A new report suggests that cuts to Social Security and Medicare would weaken small businesses by undermining owners’ retirement security and consumer demand.
In Connecticut, a 3 percent reduction in both programs would mean the loss of $453 million in economic activity, according to the report by The Main Street Alliance, a national advocacy organization that advocates for small businesses. The alliance based the report on an analysis of the U.S. Census Bureau’s survey of small business owners.
Nearly 40 percent of small business owners in Connecticut are over the age of 55 and many have reported delayed plans of retirement due to financial restrictions as a result of the slow economy, the report said. Social Security and Medicare are often a critical source of income in retirement and reductions would suppress consumer demand, making it hard for small businesses to grow and hire more employees, according to the alliance.
The report cited a February poll conducted by Small Business Majority, which found that 80 percent of small business owners opposed cuts to Social Security to reduce the federal budget deficit, 74 percent oppose cuts to Medicare and 67 believe that reducing Medicaid benefits would be “unacceptable.”