Office of Management and Budget

An Economy Built to Last and Security for African American Families

We now face a make-or-break moment for the middle class and those trying to reach it. After decades of eroding middle-class security as those at the very top saw their incomes rise as never before and after a historic recession that plunged our economy into a crisis from which we are still fighting to recover, it is time to construct an economy that is built to last. The President’s 2013 Budget is built around the idea that our country does best when everyone gets a fair shot, does their fair share, and plays by the same rules. We must transform our economy from one focused on speculating, spending, and borrowing to one constructed on the solid foundation of educating, innovating, and building. That begins with putting the Nation on a path to living within our means – by cutting wasteful spending, asking all Americans to shoulder their fair share, and making tough choices on some things we cannot afford, while keeping the investments we need to grow the economy and create jobs. The Budget targets scarce federal resources to the areas critical to growing the economy and restoring middle-class security: education and skills for American workers, innovation and manufacturing, clean energy, and infrastructure. The Budget is a blueprint for how we can rebuild an economy where hard work pays off and responsibility is rewarded.

To construct an economy that is built to last and provide security for African American families, the 2013 Budget will:

Strengthen Anti-Discrimination Enforcement. Even in these fiscally constrained times, the substantial investments that have been made by the Administration to strengthen civil rights enforcement against racial, ethnic, sexual orientation, religious, gender, and gender identity discrimination continue in the 2013 Budget. The Administration proposes an increase for the Community Relations Service in the Department of Justice to fight hate crimes and provides a $14 million, or 4 percent, increase over the 2012 enacted level for the Equal Opportunity Employment Commission (EEOC), which is responsible for enforcing Federal laws that make it illegal to discriminate against a job applicant or an employee. This investment will allow EEOC to add staff to reduce the agency’s backlog of private-sector discrimination charges.

Improve Higher Education for Students from Minority Backgrounds. The Budget invests $55 million in a new initiative to increase college access and completion and improve educational productivity through an evidence-based grant competition, up to $20 million of which will go directly to minority serving institutions. In addition, the Budget provides $30 million for a new competitive grant to improve and expand teacher education programs at minority-serving institutions, a significant pipeline for preparing a diverse teaching force. Finally, the Budget maintains funding for programs administered by the Department of Education, the Department of Energy and the National Science Foundation that fund HBCUs.

Support Minority Businesses. Even in the more constrained budget environment, the Administration continues to support robust funding of programs that support growth and access to credit in underserved and lower-income communities. To help businesses thrive, the Budget will:

  • Support Growth and Lending. For example, the Budget provides $221 million for the Treasury Department’s Community Development Financial Institutions (CDFI) Fund, which provides capital to low-income communities across the Nation and is targeting a portion of its funds to help bring grocery stores and other healthy food retailers to underserved urban and rural communities. The Budget also funds several initiatives designed to promote entrepreneurship in underserved areas including the Small Business Administration’s (SBA) Small Loan Advantage and Community Advantage programs and the Small Business Investment Company (SBIC) Impact Fund debenture program, which will support impact investments that target residents of economically distressed regions or owned by a socially or economically disadvantaged group. The Budget also supports funding for the Minority Business Development Agency through the Department of Commerce.
     
  • Enhance Small Business Access to Credit. Small businesses are the engine of economic growth and job creation. That is why the Administration is taking a series of steps to improve the access to capital for small businesses. First, the Administration supports $16 billion in SBA 7(a) loan guarantees, which will help small businesses operate and expand. This includes an estimated $14 billion in term loans and $2 billion in revolving lines of credit; the latter are expected to support $46 billion in total economic activity through draws and repayments over the life of the guarantee. The Administration also supports $6 billion in guaranteed SBA lending for commercial real estate development and heavy machinery purchases; $4 billion in Small Business Investment Company (SBIC) debentures to support new businesses and new jobs through early-stage and mezzanine small business financing; and $18 million in direct loans, for intermediaries to provide small loans to emerging entrepreneurs and other borrowers unable to receive credit elsewhere.

Take Immediate Action to Support Growth and Job Creation. While we have made progress in restarting job creation – with 3.7 million private sector jobs created over the past 23 months – the President believes much more needs to be done to put Americans back to work. Building off the provisions he proposed in the American Jobs Act, the President is calling for immediate steps to support job creation this year. These steps include extending the payroll tax cut through the end of the year – ensuring that 160 million workers do not see their taxes go up – providing aid to states and localities to hire and retain teachers and first responders, extending Unemployment Insurance, and making a $50 billion up-front investment in infrastructure.

