President Biden announced today new steps his administration will take to reduce the racial wealth gap.
Here are key things to know about the actions:
Combating housing discrimination. The President is charging Secretary of Housing and Urban Development Marcia Fudge with leading a first-of-its-kind interagency initiative to address inequity in home appraisals. The effort will include carrying out potential enforcement under fair housing laws, regulatory action, and the development of standards and guidance in partnership with industry and state and local governments.
To allow the more vigorous enforcement of the Fair Housing Act, the agency also will publish two rules aimed at combating practices that contribute to systemic inequality. The rules would reinstate the agency’s discriminatory effects standard and the requirement that municipalities that receive agency funding show that the money’s use does not further discrimination.
These efforts are aimed at reversing efforts by the Trump administration to weaken Fair Housing Act protections and stem from an executive memorandum Biden issued in January that focused on redressing the federal government’s history of discriminatory housing policies.
The moves are a “welcome step” and go part of the way to addressing structural divides in the housing market that have developed over decades, said Michael Neal, senior research associate at the Urban Institute. He would also like to see downpayment assistance, particularly for the historically disadvantaged.
Directing federal contracts to small businesses. In addition, Biden wants more federal purchasing to be made from small, disadvantaged businesses, many of them minority-owned — though it could take years to have an impact. His goal is to increase the share of contracts going to them by 50% by 2026.
The President can direct federal agencies to conduct outreach to smaller businesses and reduce barriers that exist for them to compete in federal contracts. It’s unclear whether he will need Congress to pass legislation that changes some of the rules.
Biden has already set in motion a process to alter federal purchasing rules when he signed an executive order in January. It set a 180-day deadline to change how domestic content is defined and measured for qualifying products as well as increase the required threshold in an effort to boost American manufacturing. Biden also hired the first Made in America Director, Celeste Drake, to help implement the federal procurement process and focus on reaching small businesses and minority entrepreneurs.
What else Biden could do: Several policy experts say canceling student debt would help close the racial wealth gap because Black Americans are more likely to take on student debt and then struggle to repay it. More than 200 advocacy groups, including the Center for Responsible Lending and the American Federation of Teachers union, called on Biden to use his executive powers to cancel student debt on day one of his administration.
Dozens of Democratic lawmakers, including Senate Majority Leader Chuck Schumer and Massachusetts Sen. Elizabeth Warren, also called on Biden to take action and cancel $50,000 per borrower. The move would be unprecedented, but a memo from lawyers at Harvard’s Legal Services Center and its Project on Predatory Student Lending says the Department of Education has the power to do so.
Biden has resisted the pressure so far but has said he would support a move by Congress to cancel $10,000 per borrower. It’s unlikely that legislation would pass the Senate where Democrats have a razor thin majority.
Taking executive action does not appear to be off the table, though. Biden directed Education Secretary Miguel Cardona to write a memo on the president’s legal authorities to cancel debt, White House Chief of Staff Ron Klain said in an interview with Politico in April.
Biden did not include a student debt cancellation provision in his $1.8 trillion American Families Plan, which calls for making community college free and expanding Pell Grants for low-income college students, or in his proposed budget. NAACP’s National President Derrick Johnson criticized Biden for failing to address the student loan crises, which he said was at the core of the racial wealth gap.
CNN’s Kate Sullivan contributed to this story.