S. HRG. 113–391 

CLOSING THE WEALTH GAP: EMPOWERING 

MINORITY-OWNED BUSINESSES TO REACH 

THEIR FULL POTENTIAL FOR GROWTH AND JOB 

CREATION 

ROUNDTABLE 

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

AND ENTREPRENEURSHIP 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

SEPTEMBER 18, 2013 

( 

Printed for the use of the Committee on Small Business and Entrepreneurship 
CLOSING THE WEALTH GAP: EMPOWERING MINORITY-OWNED BUSINESSES TO REACH 

THEIR FULL POTENTIAL FOR GROWTH AND JOB CREATION 
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WASHINGTON : 

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88–039 PDF 2014

S. HRG. 113–391 

CLOSING THE WEALTH GAP: 

EMPOWERING MINORITY-OWNED BUSINESSES 

TO REACH THEIR FULL POTENTIAL FOR GROWTH 

AND JOB CREATION 

ROUNDTABLE 

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

AND ENTREPRENEURSHIP 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

SEPTEMBER 18, 2013 

Printed for the use of the Committee on Small Business and Entrepreneurship 

( 

Available via the World Wide Web: http://www.fdsys.gov 
(II) 

COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP 

ONE HUNDRED THIRTEENTH CONGRESS 

MARY L. LANDRIEU, Louisiana, Chair 

JAMES E. RISCH, Idaho, Ranking Member 

CARL LEVIN, Michigan 

TOM HARKIN, Iowa 

MARIA CANTWELL, Washington 

MARK L. PRYOR, Arkansas 

BENJAMIN L. CARDIN, Maryland 

JEANNE SHAHEEN, New Hampshire 

KAY R. HAGAN, North Carolina 

HEIDI HEITKAMP, North Dakota 

EDWARD J. MARKEY, Massachusetts 

DAVID VITTER, Louisiana 

MARCO RUBIO, Florida 

RAND PAUL, Kentucky 

TIM SCOTT, South Caarolina 

DEB FISCHER, Nebraska 

MICHAEL B. ENZI, Wyoming 

RON JOHNSON, Wisconsin 

JEFFREY S. CHIESA, New Jersey 

JANE CAMPBELL, Democratic Staff Director 

SKIFFINGTON HOLDERNESS, Republican Staff Director 
(III) 

C O N T E N T S 

OPENING STATEMENTS

Page 

Landrieu, Hon. Mary L., Chair, and a U.S. Senator from Louisiana .................. 1 

Jackson Lee, Hon. Sheila, a U.S. Representative from Texas ............................. 9 

Richmond, Hon. Cedric L., a U.S. Representative from Louisiana ..................... 18 

WITNESS TESTIMONY

McKernan, Signe-Mary, Economist, The Urban Institute ................................... 3 

Kochhar, Rakesh, Associate Director, Research and Hispanic Trends, Pew 

Research Center ................................................................................................... 4 

Powell, Toya, Vice President of Operations, the U.S. Black Chambers, Inc. ..... 4 

Hasegawa, Lisa, Executive Director, National Coalition for Asian Pacific 

American Community Development ................................................................... 4 

Hurley, Zenita Wickham, Special Secretary of Minority Affairs, Maryland 

Governor’s Office .................................................................................................. 5 

Hairston, Darryl, Associate Administrator for Business Development, U.S. 

Small Business Administration .......................................................................... 5 

Taylor, Dr. Shree, Managing Partner, Delta Decisions of DC ............................. 6 

Major, Barbara, lead organizer, The Collaborative .............................................. 6 

Evans, Connie, President and CEO, Association for Enterprise Opportunity .... 7 

Balwani, Anisa, President, RCI Technologies, Inc. ............................................... 7 

Allis, Kevin, tribal member, Forest County Potawatomi Community ................ 8 

Campbell, Jane, staff director with Senator Landrieu’s office ............................. 8 

ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED

Allis, Kevin 

Testimony .......................................................................................................... 8 

Balwani, Anisa 

Testimony .......................................................................................................... 7 

Prepared statement .......................................................................................... 93 

Campbell, Jane 

Testimony .......................................................................................................... 8 

Evans, Connie 

Testimony .......................................................................................................... 7 

Prepared statement .......................................................................................... 88 

Fakhoury Law Group, PC 

Report ................................................................................................................ 355 

Hairston, Darryl 

Testimony .......................................................................................................... 5 

Prepared statement .......................................................................................... 80 

Hasegawa, Lisa 

Testimony .......................................................................................................... 4 

Prepared statement .......................................................................................... 66 

Hurley, Zenita Wickham 

Testimony .......................................................................................................... 5 

Prepared statement .......................................................................................... 69 

Introduction of participants .................................................................................... 45 

Jackson Lee, Hon. Sheila 

Opening statement ........................................................................................... 9 

Kochhar, Rakesh 

Testimony .......................................................................................................... 4 

Prepared statement .......................................................................................... 62 
Page

IV 

Landrieu, Hon. Mary L. 

Opening statement ........................................................................................... 1 

Prepared statement .......................................................................................... 34 

Wealth Gap Report ........................................................................................... 95 

Major, Barbara 

Testimony .......................................................................................................... 6 

Prepared statement .......................................................................................... 85 

McKernan, Signe-Mary 

Testimony .......................................................................................................... 3 

Prepared statement .......................................................................................... 47 

National CAPACD 

Prepared statement .......................................................................................... 349 

Powell, Toya 

Testimony .......................................................................................................... 4 

Prepared statement .......................................................................................... 64 

Richmond, Hon. Cedric L. 

Opening statement ........................................................................................... 18 

Rubinovitz, Robert N. 

Prepared statement .......................................................................................... 160 

Taylor, Dr. Shree 

Testimony .......................................................................................................... 6 

Prepared statement .......................................................................................... 83 

Wainwright, Jon 

Civil Action No. 12-CV-744 .............................................................................. 190 

Wong, Peter 

Prepared statement .......................................................................................... 353 
(1) 

CLOSING THE WEALTH GAP: EMPOWERING 

MINORITY-OWNED BUSINESSES TO REACH 

THEIR FULL POTENTIAL FOR GROWTH 

AND JOB CREATION 

WEDNESDAY, SEPTEMBER 18, 2013 

UNITED STATES SENATE, 

COMMITTEE ON SMALL BUSINESS

AND ENTREPRENEURSHIP, 

Washington, DC. 

The committee met, pursuant to notice, at 10:04 a.m., in Room 

428, Russell Senate Office Building, Hon. Mary L. Landrieu (Chair 

of the Committee) presiding. 

Senators Present: Landrieu. 

Representatives Present: Lee and Richmond. 

OPENING STATEMENT OF HON. MARY L. LANDRIEU, CHAIR, 

AND A U.S. SENATOR FROM LOUISIANA 

Chair LANDRIEU. Good morning, everyone. Welcome to our fourth 

annual gathering in this room, and today it is an official roundtable so I am very pleased to host a roundtable on empowering 

america to reach its full economic potential by closing the wealth 

gap: I think a very serious challenge to our Nation. 

I want to acknowledge that several Members of Congress may be 

stopping by the hearing. I know that Cedric Richmond, Congressman from Louisiana, will be stopping in. And of course, the annual 

CBC conference is taking place today through Saturday, so there 

are a lot of members that are doing work here on the Hill. 

But this is the fourth year that our Small Business Committee 

has used this particular week as an opportunity to focus on one of 

the most significant challenges, I think, before America and that is 

the wealth gap between majority and minority. And more importantly than focusing on the gap is focusing on solutions to close 

that, not by pulling people at the top down but by lifting up those 

on the bottom and mostly because it is important for American economic competitiveness. 

Fifty years ago America engaged in a war on poverty. During the 

last 50 years, our Nation has made great strides in a number of 

areas affecting economic opportunity. Education gaps have been 

closed. Income gaps have been closed. There are more people of all 

races graduating from colleges. Income levels have risen. 

This is good news. We should be proud of this. But despite some 

of these obvious achievements, the data tells us that this progress 
2 

is, for some reason, not necessarily translated into accumulated 

wealth—and that is what we are going to focus on today. 

This Committee is the Small Business and Entrepreneurship 

Committee. We take the entrepreneurship of this title very seriously, knowing that entrepreneurship is a core American value. It 

also is a great strategy and tool to create wealth, jobs, and economic power. 

So, in that context we are looking at a wealth gap that, in fact, 

has become wider, not narrower, between white and minority communities in the last three decades, when this data was first collected. This is very troubling. 

Closing the wealth gap is a challenge we must meet for America 

to compete effectively in the 21st century global economy. We need 

all of Americans, not two-thirds, not half, on the field competing as 

workers, as entrepreneurs, as business leaders, as corporate leaders to make this economy as strong as it can be in our capitalistic 

system. 

Last September this Committee held a roundtable that examined 

this wealth gap, the reality of it, the details of it; and I would call 

your attention to this chart which you have before you which is 

very troubling. 

You can see that in 1983 the accumulated wealth of all white or 

Caucasian families in America was $81,000. The accumulated 

wealth of African-American families in 1983 was $6,012 and in the 

accumulated wealth of Hispanic families was $8,250. It is a pretty 

wide gap, but more troubling is that ‘‘X’’ number of years later, you 

know 50, 40, 30 something years later, that now has changed. For 

Caucasian families, it has gone up from $81,000 to $110,000, which 

is good news that wealth is speculating. However, with AfricanAmerican families, it has only slightly increased to $6,314; and for 

Hispanic families, it has actually fallen to $7,683 from $8,250. 

So what this gap signals to me and to this Committee is that 

there are potentially some strategies that either the private sector, 

the nonprofit sector, or the government sector at the local, state, 

and federal level could pursue more effectively and aggressively to 

close this wealth gap and to basically give all Americans a true opportunity to get on the economic playing field. 

We cannot really compete effectively with countries like China 

and India, that have many times more population than we have, 

without all of our people engaging in full economic capacity and access to wealth. Earning wealth and using wealth to build not only 

the strength of individual families, but of communities and cities, 

is very important to the economic growth of the country. 

So, that is what our roundtable is going to explore today. A recent Urban Institute report finds that the wealth gap measured the 

difference in wealth cumulated by majority and minorities, unfortunately, is the largest that it has ever been since the Federal Reserve started tracking it 30 years ago. 

