EYE ON BUSINESS: Making sense of the president’s policies
Making sense of the president’s policies
BY ERNEST FOUNTAIN
CEO of New Ventures Capital Development, Las Vegas
The truth behind the Obama administration’s effect on black business interests.
We hear it all the time: President Obama has been blocked from doing anything for our people. But is it true? The facts suggest that the administration’s own policies have had a negative effect on the black community overall — and black businesses in particular.
Case in point: the president’s economic stimulus plan. Approved by a Democratic-controlled Congress, that $787 billion package contained no requirements for minority participation. After all of the money was spent, blacks received less than 1.4% of the funding.
Though the stimulus provided additional funding for the Small Business Administration, the Economic Development Administration and certain divisions of the Commerce Department, the only federal agency specifically created to assist minority firms — the Minority Business Development Agency (MBDA) — did not receive a penny. That agency’s $30 million budget has not increased at all since President Obama moved into the White House. In fact, its budget was $60 million under the Reagan Administration and was first subjected to deep cuts under President Clinton.
When President Obama appointed David Hinson as national director of the MBDA in February 2009, his first directive to the 40 centers funded by the agency (which provides ongoing management and technical assistance to minorities) was to provide services only to minority firms that generate over $1 million in revenue. The problem is, out of 4.2 million minority firms in existence at the time, only 170,000 generated $500,000 in total revenue — representing only 3% of total minority firms. The firms that generate $1 million represent only 1%. Why ignore the 99% and provide services to the businesses that do not need the agency’s help in the first place?
And what do other communities get from the administration? On Oct. 14, 2009, President Obama signed Executive Order 13515 — reestablishing the White House Initiative on Asian Americans and Pacific Islanders, which works to improve the quality of life and opportunities for that demographic by facilitating increased access to and participation in federal programs where they remain underserved. The initiative also works with the Native Hawaiian community. In July 2012, the president signed an executive order to establish the White House Initiative on Educational Excellence for African Americans.
Look at the difference between the two: The AAPI deals with economics and federal contracting, while the African-American community gets so-called improvements to education. Big difference!
Currently, there are 105 historically black colleges and universities in the United States — public and private, two-year and four-year institutions, medical schools and community colleges. They educate about 374,000 students, including white students. The enrollment is declining at these schools because in 2011, the PLUS loans disqualified borrowers with unpaid debts that had been referred to collection agencies over the past five years. Black colleges have lost over $500 million in revenue and their enrollment has declined by 25% since this policy change.
Then there’s this: In 2014, the administration provided over $171 million to colleges and universities to increase minority enrollment. Only $3.5 million was awarded to a total of three historically black colleges.