro Bedoya. Commissioners Slaughter and Bedoya have been champions for small businesses, supporting a ban on non-compete agreements, working to rein in big tech companies that harm small firms and advocating for Robinson-Patman Act enforcement to stop price discrimination.
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President Trump’s executive order seeking to gut the Community Development Financial Institutions (CDFI) Fund and the Minority Business Development Agency (MBDA) is the wrong approach to small business development.
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Congress put small businesses in an impossible position. On one hand, a government shutdown would be bad for small firms, depriving them of access to critical resources at a time when they are already facing enormous uncertainty due to the Trump administration’s unpredictable approach to tariffs, threats of mass deportations of immigrants, and reckless approach to government staffing and funding cuts. On the other hand, the continuing resolution (CR) that would keep the federal government operating through September falls far short of meeting the needs of our nation’s growing small business community.
On March 11, Small Business Majority sent a letter to House and Senate leadership ahead the consideration of a full-year continuing resolution (CR) to urge lawmakers to rather prioritize the needs of America's entrepreneurial community through the passage of a clean, short-term CR that allows Congress to work in a bipartisan manner to fulfill its duty of enacting all 12 FY25 appropriations bills to properly fund the agencies and programs that small businesses utilize to grow.
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New tariffs on Canadian and Mexican imports will put small businesses and family farmers at a competitive disadvantage. We’ve heard from a number of small business owners who said that any cost increases can be devastating for businesses already operating on thin margins. And large tariffs like 25% would mean most small businesses have no choice but to pass their costs on to customers. Larger businesses, however, are more likely to have flexibility to absorb increased overhead, keeping prices lower and undercutting their smaller competition. At a time when inflation was already spiking, even consumers who may prefer to shop small are more likely to buy big if there is a significant price difference for similar products. We’ve also heard from small business owners who would be happy to purchase products made in the United States if they could; the reality is that they simply cannot either because those products are too expensive or because the industries that supply what they need relocated offshore decades ago.
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The budget resolution adopted by Republicans in the U.S. House of Representatives brings Congress one step closer to gutting programs that many small businesses and their employees rely on for access to healthcare and sources of capital.
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