Racial economic equity – biden vision
THE BIDEN PLAN TO BUILD BACK BETTER BY ADVANCING RACIAL EQUITY ACROSS THE AMERICAN ECONOMY
Joe Biden’s jobs and economic recovery agenda is built on the proposition that we must build our economy back better than it was before the COVID-19 crisis.
https://joebiden.com/racial-economic-equity/
Over the last month, Biden has been laying out his vision for a stronger, resilient, and inclusive economy. He believes in an economy where every American enjoys a fair return for their work and an equal chance to get ahead. An economy more vibrant and more powerful precisely because everybody will be included in the deal. An economy where Black, Latino, Asian American and Pacific Islander (AAPI), and Native American workers and families are finally welcomed as full participants.
Today, multiple, overlapping crises reinforce how far we have to go to deliver on that vision. The pandemic has shone a bright light on racial disparities in health and health care — as Black and Brown Americans have suffered and died from the coronavirus at rates far higher than white Americans. The economic crisis has hit Black and Brown communities especially hard, with Black unemployment at 15.4 percent, Latino unemployment at 14.5 percent, and businesses owned by Black, Latino, and Asian American people closing down at alarming rates. We are also seeing a national reckoning on racial justice and the tragic human costs of systemic racism in the murder of George Floyd and so many other Black men, women, and children. And through it all, the climate crisis mounts, with air and water pollution, superstorms and extreme weather, disproportionately impacting Black and Brown communities.
Biden believes we cannot build back better without a major mobilization of effort and resources to address these challenges and to advance racial equity across the American economy. That is why racial equity is a distinct pillar of his Build Back Better plan, as well as incorporated in each of the other pillars. Biden will remove barriers to participation in our economy, expand access to opportunity, and fully enforce the policies and laws that we already have on the books — and the pledges Biden has made in this campaign.
In laying out his Build Back Better agenda, Biden has announced bold investments — in infrastructure, innovation, manufacturing, education, housing, clean energy, federal procurement, and small businesses. Today, as the fourth pillar of the Build Back Better Agenda, he is announcing how he will direct many of these investments to advance racial equity as part of our nation’s economic recovery.
Specifically, Biden will:
Spur Public-Private Investment through a New Small Business Opportunity Plan
Reform Opportunity Zones to Fulfill Their Promise
Make a Historic Commitment to Equalizing Federal Procurement
Ensure His Housing Plan Makes Bold Investments in Homeownership and Access to Affordable Housing for Black, Brown, and Native Families
Achieve Equity in Management, Training, and Higher Education Opportunities Connected to the Jobs of the Future
Boost Retirement Security and Financial Wealth for Black, Brown, and Native Families
Ensure Workers of Color Are Compensated Fairly and Treated With Dignity
Ensure Equity in Biden’s Bold Infrastructure and Clean Energy Investments
Support Second Chances for Economic Success
Strengthen the Federal Reserve’s Focus on Racial Economic Gaps
Promote Diversity and Accountability in Leadership Across Key Positions in All Federal Agencies
Build a 21st Century Care Infrastructure
Address Longstanding Inequities in Agriculture
SPUR PUBLIC-PRIVATE INVESTMENT THROUGH A NEW SMALL BUSINESS OPPORTUNITY PLAN
Small business ownership is one of our country’s cornerstones for wealth building and job creation. However, persistent racial disparities in wealth and access to capital, combined with outright discrimination in the financial sector, have contributed to inequities in small business ownership, growth, and success. To address the racial wealth gap, the opportunity gap, and the jobs gap for Black and Brown people, Biden will launch a historic effort to empower small business creation and expansion in economically disadvantaged areas – and particularly for Black-, Latino-, AAPI-, and Native American-owned businesses. In addition to providing small businesses with an ambitious “restart package” to survive the current crisis and come out the other side strong, he is launching a special, ongoing initiative to empower these entrepreneurs to succeed and grow with a three-prong Small Business Opportunity Plan. His plan is consistent with key elements in the Jobs and Neighborhood Investment Act recently proposed by Democratic Senators Chuck Schumer, Mark Warner, Cory Booker, and Kamala Harris. Biden will:
Spur more than $50 billion in additional public-private venture capital to Black and Brown entrepreneurs by funding successful state and local investment initiatives and making permanent the highly effective New Markets Tax Credit.
Expand access to $100 billion in low-interest business loans by funding state, local, tribal and non-profit lending programs in Black and Brown communities and strengthening Community Development Financial Institutions (CDFIs), Minority Depository Institutions (MDIs), and the Community Reinvestment Act.
Eliminate barriers to technical assistance and advisory services by investing in a national network of cost-free business incubators and innovation hubs and intensive business seminars.
Collectively, Biden will leverage more than $150 billion in new capital and opportunities for small businesses that have been structurally excluded for generations. Biden will devote $30 billion (or 10%) of the $300 billion in innovation funding as part of his plan to ensure the future is “Made in All of America” to the Small Business Opportunity Fund to leverage private investment of $5 for each $1 of new public investment to reach this $150 billion. And, by empowering the financial institutions that support businesses owned by Black and Brown people, generating new capital, and providing robust technical assistance, Biden will unleash the full potential of small businesses and entrepreneurs.