So, now that we have acknowledged this challenge and our Committee has tried, even though it is a relatively small committee— 

not as robustly staffed as some of the larger Committees here on 

Capitol Hill—we have taken a particular interest in this and we 

have looked at the areas that merge with the jurisdiction of this 
3 

Committee: capital accumulation, access to capital, access to opportunities for business growth and expansion. 

What are some of the ideas that seem to be working out there 

in the local and state governments that we could potentially cast 

some good light on and what are we doing wrong; what is the government doing wrong; what is the private sector not doing correctly 

in regard to solving this wealth gap issue and why isn’t the wealth 

gap decreasing? The income gap is closing, high school completion 

rates gap is closing, the gap in college graduation rates is closing, 

but the wealth gap seems to be widening? 

So, that is what I am going to challenge the panelist today to 

talk about. 

We have your bios. Of course, we know who you are. We invited 

you to come; but for the purposes of this discussion, introduce yourself, talk a minute about why this area is of interest to you or what 

aspects you and your team have been tackling; and then we are 

just going to open it up to some very general, informal conversation 

and questions. 

So, when you want to speak after that, you just put your placard 

up faced to me. I will go through a series of questions. It is very 

informal but the great thing is all of this is on the record, and we 

are going to be building a record and taking a lot of ideas from people all over the country on this important subject and hopefully 

transmitting some of this to the other Committees, whether it is Finance or Commerce or the White House itself, on some of the 

things that we are finding. 

And, let me also mention that after our three roundtables previously, our staff has issued a wealth gap report which brings in 

all of the information that our Committee has received on this, acknowledging that it is real. This is not something that we have 

made up. It is from the census data collaborated by many think 

tanks, liberals, moderates, and conservatives. 

The solutions to fixing it are very interesting and diverse but 

that is what this panel is hopefully going to explore, things that 

you know in your own fields are working or other comments that 

you might have. 

So, Doctor, let us start with you and we will be releasing this report today. 

Ms. MCKERNAN. I am Signe-Mary McKernan from the Urban Institute. 

Chair LANDRIEU. And you have to speak, kind of lean into your 

mic or pull the mic as close to you as you can so that the reporter 

can pick this up. 

Ms. MCKERNAN. Signe-Mary McKernan from the Urban Institute. 

Chair Landrieu, thank you for the opportunity to be here today 

to talk about closing the racial wealth gap. When it comes to economic gaps between whites and families of color in the United 

States, income inequality only tells part of the story. Urban Institute research shows that the racial wealth gap is three times larger 

than the racial income gap. 

Wealth is where economic opportunity lies. Wealth is not just 

money in the bank. It is insurance against tough times. It is tuition 

to get a better education and a better job, capital to build a small 
4 

business, savings to retire on, and a springboard into the middle 

class. 

Urban Institute analyses of wealth accumulation over the life 

cycle show that the wealth gap grows sharply with age. When people are in their 30s and 40s, whites have about three and a half 

times more wealth than people of color; but by the time they reach 

their 60s, the peak of their wealth building years, that gap has 

doubled. So, African-American and Hispanic families are not on the 

same wealth building pass as white families. 

Chair LANDRIEU. We are going to come back to your testimony. 

Ms. MCKERNAN. Okay. 

Chair LANDRIEU. This is just brief introductory remarks. You will 

get plenty of time to include that in. But thank you. 

Ms. MCKERNAN. Okay. 

Doctor. 

Mr. KOCHHAR. Thank you, Senator. Good morning, everyone. My 

name is Rakesh Kochhar. I am with the Pew Research Center. The 

Pew Research Center does not take a position on policy issues. So, 

whatever I have to say will focus on evidence. 

I work within the Pew Research Center on the Hispanic Trends 

project where we focus on the outcome, the economic outcomes of 

racial and ethnic groups, bringing context to the change that Hispanics are bringing to the United States, the racial and ethnic dynamics of income and demographics and so on. 

Chair LANDRIEU. Thank you very much. The Pew research has 

been very pivotal in our examination of this issue and we thank 

Pew for its data that you have provided. 

Ms. Powell. 

Ms. POWELL. Good morning, everyone, and thank you, Senator, 

for hosting this roundtable discussion. My name is Toya Powell, 

V.P. of Operations with the U.S. Black Chambers. We support 112 

chambers across the country in 24 states and 240,000 businesses. 

We do that through five pillars of service: advocacy, access to 

capital, contracting, entrepreneur training, and chamber development. One of the things that I would like to highlight that is a primary barrier to entry for business expansion growth is access to 

capital; and to kick off the 43rd Annual Legislative Conference this 

week, the Congressional Black Caucus Foundation made a $5 million investment in five African American-owned banks and that is 

in partnership with the National Bankers Association, the U.S. 

Black Chambers, Inc., and the Congressional Black Caucus Foundation. 

We believe that this major investment is historical in that it will 

set the pace for other individuals to follow our lead. Thank you. 

Chair LANDRIEU. Okay. 

Ms. Hasegawa. 

Ms. HASEGAWA. Good morning, everybody. Lisa Hasegawa from 

the National Coalition for Asian Pacific American Community Development. We were founded about 13 years ago and we are based 

here in Washington, D.C. 

We have a network of about 100 community-based organizations 

and community development corporations that focus on the needs 

of low income Asian Americans and Pacific Islanders around the 

country. We are in about 28 states across the country including 
5 

Louisiana, so looking forward to talking to you more about that 

and what is going on with a lot of the Asian American small businesses in New Orleans. 

We just recently came out with an Asian American and Pacific 

Islander poverty report. I think a lot of folks are not talking about 

poverty, and particularly for Asian Americans and Pacific Islanders 

there is a perception that we are doing much better than everyone 

else, et cetera, and so I am going to be presenting more information 

later about that. 

Chair LANDRIEU. Let me just make a note. The reason we do not 

have the Asian population here is because it was not tracked in the 

first year which was 1983. But we do have the data for 2000 and 

we do want to talk about that because it is actually higher than 

Caucasian wealth and we want to talk about that but we will do 

that as we go through. 

Ms. HASEGAWA. Right. 

Chair LANDRIEU. Ms. Hurley. 

Ms. HURLEY. Good morning, Madam Chair and other panelists 

and Committee members. My name is Zenita Wickham Hurley. I 

am the Special Secretary for the Governor’s Office of Minority Affairs for the State of Maryland, GOMA as we call ourselves. 

We are a cabinet-level agency that advises the governor of Maryland on issues affecting small and disadvantaged businesses. One 

of our biggest responsibilities is administering the State’s minority 

business enterprise program. That is a program that has been in 

place for over 30 years and we just raised our goal to 29 percent. 

We have had a lot of success in seeing growth in the program; 

and because of our long history of having a very progressive program, I think we are widely regarded as a national leader among 

states and minority business inclusion; and much of what we focus 

on of late is growing and developing MBEs into prime contractors, 

training MBEs on administrative skills so that they are ready for, 

they can build the capacity necessary to take on bigger contracts 

and grow wealth; and I look forward to sharing more of my experiences with the Committee in the discussion today. 

Chair LANDRIEU. Thank you very much. 

Mr. Hairston. 

Mr. HAIRSTON. Good morning, Chair Landrieu, and thank you for 

inviting the Small Business Administration to participate in our 

discussion today. I am Darryl Hairston. I am the Associate Administrator for Business Development at SBA where I oversee the 8(a) 

business development program. That program is a program designed to assist disadvantaged business owners gain access to the 

economic mainstream. 

Minority communities work were especially hard hit during the 

economic downturn. There are growing disparities in assets, education, and experience which has had a negative impact on entrepreneurship rates and small business success; and I am pleased to 

be here today to discuss that. 

There are two recent studies that SBA will be submitting for the 

record that look at the competitive disadvantages that minorityowned firms suffer when competing for Federal Government contracts. 
6 

One is by Dr. Jon Wainwright and another is by the U.S. Department of Commerce, and both studies demonstrate the continuing 

need for programs like the 8(a) program. Thank you. 

Chair LANDRIEU. Thank you. Dr. Taylor. 

Ms. TAYLOR. Good morning, Senator. Thank you for inviting me 

and it is good to be back again. I participated in the roundtable on 

Bridging the Skill Gap for high-skilled American workforce, and it 

is interesting that it is very closely tied to the wealth gap as well. 

For those that, I apologize, that do not know me, my name is Dr. 

Shree Taylor. I am a business owner. Our firm was established in 

2006. It is totally woman owned. We are also a part of the 8(a) program. 

Delta Decisions of D.C. has a focus on analytics. In closing the 

wealth gap and also in trying to find and maintain high-skilled 

workers, what we find is that the pool of these applicants is very 

small. And so, a few of my areas that I really advocate for is not 

only resources and access to capital but also education. 

There are programs in the lower grade school levels and also in 

the high school level that introduce students to entrepreneurship 

at a very young age; and those programs are instrumental and very 

key in changing the dynamics of our society. 

Chair LANDRIEU. Thank you, Dr. Taylor 

Ms. Major. 

Ms. MAJOR. Good morning. My name is Barbara Major, and I 

and lead organizer with the group from New Orleans called The 

Collaborative, and I want to thank you, Senator Landrieu, and 

your staff for the invitation. We were organized to ensure that of the $3 billion in New Orleans to be spent in the next three to five years that the AfricanAmerican community small businesses have access to it. 

But there are also some things that we are concerned about in 

terms of updating, looking at SBA policies and seeing where we 

could correct those policies, coming up with some creativity ways 

that we can ensure access, particularly access to capital. 

And, one of the things that we know for sure is that very few 

things in this country are race and gender neutral; but when it 

comes to responding to historical neglect and lack of access, you 

have got to be race and gender neutral. 

We know that if we could have a legally defensible disparities 

study, then maybe we could look at how we could create some race 

specific programs that can be funded within the SBA. And so, there 

are some things we have done creatively working with both our city 

leadership, our mayor, and our city council to come up with a 

strong DBE policy. 

However, we also understand that DBE does not mean AfricanAmerican so like a lot of the programs that have been targeted to 

disadvantaged communities disproportionately benefit white 

women, particularly when I look at DBE programs. 

So, we have to look at how we can become more specific in policy 

and practice and how we really look at how we continue to fund 

an SBA program. As far as we can see, it continues to benefit 

banks. If you loan to a bank and our businesses cannot get a loan 

from a bank, if it is SBA money, they tell us quick you are not 

going to get the SBA money either. 
7 

So, how do we look at community financial institutions more? 

Chair LANDRIEU. Thank you. 

Ms. Evans. 

