President Bush's 2006 budget proposal is a mixed bag for businesses
The plan calls for major cuts for a network of manufacturing assistance centers, but boosts funding for nano-manufacturing research and provides tax rebates for small companies that offer health savings accounts for employees.
The administration's $2.57 trillion budget generally holds flat or cuts spending for many domestic programs, as part of Bush's call to cut the deficit in half by 2009 while boosting spending on homeland security, military and foreign affairs.
The proposed budget would cut funding for the Manufacturing Extension Partnership from $109 million to $47 million. MEP is a network of centers providing consultants in areas such as boosting productivity.
The 59 MEP centers around the country are funded with federal and state money and user fees from companies, said Mike Coast, president of the Michigan Manufacturing Technology Center in Plymouth, Mich. He also is president of the American Small Manufacturers Coalition, a trade group representing the MEP network.
In three of the past four years, Bush has proposed large cuts to MEP, but Congress ultimately restored the funding. The Bush administration said its funding request for MEP ``reflects tough but necessary budget decisions that reflect national priorities and budget constraints.'' The administration said the centers could generate more revenue from services and maintain their network.
Coast said the tough budget climate this year could make it more difficult to restore funding. He said MEP is the ``only federally funded program out there focused on helping manufacturing become better.''
John Engler, president of the National Association of Manufacturers, said in an interview that NAM would work to restore funding for MEP and said MEP is important for small and medium-size companies because it helps them innovate.
In a Feb. 10 speech to the National Press Club in Washington, he also noted that federal spending on research and development has ``largely stagnated'' in recent years and should be increased.
The administration also proposed eliminating the Advanced Technology Program - which provides businesses research money for high-risk projects - in favor of ``higher-priority needs.''
In other areas, Bush proposed additional spending. His budget calls for a $20 million boost in some technical areas, such as measurement technology for nano-manufacturing and supporting international standards development so they do not become nontariff trade barriers for U.S. exports.
Broadly speaking, business groups both praised and criticized the budget.
The National Federation of Independent Businesses likes Bush's call for tax rebates for health savings accounts. The American Gas Association, on the other hand, said it was ``surprised'' that Bush called for eliminating federal funding for research on finding and producing natural gas, a key component of plastic resin.
The administration proposed a 5.6 percent cut in Environmental Protection Agency spending, while it essentially held flat spending on the Occupational Safety and Health Administration.
OSHA said the budget would allow it to conduct the same number of workplace safety inspections in 2006, while adding staff for voluntary compliance assistance.