NADO Issues Action Alert on EDA

Posted on: May 7th, 2012 by NADO Admin

Click here to download a PDF of the NADO EDA Action Alert

ACTION NEEDED: Urge your Representatives to vote “yes” on the Rep. Michael Michaud (D-ME) amendment to restore a proposed $38 million cut to the U.S. Economic Development Administration (EDA) as the House considers the FY2013 Commerce-Justice-Science Appropriations bill. This year, the U.S. House of Representatives has proposed to cut EDA’s FY2013 budget to $219 million, $38 million below FY2012 and level with the President’s FY2013 budget request. The amendment offered by Rep. Michaud would restore the $38 million cut.

During the U.S. House debate on the Full Year Continuing Appropriations Act of 2011 (H.R. 1), Rep. Michaud successfully offered a similar amendment to restore a proposed $80 million cut, or 33 percent reduction, in EDA’s FY2011 funding.  The House overwhelmingly adopted, by a strong bipartisan vote of 305 to 127, to retain EDA’s funding at the FY2010 enacted level.  With 60 percent of the Republican caucus and 83 percent of the Democratic caucus supporting full funding for EDA, this was a clear demonstration of the agency’s results over the years and the need for future strategic public investments to lower the unemployment rate and generate high-quality private sector employment opportunities.

BACKGROUND: On April 19, the Senate Appropriations Committee approved a FY2013 Commerce-Justice-Science (CJS) Appropriations bill that would provide $238 million for EDA, approximately $20 million below FY2012 and $19 million above the President’s FY2013 budget request. On April 26, the House Appropriations Committee approved their version of the FY2013 CJS Appropriations bill that would provide $219 million for EDA, $38 million below FY2012 and level with the President’s FY2013 budget request.  The FY2012 appropriation for EDA included $200 million for disaster assistance for areas that received a disaster designation in fiscal year 2011.

The U.S. Economic Development Administration (EDA) is the only federal agency focused solely on private sector job creation in distressed areas as its entire mission.  With its modest budget, EDA has developed an impressive track record of making strategic investments and building partnerships that help regions and communities respond to shifts in international markets, address severe unemployment challenges and recover from plant closures, major natural disasters, and other chronic and sudden and severe economic hardships.

At a time when the nation must make the public sector investments necessary to compete in the global economy, the flexibility, partnership structure, and accountability of EDA’s programs should be at the forefront of the federal toolbox.  EDA’s portfolio of economic development infrastructure, business development finance, regional innovation strategies, and public-private partnerships are tailored to support the unique needs of each region.

EDA partners with the nationwide network of 380 Economic Development Districts and other state and local officials to address the fundamental building blocks for economic development, such as regional innovation strategies, vital public infrastructure, business loan funds, and flexible resources for communities to respond to plant closings, base closures, natural disasters, and other sudden and severe economic dislocations.  EDA’s infrastructure investments are targeted at essential facilities and assets like water and wastewater systems, middle mile broadband networks, workforce training centers, business incubators, intermodal facilities, and science and research parks.  These assets are often lacking in the nation’s most distressed areas, yet they are a prerequisite for private industry to invest in job creation and economic development activities in these areas.  As we have witnessed in recent years, private companies will relocate to places with these basic yet vital public infrastructure assets, including outside of the United States. 

KEY TALKING POINTS:

  • EDA is unique among federal programs.  While other federal programs often support broader community development activities, EDA focuses strictly on private sector job creation and economic growth.
  • By federal law, EDA projects typically require a 50 percent local cost share and significant private sector investment, ensuring that local leaders and businesses are committed to the project’s success.  In addition, EDA investments are focused on high quality jobs, especially in advanced manufacturing, science and technology, and emerging knowledge-based industries and sectors.
  • By federal law, EDA project investments must be tied into a regional Comprehensive Economic Development Strategy (CEDS) developed and vetted by local officials (including Economic Development Districts)—this helps ensure projects have significant local support and are part of a broader regional strategy.

EDA invests in public assets that private companies are reluctant to fund themselves.  These assets are often lacking in the nation’s most distressed areas, yet they are a prerequisite for private industry to remain or locate in these areas.  As we have witnessed in recent years, private companies will relocate to places with these basic yet vital public infrastructure assets, including outside of the United States.

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