WASHINGTON — The Biden administration has proposed increased funding for government agencies involved in combating illicit finance, Small Business Administration programs that support private sector lending, affordable housing funded by financial institutions for community development, and community development efforts Combating climate change and its risks are entrusted to Posen for the financial system.
The White House’s proposed budget totaling $5.8 trillion for fiscal 2023, released Monday, reflects this many of the core priorities from the budget proposal of the previous year by the administration. The task of approving the funds ultimately falls to Congress.
In a statement, Treasury Secretary Janet Yellen said the US’ “rapid” economic recovery from the COVID-19 pandemic last year “enables us to look beyond the crisis created by the pandemic and provide a roadmap to address future challenges: the Create a tax system that is fair to working families, expand access to capital in disadvantaged communities, and protect the financial system.”
While the US continues to expand its sanctions regime against RussiaThe White House budget includes an allocation of $210 million for the Treasury Department’s Financial Crimes Enforcement Network — $83 million more than what Congress approved in 2021. The Office of Terrorism and Financial Intelligence, another Treasury Department branch, would be allocated $212 million from the White House, up $37 million from 2021.
Fincen needs more funding to adequately enforce new anti-money laundering legislation enacted last year, former acting director Michael Mosier told the Senate Banking Committee earlier this month. Fincen and the Treasury Department’s Office of Foreign Assets Control also need the additional resources to keep up with the rapidly evolving use of cryptocurrencies for illicit activities.
The funds would primarily be spent on additional staff and technology, according to Mosier, who is now a senior advisor in the financial crime and digital assets practice at consulting firm Oliver Wyman.
“Give them resources for their current job before burdening them and the industry with more unfunded mandates,” Mosier urged committee members at a March 17 hearing on digital assets and illicit funding.
On Monday, the White House requested an additional $293 million to “rebuild institutional capacity and strengthen the role of the Treasury Department’s policy offices,” according to the department’s comment on the budget. The Trump administration has slashed budgets, and with it the policy capabilities of some parts of the Treasury Department, most notably the Office of Financial Research, which is tasked with alerting policymakers to emerging threats to the financial system.
The budget plan also includes $215 million to protect against cyberattacks targeting the Treasury Department’s own data and systems.
For the Small Business Administration, the fiscal 2023 budget approves borrowings and investments totaling $71.5 billion — a 15% increase from fiscal 2022. The largest increase, $5 billion, will go to the flagship -Assigned to the Agency’s Loan Guarantee Program 7(a), which would be eligible to guarantee US$35 billion in loans. The budget would also boost 504, the SBA’s second-largest program, allocating $9 billion for regular 504 loans, up from $7.5 billion in fiscal 2022, and $7.5 billion for the refinance program for commercial real estate.
In addition, the budget would expand SBA’s aftermarket warranty program and support total sales of $15 billion, up from $13 billion in fiscal 2022.
Elsewhere, the budget proposes $5 billion in long-term mandatory funding for community development financial institutions, institutions that operate primarily in low-income areas, to create new affordable housing. This includes both rental and sales units.
Additionally, the budget would allocate $331 million to the Treasury Department’s CDFI fund — a 23% increase from the current fiscal year.
The budget also includes some funding to meet the Biden administration’s climate finance goals, with a $1.6 billion contribution to the Green Climate Fund and a $3.2 billion loan to the Clean Technology Fund . The two entities are multilateral funds aimed at helping developing countries make the clean energy transition and promoting international cooperation on climate change.
In total, the budget includes more than 11 billion US dollars in international climate finance.
There would be additional funding for the Treasury Department’s “Climate Center,” an initiative led by John Morton, a former adviser to the Obama administration, that focuses on aligning the regulatory agenda with climate risks to the financial system.
John Reosti and Kyle Campbell contributed to this article.