Gephardt Shifts Focus to Minority Communities

Times Staff Writer

Expanding the scope of his domestic agenda, Rep. Richard A. Gephardt proposed a series of measures Tuesday that would shift federal spending toward minority communities in an effort to increase opportunities that he said "for too long have been denied for too many."

The Missouri congressman's proposals represent one of the first efforts by the top-tier candidates for the Democratic presidential nomination to focus on the economic needs of minority voters.

"Today, the state of our racial disunion is clearly fractured along economic lines," he said in a speech in Hamtramck, Mich. "We cannot be a United States of America if all Americans are not united in opportunity."

Gephardt's proposals would not dramatically increase federal spending -- his campaign estimated they would cost slightly more than $1 billion. But his plan would alter rules for the government's contracting and purchasing system so that minority-owned businesses could get more federal money.

He also said that he would increase federal loans for minority-owned small businesses that qualified as economically disadvantaged and that he would press federal regulators to more closely monitor financial institutions to fight predatory lending to members of minority groups -- an approach that the Clinton White House favored.

The plan is rooted in measures that were at the center of efforts pushed during the administrations of Lyndon B. Johnson and Richard Nixon decades ago, when each president sought to increase the flow of federal dollars to impoverished urban communities.

"These are not new ideas," said John D. Skrentny, a sociology professor at UC San Diego whose most recent book, "The Minority Rights Revolution," includes a chapter on the history of government assistance to urban centers.

Nevertheless, Skrentny said that if the aid were carefully targeted at disadvantaged minorities and that if it were to meet constitutional tests prohibiting illegal racial discrimination, it could be "really helpful."

Gephardt, in a telephone call with reporters after he delivered the speech, said that because his proposals largely involved shifting current spending, rather than expanding overall allocations and procurement, there would be little effect on the federal budget deficit.

In a campaign that has focused largely on the Iraq war, health care and the state of the overall economy, Gephardt's address reflects an effort to address the particular needs of minority voters.

"The African American voter is going to have a very central role to play" in the Democratic primaries and caucuses, Gephardt said in the telephone call.

Gephardt's plan calls for increasing the amount the government spends in its dealings with minority contractors, increasing the overall value from 5% of its total purchasing and contracting to at least 10%.

He said he would increase federal purchasing and contracting with all small businesses from the current goal of 20% to 25%.

Among other Democratic presidential candidates, Sen. Joe Lieberman of Connecticut has advocated steps to make it easier for small businesses to obtain investment capital. Sen. John F. Kerry of Massachusetts has supported making the head of the Small Business Administration a member of the Cabinet. Sen. John Edwards of North Carolina has proposed measures to help economically depressed small towns in rural areas obtain venture capital.

A spokesman for Howard Dean said the former Vermont governor was planning to unveil urban policy proposals in several weeks.

Gephardt also would increase, from $9.3 billion to $10.3 billion, the federal funding of small-business loans going to start-up companies, giving a priority to small companies considered disadvantaged and seeking working capital so they could meet the requirements for federal contracts.

Companies that meet the federal definition of disadvantaged are often minority owned.

Gephardt said he would seek to expand the government's effort to help disadvantaged businesses find private investors. He would add $10 million to a program that gives small loans, generally no more than $35,000, to businesses owned by women, minorities and low-income citizens. In the current fiscal year, the program has been cut from $31 million to $20 million.

Gephardt couched the proposals he made Tuesday as an outgrowth of the civil rights campaigns of the 1960s.

"The moral imperative includes not just civil justice, but economic justice as well," he said in the speech delivered at the Corinthian Baptist Church.

Arguing that "economic progress for minorities has been intermittent at best," Gephardt said that the average income of an African American family is 65% that of an average white family and that Latino families were faring only slightly better.

Times staff researcher Susannah Rosenblatt contributed to this report.

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