Ms. EVANS. Good morning and thank you, Chair Landrieu and 

members of the Committee, for allowing me to be a part of this 

roundtable. I am Connie Evans, president and CEO of the Association for Enterprise Opportunity. AEO is the national trade association for U.S. micro-business and micro finance. 

We view entrepreneurship, particularly micro business, as a way 

to generate income and assets as a means of closing the widening 

wealth gap. In fact, a micro-business which is defined as having 

fewer than five employees, we found through our research that 

when individuals partake in micro-business or business ownership, 

our research shows that the median net worth of business owners 

is two and a half times that of non-business owners. For a black 

woman, the difference is more than 10 times. For a Latino man, 

the difference is five times. 

Now of course, there are barriers but our 450 member organizations and partners are working to solve that problem. We recently 

launched a strategy that links diverse stakeholders to mobilize capital and to channel technology and other resources on behalf of 

Main Street micro and solo businesses. 

So, I am looking forward to having an opportunity to discuss 

with you and others in the room today that particular solution and 

how all stakeholders can really play in solving this particular problem of the wealth gap. 

Chair LANDRIEU. Thank you, Ms. Evans. That sounds very exciting. Thank you so much. 

Ms. Balwani. 

Ms. BALWANI. Yes. Good morning. Thank you. 

Chair LANDRIEU. Good morning. 

Ms. BALWANI. It is an honor and privilege to be here today. I am 

Anisa Balwani. I am the owner of a small business, RCI Technologies, Incorporated. We are headquartered in Iselin, New Jersey, with branch offices in Maryland and in Texas. We provide information technology professional services nationwide to major corporations and government agencies. 

We have been in business for almost 30 years and I am looking 

forward to add value to our discussion. It is twofold for me. Myself 

I am passionate, of course, about my business but I am also very 

passionate about helping others start up and minority and womenowned businesses. 

I serve on many women’s board organizations such as Women’s 

Business Enterprise National Council and the New Jersey Association of women business owners. I am on the board of trustees 

there. 

So, I do have other people who are concerned and I myself as a 

small business owner, you know, sometimes cannot sleep at night 

paying payroll. So, I would like to share my experience. I know you 

have a great data here but I myself am here to tell you it is tough, 

right now in the economic climate that we are in and the competition is fierce for small business owners. 

Chair LANDRIEU. Thank you. We are going to really look forward 

to your prospective. 
8 

Mr. Allis. 

Mr. ALLIS. Good morning, Senator. Thank you very much for 

having me here. It is very exciting. I am honored to be amongst 

you and this wonderful crowd of very special people. 

My name is Kevin Allis. I am a tribal member of the Forest 

County Potawatomi Community in Wisconsin. I am the son of a 

mother who grew up on an Indian reservation in a one-room log 

cabin with a dirt floor and have intimately been involved in Indian 

country for all of my life. 

I am the chairman of the board of my tribe’s business development corporation which is the economic development arm of our 

tribe that is designed to generate growth and capacity and provide 

resources to a community that is growing and becoming more vibrant. 

I also serve as the Executive Director for the Native American 

Contractors Association which is responsible for representing the 

interests of all Native Americans and tribes in the lower 48, Alaska 

Native Corporations, and Native Hawaiian organizations. 

I, like the Asian community, notice that our name did not show 

up on some of the charts but I recognize, you know, some of the 

things that you spoke to. I would say that the people in the back 

would not see any of the stuff that would be on there anyway. 

Some of the Native communities are still some of the poorest and 

most depressed communities in the world, and they exist right here 

in the lower 48 and some of our villages in Alaska are extremely 

remote. 

So, I am very excited to speak to this group and to you about 

some of the things that our tribe is doing, some of the things that 

NACA is doing to not only help the Native American community 

but also work with some of the other minority groups to grow small 

business as a whole. 

Chair LANDRIEU. Wonderful. And let me just for the record be 

clear and particularly Mr. Allis, you can help and then I am going 

to recognize a Congresswoman who came in for brief remarks. I do 

not know how long this wonderful Congresswoman is going to be 

able to stay with us. 

But just to make sure the staff prepares this, the data on Asian 

Americans is here in front of me and it is $89,339 as of 2011. So, 

the 110 number, the $6,314, the $7,683 correlates to the $89,339 

for Asians. So, we are going to have some questions about this. 

In other words, the gap between white and Asians is much less 

than it is between African-Americans and Hispanics, and we want 

to hear some details or comments about that. And, I want to ask 

the staff why we do not have the Native American numbers on 

here? Is it that we do not have them? Does anybody know? 

Ms. CAMPBELL. Senator, They did not collect net worth. 

Chair LANDRIEU. Okay. There was no net worth collected for Native Americans. Does the Pew Research have something on this 

that you could add before we get started? 

Mr. KOCHHAR. The problem is sample size. These are surveys 

that only survey so many people; and when you get down to very 

small populations, and that includes Asian Americans who are 

about five percent of the U.S. population. So, within a survey, you 
9 

get a very small number of people and it is typically hard to get 

to reliable data on certain subgroups. 

Chair LANDRIEU. Ms. Hasegawa, go ahead. 

Ms. HASEGAWA. But I think that can be changed. My background 

actually is in health research and there is a lot of methodologies 

around over sampling so if there is some planning in the beginning 

around, you know, that you really want to get data about particular smaller minority populations, you can do that. 

We deal with this all the time also because I think that for Asian 

Americans when you look at it in the aggregate, it all looks like 

we are healthier, wealthier, wiser than everyone else, and everyone 

owns Yahoo. 

So, but I think that that is not, does not to tell the full picture. 

So, I would also say for the Asian American population do not look 

at it in the aggregate alone. We have to look at it because we are 

bimodal, and the folks who are doing really well sort of really overshadow what has been happening on the lower income side. 

Chair LANDRIEU. We are going to depend on you to provide some 

accurate data with Pew on this and some strategies for getting this 

data, because when I start to solve a problem it is really important 

to actually identify what the problem really is before you start 

throwing solutions at it. 

So, I think we have got some gap in our research here. And, Mr. 

Allis, would you do the same to help us with the Native American 

community and could you comment just briefly on where we could 

get better data on the economics of some of the tribes and some of 

their situations in the lower 48 as well as Alaska? 

Mr. ALLIS. Certainly. There are several organizations out there 

that we work with, sister organizations like the National Congress 

of American Indians, the National Indian Gaming Association, the 

National Center for American Indian Enterprise Development that 

we do have information that can be helpful. 

I mean it is hard and I understand the difficulty in gathering accurate information especially for Indian country because our communities often are in the middle of nowhere. A lot of these people 

do not have a whole lot of methods of communication, transportation; and so, you know, they are isolated and sometimes it becomes a difficult problem. 

Chair LANDRIEU. Well, we are going to depend on you to help us 

to try to identify that and bring it into focus as much as we can. 

Let me now turn to introductions for the Congresswoman. Thank 

her for coming and open to your remarks. 

Representative JACKSON LEE. Thank you. Good morning, everyone. I am Congresswoman Sheila Jackson Lee, a neighbor to Senator Landrieu in Houston, Texas; and I serve on a number of Committees in the House. The House Judiciary Committee and Homeland Security, which was born after the tragedy, the horrific tragedy of 911. 

But in the context of those Committees, I would tell you that on 

the Judiciary Committee, we are constantly looking at issues dealing with the infringement of the rights of Americans and the protection of the rights of Americans. 

One of those involves intellectual property and the genius that 

comes much from small businesses. On the Homeland Security, I 
10 

would say that it is the largest department next to the defense department and procures a lot. 

We have spent a long number of times working to ensure that 

the process of procurement under Homeland Security is fair and 

open to small and minority businesses. 

I join Senator Landrieu because you could not have a better 

champion for the idea of small businesses. I am reminded of the 

tragedy of Hurricane Katrina. Besides trying to help the State of 

Louisiana as she did and did it superbly, she was dogged about the 

idea of Louisianans and those who had been devastated helping to 

rebuild their State. 

Now, I notice that Mr. Hairston mentioned the $400 billion in 

procurement by the Federal Government. I would almost think 

that it is $400 billion and growing. But I will say that in order to 

make this work and as I look at those numbers they are stark and, 

Lisa, I know you will discern for us the differences among the 

Asian population from Vietnamese to Chinese. I think they put Indian Americans and Indo-Americans and Pakistani and others in 

that group. 

But one of the places, Senator Landrieu, that I hope that we 

could work more extensively on the General Services Administration. They are the purchasers; and I will say that although there 

are certainly good workers and committed servants, public servants 

there, the toughest time that I have had for small businesses is the 

General Services Administration. 

And, their sensitivity to not only purchases but also construction, 

maintenance of our buildings, they are the ones that build everything we have from courthouses to otherwise; and you will find 

among the minority populations as you will find is that they can 

do that. They can do a lot of that work. You just have to put the 

pause button on to work with them. 

So, I came today, we are right now in the middle of a classified 

briefing on the Judiciary and so please accept my apologies but I 

really wanted to come to, one, thank all of you for the data that 

I think is going to be enormously important. 

As Senator Landrieu fights for this whole concept of embracing 

small businesses, she is being reaffirmed. This morning we met 

with the head of Dell Corporation, and he said that the churning 

of America’s economy is in small and medium-size businesses. I 

like to say small minority-owned businesses and women-owned 

businesses that is churning this economy. So, she is on the right 

track. 

And, if I might just add and additional moment, Senator, as we 

met with the head of the OMB for the President this morning as 

well is that we in Washington, Senator Landrieu is looking to make 

the government thrive, grow, invest. We are not looking to sequester and withdraw and restraint. We are looking to be efficient. 

And, it is through the work of Senator Landrieu that really focuses on investment in people, investment in this country and I 

hope that those of you as small business leaders and others will 

understand our opposition to something called sequester so that we 

can continue to invest in this Nation and churned the economy. 

I think this is a very important hearing and count me as a collaborator on the House side in the ways that we can collaborate 
11 

and work together to build the economy on the most important aspect of it and that is small, minority, and women-owned businesses. 

So, thank you for allowing me to sit in for just a moment. 

Chair LANDRIEU. Thank you, Congresswoman. We really appreciate your comments. We intend in this Committee to try our best 

to build support both in the House and in the Senate and among 

the Democratic and Republican parties for solutions to help make 

the American economy stronger which benefits everyone, and that 

is the spirit in which we start this roundtable this morning. So, 

thank you, and I understand if you have to slip out. 

