NEW YORK – More than 1,000 miles from Washington, D.C., Marie DeNicola's small business is already experiencing the consequences of lawmakers' inability to compromise on the budget.

If Democrats and Republicans don't come to a consensus soon, a combination of billions of dollars in tax increases and budget cuts will go into effect Jan. 1. This "fiscal cliff," as it is commonly being called, is already hurting DeNicola's company Mainstream Boutique, a Minneapolis-based chain of 23 franchise stores that sell women's clothes. DeNicola recently got a painful e-mail from a prospective franchisee who said that she changed her mind about opening a store because of uncertainty about the economic and political climate.

"It was like a punch in the stomach," says DeNicola, who also operates one of the stores. "It's a little scary — because of the unknown, small businesses aren't waiting until January or February to see what happens. People are reacting now."