Spur More than $50 Billion in New Equity Investment and Venture Capital for Entrepreneurs in Economically Disadvantaged Areas: Black and Brown entrepreneurs face unique barriers to obtaining the capital that they need to start and grow a business. For example, three-fourths of venture capital goes to just four cities – and far too little flows to businesses owned by Black and Brown people. To address this problem, Biden will:
Dramatically increase the availability of venture capital investments for small businesses, especially those owned by Black and Brown people. The Obama-Biden Administration’s State Small Business Credit Initiative (SSBCI) succeeded in expanding venture capital in states and areas too often left behind. More than 80% of venture capital supported by the SSBCI went to states that typically receive just 20% of private venture capital. Biden will expand those efforts by allocating $10 billion from the new Small Business Opportunity Fund to state and local venture capital programs that, based on past SSBCI investments, can spur $50 billion in new equity investment for small businesses. This new investment will be targeted to entrepreneurs who create jobs and growth in lower-income urban, tribal, and rural areas, with an emphasis on reaching businesses owned by Black and Brown people. This robust funding will help meet the goal Biden laid out in his “Made in All of America” initiative of venture capital and innovation investments benefiting all Americans across all of America.
Encourage private equity investment in businesses owned by Black and Brown people by expanding the New Markets Tax Credit (NMTC) to $5 billion yearly and making it permanent. The NMTC provides a credit of up to 40% for equity investment in small businesses that are pre-approved as benefiting low- and moderate-income areas. It is highly efficient: Every $1 of public funding leverages $8 of private investment. Through 2019, the NMTC supported $100 billion of investments in businesses and economic development projects to help revitalize disadvantaged communities. Expanding the NMTC will provide more investors the incentive to fund businesses owned by Black and Brown people. By increasing NMTC funding and making it permanent – together with the bold new venture funding in the Small Business Opportunity Fund – Biden will help ensure that more than $50 billion in additional venture and equity capital flows to small businesses and communities that have been held back due to systemic racism. And he will work to ensure that tribal projects benefit from the credit.
Leverage $100 Billion in Additional Financing for Small Businesses: In 2019, only 10% of funding from the Small Business Administration’s (SBA) major lending programs went to Black, Latino, and Native American entrepreneurs. Meanwhile, the Paycheck Protection Program has been rife with inequities: A recent “secret shopper” study by the National Community Reinvestment Coalition found that when Black small businesses applicants contacted a bank, nearly half the time, they were given inferior treatment to white applicants with nearly identical credit histories and business profiles. To address this problem, Biden will:
Expand lending through the expanded Small Business Opportunity Fund. Every $1 for state lending programs under the Obama-Biden SSBCI was proven to leverage anywhere from $5 to $23 of increased lending for small businesses through lending programs like capital access programs, revolving loan funds, and collateral assistance. Approximately 80% went to small businesses with 10 or fewer full-time employees. Biden will dramatically expand and broaden successful state, local, tribal, and non-profit programs that provide low-cost lending to minority small businesses and others serving underserved areas. In addition to supporting state initiatives for disadvantaged small businesses, Biden will also include an innovation fund that will allow coalitions of cities, CDFIs, or non-profits to seek funding to create or expand small business lending programs that disproportionately benefit small businesses owned by Black, Latino, AAPI, and Native American people and those serving low income communities.
Capitalize Community Development Financial Institutions. CDFIs are on the frontlines of the battle to close the racial wealth gap. Biden will seek to expand the role of CDFIs in underserved communities around the country by doubling their direct funding, making them a top vehicle for funding from the Small Business Opportunity Fund, and expanding their capacity to offer both micro-loans to small start-ups and larger loans to existing small businesses who have the capacity to grow. Biden will use the Small Business Opportunity Fund to strengthen CDFI stability and lend through targeted policies, such as those proposed in the Jobs and Neighborhood Investment Act. He will also ensure these investments direct increased resources to the Native American CDFI Assistance Program (NACA Program), which has proven a successful way to increase capital access across Indian Country.
Ensure all small business relief efforts are specifically designed to aid businesses owned by Black and Brown people. Trump’s team designed the PPP to allow the largest banks to give their most well-off clients “concierge” service at the front of the line while closing the door on Black-, Latino-, AAPI-, and Native American-owned businesses that did not have deep relationships with big banks. Biden will ensure from the start that any emergency small business relief plan that will still be needed in January 2021 will have clear provisions to ensure that true small businesses — especially those owned by Black and Brown people and those serving underserved rural, tribal, and urban areas — get the relief they need. He will reserve half of new small business relief — whether the PPP or future efforts — for small businesses with 50 employees or fewer, including microbusinesses and sole proprietorships, so the bigger and more well-connected aren’t able to win in a first-come, first-served race. Biden’s technical assistance programs — described below — will also involve “navigator” assistance for small — often minority-owned — businesses to ensure fair access to these programs.
Strengthen and expand the Community Reinvestment Act to ensure that our nation’s bank and non-bank financial services institutions are serving all communities. The Community Reinvestment Act currently regulates banks, but does little to ensure that “fintechs” and non-bank lenders are providing responsible access to all members of the community. On top of that gap, the Trump Administration is proposing to weaken the law by allowing lenders to receive a passing rating even if the lenders are excluding many neighborhoods and borrowers. Biden will expand the Community Reinvestment Act to apply to mortgage and insurance companies, add a requirement for financial services institutions to provide a statement outlining their commitment to the public interest, and, importantly, reverse new rules that allow these institutions to avoid lending and investing in all of the communities they serve.
Expanding Access to Additional Resources and Technical Assistance for Black and Brown Entrepreneurs: There are no limits or barriers to the talent and entrepreneurial spirit across our nation. Yet, for many, there are major limits to accessing the networks and professional services needed to succeed. For small businesses in underserved communities, this type of assistance is often unavailable or unaffordable, creating an additional barrier to opportunity. As President, Biden will launch an Expanding Entrepreneurship Initiative that provides all Americans, regardless of their background, with the resources and technical assistance they need to start and grow their own business. This initiative will:
https://joebiden.com/racial-economic-equity/