Strengthening the Economy for Rural America
The President’s Fiscal Year 2014 Budget demonstrates that we can make critical investments to strengthen the middle class, create jobs, and grow the economy while continuing to cut the deficit in a balanced way.
The President believes we must invest in the true engine of America’s economic growth – a rising and thriving middle class. He is focused on addressing three fundamental questions: How do we attract more jobs to our shores? How do we equip our people with the skills needed to do the jobs of the 21st Century? How do we make sure hard work leads to a decent living? The Budget presents the President’s plan to address each of these questions.
To make America once again a magnet for jobs, the Budget invests in high-tech manufacturing and innovation, clean energy, and infrastructure, while cutting red tape to help businesses grow. To give workers the skills they need to compete in the global economy, it invests in education from pre-school to job training. To ensure hard work is rewarded, it raises the minimum wage to $9 an hour so a hard day’s work pays more.
The Budget does all of these things as part of a comprehensive plan that reduces the deficit and puts the nation on a sound fiscal course. Every new initiative in the plan is fully paid for, so they do not add a single dime to the deficit. The Budget also incorporates the President’s compromise offer to House Speaker Boehner to achieve another $1.8 trillion in deficit reduction in a balanced way. When combined with the deficit reduction already achieved, this will allow us to exceed the goal of $4 trillion in deficit reduction, while growing the economy and strengthening the middle class. By including this compromise proposal in the Budget, the President is demonstrating his willingness to make tough choices and his seriousness about finding common ground to further reduce the deficit.
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The vitality of rural America is critical to ensuring the strength of our economy, the affordability and security of our food, the independence of our energy supply, and the vibrancy of small communities. To support vibrant rural communities, the Budget will:
Redirect Aid to Needy Rural Americans. The economic situation in some non-farm rural communities remains troubling. Population loss tends to reduce property values, increase tax burdens, reduce the supply and demand for local goods and services, and result in the loss of young, highly-skilled workers. Given the unique needs of rural farm and non-farm communities, the President’s Budget contributes to the job creation and economic growth goals of the White House Rural Council by continuing to fund programs that effectively promote renewable energy, job training, infrastructure investment, access to capital, and green jobs throughout rural America.
Provide Targeted Energy Assistance to Low-Income Families. The Budget provides $3 billion for the Low Income Home Energy Assistance Program (LIHEAP) to help struggling families with residential heating and cooling expenses. The amount includes $50 million for competitive grants to help reduce energy burdens for LIHEAP households that rely on persistently high-cost systems.
Prevent Hunger. At a time of continued need, the Budget provides $7.1 billion to support the 8.9 million individuals expected to participate in the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), which is critical to the health of pregnant women, new mothers, infants, and young children. The Administration also continues its support of the Supplemental Nutrition Assistance Program (SNAP), the cornerstone of our Nation’s food assistance safety net that touches the lives of more than 47 million people by helping families put food on the table.
Support Healthy Eating. The Budget supports the implementation of the Healthy, Hunger-Free Kids Act of 2010 with $35 million in school equipment grants to aid in the provision of healthy meals and continued support for other school-based resources, and $4.3 million through the Agriculture Marketing Service for food hubs and other food value chain activities. The Budget also provides $35 million for the Healthy Food Financing Initiative, which promotes the development of healthy food outlets in ‘food deserts’ (low-income areas with limited access to healthy food options).
Continue Funding for Health Centers. Health centers are a key component of the Nation’s health care safety net. To ensure Americans receive comprehensive, high quality, primary and preventive health care services regardless of their ability to pay, the Budget invests $3.8 billion for health center services in 2014 to support services to over 22 million patients. The Affordable Care Act provides the Health Center program with a total of $9.5 billion through 2015. Health centers will continue to be a critical element of the health system, largely because they can provide an accessible and dependable source of primary care services in underserved communities.
