Budget in Brief: An Overview of the President’s FY2015 Budget Submission
On March 4, 2014, President Obama released his FY2015 proposed Budget. The Budget, which is submitted annually to Congress, is a blueprint of the Administration’s priorities for the upcoming fiscal year. It details funding requests for government programs and proposed policy changes. The Congress uses the President’s Budget as a starting point for the appropriations process as it considers how to fund the government agencies.
For FY2015, the President’s Budget adheres to the funding level – $1.014 trillion – agreed to in the December 2013 Budget deal. This is somewhat misleading, however, because the President attached an additional request for $56 billion to fund new projects in defense, transportation infrastructure, universal preschool education and an expanded Earned Income Tax Credit (EITC) for individuals.
Small Business Administration
The President has requested $710 million for the Small Business Administration in FY2015 — a significant [23.6%] decrease from the FY2014 enacted funding level [$929 million]. The Administration attributes the reduced request to improving economic conditions, which are expected to reduce guaranteed loan default rates. The Budget, nonetheless, expects that the SBA will continue to guarantee loans at the Congressionally authorized level of $25 billion in FY2015.
Microloan Program (Lending) – $25 million
Microloan Program (TA) – $20 million
Small Business Development Centers – $113 million
Office of Advocacy – $8.5 million
Boots2Business – $7 million
Emerging Leaders ([formerly E200) – $15 million
The President’s Budget submission would eliminate the SBA’s Program for Investment in Microentrepreneurs (PRIME).
Please note: For other entrepreneurial counseling programs, such as the Women’s Business Center (WBC) Program, the Budget does not provide funding amounts at that level of detail.
The Budget includes a policy proposal to reauthorize the SBA’s 504 Loan Refinancing Program. This offshoot of the standard 504 loan program allows small business owners to access low, long-term interest rates to refinance commercial mortgage and equipment debts. Similar legislation has already been introduced in the Congress. (Please note: this is not to be confused with the standard 504 loan program for commercial real estate mortgages.)
Department of the Treasury
The President’s Budget requests $225 million for the Department of the Treasury’s Community Development Financial Institutions (CDFI) Fund, unchanged from the FY2014 appropriated amount. The Budget specifies that $35 million of the $225 would be reserved for the Healthy Foods Initiative.
The Budget also requests $1.5 billion for a second funding round of the State Small Business Credit Initiative (SSBCI). The SSBCI allows states to use federal funds to support programs that leverage private lending to help finance small businesses and manufacturers that are creditworthy. The SSBCI is expected to help spur up to $15 billion in lending to small businesses.
Department of Labor
The President’s FY2015 Budget includes $3 billion grants to States and localities to provide Employment and Training (ETA) services at 2,500 American Job Centers across the country through the Workforce Investment Act (WIA).
Building on the President’s pledge in his State of the Union address to improve workforce training, the Budget requests an additional $750 million to restore prior cuts to these grants, increase the investment in innovation, evidence-based practices, and performance in the workforce system.
The Workforce Innovation Fund (WIF) request is for $60 million, while the FY2015 Budget also includes $80 million for Incentive Grants, a new grant to reward states that succeed through their WIA programs in serving workers with the greatest barriers to employment.
Expanded Earned Income Tax Credit (EITC)
The President’s FY2015 Budget includes a proposal to expand the eligibility of the EITC. The proposal would increase the maximum credit for workers without children from $500 to $1,000 and expand the age of eligibility to 21 – 66 years of age (currently 25 – 64).