Spur Job Creation through Infrastructure Investment. Recognizing the importance of a modern transportation infrastructure to the growth and competitiveness of the economy, the President proposes an upfront investment of $50 billion in infrastructure in 2012, as well as a $476 billion surface transportation reauthorization proposal that will result in additional job creation and fund projects that will improve the Nation’s highway, transit, rail, airport, and the air traffic control systems, making the U.S. more competitive going into the future. Together, this proposal is an increase of more than 80 percent above the inflation-adjusted levels in the previous six-year bill plus annual appropriated funding for passenger rail during those years. Competitive funding is also provided for transportation training programs, particularly focused on workforce skill gaps, and disadvantaged business enterprise training assistance.

Give Every American a Fair Shot at Success by Improving and Reforming K-12 Education. The Administration has jump-started landmark reforms in our education system by rewarding excellence and promoting innovation. To build on this success, the Budget will:

  • Support Improvements in Early Learning. Recognizing that quality education is an investment that pays off for years to come, the Administration proposes $850 million in the Race to the Top program, which seeks to implement systemic reforms in five critical areas, including early learning and care. As part of the 2013 Race to the Top, the Budget supports deepening the Administration’s investment in Race to the Top Early Learning Challenge, a program that in 2011 awarded nine grants to States committed to ambitious efforts to build statewide systems of high-quality early learning and development programs intended to close the school readiness gap. The Budget also provides $300 million in new resources at the Department of Health and Human Services to improve child care quality and prepare children for success in school.
  • Improve Elementary and Secondary Education. Too often, education funds are allocated based on factors not tied to success. Consistent with goals for the reauthorization of the Elementary and Secondary Education Act, the Administration is committed to consolidating narrow programs into broader authorities with higher, clearer standards and assessments; recognizing and rewarding schools and teachers that help students make gains; and giving States and school districts new flexibility to help all students graduate from high school, college- and career-ready. The Budget also continues to support successful new programs like Race to the Top, School Turnaround Grants, Investing in Innovation, and Promise Neighborhoods.
  • Expand Opportunities for Students in Math, Science, and Engineering. The Budget provides $141 billion overall for research and development in science and engineering. It also allocates $80 million from the Department of Education to prepare effective STEM (science, technology, engineering and mathematics) teachers and funds a jointly-administered mathematics education initiative, with $30 million from the Department of Education and $30 million from the National Science Foundation, to support evidence-based approaches at the K-12 and undergraduate levels. These programs will be developed in conjunction with a Government-wide effort to increase the impact of Federal investments in math and science education by ensuring that all programs supporting K-12 and undergraduate education adhere to consistent standards of effectiveness.
  • Attract, Prepare, Support, and Reward Great Teachers. The Budget provides $400 million in the Teacher and Leader Innovation Fund, a competitive grant program to transform teacher and leader evaluation and support systems, to reward strong teaching and improve learning and instruction, and $2.5 billion for an overhauled teacher quality formula grant, including a 25 percent set-aside to build evidence on ways to best recruit, prepare and support effective teachers and principals. The President is also asking for a new $5 billion competitive program that will challenge states and districts to work with their teachers and unions to comprehensively reform and support the teaching profession.
  • Give Students Access to Successful Schools. The Budget provides over $500 million to School Turnaround Grants to help States and school districts turn around our Nation’s lowest performing schools and expand educational options by helping to grow effective charter schools and other autonomous public schools that achieve positive results.

Expand Access to College. To boost the number of college graduates, we need to make it easier for students to afford a postsecondary education and increase the number of students who complete their degree. The Administration has already taken significant strides to improve access to college. Today, nearly 10 million students receive Pell Grants, and more than 13 million students receive low-cost loans, with new affordable repayment options based on their income after leaving school. To help more young Americans go to college, the Budget will:

  • Keep College Affordable. Since 2008, the Administration has increased the maximum Pell Grant by $900, to $5,635 in 2013, ensuring access to postsecondary education for nearly 10 million needy students. The Budget continues that commitment to Pell and provides the necessary resources to sustain the maximum award through the 2014-15 award year. In addition, the Budget proposes a one-year measure to prevent student loan interest rates from doubling this summer and increases funding for work-study jobs. To address rising costs of higher education, the Budget also supports a new Race to the Top for College Affordability and Completion program and reforms to federal campus-based aid programs.
  • Help Students and Their Families Pay for College. The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 extended for two years the new American Opportunity Tax Credit (AOTC) -- a partially refundable tax credit worth up to $10,000 per student over four years of college. AOTC helps more than 9 million students and their families afford the cost of college. The President’s Budget proposes to make it permanent.