Let us start our discussion, and I am going to throw in the first 

question to Dr. McKernan to talk again about what your research 

is showing about why, although we are making a lot of progress, 

it seems in income, closing the gap, graduation rates, and home 

ownership, you know, the gap is narrowing. 

Why is this not the case for the wealth gap, in your opinion, and 

are there two or three particularly obvious root problems that you 

think this Committee or other policy makers in Washington should 

be focused on? 

And, I want that question for everyone. I am going to start with 

the doctor and then if you all have comments or if she says something that you agree or disagree with, please speak up. This is very 

informal and all you have to do is raise your placard and I will try 

to get you in the order in which you raise your placard. 

Dr. McKernan. 

Ms. MCKERNAN. Thank you. So, I think that there are three key 

reasons that wealth inequality is not improving. First is that 

wealth disparities are passed from generation to generation. 

African-American and Hispanic families start out behind. They 

are five times less likely to receive a large gift or inheritance than 

a white family, and these are dollars that can be used for important investments such as in a small business. This country has a 

history of discrimination and the low wealth resulting from it is 

still being passed from generation to generation. 

Second, today’s skewed federal subsidies exacerbate the disparity 

in wealth holdings and the racial wealth gap. The Federal Government spends billions of dollars annually through the mortgage interest deduction and through preferential tax treatment of retirement savings and because these subsidies go through the tax code, 

they primarily benefit high income families, leaving out AfricanAmerican and Hispanic families who have lower incomes. And 

third, African-American and Hispanic families are less likely to be 

in automatic savings vehicles such as homes and retirement accounts. 

So, reforming wealth building policies so that they benefit all 

families and helping families enroll in an automatic savings vehicles will help improve wealth inequality and promote savings opportunities for all Americans. 

My specific suggestions then would be to make home ownership 

subsidies more equitable; homes can be used to borrow against for 

a small business. Promote automatic retirement savings; half of 

Americans do not have access to an employer-provided retirement 

account. 
12 

And then, reauthorize the assets for independence program. This 

is the primary source of funding for individual development accounts, which are personal accounts directed toward low income 

households to help them save for investments in a small business, 

education, and also in homes. They do that by matching earned income deposits and by providing other program supports. 

Chair LANDRIEU. Thank you very much. 

It is in testing to hear about IDAs. The Clinton Administration 

was very forward leaning on this as well as a group that I belong 

to, the DLC, the Democratic Leadership Council. 

Senator Lieberman used to be a big champion of that idea here 

in the Senate. So, it is good to hear it again and it is a strategy 

that, if funded, could work but it has just waned in support for any 

number of reasons. We have a lot of pressures on the budget which 

are obvious and real. 

But, thank you for raising that. 

Ms. Evans, anything you want to add? 

Ms. EVANS. Yes. Of course, I would definitely support the notion 

of savings and developing assets. It is critical through all portions 

of one’s life. The reason I think it is so critical is because we have 

found that because of the starting low wealth of individuals, it literally is serving as a main barrier for them being able to access 

the capital and services they need to go into business ownership. 

If people do not have collateral and assets, unfortunately they 

are not able to access not only capital but some of the business 

services that one needs to actually be successful in managing your 

business. 

What we think has to happen, of course, is we need to change 

the risk models. We have seen that with his recent recession and 

the problems in the housing where people who use their homes as 

the main way of equity for business capital, that has been decimated. And so, this low-level starting position puts them behind 

even further than they were already. 

Banks do not have to look at these entrepreneurs as so high risk. 

Unfortunately, they are operating under what we would call really, 

you know, 18th century almost business models, totally outside 

what is necessary to actually consider these loans. 

We recommend changing the way capital and services flow to 

these entrepreneurs. TILT Forward, one of our new programs, is 

using technology that is world-class. AEO has partnered with one 

of the top leading technology firms in the financial services industry. A private-sector, venture-backed firm that has partnered and 

licensed with AEO to bring their world-class technology to the community lending field. 

So, the community development lenders through our TILT Forward program now have an opportunity to operate lending programs that create wider distribution. We are able to offer a working capital loan up to $250,000 with no collateral pledge. It is an 

unsecured loan. And, we have an underwriting system that is proprietary to on-deck capital. 

A couple of the features that allow that to happen is that daily 

repayments are made; and so again, it is an issue of getting people 

willing to be innovative in changing the risk model. 
13 

Chair LANDRIEU. Now, where is this happening, Ms. Evans? It is 

very interesting. Where is this happening, the physical location? 

Ms. EVANS. We launched this program last October in St. Louis, 

Missouri. We are in the process of building out a national distribution system so that anyone across the country, rural or urban communities, will be able to actually access a loan via a platform or 

through working with any of our community development financial 

institutions and micro lenders around the country. 

Chair LANDRIEU. Thank you. I am going to get others for comments, Ms. Major, but let me ask a question. Are you funding this 

with private capital or a combination of private capital and some 

public investment? 

Ms. EVANS. Thank you. One of the good things about this TILT 

Forward product is that the whole system. We are also trying to 

change what we realize how capital is mobilized. There are many 

programs that you and the Administration have worked really hard 

to move capital out. 

The problem is not just moving capital though. The system is 

broken; and so, many of the programs where capital is sitting in 

state programs, there is no capacity on the ground from the community lenders or the banks or anyone else to get that capital into 

the hands. 

So, what we have also done with TILT Forward is to create a 

special purpose vehicle called the American Dream Fund that will 

aggregate capital from government, from private sources, from 

foundations and philanthropic sources, and then make that capital 

available as low-cost, fairly priced capital to entrepreneurs. But 

just as importantly, low-cost capital to these community-based 

lenders. 

Chair LANDRIEU. Love this idea. Mr. Hairston, I want you to 

comment on this. This is very interesting, and what would you say 

as the director of a small business about this idea? And have you 

heard of it before? 

Mr. HAIRSTON. I think it is an excellent risk model. Over the 

past couple of years, our Office of Capital Access has been looking 

at a number of models. In that process, they have taken on the 

task of reengineering several of our loan programs to try to make 

capital more accessible to the under served communities. 

And particularly, our working capital lending programs have 

been revamped to make them more available and more attractive 

to our lending partners. Of course, we created our Community Advantage Program, which is a very similar concept geared toward 

providing lending in our under served communities. 

But I think Ms. Major made a very good point in her remarks 

when she indicated that our lending is primarily through banks; 

and of course, that is exacerbated by the other circumstances 

where we have seen where with the economic downturn where we 

have lost equity in the primary assets, the minority community 

took the largest hit in terms of equity losses in the housing area. 

Over my years of experience at SBA in a variety of different roles, 

our small businesses are more dependent on personal savings and 

equity in their home. 

If I could just make a point going back to the 8(a) program, in 

a recent report—we prepare an annual report to Congress on the 
14 

8(a) program and we look at new entrants in the 8(a) program and 

one of the tests for getting into the 8(a) program is economic disadvantage. 

We aggregate that data annually. In looking at that data, when 

we determine economic advantage, we exclude the equity in the 

primary residence and we exclude the equity of business owners in 

their business. 

And, looking at it on average after those exclusions, the average net worth of firms approved for the 8(a) program is about $58,000 

which means that these are companies that have been in business 

and have been operating and we look beyond that the average net 

worth or the median net worth for firms that we approve before excluding that is around the $146,000. 

So, that means that they are bootstrapped when they come into 

the program in terms of being able to take the next step and move 

the company forward. 

So, I think the idea about the lending model and taking another 

look at how we look at risk in that respect is not a bad idea. 

Ms. EVANS. Chairman, may I follow-up? 

Chair LANDRIEU. Yes. Go ahead, Ms. Evans. 

Ms. EVANS. I just want to follow-up on that. In talking about the 

banks, every day banks in this country decline 8000 small business 

loans. We could get banks to participate on our TILT Forward platform with some encouragement perhaps from the Small Business, 

from the Congress, from the Senator’s office, because what we can 

do, we project already that, if you take the declinations from banks 

currently that on this platform we could finance 20 to 30 percent 

of those loan turn-downs by banks within 48 hours. 

We project that we could finance another 30 percent within four 

to six weeks by working with our community-based lenders, and we 

anticipate that we could finance out of the balance probably about 

70 percent of those within 12 months by working with mentors and 

coaching services, et cetera, within our network. 

And so again, there is an opportunity here to actually make some 

changes if we could all get people to come together, get the stakeholders to work together. 

Chair LANDRIEU. Ms. Evans, that is exactly what this roundtable 

is and I cannot thank you enough for your enthusiasm and your 

passion; and what I loved about what you said was that you are 

not lowering the risk, you are just changing the risk dynamic. 

It is not making the loans riskier; that is not what I heard because we cannot do that, but it is changing the risk paradigm to 

make them in some ways, you could argue, almost more secure, different than what it is. 

And we hear, believe me. I work very closely with community 

banks as everyone knows, and credit unions, but I cannot tell you 

how many small business owners have sat around this table over 

the last four years and said they have been turned down time and 

time again from banks because they do not fit that routine risk 

model. 

And, if we want to get this economy out of a routine sluggishness, and we need to change the way we are doing things. To get 

to an extraordinary economy, we need extraordinary actions that 

are safe but secure. 
15 

Ms. Major. 

Ms. MAJOR. Yes. One of the things too, Senator, is what we 

learned was how federal dollars come through the state even when 

they are meant for people on the ground. 

At our state level, we do not have a DBE mandate. So, money 

hits our state and there is no mandate. $2 billion was spent to rebuild schools in New Orleans. $1.2 billion has already been spent. 

Not one percent went to small business. 

So, we have had to organize all over again to make sure that the 

school system then puts its own DBE policy. But if federal laws followed those dollars until they hit in the hands of the city, it would 

make a big difference. 

A disparity study is needed because it is not just, I mean let us 

be real, it is not just about risk. It is also about race. So, we need 

a disparity study and that disparity study needs to be updated so 

that we can really embed some race-specific programs. 

One of the things that we have had to do and as only as we have 

a model. I chaired the Regional Transit Authority of New Orleans, 

and what I did was a disparity study at the authority that say why 

are not small businesses getting contracts? 

And so, you have always got to prove what you already know so 

we have to do a study to prove that they knew that they were not 

getting it. So, what we did was set up a small business office. You 

have got to put your money where your mouth is. 

We set up a small business office in the Regional Transit Authority. Then we removed, I took all the money out of one bank because 

nobody again looks at community investment of bank policies. I 

looked at that. Took all the money out of a national bank and put 

in my local bank. 

