LaJuanna Russell is president of Business Management Associates Inc. in Alexandria and a member of Small Business Majority’s Small Business Council.
While President Trump digs in as he seeks $5 billion to build a wall on the country’s southern border, I’m trying to dig out of a financial hole created by the partial shutdown of the federal government. In fact, no matter how soon the ongoing dispute over funding for border security is resolved, small businesses such as mine will pay a price.
I’m president of an Alexandria-based small business that has been awarded government contracts, and the partial government shutdown already cost my business substantial revenue. The stoppage also leaves my firm to wait on some contracts that either can’t or won’t be made while Trump and Democrats in Congress play a game of chicken.
The situation is even worse for my employees. As a small business, my company doesn’t have the resources to pay employees if it is unable to recover the revenue, so the longer this shutdown lasts, the more vacation days my staff will be forced to use. If the shutdown runs long enough, some of my staff may have no choice but to go on unpaid leave. And unlike furloughed government employees who typically receive back pay after a shutdown concludes, I won’t be getting paid back for work we were prevented from performing while the government was closed. My employees are just out of luck.
Unfortunately, my situation is common among federal contractors. Nearly one-quarter of all federal contracting dollars spent in 2016 went to small businesses. A report by the Office of Management and Budget found that the 2013 shutdown cut small-business federal contracts with the Defense Department by almost one-third over the first two weeks of the shutdown. Moreover, all small businesses in regions with large numbers of government workers as customers will suffer.
Government shutdowns are also really bad for our economy as a whole. The 2013 shutdown was estimated by the Standard & Poor’s ratings agency to have cost $24 billion in lost economic output. S&P Global analysts predicted that a government shutdown would cost $6.5 billion per week, which is about 0.2 percent of gross domestic product growth. The U.S. economy has been experiencing record growth, with unemployment at the lowest point since the recession and signs indicating that a rise in wages is finally here.
Republican leadership in Congress promised for years to return to normal order and pass budget and spending bills on time. Instead, Republican control of Congress and the presidency produced two shutdowns in less than 12 months as well as repeated failure to fund the government for anything more than a few months. Now that control of Congress and the White House is split between parties, the president seems far more concerned with appeasing his base and keeping a campaign promise than with the health of the nation’s small businesses. Worst of all, at one point Trump was reportedly ready to sign a deal that would have averted this shutdown only to bow to pressure, backtrack and hold much of the government hostage instead.
Given the harm that is done to small businesses by a government shutdown, lawmakers must set ideological issues aside so they can quickly pass a clean budget that would fund the entire federal government. Once they do that, they must ensure this endless budget turmoil finally ceases because federal work stoppages do so much preventable damage to the United States’ job creators.