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Federal Alert: Two Major White House Proposals
Charlotte Scott   on Wednesday, February 14, 2018 at 12:00:00 am

This past week, the White House made two major announcements, including an infrastructure plan and their budget proposal for fiscal 2019. Both proposals have far-reaching implications for economic developers.

White House Budget Proposal

The proposal includes a plan to bolster defense spending to $716 billion, while imposing heavy budget cuts that limit non-defense discretionary spending to $540 billion. Trump aims to mitigate the nation’s growing deficit via this budget strategy. Here are the overall highlights:

  • The Department of Veterans Affairs, Homeland Security, and Department of Defense will all see significant funding increases
  • HUD, EPA, Labor Department will all see significant funding cuts
  • Opioids and Mental Health will receive an additional $10 billion in funding
  • The Department of Homeland Security will receive an additional $5.1 B
    • Including $1.6 billion for 65 miles of border wall, $2.8 billion to increase immigration detention to 52,000 beds per day, $782 million to hire an additional 2,750 officers and agents at CBP and ICE

How does this proposal affect economic development?

Department of Agriculture:

  • Eliminates the Rural Business-Cooperative Service
  • Eliminates the Rural Water and Wastewater Grants program while modifying the loan program to expand the eligible community size ceiling to 20,000
  • Eliminates the Rural Economic Development Grants program

Department of Commerce:

  • Eliminates the Economic Development Administration
  • Eliminates the Manufacturing Extension Partnership (MEP), it directs MEP centers to transition solely to non-Federal revenue sources.
  • The Budget requests $9.8 billion for DOC (including changes in mandatory programs), a $546 million or a 6-percent increase from the 2017 enacted level.
  • Establish Minority Business Development Agency (MBDA) as a policy office, and eliminates their business outreach centers.

Department of Defense:

  • Provides $10.5 million for the Office of Economic Adjustment
  • Does not call for a round of Base Realignment and Closures (BRAC)

Department of Housing and Urban Development:

  • Eliminates the Community Development Block Grant (CDBG) program.

Department of Labor:

  • Funding cuts for National Dislocated Worker Grants and Adult Employment and Training Activities
  • Nearly doubled funding for apprenticeships from $95 million to $200 million

Department of Transportation:

  • TIGER program is eliminated
  • Limiting funding of the Capital Investment Grant program to projects that already have secured funding agreements

It is important to note that the President released this budget proposal just days after Congress passed budget legislation that significantly increased funding for both defense and non-defense discretionary spending. Perhaps with more time to adjust, this proposal would have provided a less aggressive budget cut strategy. We will continue to track the progress of this proposal and any changes that should arise, but it is worth noting that it is exactly this: a proposal. Congress will ultimately decide what to fund and at what levels.

IEDC will be reaching out shortly to offer guidance and resources on how best to engage your elected officials here in Washington. In the meantime, please take a moment to review our ‘Why Invest Brochure’ and consider sharing it with your colleagues, local stakeholders and elected officials.

Infrastructure Proposal

With a $200 billion investment in Federal funds, the plan claims that it will generate roughly $1.3 trillion via public-private financing at state, local, Tribal, and private levels. The main areas the plan aims to tackle are:

  • Encouraging Rural Investment
    • $50 billion will be devoted to a new Rural Infrastructure Program, which will allocate the bulk of these funds to State governors.
  • Increasing State and Local Authority
    • The Incentives Program and the Rural Infrastructure Program will award funds directly to state and local authorities, who can decide which projects to prioritize.
    • The plan will expand processed that allow environmental review and permitting decisions to be delegated to States.
    • The plan allows Federal agencies to divest assets that can be better managed by State or local governments or the private sector.
  • Reducing Regulatory Barriers to Streamline Projects
    • The plan intends to increase flexibility of the US Army Corps of Engineers, the Department of Veterans Affairs, and transportation projects with minimal Federal funding.
    • The Superfund program plans to expand funding eligibility for land revitalization projects and provide tools for managing their legal and financial matters.
  • Altering the Environmental Permitting Process
    • A “one agency, one decision” structure will be established for environmental review, transforming it from a consecutive to a concurrent review process, aiming to shorten it to a two-year operation.
  • Strengthening Workforce Development
    • The plan will reform the Perkins Career and Technical Education Program, and create short-term programs that provide students with a certification or credential in an in-demand field eligible for Pell Grants.
    • The plan will also target Federal Work-Study funds.

Trump aims to “layer over” existing trust funds by administering block grants, relying heavily on public-private investment to reach the $1.3 trillion goal. This plan highlights the many regulatory issues and barriers that delay infrastructure development. Introducing this infrastructure plan will likely incite Congressional debate surrounding these issues, which could potentially lead to significant legislative fixes in the long run.

The next few months will be packed with debate and, hopefully, legislative action. IEDC will continue to share updates with you as these and more initiatives move forward. We will be talking about all thing federal economic development at the 2018 FED Forum, taking place March 25th – 27th here in Washington, DC. There’s still plenty of time to register and we’re adding new speakers daily – register here today!

Please contact Matthew Mullin, Senior Director, Public Policy & Strategic Engagement at mmullin@iedconline.org with any questions or concerns.