I have gone back to the local banks and said, okay, now let us 

play. You use the contracts to my small business owners, my DBEs 

as collateral to give them some working capital so that they can 

participate in contracting because they do not have capacity. 

The one thing about risk is the CDFIs are probably the most accessible for our community because CDFIs, I mean the reality is 

that our people are not as bankable, this language that is used. 

So, I think SBA also needs to go back and look at its mission because we can keep setting up CDFIs and all these outside entities. 

But how does this federal institution become what I think it was 

in the spirit it was created to be. 

So, if its mission really is to serve small business, then the reality is that we have to look at the histories of denial of access for 

small businesses. 

So, create internally I think like when we look at the risk, look 

at CDFIs. The SBA could do a CDFI with a program like I am 

doing at the Regional Transit Authority. So, I am not pushing that 

they do it actually Sewage and Water Board, that they do it at, the 

city is doing it but they do it anywhere else they have. 

Where is your money going? So, what we have had to do, it is 

just so much work that the community has to do. Now, we are asking our city leadership, where is the city banking and how is that 

bank playing with the community? 
16 

Is it playing fair? If it is not playing fair, you need to take your 

money out or you need to go back to them and say this is the way 

we need to do this. 

So, even those of us, I mean, you can do so much, but there are 

some things that we can do on the ground as well but the one thing 

for me is to make sure that dollars coming States like Louisiana 

maintain the mandate for DBEs because other than that we get absolutely nothing, absolutely nothing. 

Chair LANDRIEU. Very good point. 

Ms. Hurley. 

Ms. HURLEY. Yes. Thank you. I wanted to echo Ms. Major’s point 

about the importance of disparity studies and race conscious, public 

contracting programs, because in Maryland for a number of years 

now, every five years, we do a disparity study and the value of having that statistically significant evidence of a disparity for the businesses owned by racial minorities in your jurisdiction I just cannot 

say. It has really allowed us to do some really progress of things. 

I think someone mentioned the how do you deal with the fact 

that your program may cover a lot of different minority groups but 

you identify certain groups are suffering much worse than others. 

And, one of the things that Maryland has done a few years ago 

is really expand what we call our subgoal policy; and so we break 

our government contracting into different industry groups like construction, construction-related services, A and E. 

And, within those groups, we have chosen the top three most disadvantaged groups and given them subgoals, recognizing that in 

many categories we may see, for example, African-Americans are 

getting much fewer contracts than others or Hispanic Americans or 

Asian-American, depending on the different industry. 

And, while it is difficult for our leadership to put some groups 

at a place of advantage seemingly against their peers, we recognize 

that we have to be really targeted. 

Otherwise if you just kind of throw it out there and hope that 

it will disperse and you will achieve parity in the way that you 

have availability in a community, if you cross your fingers, that has 

not worked. 

And so, while it is something that is new for us, we are certainly 

starting to track of that data and see what impact it has. But our 

disparity study shows significant disparities in our community and 

we have had a program for over 30 years. 

And so, we know that our businesses tell anecdotally while our 

participation Maryland contracting is going there is still suffering 

discrimination. They are still facing hurdles of access to capital; 

and this data that we have, this big 600-page tome that cost us 

over $1 million. 

And so, you need to have leadership that says this is important 

in shrinking budgets to pay this money to get this evidence so you 

can have robust programming. 

Chair LANDRIEU. Excellent. 

Now, Ms. Balwani, did you want to speak because you had your 

placard up and I did not want to not call on you. 

Ms. BALWANI. Yes. I wanted to add the comment to Ms. Evans. 

I believe this program is great but I strongly feel that the education is not there to small business owners. The awareness is not 
17 

there, but the more awareness that we can provide to the small 

business owners and especially start up companies, they are really 

getting discouraged. 

I have spoken to so many people who say, to your note that if 

I do not have my parents who are going to give me money to start 

up a small business, there is no way I can get a loan these days. 

So, your program sounds like it is fantastic and the message 

needs to resonate there, you know, into this entrepreneurship level. 

Chair LANDRIEU. So, what do you tell people that come to talk 

with you if they say, ‘‘I would love to start a business. I have got 

a great idea or I think I have a great product but I cannot—my 

parents are not in a position to lend me the money, I do not have 

any equity in my home.’’ What do you tell them? 

Ms. BALWANI. I personally have asked them to go to the SBA because I do believe that SBA has a very good solid program. I am 

a graduate from the 8(a) program, that my company was an 8(a) 

program, and I worked very closely with my district office in Newark. And, the SCORE counselors, they really sit down and help 

with the paperwork. 

So, that is my first guidance to a person who is asking for my 

advice because sometimes I believe the commercial lenders do not 

have the time to really sit through and coach a startup business 

and they definitely do not want to take that risk. 

Chair LANDRIEU. Well, interestingly enough this Committee, the 

majority of members of this Committee have been trying without 

success to convince the minority members that investing in SCORE 

is an important thing to do. So, hopefully your voices can be raised. 

SCORE is the not-for-profit, private, entrepreneurial mentors. 

There are 350 chapters for free that exist all over the country. Taxpayers are getting a phenomenal deal. We invest only $7 million of federal funds. That is it. On 350 

chapters that work for free. These are volunteers but you have to 

have some money to organize them. 

We have yet to convince—hello, Mr. Congressman—we have yet 

to convince the minority members who are not here to represent 

their views. But if they were, I would give them the time to step 

that funding up to $20 million so that we could expand the SCORE 

chapters because I think you have said exactly, the banks are not 

only reluctant, they have new regulations. They might not be 

aware, and they do not have the time to counsel small business 

owners. 

It is really not their job if you think about it. I mean, their job 

is to lend money and to make money, and I am not underestimating the help that bankers can be when you come in. I have 

borrowed money from a bank before and gotten good advice from 

my banker. 

But it is not like sitting down with a business owner that has 

built and sold multiple businesses, to say this is what you should 

do, this is how you should do it, et cetera. 

So, that is just one small step but I think it would be an important step to expand this volunteer network of entrepreneur 

mentorship in the country. Some of it is being done for profit, perfect. Some of it is being done nonprofit. Some of it is being subsidized a little bit by the federal taxpayer but for great benefit. 
18 

And, I am very happy to see that you yourself were beneficiaries 

of something that this Committee has strongly supported along 

with the SBA programs. But it still does get back to Ms. Evans and 

Ms. Major’s comments that even with that help, some of the capital 

is not finding its way to the communities to access that economic 

power that is there. And, that really is a problem for America. 

Now, I am going to recognize everybody with a placard up. I 

want to ask the Congressman because I know his time is short. We 

just had Congresswoman Sheila Jackson Lee come by and give 

some brief remarks. 

But as you know, this panel, Cedric, is focused on the wealth gap 

and what a drag this is on the American economy because if communities—African American communities, Hispanic, Asian, Native 

American—had equal opportunities, the whole economy would be 

stronger. 

But we are happy to have any introductory remarks and then I 

am going to get back to the questioning at hand. But thank you 

so much for coming on a very busy week. 

Representative RICHMOND. Well, let me just start with thanking 

the Senator for her effort, and she has been steadfast in representing and advocating the importance of investing in disadvantage businesses, small businesses, low income communities to 

make sure that, one, living in Louisiana we see it every day and 

living in New Orleans we have seen the good and the bad, and 

first-hand we can see the impact it has when everyone participates 

in the economic system. 

And, what you see when it does not happen is that it manifests 

itself in other areas, in education, in crime, and all of those things. 

So, as we talk about crime in the city of New Orleans and other 

metropolitan areas, you have to talk economic development and 

you have to talk about minority participation in businesses because 

they go hand in hand. 

And, I am a product of a family that had a small business with 

an electrical contracting firm but watching them work and do what 

they did made a lot of sense. And, if you think about it now and 

I go back and think about my childhood, as we reenter 15,000 people into the population out of incarceration in Louisiana each year, 

the question becomes who is going to hire them. And, small businesses more often than not are the ones that will give them a 

chance. 

As my parents employed people, I do not remember them ever 

running a background check or not hiring someone because they 

were an ex-offender. They interviewed them. If they had a good 

feeling about them, they gave them an opportunity. 

And, now with so many people coming home, we have to figure 

out ways to give them opportunities; and this area is a prime way 

to give them an entry into the legitimate workforce. 

And, it is our obligation as government, I believe, to make sure 

that we give those small businesses every opportunity to succeed. 

So, that means technical assistance. That means capital. That 

means everything we can do; and sometimes it is going to mean 

preference and that is just what it is. 

But the domino effect and the spin off when we do that will pay 

dividends that you cannot measure in all types of ways. 
19 

So, I just want to thank the Senator for again doing this because 

it is so very important and I am so happy that she is over here 

doing it because in the body I serve in, I do not see us doing as 

much as we need to be doing in order to achieve it. 

But I think that if it is not obvious yet it will be obvious to the 

American people that some people ought to just not be governing. 

Chair LANDRIEU. Thank you. Dr. Taylor, we will acknowledge 

you and then Mr. Allis. 

Ms. TAYLOR. Okay. I just wanted to echo what Ms. Balwani was 

speaking about. After the money makes it to the community, let us 

make the assumption that it does get into the hands where it needs 

to be. Then we are faced with having entrepreneurs that have not 

been properly educated on what to do with those funds or how to 

run a business or how to hire the right workforce. 

Having programs in place in schools that teach financial literacy 

is essential; it needs to be taught whether you have the goal of becoming an entrepreneur or not because your credit starts there. 

In a lot of cases, there is the misconception that no credit is 

okay. No credit equals bad credit. But that is not obvious to a lot 

of the communities that we represent, and we should make sure 

that our communities have that understanding. 

Also, there are programs to teach about entrepreneurship for 

those students that show an interest and there are so many creative young people who do not fit comfortably into a traditional environmental or educational system. 

What I mean by that is that they go through the school system 

and they do not do so well but they are extremely talented and 

there is no other outlet in the community to take their talents and 

nurture them. 

So, I am a huge advocate of the Network for Teaching Entrepre- neurship (NFTE) and also the Jump$tart Coalition which I know 

about; I am also a mother at a Title I school in Virginia. For those 

who are not quite familiar with Title I schools, these schools have 

been designated as schools with families that have a high number 

of poverty or low income families. 

When I go into my school and I am serving on the PTA, it is primarily Hispanic and African-American students in the schools and 

I talk to the teachers and the principal and they have not even 

heard of these programs. 

