The Rust Belt Economic Review

Over the past half decade, in a post-pandemic world, Rust Belt states have seen increased economic stimulation at the municipal level. This increase in development, however, has not largely been driven by traditional local methods. Instead new forms of sparking economic growth have been implemented, one such method has been main street lobbying. Main Street advocacy refers to small to medium-sized corporations with vested interests in a local community, whether through local manufacturing or a significant portion of revenue generated locally. Main Street lobbying refers specifically to these companies advocating for business and community interests to the federal government, through members of Congress, departments, and agencies. Efficiency in this paper shall refer to the measurement of successes of the allocation of economic resources including state and federal development capital. 

The act of main street businesses lobbying the federal government while previously existing is not something that has been seen before on as large of a scale as it is now. In quarter one of 2025 alone the National Federation of Independent Businesses (NFIB), which represents many main street corporations and is one of the largest players in mainstreet lobbying, spent over $2.27 million dollars on lobbying targeted at members of congress. This is compared to the same organization spending just $1.2 Million in the first quarter of 2018, representing an 89.2% increase in spending. This increase in spending however is, not just limited to the NFIB. The National Small Business Association (NSBA) , which is smaller in scale to the NFIB, increased its spending on federal lobbying from $108,000 in 2018 to $190,000 in 2025, representing a 75.9% increase over the time period.  

From this, this spending has largely been targeted at members of congress representing communities with significant small business economies. This money is not just contributed to sway members' hearts but instead to show support for the creation and continuation of special opportunities for small business. One such opportunity that has been particularly popular is that of the Federal “HUBZONE” program overseen by the U.S. Small Business Administration. The HUBZONE program which was created in 1997 as a response to small business lobbying directly supports small businesses nationwide by giving advantages in winning government contracts, providing tax breaks and providing regulatory relief. It was due to small business lobbying in 2025 that the organization that has a budget comprising a set 3% of federal government contract spending was largely spared from a decreased budget and decreased powers under the new Trump administration’s “Department of Government Efficiency" and other cost saving efforts (Small Business Administration). 

This advocacy was implemented through campaign donations to members of congress running in the 2024 election cycle, pressure on these same members following the election in the form of office visits and constituent letters & through endorsements by organizations like local chambers of commerce.

With this success in keeping one of the most important small business focused government programs operating the question now becomes, To what degree does main street advocacy influence the allocation efficiency of federal and state small business programs in former rust belt states in a largely post industrial era? The answer to this question boils down to one key concept, increased efficiency in government programs at the state and federal level. Although programs such as HUBZONE have been effective they have historically been limited in their direct effect on many small businesses outside of government adjacent industries (Daley). This has been true at both the state and federal level with the most prominent industries winning resources being defense, construction & energy production (Moran). 

This lack of resources being allocated to other types of industries has created the inefficiency of some industries being almost shut out of government relationships and the reality that in some industries a handful of large companies dominate in the process of resource allocation. This specific inefficiency can be solved by increased resources being available in both state and federal programs for the sole purpose of stimulating growth in industries not already receiving stimulation and in need of it. For example, states in the rust belt seeing declining downtowns in their cities can implement state wide programs to assist municipal initiatives that currently lack resources (Fox). With these increased resources more action can be taken in a more efficient manner as more and more municipalities use programs to develop efficient models for others to follow. Increased resources would additionally solve the inefficiencies of current programs that are falling short in certain rust belt states (Armstrong). 

Continuing this, increases in resources for municipalities however, could also be undertaken by the federal government in addition to with state governments. A national initiative for rustbelt municipalities could take shape in the form of a national contest where rustbelt cities could propose plans to be implemented. It is important to note however the limitations that must be put on such a program in order to limit federal power when in comparison to that of respective state governments. States not the federal government should be the primary driver of reform in the rust belt in response to main street lobbying. This is in order to ensure that tailored progress can be given to independent states through their legislatures while the federal government takes the simple role of providing limited resources on a competitive basis.  

Furthermore, this tailored progress is what will be at the epicenter of further development for Mainstreet businesses as one national standard or an excess of federal power risks over generalizations and policy shallow in thought or effect when regulating and impacting small business. An excess in this power could negatively shape the ability for companies to meet new regulations, to compete against larger corporations and other unforeseen consequences that can only be avoided if the primary drivers of new programs are state governments.

Additionally, new state programs should have limitations on their capacity to interfere in the private sector beyond the starting principle of igniting economic growth. This is due to the private sector currently being and for the foreseeable future counting to be the most efficient driver of long term economic stability. If government does not check its own power when involving it in the private sector in the form of programs like this the additional risk of government overreach is brought into existence. Any new programs in the rust belt as a result of main street lobbying must balance additional powers of government while also duly ensuring that new programs have enough resources in order to assist main street businesses. 

Correspondingly, checks on the power of government programs can be implemented in a few key ways. The one recommended by this paper however, when regarding the implementation of programs targeted at revitalizing main street business in line with the efforts of main street lobbying is that of a national government program being established at the federal level under the department of Commerce. Additionally resources should be allocated to departments of commerce at the state level in line with preexisting economic development infrastructure. This federal program under the department of commerce should be held accountable to the same degree as any other federal government program but should additionally for the purpose of accountability have a team of outside counsel. State programs should however, be submitted to less regulatory framework than the federal program in order to prioritize efficiency, speed and tailored local solutions. This decreased amount of oversight at the state level however, will still need to be enough in order to avoid the likes of fraud and mismanagement which could cripple programs.

