Trump Budget Slashes Rural Development and Investment Programs

The president’s proposed budget includes more than a $1 billion reduction in rural development spending for 2018. Other federal programs with a strong rural impact are also identified for cuts or eliminations. The Daily Yonder provides a brief profile of a baker's dozen of the programs on the block.

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The president’s budget proposes cuts of more than a billion dollars in Department of Agriculture rural development programs next year.

In its place, the president proposes regulatory relief, private-sector lending, and a new rural infrastructure fund of $162 million – half of which would have to be spent in Appalachia.

During his campaign, Donald Trump pledged to return coal jobs to the Appalachian coalfields – a feat he said he would accomplish through regulatory relief. In the meantime, Appalachia – which contains less than a tenth of the nation’s population – would receive half of all the new funding in the Department of Agriculture’s new rural infrastructure fund.

But even the winners are losers in the Trump proposal. While Appalachia would receive $80 million from the new infrastructure fund, it would lose $120 million through deep cuts in the Appalachian Regional Commission, a state-federal partnership that funds a variety of development projects in the economically rough region. It would also lose the region’s share of a $90 million pilot project to use Abandoned Mine Lands Fund dollars to support reclamation efforts tied to economic development.

Cuts or eliminations of $855 million are also proposed for USDA programs that support business development, job training, water treatment plants, electricity and communications infrastructure, and community facilities. Another $680 million in salaries and expenses would be eliminated from the Rural Development program area or shifted to other parts of USDA, according to the White House budget document.

Outside of the Agriculture Department’s Rural Development, other programs with significant impact on rural America were also pegged for cuts or eliminations. The budget proposal calls for phasing out the Corporation for National and Community Service, which is a source of VISTA and AmeriCorps volunteers for government agencies and nonprofits; cutting the Delta Regional Authority by nearly 90 percent; eliminating all funding ($1.2 billion) for 21st Century Community Learning Centers; and eliminating National Infrastructure Grants from the Department of Transportation.

We are still looking through the large combined presidential budget proposal, and each department has a more detailed plan for spending in 2018. And we’re collecting reactions to the budget from around the country.

So, as the budget proposal story unfolds, here are some rural highlights:

Department of Agriculture

Rural Business and Cooperative Service
Purpose: Programs that support business development and job training opportunities for rural residents.
FY 2017: $95 million, Trump Proposal: $0
Rationale: The president’s budget document says that the programs duplicate efforts offered in other agencies and departments of the federal government. It also charges that the programs are hard to evaluate for accountability and that there were previous management problems with two loan programs. Instead of providing business development and job training, the Trump administration says it will improve rural economies with “tax, regulatory, and infrastructure policies.”

 

Rural Water and Waste Disposal Program
Purpose: Funding for drinking-water treatment and sewage-treatment plants, solid waste disposal, and storm water drainage to households and businesses in eligible rural areas.
FY 2017: $498 million, Trump Proposal: $0
Rationale: The president’s budget document says that the Environmental Protection Agency’s State Revolving Funds already support water and waste-disposal infrastructure projects. If the elimination creates a gap in funds for rural project, the document says, the private sector will step in to fill the void for financing water and waste-water treatment.

 

Single Family Housing Direct Loans
Purpose: Subsidizes mortgage payments for low-income rural families.
FY 2017: $61 million, Trump Proposal: $0
The proposal calls for eliminating direct support from the government to consumers for home mortgages. The document says the private sector will fill any gap in mortgage funding.

 

Rural Economic Infrastructure Grants
Purpose: A new program to support initiatives for “Distance Learning and Telemedicine, Broadband, Community Facilities, and housing repair for very low income residents.” Of the $160 million proposed total, up to $80 million “will be set aside to assist the Appalachian region.”
FY 2017: $0, Trump Proposal: $160 million
Rationale: The budget document says “by creating a single account, RD will be able to better allocate funds to the projects that most need them.” This pool of funding is intended to take the place of the Regional Commissions, such as the Appalachian Regional Commission and Delta Authority.

 

Rural Utilities Service Broadband Grants
Purpose: Funds deployment of broadband technology in rural communities.
FY 2017: $10 million, Trump Proposal: $0
Rationale: The document eliminates RUS Broadband Grants while retaining the $27 million per available as loans. No rationale is listed for eliminating the grant program.

