Trump’s budget would cut funding for Appalachia — and his allies in coal country are livid

During the campaign, Donald Trump billed himself as the “last shot” for coal country. He alone could save regions like Appalachia that had long suffered from poverty and dwindling coal jobs. And voters in West Virginia and eastern Kentucky believed him — choosing Trump over Hillary Clinton by wide, wide margins.

So it’s striking that President Trump’s first budget proposal would slash and burn several key programs aimed at promoting economic development in coal regions — most notably, the Appalachian Regional Commission and the Economic Development Administration. In recent years, these programs have focused on aiding communities that have been left behind as mining jobs vanished.

Even some of Trump’s staunchest allies were livid at the proposed cuts. “I am disappointed that many of the reductions and eliminations proposed in the President’s skinny budget are draconian, careless and counterproductive,” said Rep. Hal Rogers, a senior House Republican from a key coal-mining district in southeastern Kentucky.

So what gives? It’s possible Trump just didn’t put much thought into these reductions — and didn’t realize (or didn’t care) that he was backhanding his biggest supporters. Or it’s possible Trump genuinely believes he’s going to bring back coal jobs in Appalachia, as he’s promised, and hence figured there’s no need for all those other government programs.

Except Trump can’t bring back all the mining jobs that have disappeared over the past 30 years — it’s just not feasible. That’s a promise he won’t keep. And now he’s cutting the region’s safety net, too.

Trump wants to kill two big programs aimed at helping coal country

First, Trump’s proposing to eliminate the Appalachian Regional Commission (ARC), an independent agency set up in 1965 “to address the persistent poverty and growing economic despair of the Appalachian Region.” Since October 2015, the ARC has invested $175.7 million in 662 projects around the region, with a disproportionate focus on “distressed” counties and coal towns. In some places, that means new highways or broadband infrastructure. In others, it means grants to help former coal communities develop, say, outdoor recreation industries instead.

(Appalachian Regional Commission)

A government review estimated that, last year, the ARC created or saved at least 23,000 jobs and provided 25,500 households with infrastructure services such as water or broadband. There have been criticisms of the program over the years — it’s odd to have a standalone agency for this one region, and the ARC often focuses on bigger towns and neglects rural areas — but it’s also broadly popular with Democrats and Republicans alike in Appalachia.

Second, Trump is proposing to zero out the Economic Development Administration (EDA), which sits within the Commerce Department and provides about $250 million per year in grants to support economic growth in certain regions. During the Obama years, the EDA began devoting a sizable portion of that money to coal communities around the country that were suffering economically as cheap natural gas and new air pollution rules shriveled the coal industry. (The EDA also supports non-coal communities, providing trade adjustment assistance and other services.)

It’s unclear if the White House conferred with coal-state politicians before proposing these cuts. Rogers, who helped double the ARC’s budget as chair of the House Appropriations Committee from 2011 to 2016, was absolutely scathing in response:

While we have a responsibility to reduce our federal deficit, I am disappointed that many of the reductions and eliminations proposed in the President’s skinny budget are draconian, careless and counterproductive.

In particular, the Appalachian Regional Commission (ARC) has a long-standing history of bipartisan support in Congress because of its proven ability to help reduce poverty rates and extend basic necessities to communities across the Appalachian region. Today, nearly everyone in the region has access to clean water and sewer, the workforce is diversifying, educational opportunities are improving and rural technology is finally advancing to 21st Century standards. But there is more work to be done in these communities, and I will continue to advocate for sufficient funding for ARC and similar programs, like the Economic Development Administration.

Sen. Joe Manchin of West Virginia, one of the few Democrats who tends to side with Trump on various issues, told constituents at a town hall on Thursday that he was not happy with these cuts, either.

Meanwhile, Mitch McConnell, the Republican Senate majority leader who hails from Kentucky, has stayed silent so far. In the past, McConnell has vocally opposed efforts by his colleagues to defund the ARC — though he has supported reforms to the program. On Thursday, all he would say was: “I look forward to reviewing this and the full budget when it is released later this spring.”

Groups on the ground in Appalachia say they’re also stunned by the proposal. “I’m not sure they talked to anyone in Appalachia before writing this budget,” says Thom Kay of Appalachian Voices, an advocacy group that works on environmental issues in the region. “It’s possible they were just looking for cuts wherever they could find them and didn’t realize what this meant.”

Indeed, in crafting its budget, the White House seemed to be taking its cues from the conservative Heritage Foundation, a think tank in Washington, DC, which has previously called for eliminating both programs. Among other things, Heritage argued that the ARC was unduly focused on just 13 states and was also unnecessary, given that the Department of Transportation already spends money on infrastructure. “If states and localities see the need for increased spending in these areas,” a Heritage report said, “they should be responsible for funding it.”

