Trump budget would eliminate $125 million in funding to support small businesses
President Donald Trump's proposed budget calls for eliminating federal funding of a program to support small manufacturers that officials say created or protected more than 100,000 jobs in the last fiscal year alone.
The proposed $125 million cut would slash budgets for 51 local offices affiliated with the Manufacturing Extension Partnership for fiscal 2019.
Local officials involved with the program worry the elimination of federal funding would imperil their work assisting smaller manufacturers with business planning, employee training and cybersecurity protection.
“If we lose our federal funding, we close our doors—it's that simple,” Scott Broughton, director of the Advantage Kentucky Alliance, said this week between visits to manufacturers in the Hazard, Ky., area. About half of the not-for-profit group's $1.2 million budget this year is expected to come from client fees, Mr. Broughton said.
The Trump administration says the program, founded in 1988, was intended to eventually operate without federal subsidies. Funding requires local matching money, such as from state governments or from fees from manufacturing clients.
U.S. Commerce Secretary Wilbur Ross said the president's budget prioritizes national defense, economic growth and fiscal responsibility, and noted his department wants to maintain funding for a separate program aimed at manufacturing research and development.
“With President Trump in charge, there has been no better time to build things right here in America, and things will only get better from here,” Mr. Ross said in a statement Wednesday. “The president's policies, from tax cuts, to deregulation, to trade, are reviving American manufacturing across our nation.”
The cut to the manufacturing extension program might not last in the president's budget proposal. A former Commerce Department official said the program has typically had broad bipartisan support in Congress.
U.S. Sen. Richard Shelby (R., Ala.), for example, has supported full funding for the program as an appropriations subcommittee chairman, a spokesman said, adding: “It is not likely that he will support the president's proposal to end federal funding for the program.”
U.S. manufacturing has strengthened in Mr. Trump's presidency. As companies boosted sales and output, workers benefited as well: Manufacturers added 186,000 jobs from January 2017 to January 2018, compared with a loss of 15,000 jobs in the year before Mr. Trump took office, according to government data.
Manufacturers credit local extension offices with providing them advice and services they couldn't afford from the private sector.
“In my experience [the extension program] has been tremendously beneficial to local manufacturers, and generally speaking the administration has seemed to be very much pro-business and very much pro-manufacturing,” said David VanVoorhis, chief executive of Precision Molded Plastics Inc., a Los Angelesarea maker of parts for aerospace, medical and other industries.
Mr. VanVoorhis said his firm might not have survived the recession between 2007 and 2009 without free training from California's extension office that helped him improve quality, boost efficiency and lower prices.
—Bob Tita contributed to this article.
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While manufacturing jobs were added during President Trump's first year in office, his proposed budget calls for cutting federal funding to a program that supports small- and medium-size manufacturers.
BY ANDREW TANGEL