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Congress Cuts MEP Funding

January 1, 2004
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Washington-Congressional appropriators gutted a federal program that serves America's small manufacturers, despite the support of more than 300 members of Congress.

A bipartisan Congressional group conducted a letter writing campaign to the CJS Subcommittee leadership calling for funding to be set at $110 million. Supporters say the MEP program is a way to combat the decline in U.S. manufacturing, which has lost 2.5 million manufacturing jobs since the beginning of 2001.

Instead Congress has approved $39.6 million in funding for the Manufacturing Extension Partnership (MEP) this year, a 63% cut from the current funding level. For fiscal year 2003, Congress provided MEP with $106.6 million. The cut to MEP came during last-minute wrangling over a final Omnibus Appropriations bill that would provide about $700 billion for up to 12 federal departments.

"This is the wrong thing to do, especially now as our economy is struggling to get back on track. Now is the time to build MEP, not cut it. Without MEP assistance, even more of our small manufacturers are going to have trouble competing," says Dick Munson, director of the Northeast Midwest Institute (Washington, D.C.).

MEP assists small manufacturers and helps boost their productivity, sales, employment and investment in modernization. As a federal-state-

private partnership, MEP supports a national network of more than 60 centers with 400 locations across the country and Puerto Rico providing technical assistance and business support services to small manufacturers. These not-for-profit centers employ more than 1,800 professionals who work with manufacturers to help them adopt and use the latest and most efficient technologies, processes and business practices.

MEP clients report impressive improvements as a direct result of MEP assistance, according to the Northeast Midwest Institute. For fiscal year 2001, clients reported $2.19 billion in new or retained sales, $441.5 million in cost savings, $680.5 million in new investment in modernization and the retention and creation of more than 24,400 jobs. With only a third of its funding, MEP Centers will be able to help fewer manufacturers and these annual impacts will decline.

A September 2003 review by the National Academy of Public Administration determined: "The MEP program ... is the only federal program designed specifically to help small manufacturers, and positioned to help create an infrastructure for providing support to these firms as the U.S. economy moves through enormous economic transition."

"This just doesn't make any sense. Congress and the president say they want to help manufacturers, and then they gut the one program that helps our small manufacturers. And all of them agree that it's a highly effective program." says Mike Wojcicki, president of the Modernization Forum, the trade association for the MEP centers. "I think we're hearing a lot of campaign rhetoric and hollow promises."

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