So, what do you do in that case? They get funding but they are 

not necessarily sure on what to do so there needs to be more marketing, if you will, and education on the resources that are out 

there. Therefore, the answer in this case is not only to make sure 

that the capital gets into the hands but to also make sure that the 

community is properly educated. 

Chair LANDRIEU. Thank you, Ms. Taylor, for sharing that and it 

really hit a chord with me. When I was State Treasurer, I started 

the first ‘‘bank-at-school’’ program in Louisiana for exactly that 

purpose—for the third graders. I worked with bankers and the 

CPAs, and the principals and teachers association to literally go 

into dozens of schools and help students in third grade understand 

what a bank account is. 

Many of these families were unbankable. That is the term, but 

they had just not had any relationship with the bank; and then the 
20 

kids would come home and explain to the parents what a savings 

and a checking account was. We did it on a shoestring. There are 

programs that I am aware of that are being done all over the country in small scale and I am aware that this is a subject that members of Congress have been talking about, both parties, about this 

financial literacy piece. 

So, I am glad you raised it. This Committee has some jurisdiction 

over that, but it is an important part of our, you know, of maybe 

one of these solutions and it really should under the Department 

of Education to be pushing out opportunities to use those Title I 

dollars which we are very familiar with. We get a lot of those in 

Louisiana because we are a relatively poor state. 

But you are right. There is flexibility in Title II and in Title I, 

dollars that could be used for programs like this but people do not 

know about it. So, thank you for making that. 

I am going to get you, Lisa. 

Ms. HASEGAWA. You can call me Ms. Lisa. 

[Laughter.] 

Well, two points. I definitely want to talk about the data issues 

but just to continue on with what has been discussed around the 

capacity for targeted technical assistance to minority and low income communities and small businesses. 

So, we are a national HUD housing counseling intermediary; and 

before three years ago, there was not such an intermediary to really deal with housing counseling for Asian Americans and Pacific Islanders and native Hawaiians who were really being hit by the 

foreclosure crisis. 

So, there is a lot of capacity at the National Urban League, National Council of La Raza and a lot of housing counseling and community-based organizations across the country that now have capacity around financial literacy and financial coaching. 

And so, a lot of us are having this conversation of how do we 

transition that technical knowledge that is specific now right to 

foreclosure to actually a broader effort that is really about economic 

recovery and it is infrastructure and capacity that currently exists 

in minority communities. 

So, I feel like financial education is necessary but not sufficient. 

It is really important but I think that there needs to be infrastructure. There needs to be national community-based, nonprofit, small 

business technical assistance infrastructure. 

So, there are programs at the SBA, at MBDA. But a lot of those 

funds actually go to local governments; and again there are the 

same barriers though. And, I think that nonprofit organizations 

particularly who have long track records and trust with communities of color, I think are really good partners. 

And, right now the way that SBA and MBDA programs are 

structured, those opportunities are not there. So, the infrastructure 

to do that capacity building, technical assistance, and coaching, et 

cetera, that is specifically grounded in communities of color really 

I think is not there but I do not think it would take rocket science. 

Chair LANDRIEU. I am going to get Mr. Allis. 

Thank you for making that point, and I want to underscore this 

and make sure the staff has noted it. It is a very interesting idea 

that the capacity over the last five years in the country to address 
21 

this home ownership crisis, and the recession of falling home ownership, is we are sort of coming almost to the end of that and we 

hope the end, but that network is out there. 

And, with a little bit of tweaking particularly by the Small Business, this could really come from a great suggestion from the SBA, 

you could turn that network from its focus on housing stability, 

which is important and still a need, but to this financial literacy 

and connecting, Ms. Evans, the capital that is in the community 

with a little bit of tweaking. 

So, let us explore that very positive idea because it is not building a new mousetrap. It is using what is there and just tweaking 

it. 

And I was reminded by my staff to say for the record that Senator Enzi and Senator Risch, who are not here, Senator Risch is 

my ranking, do support score. And the opposition is coming from 

House Republican leadership. Do not ask me. 

It is a volunteer organization. It is a private, not government, entity. They do not support it. We cannot get it passed. So, we are 

going to keep pushing but it is not coming, I have been, told by the 

opposition of the Republicans on this Committee. It is the House 

Republicans. 

Mr. Allis. 

Mr. ALLIS. Thank you, Senator. I just want to highlight the importance and I know you recognize and the Congressman does the 

importance of minority-conscious federal programs that help minority businesses often in rural areas and specific to Indian country 

it is rural. 

And, really, you know, from our voices and our concern it’s making sure that these programs, their value is recognized and it is 

protected. That some of the attacks that we hear of through the 

courts, that we experience through the court systems, sometimes 

from other areas even up here on the Hill, on various parts of the 

8(a) program are very harmful and we really need to take a deep 

look at what those are and what the long-term impact is. 

For my tribe and as my role at NACA when I look at the 8(a) 

program, that ability to produce small businesses to engage in federal contracting has been valuable, in that it has fueled growth in 

these tribal communities. 

And, it is contagious amongst these tribal communities. As the 

tribe is able to be involved, as the Alaskan Native Corporation is 

able to be involved, as the NHO companies are able to be involved 

in this program, their members, tribal members, shareholders community members see that value. 

Not only are they the beneficiary of some of the things that come 

out of that, they see an interest in wanting to become business 

owners and entrepreneurs. They see it working. 

When they see it not working or they see attacks on it and they 

see bad things happen, they see resources disappear, they get disgruntled too and they are not too confident and not overly excited 

about pursuing that direction because everything is on the line 

when they start putting their own resources into an effort to build 

the business. 

So, we at NACA and we at the Forrest County Potawatomi Community recognize the importance of these programs, and also recog-
22 

nize being conscious of our peers and the other minority groups 

that are participating in the same program, as well in making efforts to bring them together as a collective voice that we can promote and support this program. 

I am proud to say that NACA has entered into, the first time 

ever, a memorandum of understanding with the U.S. Black Chamber, Inc., and the U.S. Hispanic Chamber of Commerce, together 

moving forward to not only recognize these kinds of programs but 

also work together in other programs, along with the SBA, in 

bringing these groups together and adding that knowledge piece 

that I heard talked about a little bit before. 

But, Senator, there has been a lot of attention given to the 8(a) 

program, not only on the Native side but also on the program as 

a whole; and we really need people to understand that this program works and needs to stay there. 

Chair LANDRIEU. Thank you. 

Ms. Powell. 

Ms. POWELL. Yes, thank you. Following up on the opening statement that I made earlier in reference to the investment that the 

Congressional Black Caucus Foundation made in National Black 

Banks, I do want to recognize from the audience B. Doyle Mitchell, 

Jr., who is the Chairman of the National Bankers Association 

(NBA) and President of the Industrial Bank, because a lot of the 

comments that are being made here about banks and I do not know 

that the connections have necessarily been made to NBA. It will be 

good for you all to have that conversation about how to revamp 

some of these risk models so that the money that went to Louisiana, New Jersey, Chicago, D.C., and North Carolina can definitely get to the communities that we serve. And, many of these 

things NBA banks are CDFIs. Therefore, I just want to bridge that 

gap and make that acknowledgment. 

Also, we have a partnership with Ann Sullivan and Madison 

Services Group, who has been instrumental in helping us make 

connections to other corporate partners; and one of those partnerships is with American Express Open. 

During our signature conference in July, we hosted our top 100 

business owners from across the country, and they were able to 

meet one on one directly with 25 government buyers. 

These types of activities and initiatives are very important in 

terms of making sure that business owners have access to resources and opportunities that they would not otherwise. 

Another partner, who you have been involved with Senator, is 

Google. Google hosted a huge technology workshop at our conference helping our business owners to increase their search engine 

optimization so that they can better market to the world and increase their overall revenues to strengthen their capacity to hire 

and reduce the unemployment rate. 

And then finally, to Congressman Richmond’s point, in February 

of this year we launched a hire one campaign to encourage all African-American business owners to hire at least one additional employee so that we can be at the forefront of the ongoing economic 

recovery. 

Chair LANDRIEU. And if you did, the recession would be over. 

Ms. POWELL. Exactly. 
23 

Chair LANDRIEU. Because you would hire, what is the number? 

I used to know that number. About 2 million. 

Ms. POWELL. Exactly. We would hire about 2 million. 

Chair LANDRIEU. And the recession would be over. 

Ms. POWELL. Exactly. We have recently highlighted several of 

our businesses that answered the call and we have also highlighted 

many of the black-owned hotels that have answered the call. 

Even the leisure and hospitality sector is one of those sectors 

where everybody can develop a skill that is transferable to another 

job or opportunity. We want to encourage our partners around the 

tables and those that are now aware of what we all are doing, to 

go back to our respective communities to raise awareness about 

these initiatives. 

Dr. McKernan. 

Ms. MCKERNAN. I just wanted to second the Congressman’s point 

that wealth inequality matters for everyone, not just the poor, because a strong, vibrant, and thriving middle class is important for 

economic growth. 

And then, I wanted to build on the Senator’s and others comments about the importance of training. I think what is particularly powerful is when you can combine capital with that training 

at the same time. That is in part what individual development programs do. 

At the Urban Institute, our research with CFED shows that 

IDAs have helped maintain home ownership through the foreclosure crisis; foreclosure rates for home buyers who bought 

through an IDA program and received that training at the same 

time as they were doing that saving were one half to one-third the 

rate that they were for other low income home buyers in the same 

communities. 

It’s the power of combining training with capital. Spending on 

IDA programs represents less than one percent of the federal 

spending on asset development and inefficient funding subsidizing 

large homes and debt such as the mortgage home interest deduction could easily make that a revenue neutral increase. 

Chair LANDRIEU. Excellent suggestion. 

Mr. Hairston. 

Mr. HAIRSTON. Just following on with regard to the comments regarding the importance of management and technical assistance, I 

believe that understanding how to effectively employ capital is as 

important as having access to capital. 

One of the big impacts of the economic downturn and the impact 

that it has on the minority community is that the fact that they 

do lack capital inhibits their ability to have access to those resources that will enable them to more effectively run their businesses and do, in fact, have access to the networks that are important in developing and sustaining a business. 

A lot of people do not realize that when we talk about the 8(a) 

program, everybody thinks about Section 8(a) of the Small Business Act but the 8(a) program was actually legislated under two 

sections of the Act. 

