An eleventh-hour plan to fund federal operations until November 17 was passed over the weekend, narrowly averting a government shutdown that could have heavily impacted struggling small businesses.
A government shutdown seemed near certain on Friday evening, as several far-right lawmakers in the Republican-majority House rejected speaker Kevin McCarthy’s proposed spending bill. However, over the next 24 hours, a last-minute plan to fund federal programs for another 45 days was presented to Congress, passing with bipartisan support in the House and Senate on Saturday evening and signed into law by the President on Sunday.
Although the measure only postpones the possibility of a government shutdown, federal lawmakers have gained a few more weeks to negotiate on spending. This might prove difficult for the conflicted House, as border control funding and aid to Ukraine remain divisive topics. Additionally, McCarthy now faces calls from a handful of conservative politicians to oust him from his speaker position, a move that could weaken Republican leadership and further delay negotiations.
A government shutdown could have numerous effects on small business owners who rely on federal programs for financing and loan servicing. A fact sheet released by the White House last Friday noted the disruption would have delayed contracts with private-sector partners, depriving companies of critical funds during a time of economic vulnerability. The Biden Administration also claimed that small businesses would lose $100 million daily during a shutdown due to loan servicing delays. The Small Business Administration echoed the President’s concerns, with chief Isabella Guzman saying the organization would be forced “to pause all guaranteed SBA business loans…”
The new deadline for Congress to agree on a spending plan is November 17. A government shutdown has not occurred since the previous administration.