Partner with Communities to Help Them Rebuild. The Promise Zones initiative will revitalize high-poverty communities across the country by attracting private investment, improving affordable housing, expanding educational opportunities, providing tax incentives for hiring workers and investing in the Zones, and assisting local leaders in navigating Federal programs and cutting through red tape. The initiative will ensure Native American and rural representation among the designated Promise Zones. To align Federal investments with these hardest-hit communities, the Budget invests $300 million in combining effective cradle-to-career services with comprehensive school reforms through Promise Neighborhoods; $400 million in Choice Neighborhoods to revitalize affordable housing and surrounding neighborhoods; and $35 million in Byrne Criminal Justice Innovation Grants to combat serious crime and violence using proven public safety strategies.
Support Businesses in Underserved Areas. Even in the more constrained budget environment, the Administration continues to support robust funding of programs that support growth and access to credit in underserved and lower-income communities. To help businesses thrive, the Budget will:
Support Growth and Lending. The Budget increases funding for the Community Development Financial Institutions (CDFI) Fund, which provides financing to increase economic and community development and provide job opportunities in underserved rural communities. It also proposes a one-year extension of the Fund’s Bond Guarantee Program, which will provide needed additional financing to small businesses and entrepreneurs in these communities.
Enhance Small Business Access to Credit. The Budget supports $29 billion in loan guarantees in SBA’s 7(a), 504, and Small Business Investment Company (SBIC) programs, in addition to $25 million in direct microloans.
Enhance Small Business Access to Federal Procurement Opportunities. The Budget provides $4 million for SBA to hire 32 new Procurement Center Representatives, who will be strategically embedded in agencies across the Federal Government to assist agencies in structuring Federal procurement awards to be accessible for small businesses.
Cut Taxes for Small Businesses Seeking to Grow and Expand: The President is proposing to build on the 18 small business tax cuts he has already signed into law with new tax cuts to encourage growth and investment.
- Increase Program Effectiveness: The Budget includes $55 million for a new evidence-based business and cooperative grant program that will replace seven existing programs and allow USDA’s Rural Business and Cooperative Service to target funding on what works best to create jobs and foster growth.
Promote Rural Community Development. The Budget supports economic growth in rural areas by funding loan programs that effectively promote infrastructure investment and access to capital throughout rural America. For instance, in order to provide support for projects in low-income rural areas, the President’s Budget includes $1.5 billion in Community Facilities direct loans, a $200 million increase over 2012 enacted levels. This program funds a wide array of rural projects, including schools, hospitals, day care facilities, and fire and police stations. In 2014, the program will prioritize projects related to local and regional food system infrastructure. In addition, the Water and Wastewater program, which provides financing for water infrastructure in rural areas, is requested at a $1.5 billion program level, a $277 million increase over the 2012 enacted level. The Budget also provides $24 billion in guaranteed single-family housing loans, which will support mortgage lending institutions in rural areas and boost home ownership among moderate to low-income rural residents.
Provide $50 Billion in Upfront Infrastructure Investments. The national transportation system continues to face an immense backlog of state-of-good-repair projects, a reality underscored by the fact that there are nearly 70,000 “structurally deficient” bridges in the country today. To address this problem, the Budget includes $40 billion for “Fix it First” projects, to invest immediately in our Nation’s infrastructure with an emphasis on reducing the backlog of deferred maintenance on highways, bridges, transit systems, and airports nationwide. The Budget also includes $10 billion for competitive programs to encourage innovative reform and help get high-value infrastructure projects from the planning stage to execution.
Conserve Landscapes and Ecosystems as Part of the America’s Great Outdoors Initiative. The 2014 Budget leverages and integrates efforts of the Fish and Wildlife Service, the National Park Service, the Bureau of Land Management, and the U.S. Forest Service, along with States, Tribes, and others, to conserve the most critical landscapes. For the first time ever, the Budget proposes mandatory funding for LWCF programs in the Departments of the Interior (DOI) and Agriculture (USDA), including $200 million in mandatory funds out of $600 million overall for LWCF programs in 2014. Starting in 2015, the Budget proposes $900 million annually in mandatory funding, which is equal to the amount of oil and gas receipts deposited in the LWCF each year. In 2014, $356 million is proposed to conserve lands in or near national parks, refuges, forests, and other public lands. The Administration also proposes funding for key grant and partnership programs, such as historic preservation programs and wildlife protection programs.
