While Washington Shuts Down, Small Business Shows Up

Why the Economy's Backbone Deserves Better Support

As the federal government enters its third week of shutdown, 2,300 small business owners are preparing to converge on Washington, D.C. for the Goldman Sachs 10,000 Small Businesses Summit on October 29-30. They'll hold hundreds of meetings on Capitol Hill, advocating for access to capital, workforce development, and support for AI adoption—the very tools they need to compete and grow.

The timing is striking. While Congress remains gridlocked, unable to fund basic government operations, America's small business owners are showing up to make their case. They're asking for support from a government that, even when it's operational, directs the vast majority of its resources to the corporations that need it least.

The Backbone of the Economy

Small businesses aren't asking for charity. They're asking for recognition of what they contribute—and what they could contribute with fairer access to resources.

The numbers tell a compelling story. Small businesses employ 59 million Americans—45.9% of the private sector workforce. They generate 43.5% of U.S. GDP, contributing trillions of dollars in economic activity annually. Since 1995, they've created 12.9 million net new jobs, accounting for 61.1% of all new employment in America.

Source: U.S. Small Business Administration Office of Advocacy, Bureau of Labor Statistics (2024)

They're also the primary engine of innovation in the American economy, producing 16 times more patents per employee than large corporations. When you shop local, buy from independent businesses, or work for a company with fewer than 500 employees, you're participating in the half of the American economy that runs on entrepreneurship, not corporate consolidation.

Small businesses represent 99.9% of all U.S. businesses. By sheer numbers alone, they are the American economy. Yet when it comes to federal support, the story changes dramatically.

The Disparity

In 2024, the federal government spent $181 billion on business subsidies—what's often called "corporate welfare." The largest beneficiaries? Boeing received nearly $16 billion in government subsidies over the past 25 years. Intel has received more than $8 billion, with billions more on the way through CHIPS Act funding. Agricultural subsidies total $44 billion annually, with 60% going to the largest 10% of corporate farms.

Federal contracting tells the same story. In fiscal year 2024, the federal government awarded $774 billion in contracts. Large corporations received $579 billion—76.7% of the total. Small businesses, which make up 99.9% of all businesses, received $183 billion—just 23.3% of federal contracts.

Source: Cato Institute Corporate Welfare Analysis, Federal Procurement Data System (FY 2024)

Let that sink in: Small businesses are virtually the entire business landscape by count, produce nearly half of GDP, and employ half the private sector workforce. Yet they receive less than a quarter of federal contract dollars and a fraction of the subsidies that flow to large corporations.

This disparity isn't just unfair—it's inefficient. When federal dollars flow predominantly to established corporations, we're investing in companies that already have access to capital markets, established supplier relationships, and the scale to weather economic disruptions. We're subsidizing strength, not supporting growth.

The Vulnerability

The support gap matters because small businesses operate without the safety nets that large corporations take for granted. While major corporations can tap debt markets, delay projects, or restructure operations during downturns, small businesses live month-to-month.

Source: U.S. Bureau of Labor Statistics Business Employment Dynamics (2024)

The survival data is sobering. About 79% of small businesses survive their first year. By year five, only 50% are still operating. After ten years, just 35% remain. The 2001 and 2008 recessions dramatically worsened these survival rates, particularly for businesses born during economic downturns.

Cash flow is the killer—82% of small business failures involve cash flow problems. During government shutdowns, that pressure intensifies. SBA loans freeze. Federal contracts pause. Government customers stop spending. For a small business operating on thin margins, a few weeks without revenue or access to capital can mean the difference between surviving and closing permanently.

Large corporations weather shutdowns with cash reserves, credit lines, and diversified revenue streams. The S&P 500 companies collectively hold $2.1 trillion in cash reserves. Small businesses don't have that luxury. When federal support disappears—even temporarily—the impact is immediate and often fatal.

Economic disruptions hit small businesses first and hardest. Yet federal support consistently flows to those who need it least.

What Small Businesses Are Asking For

The Goldman Sachs Summit agenda reflects what small businesses actually need—not handouts, but tools to compete:

Access to capital. Not billion-dollar subsidies, but reasonable loans and guarantees that help businesses invest in equipment, hire employees, and expand operations. During the shutdown, SBA loan approvals have stopped entirely—an estimated $170 million per day in frozen funding that would support real business growth.

Workforce development. Help training employees and building the skilled workforce that small businesses need to compete. Large corporations can afford internal training programs and partnerships with universities. Small businesses need public support to develop talent.

AI adoption and training. The technology revolution isn't optional—businesses that don't adopt AI tools will fall behind. Large corporations have IT departments and consulting budgets. Small businesses need accessible tools, training, and support to leverage these technologies.

Support for small manufacturers. As supply chains face ongoing disruption and reshoring becomes strategic, small manufacturers could play a critical role. But they need capital to upgrade equipment, meet regulatory requirements, and compete for contracts.

These aren't requests for competitive advantage—they're requests to compete at all.

The Case for Support

I believe federal policy should recognize what small businesses contribute and what they could contribute with fairer support. This isn't about redistributing wealth from large corporations to small ones. It's about ensuring that federal resources—taxpayer dollars—support economic growth broadly, not corporate consolidation.

Small businesses aren't asking for the $16 billion Boeing received or the billions flowing to Intel. They're asking for the programs that exist on paper to actually function—SBA loans, small business set-asides, and support programs that help them access the tools large corporations take for granted.

The efficiency argument is clear: every dollar invested in small business support generates employment, drives innovation, and strengthens communities in ways that corporate subsidies simply don't. Small businesses can't relocate operations overseas, shift profits to tax havens, or lobby for specialized tax breaks. They operate locally, employ locally, and invest locally.

They also innovate faster. Without layers of bureaucracy and quarterly earnings pressure, small businesses can pivot, experiment, and respond to customer needs in ways that large corporations can't match. They're closer to their customers, more responsive to local markets, and more willing to take the risks that drive economic evolution.

Federal policy should reflect these realities. When small businesses succeed, communities thrive. When they fail at rates of 65% within ten years—often due to preventable cash flow problems or lack of access to capital—we lose not just businesses but community anchors, employment opportunities, and local innovation.

A Seat at the Table

The Goldman Sachs Summit represents something important: small business owners refusing to wait for perfect conditions. While Congress fights, they're showing up. While federal support remains frozen, they're making their case. While the shutdown continues, they're advocating for the policies that would help them compete and grow.

Policymakers should listen. The federal government is the world's largest buyer of goods and services, spending over $630 billion annually on contracts. It provides hundreds of billions in subsidies and support. How those resources are allocated matters—not just for fairness, but for economic dynamism, job creation, and innovation.

Small businesses aren't asking for bailouts or special treatment. They're asking for what large corporations have long enjoyed: a seat at the table when decisions are made, access to the support systems that exist, and a fair shot at competing.

They've earned it. They employ half the private sector. They generate half the GDP. They create two-thirds of new jobs. They drive innovation. They strengthen communities.

While Washington shuts down, small business shows up. That's worth supporting.

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