The U.S. Chamber of Commerce released a report on Thursday, stating that contractors who have contracts with the federal government have incurred losses of $12 billion during the four weeks of the government shutdown.
The report reveals that around 65,500 small businesses across the United States are facing losses of approximately $3 billion per week due to the government shutdown.
Contractors affected by the shutdown include companies supplying high-tech machinery, office supplies, and landscaping services.
The states of Maryland and Virginia have been hit hardest in terms of government contractors impacted by the shutdown, while Alabama, California, Florida, and Texas have also seen a substantial decrease in contract revenue since the government shutdown on October 1.
Neil Bradley, Executive Vice President and Chief Policy Officer of the U.S. Chamber of Commerce, stressed in the report’s cover letter that federal contracts make up a significant portion of the total income for many small businesses.
Bradley emphasized that while federal employees can expect retroactive pay once the government reopens, there is no similar legal guarantee for contractors.
“Contractors rarely receive full compensation after the government reopens,” he said. “The shutdown may have only delayed the procurement of many goods, but some orders may have been permanently lost.”
The report will be submitted to members of Congress. Bradley urged Congress to pass a short-term funding bill to quickly reopen the government. “We also urge Congress to consider how to assist federal contractors, especially small business contractors, in helping them resume normal operations,” he wrote.
A temporary funding bill proposed by House Republicans has been voted on 13 times in the Senate but has failed to reach the necessary 60-vote threshold each time. Democrats insist that an agreement must be reached first to extend the Affordable Care Act’s premium tax credit offset provisions set to expire at the end of this year.
According to the Congressional Budget Office (CBO) report, some contractors’ financial losses are expected to be partially compensated after the government reopens.
The CBO’s report estimates that the government shutdown will cause a GDP loss of at least $7 billion due to federal employees being furloughed and reduced work hours.
CBO Director Phillip Swagel, in a letter to House Budget Committee Chairman Jodey Arrington, a Texas Republican, pointed out that if the government shutdown continues for six weeks, it will result in an economic loss of $11 billion; if extended to eight weeks, the loss will reach $14 billion.