Trump’s budget may contain other bad news for coal country, too

Photo by Mario Tama/Getty Images

Trump’s budget outline had a few other tidbits that could well have a negative impact on coal regions, though we’ll likely have to wait for the full budget proposal in May to know for sure. Some highlights:

• Unlike President Obama’s final budget proposals, Trump’s outline doesn’t say anything about providing assistance for the thousands of retired coal miners in Appalachia who are at risk of losing their pensions and health care due to a string of (dodgy) industry bankruptcies. Back in December, Sen. Shelley Moore Capito (R-WV) explicitly begged Trump to address this looming crisis. In reply, he sent her a handwritten note saying “Great — I am all for the miners.” But there’s nothing in the budget.
• Meanwhile, Trump’s budget proposal “decreases Federal support for job training and employment service formula grants, shifting more responsibility for funding these services to States, localities, and employers.” That could potentially affect efforts in states like West Virginia and Kentucky to retrain laid-off coal miners, although we’ll need to see the full details on this.
• The proposal also eliminates federal Abandoned Mine Land grants, which it lumps in with “unnecessary, lower priority, or duplicative programs.” Last year, the federal budget included $90 million split between Pennsylvania, Kentucky, and West Virginia to turn abandoned mine sites throughout Appalachia into office parks, gardens, tourist attractions, and so on — a measure supported by many Republicans.
• Finally, the budget proposes scaling back the Department of Energy’s Fossil Energy Research and Development program, which has been working to help demonstrate carbon capture and sequestration for coal — a technology seen as a potential lifeline for the coal industry in a world concerned about global warming. However, there are scant details about how this program would be altered, so we’ll have to wait and see.

Trump is focused on saving coal country by repealing environmental rules — but that’s not enough

For now, the only thing Trump is proactively doing to help coal communities is pushing to repeal a bunch of Obama-era environmental rules, including the Clean Power Plan and a rule barring coal companies from dumping their waste in streams.

One problem is that this won’t be nearly enough to reverse the massive decline in coal employment over the past 30 years. The US coal industry has lost more than 30,000 mining jobs since 2009 — and is down to just 50,000 today. Repealing the stream protection rule, by contrast, is estimated to save about 124 jobs per year. Total.

(Federal Reserve Bank of St. Louis)

The real reasons for coal’s long-term job losses are complex, but analysts typically point to three big factors: 1) Mining has become increasingly automated, meaning fewer jobs per ton of coal produced; 2) a glut of cheap natural gas from fracking has cut into coal’s market share, leading to a sharp drop in US coal production since 2008; 3) various Obama-era environmental rules have made it more costly to operate coal plants, which has pushed many utilities to switch to natural gas or renewables.

Trump has promised to attack #3 and repeal some Obama-era environmental rules. But he has nothing to say about automation or cheap natural gas. (On the contrary, he’s promised to expand US fracking, which would further hurt coal.) So anyone hoping Trump is “going to bring those miners back,” as he’s pledged, and restore coal to its glory days is in for disappointment. At best, scrapping Obama’s climate rules might bring back a fraction of lost jobs. But no analysts think Trump can bring them all back.

Both Obama and Hillary Clinton looked at this same situation and decided that coal’s decline was basically irreversible. Indeed, coal would need to decline much further and much faster if we wanted to halt climate change. So, to soften the blow, Clinton proposed a $30 billion program to help mining communities in West Virginia, Kentucky, and elsewhere to deal with the loss of coal jobs — a plan focused on job training and small-business development.

That’s not necessarily the only way to help places like Appalachia. The federal government's track record on job retraining is pretty dismal, after all. And it’s possible that someone devoted to the problem could come up with better ideas than Clinton’s. (Conservative economist Lyman Stone has some thoughts on these lines, which include investing in things like universities and national labs in the region.)

But Trump isn’t proposing alternatives. At this point, his main idea for coal country is to make unrealistic promises about jobs — and then cut the few federal programs intended to aid the region when the jobs don’t materialize.

Further reading

• Trump is making promises on coal jobs that he can’t possibly keep.
• My colleague Jeff Stein nicely explained the issue with 12,000 miners possibly losing their pensions and health care. Note that Mitch McConnell has been holding up a bill to address this issue, possibly because of a long-standing feud with the main mining union, the United Mine Workers of America.
• Why Trump killed a rule restricting coal companies from dumping waste in streams.