Small Business Committee Democratic Site

ADDRESS
by the
Honorable Nydia M. Velázquez
Ranking Democratic Member, House Small Business Committee
U.S. Hispanic Chamber of Commerce
March 6, 2002

Thank you very much. I would like to thank George Herrera and the Hispanic Chamber for inviting me. It is a wonderful honor and opportunity to talk to you today.

As we come together to discuss the state of the Hispanic business community, I am just so struck by the accomplishment and vast potential in this room. We have some pioneers of the Hispanic business community here --- and some new faces, too. Our past and future are assembled today as one.

It is a good reminder for those of you just venturing into the business world that we should never forget those who cleared the path before us. My family and I grew up watching my father struggle with his business every day without proper access to necessary resources for growth. And we experienced his frustrations when unfair and burdensome government regulations further hindered that growth.

I go to work every day as Ranking Democrat on the House Small Business Committee with this living history in mind --- knowing that just as my father the businessman worked to improve our neighborhood and community, so do many comerciantes Hispanoamericanos de hoy en dia.

While corporations shed jobs and abandon our cities to shift production overseas, YOU are creating more jobs and leading more innovation than ever, here at home. In fact, Hispanic businesses more than doubled during the 1990s --- to over 1.2 million companies! Your hard work helped to haul our country out of recession into the biggest economic boom on record --- and I know you are doing it again, right now.

The clout of the Hispanic community in American commerce and culture cannot be denied. Today, Hispanics spend more, are better-educated and earn more money. Latin Americans spend an estimated $383 billion in the marketplace each year --- an increase of 84 percent during the past decade.

But the true turning point is still in front of us. To fully participate in American public life, we must transform our economic prowess into real political power. It is true that we are fielding more candidates and affecting more elections. But we need to make sure our elected representatives are advancing our agenda. They need to know we are not merely to be wooed and won. They must respect our values and defend our interests.

Now, some of the Hispanic Business community's interests are universal and mainstream. We want to reduce regulatory burdens and lower taxes. We want to make it easier to provide worker training and employee health care. We want to open access to capital for growth and expansion. In short, we want you and those who work for you to have the tools to build the American Dream.

But there is more to be done to meet our own particular interests. Unfortunately, I'm afraid that from my perspective on the House Small Business Committee, the current Administration and others in Congress are working against the best interests of our community.

Today, Hispanics are still very much on the outside looking in when it comes to accessing this country's largest marketplace - the $200 billion dollar federal arena.

I would like to stand here before you and tell you how the federal government mirrors the private sector. I would like to tell you that procurement officers are taking advantage of our innovators and problem-solvers who can respond to any situation.

Unfortunately, nothing could be further from the truth. Between 1995 and 2000, contracting opportunities for minorities fell 20 percent --- with a $500 million dollar drop in federal dollars in 2000 alone.

This is shameful. Today, in many sectors of the federal marketplace the "good old boys" network is alive and well --- sending the message that minorities need not apply.

In the end, American taxpayers suffer when their hard-earned income is wasted on higher costs and lower-quality products and services --- because federal bureaucrats aren't required to look beyond the established contracting network. We must demand equity and opportunity in the federal marketplace. We know we can do the job. We've proven it in the private sector. This is a matter of fairness.

Because the federal government lags far behind the private sector's understanding that diversity means quality, I began issuing a report examining how federal government does business with small companies. My last Scorecard report showed that in 2000 the federal government failed to meet any of its commitments to minority and women-owned small businesses.

These reports tell federal agencies that they can no longer make their deals in back rooms --- we are watching, and they cannot shirk accountability for equity and fairness.

For 30 years our one tool to break this lockout of federal contracts has been the 8(a) program. Since its inception in 1969, the 8(a) program has helped minority-owned firms across the nation break into the procurement arena. 60 percent of federal procurement for minority-owned firms is due to the 8(a) program.

