Bipartisan Push for COVID-19 Relief Aims to Help Minority Businesses

Black and Latino businesses have been so hard-hit by the economic fallout of the coronavirus pandemic, lawmakers are reigniting a push for a bipartisan, $50 billion plan to help small businesses with a focus on rural and minority-owned businesses.

The legislation was first introduced in May by New Jersey Senator Cory Booker, a Democrat, and co-sponsored by Montana Senator Steve Daines, a Republican. It would inject $50 billion in federal money to cities and rural communities to dole out to small businesses in need. The legislation was rolled out with 100 mayors on board, who prefer the flexibility the setup provides.

But now Daines is stepping up his push of the bill—Daines has been giving interviews in recent weeks on how it would help small businesses in Montana—amid his bruising election fight against Democratic Governor Steve Bullock, who a recent University of Montana poll showed leading at 47 percent to Daines's 43 percent.

A source who asked for anonymity to give a frank assessment of the political sensitivities at play, said Booker's circle is heartened to see Daines pushing the bill because they want to help small business owners, but also don't want to be seen being too helpful to Daines' reelection prospects. The hope on both sides is that the bipartisan bill will become part of the next relief package.

But Daines's office waved away any talk of political concerns, noting Booker and Daines rolled out the legislation together.

"This has nothing to do with politics or partisanship—that's why Senator Daines and Senator Booker are working together to support and provide relief for America's smallest businesses and workers," Daines spokesperson Katie
Schoettler told Newsweek.

It is also unclear where the White House stands on the legislation and whether Daines's new push for the bill comes with the Trump stamp of approval. Daines's office did not respond to the question, while the White House did not provide Newsweek with an on the record response.

Joe Biden's campaign has called for a $60 billion small business fund, which would provide money to smaller lenders and community-based banks. Regarding the Paycheck Protection Program, the $670 billion effort to aid businesses, Biden in April asked the White House to "produce a weekly dashboard to show which small businesses are accessing loans—to make sure that the program isn't leaving out communities, minority—and women-owned businesses, or the smallest businesses."

"Vice President Biden supports a wide range of proposals to help businesses owned by people of color and women, and address the yawning racial and economic disparities that have been exposed by COVID-19, and he looks forward to working with Senator Booker and other leaders on Capitol Hill to make these badly-needed changes a reality," said Campaign spokesperson Michael Gwin.

Booker's office did not respond to Newsweek's questions about conversations with the Biden campaign, citing strict rules about staffers discussing political campaigns.

The impetus for the bill on the Democratic side was that the Treasury Department relied on big banks and big lenders, which left out businesses like taquerias and barbershops that don't have relationships with big banks. These businesses have been disproportionately affected, according to a study by the National Bureau of Economic Research, which found that the number of Black business owners dropped 41 percent, Latino business owners fell 32 percent, and Asian business owners dropped 26 percent.

The situation is not improving quickly enough for many business owners, with the June jobs report showing that the unemployment rate for black men worsened and one in five Latinas are out of work.

Cid Wilson, president of the Hispanic Association on Corporate Responsibility, who lost his father after a battle with COVID-19, told Newsweek that "protecting our minority-owned businesses during this period is imperative."

"In this environment, we have been active in calling on companies to double down on Hispanic and black and other minority-owned businesses that are being impacted significantly more than the general population," he said, calling them the economic engine that leads to job creation and reinvigorate local and regional economies.

The bipartisan legislation calls for grants, but allows the flexibility for states or cities that wish for the help to be provided via loans that must be paid back at a later time—which conservatives like because it includes the large amount of money that could be allocated to rural towns. The breakdown of the aid means 70 percent of a $35 billion block would be allocated to larger cities and counties, with the remaining 30 percent going to states to serve rural communities. The leftover $15 billion would serve as a "rural bonus," which would provide states financing exclusively to businesses in rural areas.

"This bipartisan legislation is about taking the decision making powers out of the hands of Washington D.C. and putting it in the hands of our local communities who know their own needs best," Daines said. "We need more targeted action that strengthens local response and empowers our local economic development leaders to provide relief for our most vulnerable small and rural businesses in the wake of the COVID-19 outbreak."

States such as Chicago and Detroit have local programs in which money ran out immediately once the pandemic struck. In a video conference with Booker announcing the bill, Los Angeles Mayor Eric Garcetti said the bill would provide his city $560 million of "deeply needed investment" into small businesses.

"There's no politics in this bill," he said, as Booker looked on.

Cory booker
Sen. Cory Booker (D-NJ) (C) talks to a reporter after introducing new legislation to end excessive use of force by police and make it easier to identify, track, and prosecute police misconduct at the U.S. Capitol June 8, 2020 in Washington, D.C. Chip Somodevilla/Getty Images/Getty