SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
5
#000000
#FFFFFF
inority business development agency
The GOP Must Choose: Pro-Business or Anti-Woke?
The House Anti-Woke Caucus appears to be somewhat out of step with a majority of Republican leaders and right-wing organizations on the issue of federal support for small disadvantaged businesses.
Apr 18, 2024
In March 2023, a group of House Republicans launched a new Anti-Woke Caucus to “root out all far-left political programs from the federal government”—including those focused on ensuring diversity, equity, and inclusion, or DEI, in both hiring and workplace practices. The group wants to “protect taxpayer’s [sic] from being forced to fund woke and divisive ideologies.”
Rep. Jim Banks (R-Ind.) chairs the caucus, which has 26 members, half of whom are also members of the far-right, obstructionist House Freedom Caucus.
The major difference between the two special interest groups is that the more radical Freedom Caucus seeks to completely change the direction and approach of the House GOP, which it believes is too accommodating to Democrats and the few moderate Republicans still in office.
Calling for the total elimination of any preferential treatment based on race, color, or national origin—part of the so-called “leftist” agenda—may make for good GOP rhetoric and energize a receptive base of Christian white nationalists. But it also has real-world implications that conflict with the positions of other Republican interest groups.
In contrast, the Anti-Woke Caucus includes members who are willing to work with party leaders and only want to focus on a single cause: exposing and eliminating programs it considers “far-left” or too progressive throughout the federal government.
The first action the caucus undertook last year was to endorse the Fairness, Anti-discrimination, and Individual Rights Act (FAIR Act) sponsored by Rep. Thomas Tiffany (R-Wis.), which prohibits the federal government, federal contractors, or any state or private entity that receives federal funding from “discriminating” by barring them from “giving preference to” any person or group based on “race, color, or national origin.”
Last year the caucus also backed a House amendment Banks added to the FY 2024 appropriations bill for the Department of Defense (DOD), which would have prevented federal funds from being used to hire or pay employees to develop, refine, and implement DEI policies. Since the Senate rejected the amendment, the restriction on DEI initiatives within the military did not make it into the final DOD appropriation.
Targeting Support for Minority-Owned Business
Calling for the total elimination of any preferential treatment based on race, color, or national origin—part of the so-called “leftist” agenda—may make for good GOP rhetoric and energize a receptive base of Christian white nationalists. But it also has real-world implications that conflict with the positions of other Republican interest groups.
The FAIR Act’s prohibition on preferences based on race would, for example, eliminate programs to encourage the growth and expansion of minority-owned businesses—also known as “set-aside” contracting. Through the Small Business Administration (SBA) and other agencies, the federal government is actively amping up its support of these businesses.
Dozens of studies have shown that minority-owned businesses are more likely to be denied credit in the private sector and are less likely to apply for loans due to fear of rejection.
The GOP had generally supported federal government contracting with minority-owned businesses, not as a means of addressing historical disparities but as a way to attract more Black, Latino, and Asian-American voters.
They “are likely to pay higher interest rates” on loans, according to Minority Professional: 7.8% on average versus 6.4% for businesses run by non-minorities. In addition, minority-owned businesses are “less likely to receive loans” and when they do, “they receive lower loan amounts.” Since state and federal government leaders have long recognized this disparity, they have created minority business set-aside programs as a counterbalance to these unfair practices.
Bipartisan support for minority-owned business contracting began as long ago as 1969 when Republican President Richard Nixon established the Office of Minority Business Enterprise. Today, that office is known as the Minority Business Development Agency (MBDA) within the U.S. Department of Commerce.
In addition, the SBA offers counseling, training, and funding for minority-owned businesses. President Joe Biden has greatly expanded outreach and access to small disadvantaged businesses (SDB)—those owned by one or more individuals who are socially or economically disadvantaged—while also increasing the percentage of government contracts going to these businesses.
GOP Waffles on Its Position
The Anti-Woke Caucus appears to be somewhat out of step with a majority of Republican leaders and right-wing organizations on the SDB issue. During his first year in office, former President Donald Trump proposed eliminating the MBDA, but minority-owned businesses and groups representing them got so outraged that he backed down. Up until then, the GOP had generally supported federal government contracting with minority-owned businesses, not as a means of addressing historical disparities but as a way to attract more Black, Latino, and Asian-American voters.
The U.S. Black Chambers (USBC) called Trump’s proposal to eliminate the MBDA “another failure to recognize the impact of Black business owners.” It pointed out that the MBDA actually “accounts for less than 0.001% of federal spending [yet it] supports business centers throughout the country and has helped secure $36 billion in contracts and capital for minority-owned businesses, retaining 125,000 jobs.”
Given the pushback—including bipartisan support in Congress and from the Congressional Black Caucus, in particular—Trump reversed course, kept funding for the MBDA in the proposed budget, and even went so far as to welcome winners of an MBDA enterprise development award program to the White House in October 2017.
Trump and the far Right can’t seem to land on a consistent position on the value of minority-owned business support.
“The work you do and the products and services you bring into this world generate new prosperity across America,” Trump congratulated the attendees. “For that, we are in your debt.”
Right-wing organizations also recognize that the Commerce Department’s longstanding agency enjoys broad, bipartisan support. Even The Heritage Foundation, speaking on behalf of more than 100 right-wing groups supporting its Project 2025 “presidential transition” playbook, recommends keeping the agency if Trump is elected to a second term.
At 900 pages, the Heritage playbook lays out the Right’s agenda for reconfiguring the federal government during a second Trump administration, with line-item eliminations of hundreds of programs in the federal budget. It envisions a country with a significantly weakened role for the federal government—which would no longer take action on climate change, for example, or provide protections based on race or sexual identity—and calls for replacing a nonpartisan, apolitical civil service with far-right political appointees.
Heritage admits that using race as an explicit criterion for federal funding is problematic for conservatives (see Project 2025, p. 716). But since it acknowledges that one-third of the total businesses in the U.S. are owned by non-whites, the numbers are too large to be ignored.
Even though Trump reversed course on MBDA in 2017, he could, of course, change his mind again if he regains office. Last month, the Trump-appointed Judge Mark T. Pittman of the U.S. District Court of the Northern District of Texas ruled in a lawsuit filed by the right-wing Wisconsin Institute for Law and Liberty that MBDA discriminates against white business owners and violates the U.S. Constitution’s Fifth Amendment equal protection clause.
Arguing that even saying minorities are at a disadvantage denies the rights of whites, Pittman ordered the MBDA to accept applications for loans and grants from white businesspeople as well. He acknowledges that the agency is meant to help “alleviate opportunity gaps” for minority entrepreneurs, but says that it is wrong to presume that racial minorities are inherently disadvantaged and that “two wrongs don’t make a right.”
The Biden administration is likely to appeal the decision.
Trump and the far Right can’t seem to land on a consistent position on the value of minority-owned business support. But given its popularity among business groups and many politicians, it seems unlikely that the Anti-Woke Caucus will get its way—at least on this particular issue.
Keep ReadingShow Less
Most Popular