ACTION ALERT to AEO Community re: FY 2018 Federal Budget - May 25, 2017
May 30, 2017
Dear AEO Community:
You have probably seen all the media reports on the release of President Trump’s budget and the requested deep cuts in safety net programs and those that support distressed communities. Unfortunately, and as we feared despite a brief respite through the omnibus budget that funds the federal government through the end of September 2017, the President proposed deep cuts for FY18 that support small businesses. Here is a summary table of the programs that most impact small businesses indicating current FY 2017 funding versus the President’s FY 2018 funding request compared with AEO’s FY 2018 funding request.
One of the deepest cuts is the proposed reduction in the Community Development Financial Institutions Fund from $248 million to a paltry $14 million. This essentially amounts to elimination of the crucial fund, which would be a heavy blow to small businesses in distressed rural and urban areas. The administration’s reasoning behind their decision is that the program has been so successful that it is no longer necessary. The first part of that statement is accurate. The last part is very dangerous.
As you know, the CDFI Fund supports hundreds of mission-focused lenders (CDFIs) that provide capital to communities and entrepreneurs who often find traditional sources of capital closed to them. Eradicating the Fund would have a devastating impact on distressed communities, particularly businesses owned by people of color that often exist in these areas. Other programs that support small businesses have also had their funding reduced, while a few have been zeroed out completely, including the Delta Regional Authority, the Appalachian Regional Commission and the PRIME grant program.
The Small Business Administration justifies some of the program cuts listed in the attached summary by noting that they are duplicative of other services or that it has been strengthening its partnerships with major banks to help them deliver billions more in financing to underserved communities.
Despite the Administration’s rhetoric, we know that without these programs, underserved entrepreneurs will suffer and economic growth will be impacted. If you are currently a member of AEO, now is the time to lend your voice in your local communities in support of maintaining funding for these crucial programs. If you are not currently an AEO member, I encourage you to join. Together, we can speak in one larger voice on the importance of maintaining funding for these crucial programs.
To help you in speaking out, the April 2017 recess packetexplains the budget impact as well as templates you can use in reaching out to your local media and Congressional Representatives when they are in your home districts. While the President proposes a budget, the Congress makes the actual funding decisions. This is why your involvement with your Members of Congress is important. Congress is in the process of deciding FY18, so now is the time to raise your voice.
Your voice is critical. Please use it…and stay tuned for specific alerts from AEO for action needed.
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