Equip American Workers for Good-Paying Jobs Today and in the Future. In this increasingly interconnected global economy, it is important that we give American workers the capabilities and American businesses the tools to compete and win in the global economy. To improve the capabilities of our workforce and expand lifelong learning opportunities, the Budget will:

  •  Build the Skills of American Workers. The Budget includes a $12.5 billion Pathways Back to Work Fund, which will support summer and year-round jobs for low-income youth, and will help connect the long-term unemployed and low-income adults to subsidized employment and work-based training opportunities. To complement this short-run investment, the Budget continues to support a Workforce Innovation Fund that, paired with broader waiver authority, will encourage States, regions, and localities to break down barriers among programs, test new ideas, and replicate proven strategies for delivering better employment and education results in a more cost-effective way. The Budget also funds a new initiative designed to improve access to job training across the nation and provides $8 billion in the Departments of Education and Labor to support State and community college partnerships with businesses to build the skills of American workers.
  • Give Dislocated Workers the Help They Need to Find New Jobs. Nearly 7 million of the Americans who lost jobs in 2009 were displaced from jobs that are unlikely to come back, and those who do find reemployment, on average, suffer significant earnings losses. As part of the Administration’s effort to reform and modernize the nation’s job training system so that individuals can quickly gain the training they need for the jobs created as our economy evolves, the Budget proposes a universal core set of services where the focus is on helping all dislocated workers find new jobs.
  • Prepare Young People for Jobs through a Reformed Career and Technical Education Program. The President’s Budget recommends reauthorization and reform of the Career and Technical Education (CTE) State Grant program, currently set to expire in 2013. The Administration’s $1.1 billion reauthorization proposal would restructure CTE to align what students learn in school with the demands of 21st Century jobs. The Budget also invests $1 billion through immediate job-creation measures to increase substantially the number of students enrolled in Career Academies, a particularly successful educational model for young people.
  • Reform Job Corps. The Administration strongly supports Job Corps, but believes the program could be more effective and efficient. The 2013 Budget launches a bold reform effort for Job Corps to improve program outcomes and strengthen accountability.

Preserve Affordable Rental Opportunities. The Budget proposes $19.1 billion for the Housing Choice Voucher program to help more than two million extremely low- to low-income families with rental assistance live in decent housing in neighborhoods of their choice. The Budget funds all existing mainstream vouchers and provides new vouchers targeted to homeless veterans. The Administration remains committed to working with the Congress to improve the management and budgeting for the Housing Choice Voucher program, including reducing inefficiencies, and re-allocating Public Housing Authorities’ Housing Voucher reserves based on need and performance. This year, the Administration extended the $15 billion Treasury Housing Finance Agencies Initiative that helped support development of more than 25,000 affordable rental properties over the past 2 years. The Budget also provides: (1) $8.7 billion for Project-Based Rental Assistance to preserve approximately 1.2 million affordable units through funding for contracts with private owners of multifamily properties; and (2) a total of $6.6 billion for the Public Housing program, which provides decent, safe, and sanitary housing to 1.1 million extremely low- to low-income families. In addition, the Budget proposes $1 billion in mandatory funding to finance the development, rehabilitation, and preservation of affordable housing for extremely low-income families through the Housing Trust Fund.

Promote Affordable Homeownership. The Administration projects that the Federal Housing Administration (FHA) will insure $149 billion in mortgage borrowing in 2013, supporting new home purchases and re-financed mortgages that significantly reduce borrower payments. FHA financing was used by 37 percent of all homebuyers and 60 percent of African American homebuyers and 59 percent of Hispanic families who purchased homes in 2010. It also is a vital financing source for first-time homeowners, 56 percent of whom used FHA insured financing in 2009 and 2010. In addition, 92 state and local housing finance agencies utilized Treasury’s $15 billion Housing Finance Agencies Initiative to provide mortgages in low and moderate income communities for creditworthy homebuyers, with an average home purchase price of $110,000.

Support Responsible Homeowners and Help Them Stay in Their Homes: The President has put forward a legislative plan to support responsible homeowners by making millions more eligible for streamlined refinancing, which can save hundreds of dollars a month. In addition, the President has expanded efforts to help families avoid foreclosure by making 12-month forbearance for unemployed borrowers an industry standard and expanding eligibility for the Home Affordable Modification Program (HAMP). The Budget also includes $141 million for housing and homeowner counseling through HUD and the Neighborhood Reinvestment Corporation (NeighborWorks). Over half of these funds are dedicated to foreclosure assistance. NeighborWorks’ National foreclosure Mitigation Counseling program has assisted over 1 million households since its inception in 2008.

Help States Provide Paid Family Leave to Workers. Too many families must make the painful choice between the care of their families and a paycheck they desperately need. The Family and Medical Leave Act allows workers to take job-protected unpaid time off, but millions of families can’t afford to use unpaid leave. A handful of States have enacted policies to offer paid family leave, but more States should have the chance. The Budget supports a $5 million State Paid Leave Fund within the Department of Labor that will provide technical assistance and support to States that want to establish paid-leave programs.

