October 1, 1976
Page 34754
S. 2617 — THE MINORITY BUSINESS DEVELOPMENT ACT OF 1976
Mr. MUSKIE. Mr. President, on Tuesday, September 28, 1976, the Intergovernmental Relations Subcommittee of the Senate Government Operations Committee voted by 8 to 0 to refer S. 2617, the Minority Business Development Act of 1976 to full committee. The distinguished junior Senator from Ohio, Senator GLENN has been quite active with this legislation. He chaired the hearings on the bill and worked hard on needed modifications.
I ask unanimous consent that the following statement by Senator GLENN on S. 2617 be printed in the RECORD.
There being no objection, the statement was ordered to be printed in the RECORD, as follows:
STATEMENT BY SENATOR GLENN
I expect that the Intergovernmental Relations Subcommittee of the Senate Government Operations Committee will soon act on S. 2617, a bill to establish a Minority Business Development Administration in the Department of Commerce administered by an Assistant Secretary for Minority Business Development.
S. 2617 was introduced in November of 1975 by Senator Johnston. Congressman Andrew Young of Georgia introduced a companion measure in the House. As a principal cosponsor, I was happy to chair a full day of hearings on this bill this past April. After carefully reviewing testimony from those hearings, Senator Johnston and I made several modifications to the original bill and emerged with a solid piece of legislation.
Let us make no mistake about it, the status of minority business development indicates that this nation still has very great strides to make before we can accurately state that the minority businessman has entered the economic mainstream. I believe that we need to significantly upgrade the status, power and funding of the federal minority business development effort and that we must elevate this issue from the back burners of national priority. I believe that S. 2617 starts us moving toward these goals.
No later than 90 days after the enactment of S. 2617 there are to be transferred to the new Assistant Secretary any separable federal activity relating to the development of minority business enterprises with the exception of SBA loan programs and CSA community development programs. One of the Secretary's other key activities will be the coordination of federal programs and activities that relate indirectly to the goals of minority business development. A vital additional function of the Secretary would be the arrangement for and coordination of technical assistance programs conducted by public and private agencies.
The Secretary will pack "clout" in terms of prestige, legislative authority and budget. Tragically, the current federal minority development effort lacks that clout.
There are at least 17 different Government agencies charged with administering programs designed to assist the development of minority business and fully 28 agencies involved in funding for minority businesses, much of which is in contract awards. Obviously, there is a great need here for a strong, powerful coordinated effort that is capable of maximizing the federal developmental effort. S. 2617 attempts to begin that process of coordination.
We often speak about "recessions" and "economic downturns" but we rarely state that many of our minority communities are in states of outright economic depression. Tight credit, high interest rates, massive unemployment: these are depression-level conditions in minority areas. Developing a solid and strong minority business community that functions well not only in the minority communities but in the overall economy is one sure way of combating such economic depression.
Minorities represent about 16 percent of the U.S. population, yet only about 382,000, or 3 percent, of the roughly 13 million businesses in the U.S. are owned by minorities. Of $2.54 trillion in gross business receipts for the nation, about $16.6 billion, or 0.65 percent, of that total was realized by the minorities. Only 20 percent of minority owned firms were employer firms and they accounted for $12.069 billion or 73 percent of total receipts, which indicates, as we class it, the mom-and-pop nature of most minority businesses as compared to the much broader participation by the average white businessman.
As in the past, minority owned firms are primarily concentrated in the retail and service areas and 92 percent, 320,593 of minority businesses were sole proprietorships. Interestingly, this large sole proprietorship group in 1972 accounted for only 56.8 percent of the total gross receipts by minority businesses, while the 20,497 (5.9 percent) partnerships accounted for 15.9 percent of receipts and the 6,845 (2 percent) corporations accounted for 27.3 of the gross receipts.
This statistical picture tells us that: (1) we need to greatly diversify and expand the range and focus of minority business; (2) the size of minority business must be significantly expanded, both numerically and in terms of size of operations; (3) The federal effort to help achieve these goals must be increased in power, priority and funding. S. 2617 seeks to achieve these goals.
I fully realize that the 94th Congress may adjourn without finally acting on S. 261'7. Yet, I believe that Subcommittee action will give us momentum for early action in the 95th Congress. I would hope that we could join Senators Brooke and Javits and Congressman Parren Mitchell of Maryland, in a comprehensive effort to upgrade the federal minority business development effort. Senators Javits and Brooke and Congressman Mitchell have long been involved in this area and have highly significant legislation dealing primarily with SBA. We should combine our efforts next session and press for enactment.
In conclusion, I would like to say that S. 2617 received support from the National Economic Development Association, the National Urban League, the Latin American Manufacturers Association and many community groups in Ohio, Louisiana and across the nation. The grass roots entrepreneur knows the real problem, he or she is not concerned about petty, bureaucratic squabbling such as "SBA vs. OMBE". What the grass roots entrepreneur seeks is assistance in overcoming the vestiges of racial and economic discrimination and exclusion. He or she wants to assume a rightful place in the mainstream of economic and business life. These goals are the identical goals of S. 2617 and I will fight to help achieve them in the 95th Congress.