Warren proposes $7 billion plan to support minority-owned businesses

Warren proposes $7 billion plan to support minority-owned businesses
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White House hopeful Sen. Elizabeth WarrenElizabeth Ann WarrenTrump executive order aimed at combating anti-Semitism stirs up controversy Booker leads other 2020 Dems in petition urging DNC to change debate qualifications Democrats threaten to skip next debate over labor dispute MORE (D-Mass.) unveiled Friday a $7 billion proposal to help boost minority-owned businesses. 

The plan would create a Small Business Equity Fund run by the proposed Department of Economic Development to provide grants to entrepreneurs of color and women. It would also require states and cities administering money from the new fund to partner with women- and minority-owned businesses to make investment decisions. 

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Warren said she intends to support 100,000 new minority-owned businesses, which she said would create about 1.1 million jobs. The cost of the entire plan would be entirely covered by Warren’s “ultra-millionaire tax” on households with a net worth of $50 million or more.

The Massachusetts Democrat said the plan is necessary to help level the entrepreneurial playing field, as entrepreneurs of color and women on average have less wealth than white entrepreneurs to invest in their companies and less collateral to attract outside credit. 

“The small business gap is another example of how the racial wealth gap in America holds back our economy and hurts Black, Latinx, Native American, and other minority families and communities,” Warren said in a release. 

“And because the government helped create that wealth gap with decades of sanctioned discrimination, the government has an obligation to address it head on — with bold policies that go right at the heart of the problem.”

The program would have federal standards but would be run through states and municipalities, like the State Small Business Credit Initiative. It would also be restricted to entrepreneurs who are eligible for the Small Business Administration’s 8(a) program and who have less than $100,000 in household wealth.

Warren maintains that $7 billion in funding for the program would “ensure that if Black, Latinx, and Native American entrepreneurs started businesses at the same rate as white entrepreneurs, we could fully close the startup capital gap for every single one of these new minority-owned businesses for the next ten years.”

To help boost investments in small businesses after their founding, Warren intends to direct all federal pension and retirement funds to diversify their sets of investment managers and triple the Minority Business Development Agency’s budget.

Warren, who announced her White House ambitions in December and has recently seen a steady rise in primary polling, has attracted attention to her campaign by releasing a slew of detailed policy platforms on issues like eliminating maternal mortality rates, raising taxes on wealthy families, reducing student debt and more.