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Letter to John Boehner, Speaker, U.S. House of Representatives, and Eric Cantor, Majority leader, U.S. House of Representatives

This week, Congresswoman Yvette D. Clarke sent a letter to Speaker of the House John Boehner and House Majority Leader Eric Cantor urging them to restore the $200 million cut from the Community Development Financial Institutions (CDFI) fund, reflected in H.R. 1, which funds the government through September 30, 2011.

"Cutting this program so drastically will cost 19,000 jobs nationwide, jobs we cannot afford to lose. I understand the need to begin reigning in our national debt, however, this cannot be done at the expense of good jobs," stated Congresswoman Yvette D. Clarke. "The primary focus of the 112th Congress should be to focus on President Obama call for our nation to out-innovate, out-educate, and out-build the rest of the world so that we can fully recovery from this economic downturn."

"While it is a hard fact to face, almost a decade of irresponsible tax policies, lax regulatory practices for big banks and fighting two wars overseas under the Bush Administration, turned our once record budget surpluses under the Clinton Administration, into record national debt. As opposed to cutting vital programs that strengthen small businesses, bolster our economy and help working class and disadvantage communities; let us stop implementing the antiquated policies from the Bush Administration. For example the cost of permanently extending the Bush era tax cuts for those who make 250,000 a year or more will cost us $700 billion over ten years," added Congresswoman Yvette D. Clarke.

"Restoring CDFI Funds will allow our small businesses to directly help restore our economy by giving them the access to capital they need for business development and job creation. As a Member of the House Small Business Committee, I understand that small businesses are the backbone of the economy and these funds play a vital role in ensuring that small businesses continue to pave the way toward full economic recovery," added Rep. Yvette D. Clarke.

Members of Congress who joined Rep. Yvette D. Clarke's letter include; Reps. Edolphus Towns; Eleanor Holmes Norton; Sam Farr; Luis Gutierrez; Sheila Jackson Lee; Elijah Cummings; Jesse L. Jackson Jr.; Danny K. Davis; Grace F. Napolitano; Steve Cohen; Emanuel Cleaver II; Marcia L. Fudge; Henry C. "Hank" Johnson; Andre Carson; Hansen Clarke; and Frederica Wilson.

The full text of the letter is as follows:

February 15, 2011

The Honorable John Boehner
Speaker, U.S. House of Representatives
Office of the Speaker
H-232, The Capitol
Washington, DC 20515

The Honorable Eric Cantor
Majority leader, U.S. House of Representatives
Office of the Majority Leader
H-329, The Capitol
Washington, DC 20515

Dear Speaker Boehner and Majority Leader Cantor:

We urge you to reconsider the $200 million cut over President Obama's FY '11 request, to the Community Development Financial Institutions Fund currently reflected in H.R. 1, the Full-Year Continuing Appropriations Act of 2011 (CR), which funds the government through September 30th, 2011. In assuming office, you both promised to focus on finding solutions to the issue of unemployment. If the proposal is pursued, unemployment will rise as families and small businesses in underserved communities, rural and urban, will be unable to access affordable credit.

The Community Dvelopment Financial Institutions Fund, which has a current private to public dollar ratio of 10:1, does not provide direct funding to individuals or projects. Their primary function is to offer financing and support services that build the capacity of Community Development Financial Institutions (CDFIs); institutions that specialize in serving low-income communities and individuals. These CDFI's, which include community devlopment banks, credit unions, and loan and venture capital funds, offer not only retail banking services and financing for small businesses and affordable housing projects, but also provide business planning, credit counseling and homebuyer education services.

The $200 million reduction in the CDFI Fund represents an 81.8% cut in their current operating budger, essentially reducing the Fund to 1997 levels. In FY '97, the CDFI Fund made 32 awards totaling $37 million; by comparison, in FY '10 the Fund made 179 awards totaling $104.8 million. The funding level reflected in the CR, should it be allowed to go forward, is projected to cost over 19,000 jobs, limit affordable housing by over 14,000 units, affect almost 3,200 small businesses that would otherwise not have the funding necessary to invest in their communities, and reduce private sector investment by $1.6 billion.

Economically disadvantaged communities already face a disproportionate challenge in obtaining access to credit and capital. Our economy will not fully recover until small businesses of all types are full participants in creating jobs and investing in their communities. This reduction of the CDFI Fund would put economically underserved communities at an even further disadvantage and potentially stymie our nation's economic recovery. At a time when the first priority of Congress is to promote job creation, severely cutting the CDFI Fund to the proposed levels would undercut the ability to create jobs and promote economic development.

We, the undersigned, urge you to consider the adverse economic impact on our country's economy during our fragile recovery and restore the CDFI Fund's funding to reflect President Obama's FY '11 budget request.

Yvette D. Clarke
Member of Congress

Edolphus Towns
Member of Congress

Marcia L. Fudge
Member of Congress

Jesse L. Jackson, Jr.
Member of Congress

Henry C. "Hank" Johnson
Member of Congress

Luis V. Guiterrez
Member of Congress

Andre Carson
Member of Congress

Eleanor Holmes-Norton
Member of Congress

Elijah E. Cummings
Member of Congress

Hansen Clarke
Member of Congress

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