Bipartisanship At Its Best
Ever since the impeachment proceedings of Pres. Clinton in 1998 and 1999 the Congress has been divided along party lines over almost every issue. And this year in particular, with an election on the horizon, the cooperative spirit has not exactly flowed between Democrats and Republicans. But a change may be coming and in an area of particular importance to the Black Electorate.
The issue of economic development has long divided both parties especially in Congress, with Democrats appearing to do that which ensures the growth of jobs and alleviates the suffering of the hungry and homeless and with Republicans appearing to do that which is in the best interest of the entrepreneur and which frees financial capital from the burden of taxation. At times the two approaches have been so far apart that it has been impossible for either side to pass an effective economic development agenda into legislation.
Instead of building coalitions that would unite Democrats and Republicans both sides have sought to obtain numerical majorities in both the House and Senate that would allow them to pass legislation without cooperating with members of the opposite party. But in an impressive fashion and in the midst of posturing and bickering the two sides are attempting to find a way to come together on the subject of community and economic development.
The potential agreement between Republicans and Democrats centers around two pieces of legislation currently before the House Banking Committee that are set to be marked up in committee tomorrow, HR 2764 introduced by Rep. John J. LaFalce, D-N.Y. (this bill is endorsed by the Clinton Administration), and HR 2848 sponsored by J.C. Watts (R-Okla.). Both are bills designed to expand small business lending in inner city and rural areas that are of low and moderate-income levels. LaFalce's bill would create a special license designation known as an "American Private Investment Company" or APIC ; a distinction that would give a qualifying group government loan guarantees for capital that is borrowed and invested in businesses that operate in low-income communities.
According to Congressional Quarterly, to qualify for the APIC distinction: "A company or organization would have to be a for-profit community development group, have a minimum of $25 million in equity capital available, and have a goal statement that covers investing, job creation and involving community-based organizations and residents in their efforts. Another licensing requirement is that at least 50 percent of an applicant's gross income must come from activities in 'low-income communities' -- demographic regions based on census data where poverty rates exceed 20 percent and where median family income does not exceed 80 percent of the greater metropolitan or statewide median family income." The aim and purpose in establishing the APIC is to encourage venture capitalists, corporations and high net -worth individuals an incentive to invest capital into America's poorest areas.
The LaFalce bill gives an increased role to the Department of Housing and Urban Development (HUD) in the distribution of funds pertaining to community development and specifically with APIC. J.C. Watts' bill is the latest version of his American Community Renewal Act, which eliminates taxes and provides tax credits for businesses that operate in distressed rural and urban areas. Watts' bill would also give Congress a greater authority over community development programs and diminish that of HUD. President Clinton and House Speaker Dennis Hastert have both committed to working out a compromise between the two bills. Both sides want the compromise because it would allow them to say that they have been responsive to the needs of the poor in an election year.
The prospects of a compromise mean good news to the Black Electorate as it will mean greater attention to the issue of economic development; a subject that of late has taken a back seat to racial profiling and police brutality. And the compromise would be a rare example of the merging of successful government programs with market-based approaches to community development. It would represent a true public-private partnership and a paradigm shift in the way the two-party system addresses problems that plague the Black community.
Both pieces of legislation don't do enough to get capital into the hands of Black entrepreneurs and the proposals do open the door for corporations to benefit disproportionately from a program that is supposed to be for the poor. However, they do represent a point of departure for future legislation that can lead to a faster rate of economic growth in the Black Community. The compromise bill is also another indication of how far the liberal wing of the Democratic Party has moved toward the center of American politics: the APIC program was first announced by Pres. Clinton at Rev. Jesse Jackson Sr's Wall St. Project in Jan. of 1999 -- not in front of the Democratic Party's traditional base of low to middle income Americans but in front of an audience of middle class-to-affluent Blacks and white corporate executives and financiers. Rep. Harold Ford Jr. (D-Tn.), Rep. Jesse Jackson Jr. (D-Il.), Rep Danny Davis (D-Il.) and Rep. J.C. Watts (R-Okla) are to be commended for their advocacy of the initiative and even for pushing for more action. Their willingness to advance a similar issue on both sides of the aisle represents bipartisanship at its best.
Tuesday, April 11, 2000
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