 

Supplemental Nutrition Assistance Program (SNAP)
Purpose: SNAP provides benefits, commonly known as food stamps, for low-income families to use to purchase food.
Trump Proposal: $191 billion in cuts to mandatory spending during the next 10 years.
Rationale: The budget proposal calls for a variety of SNAP changes that “close eligibility loopholes, target benefits to the neediest households, and require able-bodied adults to work.” The reforms also include passing along more costs to states over time. The budget document says that too many people have remained on the program after the end of the 2008 Great Recession and that these measures will “right size” the programs.

 

Farm Subsides
Trump Proposal:
$38 billion in cuts to mandatory spending during the next 10 years.
Rationale: The cuts are proposed for farmers with greater than $500,000 of adjusted gross income. Crop insurance premium payments are also capped. Conservation program cuts are mentioned, but no specific programs were singled out for cuts.

 

Health and Human Services

Community Services Block Grant
Purpose: Funds activities and infrastructure that alleviates “the causes and conditions of poverty.”
FY 2017: $714 million, Trump Proposal: $0
Rationale: The budget document says the program’s funding is “not well targeted” and does not encourage effectiveness and innovation. The Community Action Agencies that receive funds from the Community Services Block Grant also get support from other federal sources, the document says.

 

LIHEAP (Low-Income Home Energy Assistance Program)
Purpose: Funds and provides incentives to low-income families for energy costs, utility bills, and energy efficiency improvements.
FY 2017: $3.384 billion, Trump Proposal: $0
Rationale: The budget document charges that the program has a history of waste, fraud, and abuse. It says these programs are better handled by states.

 

Department of Homeland Security

Flood Hazard Mapping and Risk Analysis Program
Purpose: Funding for new mapping of flood risks. The data is used to inform the Federal Flood Insurance Program for home and business owners.
FY 2017: $190 million, Trump Proposal: $0
Rationale: The budget document says that homeowners should pay for the mapping, not taxpayers.

 

Department of the Interior

Abandoned Mine Land Grants
Purpose: Funding for economic development and reclamation activities in communities with abandoned mine lands.
FY 2017: $90 million, Trump Proposal: $0
Rationale: The budget eliminates a pilot program in which money from the Abandoned Mine Lands Fund could be used for reclamation efforts tied to economic development. It says those types of grants are beyond the expertise and purpose of the federal Office of Surface Mining Reclamation and Enforcement. Instead, the Trump administration will improve the coalfields’ economy by reducing regulation on mining and greenhouse gas emissions. The coalfields would also be part of a proposed infrastructure grant program to be housed within USDA.

 

Treasury Department

Community Development Financial Institutions (CDFI) grants
Purpose: Funding to local agencies to reduce poverty, revitalize low-income communities and to empower low-income families to become self-sufficient. The primary recipients are Community Action Agencies.
FY 2017: $210 million, Trump Proposal: $0
Rationale: The budget document says that Community Development Financial Institutions are now mature and can stand on their own without further assistance from public sources.

Other Independent Agencies

Corporation for National and Community Service
Purpose: Funds organizations that “improve lives, strengthen communities, and foster civic participation” by providing to stipends and education allowances to volunteers. Key programs are Americorps and Senior Corps.
FY 2017: $1.093 billion, Trump Proposal: $135 million
Rationale: The budget document says many funded projects “struggle to measure and demonstrate their impact.” The document calls for the “orderly shutdown” of the Agency, and says “subsidizing the operation of nonprofit organizations” is “outside the proper role of the federal government.”

 

Regional Commissions/State and Federal Partnerships
Purpose: Funds economic development projects and organizations in communities with persistent poverty.
Appalachian Regional Commission FY 2017: $146 million, Trump Proposal: $27 million
Delta Regional Authority FY 2017: $25 million, Trump Proposal: $3 million
Denali Commission FY 2017: $15 million, Trump Proposal: $7 million
Northern Border Regional Commission FY 2017: $8 million, Trump Proposal: $1 million
Rationale: The budget document proposes “elimination of the regional commissions” to reduce federal spending and encourage “states and localities to partner with the private sector to develop locally-tailored solutions to local problems.”

 

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