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The High Cost of the Reconciliation
Bill for Small Businesses

By Thomas M. Sullivan, US Chamber of Commerce

Small business makes up the backbone of our More federal stimulus will drive up already
nation’s economy. There are 31.7 million small out-of-control inflation.
businesses in America, which account for 99.9 Keeping up with rising costs for supplies during
percent of all U.S. firms. Small businesses have ongoing supply chain disruptions is already
created just under two-thirds of new jobs added creating a huge burden on small business owners.
since 2000 and employ just under half of the For example, Adam and Amy Fazackerley, owners
private sector workforce. of bag company Lay-n-go, said the cost of a 40
Coming out of the pandemic, small businesses foot container to ship product from Southeast Asia
are facing several big challenges including finding to the United States around this time of year was
workers for their open positions and navigating previously $5,000. The price is now $25,000.
supply chain disruptions. Several provisions that Julianne Weiner, COO of Sonic Promos, a
have been discussed as part of President Biden’s marketing company specializing in promotional
reconciliation spending bill will only create products, says client demand has tripled since this
more headaches. time last year.
Here are three reasons the reconciliation bill "Dealing with incoming requests is like trying
could come at a serious cost for small business to take a sip from a fire hose. The entirety of the
owners and is a threat to our nation’s fragile supply chain impacts our business…material
economic recovery. availability, production times, delivery dates,
inflation," says Weiner. "Since lack of materials
Some provisions and low staffing levels at our partner factories
being discussed makes processing every order more challenging,
for inclusion in the things that could be done in 48 hours now takes
reconciliation bill two weeks. Things that normally take two weeks
could increase costs, take four."
punish entrepreneurs, The supply chain challenges are leading to rising
and create costs for businesses and consumers—and another
unnecessary fines massive influx of federal stimulus will spike
that small businesses inflation up even further.
cannot afford. According to the U.S. Chamber and MetLife’s
latest Small Business Index survey, 72 percent of
small businesses said managing higher costs due
to inflation is difficult. Seventy-three percent said
rising prices have had a significant impact on their
business in the past year. It was second-most cited
challenge behind revenue concerns.

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