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White House budget and MBDA restructuring
Charlotte Scott   on Friday, March 30, 2018 at 1:00:00 pm

The Minority Business Development Agency (MBDA) was established in 1969 under the U.S. Department of Commerce. From its inception, the agency has helped facilitate growth and global competitiveness among businesses owned and operated by minority entrepreneurs. MBDA offers a range of services and programs, which provide clients with technical assistance, access to capital and finance management, contract opportunities, and access to new markets. In FY 2015 alone, the agency helped generate 26,896 jobs and awarded more than $5.9 billion in contracts and capital.

            MBDA fills an essential and targeted role in promoting the economic prosperity of minority-owned business, which in total, contribute over $1.4 trillion annually to the U.S.’s economic output, and directly account for 7.2 million U.S. jobs. The agency helps foster a more inclusive economy, promoting an economic environment that benefits all citizens.

            MBDA was marked for elimination in the White House FY 18 budget proposal, but was not in the FY 19 proposal. This indicates a shift in a positive direction; however, ongoing turnover has left the agency without a permanent director. On February 27, 2018, Acting National Director Chris Garcia resigned amid security clearance issues, and was replaced by Edith Jett McCloud. Although the agency is no longer set for elimination, the FY 19 White House budget proposal outlines major reorganization of MBDA’s structure and operations. The budget proposes to eliminate all 40 of the agency’s business outreach centers, claiming they are, “duplicative of programs operated by other Federal agencies…” The White House aims to re-establish the MBDA as a policy office, which will advocate for minority businesses across other Federal programs and agencies. This plan would mark a significant shift in the agency’s purpose.

            This potential restructuring would directly affect MBDA’s ability to continue its active, hands-on role within the economic development, and would require a complete transformation of its internal operations. For now however, MBDA is stable due to the recently passed Omnibus bill, which appropriates the agency $39 million. This number reflects a $6 million increase from FY 17. This final bill does not include any restructuring plans for MBDA, meaning that the President’s plan is temporarily postponed. However, it still remains important to continue monitoring the political discussion surrounding the agency in order to track the progress of potential legislation that will push this plan forward.