The other part of the Act which is really the premise of the program which is business development is section 7(j) of the Act; and 

under section 7(j) of the Act, we have the ability to provide man-
24 

agement and technical assistance to not only 8(a) firms but other 

disadvantaged-owned companies. 

And through that program, we provide a lot of assistance handson, a lot of training, and a lot of directed assistance in terms of direct developing marketing plans, teaching individuals how to manage their companies, teaching them how to develop their business 

plan, how to manage their assets. 

So, that is an important asset that we have available and I am 

glad that the Chair mentioned our SCORE program but we have 

a lot of other technical assistance programs as well through our 

small business development centers, our women’s business development centers, and we work very closely with the PTACs as well. 

But I just think it is very important that we do not forget the 

affect of the widening of the income gap has on the ability not only 

to access capital but to access the knowledge base that is necessary 

to effectively run businesses. 

Chair LANDRIEU. Thank you. 

Ms. HASEGAWA. If I may comment? 

Chair LANDRIEU. I’m sorry. I asked the staff to go get a chart I 

wanted to put up on your point but I wanted to make just a couple 

of comments. 

This CDFI has come up time and time again and I wanted to say 

that I am very proud that this Committee has voted out President 

Obama’s recommendation, and it was our own as well, to increase 

CDFI authority from $3 billion to $4 billion and to increase the 

family of funds limits from 250 to 350 I think. 

Somebody on my staff has to correct me, and the reason is because some of these very successful CDFIs that Ms. Major has 

talked about and Ms. Evans has talked about have reached their 

capacity to lend and it is an arbitrary cap that the Federal Government has put on them. 

And so, it is a very important piece of legislation again having 

great difficulty getting through the other body. But I do think that 

there is support because it passed out of our Committee with Republican and Democratic support to increase the authorization. 

That is another billion dollars that could find its way to communities and increase the fund limit of those that are hitting up 

against their limit and basically rewarding the more successful 

CDFIs that are actually lending. 

Some exist and are not doing anything. Fine. They can just, well, 

we would like to eliminate them but we definitely do not want to 

tap down the successful CDFIs, and these are lenders that are nonbank lenders. 

So when I look at the country as Chairman of this Committee, 

I think of the 8000 banks that are out there, community banks— 

I am not talking about your big banks—8000 community banks, 

thousands of credit unions, hundreds of CDFIs. 

And then, outside of CDFIs there are other non-bank lenders, 

nonprofit organizations that this Committee tries our best every 

day to strengthen that network, to push capital out through that 

network. But as a Barbara Major said, it is the last mile that is 

the hardest. 

It is almost like when you put up an electric grid for the country. 

You can put it up on the main highways. That is the easy thing. 
25 

But getting that last mile. It is the same way with the post office. 

It is the most expensive to deliver the post to the house itself on 

a rural country road. 

So, do you see what I am saying? That is the same way capital 

flows, and we are doing a pretty good job of getting it out there 

generally. But getting it into the communities that need it the most 

to lift the economics of the country is what our challenge is. And 

I think you are coming up with some really good ideas. 

Ms. Major and then Ms. Evans. 

Ms. MAJOR. Yes. One of the things too, speaking of CDFIs, I 

headed a CDFI that we created after Katrina. 

Chair LANDRIEU. And there are a thousand of them. So, go 

ahead. I wanted to make sure. 

Ms. MAJOR. Right. That money came through HUD. So, I think 

there needs to be some collaboration between HUD and SBA 

around the issue of CDFIs because also what I have noticed is that 

the bigger CDFIs are the ones that keep getting. The smaller 

CDFIs who have feet on the ground in the community do not get 

the same kind of access. I am just putting it out. 

Wherever the bank guy is in here, I will talk to you later because 

the banks have to be willing. 

Chair LANDRIEU. I think you will actually like him. But go 

ahead, Barbara. 

Ms. MAJOR. The banks have to be willing. It seems to be an assumption that the banks are going to be willing to do the right 

thing and that has not been the case. 

So, one is develop a comprehensive approach because often what 

I hear is when we start talking about wealth gap, we start talking 

about jobs. Jobs are important but jobs alone is not what is going 

to close that gap. So, when we talk about wealth building, we are 

talking about the ability to create wealth over generations. 

After Katrina—I would think in New York and New Jersey as 

well—the wealth in the African-American community is based on 

what you own. It is property. We lost all of that so it kicked us 

back a generation. 

The assumption that, you know, like you just have good credit. 

You have got to understand history and why folks do not have good 

credit in the first place. 

So, it is still set up that if you have you can still get. If you do 

not have you cannot get. So, you cannot speak of any of these 

issues in the absolute of understanding the history in these communities. 

A comprehensive approach is one. We have got to have literacy. 

But I am dealing with businesses who say, look, I already have the 

literacy. I need the money. Do you know what I am saying? So, we 

have to have a place that deals with where can I access some capital, how can I enthusiastically encourage big business to do business with me. 

So, one of the things we are doing is, like I said, it is going to 

be $3 billion in the next 24 to 36 months. Anybody here know some 

big contractors? Tell them to come to New Orleans. They want to 

play right with our small businesses, we will deal with them because we cannot—and the other thing is prompt payment. 
26 

A simple thing. I did a policy on the RTA board that DBEs get 

paid within 15 days. I had no idea of the impact that that was 

going to have on small business. If nothing else, you go back to 

your community tell your boards to pay DBEs quicker. Thirty days 

hurt; 45 days kill. So, so prompt payment. 

And the mandates on federal. When you get federal dollars, you 

ought to be mandated to pay people, especially small businesses, 

before 30 days. I know they will not go there but I will say it 15 

days. 

Chair LANDRIEU. Ms. Evans and then Ms. Lisa. 

Ms. EVANS. I just want to make a couple of comments. One, AEO 

released its report last year that documents that those businesses 

that receive technical assistance and business support from nonprofit organizations in their community actually experience growth 

30 percent times more than those who do not. So, their revenues 

grew actually 30 percentage points higher. 

But I actually want to make a more provocative statement and 

that is that size matters. As we sit here and talk about closing the 

wealth gap, I think it is important to make sure that we are proposing solutions to fit the size of where most minority businesses 

actually are. 

Ninety-two percent of all businesses in this country are micro. 

Nearly 99 percent of all African-American businesses in this country are micro; and so when we talk about small business, I think 

size matters in that we have to make sure we are talking about 

where these African-American Hispanic and other minority-owned 

businesses really are. Small business strategies may miss them entirely because we are talking about micro is where they really are 

based and formed. 

Lastly, I want to also, AEO in November will be releasing research on the national economic impact of micro-business which I 

hope you will attend and everyone here will attend. Our release of 

that data. 

But one of the pieces of that data that I think is so important 

for this conversation, and particularly to those of you who are 

doing the disparity report, the disparity studies, what we have 

found out is that the concentration of African-American and Latino 

particularly business are in industry sectors that actually have low 

revenues; and so we need to have strategies that actually focus on 

how do we move more African Americans, Latinos, Native Americans and Asian-Americans into higher gross things industry sectors 

because we are seeing that the participation rates really are clustered in some of the lowest revenue producing industries that are 

there. 

Then lastly, although I agree about your point about jobs and 

that it is about assets and wealth, what we know is that most of 

the job creation, as others have said here, that are going to take 

place like the people your parents hire. I am the product of a selfemployed mother from Tennessee and the people who my mother 

hired, they would not have had jobs had it not been for neighborhood, local business owners. 

In fact, as of today, if one in three main street micro businesses 

hired just one employee, just one, not all of them have to hire, one 
27 

in three main street micro businesses hired just one employee, we 

would bring the country to full employment. 

Chair LANDRIEU. It is an amazing statistic, Ms. Evans, and 

thank you. Let me ask you. How would you define micro-business? 

Under 10? 

Ms. EVANS. A business with five or less. 

Chair LANDRIEU. Five or less? 

Ms. EVANS. Yes. 

Chair LANDRIEU. I am going to get back to the SBA to ask specifically what they are doing today or what you have planned to 

help micro-businesses, five or less. Be thinking about that. 

Ms. Balwani. 

Ms. BALWANI. I would just like to comment on Ms. Major about 

the payment structure. I would love to get paid in 15 days but honestly it is 60 days, and now it is 90 days. 

So, you tell me how can small business owners like myself survive if I have to pay people every two weeks. So, it is an astonishing and it discouraging a lot of small businesses. They are actually hurting very much. 

I am fortunate that my business is well established. I have a 

positive cash flow; but if I had not, there is no way. I would have 

to close my business absolutely. 

So, there has to be an awareness that these companies are really 

stretching us. It is the major corporations. It is the largest pharmaceutical companies that are there who are saying take it or leave 

it. It is 60 days now. They have increased it to 90 days. 

Chair LANDRIEU. I really want to underscore this, and I am sure 

we are stepping on some territory of some other Committees. But 

the question is. Is the Federal Government a slow payer? Are state 

governments slow payers? 

Are local governments slow payers? And are major corporations 

slow payers? 

And that hurts all small businesses and the question would be: 

Why should the smallest businesses in the country be basically 

floating, why should they be riding on the backs of small businesses? They can get access to money much quicker. 

Now, I know I am probably treading on some other territory 

here, but let us just throw that out from our Committee and see 

if we can get some answers, because I hear this complaint from 

small business owners. It is so risky for us to take this contract because it is big. We can do it; but if we do not get paid quickly, it 

could bankrupt our company. I hear that a lot when I am traveling. 

Ms. Hasegawa. 

Ms. HASEGAWA. I have not addressed the data issue. So, I appreciate my colleagues including Asian-Americans. I think that that is 

great. However, you look at the numbers and you cannot ignore the 

fact that Asian-Americans in the aggregate are doing much better. 

However, just in terms of trends, Asian-Americans did lose 

$70,000 in average of their networks. So, it went to being higher 

to whites, then $20,000 less than the whites and it is still substantially higher than other communities of color. 

However, like I said, we focus on low income Asian-Americans 

and Pacific Islanders solely. And so, you know, in terms of that 

population, Asian-American and Pacific Islanders who are in pov-
28 

erty, that poverty population group grew by 40 percent in the wake 

of the recession. 

And so yes, the rate of poverty for the population as a whole 

went down. But if you look at just those who are poor or who are 

economically vulnerable, right on the edge of falling under the poverty line, that poverty population has grown by close to 50 percent. 

So, if you are the community-based organization focusing on low 

income Asian-Americans and Pacific Islanders, the number of people that are eligible for your services that you need to serve as double the basically. 

