Rep. Yvette D. Clarke Testifies Before The House Budget Committee

Statement

Today, Congresswoman Yvette D. Clarke testified before the House Committee on the Budget about her principal interests regarding the Budget Resolution for Fiscal Year 2011. Clarke advocated for increased funding of the Community Development Financial Institutions Fund; the Minority Business Development Agency; and the Community Development Block Grant. After her testimony, Budget Committee Chairman John Spratt vowed to work with the Congresswoman on these economic recovery programs that support minority and women owned businesses and the communities they serve. Rep Clarke made the following statement:

"Mr. Chairman, Ranking Member Ryan, and Members of the Committee, I would like to thank you for this opportunity to discuss the federal budget's impact on minority and women owned small businesses and other engines for community development in New York City. I am quite pleased with the direction that the Administration is going, however more can be done to support spur innovation and growth by investing in small businesses and the communities they serve.

"According to the New York State Small Business Task Force, in New York State, small business is big business. Small businesses represent over 98 percent of all of the State's private employers and employ 55 percent of the State's active private sector labor force. Minority- and Women-owned small businesses employ nearly 5 million people and make up almost 20% of all businesses in the United States. Unfortunately, the economic recession has hit these businesses especially hard, forcing many to shed jobs or scale back operations. The credit crisis has made it more difficult for all small businesses to secure financing; limiting growth opportunities and jeopardizing short term business stability.

"The President's Fiscal Year 2011 Budget presents us with an opportunity to reset the stage for economic growth for the in this decade and beyond. As a Member of the House Committee on Small Business, I have been in touch with Minority- and Women- owned businesses from all across the country, especially those from underserved and economically distressed areas that have been disproportionately affected by this difficult downturn. Today, I want to highlight three critical programs that impact these businesses and the communities they serve.

"I first want to ask that you provide $260 million for the Community Development Financial Institutions Fund, which is $10 million above the Department of Treasury's request of $250 million. I am proposing that the additional $10 million be allocated to the CDFI Program. Founded in 1994, Community Development Financial Institutions Fund, or the CDFI Fund, is a much needed economic stimulus tool.

"CDFIs are loan funds, banks, credit unions, community development venture capital funds and other organizations principally engaged in economic development. CDFI customers are 70 percent low income, 60 percent minority and 52 percent female. In light of the economic downturn and subsequent restriction on lending to low- and moderate- income families and small businesses, the work of CDFIs is especially important right now.

"On December 2, 2009, the FDIC released a study which reported that approximately 30 million Americans do not have access to traditional banks or credit unions. That means that 54 percent of African American households and 43 percent of Hispanic households often turn to alternative financial services such as payday loans, title loans, and other cash advances, that charge exorbitant rates to access capital. CDFIs work every day to provide credit to underserved populations, replacing their need to turn to high priced alternative financial products. While the President's request of $250 million for FY 2011 illustrates the Administration's commitment to this important Fund, consumer demand for CDFI program assistance has skyrocketed during this recession. With the additional $10 million, the CDFI program would receive a total of $150 million to expand the availability of affordable capital and credit products to distressed families and small businesses. Congress must invest in this important economic stimulus tool.

"Second, I want to ask the committee to fund the Minority Business Development Agency (MBDA) at $40 million, an $8 million increase over the Department of Commerce's FY2011 budget request of over $32 million for the Agency. The Administration's $816 thousand increase over the FY2010 funding level is a modest improvement, but this sum will not make the kind of tangible impact my constituents are seeking.

"MBDA has served minority businesses since 1969 and is the sole federal agency devoted specifically to the establishment and growth of minority businesses in America. Through a network of minority business centers and strategic partners, MBDA works with minority entrepreneurs who wish to grow their businesses in size, scale, and capacity. These firms are then better positioned to create jobs, impact local economies, and expand into national and global markets.

"In light of the current economic climate which has been plagued by persistent job loss and high unemployment rates, MBDA can play a central role in mobilizing resources to increase minority business capacity and improve economic outcomes. During FY 2009, with a budget of just under $30 million, MBDA was able to create 3,024 new jobs and preserve thousands more while facilitating $2.9 billion in new business- to -business opportunities and development projects. My constituents have told me that MBDA's efforts in 2009 were helpful to their business expansion and job creation endeavors, but they believe more can be done.

"In order for the MBDA to deliver their effective and personalized services to more minority entrepreneurs, it is vital that the Agency have adequate financial resources. Te agency can use the increased funding to open additional business development centers, which has been cut from more than one hundred in 1969, to just forty as of today. With $40 million, the MBDA would also be able to increase its team of skilled and experienced nationwide staff.

"By adequately funding the MBDA, hundreds more small and medium sized businesses would have access to the technical assistance and capacity building tools necessary to help them prosper. Our relatively small investment in this important Agency would mean that thousands of Americans would be able to either get back to work or keep their jobs.

"Lastly, I want to express my strong support for increased funding of the Community Development Block Grant (CDBG). As I discussed in my testimony last year, the CDBG program provides vulnerable communities with resources to address a wide range of unique community development needs. One of the near these numbers with requests for $4.38 billion and $3.99 billion for formula grants. I urge this committee support funding for the CDBG program at the FY 2010 level of $4.45 billion and $3.99 for formula grants.

"Thank you again for the opportunity to testify before this committee today. I look forward to working with you over the next several weeks to craft a budget that provides fiscal recovery and responsibility, while addressing the needs and priorities of the people of New York City and all Americans."

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