White House Releases FY2018 Budget Proposal – What It Means for Economic Development

This note from Jeff Finkle, president and CEO of the International Economic Development Council, came into our inboxes late last week. Likely, you’re very aware and have already mobilized your networks and let them know the impact these proposed cuts would have on innovation, job creation and local economies.

Below Jeff explains the proposed cuts, their impact and how what you can do to inform leaders about why we need to invest in economic development.  

Today, the White House released their budget proposal for fiscal year 2018. The proposal, titled America First, A Budget Blueprint to Make America Great Again – confirms our concerns regarding what this administration has planned for our priorities. Over the past few weeks there has been speculation that the White House would take budget recommendations outlined by the Heritage Foundation and the Republican Study Committee. Many of the recommendations contained in these reports ask for the elimination or decrease in funding of several key federal economic development programs. It seems that is exactly what has happened.

The days of having the federal government as a partner in our economic success will be over if the White House proposal becomes law. This means when a natural disaster hits, there would be no federal programs to assist in economic recovery. If a major factory shuts down, where the feds could assist out of EDA or Labor with a declaration of “Sudden and Severe Distress”, that declaration would be meaningless. The cuts proposed cut to the bone, not just the fat. As a result, IEDC and many of our members have taken action to highlight the great value of these programs.

What’s in the Proposal?

The White House proposal is said to reprioritize federal spending to advance the administration’s national security and public safety priorities and ensure safety and security of the American people. It would increase defense and homeland security spending by $54 billion, cutting $54 in non-defense spending to avoid increasing overall spending.

A primary focus of the proposal is to make the Federal Government lean and operate more effectively, efficiently, and securely with less funds. In order to enact that goal, the administration asks for elimination and cuts that are allegedly duplicative or ineffective. Below are a few highlights on some programs to be cut or eliminated:

Elimination of:

  • Economic Development Administration
  • Minority Business Development Agency
  • Appalachian Regional Commission
  • Delta Regional Authority
  • Denali Commission
  • Community Development Block Grant Program
  • National Endowment for the Arts
  • Northern Border Regional Commission
  • TIGER Discretionary Grant Program
  • Community Development Financial Institutions
  • Discontinues discretionary spending in the Rural Business Cooperative Service at USDA — $95 million

Cut funds:

  • Discontinue funding for the Manufacturing Extension Program – $124
  • Discontinues discretionary spending in the Rural Business Cooperative Service at USDA — $95 million

As we go deeper into the proposal and find new information, we will share it with you. Rest assured, there are more cuts impacting our work.

What next?

With the release of the President’s budget proposal, the time for speculation is over. The White House budget proposal endangers dozens of programs, representing billions of dollars in funds used to promote economic development. However, all is not lost. As Congress evaluates the budget proposal and develops its own budget resolutions, below are actions you can take now to show your Members of Congress just how important federal economic development programs are:

  1. Share the Why Invest in Economic Development brochure with your Members of Congress, their staff and all economic development colleagues. Share it also with your mayors, city councils, county commissioners, and business leaders and encourage them to meet with your Congressmen, as well as pass local resolutions supporting these important programs.
  2. Request meetings with your Members of Congress and their staff to stress the importance of these programs to your community and congressional district, and the repercussions of cuts or eliminations.
  3. Report your Congressional activities to Karen Garcia ([email protected]) so we can keep track of all contacts being made.

As economic developers you are constantly on the front line promoting economic health and prosperity in your communities. We ask you to once again stand up for the federal programs that support our work in the promotion of economic growth, resilience, and equity.

We will continue our work here in Washington supporting federal economic development programs and will continue to keep you posted on our efforts and the latest news. If you have any questions please feel free to reach out to me or Matt Mullin, Senior Director for Public Policy and Strategic Engagement at [email protected].

There will be much more to come. Thank you for all that you do to support economic development and our profession.


Jeff Finkle
[President & CEO, International Economic Development Council]

P.S. Remember once a program dies, they do not come back to life. We need to support these many programs to support our local economic development efforts.