Extend Expanded Tax Cuts for Lower-Income Families. The Budget permanently extends expansions of the Child Tax Credit and the Earned Income Tax Credit that were passed in the Recovery Act and continued as part of the bipartisan Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act that the President negotiated and signed into law in December 2010. The expanded refundability of the Child Tax Credit provides a larger credit to 11.8 million families with 21.3 million children. The expansion of the Earned Income Tax Credit is worth up to $655 for families with three or more children, benefitting 5.8 million families with 12.5 million children.

Prevent Hunger and Improve Nutrition. At a time of continued need, the Budget provides full funding to support the 9.1 million individuals expected to participate in the Special Supplemental Nutrition Program for Women Infants and Children (WIC) program, which is critical to the health of pregnant women, new mothers, and their infants. The Budget also supports continued implementation of the Healthy, Hunger-Free Kids Act of 2010, which is strengthening the child nutrition programs and increasing children's access to healthy meals and snacks. In addition, the Budget re-proposes to extend certain temporary Supplemental Nutrition Assistance Program (SNAP) benefits. SNAP is the cornerstone of our Nation’s food assistance safety net and touches the lives of millions of Americans, half of them children. Finally, in order to combat food deserts, the Departments of Agriculture, Health and Human Services, and Treasury have partnered to make available approximately $400 million in financing to community development financial institutions, other nonprofits, public agencies, and businesses with sound strategies for addressing the healthy food needs of underserved communities.

Support Prisoner Re-entry Programs. The Budget provides $831 million for Department Justice prisoner re-entry programs, including $80 million for grant assistance under the Second Chance Act and $21 million for residential substance abuse treatment programs in State and local prisons and jails. In addition, the Budget provides $85 million for Department of Labor programs that provide employment-centered services to adult and youth ex-offenders and at-risk youth. These programs reduce recidivism by providing counseling, job training, drug treatment, and other transitional assistance to former prisoners as they reintegrate into the job market and community life.

Continue Construction of National Museum of African American History and Culture. The Budget proposes $85 million this year to continue construction of the Smithsonian Institution’s National Museum of African American History and Culture on the National Mall in Washington, D.C. Federal funding will be matched one-for-one by private donations. The museum, which was established by a bipartisan Act of Congress in 2003, will open in 2015 to coincide with the 150th anniversary of the end of the Civil War, the 150th anniversary of the 13th amendment which abolished slavery, and the 50th anniversary of the Voting Rights Act.

Revitalize Distressed Urban Neighborhoods. The Budget reflects an integrated and performance-driven approach to distressed urban neighborhoods, where the challenges tied to jobs, education, public safety, and other needs intersect and compound each other. The Budget provides $150 million for the Choice Neighborhoods initiative to continue transformative investments in high-poverty neighborhoods where distressed HUD-assisted public and privately owned housing is located, a $30 million increase from 2012 enacted level. The Budget will provide grants that primarily fund the preservation, rehabilitation and transformation of HUD-assisted public and privately-owned multifamily housing, and will also engage local governments, nonprofits, and for-profit developers in partnerships to improve surrounding communities The Budget also maintains funding for the Department of Labor’s YouthBuild program, which helps low-income young people ages 16-24 finish high school and learn job skills by building affordable housing in their communities. Additionally, it provides $100 million in dedicated support for Promise Neighborhoods, modeled after the Harlem Children’s Zone, which aims to improve college-going rates by combining a rigorous K-12 education with a continuum of effective family and community services in an entire neighborhood. In addition, the Budget includes $15 billion for Project Rebuild, which invests in proven strategies that leverage private capital and expertise to rehabilitate hundreds of thousands of properties in communities across the country.

Invest in Regional and Community Planning Efforts for Sustainable Development. The Budget continues to support the multi-agency Partnership for Sustainable Communities, which aims to lower the cost of living while improving the quality of life for families and is one of the pillars of the Administration’s place-based agenda. The Budget provides HUD $100 million to create incentives for more communities to develop comprehensive regional and local housing and transportation plans that result in sustainable development, reduced greenhouse gas emissions, and increased transit-accessible housing. As a part of this effort, up to $3 million will be used to improve energy efficiency in HUD-assisted public and privately-owned housing through better energy use data collection and analysis. HUD’s funds are used in combination with DOT’s funding for strengthening State and local infrastructure capacity and EPA’s technical assistance. The Budget also provides $4 billion for DOT's Livable Communities program, which will focus resources on place-based planning, policies, and investments to help communities increase transportation choices and access to transportation services.