The White House announced Friday (September 25) that Trump is using a “pocket rescission,” the controversial tactic of submitting a request to cancel previously approved federal funding just days before the money is set to expire. Under federal law, the president can temporarily withhold funds while Congress considers a rescission request for up to 45 days. Because the fiscal year ends September 30, the funds could effectively expire before Congress takes action, according to CNN.
The package includes a $10 million cut to the Minority Business Development Agency, or MBDA, which helps minority-owned businesses access capital, contracts, and markets.
The $10 million represents 20% of the $50 million Congress approved for MBDA for fiscal year 2026. MBDA reported that its programs helped minority-owned businesses access $1.5 billion in capital and more than $2.6 billion in contracts during fiscal year 2024.
Small Business Majority, a small-business advocacy organization, said the proposed cut would further reduce resources available to entrepreneurs. The group has highlighted MBDA’s role in connecting small-business owners with community lenders, Community Development Financial Institutions and other business-development resources.
The Trump administration argues that MBDA funding is unconstitutional because its grant programs direct money based on the race of business owners. The White House cited a 2024 federal court ruling that found the agency’s presumption of social disadvantage based on race or ethnicity unconstitutional.
The package also targets $56 million in Housing and Urban Development funding for housing counseling programs. The White House identified grants to the National Urban League, which works to advance civil rights and economic opportunity for Black Americans, among the funding it wants to rescind.
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