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Trump's first budget: What you need to know
Karen Garcia   on Friday, March 3, 2017 at 12:00:00 am

The two-month anniversary of the Trump administration approaches, and the White House has yet to release the president’s budget proposal for fiscal year 2018. Currently, the deadline set by the White House for the submission of this budget proposal is March 16. 

Download the "Why Invest in Economic Development?" brochure here (PDF).

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While the president’s proposal has not been released, numerous organizations have sought to influence the decision-making both in the executive and legislative branches of government through various publications. Among them, below are two budget blueprints that delineate what may be expected from the president:

While these sources are only providing recommendations and cannot be considered the definitive voice on federal budget development, they should be seen as strong influencers, and their recommendations should be taken seriously. Some of the contributors to these publications are now established in key positions throughout the Trump administration. For example, Mick Mulvaney, the Director of the Office of Management and Budget was a member of the Republican Study Committee. Additionally, Paul Winfree, director of budget policy and deputy director of the Domestic Policy Council for the White House, was most recently an economic policy director at the Heritage Foundation and was also a key contributor to its budget blueprint.  

Below is an outline of the budget blueprints, as well as the potential changes to the federal budget that target federal programs that communities depend on to advance their economic development goals. There is also information on the resources readily available to help advocate and champion these federal economic development programs.

What is at stake?

The budget blueprints shown above propose the reduction of U.S. debt through cuts to federal spending that is non-defense focused. These proposed cuts aim to significantly reduce funding for or to completely eliminate numerous economic development programs. Below are several programs currently outlined for significant reduction in funding or for complete elimination:

  • Economic Development Administration ($227 million) – elimination

  • International Trade Administration ($503 million) – elimination

  • Rural Utilities Service ($522 million) – elimination 

  • Rural Business-Cooperative Service ($146 million) – elimination

  • Minority Business Development Agency ($33 million) – elimination

  • Manufacturing Extension Partnership ($133 million) – elimination

  • Office of Energy Efficiency and Renewable Energy ($1.99 billion) – elimination

  • Export-Import Bank ($200 million) – elimination

  • Workforce Innovation and Opportunity Act Job-Training Programs ($3.4 billion) – elimination

  • Appalachian Regional Commission ($149 million) – elimination

  • Transportation Investment Generating Economic Recovery Grant (TIGER) Program ($510 million) – elimination

  • Federal Emergency Management Agency’s (FEMA) Disaster Relief Fund ($7.3 billion) – reduced 

The possible elimination of these programs would roughly slash $15.1 billion in funds and initiatives and impede economic development work. These programs have had a tremendous role and impact in the promotion of growth and job creation. They have funded investments in highways, training programs for the U.S. workforce, loans for small businesses, export promotion of businesses’ goods, and the promotion of foreign direct investment into U.S. communities.

The potential repercussions for economic developers could be widespread – with the worst case scenario being the absence of federal economic development programs and funds. These are programs and funds that are readily available to complement state and local efforts that maximize opportunity for every American. There would no longer be funds to draw in private-sector investment in infrastructure improvements, workforce development, innovation and entrepreneurship, small business expansion, and ultimately job creation.

Again, the administration’s budget proposal has yet to be released, and there is no certainty if the recommendations from the Heritage Foundation or the Republican Study Committee will be pursued. Additionally, even if the proposed reduction of funds or complete elimination are included in the president’s budget proposal, it is important to note that this is not an exceptional occurrence. Previous administrations have unsuccessfully targeted some of these programs for elimination.

Call to action

Equally as important to note, the president’s budget submission will be a proposal. In order for it to go into effect, Congress must approve it, and this is where economic developers can have a real impact. 

IEDC has developed a brochure (PDF) that explains the important role federal economic development plays in U.S. communities. It contains easy-to-remember talking points about a handful of economic development programs and their impact. The brochure is meant to serve as an educational tool that can be shared widely with other economic development organizations at the state and local level. But more importantly, it is a tool that can be used in current and future conversations with members of Congress that can help emphasize quickly and succinctly the importance of federal economic development programs and why they must be preserved.

IEDC is also collecting examples of federal economic development investments from communities across the country. If you haven’t already added to our growing library, please consider doing so today. It will be critically important to have real-world examples of the impact of these programs.