The details: President's plan, including Small Business Investment Company Program, will bring jobs and capitol to rural areas; "Good bang for the taxpayer buck," says SBA Administrator Karen Mills...As his Administration struggles with a stubborn national unemployment rate that has remained above 9% for months, President Obama will today unveil new, multi-million dollar measures to boost rural job creation and revamp communities during his Rural Economic Forum in Peosta, Iowa, according to Agriculture Secretary Tom Vilsack and Small Business Administrator Karen Mills. (Above: The President speaking in Decorah, Iowa, on Monday evening, during his second town hall)
"This is a historic commitment," Vilsack said. "Ninety percent of persistent poverty is in rural America, and it is also responsible for our food, fuel, and fiber."
Vilsack and Mills are traveling with the President on his shiny black tour bus, and will participate in breakout sessions with him at today's Forum, which will bring together invited farmers, small business owners, private sector leaders, rural organizations, and government officials. During a conference call on Monday, Vilsack and Mills described the series of new programs under which the White House will bring federal funding and private sector investment capitol into rural America to boost investment in small businesses; expand the ability for citizens to find jobs and training services; and increase rural access to health care workers and technology.
There will be a focus on attracting cutting-edge businesses, such as renewable fuels and hi-tech entrepreneurs, to rural America, they said. The plans build off the findings in a Report issued last week by the White House Rural Council, "Jobs And Economic Security For Rural America." Vilsack and Mills only briefly discussed the impact of the new funding on agriculture, but promised more for Tuesday.
"We are going to double our current rate of investments in rural businesses over the next five years," said Mills, noting that half of people in rural areas work in small businesses, and 2 out of 3 private sector jobs are in small business.
"We can do this with our existing authority and existing funds, so it will have zero additional cost to taxpayers," Mills added. "It's pretty good bang for the taxpayer buck."
Download the White House Rural Council Report here; PDF.
The New Initiatives from the White House
1. Helping Rural Small Businesses Access Capital*Doubling SBA Investment Funds for Rural Small Businesses over the Next 5 Years: As part of the Startup America Initiative, SBA recently announced the creation of a $1 billion Impact Investment Fund through its Small Business Investment Company (SBIC) Program. The Impact Fund will invest in distressed areas as well as in emerging sectors such as clean energy. SBA provides up to a 2:1 match to private capital raised by this fund, partnering with private investors to target “impact” investments. SBA and USDA will partner together to drive $350 million of investment capital through the Impact Fund and existing SBICs into rural small businesses over the next five years, doubling the current rate of investment.
*Connecting Rural Small Businesses with Private Investment Capital: To further achieve this goal, SBA and USDA will launch a series of Rural Private Equity and Venture Capital conferences nationwide to provide a platform for connecting private equity and venture capital investors with rural start-ups. USDA, SBA, Treasury, Interior and other relevant agencies will also create rural capital “marketing teams” that pitch federal funding opportunities to private investors. These “marketing teams” will leverage existing personnel with expertise about rural funding sources across all federal departments and agencies.
2. Expanding Rural Job Search and Training Services
*Expanding DOL Job Search and Training Services to 2,800 USDA Sites Nationwide: USDA and DOL will partner to increase access to existing job search and training information for rural job-seekers by providing DOL employment information at 2,800 USDA field offices nationwide. This will significantly reduce the distance that rural Americans need to travel in order to access DOL job search employment information.
3. Increasing Rural Access to Health Care Workers and Technology
*Increasing Physician Recruitment at Critical Access Hospitals: HHS will issue guidance to expand eligibility for the National Health Service Corps loan repayment program so that Critical Access Hospitals (those with 25 beds or fewer) can use these loans to recruit new physicians. This program will help more than 1,300 CAHs across the country recruit needed staff. The addition of one primary care physician in a rural community generates approximately $1.5 million in annual revenue and creates 23 jobs annually. The average CAH creates 107 jobs and generates $4.8 million in payroll annually.
*Expanding Health Information Technology (IT) in Rural America: USDA and HHS will sign an agreement linking rural hospitals and clinicians to existing capital loan programs that enable them to purchase software and hardware needed to implement health information technology (HIT). Under current conditions, rural health care providers face challenges in harnessing the benefits of HIT due to limited access to capital and workforce challenges. Rural hospitals tend to have lower financial operating margins and limited capital to make the investments needed to purchase hardware, software and other equipment.
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