Supporters of the agency said its gutting could hurt minority-owned businesses that already face additional barriers to gaining capital.
The Trump administration’s move to gut an agency that aims to support minority-owned businesses has alarmed Democratic lawmakers and nonprofits, who say the action could harm job growth and businesses that rely on the agency’s services.
President Trump signed an executive order last month that would effectively dismantle seven agencies “to the maximum extent consistent with applicable law,” including the Minority Business Development Agency. Housed in the Commerce Department, the agency funds more than three dozen centers across the country that provide technical assistance to minority-owned businesses with the goal of helping them secure loans and contracts.
Nearly all of the agency’s roughly 70 workers were placed on administrative leave late last month, and only three employees remain, according to a person familiar with the matter.
Democratic lawmakers have condemned the Trump administration’s actions. Senator Tammy Baldwin of Wisconsin urged the administration last week to immediately release details on its proposed cuts for the agency and how they could affect small business owners. In a letter to Commerce Secretary Howard Lutnick last week, Senators Maria Cantwell of Washington and Lisa Blunt Rochester of Delaware said that a major reduction of the agency’s work force would be “to the detriment of the U.S. economy” and have devastating effects on its ability to “carry out its programs and duties as mandated by Congress.”
In the past fiscal year, the Minority Business Development Agency helped businesses gain access to more than $1.5 billion in capital and create or retain about 23,000 jobs, according to the agency’s annual report.
Other proponents of the agency said its gutting could hurt minority-owned businesses that already face additional barriers to capital because of a lack of capacity, expertise or an expansive network, among other things.