FY2021 Budget: Cuts to SBAFebruary 12, 2020
On Feb. 10, President Trump released his Fiscal Year (FY) 2021 Budget proposal which details plans for defense and non-defense discretionary spending. The budget blueprint outlines $4.8 trillion in annual spending and estimates the deficit would be cut in half by 2024, however such a drop is unlikely given the steep spending cuts Trump proposed for many agencies and somewhat unrealistic assumptions for economic growth.
Among the agencies targeted for cuts is the U.S. Small Business Administration which would receive a 25 percent cut in funds from the 2020 enacted level. Other major proposed cuts include: Commerce Department cut by 37 percent; Department of Labor cut by 11 percent; State Department cut by 21 percent; the Education and Energy Departments cut by eight 8 percent each; Environmental Protection Agency cut by 27 percent; and the Department of Health and Human Services by 9 percent.
Specifically, the Budget requests $739 million for SBA in new budget authority for 2021, a $243 million or 25-percent decrease from the 2020 enacted level. That would include a 35 percent cut to funding for Small Business Development Centers, increased loan and administrative fees for the SBA 7(a) program, and a 20 percent cut to the SBA’s Microloan program
The Commerce Department would also see significant cuts, led by reduced spending on the Census and the elimination of the Economic Development Administration which is charged with promoting economic growth in distressed areas. The Manufacturing Extension Partnership, which works to find cost-saving innovations for small and medium-size manufacturers, also is on the chopping block.
Only a handful of federal agencies would see an increase in funding: the Department of Veterans Affairs would receive a notable increase (13 percent) while Defense, Treasury and Homeland Security would all receive modest increases of three percent or less.
To read the full FY21 Budget Blueprint, please click here.