Paloma Clothing has weathered several recessions, but Roach says the most recent downturn has had by far the greatest impact on his customers, driving down spending by individuals at every income level. And while consumers have started showing slightly more confidence to start the year, Roach warns that it’s still “a very fragile confidence” — one that could be shattered if policy makers trim too much from what he calls the nation’s “social safety net” in their attempts to balance the federal budget.
“If you start hacking away at programs like Medicare and Social Security, you’re going to damage that little bit of confidence our customers have finally been developing after five hard years,” Roach said. “The short- and long-term deficit issues are by no means non-existent, but the priority right now should be improving the state of the economy, and for that, we need a strong base of consumers.”
That sentiment is shared by an overwhelming majority of small business owners, according to new polling data obtained by The Washington Post.
Responding to a series of policy questions posed by lobbying group Small Business Majority, 80 percent of business owners said they oppose proposals to save federal money by curbing Social Security benefits, which have been floated in varying degrees by both parties in Washington. Nearly three in four said lawmakers shouldn’t cut back on Medicare, and two in three said the same about proposed cuts to Medicaid, according to the poll, which will be published Wednesday.
The findings are based on responses from 500 business owners around the country who have fewer than 100 employees. Notably, more than half (52 percent) identified as Republican, the party that has generally pursued deeper cuts to federally funded social programs, while only 34 percent were Democrats.
For some business owners, proposed entitlement cuts pose a direct threat to their personal finances, which may leave less capital to invest back into their companies. One in eight small business owners in 2007 (most recent census data) was over the age of 65 and one in four was less than a decade away from qualifying for Medicare.
But for most, the concern is for their customers and, by extension, their revenues.
“In any effort to deal with the deficit, small business owners aren’t interested in methods that are going to pull money out of the economy or negatively impact the middle class,” John Arensmeyer, founder and chief executive of Small Business Majority, said in an interview. “They can’t afford for the government to start cutting benefits on Medicare and Social Security.”