And so, I plead with you who, I am a resident of Maryland, and, 

you know, with the Federal Government, a lot of the Federal Government or just any government reports look at Asian-American 

data in the aggregate. And so, I just say there are different ways 

to look at need in the Asian-American community. 

Otherwise, it looks like why are we doing anything for the Asians 

because they are doing better than everyone else. And so, I think 

with regards to government programs, it is very important to look 

at the subpopulation. Bangladeshis have one of the highest poverty 

rates. Tongans and Somoans have one of the highest rates of incarceration. 

So, I think that, you know, strategies to self-employ people who 

are formally incarcerated, who are limited English proficient, small 

business is really the alternative to being unemployed, and micro 

businesses. So, I think that we have to think about it in those 

broader frames. 

So, I appreciate everybody saying Asian American but I just 

wanted to say the finer points at least for our organization, race 

is important. Discrimination still exists but at least for AsianAmericans and Pacific Islanders and native Hawaiians in particular, you need to look at subpopulations and you need to look at 

those who are low income and under served and limited English 

proficient. 

Mr. RICHMOND [presiding]. Good point. 

Dr. McKernan. 

Ms. MCKERNAN. Yes. I just wanted to say that we have talked 

about the broader role that home ownership and retirement wealth 

play for small business growth too. I think home ownership and retirement savings are powerful wealth-building vehicles because 

they make savings automatic and this is part of why we see that 

African-American and Hispanic families are not on the same 

wealth-building path. They are less likely to own homes, and they 

are less likely to have retirement savings accounts. And, these are 

two of the primary vehicles where Americans build their wealth. 

What I mean by automatic is that the power of home ownership 

comes not from price appreciation but from that automatic monthly 

mortgage payment that comes due. It is a form of forced savings. 

You pre-commit and then you save. 

The power of retirement savings comes in much the same way. 

The employer sets up an automatic process for sending money directly to our retirement accounts. After that initial decision, you do 

not have to do anything. But we know that nearly half of Americans, half of American workers do not have access to an employersponsored savings plan. 
29 

So, we can promote retirement savings through an automatic 

IRA, an automatic individual retirement savings account. Auto 

IRAs allow particularly low-wage workers—who do not have access 

to employer-sponsored retirement accounts—to make that initial 

decision and have that savings happen automatically each month. 

Representative RICHMOND. Thank you. 

Mr. Allis. 

Mr. ALLIS. Congressman, thank you. 

With respect to business development, the action items that I 

think we all ought to consider, the leaders that are in this room 

and amongst this table is, as Darryl will, you know, testify too, the 

8(a) programs has been extremely successful for all minority communities that participate in the program, and it needs to stay 

there. 

The federal court cases, Rothe I, DynaLantic, Rothe II question 

the constitutionality of the program and cause a lot of concerns to 

a lot of people. As we have interacted with the different agencies 

and the people involved in some of these cases, they have reached 

out to us asking for statistics, data, information that would show 

the discrimination and bias in contracting and in business development opportunities. 

I have heard from all a lot of good information from some of the 

people here talking about statistics that they have on this industry, 

that industry. I would proffer that we all get together and the 

groups get together and supply that information to our leaders in 

Congress, to the various important people in The Administration, 

and Federal agencies. So, it is on the record. It is there. 

So, we will be ahead of the curve of the court rulings that seem 

to be heading in the wrong direction, and make sure that this program stays around for generations to come in the long future. 

Representative RICHMOND. I will comment on that and I think 

that what you are saying is very important, specially in looking at 

the opinion that the Supreme Court issued in the Voting Rights 

Act case which clearly said that we will not expressed much of an 

opinion except that the data is outdated. You cannot use data from 

1962 to justify a current day program. 

So, as you bring it up, we need to make sure that the data we 

used in justifying programs even through the statute and legislation continues to be updated so that there is a clear articulation 

and data to support the need for the program. 

And, I think the people in this room are probably the best to help 

facilitate that. But you will need to, and we need to push that more 

in Congress because part of what the court said, and there were 

volumes and volumes and truckloads of evidence produced in the 

voting rights case but they look to the evidence and data that Congress used to justify the program. 

So, that is something that is also very critical; and since you had 

the mic, I will pose a question to you and Ms. Powell and Ms. 

Hasegawa, remember my parents were electricians. We just 

worked it out. 

Part of my question is just the support that the U.S. Chamber, 

are they there on any of the issues? Are they supportive and the 

collective effort of all of the minority chambers in addressing disparities, access to contract, access to capital, because I think if they 
30 

made a point to make it a priority and also talk about prompt pay, 

then the message might actually get out there. 

Mr. ALLIS. Congressman, good question. I cannot speak to some 

of the other groups but the U.S. Chamber of Commerce in the last 

year has formed a group that specifically focuses on Native issues 

and it could be a wide variety of different issues. My understanding 

recently, there has been a kind of change in the leadership of that 

particular division so I do not know exactly where it is going. 

But more importantly, you know, the 8(a) issue in DynaLantic 

kind of left us all scratching our heads on how do we figure out 

if, in fact, the 8(a) program is a good program in this particular industry group or that. 

And so, whether it is the U.S. Chamber, you know, or it is all 

of us, we have got to figure out a way to have a clearinghouse 

where we can provide these stats, this information; and then we 

need you folks on the Hill to recognize that, and to make sure that 

the 8(a) program is safe. 

Something has to be done now to, you know, turn the tide on the 

way these cases are going in the federal courts, to make sure we 

are not behind the eight ball, or chasing and defending, as opposed 

to being more proactive and letting them know that, you know, this 

program is right, it is constitutional, and here are the stats that 

support that. 

And, there is a lot of good wealth of information in this room and 

there is a lot outside too. So, we have to figure out a way to get 

that to come in here. 

Chair LANDRIEU. I am going to ask the SBA now to comment on 

the micro businesses because Ms. Evans, you have made several 

statements that deserve attention and response. 

And, I have said from this chair many, many times when small 

businesses in America are defined by federal law as 500 employees 

or less, and we keep crafting our programs for 500 employees or 

less, we are just shooting wildly. 

I hate to use the word ‘‘shooting’’ but it is too wide. We have to 

focus and target. So, I am trying to get our staffs, both minority 

and majority, to understand that we have certain strategies for 

businesses between 200 and 500. They have an interesting set of 

problems and dilemmas trying to really grow really big. 

But then what do you do with the majority of businesses in 

America that are micro, zero to five. And many, many businesses, 

almost 99 percent I think are zero to 15 or zero to 20. 

You know, those are the businesses we want to focus on and really help to emerge, and let me just make this point because I am 

on a little soap box about this. 

I believe, like Cedric, my family had some small businesses too. 

My father was a self-employed lawyer who made $350 a month 

with nine children. That was very hard. I do not know how much 

your parents made. I think a little bit more than mine but anyway 

we came from hard working parents. 

But you know, what I am trying to focus on are businesses in 

America that I would define, and if Pew has a better word great, 

but lifestyle businesses. People that want to run one restaurant. 

They do not want to run a chain of restaurants. They want to run 

one profitably. Pay for their home, send their kids to college, have 
31 

an impact on their neighborhood. Can anybody tell me if there is 

something wrong with that? 

Why do we not ever focus on these lifestyle businesses? All we 

can talk about up here is Microsoft, Google. I am all for that. I am 

all for Microsoft, Google, Dell Computer, et cetera, et cetera. 

But if we do not in Washington get our eyes on the people that 

are hiring in our neighborhoods, in the suburbs, in the rural areas, 

in the urban areas, those shoe shine, you know, the shoe repair, 

the cleaners, restaurants, those businesses. 

Now, they might have small margins of profit; but if run correctly, they can create a lot of wealth over time and be transferred 

to the next generation. I don’t want to underestimate how important these start up businesses are, where the earnings are spectacular in the finance sector, in the tech sector and moving, you know, 

the base of our community into those is very important as well. 

But I think it needs to be balanced. And if someone has a different view, we can submit it to the record because I do not want 

to be completely dictatorial about this but until somebody gives me 

some evidence, I am going to continue to say, despite the fact that 

I am a lone voice, these lifestyle businesses are important in getting entrepreneurs who do not want to have a hundred employees. 

They would like to have 15 for 50 years and have great impact in 

their communities. We need to be helping them to make sure that 

they are not at risk. 

Now, I am going to step out because I have unfortunately another commitment. I am going to have my small business staff director, bring us to close in the last 10 minutes. If you can stay, 

Congressmen, please you can provide some leadership here as well. 

But I want to just say this record will stay open for the next two 

weeks. I want to acknowledge and get your final comments verbally 

but this record will stay open for two weeks and all of your organizations can submit even after that documents, reports, et cetera, 

that you think will be helpful to this discussion. 

And, we plan to share this with other Committees, the Commerce Committee, maybe even the Justice Committee, the Finance, 

the Housing Committee, and the Education Committee so when we 

get ideas that you all have come that they need to be more open 

to, we will do that. 

So, I am going to step out. I am going to have Jane Campbell, 

my very able staff director step in, and then thank you, Congressman, and if you can wrap it up for us as well. Thank you very 

much I really appreciate it. 

Ms. CAMPBELL. Friends and neighbors, I am not Senator 

Landrieu and so I can only provide you with the logistics. We are, 

in fact, keeping the record open for a month on this particular one 

because of the complexity of the issues and because of the number 

of participants and the amount of interest that there was. 

So, if you have any additional thoughts, questions, comments, 

please let us have those within that time period. If you know of 

others who you work with who have thoughts and comments on 

this, what Senator Landrieu would like to do is to use this next 

year to try to put together a similar report, the report that we 

issued today, that it is focused on best practices for raising the so-
32 

cially disadvantaged population and increasing wealth amongst 

that population. 

So, she is particularly interested in stories of success. What has 

been done that has been successful, whether that is a private program, a public program, a public-private partnership with a special 

idea about recommendations for the Federal Government. 

So, as we no longer have a member of our Committee here, we 

should close the formal portion of this. We certainly invite you to 

talk to one another and we look forward to your ongoing participation. 

Thank you so much for coming, for participating, and for your interest in trying to really solve this problem. We look forward to 

working with you. 

This meeting is officially adjourned. 

[Whereupon, at 11:48 a.m., the roundtable adjourned.] 
(33) 

APPENDIX MATERIAL SUBMITTED 
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ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD
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The following organizations submitted material for this hearing. 

That material will be maintained in the committee’s permanent 

record. 
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Æ