Senator Warner Claims OMB Directed CDFI Layoffs
Senator Mark Warner, a Democrat from Virginia and co-chair of the Community Development Finance Institutions (CDFI) caucus in Congress, has expressed his belief that the order to lay off the entire staff of the Community Development Financial Institution Fund came from the Office of Management and Budget (OMB). This revelation follows the recent issuance of reduction-in-force notices from the Treasury Department, where the CDFI Fund is housed.
The notices stated, “The [Reduction in Force] is necessary to implement the abolishment of the Community Development Financial Institutions (CDFI) which is based upon the Department of Treasury determination that its programs, projects, and activities do not align with the President’s priorities.” However, Warner contends that the decision was not made by the Treasury but instead directed by the OMB.
OMB’s Role in the Dissolution of the CDFI Program
Warner’s claim that the OMB directed the layoffs is based on his belief that the OMB is behind the apparent dissolution of the CDFI program. The Treasury Department had previously informed the OMB that all programs under the CDFI are statutorily mandated, theoretically safeguarding them from cuts. Despite this protection, Warner believes the OMB overstepped its boundaries.
“We think this directive came from OMB,” Warner said. “The idea that an OMB director can just unilaterally lay off its entire staff seems to me to go completely against the law and the purpose of the law.”
Furthermore, Warner shared that his belief in the OMB’s involvement was reinforced by interactions between his staff, the Treasury, and the OMB during his efforts to secure the release of CDFI funds. “I felt along the way as we were trying to get some of the CDFI Funds released — because, again, this is one of the areas that OMB had targeted — we were operating under the premise that Treasury was supportive,” Warner said. “I’ve not seen the RIF notice per se, but you can’t simply dismantle a program that is in law by statute.”
The Fate of the CDFI Fund
Since the start of the current administration, the CDFI Fund has been a prime target for the White House and the OMB. An executive order was issued in February, dissolving the program to the extent that it is not statutorily mandated.
In response, the Treasury Department sent a note to the OMB in March, affirming that all the CDFI’s programs are statutorily mandated. Despite this, the OMB has not apportioned funds that would typically be awarded to CDFIs.
Warner expressed his frustration with the situation, stating, “Either some folks at OMB are ignorant of the law, or just consciously negligent.” The Senator’s next step is to pressure the Treasury to reinstate the fired workers. The efficacy of this pressure, however, will largely depend on the level of Republican support he can garner for this cause.
The outcome of this fight is indicative of how far the White House and the OMB are willing to go in shutting down programs that are statutorily mandated by Congress. It serves as a test case for the balance of power between the executive branch and the legislative branch, and the ability of the latter to protect programs it has enacted into law.
Source: Here
