Thousands of businesses that contract with the federal government are losing roughly $3 billion every week as the government shutdown continues, according to a report from the U.S. Chamber of Commerce. The Chamber estimates that in just the month of October 2025, these businesses faced a total revenue loss of about $12 billion. Unlike federal employees, who are legally entitled to back pay once operations resume, contractors do not have such protections, leaving many companies in a precarious financial position. This ongoing shutdown stems from a Senate deadlock over whether to include Affordable Care Act tax credits in any government funding measure, preventing a resolution to reopen the government.
Federal contractors include thousands of small businesses and larger companies that provide a range of services to government agencies, from office supplies and landscaping to high-tech machinery and defense equipment. The Chamber’s data highlights that approximately 65,500 small business contractors across all 50 states are affected. The scale of impact varies by state, with Maryland, Virginia, California, Florida, and Texas among those where weekly payments at risk range from tens to hundreds of millions of dollars.
Neil Bradley, Executive Vice President and Chief Policy Officer at the U.S. Chamber of Commerce, explained that many contractors rely on federal contracts for a significant portion of their revenue and warned that the longer the shutdown continues, the more damage is done. He noted that while federal workers eventually receive back pay, many contractors face delays in payment or permanent loss of earnings. “When government reopens, contracts that were halted may never fully recover what was lost,” Bradley said in a letter to Congress accompanying the report.
The Senate stalemate centers on a dispute between Republicans and Democrats about extending premium tax credits under the Affordable Care Act, set to expire this year. The impasse has repeatedly blocked short-term funding bills that could reopen government operations. This prolongs uncertainty for federal contractors whose work largely depends on appropriated funds. The Congressional Budget Office estimates that a six-week shutdown could knock $11 billion off the U.S. economy, rising to $14 billion if extended to eight weeks.
Beyond the immediate financial losses, the shutdown disrupts broader economic activity with slower payment cycles impacting supply chains and subcontractors tied to federal contracts. The Professional Services Council, an association representing federal contractors, estimated that over one million contractor employees nationwide face furloughs or missing paychecks, which also hits local economies.
The Chamber has urged Congress to pass a continuing resolution swiftly to end the shutdown and has called on policymakers to consider measures that help contractors, especially small businesses, recover lost revenue and maintain workforce stability. Their appeal underscores the economic risks posed as small businesses face cash flow pressures and the broader economy feels the shutdown’s ripple effects.
The financial stress on federal contractors illustrates a less visible but deeply significant impact of government funding conflicts. Until lawmakers resolve their differences, thousands of businesses and workers contracted to serve government functions remain caught in the crossfire of political deadlock, facing mounting losses and uncertain futures.
