1 Million Small Business Jobs Could Be Lost In Sequester Cuts
Get Breaking News First
WASHINGTON (CBSDC/AP) — Two millions jobs could be lost, nearly half of those coming from small businesses, due to the sequester cuts.
MoneyWatch reports a study done by George Mason University’s Dr. Stephen Fuller and Chmura Economics and Analytics shows that small businesses might not realize that these cuts could affect them.
“Many small businesses are subcontractors, suppliers and vendors to larger scale businesses that are the prime federal contractors,” Fuller told MoneyWatch. “These subcontractors, suppliers and vendors have little recourse when their contracts with their primes are scaled back or terminated. In fact, the suppliers and vendors may not even know that their business is linked to a federal contract that could be canceled due to some called ‘sequestration.’”
According to the Small Business Administration, 20 percent of the Pentagon’s prime contracts and 35 percent of its subcontracts were given to small businesses.
Karen Mills, outgoing head of the SBA, said that small businesses are already feeling the effects.
President Barack Obama warned this week that the $85 billion in automatic spending cuts are already affecting the economy.
“The uncertainty is already having an effect,” Obama said. “Companies are preparing layoff notices. Families are preparing to cut back on expenses. The longer these cuts are in place, the bigger the impact will become.”
Despite the urgent rhetoric, there was no indication the White House and congressional Republicans were actively negotiating a deal to avoid the so-called sequester ahead of Friday’s deadline.
(TM and © Copyright 2013 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2013 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)