Following all of these guidelines and needs, one such program that could be implemented effectively and efficiently and that could be proposed by this paper is that of a commission in the state of Michigan. A program within this state would be under the Michigan department of commerce and specifically under the economic development initiative. The program would be overseen by such departments and would have annual reviews conducted by both the legislature and Michigan state auditors office. This is in order to meet the first requirement for any new program, accountability. The commission would need to then meet the second requirement of efficiency. This would be met through the commission providing resources to local municipalities and giving them the right to allocate resources as seen fit in order to promote tailored solutions. The third requirement that the program would need to meet is solvency. This point could be met by the commission receiving a set percentage of state revenue; for instance, 5% of annual state income tax revenue of roughly $1.64 billion totaling for the commission, $81.9 Million annually (Clearly). This specific amount would allow the commission to invest in multiple communities simultaneously while still doing so meaningfully. A 5% allocation however, could be changed as circumstances do but a percent allocation should be set for set periods at a time i.e. 5 years to promote consistency in commission resources and structure. 

From this, in order for this solvency point to then connect with the point of efficiency such a program and the allocated tax revenue to it should be up for review by the legislature every 4-6 years in order for progress to be measured and the efficiency of the program to be demonstrated. The fifth and final point that such a program would need to meet is that of having the interests of main street business at heart. This is in order to serve the interests of communities primarily served by small business communities and to accomplish the net benefit goals of small business advocacy such as post industrial revitalization. Such guiding principles could be accomplished by an outside panel of small business professionals appointed by the legislature or the state's governor. These outside counsel would ensure the commission follows its guiding purpose while also providing advice on efficiency and impact benefiting the program overall. 

Additionally, such a program following these five key principles would largely be uncontroversial in most states. This is due to large amounts of public support for increased government attention to small businesses. For instance, in an April 2025 poll conducted by the NFIB in cooperation with an outside agency it was found that nationwide 83% of Americans found federal government assistance to small businesses to be "extremely important”. This support at the national level directly and duly represents support at the state level especially in states like Texas, Georgia, Illinois and Ohio which have large small business communities (National Federation of Independent Businesses). This public support effectively defeats any arguments that the plan might be too controversial for legislatures or the federal government to implement. With this it also duly defeats the argument that a majority of Americans do not want more assistance for small businesses and that main street advocacy is a null and void concept with no real backing. 

With these arguments being defeated however the issue of future state inefficiency is laid upon the table. When an influx of government funds is presented to communities inefficiencies can be created independent of whether those dollars came from the federal level or the state level. These inefficiencies can include contracts being awarded without competitive bidding processes, development on prolonged schedules and financial inefficiencies like overspending. Following the same proposal that this paper has presented for Saginaw state programs as well as a national program should each have an arm of their respective organizations dedicated fully to the process of efficiency. These arms should be overseen by a myriad of officials from both the private and public sectors, for instance for the Michigan program officials including but not limited to those from the Ford Motor Company and the Michigan Department of Labor and Economic Development. Private sector officials should be composed of those employed by or those with significant interests in corporations with vested interests in a state's economic success much like the  program of main street support that they serve. 

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For Further Reference: 

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Legis1 - Congressional Intelligence Platform. (2026). Legis1. https://legis1.com/news/nfib-spends-record-2-27m-on-in-house-lobbying-in-q1-2025

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National Federation of Independent Business Lobbying Reports. (2026). OpenSecrets. https://www.opensecrets.org/federal-lobbying/clients/reports?cycle=2018&id=D000000160

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National Small Business Assn Lobbying Profile. (2026). OpenSecrets. https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2018&id=D000054337

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National Small Business Assn Lobbying Profile. (2026). OpenSecrets. https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2025&id=D000054337

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‌Moran, G. (2022). An Examination of Small and Midsize Defense Business Corporate Lobbying. ScholarWorks. https://scholarworks.waldenu.edu/dissertations/13612/

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Small Business Administration HUBZone Program. (2010, October 15). Everycrsreport.com; Congressional Research Service. https://www.everycrsreport.com/reports/R41268.html

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Freeman, T., & O’Brien, T. (2025, January 13). Rural America’s economies are often left out by a design flaw in federal funding. The Conversation. 

https://theconversation.com/rural-americas-economies-are-often-left-out-by-a-design-flaw-in-federal-funding-246771

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Fox. Are Business Improvement Districts Perceived as Effective for Revitalizing Mid-- Sized Rust Belt Cities? (2013). https://dl.tufts.edu/downloads/9880w312k?filename=7s75dr146.pdf

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‌Armstrong, B. (2021). Industrial Policy and Local Economic Transformation: Evidence From the U.S. Rust Belt. Economic Development Quarterly, 089124242110228. https://doi.org/10.1177/08912424211022822

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Cleary, M. (2024). STATE OF MICHIGAN REVENUE STATE SOURCE and DISTRIBUTION. https://house.mi.gov/hfa/PDF/RevenueForecast/Source_and_Distribution_Dec2024.pdf

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‌THE 20% SMALL BUSINESS TAX DEDUCTION Quantitative Findings. (2025). https://www.nfib.com/wp-content/uploads/2025/04/NFIB-Survey-March2025.pdf