Under President Biden's leadership, the home appraisal gap-an indicator of potential racial and ethnic bias-has shrunk by more than 40%
80% of Congressional Republicans are supporting a plan that would reverse this progress, while cutting Medicare, Social Security, and the Affordable Care Act
Nearly three years ago at a speech to commemorate the centennial of the Tulsa Race Massacre, President Biden committed to addressing racial inequities in the home appraisal process and increase the share of federal contract spending awarded to small disadvantaged businesses by 50%. Today, during remarks at the National Action Network Convention, President Biden will highlight how his Administration is delivering on that promise and announce key progress being made to create opportunity in historically under-resourced communities and narrow the racial wealth gap.
While the President and Vice President continue working to close the racial wealth gap and create more opportunities for all Americans, 80% of Congressional Republicans are supporting a plan that would move the country backwards. Their plan would defund the President's executive orders on racial equity, while cutting Medicare, the Affordable Care Act, and Social Security-raising the Social Security retirement age in the process. Congressional Republicans would also roll back billions of dollars in investments and tax incentives that support small businesses as they shift to a clean economy. Moreover, the Congressional Republican plan would also increase prescription drug, energy, and housing costs, while fighting for tax giveaways for the very rich and big corporations.
In direct contrast, closing the racial wealth gap has been central to the Biden-Harris Administration's economic agenda, and the progress we are making under the President's leadership is delivering for communities nationwide, including Black Americans. The President's announcements today to build on this progress include:
Rooting out bias in the home appraisal process. The Federal Housing Finance Agency is releasing new data showing that the "appraisal gap"-the likelihood that homes in communities of color are undervalued compared to homes in majority-white communities-has been cut by more than 40% since the Biden-Harris Administration took action on appraisal bias. The data also show that some states have eliminated the gap entirely. In these states, families in communities of color are no more likely to have their home valued at less than the agreed contract price than are families in white communities. This means that more Black Americans and people of color are able to build greater wealth from owning a home.
While there can be many reasons why an individual home is valued below the agreed-upon contract price, systemic undervaluation in communities of color can indicate racial bias in the appraisal process.
On June 1, 2021, the centennial of the Tulsa Race Massacre, President Biden announced the creation of the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE): a first-of-its-kind effort to root out bias and advance equity in the home appraisal process. Since releasing the PAVE Action Plan in March 2022, the Task Force has made critical progress towards implementation, including major steps to empower consumers to take action against appraisal bias; prevent algorithmic bias in home valuation; and support a well-trained and more representative appraiser profession.
Rooting out bias in appraisals can help narrow the racial wealth gap. According to a recent study, eliminating racial disparities in the amount of wealth families gain from owning a home would narrow the wealth gap by 16% between Black and white households and by 41% between Latino and white households.
Achieving record federal investment in small disadvantaged businesses. Today, President Biden is also announcing that in Fiscal Year 2023, agencies surpassed the President's goal for federal contracting dollars going to small disadvantaged businesses (SDBs), awarding SDBs a record-breaking $76.2 billion, or 12.1% in federal contracts. This sets a new all-time record for federal dollars to SDBs, surpassing the record set by the Biden-Harris Administration last year of $69.9 billion, and illustrates continued progress towards the President's goal of 15% to SDBs by 2025. Three consecutive years of record-breaking awards to SDBs underscores the Administration's unwavering commitment to leveling the playing field for the Nation's small businesses and ensuring that no talent is left on the sidelines, even in the face of legal attacks that seek to undercut the Administration's efforts.
Increasing federal investments in under-resourced businesses not only helps more Americans realize their entrepreneurial dreams and strengthens the supplier base, but also narrows persistent wealth disparities. According to analysis from the White House Council of Economic Advisers, eliminating racial disparities in business ownership rates would narrow the wealth gap by an additional 22% between Black and white households and by an additional 17% between Latino and white households. Recognizing this historic opportunity, in 2021, the President set a bold goal of increasing the share of the more than $630 billion in contracting dollars going to SDBs each year, including Black, Latino and Asian American-owned small businesses, to 15% by 2025-or an increase of 50% from 2010.
Canceling student loan debt. The Biden-Harris Administration also today announced that it is canceling an additional $7.4 billion in student loan debt for 277,000 borrowers. This brings the total amount of debt relief approved by the Administration to $153 billion for 4.3 million Americans. Today's announcement builds on the President's announcement earlier this week, laying out his Administration's plans that would cancel student debt for tens of millions of Americans, if implemented as proposed. These plans would cancel runaway interest for over 25 million borrowers, cancel loan debt for borrowers eligible for forgiveness programs but not enrolled in those programs, and cancel student debt for borrowers experiencing hardship in their daily lives preventing them from paying back their loans.
Black and Latino borrowers are more likely to experience growth in their student loan balances due to excessive interest accumulation. Four years after graduation, Black bachelor's degree borrowers, on average, owe more than they borrowed. These plans would not only help create more financial stability for millions of working and middle-class families, they would also help address the disproportionate debt burden on communities of color and advance racial equity.
Today's announcements build on the progress the President has made to leverage the full force of the Federal Government-including with the signing of two executive orders on advancing racial equity-in order to ensure the promise of America for all communities, including Black Americans. Here are just a few examples of how Bidenomics and the President's Investing in America agenda are already delivering for Black Americans:
- Under President Biden, the Black unemployment rate and gap between Black and white unemployment hit record lows.
- Black wealth is up 60% relative to pre-pandemic levels.
- The share of Black business owners more than doubled between 2019 and 2022.
- Black-owned businesses are being created at the fastest rate in 30 years.
