U.S. Chamber Survey: 93% of Small Businesses Concerned About Fiscal Cliff
The U.S. Chamber has taken the pulse of the nation’s small business leaders and found that the mood is predominantly uncertain.
The Chamber’s Quarterly Small Business Outlook survey shows a decline in small business attitudes about the business climate compared to last quarter: only 15% say they believe the economy will greatly or somewhat improve over the next two years, which is a decline from 19% in July. In addition, six-out-of-ten of small businesses now say the climate for their business has gotten worse in the last two years, compared to 55% in July.
That pessimism manifests in a very real way for those seeking work: only 17% of small business owners surveyed say they are likely to add more employees in the next year. The majority (61%) don’t expect to hire in the next year.
“Continued uncertainty is the greatest threat to small businesses and our country’s economic recovery,” says Chamber President and CEO Tom Donohue. “We know that’s true from talking to our small businesses, and our survey proves it. Uncertainty forces job creators to sit on the sidelines instead of hiring more employees and expanding their operations. We can help reverse this downward trend by addressing the fiscal cliff, promoting sensible regulations, and providing a clear road map for growth.”
As the deadline for automatic spending cuts and tax increases known as the “fiscal cliff,” draws closer, the intensity of concern has spiked. 93% of small business owners are concerned, and 72% say they are very concerned – an increase from 65% who were very concerned in Q2.
If Congress does nothing and the United States plunges off the fiscal cliff in three months, taxes would rise for 90% of Americans due to automatic increases in income and payroll taxes and other financial shocks, according to the Tax Policy Center. This outcome would likely plunge the country into another recession, economists including the Chamber’s Chief Economist Marty Regalia have warned.
Businesses are also making the connection between the fiscal cliff and their ultimate survival. Nearly two-thirds of small businesses (62%) surveyed believe that the fiscal cliff will have a significant negative impact on their business, an increase from 59% in July.
However, the uncertainty hanging over their heads is also mobilizing small business leaders. Leading into the election, the small business community is also energized to effect change, with 92% saying they are very motivated to vote and 97% outlining support for candidates who support free enterprise.
“It’s no surprise that given the current economic climate, small businesses are highly motivated to vote in November,” continued Donohue. “These job creators recognize that leadership in Washington directly impacts their ability to thrive, and they will use their voice and their vote to support candidates who will fight for free enterprise policies this November.”