News Column

How the Candidates Stand on Minority Lending and Affirmative Action

Oct. 6, 2008

Neil H. Simon, for Hispanic Business Magazine

Candidates Minority issues

The presidential campaigns of John McCain and Barack Obama are zigzaging across the country, and their positions on affirmative action are doing the same.

While Hispanics leaders commend both candidates for supporting expansion of minority-owned business opportunities, they fear both candidates could further erode federal laws that have helped minorities gain educational and career advancement.

Obama -- Affirmative Action Based On Class

Sen. Obama, the son of a Kenyan and a Kansan, acknowledged personally benefiting from affirmative action in his own education, but said his own daughters should not.
Affirmative action policy should be crafted "in such a way where some of our children who are advantaged aren't getting more favorable treatment than a poor white kid who has struggled more," Sen. Obama told minority journalists in Chicago this summer.

That idea of shifting to class-based affirmative action has some civil rights groups waiving caution flags.

"You can't just use economic status or class as a proxy for race, because you simply won't end up with a diverse student body," said Peter Zamora, Washington regional counsel for the Mexican-American Legal Defense and Educational Fund.

McCain -- Supported Anti-Affirmative Action

Republican Sen. McCain "does not favor replacing one set of affirmative action criteria with another," said Carly Fiorina, a Sen. McCain adviser and former CEO of Hewlett-Packard.
This summer Sen. McCain said he supported an anti-affirmative action measure now on the ballot in his home state. The referendum would bar Arizona from granting "preferential treatment" based on race, ethnicity, or gender.

"I support it. I do not believe in quotas," Sen. McCain told ABC News. "I've always opposed quotas." The Supreme Court has outlawed quotas for decades.

Sen. McCain, of Arizona, has not always been so clearly opposed to affirmative action, the position he now appears to advocate. In 1998, he called an anti-affirmative action effort in his home state "divisive."

The affirmative action debate highlights how both candidates are still trying to shore up and broaden their bases of support.

McCain is working late in the election season to keep right-wing conservatives – whom he largely lost in the primary season -- comfortable with his candidacy.
By focusing on class, Sen. Obama, who is of partial African-American heritage, shows a continued effort to make his campaign transcend race.

Federal Contracting
While civil rights groups look skeptically at the candidates' stances on affirmative action, David Ferreira is studying something else -- their economic policies.

From his Washington office, the vice president for government affairs at the Hispanic Chamber of Commerce tracks all things minority business, he likes what he sees in the 2008 White House race.

"Both have been very gracious in not necessarily accepting our views, but understanding where our views come from and saying, 'there is a lot of traction here,'" he said.

Federal Contracting

High on the policy wish list for the Hispanic Chamber is federal contracting reform.

Of the $436 trillion dollars the federal government doled out last year, only five percent went to minority-owned businesses.

Mr. Ferreira said part of the problem is larger contractors get government contracts promising they will hire minority subcontractors, then don't. He called for oversight on these companies.
Former energy secretary and Obama campaign adviser Federico Pena said Sen. Obama would do "whatever it takes to make sure people are complying with the law. There are a variety of sanctions that I think would be effective," he said.
But Sen. McCain's adviser Ms. Fiorina said a new Republican administration would be more methodical in its approach to contracting.
Punishing companies "makes sense" Ms. Fiorina said, but, "it's not just let's go in and do something different."
Sen. McCain has supported a one-year government audit, and Ms. Fiorina said the results, including revealing those companies cheating the government, would be published online.
"This is not a guy who's afraid to look at what's really going," she said, referring to Sen. McCain's maverick reputation.

Small Business Lending
Small business challenges go well beyond losing out on government contracts. During the eight years President Bush has been in office, the Small Business Administration budget has been nearly sliced in half. With the SBA down from $1.1 billion in 2001 to an estimated $569 million this year, small business advocates fear the agency will be dissolved or rolled into the larger Department of Commerce.
Ms. Fiorina, speaking for the Sen. McCain campaign, said that would not happen under a potential McCain administration. Challenges remain at SBA, where large corporations have benefited by having their smaller subsidiary companies apply for the agency's government-backed loans.
"If people are trying to game the system, that's something the new SBA administrator will look at and bring some more balance and fairness," Sen. Obama adviser Pena said.
In discussing reforms, Sen. McCain's campaign suggested looking outside Washington for solutions. "Regional and local programs do a much better job of serving small biz," Ms. Fiorina said.
Private sector venture capitalists seem to have largely ignored opportunities to invest in minority-owned companies, according to industry experts. Both campaigns said the government could help bridge that gap between investors and new minority firms.
"The minority community and the venture capital community are yet to meet," the chamber's Mr. Ferreira said. "Or at least they still don't know each other's first names."

Neil H. Simon is a multimedia journalist in Washington, D.C. He can be found online at

Source: (c) 2008. All rights reserved.

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