Biden’s plan to help boost Black American wealth

Everything Biden’s done and planned to close the racial wealth gap

Feb 22, 2021 | Editorial | Government | Current Events
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To honor Black History Month, The Post is highlighting the most relevant financial issues for Black communities in America today.

Biden makes money moves for racial equality

After speaking out against racism and white supremacy in his inaugural address (something no other US President has done), Biden signed four executive orders days later to push his racial equality agenda forward. Only two other Presidents have devoted as much early attention to closing racial divides: Ulysses S. Grant and Lyndon B. Johnson. Quick history refresher — U.S. Grant helped keep America in one piece during the American Civil War, and LBJ became President just in time to sign the 1964 Civil Rights Act into law. Similarly, Biden’s Presidency kicked off in a moment of racial reckoning that’s one for the history books, with last summer’s global protests for racial justice still fresh and the pandemic that hit Black Americans’ finances hard still raging.

Just how bad have things gotten?

For Black Americans’ bank accounts, things have been better. Between 2010 and 2019, the percentage of Black households with money saved rose from 39% to 47%. And the median stash of cash in Black Americans’ retirement accounts jumped 67%, from $20,900 in 2013 to $35,000. These stats signaled Black Americans were bouncing back from the last economic recession. Then came Covid-19. Last April, 44% of Black Americans said a member of their household lost income due to the pandemic, and 73% didn’t have an emergency fund. But don’t think Black Americans’ financial disadvantages start and stop with Covid-19. The pandemic only made things worse. Case in point? Around half of those surveyed (48%) said they couldn’t pay all their bills last April, but 46% said they couldn’t have paid them anyway, pandemic or no pandemic. As for net wealth, the median amount for a White American family was $188,200 in September 2020. The median wealth for Black families? $24,100.

So what’s the President going to do about it?

He’s done some things already, and has more plans in the pipeline. From the campaign trail, Biden advocated for a $2 trillion investment in Black and Brown communities to update everything from bridges and roads to schools and broadband networks. His Small Business Opportunity Plan hinges on business ownership as a top way to build wealth and will create clearer paths to entrepreneurship for Black Americans. The plan aims to direct $50 billion in venture capital to Black and Brown entrepreneurs, expand access to $100 billion in low-interest lending to those same folks, and strengthen CDFIs. And in a move that’s less easy to quantify but noteworthy nonetheless, Biden said he won’t silo racial justice as a fringe issue, but keep it front and center to inform everything he does, assembling the most diverse cabinet ever to help make it happen.

The Prez’s other policy plans won’t only benefit Black Americans struggling to build wealth, but lend a boost to all low-income earners. A $15,000 tax credit would help give first-time homeowners the means to afford the dreaded down payment, which now makes homeownership cost prohibitive for many. Women borrowers and people of color would be the biggest winners from student debt forgiveness, and for incoming freshmen, Biden supports tuition-free college for families earning less than $125,000 a year. And even though $15 federal minimum wage talks have been tabled for now, a wage increase down the road would give 31% of Black workers a raise.

Biden’s balancing act

An overwhelming majority of Black voters ticked the box for Biden back in November — 87% to be precise. To keep those votes in 2024, the President’s greatest challenge may be delivering on his campaign promises to close the racial wealth gap, while forging unity along party lines at the same time. But Biden seems up for the challenge.