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Left to right: Louis Green and U.S. Rep. Sheila Jackson Lee
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By Robert Stanton
Since 1969, the U.S. Department of Commerce Minority Business Department Agency has been a beacon of light for minority businesses nationwide, investing in contracts, capital and counseling that have yielded remarkable results.
When the agency was created in 1969 by President Richard M. Nixon, there were about 322,000 minority-owned firms in the United States. Today, there are about 5.8 million minority business enterprises that contribute $1 trillion to the nation’s economy, with average annual revenues of about $1.7 million.
Forty-eight years and eight presidents later, MBDA finds itself on the chopping block by the Trump administration, which maintains that the agency duplicates other programs carried out by the U.S. Small Business Administration in its Small Business Development Centers across the country.
The proposal to ax MBDA has sent supporters scrambling for ideas to save the agency, which has a $32 million budget.
‘Unconscionable’ proposal
“For nearly 50 years, the Minority Business Development Agency has led federal government efforts to provide focused support to our nation’s 5.8 million minority-owned firms,” said U.S. Rep. Sheila Jackson Lee (D-Texas). “These companies contribute to local economies and provide much-needed jobs for Americans of all backgrounds and cultures.
“It is unconscionable for the president to seek to eliminate the only federal program dedicated to advancing minority business enterprise,” she added. “Once again, this White House is demonstrating its utter disregard for the needs and concerns of the black and brown citizens of America. Irrespective of this wrong-minded approach, I will continue to fight to secure funding for the MBDA.”
The proposal to do away with MBDA concerns Louis Green, interim president of the National Minority Supplier Development Council.
“We would no doubt be at a disadvantage without the longstanding support and partnership we have with the MBDA,” he said, adding that the council has an excellent relationship with MBDA Acting National Director Chris Garcia and U.S. Commerce Secretary Wilbur Ross.
“Regardless of how one’s political leanings inform their feelings about public sector initiatives like the MBDA, no one can deny that our country is changing,” Green said. “America is an increasingly diverse nation and will only continue to trend in that direction. The fate of our economy rests in the hands of minority businesses. What will our economy look like in 2062 if we haven’t invested properly in minority businesses which are — and will continue to be — the the fastest growing segment of the economy?”
Ron Busby, president and CEO of U.S. Black Chambers Inc., said the efforts of the agency’s supporters are paying dividends.
“Under this administration, the agency was originally targeted for an 83 percent budget cut,” he said. “Fortunately, a bipartisan group of federal legislators in both the House and Senate pushed back.”
Still, the premise asserted against the agency is that its services duplicate those provided by other federal agencies, he said.
For MBDA, being part of the U.S. Department of Commerce is appropriate, Busby said, because the department was established to promote economic growth and create jobs. “Minority business owners are the job creators within minority and underserved communities,” he said. “Their success contributes greatly to our nation’s economy.”
‘Ignorance’ of efforts
U.S. Rep. Cedric Richmond (D-La.) and the Congressional Black Caucus that he chairs are at the forefront of efforts to keep the agency open for business.
“The Minority Business Development Agency is vital to helping small- and medium-sized business owners grow in underserved communities,” Richmond said. “The president’s proposed elimination of the MBDA shows his ignorance of what it takes to help minority communities advance economically.”
The Congressional Black Caucus trumpeted its support of MBDA in a 130-page report submitted to the White House earlier this year.
“The MBDA has operated with a budget under $40 million for many years,” the CBC report stated. “If the administration is serious about boosting investments in minority-owned businesses, it could study ways to expand support for this agency that helps minority firms compete in a rapidly changing marketplace.
“Unfortunately, the president’s fiscal year 2018 budget request eliminates funding for the MBDA, the only federal agency solely tasked with supporting minority businesses,” according to the report.
John F. Robinson, president and CEO of National Minority Business Council Inc., is another stalwart supporter of MBDA. If the agency is being targeted for closure, a better solution would be to merge it with another federal agency to save it.
“If that [budget ax] is the reality, the MBDA should be merged into SBA [U.S. Small Business Administration] in some form, shape or manner,” he said. “We would like to see a minority business enterprise unit of SBA, and have an [SBA] associate administrator run that unit. That way, the good parts of MBDA could be saved.”
Robinson said that NMBC has worked for over 45 years to grow minority businesses in the nation, and to allow MBDA to come to an end would be counterproductive to those efforts.
SBA officials declined to comment on this issue.
“It is the SBA’s position not to comment on proposed, pending or prospective matters,” Press Secretary Casey Brinck said in a statement. “The SBA continues its mission to aid, counsel, assist and protect the interests of small business concerns, to preserve free, competitive enterprise and to maintain and strengthen the overall economy of our nation.”