When contracting opportunities for Hispanics are in such dire straits, there should be a movement to strengthen the last remaining vehicle to opening the federal marketplace for Hispanics. Instead, through attacks by conservatives, indifferent lawmakers and incompetent bureaucrats, the 8(a) program has been pushed into disrepute and disrepair.

Today, the program faces its greatest challenge ever as it now stands to be eliminated through regulatory fiat. Recently, the Administration announced a wholesale rewrite of contracting programs. The stated aim was to increase economic opportunities in low-income communities --- certainly a laudable goal. But the reality behind the rhetoric is very different. This change will in fact ignore low-income communities and rob minority businesses of the contracts they deserve.

Worse, this measure will pit minority business owners against low-income communities. In the end, it means job losses and the threat of failure for small businesses. Some will argue that the interests of the minority and low-income communities are one and the same. This generalization borders on racist stereotype.

There are some who will pay lip service to our cause by saying that they want to fix the 8(a) program and believe that this regulatory shift will improve it. But we cannot make improvements to a minority-business program that no longer exists. We must protect the 8(a) program and strengthen it so that it can help other Hispanic business owners get their slice of the federal contracting pie.

We must make it clear to lawmakers and rule-writers that this is a defining issue for the Hispanic business community. The survival of the 8(a) program is something that I strongly believe in. Many of you know I am no shrinking violet --- and I will go to the mat to protect this program and contract opportunities!

I want to commend George Herrera and the Hispanic Chamber for speaking out so forcefully in opposition to this change.

Now, you would think that all this so-called concern for low-income communities would translate into support for established programs with that exact goal. But without irony, they rationalize eliminating the 8(a) program and in the same breath they argue to terminate the New Markets initiatives. These programs are a vehicle for economic development through venture capital, technical assistance, and government contracting opportunities.

New Markets grew out of a 1998 trade mission to South America during which I had the opportunity to accompany President Clinton and talk to him about the importance of opening opportunities not just overseas, but right in our own backyards.

In December of 2000 --- barely a year ago --- the President signed the New Markets Venture Capital Program into law, and it did exactly that. Not only because we have an obligation to do so, but because it makes good business sense.

This sent a message to Hispanics across the country, whether you were a migrant worker who doesn't have safe water to drink or a Latina who lives in el barrio trying to make ends meet --- economic prosperity must --- and will --- benefit everyone. We must ensure that they, too, will be able to live the beauty of their dreams.

Unfortunately, at the exact time we need these programs, the Administration's budget proposal completely eliminates the New Markets initiatives, labeling them duplicative and unnecessary. This disconnect at the White House is astounding --- and will result in forfeiting our commitment to those hard-working Americans.

The president says he wants to lead us out of the recession by creating new jobs, and with good reason. The Hispanic unemployment rate is at 8.1 percent and climbing, while the national rate is 5.6 percent and dropping. The New Markets program was designed to reverse this inequality, by spurring economic development in the neighborhoods that need jobs most.

These are difficult and trying times. Our country is at war, Americans worry about their families' safety at home and at work, and we are trying to recover from a recession. It is easy to lose sight of important issues like minority contracting and investment in our communities. But it is precisely in times like these when we must be most vigilant in protecting our values and our interests. The future of our community --- and all that we have built together --- will depend on it.

These are the goals we must use our new-found political power to defend and advance. If you value a fair chance, then we must hold our public servants accountable for the decisions they make that roll back 30 years of progress for our community. That is the meaning and obligation of real political power. If they fail to heed us, we must make it clear that we will turn them out and find someone who will!

The American creed is one of ever-expanding opportunity. Over the centuries, Americans have struggled to make that opportunity available so that every one of us can realize our God-given talents. Opportunity is rarely just given. It must be demanded, even wrestled and fought for. But it is always worth the fight.

And the fight continues today. I hope that we can put the astonishing power of the Hispanic community to work in the political arena, to ensure that the American creed continues to envelop more and more people, families, neighborhoods and communities. That is the obligation of our success.

I will continue to work for our community in Congress. I look forward to cooperating with everyone here, and especially my colleagues, to move our agenda forward.

Thank you very much.