Small Businesses will Face Strains from Federal Budget Cuts

The federal government continues to contemplate deep budget cuts to key programs. And the owners of small businesses across Wisconsin worry about the ripple effects these decisions could have on their livelihoods. Richard Trent, national executive director of the Main Street Alliance, joins Pat Kreitlow, host of UpNorthNews Radio, to discuss why small businesses are already struggling with uncertainty, and how potential federal budget cuts would increase these challenges.

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Listen to the full interview. Trent joins Kreitlow at 24:00:

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Trent points out that small businesses create two-thirds of new jobs in the U.S., and rely heavily on access to capital, healthcare, and support systems like child care. The proposed budget cuts would undermine these systems, making it more difficult for entrepreneurs to stay afloat. A major concern is the uncertainty surrounding programs like the Main Street Bounce Back Program. It helps small businesses recover from pandemic-related closures. Trent tells Kreitlow he is calling for a $50 million extension of this program to continue offering crucial financial support.

The ongoing trade war and its inflationary effects, along with rising tariffs, are already pushing operating costs higher for many small businesses – whether it’s for raw materials or goods from overseas. 

“These types of policies, if left unchecked, will lead to price hikes that will be passed down to consumers,” Trent says. “It could potentially reduce demand and hurt businesses that operate on thin margins.”

And though the immediate focus is on small businesses, the potential impact of cuts to local school districts is also concerning. Wisconsin Department of Public Instruction (DPI) officials say schools stand to lose millions of dollars if federal funding is slashed. One example is Chippewa Falls where the loss could be as much as 6% of the overall budget. This would directly affect services and programs local businesses depend on to develop a skilled workforce.

“Small businesses rely on a healthy, educated workforce and reductions in educational resources could undermine long-term economic growth,” Trent explains. “People may forget small businesses and education systems are intertwined. Supporting one benefits the other.”

Main Street Alliance leaders plan to continue pushing for policies restoring fairness and stability in the economic environment, along with advocating for targeted investments in small businesses and programs providing essential services. If policymakers fail to act – small businesses, schools, and working families could all face increased financial hardships as a result of these cuts.

“The conversation is just beginning,” Trent says. “But with local economies at stake, it’s clear that protecting federal funding for education and small businesses must be a top priority.”