Restore Our National Forests While Creating Rural Jobs. Restoration and sustainable management of our National Forests is essential to improve the health of watersheds, conserve habitat for wildlife, reduce the risk of catastrophic wildfires, and improve the economic vitality of America’s forest-dependent communities. By focusing on restoring our National Forests, the Administration will conserve watersheds and wildlife while putting Americans back to work in rural America. The Forest Service is accelerating forest restoration by integrating specific activities in its Integrated Resource Restoration line-item . In addition to the environmental benefits, these activities create jobs in the forest industry which has been hurt significantly by the economic downturn.
Invest in Clean Energy Technology. The Budget continues the President’s commitment to keeping the United States on the forefront of clean energy production and deployment. To do this, the Budget builds on past Administration successes by increasing funding for clean energy technology across all Federal agencies by 30 percent compared to the FY 2012 enacted level, to approximately $7.9 billion. Within this government-wide total, the Budget includes $255 million to support research, development and deployment of clean energy technologies through various programs across eight agencies at the Department of Agriculture. Within USDA, the Budget also supports clean energy deployment with $4 billion in loans to rural electric cooperatives and utilities that will support the transition to clean-energy generation and $238 million in loan guarantees and grants to assist agricultural producers and rural small businesses in developing renewable energy systems and energy efficiency improvements.
Expand Access to Wireless Broadband. The Administration and the Federal Communications Commission are continuing their work in 2014 to expand availability of spectrum for wireless broadband use through incentive auctions and by identifying spectrum used by Federal agencies that could be repurposed for commercial use. In addition, through the First Responder Network Authority, created by the Middle Class Tax Relief Act of 2012, the Administration is also working to develop a highly reliable, nationwide interoperable wireless broadband network for first responders. The Budget also provides $764 million in loans and grants through the Department of Agriculture for the expansion of telecommunication and broadband networks in rural America.
Encourage Growth Through National Export Initiative. A critical component of building a stronger American economy is ensuring that U.S. businesses, farmers, and ranchers can actively participate in international markets by increasing their exports of goods and services. The Administration launched the National Export Initiative (NEI) in January 2010 with the goal of doubling U.S. exports over five years while supporting 2 million new jobs. The Administration is currently making historic progress toward this target — in 2012, exports of goods and services reached record levels of over $2.2 trillion, 39 percent above 2009 levels. The Budget provides targeted increases for agencies involved in trade promotion and financing, development finance, and trade enforcement in support of the NEI.
Provide a Permanent Tax Incentive for Renewable Energy Production and Energy Efficiency and Tax Credits for Advanced Energy Manufacturing. The Budget includes $23 billion of incentives for renewable energy production and energy efficiency over the next 10 years. To provide a strong, consistent incentive to encourage investments in renewable energy technologies and to help meet our goal to double generation from wind, solar, and geothermal sources by 2020, the Budget would make permanent the tax credit for the production of renewable electricity. The Budget makes the Production Tax Credit refundable so new, growing firms can benefit and provide renewable electricity generation. The Budget would also reform and make permanent the deduction for energy efficient commercial property. To encourage investment in advanced energy equipment and facilities for clean energy manufacturing, the Budget provides an additional $2.5 billion in tax credits for advanced energy manufacturing projects.
Create National Infrastructure Bank. The President continues to call for the creation of an independent National Infrastructure Bank. The Bank will have the ability to leverage private and public capital to support infrastructure projects of national and regional significance. In addition, the Bank will be able to invest through loans and loan guarantees in a broad range of infrastructure projects, including transportation, energy, and water, and will operate as an independent, wholly-owned Government entity outside of political influence.
Implement Newly Expanded TIFIA Program. The Transportation Infrastructure Finance and Innovation Act (TIFIA) loan program received an eight-fold increase in funding in the recent surface transportation reauthorization. The program, which is especially important to mayors and local leaders, highlights the important role that infrastructure financing can play in catalyzing private investment.