Highlights from the President's FY17 Department of the Treasury Budget Request

February 11, 2016

Enacted FY16 funding levels are used for comparisons unless otherwise noted.
Proposed FY17 funding for the Department of the Treasury totals $13.3 billion (5.3 percent increase) in discretionary funds, with an additional $2.3 billion for international assistance programs. Much of the increase in funding is attributable to a major investment in cybersecurity under a new $109.8 million initiative. The Treasury request also includes $250 million toward the U.S. pledge to the Green Climate Fund, which would be combined with another $500 million through the Department of State.

Treasury’s proposal includes a new authorization of $1.5 billion for a second round of the State Small Business Credit Initiative (SSBCI). The initiative strengthens state programs that support lending to small businesses and small manufacturers. The $1.5 billion would be awarded in two allocations: $1 billion on a competitive basis to states best able to target local market needs, promote inclusion, attract private capital for startup and scale-up businesses, strengthen regional entrepreneurial ecosystems and evaluate results. The remaining $500 million would be awarded by formula, based on economic factors such as job losses and the pace of economic recovery.

Most of Treasury’s support for economic opportunity is funded through the Community Development Financial Institutions (CDFI) Fund, which would receive $245.9 million (5.3 percent increase) under the proposed budget. Within that funding, the CDFI Program would receive $153.4 million (no change). The CDFI program uses federal resources to build the capacity of CDFIs to serve low-income and underserved communities lacking access to affordable financial products and services. These awards may be used to further economic development projects. The program also provides technical assistance awards.

The New Market Tax Credit (NMTC) Program attracts private sector capital into low-income communities by awarding tax credit authority in competitive rounds to Community Development Entities. No direct appropriation would be made for the program, but in December 2015 Congress extended the authorization of the program for $3.5 billion per year in qualifying investments, and permitted the NMTC to offset the Alternative Minimum Tax liability. Similarly, no direct appropriations would be made for the CDFI Bond program, but Treasury proposes to extend the program through FY17 and to reduce the minimum bond issue size from $100 million to $25 million.

 

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